NSCA denies privilege claim for statement made in collective agreement bargaining

On March 10th, the Nova Scotia Court of Appeal held that a government statement made to the province’s teachers union in the course of collective agreement bargaining was not subject to settlement or case-by-case privilege.

The union has brought an application that alleges breach of the duty to bargain in good faith and a Charter infringement. The statement it wishes to use in this application is hardly a secret. The Deputy Minister of Finance and the Treasury Board apparently told the Union’s lead negotiator that, if the teachers did not accept an offer, the Government would introduce legislation to impose lower compensation. The negotiator then conveyed the statement to the union’s 9,300 person membership by way of letter in advance of a ratification vote.

In this context the Court held that the a privilege claim could not be rightly made. In addressing the settlement privilege claim, the Court also held that the inevitability of litigation could not be presumed.

Nova Scotia (Attorney General) v Nova Scotia Teachers Union, 2020 NSCA 17 (CanLII).

Hint of compromise not necessary to shield meeting communications with settlement privilege

On July 6th, the Ontario Superior Court of Justice held that communications exchanged in a settlement meeting need not demonstrate “a hint of compromise ” to be subject to settlement privilege. Such a requirement would be inappropriate, the Court said, given the ebb and flow of a settlement meeting. Here are the key quotes:

In my view, where the communications in question are made in a meeting the purpose of which is to attempt to resolve a dispute, as opposed to through a written communication that may or may not be marked “without prejudice”, different considerations apply to the third requirement for settlement privilege. This is because a participant at such a meeting cannot be expected to calibrate the words chosen in each sentence spoken during an open, free-flowing and unscripted conversation to ensure that each sentence meets the three requirements for settlement privilege.

In my view, the communications at a meeting that is held for the purpose of attempting to settle a dispute, when considered after the fact, do not need to reveal a willingness by either side to compromise the litigious dispute in order for settlement privilege to be engaged. Even if the dispute is not resolved, and even if no offer of settlement is made during the meeting by one side, or by either side, if the first two requirements for settlement privilege are satisfied, then the communications at the meeting will be protected by settlement privilege if the purpose of the meeting was to attempt to effect a settlement of the dispute (unless an exception applies).

Singh v. Progressive Conservative Party of Ontario et al, 2017 ONSC 4168.

Party defending against claim based on prior settlement does not waive settlement privilege

On September 30th, the Divisional Court held that a party defending against claim based on prior settlement does not waive settlement privilege. The Court reasoned as follows:

Consistent with such notions of fairness, we are satisfied that the LCBO has not waived settlement privilege in this case. The LCBO claims that Magnotta’s current actions advance the same claims as the prior settled proceedings, and we express no view on that assertion. However, the LCBO should, as a matter of fairness, be able to raise the settlement in its defence and in support of its proposed motion, without automatically losing the benefit of settlement privilege. In particular, the LCBO should be able to rely on the Minutes of Settlement for this purpose.

The defendant obtained a sealing order based on the public interest in encouraging parties to settle their disputes.

Magnotta Winery Corp v Ontario (Alcohol and Gaming Commission), 2015 ONSC 6234 (CanLII).

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).

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).

Alberta court finds that grievance response is privileged

On February 26 the Court of Queen’s Bench of Alberta held that an employer’s response to the first step meeting in a grievance procedure was subject to settlement privilege.

Communications made in a grievance meeting are customarily treated as subject to settlement privilege, but whether the privilege extends to an employer’s formal response to the meeting is questionable. Here, the Court treated the grievance response as part of the continuum of settlement communications. It said:

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 also discussed the implied waiver doctrine and the principled exception to settlement privilege and found neither justified a production order in the circumstances.

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

ABCA stands up for settlement privilege

On January 21st, the Court of Appeal of Alberta refused to make an exception to settlement privilege to allow a party to answer a limitation period defence. In seeming to answer the deciding master’s comment that settlement privilege is not as “robust” a form of privilege as others, the Court said, “for the rule to operate properly, not only must the ambit of the settlement privilege be broad, but the exceptions to the exclusionary rule must be narrowly construed and only be given effect where another policy objective can be shown to outweigh any impact that may arise to the settlement objective.” It held that settlement privilege should not normally give way to allow a party to answer a limitations defence and held there was nothing about the circumstances to justify making an exception.

Bellatrix Exploration Ltd v Penn West Petroleum Ltd, 2013 ABCA 10 (CanLII).

Case Report – Settlement correspondence to be produced despite clear terms of settlement

On November 16th the Nova Scotia Supreme Court ordered the plaintiff in an action for LTD benefits to produce correspondence he had sent and received in the course of settling a claim against his former employer.

The plaintiff settled a wrongful dismissal action and a human rights claim brought against his former employer for $65,000. The amount was expressly allocated as general damages in the settlement agreement. The plaintiff continued his action against the LTD insurer for non-payment of benefits, which raised the issue of whether any portion of the $65,000 would be deductible under the LTD plan as “earnings recovered.” To address this issue, the insurer requested production of the settlement correspondence. The plaintiff resisted by raising settlement privilege and claiming that the settlement document itself (which had been produced) was proof that none of the damages were deductible.

The Court ordered the documents to be produced, noting that the plaintiff could still raise a parole evidence argument at trial. It rejected the plaintiff’s argument that the express allocation to general damages weighed against production, noting that the plaintiff had a duty of good faith to the insurer:

There may not have been a contractual right to control the settlement process, but the plaintiff does have good faith obligation in dealing with the LTD Fund, in circumstances where lost earnings may have been a significant factor in arriving at settlement.

Inglis v. Nova Scotia, 2007 NSSC 314.