In Ebrahim v. Continental Precious Minerals, 2012 ONSC 1123 (CanLII), Mr. Justice David M. Brown undertook a fairly comprehensive analysis of the circumstances in which both lawyer-client privilege and litigation privilege will be found to have been waived. The discussion arose in a somewhat unusual context, in that the litigation was playing out in applications rather than in actions. The fact that Justice Brown, as the applications judge, would be hearing the dispute on its merits, clearly played a significant role in his finding that waiver of privilege had taken place.
This was a shareholders’ dispute which has given rise to two applications, both of which are to be heard in late March of this year.
Cross examinations on affidavits have taken place and the motions heard by Justice Brown arose out of refusals on the cross examinations.
Waiver of lawyer-client privilege
The applicant in one of the applications swore an affidavit in which he deposed, “My sons and I do not act jointly and in concert and received legal advice to that effect prior to initially purchasing shares of the Company”. The respondent in that application took the position that this amounted to a waiver of privilege. In response, counsel for the applicant sent a letter in which he said, “we will agree to remove the reference to receiving legal advice”. In addition, the applicant himself swore a supplementary affidavit in which he said, “If I did waive privilege by making such statement in my affidavit, that was certainly not my intention.”
Justice Brown refused to permit the applicant to withdraw the portion of his affidavit in which he referred to having received legal advice. His Honour was satisfied that the applicant had “intentionally included in his affidavit the language which he now seeks to withdraw – this is not a case of inadvertence, mistake or oversight”.
Brown J. then turned to the question of whether or not the applicant had waived privilege. He quoted from Sopinka, Lederman and Bryant’s text on the Law of Evidence, for the proposition that, “whether intended or not, waiver may occur when fairness requires it”.
The applicant, relying on a decision of Mr. Justice Paul Perell in Creative Career Systems Inc. v. Ontario 2012 ONSC 649 (CanLII), 2012 ONSC 649 (S.C.J.), argued that “a waiver of privilege will not be found unless it is demonstrated that the client used the presence or absence of legal advice as a material element or of his or her claim or defence”. Justice Brown considered that decision, as well as two other cases that had been referred to by Perell J.: Guelph (City) v. Super Blue Box Recycling Corp. 2004] O.J. No. 4468 and Simcoff v. Simcoff 2009 MBCA 80 (CanLII), 2009 MBCA 80. Generally speaking, those cases stood for the proposition that merely referring to the fact of having received legal advice will not necessarily amount to a waiver of privilege. Justice Perell, in the Creative Career Systems case, said “waiver does not occur because the party discloses that he or she received legal advice, nor does it occur because the party admits that he or she relied on the legal advice; it occurs because the party chooses to use the legal advice as a substantial element of his or her claim or defence”.
Justice Brown described the three cases as “interesting”, but distinguished all three of them on the facts. He found that the applicant in this case had waived privilege on the issue with respect to which he had referred to receipt of legal advice in his affidavit. He noted that the applicant had “had available to him the advice of litigation counsel when he swore his affidavit”, that “the statements were made with some reflection” and that “this is not a case where the deponent blurted out an answer in the heat of an examination without an opportunity to consider the implications of his answer”.
The applicant was ordered to re-attend for further cross-examination to answer questions concerning the legal advice to which he had referred in his affidavit.
Waiver of litigation privilege on expert’s foundational documents
The issue of waiver of privilege arose a second time on these motions. On this occasion, it was the opposing party, Continental Precious Minerals Inc. (respondent in the first application and applicant and the second) who was alleged to have waived privilege.
Continental had filed an affidavit that was being tendered as expert evidence. Counsel for the opposing party sought production of any draft affidavits and of any documentation passing between Continental’s lawyers and the expert. It argued that litigation privilege has been waived.
Justice Brown found it significant that (1) the expert had not drafted his own affidavit; and (2) the expert had acknowledged that his firm had an ongoing commercial relationship with the party that was tendering his evidence.
His Honour considered Browne (Litigation Guardian of) v. Lavery 2002 CanLII 49411 (ON SC), (2002), 58 O.R. (3d) 49 (S.C.J.), the Court of Appeal’s decision in Conceicao Farms Inc. v. Zeneca Corp 2006 CanLII 31976 (ON CA), (2006), 83 O.R. (3d) 792 (C.A.) and Aviaco International Leasing Inc. v. Boeing Canada Inc. [2002] O.J. No. 3799 (S.C.J.). He noted that all three cases had “considered the scope of pre-trial disclosure of information concerning an expert’s report” but that the situation is quite different in the case of an application. Here, the evidence of the expert was being put forward in its final form by way of affidavit: there would be no subsequent oral hearing, as there would have been the case of an action. For this reason, Justice Brown said, “the issue engaged on this motion does not concern the scope of pre-trial disclosure, but what a judge presiding at a final hearing can require an expert called to testify before him to produce during the course of his cross-examination”.
In the result, Justice Brown found that, by tendering the expert, Continental had waived litigation privilege on any documentation passing between the expert and its lawyers concerning the affidavit or his evidence, including any prior drafts of the affidavit.