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Globe and Mail reporter Daniel Leblanc stands outside court with his lawyer on Wednesday, November 5, 2008, in Montreal.Ian Barrett/The Globe and Mail

A confidential media source who was instrumental in exposing the Quebec sponsorship scandal may be the last such hero if the courts fail to protect her anonymity, the Supreme Court of Canada was told Wednesday.

Globe and Mail lawyer William Brock said that the source - identified only as "MaChouette" - did the country a major service by providing journalist Daniel Leblanc with information showing misuse of federal funds that were designed to promote national unity after a Quebec referendum on sovereignty.

"Today's decision will determine not just MaChouette's reward for her service to the country, but whether there will be future MaChouettes in this country," Mr. Brock said.

The Globe is fighting an attempt by Montreal media company Le Groupe Polygone Éditeurs Inc. to force Mr. Leblanc to reveal his source's identity as part of its defence against a federal lawsuit that is attempting to recover money the firm received.

Polygone lawyers argued strenuously that the right of a person who leaks information cannot take precedence over the livelihood of a company that is trying to defend itself in a serious lawsuit.

"How are we to go about that if we can't even get basic, preliminary information about the source?" Polygone lawyer Patrick Girard asked. "It is obvious here that the information could be very helpful to the defence.

"The burden has always been on the person who does not want to testify [to explain]why he ought not have to testify."

Mr. Girard also warned the court against creating a constitutional protection that all manner of bloggers and self-styled journalists can exploit.

In mid-2008, a Quebec Superior Court judge ordered Mr. Leblanc to divulge anonymous sources who had provided key information about the sponsorship scandal.

Soon afterward, the judge ruled that Mr. Leblanc could not report about developments in the lawsuit.

The civil proceeding forms a bookend to a major hearing last year in a Supreme Court case involving former National Post reporter Andrew McIntosh that tested the same waters of journalistic vulnerability in a criminal context. No decision has been released yet in that case.

Media lawyers are hopeful that the court will create a constitutional privilege that protects journalistic sources.

Mr. Brock and co-counsel Guy Du Pont told the court that anonymous sources were essential in exposing many of the most notorious scandals in recent history, such as the U.S. Watergate affair.

"History has shown that the most important and most explosive stories start with confidential sources," Mr. Brock said. "There is no example more important to source confidentiality than wrongdoing at the highest levels of the Canadian government."

But several judges questioned whether it is wise to give a blanket privilege of confidentiality to journalists regardless of the circumstances.

The Globe's lawyers said that judges could decide on a case-by-case basis whether a private applicant had shown compelling reasons that a promise of confidentiality should be breached.

"My submission isn't that we have an unfettered right to everything," Mr. Brock said. "My submission is that we have a constitutional right to gather news, and it is a right that includes the right to protect confidential sources.

"What is at stake is whether Daniel Leblanc will have to stand before a court and violate what he believes to be a solemn promise," Mr. Brock said. "This would reduce freedom of the press to an empty shell."

However, Mr. Girard said that the onus should be on journalists to show why they should be allowed to conceal potentially vital information in a case, not the other way around.

The Court reserved its decision in the appeal.

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