Category: Law of Privilege

Alberta CA deals with FOI standing issue, settlement privilege and more

The Court of Appeal of Alberta issued a decision on July 16th that dealt with a significant FOI standing issue among other issues relevant to FOI practitioners.

The Court quashed the Alberta OIPC’s appeal of a lower court decision to quash an order by which the OIPC compelled the Minister of the Environment to disclose a remediation agreement it entered into with Imperial Oil. It also, in obiter, affirmed the lower court’s decision.

The Court quashed the appeal based on a finding that the OIPC had no standing. Alberta case law establishes that a statutory tribunal whose own decision has been quashed on judicial review cannot appeal from that order unless its own jurisdiction is in question. The Court applied this to the OIPC despite the OIPC’s arguments about the unique role of an FOI adjudicator.

In addressing whether the remediation agreement was accessible to the public, the Court held that the agreement was subject to settlement privilege and that the OIPC had erred in finding that settlement privilege does not apply to final agreements. The application of settlement privilege to final agreements gives potentially wide protection to agreements between public institutions and outside parties and is now supported by the the Supreme Court of Canada based on its June 2013 decision in Sable Offshore Energy Inc. v Ameron International Corp.

The Court also interpreted a requirement common to third-party harms exemptions in Canadian FOI statutes that demands information “of the third-party” to qualify. It said:

The exception does not necessarily require ownership in the strict sense; the private party supplying the information would not have to prove that it had a patent or copyright on the information. If the private entity took scientific, financial, or commercial information that was in the public realm, and then applied that information to its specific business, property, and affairs, the resulting data would still be “of the third party”. In other words, it is the information as applied to the business of the third party that would be “of the third party”, not the background scientific or economic principles underlining that information.

The Court held that the OIPC erred in finding that expert reports prepared for Imperial Oil and appended to the agreements did not contain information “of Imperial Oil” because the reports “were developed at the request of the Public Body or in consultation with it.”

Imperial Oil Limited v Alberta (Information and Privacy Commissioner), 2014 ABCA 231 (CanLII).

Ontario court says PIPEDA does not apply to LawPro

On August 28th, the Ontario Superior Court of Justice held that LawPro (who insures Ontario lawyers) was entitled to report various allegations made against an insured to the Law Society of Upper Canada.

LawPro made the report after the insured was sued and before it denied him coverage.  The Court held that LawPro wrongly denied coverage but dismissed the insured’s breach of confidence and privacy claim.

The Court held that LawPro did not breach PIPEDA because it is not engaged in commercial activity. It explained:

Counsel for LawPro submits, correctly in my view, that the providing of mandatory professional liability insurance to the province’s lawyers is not a commercial activity within the meaning of section 4(1)(a) of PIPEDA. Although LawPro is designed to conduct itself in a financially viable manner, its principal shareholder is the Law Society – a regulatory body – and its mandate entails “a commitment to working with the bar in the public interest over the long term”. LawPro, Our Story: 15 Years of Making a Difference (Lawyers Professional Indemnity Company, 2010), online: http://www.practicepro.ca/LawPROmag/15Anniversary Booklet.pdf, at p. 4. That mandate takes LawPro outside of the type of activities to which PIPEDA applies.

The Court also held that LawPro acted properly in making the report notwithstanding the insured’s argument that his communications with LawPro were made to a solicitor in his and LawPro’s common interest and were therefore subject to solicitor-client privilege. The Court held that LawPro had a duty to report that superseded solicitor-client privilege.

(Is there really such a duty? I question whether the decision merely suggests that LawPro was entitled, as a matter of public interest, to report.)

Cusack v The Lawyers’ Professional Indemnity Co., 2013 ONSC 5511 (CanLII).

Non-party witness can receive document subject to litigation privilege

On August 23rd, the Supreme Court of British Columbia held that a non-party witness should have access to a statement she gave to an insurance adjuster even though it was subject to the adjuster’s litigation privilege. It said:

Although the respondent is entitled to have its litigation privilege protected, fairness requires that the petitioner be provided with a copy of her statement. The petitioner is a stranger to the litigation about the accident; she is not a party and she has no interest in it. I note that, if the petitioner was a party, there would be no question that she would be entitled to her statements, as I will discuss below. I have some difficulty imposing on a private citizen the rules of a “sporting event” that are more onerous than those placed on parties. The risk of applying those rules to a non-litigant without legal representation is that a person can, through accident or ignorance, make a mistake. The mistake can be only embarrassing to the non-litigant and/or it can distort the evidence before the court. Neither is desirable.

Within the bounds of an adversarial system, private citizens should be encouraged to participate in the litigation process and disclosure to them of previous statements, as in this case, is a modest way to accomplish that objective. The petitioner could have insisted on some kind of legal document that assured her that she would get a copy of her statement before she gave it. She did not do that. In my view, she did not have to do it and nor should she now be at a disadvantage greater than a party for failing to do it.

It ordered the statement to be produced to the witness with the proviso that it the witness keep the statement confidential.

Minnie v ICBC, 2013 BCSC 1528 (CanLII).

Breach of deemed undertaking does not fit within crime and fraud exception to s-c privilege

On July 16th Justice D. M. Brown of the Ontario Superior Court of Justice dismissed a motion to compel answers to three cross examination questions that were refused based on a solicitor-client privilege claim. He dismissed an argument that the evidence sought was a communication between lawyer and client in furtherance of crime or fraud because the communication was for the purpose of breaching the deemed undertaking rule. Justice Brown said:

The deemed undertaking rule is a most important one in the civil litigation process balancing, as it does, the public interest in getting at the truth in a civil action with the privacy interest of the person subject to examination for discovery and the compelled production of documents. Its importance is underlined by the fact that the undertaking is one given to the court. But the breach of the deemed undertaking does not attract any penal sanction. Although Rule 30.1 does not specify the sanctions for its breach, case law exists in which courts have stayed subsequent proceedings which used evidence in breach of the deemed undertaking rule, and other remedies may include striking pleadings or bringing a civil contempt motion.

That is to say, a breach of the deemed undertaking rule does not give rise to a cause of action against the party in breach, but the aggrieved party may seek a process-related remedy before the court in an existing action, such as the present one.
In my view, the nature of the conduct involved in any alleged breach of the deemed undertaking rule does not come anywhere close to that narrow cohort of “future crime and fraud” misconduct in respect of which communications between a client and its lawyer would not enjoy the protection of solicitor-client privilege

Brome Financial Corporation v Bank of Montreal, 2013 ONSC 4816 (CanLII).

ABQB finds grievance response privileged

On February 26th the Alberta Court of Queen’s Bench held that a grievance response is issued by an employer as part of the settlement process and is therefore privileged:

If these meetings are to be open in an attempt to resolve the grievance it seems clear that the discussions and documents flowing therefrom should remain confidential. The decision letter of April 30 is part of a settlement negotiation which falls within the protected category of settlement privilege and is not producible.

The Court denied production in a civil action brought by the grievor. The employer argues the subject matter of the action is within the exclusive jurisdiction of a labour arbitrator.

Thomson v University of Alberta, 2013 ABQB 128 (CanLII).

Master Glustein contextualizes privilege finding in Trillium Motor World

On June 17th, Master Glustein of the Ontario Superior Court of Justice confirmed that the finding in Trillium Motor World – that legal information (versus advice) conveyed from a firm to its client was not privileged – was driven by a unique context:

[9] Plaintiffs’ counsel sought to rely on the recent decision in Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2013 CarswellOnt 3828 (“Trillium”), in which Justice Belobaba ordered that documents that disclosed “legal information” would not be subject to privilege. However, Justice Belobaba did not set out a general principle that when a client seeks advice for general legal information, rather than a particular legal situation, privilege is waived.

[10] In Trillium, an issue in the class action was whether the defendant law firm (“Cassels”) had been retained by the plaintiff dealers or whether Cassels had been retained by the Canadian Automobile Dealers Association (“CADA”). The issue before Justice Belobaba on the motion was whether CADA properly asserted privilege on documents between CADA and Cassels.

[11] Justice Belobaba distinguished between “legal advice” sought by CADA from its counsel (which would be privileged) and “legal information” obtained by CADA to understand the effect of the General Motors bailout in 2009 to better assist its dealer-members (which would not be privileged). Justice Belobaba held (Trillium, at para. 13):

Thus, if CADA sought and received advice from its counsel at CBB about its role and responsibility as a national dealer organization and its rights and duties given its mandate and jurisdiction, or sought and received advice with respect to the content of the memos it proposed to send out to its membership (to ensure they were legally accurate and did not expose CADA to legal liability), that would certainly amount to “legal advice” as described above. However, if CADA was simply asking its counsel for information about the federal bankruptcy process”or the CCAA in order to better understand the situation and thus better assist its dealer-members, that would not be legal advice as defined in the case law.

[12] Consequently, the distinction relied upon by Justice Belobaba was whether certain “legal information” was not advice to the client but rather information to better assist its members. It was in that context that Justice Belobaba distinguished between the terms “legal information” and “legal advice”, as those terms were put forward by Cassels and CADA.

[13] In that context, the term “legal information” (as defined by CADA and Cassels) consisted of “providing answers regarding the law generally, the options available, and the relevant legal procedures that might pertain” and “how it would affect the dealers”. The term “legal advice” was defined as “advice that is given with respect to the client’s legal rights and duties and is given on the understanding that it may well be followed” (Trillium, at paras. 11-12).

[14] In other words, Justice Belobaba did not reduce the scope of solicitor-client privilege to allow disclosure of general legal information sought by a client since he included in the term “legal advice” any advice “with respect to the client’s legal rights and duties and [which] is given on the understanding that it may well be followed” or any advice “from its counsel at CBB about its role and responsibility as a national dealer organization and its rights and duties given its mandate and jurisdiction, or sought and received advice with respect to the content of the memos it proposed to send out to its membership (to ensure they were legally accurate and did not expose CADA to legal liability” (Trillium, at paras. 12-13).

[15] Consequently, in Trillium, legal advice would include both general legal advice to understand rights and particular advice on a particular problem. The disclosure of “legal information” was not privileged in Trillium because it had not been obtained to advise CADA but was general information to be transmitted to its dealers.

[16] If Trillium were read to reduce the scope of solicitor-client privilege to allow production of any general legal information provided by counsel for the purpose of advising a client as to its rights or obligations, it would be a dramatic change to the sanctity of solicitor and client privilege protected under the principles in Guelph discussed above.

Master Glustein also reviews a number of other principles that govern solicitor-client privilege.

578115 Ontario Inc o/a McKee’s Carpet Zone v Sears Canada Inc, 2013 ONSC 4135 (CanLII).

Five principles from the SCC’s settlement privilege decision

Here are five principles endorsed by the Supreme Court of Canada in its June 21st settlement privilege decision (quoted loosely from the decision itself):

  • Settlement privilege is a class privilege associated with a prima facie presumption of inadmissibility; exceptions will be found “when the justice of the case requires it.”
  • Settlement privilege extends beyond documents and communications expressly designated to be “without prejudice”; what matters instead is the intent of the parties to settle the action.
  • Settlement privilege protects documents and communications from production to other parties to the negotiation and to strangers, and extends as well to admissibility, and whether or not a settlement is reached.
  • Settlement privilege extends to the negotiated settlement itself.
  • To come within an exception to settlement privilege, a party must show that, on balance, “a competing public interest outweighs the public interest in encouraging settlement.”

The Court held that, in the circumstances before it, there was an insufficient interest favouring the disclosure of settlement amounts to two non-settling defendants in a multi-party dispute.

Sable Offshore Energy Inc v Ameron International Corp, 2013 SCC 37 (CanLII).

The scope of solicitor-client privilege, advice versus information and Trillium Motor World

Here’s a handout for an internal (Hicks Morley) talk I’m doing tomorrow on solicitor-privilege, “the continuum of communications” concept and the Ontario Superior Court of Justice’s recent decision in Trillium Motor World.

In Trillium Motor World the Court held that legal information (versus advice) conveyed from a firm to its client was not privileged. In short, my conclusion is that the decision is an outlier driven by a unique context and that in more ordinary circumstances a court will not (and should not) parse the subject matter of communications related to an ongoing retainer so delicately.

Yesterday’s post on Justice Stratas’s recent Canada (Public Safety and Emergency Preparedness) decision is another good one to read on this topic.

FCA opines on breadth of continuum of communications protected by s-c privilege

On April 17th the Federal Court of Appeal issued a judgement that nicely illustrates the scope of the continuum of communications that are protected by solicitor-client privilege. Justice Stratas explained that operational policies that are the product of legal advice are not privileged unless they truly embody the legal advice:

[28] In determining where the protected continuum ends, one good question is whether a communication forms “part of that necessary exchange of information of which the object is the giving of legal advice”: Balabel, supra at page 1048. If so, it is within the protected continuum. Put another way, does the disclosure of the communication have the potential to undercut the purpose behind the privilege – namely, the need for solicitors and their clients to freely and candidly exchange information and advice so that clients can know their true rights and obligations and act upon them?

[29] For example, where a Director of a government department receives legal advice on how certain proceedings should be conducted and the director so instructs those conducting proceedings, the instructions, essentially cribbed from the legal advice, form part of the continuum and are protected: Minister of Community and Social Services v. Cropley 2004 CanLII 11694 (ON SCDC), (2004), 70 O.R. (3d) 680 (Div. Ct.). Disclosing such a communication would undercut the ability of the director to freely and candidly seek legal advice.

[30] In some circumstances, however, the end products of legal advice do not fall within the continuum and are not privileged. For example, many organizations develop document management and document retention policies and circulate them to personnel within the organization. Often these are shaped by the advice of counsel. However, such policies are usually disclosed, without objection, because they do not form part of an exchange of information with the object of giving legal advice. Rather, they are operational in nature and relate to the conduct of the general business of the organization.

[31] Similarly, an organization might receive plenty of legal advice about how to draft a policy against sexual harassment in the workplace. But the operational implementation of that advice – the policy and its circulation to personnel within the organization for the purpose of ensuring the organization functions in an acceptable, professional and business-like manner – is not privileged, except to the extent that the policy communicates the very legal advice given by counsel.

The Court held that a protocol negotiated between the DOJ and  RCMP that dealt with the civil production of documents held by the RCMP was not privileged except for its first three paragraphs, which memorialized legal obligations for the benefit of DOJ and RCMP personnel working under the protocol.

Canada (Public Safety and Emergency Preparedness) v Information Commissioner of Canada, 2013 FCA 104 (CanLII).

Role of investigators does not support solicitor-privilege claim

On May 15th, Justice Ramsay of the Ontario Superior Court of Justice denied a claim that an investigation report was subject to solicitor-client privilege. He explained the difference between the kind of third party conduit whose role is essential to the solicitor-client relationship and an ordinary fact finder:

If the third party’s retainer extends to a function which is essential to the existence or operation of the client-solicitor relationship, then the privilege should cover any communications which are in furtherance of that function and which meet the criteria for client-solicitor privilege. Examples given in Chrusz are psychiatrists who examine the client and accountants who examine the client’s books (¶116).

On the other hand (¶22), “[i]f the third party is authorized only to gather information from outside sources and pass it on to the solicitor so that the solicitor might advise the client, or if the third party is retained to act on legal instructions from the solicitor (presumably given after the client has instructed the solicitor), the third party’s function is not essential to the maintenance or operation of the client-solicitor relationship and should not be protected.”

Both of the paragraph references above are to the Ontario Court of Appeal decision in Chrusz.

Weinmann Electric Ltd v. Niagara Falls Bridge Commission, 2013 ONSC 2805 (CanLII).