Category: Law of Privilege

Information Roundup – 5 July 2009

Here are my recent links of note from June 22nd.

If you’re interested in the law relating to corporate e-mail systems, be sure to check out Stengart v. Loving Care Agency Inc., linked through the fifth bullet below. It’s a New Jersey case about whether an employee waived privilege in solicitor-client communications by sending them through a personal internet-based e-mail account on a work computer. The e-mails were recovered by the employer, who claimed it could use them in post-employment litigation with the employee. The Court makes some extremely strong statements against employer control over “personal” communications on work systems – some of the strongest I’ve read.

I find the reasoning in Stengart troubling, but am withholding an opinion pending further thought. What’s immediately remarkable to me, however, is how value-laden these e-mail judgements are. Try reading the Alberta Court of Appeal’s recent Poliquin decision and Stengart back-to-back and you’ll see what I mean. This is not good in my view. As a management side advisor and advocate I’m not inclined to promote the enactment of privacy legislation, but if we are going to have enforceable privacy rights, enacting good and balanced privacy legislation might be a way to make such rights understandable. Without predictability, policy-making will be difficult and litigation of reasonable positions might be prohibited by risks that cannot be controlled. These thoughts to be continued at a later date.

On a personal note, Seanna and I are new parents of Penelope Green Robinson. She was born two days ago and is very healthy. “Green” is from Joni Mitchell’s song “Little Green” – a lovely (though sad) song about a mother’s love for child. Here’s a pic of PG and her brother Bug, who has been very welcoming. As for me, I’m feeling very grateful for my family and for the wonders of life.

See ya!

Dan

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Today’s “e-mail law” presentation

I was at the Osgoode PDP Electronic Evidence seminar today. There were great presentations all around, and I’ve included my notes at this Twitter feed. I was very honoured to co-present with John Gregory, whose knowledge of electronic evidence issues is deep. Our presentation is really about the law of e-mail, with a mix of content on access to e-mail on corporate systems, e-mail production and e-mail admissibility and weight. Here are the slides.

We also provided a handout with case citations and a summary sheet on the CGSB Standard on Electronic Records as Documentary Evidence.

I hope this is useful!

When employees use business systems to communicate with their lawyers

I just read Universal Sales, Limited v. Edinburgh Assurance Co. Ltd., a November 2008 judgement of the Federal Court that deals with inadvertent disclosure of solicitor-client communications.

The case is about a transcript of a telephone conversation containing solicitor-client communications that was inadvertently produced to an opponent in litigation. The judgement has a nice summary of the law on inadvertent disclosure of privileged information:

As the Plaintiffs point out, the mere physical loss of custody of a privileged document does not automatically end privilege, especially in the context of modern litigation where large quantities of documents, such as the electronic production of a CD in this case, are exchanged between counsel and accidental disclosure is bound to occur from time to time.

In cases of inadvertent disclosure, the waiver question turns more on the conduct of the privilege holder after it discovers its disclosure and also on any special prejudice that might be faced by the recipient (e.g. by bona fide reliance that does not conflict with any professional duty to immediately seal the communication).

I found Universal Sales in preparing to make some comments on whether employees waive privilege when they communicate with their solicitors on employer e-mail systems at today’s Osgoode PDP program on electronic evidence. The question is whether the waiver is intentional as opposed to inadvertent and will turn on the facts. The most authoritative Canadian case on the issue is the Daniel Potter decision by Mr. Justice Scanlan of the Nova Scotia Supreme Court.

Scanlan J. found that the CEO of a company had not waived privilege by sending solicitor-client communications through his employer’s computer system. He did consider argument based on the employee privacy cases (see my last post), but held that solicitor-client communications deserve special treatment. He also noted, however, that Mr. Potter was CEO and had “day to day executive control over policies which may have threated his expectation of privacy.”

My view on the issue is (1) that Daniel Potter does not close the debate, (2) that Canadian courts will demand very special facts to find waiver because they are staunch defenders of solicitor-client privilege and (3) the occasions when it makes tactical sense to engage in a dispute over the waiver issue are likely rare.

Looking forward to speaking to this later this morning. I’ll live blog the event at #oseev and @michaluk_live.

See ya!

Case Report – Ont. C.A. affirms disqualification of counsel for retaining “poisoned” expert

Yesterday, the Ontario Court of Appeal affirmed an order to remove plaintiff counsel in two related actions after it retained a former member of the defendant hospital’s executive team as an expert witness in one of the actions.

It was clear that the expert had retained confidential information attributable to the solicitor-client relationship while in employment with the hospital. The Court analogized her retainer to the transferring lawyer scenario and held that it was appropriate to presume that plaintiff counsel had received the information and that it would work to the defendant’s prejudice. It then applied the Celanese test and held that it was appropriate to disqualify counsel, particularly given that plaintiff counsel “caused the problem” by retaining the expert.

Stewart v. Humber River Regional Hospital, 2009 ONCA 250.

Case Report – Defendant can maintain privilege against third party it sues for spoliation

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.

Rudolph Meyer & Son Ltd. (c.o.b. Meyer’s County Sausage) v. Endurowe Consulting, 2009 CanLII 10400 (ON S.C.).

Case Report – Ontario court addresses scope of settlement privilege

On March 4th, the Ontario Superior Court of Justice dismissed a settlement privilege claim brought by a third-party to a breach of confidence and unjust enrichment suit.

Pepall J. considered the applicable jurisprudence and held that settlement privilege does not shield information that is sought for a purpose other than use as an admission against interest. Given the agreement in dispute was relevant to issues of custom, damages and the breach of confidence claim itself, she dismissed the third-party’s motion for protective relief without prejudice to its right to object to the agreement’s admissibility at trial.

Sabre Inc. v. International Air Transport Association, 2009 CanLII 9452 (ON S.C.).

Case Report – “Crown brief” production issue heading to BCCA

On February 3rd, the British Columbia Court of Appeal granted leave and expedited the appeal of an order that required the Vancouver Police Department to produce records that had become part of the Crown’s brief in a ongoing prosecution.

The plaintiff is the father of a man who was struck and killed by a motor vehicle in a hit and run. The defendant is the man charged criminally for the hit and run. The defendant’s criminal trial has been adjourned and will re-commence later this year. In the meantime, the defendant did not produce to the plaintiff the materials he received from the Crown in its disclosure. This led the plaintiff to apply for third-party production from the police. The Crown then objected, claiming litigation privilege and public interest immunity.

The Supreme Court ordered production last December. It ultimately applied a screening test like that endorsed by the Ontario Court of Appeal in D.P. v. Wagg and held that the Crown had not demonstrated that the balance of public and private interests weighed against production:

The Crown has tendered affidavit evidence suggesting that the criminal prosecution might be jeopardized by disclosure of any documents to the plaintiff because the material might find its way to potential witnesses, to the jury pool, or to persons who could seek to subvert the course of justice.  While the affidavit evidence contains general statements of possible adverse effects resulting from premature disclosure, it does not identify any specific concerns in the context of the Antunes prosecution.  Moreover, the possibility of any adverse effect can be materially reduced, or eliminated, by an appropriate undertaking from counsel and the plaintiff in the civil action.

Though this is a fairly discrete finding, in granting leave the Court of Appeal framed the issue broadly and as being about “the treatment of police investigations results in civil proceedings while criminal charges are outstanding” – that is, as being about the very principles reflected in Wagg. It indicated that hearing dates were available in late March and April and ordered the appellant’s factum to be delivered in late February.

Wong v. Antunes, 2009 BCCA 60.

Case Report – Government fails to meet burden of proving solicitor-client privilege

On February 10th, Madam Justice Layden-Stevenson of the Federal Court held that the Minister of Fisheries and Oceans failed to prove a claim that two sentences in a ministerial briefing document were subject to solicitor-client privilege. The Minister argued the sentences, which were not authored by a lawyer, were revealing of legal advice. In dismissing this claim, Layden-Stevenson commented:

Regarding the Minister’s submission that disclosure of the name of the lawyer is tantamount to disclosure of that which is subject to solicitor-client privilege, I would think that if that were so, it ought to have been stated in Mr. Ahluwalia’s affidavit.

She also held that the Minister had waived privilege by implication given disclosure of similar information in the record before the Court.

Environmental Defence Canada v. Canada (Fisheries and Oceans), 2009 FC 131 (CanLII).

Case Report – Information Commissioner can impose confidentiality screen on joint legal retainer

In a judgement dated October 5th of last year, the Federal Court held that the Information Commissioner of Canada acted lawfully in making a confidentiality order that prohibited Crown counsel from sharing information with the Crown that it gained while jointly representing individual Crown servants.

The Crown servants were compelled to give evidence before the Deputy Commissioner in the course of his investigation into an Access to Information Act complaint. Department of Justice counsel accompanied the witnesses and acted as their counsel. In order to preserve the integrity of his investigation, the Deputy Commissioner prohibited the witnesses from disclosing the questions asked, answers given and exhibits used in the examination and prohibited counsel from disclosing the same. The Crown applied for judicial review of the orders, arguing that they interfered with its solicitor-client relationship with Crown counsel.

The Court held that the Information Commissioner has an implicit power to make confidentiality orders and that the potential for a conflict of interest given the witnesses were not high-ranking officials made the Deputy Commissioner’s orders reasonable and necessary in the circumstances. It said:

Counsel for the applicant countered that there is absolutely no factual or evidentiary foundation for the proposition that such a conflict of interest exists or is even likely to come up in the present circumstances, and that the decision and orders are therefore founded on speculation and unsubstantiated assumptions. The only reason that the individuals were subpoenaed by the Deputy Commissioner was on account of their activities on behalf of the Crown. Since they were not examined in their personal capacity but rather in their professional capacity as Crown servants and employees, there can be no conflict of interest in this proceeding between the individuals and the Crown, according to the applicant’s argument.

I must confess that I am somewhat troubled by this automatic and necessary assimilation of the Crown’s and the employees’ interests. As a general rule, I am prepared to concede that it is unlikely the employees’ views with respect to the disclosure of a document will differ from those of the senior management of the Department involved. But the possibility cannot be ruled out entirely, especially when the employees subpoenaed by the Commissioner are not in the higher ranks of the Department but rather at the lower level. Similarly, I can easily envisage situations where there is no conflict at the outset but conflict develops as the questioning proceeds and the investigation unfolds. It is in those kinds of circumstances that employees must have the assurance that they will remain in control of the disclosure of their testimonies notwithstanding the fact that their counsel play a dual role.

I agree with the respondent that the investigatory process would simply be unworkable and profoundly undermined if the Attorney General had a de facto right to attend all hearings simply by providing a counsel to the witnesses compelled to give evidence.

The Court also rejected an argument that the confidentiality orders unjustifiably violated section 2(b) of the Charter.

Canada (Attorney General) v. Canada (Information Commissioner) (F.C.), [2008] F.C.J. No. 1235 (F.C.) (QL).

Case Report – BCCA considers proportionality and waiver of privilege by implication

In a leave to appeal application decided on December 4th, Smith J. of the British Columbia Court of Appeal rejected an argument that proportionality is not part of the test for implicit waiver of solicitor-client privilege.

The respondent was 15 days late in complying with a court order to serve an affidavit. The applicant brought on contempt proceedings based on the respondent’s pattern of conduct. As part of its defence, the respondent addressed the 15 day delay by claiming his solicitor did not make him aware of the deadline until too late. He served a second affidavit along with an e-mail from his counsel as evidence.

The applicant unsuccessfully applied for production of other related communications between the respondent and his counsel. The applications judge held that the 15 day delay was not central to the contempt proceeding so an order for production would not be “proportional.”

Smith J. held that the applications judge did not err by applying an inappropriate test for waiver. She held that “proportionality” was concept that is consistent with the fairness aspect of the test for waiver by implication – a rule by which privilege will be waived in communications related to those in which there is an intention to waive privilege where fairness and consistency demand a broader waiver. According to Smith J., “Fairness dictates that requests for access to non-material information do not satisfy the waiver test.”

Hub International Limited v. Tolsma, 2008 BCCA 500.