powered by privilege: protecting communications with counsel ccca national conference april 8, 2014...

Powered by Privilege: Protecting Communications with Counsel

CCCA National Conference

April 8, 2014

Calgary, Alberta

Panelists

• Brian CarukJustice and Solicitor GeneralSpecialised Prosecutions BranchGovernment of Alberta

• Arif ChowdhuryAssociateFasken Martineau DuMoulin LLP

• Steve SmythLegal CounselTervita Corporation

Introduction to Privilege

3 categories of privilege that are most relevant to commercial disputes:

• Solicitor-client privilege

• Litigation privilege

• Settlement privilege

Solicitor-Client Privilege

Applies to communications between a lawyer and the lawyer’s client, where the communication relates to seeking or providing legal advice


• The communication is made in the context of a solicitor-client relationship

• The communication is made in the course of seeking, forming or giving legal advice

• The communication is intended to be confidential

• Solicitor-client privilege belongs to the client

“Once privileged, always privileged”Blank v. Canada (Department of Justice), 2006 SCC 39

R. v. Solosky [1980], 1 SCR 821


• Any lawyer authorised to practice law in the jurisdiction in which the advice is given

• This includes in-house counsel

• Foreign lawyers may be covered, provided they are authorised or reasonably believed to be authorised by the client, to practise law in the lawyer’s home jurisdiction

Who is a solicitor for the purpose of privilege?

Blank v. Canada (Department of Justice), 2006 SCC 39


• The client is normally the person or entity receiving the legal services, or on whose behalf the legal services are provided

• For in-house counsel solicitor-client privilege protects communications concerning legal advice between the in-house counsel and typically the employer

• A wholly owned subsidiary under the management of the parent client may be a client

• Applies when in-house counsel seeks legal advice from external counsel

Who is the client?

Balabel v. Air-India, [1988] 2 ALL ER 246 (CA)

Mutual Life Assurance Co. of Canada v. Canada (Deputy Attorney General) (1988), 28 CPC (2d) 191 (ONHC)


• The presence of a Third Party does not always waive solicitor-client privilege

• In order to maintain privilege the function of the Third Party must be “essential or integral to the operation or existence of the solicitor-client relationship”

• Accountant, banker, consultant, etc., who is necessary for providing or obtaining legal advice

What if a Third Party is Present?

General Accident Assurance Co. v. Chrusz (1999), 45 OR (3d) 321 (ONCA)

Litigation Privilege

Applies to records and communications created for the dominant purpose of litigation


• Litigation privilege protects communications and records created for the dominant purpose of anticipated litigation

• Anticipated litigation cannot merely be one purpose—it must be dominant

• Litigation needs to be reasonably contemplated at the time the communications were made or the records are created

“The object is to ensure the efficacy of the adversarial process and not to promote the solicitor-client relationship”

Blank v. Canada (Minister of Justice), 2006 SCC 39


• The purpose of the creation of the records

• When the records were created

• Who created the records

• Who authorised or instructed the creation of the records

• What use was, or could be made, of the records

What was the dominant purpose?

Waugh v. British Railways Board, [1980] A.C. 521, [1979] 2 All. E.R. 1169 (H.L.)

Nova v. Guelph Engineering Company (1984), 5 DLR (4th) 755, 50 AR 199 (ABCA)


• Records to which litigation privilege may attach:

• Created by a lawyer

• Created by the party that is the subject of the litigation

• Information collected by third parties

• The dominant purpose must be for litigation

Who can create a record protected by litigation privilege?

Settlement Privilege

Applies to records or communications created for or shared during the process of settlement negotiations


• A dispute must be ongoing or contemplated

• Settlement discussions must be intended to be confidential, at least with respect to the Court

• The communication must be designed to lead to a settlement; identifying as “without prejudice” is not enough

• Settlement privilege also applies to regulatory or quasi-criminal proceedings

Settlement privilege survives settlement as against third parties

Podovinikoff v. Montgomery (1984), 58 BCLR 204 (BCCA)


• Protects admissions against interest, offers of settlement and the settlement agreement itself

• Strong policy reasons to encourage settlement

• There can be an exception where settlement discussions relevant to the litigation apart from liability

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

Robichaud v. Clarica Life Insurance Co. (2007), 53 CCLI (4th) 234 (Ont. SCJ)

Presentation Topics

• Legal Advice vs. Business Advice

• Common Interest Privilege

• Waiver of Privilege

• Extra-Territorial Considerations

• Expansion of the Crime-Fraud Exception

• Incident Investigation

Legal Advice v. Business Advice

No privilege attaches to in-house counsel’s communications that provide business advice


• Nature of the relationship

• Subject matter of the advice

• Circumstances in which the advice was sought and rendered

“…it is, of course, not everything done by a…lawyer that attracts solicitor-client privilege…”

R. v. Shirose, [1999] 1 SCR 565 at para. 50 sets out the test for determining whether solicitor-client privilege will attached to the lawyer’s advice


Multiple Hats of In-House Counsel

• Legal advisor• Risk manager• Policy advisor• Compliance monitor• Manager of lawyers and legal

expenses• Business advisor• Corporate investigator

“If an in-house lawyer is conveying advice that would be characterized as privileged, the fact that he or she is “in-house” does not remove the privilege, or change its nature”

Pritchard v. Ontario, [2004] 1 SCR 809 at para. 21


• Solicitor-client privilege will only arise when in-house counsel acts in his or her capacity as a lawyer, either giving advice or seeking instruction from the client

• Because in-house counsel can give business advice as well, in-house counsel can be questioned or examined for discovery

NEP Canada ULC v. MEC OP LLC, 2013 ABQB 540

Domcan Boundary Corp. v. Enron Canada Corp., (2006) 53 Alta LR (4th) 309 (QB)


• Solicitor-client privilege does not attach simply because the person in possession of information is a lawyer

• In-house counsel can be examined

• Even though the in-house counsel acquired information through his position as counsel, he was not entitled to assert blanket privilege

• Litigation privilege attaches to specific records or communications

Wexler v. Suncor Energy Products Inc., [2007] OJ No 994 (SCJ Div Ct)


• Solicitor-client privilege claimed over head office circular from a SVP

• It was circulated by the bank’s general counsel/secretary to various divisions

• The circular had been prepared by in-house counsel and contained legal advice

Privileged or

Not Privileged?

Toronto-Dominion Bank v. Leigh Instruments Ltd. (Trustee of), [1997] 32 OR (3d) 575 (GD)


• Solicitor-client privilege claimed over head office circular from a SVP

• It was circulated by the bank’s general counsel/secretary to various divisions

• The circular had been prepared by in-house counsel and contained legal advice

• Not privileged since general counsel was acting as an executive, and wide circulation meant the bank did not intend for it to remain confidential

Privileged or

Not Privileged?

Toronto-Dominion Bank v. Leigh Instruments Ltd. (Trustee of), [1997] 32 OR (3d) 575 (GD)

NOT PRIVILEGED


• A subcommittee report and associated documents were created at the request of general counsel

• General counsel formed the subcommittee to provide information to assist in advising the Board after receiving a demand letter

• The report was also disclosed to the full committee, senior bank executives, external auditors and the Ontario Superintendent of Financial Institutions

Privileged or

Not Privileged?

Royal Bank of Canada v. Societe-Generale (Canada), [2005] OJ No 4383 (SCJ)


• Although disclosed to external auditors and the Ontario Superintendent of Financial Institutions, it was disclosed on the basis it would not be disclosed to third parties

• Report was marked “privileged and confidential, prepared at the request of counsel; solicitor-client communications, subject to litigation privilege”

Privileged or

Not Privileged?



• Documents created for in-house counsel in order to provide legal advice to the corporation are also privileged

• Disclosing the report was not waiver because only shared on the basis that would not be shared with third parties

Privileged or

Not Privileged?


PRIVILEGED


• Clarify your role on request of an assignment

• Note that role on the documents created

• Distinguish the records created from documents prepared by operations, regulatory filings, etc.

• Retain outside counsel if your assertion of privilege could be challenged

Best Practices When Asked to Provide Legal Advice


• Consider having in-house counsel call and chair the meeting

• Create a separate document for legal items

• Limit attendance to those required and excuse third parties when legal matters discussed

• Limit the circulation of minutes and other documents

• Keep notes with in-house counsel

Best Practices When Participating in Meetings


• Confirmation that legal advice has been requested and that the information requested is for that purpose

• Mark documents “privileged and confidential” and/or “prepared at the request of legal counsel for the purpose of providing legal advice”

• Communicate legal advice separately from business advice, and identify what capacity you are acting in

• Limit the circulation of legal advice to only necessary recipients

Best Practices for Communicating within the Organisation

Common Interest Privilege

Common interest privilege is an exception to the rule that disclosure to a third party is generally a waiver of privilege


• This exception may apply where one party shares privileged records or communications with another party having a common interest

• The records or communications must have been shared on a confidential basis

• There must be a sufficient common interest: co-defendants, parties to a transaction, fiduciaries, agents, etc.


Sopinka, John, Bryant Alan, Sidney Lederman, The Law of Evidence in Canada, Butterworths, 1999


• This was a multilateral commercial transaction where Pitney Bowes, with partial financing from RBC, bought railway cars, leased them to one party, which then sub-leased them to another party

• Parties agreed that on issues where they were not adverse, they would obtain opinions from one legal counsel

• CCRA sought two of these opinions: one addressed to Pitney Bowed; the other addressed to RBC and another party

“The point of recognizing common interests is not as a means of determining whether privilege exists. The real issue is whether privilege has been lost.”

Pitney Bowes of Canada Ltd. v. Canada, (2003) 225 DLR (4th) 747


• The legal opinions were prima facie privileged, but the question was whether privilege was waived by sharing them with other parties to the transaction

• The mere existence of a commercial transaction will not mean there can be no waiver by sharing privileged materials with parties to the transaction

• Opinions must be in aid of completing the transaction and for the benefit of all parties—intended to be shared

• Parties want to negotiate with a shared understanding of each other's legal positions



• Parties negotiating a commercial transaction have a common interest in completing the transaction

• Communications between both sets of counsel and accounting advisors to ensure the transaction was completed in a commercially and tax efficient manner

• Legal opinions exchanged between the parties to the transaction during the course of a commercial transaction were still privileged as it concerned the Minister of National Revenue

“Those engaged in commercial transactions must be free to exchange privileged information without fear of jeopardizing the confidence that is critical to obtaining legal advice.”

Fraser Milner Casgrain LLP v. Canada (M.N.R.), 2002 BCSC 1344


• Where a parent company’s in-house counsel represents both the parent and its subsidiary on a matter of common interest then joint client privilege will be recognised

• Sharing of records or information within the corporate family will not amount to waiver among joint clients

• Since privilege belongs to both clients, one cannot waive it for another in disputes with third parties

• The privilege is waived in the event of adverse litigation between the joint clients

Re: Teleglobe Communications Corp., 493 F.3d 345 (3d Cir. 2007)



• Label communications or records “subject to common interest privilege”

• Only circulate communications or records between the parties that have a common interest in litigation or a transaction and not the outside parties

BEST PRACTICES

Waiver of Privilege

Privilege can be waived expressly or impliedly

Waiver of Privilege

• Solicitor-client privilege belongs to the client

• Solicitor-client privilege can be waived by the client with informed consent

• Possessor of the privilege (1) knows of the existence of the privilege, and (2) voluntarily evinces an intention to waive that privilege.

• However, waiver can be implied by the actions of the holder of the privilege—actions inconsistent with intent to maintain privilege

“Although a waiver cannot be presumed, the courts and the commentators have acknowledged [implied] waiver and given effect to it.”

Glegg v. Smith & Nephew Inc., 2005 SCC 31, [2005] 1 SCR 724

Waiver of Privilege

• “However, waiver may also occur in the absence of an intention to waive, where fairness and consistency so require. Thus waiver of privilege as to part of a communication, will be held to be waiver as to the entire communication.”

• “Similarly, where a litigant relies on legal advice as an element of his claim or defence, the privilege which would otherwise attach to that advice is lost”

S. & K. Processors Ltd. v. Campbell Avenue Herring Producers Ltd. (1983), 45 B.C.L.R. 218

Waiver of Privilege

• Dispute arose from purchase and sale of furniture business

• Price could be adjusted after closing according to inventory count

• Injunction sought against defendant

• In-house counsel for plaintiff swore affidavit deposing that she believed the plaintiff’s facts to be true and claims to be valid

Waived or Not Waived?

United Furniture Warehouse LP v. 551148 B.C. Ltd., 2007 BCSC 68

Waiver of Privilege

• Defendants take position that in-house counsel’s sworn statement constituted a waiver of privilege over the entire file

• The statement in the affidavit summarised advice given by in-house counsel to her client

• Prima facie solicitor-client privilege attaches to materials assembled or reviewed and discussed in order to formulate legal opinion



Waiver of Privilege

• “In the ordinary course, the fact that a client permits counsel to depose to advice that has been given to the client is sufficient to waive privilege in relation to the material that was assembled or reviewed and the discussions that occurred in the course of formulating the opinion.”

• Intentional expression of an opinion based on review of the claims to support injunction application was a waiver of in-house counsel’s review



PRIVILEGE WAIVED

Waiver of Privilege

• Petro-Canada applied for an order compelling Talisman in-house counsel to answer questions objected to during cross-examination

• Petro-Canada objected to an extension of time to file a Reply in response to Petro-Canada’s Amended Statement of Defence

• In-house counsel swore to the advice Talisman received to not file a Reply to the original Statement of Defence, and also Talisman’s belief that Petro-Canada’s original defence did not require a reply


Talisman Energy Inc. v. Petro-Canada Inc., 2000 ABQB 147

Waiver of Privilege

• Petro-Canada argued that solicitor-client privileged had been waived by Talisman giving evidence of privileged communications and relying on its own misunderstanding of the initial Statement of Defence, in relation to which it had received legal advice

• Waiver by pleading or giving evidence of privileged communication OR must the existence or adequacy of the legal advice be at issue?



Waiver of Privilege

• “Waiver is triggered by demonstrating reliance on legal advice for the resolution of an issue, not by the mere reference to having received it.”

• No waiver by Talisman’s affidavit merely swearing to having received legal advice in deciding not to file a Reply

• Court disagreed with Petro-Canada and did not find that Talisman’s position was that it misunderstood the original Statement of Defence; Talisman believed it did not need to reply until the amendments were made



PRIVILEGE NOT WAIVED

Waiver of Privilege

• Defendant sought production of 61 documents that the Plaintiff claimed solicitor-client privilege over

• Many documents were addressed or copied to in-house counsel; while others directed to him for his information

• In-house counsel gathered documents after being instructed to coordinate an investigation to consider whether the Plaintiff had a valid claim


H.B. Nickerson Ltd. v. Sommerville Belkin Industries Ltd., (1985) 72 N.S.R. (2d) 289

Waiver of Privilege

• A few of the documents had disclosed elsewhere during discovery

• Court found that the documents had been created for the dominant purpose of contemplated litigation

• The documents originated with or were received only by the employees directly involved in the internal investigation



Waiver of Privilege

• Since some of the documents had been disclosed during discovery, both solicitor-client and litigation privileges had been waived

• The waiver extended to all relevant documents dealing with the same subject as the documents disclosed during discovery



PRIVILEGE PARTIALLY WAIVED

Waiver of Privilege

• When this proceeding commenced a single Statement of Defence was filed on behalf of Mr. Strang and 2 corporate defendants, of which Mr. Strang was director, officer and shareholder

• As a result of a family law proceeding, Mr. Strange was enjoined from dealing with the companies and counsel withdrew as counsel for Mr. Strang as well as the companies


Biehl v. Strang, 2011 BCSC 213

Waiver of Privilege

• The companies obtained new counsel, but Mr. Strang represented himself—being a law graduate

• During discovery Mr. Strang has resiled from aspects of the Statement of Defence—the existence of a letter

• The Plaintiff argued that solicitor-client privilege was waived and sought all documents used to prepare the content of the Statement of Defence



Waiver of Privilege

• Mr. Strang during examinations stated that he didn’t instruct filing of the defence—no objections were made by the companies to this evidence

• Instead, the companies sought to call former counsel as a witness as to whether Mr. Strang approved the filing of the defence



Waiver of Privilege

• Mr. Strang understood the questions being asked and volunteered that he had not instructed counsel to file the defence

• Instructions from the defendants to their previous counsel were put in issue

• Fairness and consistency require that a party cannot disclose some privileged information for their benefit while protecting the full content of the information from the other side



PRIVILEGE WAIVED

Waiver of Privilege

• The companies were not found to have waived privilege, but would do so if called the former counsel as a witness

• Scope of the companies’ waiver only to the extent to rebut Mr. Strang’s assertions

• Waiver of privilege limited in scope to communications between Mr. Strang and former counsel regarding the statement of defence



PRIVILEGE WAIVED

Waiver of Privilege

• In litigation avoid pleading or giving evidence of state of mind or decision making based on legal advice

• Ensure witnesses do not reference or disclose privileged records while giving evidence

• Keep documents confidential and limit communication to 3rd parties that are not agents or employees of the company or legal counsel

• Employ non-disclosure agreements with non-waiver of privilege clauses where communications are circulated to 3rd parties

Best Practices

Extra-territorial Considerations

What’s protected by privilege in Canada, may not be in an American or European court proceeding


• Canadian Courts appear to take the view that solicitor-client privilege is governed by the law of the forum

• Solicitor-client privilege over legal advice provided by a foreign lawyer should be determined by the domestic law

• Advice provided by a domestic lawyer to a foreign client should be determined by the domestic law

• Whether foreign disclosure of information results in waiver should also be determined by the domestic law

Canada

Kain, Brandon, Solicitor-Client Privilege and the Conflict of Laws, The Canadian Bar Review, Vol. 90 2011 No. 2


• Attorney-client privilege applies to in-house counsel both with respect to corporate client and in communications with external counsel

• Communications between the client and in-house counsel are often subjected to heightened scrutiny because in-house counsel provide business or non-legal advice

• Attorney-client privilege that may apply can be based on State law, Federal law or sometimes even foreign law

United States


• Sarbanes-Oxley Act requires reporting by in-house counsel of material violation of law of breach of fiduciary duty up the corporate ladder to the CLO or CEO

• Reporting applies to any lawyer involved in an SEC filing

• If the CLO or CEO does not provide an appropriate response then counsel must report to audit committee, an independent committee of the board or the full board of directors

United States

Sarbanes-Oxley Act


• Requirement applied to foreign lawyers as well

• However, a foreign lawyer is not required to comply with the reporting requirement to the extent that compliance is prohibited by applicable foreign law

• The applicable law society rules of conduct are relevant

• “non-appearing foreign attorneys” are also exempted

United States

Sarbanes-Oxley Act


• Admitted to practice outside the US

• Must not hold himself or herself out as practising or give legal advice regarding federal or state securities or other laws, unless done in consultation with a US lawyer

• Appearing and practising before the SEC only incidentally to, and in the ordinary course of, their foreign practice OR done in consultation with a US lawyer

United States

Sarbanes-Oxley Act

“non-appearing foreign attorneys”


• In-house counsel in Europe may not receive the benefit of solicitor-client privilege

• Offices raided to search for evidence of anticompetitive behaviour

• Company claimed solicitor-client privilege over emails between the company and their in-house counsel

• The Court rejected the position that solicitor-client privilege arose between the company and its in-house counsel

European Community

Akzo Nobel Chemicals Ltd and Akcroz Chemicals Ltd v European Commission, EU Ct of Justice, September 14, 2010, Case No: C-550/07 P


• “An in-house lawyer cannot, whatever guarantees he has in the exercise of his profession, be treated in the same way as an external lawyer, because he occupies the position of any employee which, by its very nature, does not allow him to ignore the commercial strategies pursued by his employer, and thereby affects his ability to exercise professional independence.”

• “The in-house lawyer’s economic dependence and the close ties with his employer mean that he does not enjoy a level of professional independence comparable to that of an external lawyer.”

European Community

Akzo Nobel Chemicals Ltd and Akcroz Chemicals Ltd v European Commission, EU Ct of Justice, September 14, 2010, Case No: C-550/07 P

Expansion of the Crime-Fraud Exception

Courts have begun to expand the crime-fraud exception from solicitor-client privilege


• No solicitor-client privilege applies to a communication to further a crime or a fraud

• It is truly an exclusion because the communication can be disclosed for any purpose, even against the client

• There is some authority suggesting that privilege should not attached to communications made in furtherance of any unlawful conduct

• This might include breach of contract, torts, regulatory offences, etc.

R. v. Campbell, [1999] 1 SCR 565


• Defendants sought production of legal advice regarding commencement of the action and pre-judgment garnishment

• The Court accepted that abuse of process was a civil fraud falling under the exception and ordered a review of documents for wrongful purpose

• Intended crimes and frauds include “breaches of regulatory statute, breaches of contract, and torts and other breaches of duty”

Goldman, Sachs & Co. v. Sessions (1999), 38 CPC (4th) 143 (BCSC)


• Claim included an allegation of intentional or negligent infliction of emotional harm

• Ontario Superior Court accepted that an email from a board member to in-house counsel was not privileged because it was in furtherance of tortious conduct

• The email may demonstrate intent to inflict emotional harm to the Plaintiff

Dublin v. Montessori (2007), 85 OR (3d) 511 (ONSC)


• Breach of fiduciary duty and breach of contract are excluded from solicitor-client privilege

• The Plaintiff’s former employee was alleged to have appropriated confidential information and passed it to his subsequent employer Metcon

• Metcon’s counsel was alleged to have had communications with the employee in preparing a patent application

Northwest Mettech Corp. v. Metcon Services Ltd. (1997), 78 CPR (3d) 86 (BCSC)

Incident Investigation

What to consider when investigating an incident, collecting information and preparing a report.


• The client should instruct in-house counsel to investigate the incident for the purpose of providing legal advice to the client concerning anticipated litigation

• In-house counsel should appoint an investigation team

• Instructions to the investigation team should make clear that the purpose of the investigation is litigation and that the information gathered is not to be provided to third parties

Instructing the Investigation


• The investigation team can include in-house counsel or external counsel

• The instructions to in-house counsel or the retainer for external counsel should clearly state that the role in the investigation as as a solicitor and the purpose of fact-finding is to provide legal advice

• A report of fact-finding by counsel likely will not be subject to solicitor-client privilege

Instructing the Investigation

Gower v. Tolko (2001), DLR (4th) 716 (MBCA)


• The investigation team should protect their work product, including all records generated during the investigation—not only the final report

• Any records generated during the investigation and the final report should only be provided to the instructing counsel

• Instructing counsel should maintain strict control over all records produced by the investigation team as well as drafts and the final report

The Investigation Team


• Occupational Health and Safety Act (Alberta), s. 18(5) A report prepared under this section is not admissible as evidence for any purpose in a trial arising out of the serious injury or accident, an investigation or public inquiry under the Fatality Inquiries Act or any other action as defined in the Alberta Evidence Act except in a prosecution for perjury or for the giving of contradictory evidence

• Similar provisions in other statutes that compel incident reporting

Compulsory Reporting

Statutory Privilege


• Philip in preparation of a public offering of shares filed a prospectus with the OSC and a registration statement with the SEC

• Prior to filing, a board member admitted fraudulently diverting millions from the company

• Philip obtained legal opinions as to whether the fraud issue needed to be disclosed in its filings

• Philip did not disclose the fraud issue


Partial Waiver

Philip Services Corp. (Receiver of) v. Ontario Securities Commission (2005), 77 O.R. (3d) 209 (SCJ)


• After plunge in share price and insolvency, Philip came under OSC investigation

• Legal opinions had been given voluntarily to auditors, who provided them to the OSC pursuant to a summons

• The legal opinions provided to the auditors in that capacity constituted only a limited waiver

• The legal opinions remained privileged with respect to the OSC; auditors did not have authority to waive privilege


Partial Waiver

Philip Services Corp. (Receiver of) v. Ontario Securities Commission (2005), 77 O.R. (3d) 209 (SCJ)


• “[R]estrictions on solicitor-client privilege to attain other important societal objectives are to be closely scrutinized and restricted to what is absolutely necessary for the competing objective so as to achieve the minimal necessary impairment of solicitor-client privilege.” -G.D. Lane J.


Descôteaux v. Mierzwinski, [1982] 1 SCR 860

Philip Services Corp. (Receiver of) v. Ontario Securities Commission (2005), 77 O.R. (3d) 209 (SCJ) at para. 51


• The process of routinely submitting copies of documents to a lawyer in order to shield relevant and non-privileged documents is improper

• Solicitor-client privilege only attaches to records created to seek legal advice

• Litigation privilege only attaches to documents created for the dominant purpose of anticipated litigation

• Applies to both in-house and external counsel

Copying In-House Counsel on Records will not Attach Privilege

Guelph (City) v. Super Blue Box Recycling (2004), 2 CPC (6th) 276 (Ont. SCJ)

Cusson v. Quan (2004), 10 CPC (6th) 308 (Ont. SCJ)

Humberplex Developments Inc. v. TransCanada Pipelines Ltd., [2011] OJ No. 5876


• Litigation needs to be reasonably contemplated at the time the investigation was commenced and the materials created

• The investigation must be conducted for the dominant purpose of anticipated litigation

• In order to determine the dominant purpose, courts will consider the circumstances surrounding the creation of the records

Records Prepared During the Investigation



• Purpose of the investigation and the creation of the records

• When the records were created

• Who created the records

• Who authorised the creation of the records

• What use was, or could be made, of the records





• A bank employee was asked by in-house counsel to conduct an internal investigation after receipt of a human rights complaint

• The employee took notes throughout her interviews

• The notes were provided to the bank’s in-house counsel and were used by the employer in drafting a response letter


Reis v. CIBC Mortgages Inc., 2011 ONSC 2309


• In July 2003 the Defendant’s employee became aware of irregularities and began investigating

• Shortly after the supervisor advised employee of conversations with in-house counsel seeking direction and advice

• The investigating employee received directions from supervisor to conduct investigation

• Supervisor advised the employee that in cases of serious allegations the matter is brought to the attention of legal counsel and that legal advice is obtained on the conduct of the investigation


Poirer v. Wal-Mart Canada Corp., 2004 BCSC 1592


• Investigation and interviews regarding employee conduct culminated in a termination on October 6, 2003

• No litigation privilege since evidence suggested that decision to terminate not made until October 3, 2003

• Starting date for solicitor-client privilege was August 1, 2003 since there was no evidence on when advice regarding the investigation was obtained

• Affidavit would better have been sworn by the supervisor that obtained advice


Poirer v. Wal-Mart Canada Corp., 2004 BCSC 1592


• Solicitor client privilege may not attach unless requested for the purpose of enabling counsel to provide advice to the client

• Solicitor client privilege may not attach to reports prepared prior to counsel being retained or prior to contemplating preparation of the report to legal advice

• Litigation privilege will likely apply if third party is engaged in the course of providing legal advice in anticipation of litigation—privilege until trial

Expert Opinions

Hydro One Network Services Inc. v. Ontario (Ministry of Labour) (2002), 118 A.C.W.S. (3d) 144

College of Physicians of British Columbia v. British Columbia (Information and Privacy Commissioner), 2002 BCCA 665

Bookman v. Loeb, (2009) 72 RFL (6th) 388, [2009] O.J. No. 2741


• Draft versions of the final report should be circulated to investigation team members with express instructions to keep the information confidential

• All copies of draft versions should be returned to instructing counsel or destroyed

• Legal action, if any, should be taken after the investigation report is released

• Company policy changes should be taken prior to the release of the report

The Investigation Report

R. v. Bruce Power Inc., 2009 ONCA 573

Presentation Download

http://www.fasken.com/arif-chowdhury/

Prepared with the research and assistance of:

Sierra HeislerStudent-at-LawFasken Martineau DuMoulin LLP

Dhruv Gupta

Student-at-Law

Fasken Martineau DuMoulin LLP

http://www.fasken.com/arif-chowdhury/

Authorities Cited

• Adam Dodek, “Solicitor-Client Privilege in Canada: Challenges for the 21st Century” (2011) Canadian Bar Association

• Akzo Nobel Chemicals Ltd and Akcroz Chemicals Ltd v European Commission, EU Ct of Justice, September 14, 2010, Case No: C-550/07 P

• Balabel v Air-India, [1988] 2 ALL ER 246 (CA), 2 WLR 1036• Blank v Canada (Department of Justice), 2006 SCC 39, 2 SCR 319• Bookman v Loeb, (2009) 72 RFL (6th) 388, [2009] OJ No 2741• College of Physicians of British Columbia v British Columbia

(Information and Privacy Commissioner), 2002 BCCA 665, 2 WWR 279• Cusson v Quan (2004), 10 CPC (6th) 308, 133 ACWS (3d) 41• Descôteaux v Mierzwinski, [1982] 1 SCR 860 (available on CanLII)• Domcan Boundary Corp v Enron Canada Corp (2006), 53 Alta LR (4th)

309, 6 WWR 505

Authorities Cited (cont’d.)

• Dublin v Montessori (2007), 85 OR (3d) 511 (available on CanLII) • Fraser Milner Casgrain LLP v Canada (MNR), 2002 BCSC 1344, 11

WWR 682• General Accident Assurance Co v Chrusz (1999), 45 OR (3d) 321, [1999]

OJ No 3291• Glegg v Smith & Nephew Inc, 2005 SCC 31, 1 SCR 724• Goldman, Sachs & Co v Sessions (1999), 38 CPC (4th) 143, 93 ACWS

(3d) 231• Gower v Tolko, 2001 MBCA 11, 196 DLR (4th) 716• Guelph (City) v Super Blue Box Recycling (2004), 2 CPC (6th) 276, 134

ACWS (3d) 787• HB Nickerson Ltd v Sommerville Belkin Industries Ltd (1985), 72 NSR

(2d) 289, 36 ACWS (2d) 323


• Humberplex Developments Inc v TransCanada Pipelines Ltd, 2011 ONSC 4815, 210 ACWS (3d) 548

• Hydro One Network Services Inc v Ontario (Ministry of Labour) (2002), 118 ACWS (3d) 144, [2002] OJ No 4370

• John Sopinka et al, The Law of Evidence in Canada, 3rd ed (Toronto: LexisNexis Butterworths, 1999)

• Mahmud Jamal, “The Supreme Court of Canada on Solicitor-Client Privilege: What Every Practitioner Needs to Know” (2007) Canadian Bar Association On-Line CLE

• Mutual Life Assurance Co of Canada v Canada (Deputy Attorney General) (1988), 28 CPC (2d) 191, OJ No 1090

• NEP Canada ULC v MEC OP LLC, 2013 ABQB 54, 2013 AJ No 984


• Northwest Mettech Corp v Metcon Services Ltd (1997), 78 CPR (3d) 86, 75 ACWS (3d) 822

• Nova v Guelph Engineering Company , 1984 ABCA 38, 5 DLR (4th) 755• Philip Services Corp (Receiver of) v Ontario Securities Commission

(2005), 16 CPC (6th) 193, 77 OR (3d) 209• Pitney Bowes of Canada Ltd v Canada, 2003 FCT 214, 225 DLR (4th)

747• Podovinikoff v Montgomery (1984), 14 DLR (4th) 716, 58 BCLR 204• Poirer v Wal-Mart Canada Corp, 2004 BCSC 1592, [2004] BCJ No 2571• Pritchard v Ontario, [2004] 1 SCR 809, 1 SCR 809• R v Bruce Power Inc, 2009 ONCA 573, 245 CCC (3d) 315• R v Campbell, [1999] 1 SCR 565 (available on CanLII)


• R v Shirose, [1999] 1 SCR 565, at para 50, [1999] SCJ No 16• R v Solosky, [1980] 1 SCR 821 (available on CanLII)• Re: Teleglobe Communications Corp, 493 F3d 345 (3d Cir 2007)• Reis v CIBC Mortgages Inc, 2011 ONSC 2309, [2011] OJ No 1778• Robichaud v Clarica Life Insurance Co (2007), 53 CCLI (4th) 234, 160

ACWS (3d) 612• Roger Cramton, George Cohen & Susan Koniak, “Legal and Ethical

Duties of Lawyers after Sarbanes-Oxley” (2010) Boston University School of Law

• Royal Bank of Canada v Societe-Generale (Canada), [2005] OJ No 4383, 143 ACWS (3d) 257

• Sable Offshore Energy Inc v Ameron International Corp, 2013 SCC 37, 2 SCR 623


• S & K Processors Ltd v Campbell Avenue Herring Producers Ltd (1983), 4 WWR 762, 45 BCLR 218

• “Solicitor-Client Privilege – Sarbanes-Oxley Act” (2013) Canadian Bar Association Legal and Governmental Affairs

• Talisman Energy Inc v Petro-Canada Inc, 2000 ABQB 147, 262 AR 344• Toronto-Dominion Bank v Leigh Instruments Ltd (Trustee of), [1997] 32

OR (3d) 575, [1997] OJ No 1177 • United Furniture Warehouse LP v 551148 BC Ltd, 2007 BCSC 68, 154

ACWS (3d) 564• Waugh v British Railways Board, [1980] AC 521, [1979] 2 All ER 1169

(HL)• Wexler v Suncor Energy Products Inc (2007), 223 OAC 141, [2007] OJ

No 994