On March 12th, the Ontario Superior Court of Justice held that a defendant to a negligence claim could claim privilege in certain records against a third-party that it sued for destroying evidence related to its defence.
The matter arose out of a building fire. The owner sued a roofing contractor, who obtained several reports from a company hired to conduct an origin and cause investigation. It claimed litigation privilege in the reports in the main action. The roofing contractor later brought a third-party claim against the owner’s investigator, alleging that the investigator negligently destroyed evidence and prejudiced its defence. The third-party brought a motion to compel the roofing contractor to produce the investigation reports over which it had claimed privilege in the main action.
The Court held that the spoliation action was independent from the main action but that it was sufficiently related to the main action for privilege to apply across both actions. It said:
In the case at bar, the pivotal issue in both the main action and the third party action is whether or not the parties have been able to identify the source area and the cause of the fire. In the main action the plaintiffs must prove that the defendants’ use of the heating torch while effecting roof repairs was the cause of the fire. The third party claim is a related action the success of which depends upon the defendants proving that the third parties negligently inhibited their ability to identify the source area and cause of the same fire, and thus be able to effectively defend against the plaintiff’s claim.
The Court also dismissed an argument that the defendant waived privilege by disclosing one of the reports subject to its privilege claim. It held that the plaintiff had not met its burden of proving an implied waiver.