Case Report – BCCA applies common interest privilege

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. (4^th) 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.

Case Report – Leave to appeal granted in breach of privilege case

On October 25th, the Ontario Superior Court of Justice (Divisional Court) granted leave to appeal on a narrow issue in a case in which plaintiff counsel was ordered to be removed as counsel of record in two related actions after it retained a former member of the defendant hospital’s executive team as an expert witness.

Patillo J. made the impugned order in June. He held that the plaintiff had received confidential information attributable to the defendant’s solicitor-client relationship and held that the plaintiff had not rebutted the inference that the defendant would suffer prejudice as a result of the breach. In considering the six factors going to remedy first articulated by the Supreme Court of Canada in Celanese, he held that the potential effectiveness of after the fact precautionary steps was not an appropriate factor to consider because plaintiff counsel had initiated contact with the hospital’s former employee without taking any precautionary steps.

The Divisional Court granted leave to appeal on this issue, stating the question for appeal as, “Before being removed from the record, are these plaintiff’s precluded from an opportunity to propose ‘other precautionary steps,’ after the fact, having obtained privileged information from defendants by the plaintiffs’ own actions.”

Miele (Litigation Guardian of) v. Humber River Regional Hospital, 2007 CanLII 448209 (Ont. Div. Ct.).

Garbage case touches on idea of practical obscurity

It’s at the obscure end of what I’ll cover on this blog, but the Alberta Court of Appeal’s October 18th decision in R. v. Patrick contains an intriguing debate about an individual’s expectation of informational privacy in garbage.

Conrad J., in dissent, held that the Calgary Police violated an accused individual’s section 8 Charter rights by seizing information…

mixed in with garbage…
in opaque garbage bags…
inside garbage cans…
that were placed in a receptacle without a lid…
on the accused individual’s property.

Good use of bullet points? They’re a cute prelude to the point Conrad J. makes about the accused individual’s expectation of privacy:

In this case, the appellant put his garbage out for municipal collection. Municipalities have an interest in the orderly collection and disposal of garbage. Citizens are forbidden from burning garbage in their homes and citizens pay taxes for this municipal collection service. A homeowner, such as the appellant, places his garbage out for collection on the understanding that his garbage will be treated in the same manner as his neighbour’s garbage – it will be picked up by the garbage collectors and placed inside a garbage truck where it will be mixed with other garbage. At this point, the homeowner’s privacy in respect of much of the information regarding his lifestyle and personal choices will be completely preserved because it will have become anonymous. Any privacy in garbage that identifies the homeowner directly, such as a discarded bank statement, will also be preserved, although not so completely, by the fact it is now contained within a vast pile of collected detritus that makes it almost impossible to find.

The last sentence in the above quote is significant because it endorses the concept of inaccessibility or practical obscurity of information: information can still be private (or one’s interest in keeping something private can subsist) even if it is exposed to unauthorized or limited authorized access. This concept may become more relevant given the prevalence of electronically stored information. For starters, think of the lost backup tape that can’t easily be restored and how a valid claim that the information on the tape is inaccessible might weigh against either a civil or statutory duty to warn. Accessibility may also be relevant in some disputes about waiver of a confidentiality interest or legal privilege.

Ritter J.A.’s majority judgement leaves Conrad J.’s practical obscurity point intact. Instead, and apparently taking judicial notice that garbage often goes to sorting facilities, he states, “With respect, I disagree with this assessment as it does not equate with the myriad of ways in which garbage is handled in Canada.”

Case Report – SCC says informer privilege absolute

In a judgment released October 11th, the Supreme Court of Canada weighed the interest protected by the informer privilege against the interest in open courts. An 8 – 1 majority held that informer privilege is an absolute bar on the disclosure of an informer’s identity subject only to the innocence at stake exception.

The majority strongly affirmed the mandatory character of the informer privilege. Writing for the majority, Bastarache J. said:

The informer privilege rule is mandatory (subject only to the “innocence at stake” exception). To permit trial judges wide discretion in determining whether to protect informer privilege would undermine the purposes of the rule. Part of the rationale for a mandatory informer privilege rule is that it encourages would-be informers to come forward and report on crimes, safe in the knowledge that their identity will be protected. A rule that gave trial judges the power to decide on an ad hoc basis whether to protect informer privilege would create a significant disincentive for would-be informers to come forward, thereby eviscerating the usefulness of informer privilege and dealing a great blow to police investigations.

Despite this forceful position, the majority did leave open the possibility that the rule might be the subject of a Charter challenge. It was disinclined, however, to embark on a constitutional analysis in the circumstances because the appeal was of a discretionary order.

The core of the majority judgement is directed at how the judiciary should operationalize the privilege, for even though the privilege must always be respected it is clear that a judge also has a duty to apply it in a manner that minimally impairs the open court principle. The majority recognized that meeting this duty can be challenging for judges because the parties will frequently consent to an in camera process.

In recommending a model process to assist judges in meeting this challenge, the majority held that:

a judge can appoint an amicus curiae for the limited purpose of addressing whether the evidence supports the conclusion that a person is a confidential informer
the media does not have standing to address this question
the media may have standing after the privilege has been established in a second hearing to address the issue of minimal intrusion
members of the media should be provided with notice rather than be hand picked
whether notice to the media is given is a matter of the judge’s discretion
the media should not be provided with identifying information and, more generally, should only be provided with information essential to making an argument

LeBel J. was the lone dissenter. Unlike the majority he framed the contest as between a constitutionally-protected principle (open courts) and a judge made rule that promotes the administration of justice (the informer privilege). He held that an absolute rule was not warranted because the privilege is not an end in and of itself. He also suggested that the majority should have embarked upon a constitutional analysis even though a Charter challenge to the common law rule was not formally made. Given the qualifier made by the majority, LeBel J. may some day get another chance to make his point.

Named Person v. Vancouver Sun, 2007 SCC 43.

One to watch – Blood Tribe at the SCC

The Supreme Court of Canada is scheduled to hear an appeal of Blood Tribe Department of Health v. Canada (Privacy Commissioner) on February 21, 2008. The case will present an opportunity for the Court to comment on a principle it first articulated in 1982 in Descoteaux v. Mierzwinski – that laws authorizing interference with solicitor-client privilege must be interpreted restrictively. Of perhaps greater interest, it will be the Court’s first opportunity to provide significant commentary on the Personal Information Protection and Electronic Documents Act.

The dispute arose when the respondent to a complaint alleging a failure to provide access to personal information refused to produce records of communications that it claimed to be subject to solicitor-client privilege. In demanding the records be produced, the Commissioner relied on the investigatory powers granted by section 12 of PIPEDA, a broadly-worded provision which does not expressly grant the power to order the production of records over which solicitor-client privilege is claimed.

Litigation ensued and the Federal Court held that the Commissioner had the power to order production. It did so by applying a purposive analysis, stressing the Commissioner’s “central role in achieving the important objectives of the legislative scheme.”

The Federal Court of Appeal disagreed with the lower court’s approach, which it found to be inconsistent with the Mierzwinski strict interpretation principle and the concept of solicitor-client privilege as a substantive rule of law. It stated:

In short, the reason express language is required to abrogate solicitor‑client privilege is because it is presumptively inviolate. The exception for solicitor‑client privilege in the PIPEDA is not what shelters privileged documents from disclosure. The law of privilege does that. The exception simply recognizes that privilege.

There are some finer points to the Federal Court of Appeal’s decision that may also catch the Supreme Court’s interest, including (1) whether the principles developed in interpreting the federal Privacy Act should be applied in interpreting PIPEDA and (2) what effect should be given to language authorizing the exercise of powers “to the same manner and to the same extent as a superior court.”

Blood Tribe is likely to remain relevant given that Parliament’s Standing Committee on Access to Information, Privacy and Ethics made a rather moderate recommendation in its recent Statutory Review of the Personal Information and Electronic Documents Act. Asked by the Privacy Commissioner to address the gap to her investigatory powers identified by the Federal Court of Appeal in Blood Tribe, the Standing Committee only recommended that PIPEDA be amended to expressly permit her to apply to the Federal Court for an expedited review of solicitor-client privilege claims.

Case Report – “Crime and fraud” exception to solicitor-client privilege broadly framed

In March 2007, the Ontario Superior Court of Justice held that the “crime and fraud” exception to solicitor-client privilege applies to communications made in furtherance of perpetrating all forms of tortious conduct that may become the subject of a civil proceeding. As noted by Mr. Justice Perell, this finding may be “contentious” because it establishes an arguably broader exception than endorsed in two of the Court’s earlier decisions: see Rocking Chair Plaza (Bramalea) Ltd. v. Brampton (City) (1988), 29 C.P.C. (2d) 82 (Ont. H.C.J.) and Hallstone Products Ltd. v. Canada (Customs and Revenue Agency), [2004] O.J. No. 496 (S.C.J.). His honour distinguished the case at bar on the facts, which involved an e-mail sent to counsel during the time frame that intentional infliction of mental suffering was alleged (i.e., pre-litigation) and that he held to be prima facie evidence of the same.

Dublin v. Montessory Jewish Day School of Toronto (2007), 85 O.R. (3d) 511 (Ont. S.C.J.).

Case Report – FCA gives effect to statutory privilege in access dispute

On August 27th, the Federal Court of Appeal held that information provided by the Canadian Imperial Bank of Commerce to the Canadian Human Rights Commission as part of an employment equity audit was exempt from public access as “information supplied in confidence.”

The request, made under the Access to Information Act, was for a final employment equity report that primarily contained information provided by the bank to the Commission in the course of an employment equity audit. In arguing against disclosure, the bank relied heavily on section 34(1) of the Employment Equity Act, which creates a statutory privilege for all information obtained by the Commission under the Act. This provision is not listed in Schedule II to the ATIA, which lists nineteen other statutory privilege provisions. Information that is protected by a Schedule II provision is expressly exempt from public access by section 24 of the ATIA.

The Commission decided to disclose the report and the Federal Court dismissed the bank’s application for judicial review. On appeal, the bank argued that the report was not subject to public access because it was not under the Commission’s control, that the report was not subject to public access because the information it contained was privileged and, alternatively, that the record was exempt from public access under a number of specific provisions of the ATIA. The Canadian Bankers Association intervened in the appeal, expressing a broader interest in the confidentiality of bank disclosures to a number of federal regulators under similar statutory privilege provisions.

In the end, the Court dismissed the bank’s broader arguments and held the report was exempt from disclosure based on section 20(1)(b) of the ATIA as information provided in confidence and treated consistently in a confidential manner. It held that the application judge erred on a number of bases in finding this exemption did not apply. Most significantly, it held the application judge erred in finding that the bank had no reasonable expectation of confidentiality because the right of public access in the ATIA expressly applies “notwithstanding any other Act of Parliament” and because the Commission had warned the bank that its information could be subject to public access. Rather, the Court held that the statutory privilege in section 34(1) of the Employment Equity Act provided a reasonable basis for the bank’s belief that the information in question would be held in confidence and held that the bank had also met the other requirements of the section 20(1)(b) exemption.

While the Federal Court of Appeal judgement offers strong support for the application of the section 20(1)(b) to records of information provided to federal regulators and protected by a statutory privilege, the Court did note the requirement to bring the record within the scope of the exemption in every case: “A statutory guarantee of confidentiality is not, in and of itself, a sufficient basis for a claim of exemption under paragraph 20(1)(b) of the ATIA.”

Canadian Imperial Bank of Commerce v. Canada (Human Rights Commission), 2007 FCA 272 (CanLII).