Case Report – BCCA applies common interest privilege

7 Nov

On October 16th the British Columbia Court of Appeal applied the common interest privilege doctrine in finding that a draft legal opinion prepared for a vendor of property was immune from production despite being shared with the purchaser, its various officers and the potential financial underwriters of the proposed transaction. The opinion was about the validity of the plaintiff’s claim, which challenged the proposed transaction.

The Court explained:

The disclosures to Mr. Hotel were in the course of discussions between the solicitor for the De Graaf defendants (Mr. McEwan), the solicitor for Western (Mr. MacLean) and the solicitor for National Bank Financial. (Mr. Hotel). The interests of the clients of the three solicitors were not identical but they were common to the extent that financing of the Western exploration of the Mongolian properties was beneficial to all of them. They also shared an interest in assessing the invalidity of Maximum’s claims. Sharing the opinions in the McEwan draft was reasonably in aid of a due diligence investigation of the Maximum litigation. The chambers judge put it in terms of an ongoing interest in completing the transaction which the disclosure was designed to facilitate. In my view, that is a sufficient common interest to support the extension of the privilege. In this regard, I agree with Mr. Justice Lowry (as he then was) in Fraser Milner Casgrain LLP v. Canada (M.N.R.) 2002 BCSC 1344 (CanLII), (2002), 6 B.C.L.R. (4th) 135, 2002 BCSC 1344, relied on by the chambers judge in the quotation I have earlier included, that commercial transactions can benefit from an uninhibited exchange of legal opinions among parties allied in interest.

The Court also rejected claims of waiver based on the purchaser’s internal communications and based on “state of mind” issues pleaded in the defence.

Maximum Ventures Inc. v. De Graaf, 2007 BCCA 510.

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One Response to “Case Report – BCCA applies common interest privilege”

  1. Adolphous A. July 4, 2008 at 7:22 pm #

    Hi,
    I am a lawyer practicing in Nigeria. I stumbled on this site while conducting some research into the applicability of Common Interest Priviledge in Nigerian Law. This has been helpful.
    I must however conclude that despite the clear relationship between Nigerian and English law, common interest privilege has never (to my knowledge) been applied in Nigerian Courts. It is a relatively new development in the law and its applicability in Nigeria presently is dubtful.
    The only anology i can remember is the defence of qualified privilege in libel on the basis that the information which is libelous to the Claimant is privileged on the ground that the party making the statement shared a common interest with the party recieving same.
    Thanks anyway, the site has been helpful.

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