Waiver of Lawyer Client Privilege

Waiver of Lawyer Client Privilege

Waiver of lawyer client also known as solicitor client privilege, was reviewed in the Court of Appeal decision Araya v Newvson Resources 2019 BC CA 205.

The appeal court upheld a case management judge’s order declaring that the plaintiffs impliedly waived solicitor client privilege over communications and documents related to the claims up to and including their first meetings with Canadian legal Counsel by the virtue of having plead postponement of the running of the limitation period until they accessed legal advice in Canada. 80 various parties had made the same plea of postponement. They involuntarily injected into their pleadings the legal advice that they had obtained.

The court held that fairness and consistency required the plaintiffs to disclose all communications and documents related to the pursuit of their claims up to and, and including the contents of their first meeting with Canadian legal counsel to allow the defendant to test what knowledge they had or was available to them in respect of their claims.

There was an additional order upheld where the court ordered disclosure of a third-party retainer in order to assist in determining whether related communications are protected by litigation privilege.

The case was narrow in its facts in the sense that the question of waiver turned on the pleadings, which is not nearly as common as other acts that can be found to be waiver of solicitor client privilege.

The plaintiffs had by their plea voluntarily injected into the litigation the legal advice they had received, and thus waived solicitor client privilege.

The Law of Waiver of Solicitor Client Privilege

Waiver of privilege is ordinarily established where it is showing that the possessor of the privilege:

1) Knows of the existence of the privilege; and

2) Voluntarily evinces an intention to waive that 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 defense, the privilege which would otherwise attached to that advice is lost. S&K Procesors v Campbell Ave. Herring Producers Ltd. (1983) 45 BCLR 218

Privilege can be waived by implication. Waiver by implication was addressed in the Law of Evidence In Canada- Sopinka 1999 at 758:

“As to what constitutes waiver by implication, Wigmore stated judicial decision gives no clear answer to this question. In deciding it, regard must be had to the double elements that are predicated in every waiver. For example, not only the element of implied intention, but also the element of fairness and consistency. A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that is privileged shall cease whether he intended that result are not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or disclose, but after a certain point his election must remain final.

At paragraph 24 of Araya the court stated that “ in my view, the authorities in this province to not clearly preclude the approach taken by the judge, although, on balance, I think the weight of authority supports the proposition that a party must voluntarily injected into the litigation legal advice, it received or its understanding of the law before waiver can be implied.”

Privilege: Documents Made In Contemplation of Litigation

Privilege: Documents Made In Contemplation of Litigation

In Hamalainen (Committee of) v. Sippola (1992) 2 WWR 132 the BC Court of Appeal outlined the law relating to privilege for documents that are prepared in contemplation of litigation.

At issue is whether an insurance adjusters reports respecting a car accident that denied the plaintiff’s claim, had been prepared for the principal purpose of assisting in preparation and conduct of litigation, and if so, whether they were privileged documents that need not be produced to the opposing counsel, or alternatively were they prepared in routine conduct of an investigation, in which case they would not be privileged and must be divulged.

The appeal court dealt with the decision in which the master was found not to of erred in law and finding on the evidence that the adjusters reports had not met the dominant purpose test, and thus were producible to the opposing party.

The court started with the review on how to apply what was adopted by the Court of Appeal in Voth Brothers Construction 1974 LTD v North Vancouver School District Number 44 29 BCLR 114 for deciding questions of privilege associated with documents in the possession of one party and sought by another during the course of litigation.

The Court of Appeal followed it’s own Voth decision that had adopted the reasoning of the Australian High Court in Grant v Downs (1976 135 CLR 674 that stated:

“I have come to the conclusion that the court should state the relevant principle as follows: a document which was produced are brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production and reasonable prospect, should be privilege and excluded from inspection.”

Any attempt to apply the rule when determining a claim of privilege with respect to a document necessary requires the two factual determinations be made:

1) was litigation and reasonable prospect that the time it was produced, and
2) if so, what was the dominant purpose for its production?

The onus is on the party claiming privilege to establish on a balance of probabilities that both tests are met in connection with each of the documents falling within the claim.

If it is established that litigation was in reasonable prospect from the outset, the claim of privilege must necessarily prevail.

A reasonable prospect does not mean something more than a mere possibility, for such possibility must necessarily exist in every claim for loss due to injury whether that claim could be advanced in tort or contract. On the other hand, a reasonable prospect clearly does not mean a certainty, which could hardly ever be established unless a Red Hat actually issued. In my view, litigation can properly be said to be in reasonable prospect when a reasonable person, possessed of all pertinent information including that particular to one party or the other, would conclude it is unlikely that the claim for loss will be resolved without it. The test is not one that will be particularly difficult to meet.

The more difficult question to resolve is whether the dominant purpose of the author, or the person under whose direction each document was prepared, was to use its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation.

On occasion there is more than one identifiable purpose for the production of the report for which privilege is claimed.

Even in cases where litigation is in reasonable prospect from the time a claim first arises, there’s bound to be a preliminary period during which the parties are attempting to discover the cause of a car accident in which the claim is based. At some point in the information gathering process the focus on such an inquiry will shift such that its dominant purpose will become better preparing the party for women was conducted for the anticipated litigation. In other words, there is a continuum which begins with the incident giving rise to the claim and during which the focus of the inquiry change and what point the dominant purpose becomes that of further in the course of litigation will necessarily fall to be determined by the facts peculiar to each case.

What Constitutes Practicing Law

What Constitutes Practicing Law

Vogt v Scott 2015 BCSC 1725 reviews the essential elements of what constitutes the practice of law, as defined by the Legal Professions act.

There has been much discussion recently in the United States as to whether Michael Cohen was acting as President Trumps lawyer or not, or was merely something else, such as a “fixer”. A review of in excess of 1 million documents of Cohen’s determined  that most of them were outside the scope of practicing law and thus were not governed by the principle of solicitor client privilege.

The Vogt decision involved a dispute about a lawyers statements of accounts totaling $35,000, in which the lawyer was acting as a “parenting coordinator for the parties to assist in implementing the parenting plan for their children.

The court held that the lawyer in acting as a parenting coordinator was not in fact acting as a lawyer practicing law, as defined by the Legal Professions act, and thus the amount of the disputed accounts were not reviewable under the Legal Professions act, and instead were a matter of contract.

The same principle would apply to disputing an account rendered by a mediator.

The court defined the practice of law at paragraph 27 as follows…

Practice of Law includes:

a) appearing as counsel or advocate,
b) drawing revising or settling:
1) a petition, memorandum, notice of articles or articles under the business corporations act, or an application, statement, affidavit, minute, resolution, by law, or other documents relating to the incorporation, registration, organization, reorganization, dissolution or winding up of a corporate body;
2) a document for use in a proceeding, judicial or extrajudicial;
3) a will, deed of settlement, trust deed, power of attorney, or a document relating to a probate or a grant of administration or the estate of a deceased person
4) a document relating in any way to a proceeding under a statute of Canada or British Columbia, or
5) an instrument relating to real or personal estate that is intended, permitted or required to be registered, recorded or filed in the registry or other public office

c) Doing enactor negotiating in any way for the settlement of, or settling, claim or demand for damages;
d) agreeing to place of the disposal of another person the services of a lawyer;
e) giving legal advice;
f) making an offer to do anything referred to in paragraphs a-e;
g) making a representation by a person that he or she is qualified are entitled to do anything referred to in paragraphs a-e

Practice of law does not include:

h) any of those tasks if performed by a person who is not a lawyer or not for or in the expectation of a fee, gain or  reward, direct or indirect, from the person for whom the acts are performed
i) the drawing, revising a settling of an instrument by a public officer in the course of the officers duty;
j) the lawful practice of a Notary Public;
k) the usual business carried on by an insurance adjuster who is licensed under the financial institutions act;
l) agreeing to do something referred to in paragraph G if the agreement is made under a prepaid legal services plan, or other liability insurance program.

The definition provided by the legislation is inclusive and not exclusive.

The court concluded that the bills rendered by the parenting coordinator, even though he was a lawyer, to not represent a bill or fees, charges and disbursements to be paid to a lawyer or law firm for services provided pursuant to an agreement for the purposes of part eight of the Legal Professions act. As a consequence, the registrar had no jurisdiction, pursuant to the Legal Professions act to embark upon a review of the bill submitted.

Implied Waiver of Solicitor Client Privilege Restricted

Implied Waiver of Solicitor Client Privilege Restricted | Disinherited

HMB Holding Ltd v Replay Resorts Inc 2018 BCCA 263 reviewed the law relating to implied waiver of solicitor client privilege and restricted it’s application.

Communications with respect to legal advice between a lawyer and the client is generally speaking a near absolute protection that cannot be disclosed.

In the ordinary course of litigation, the question of waiver of solicitor client privilege will arise in one of two ways:

1. a litigant will challenge a list of documents that asserts privilege over documents, and bring an application in relation to particular documents listed, but not disclosed;

2. a litigant may refuse to answer a question based on the assertion of privilege, permitting a narrow order to be sought together to the question asked on the scope of the waiver claimed.

The two leading cases on implied waiver of privilege prior to this decision were Doman Forest Products LTD v GMAC Commercial Credit Canada 2004 BCCA 512 and Soprema inc v Woldridge Mahon LLP 2016 BCCA 471.

In Soprema the BCCA explain the starting point for understanding the test for implied waiver at paragraph 50:

“ The starting point of an articulation of the test for implied waiver must recognize with the Supreme Court of Canada has made clear about the importance of solicitor client privilege. In R. v McClure 2001 SCC 14 at paragraph 35, the court said that solicitor client privilege must be as close to absolute is possible to ensure public confidence and retain relevance. As such, it will only yield in certain clearly defined circumstances, and does not involve a balancing of interests on a case-by-case basis. Furthermore, the court said at paragraph 17 that solicitor client privilege is part of the fundamental Canadian legal system-it has evolved into a fundamental than substantial of rule of law. This view was affirmed in Goodis v Ontario 2006 SCC 31 at paragraphs 20 – 21, where the Supreme Court of Canada made clear that communications protected by privilege should be disclosed only where absolutely necessary, applying as restrictive a test is may be formulated short of an absolute prohibition in every case quote”

In an Ontario judgment Creative Career Systems, Inc. v. Ontario 2012 OH NSC 649 at paragraph 31, cited Sopinka : The Law of Evidence in Canada, fifth edition, at4,159:

“waiver is 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 is a substantial development of his or her claim or defence “

In Soprema the BCCA explained that voluntarily injecting into the litigation requires more than a statement of the litigants understanding of the law. It normally would require a pleading of reliance on legal advice (or the absence of legal advice as in Do Process LP v Infokey Software Inc 2015 BCCA 52).
In a proper case, evidence of such reliance. If it goes to a material issue may be sufficient, and even argument that the evidence shows reliance on legal advice can give rise to an implied waiver R. V Campbell (1999) 1 SCR 565

The appeal court in HMB Holdings overturned the Chambers Judge decision on the basis that the correct test for waiver was improperly applied when the judge concluded that by asserting that the conspiracy claim had been filed when it was filed to protect limitation period that the plaintiff was waiving privilege over solicitor client communications on the subject.

The court adopted the language in paragraph 51 of Soprema that the test relied on by the judge does not automatically give effect to the near absolute protection of solicitor client privilege mandated by the Supreme Court “

Solicitor Client Privilege and the Will File

Solicitor Client Privilege Upheld By Highest Court

Solicitor client privilege and the will file can often end up in a tug of war between the executor upholding a claim of privilege after the death of the estate deceased, and beneficiaries who want to see the lawyers notes and other file contents of the same deceased.

The decision of Chang v. Lai Estate 2014 BCSC 128 discusses these competing principles in the context of the advice re a   wills variation action was also in the same file as advice and documentation relating to the administration of the estate.

The court held that solicitor client privilege should apply where the beneficiaries are in an adversarial relationship with the executor. Solicitor client privilege will remain in place to preserve the confidentiality of those communications. There must be a joint for common interest before the court will entertain disclosing such communications, as otherwise they will remain privileged.

[16] It is well established that a beneficiary has a proprietary interest in and a right to production of any document relating to advice sought and obtained by an executrix or trustee in connection with the administration of an estate. The executrix cannot claim solicitor-client privilege over such documents because they have a commonality of interest with the beneficiaries in the administration of the estate. The advice taken by the executrix is for the benefit of all beneficiaries under the will. There is no need to protect solicitor-client communications from disclosure because the beneficiaries and the executrix have a joint interest in the advice: Re Ballard Estate at p. 354. The same principle applies to legal opinions the executrix obtains regarding the proper administration of the estate. No solicitor-client privilege applies because the legal opinion sought by the executrix was to further the interests of the beneficiaries under the will: Re Ballard Estate at p. 354.

[17]         The beneficiary is not, however, entitled to production of all communications between legal counsel and the executrix. Where there is an adversarial relationship between a trustee and a beneficiary, there is no “joint interest” that compels disclosure of communications that would normally be protected by solicitor-client privilege. As Lederman J. says in Re Ballard Estate at p. 354:

… there is no need to protect the solicitor-client communication from disclosure to those very persons who are claiming under the estate. The communications remain privileged as against third parties who are strangers or are in conflict with the estate, but as was stated in Stewart v. Walker, supra, not those who are claiming under the estate. And that is because the trustee and beneficiary have a joint interest…

[18]         The requirement for a joint or commonality of interest was recognized in MacPherson, where Humphries J. says at para. 18:

Both sides cited cases which stand for the same basic proposition:  A beneficiary has a proprietary interest in and is entitled to production of documents relating to advice sought and obtained by a trustee in connection with the administration or management of, for instance, a pension plan, or an estate (see Froese v. Montreal Trust Co. of Canada [1993] B.C.J. No. 1529 (S.C.), aff’d [1993] B.C.J. No. 1847 (C.A.); Re Ballard Estate [1994] O.J. No. 2281 (Gen. Div.); Cooke et al v. Canada Trust  (Van. Reg. No. S011763, October 22, 2004; leave to appeal granted); Merritt v. Imasco Enterprise Inc. [1992] B.C.J. No. 2011; Thomas v. Secretary of State for India in Council (1870) 18 W.R. 312 (Ch.)), but not to documents that arise in the course of an adversarial relationship between the trustee and beneficiary.

[19]         There are clearly conflicting principles in this case. On the one hand, it is of the utmost importance to protect solicitor-client communications from disclosure. The law has consistently upheld the confidential nature of such communications and strictly construed the circumstances that may be regarded as an implicit waiver of the privilege. On the other hand, the beneficiaries of a trust are entitled to production of documents that fall broadly within the category of administration of the estate.

[20]         Balancing these conflicting principles, I find that the issue in this case must be resolved in favour of the plaintiffs. The underlying basis for exempting from solicitor-client privilege those documents that relate to advice sought in connection with the administration of the estate is the joint or common interest of the trustee and the beneficiary. It follows that where the beneficiary is in an adversarial relationship with the executrix, solicitor-client privilege remains in place to preserve the confidentiality of those communications. In this case the defendants do not have a common or joint interest with the plaintiffs regarding the wills variation action. Their interests are clearly in conflict due to the variation of the will sought by the plaintiffs. Thus legal advice sought and received for that purpose remains privileged.

[21]         Furthermore, the fact that the plaintiffs retained the same legal counsel to act for them in regard to the wills variation action and the administration of the estate does not amount to a waiver of solicitor-client privilege. Regardless of whether Mr. Takahashi was in a conflict of interest position (and in light of the practice in estate law this is questionable), the plaintiffs cannot be taken to have waived solicitor-client privilege because he acted in both capacities. The fact that Mr. Takahashi kept the same file for both the wills variation litigation and the administration of the estate is unfortunate; however, it does not evidence a waiver of solicitor-client privilege by his clients qua plaintiffs in the wills variation action.

[22]         For these reasons, I dismiss the defendants’ application for production of the remaining documents from Mr. Takahashi’s file”

 

Lawyer Privilege: What is Included and What isn’t?

Privilege-of-Privilege

FACTS OF CASE: reviews in detail the types of documents and information that are covered by solicitor client privilege, those that are not, and the legal reasoning.

The respondents were appointed trustees in foreign bankruptcy proceedings of the appellant bankrupt. They sought an order requiring the appellant law firm to disclose accounting information relating to the bankrupt. The chambers judge found the law firm’s trust ledgers were not presumptively privileged nor did they arise out of communication for the purposes of obtaining legal advice. Disclosure was ordered with the exception of any notes relating to legal advice or communications for the purpose of legal advice.

The Appeal Court held the Chambers Judge  was correct in concluding the trust ledger was not presumptively privileged and disclosure would not violate the client’s right to communicate in confidence with his legal advisor.

The chambers judge succinctly described the principles of solicitor-client privilege established in the jurisprudence and reiterated by the Supreme Court of Canada in Maranda v. Richer, 2003 SCC 67, [2003] 3 S.C.R. 193. Following Descôteaux v. Mierzwinski, [1982] 1 S.C.R. 860, 141 D.L.R. (3d) 590, and Donell v. GJB Enterprises Inc., 2012 BCCA 135, he proceeded on the basis that:

a)     Solicitor-client privilege is a fundamental substantive right of the client founded upon the unique relationship of solicitor and client;

b)     At a minimum, Maranda establishes that lawyers’ bills, in the criminal law context, are presumptively subject to solicitor-client privilege;

c)     This presumption flows from the connection between lawyers’ bills and the nature of the relationship between lawyers and clients; the account reflects work done on behalf of the client which involves communications that are privileged;

d)     The presumption may be rebutted if it is established that there is no reasonable possibility that disclosure will directly or indirectly reveal any communications protected by privilege;

e)     Maranda did not do away with the distinction between evidence of communications, which is privileged, and evidence of facts, which is not;

f)     Financial records of lawyers other than records of bills are not presumptively subject to solicitor-client privilege insofar as they merely represent records of actions or facts, but they should not be produced automatically solely for that reason;

g)     Maranda mandates that it is necessary to consider such records in order to determine whether they arise out of the solicitor-client relationship and what transpires within it, that is, communications to obtain legal advice;

h)     If it is concluded that the records do arise out of that relationship and what transpires within it, they are presumed to be privileged, but the privilege can be rebutted and the document produced if it is established that production will not permit the deduction or acquisition of communications protected by solicitor-client privilege.

[17]         The chambers judge concluded that most of the information sought by the Trustees was evidence with respect to the objective state of affairs: the value of funds held in trust for Mr. Luu; the record of funds provided to the firm by Mr. Luu or received by the firm to his credit; and records relating to activities in the trust account. He concluded this information was not presumptively privileged.

[18]         Having decided that those specific records were not presumptively privileged, the chambers judge went on to consider whether the information recorded might nevertheless be said to arise out of communications for the purposes of obtaining legal advice. The records had not been produced for examination

Discussion

[32]         The chambers judge properly noted that the right to communicate in confidence with one’s legal advisor is a fundamental civil and legal right, founded upon the unique relationship of solicitor and client: Solosky v. The Queen (1979), [1980] 1 S.C.R. 821, 105 D.L.R. (3d) 745; and Descôteaux.

[33]         That right is not lost to a bankrupt and cannot be waived by a trustee in bankruptcy, even where doing so might reveal the whereabouts of some of the bankrupt’s property: Re Chilcott and Clarkson Co. Ltd. (1984), 48 O.R. (2d) 545, 13 D.L.R. (4th) 481 (C.A.); and Bre‑X Minerals Ltd. (Trustee of) v. Verchere, 2001 ABCA 255.

[34]         While Chilcott stands for the proposition that a trustee cannot waive the privilege that attaches to communication between the bankrupt and his solicitors, it does not stand for the broad proposition that any and all information in the hands of the bankrupt’s solicitors, with respect to the bankrupt’s affairs, is privileged. To the contrary, the solicitors were ordered to make significant disclosure in Chilcott. The Alberta Court of Appeal in Bre‑X described the issues in Chilcott as follows:

[37]      … [I]n that case, a solicitor acted on behalf of the bankrupt prior to the bankruptcy and advised the bankrupt on financial and other corporate matters. The trustee sought to examine the solicitor regarding privileged communications with the bankrupt. Although the court accepted that the solicitor could be compelled to disclose information about the bankrupt’s property, affairs and transactions, the court held that information on any topic necessarily involving disclosure of communications made between the solicitor and the bankrupt for the purpose of giving legal advice could not be disclosed. Ultimately, the court refused to speculate on circumstances in which a trustee might properly waive a bankrupt’s privilege, but it concluded that the goal of protecting creditors’ rights, standing alone, could not defeat solicitor-client privilege.

[Emphasis added.]

[35]         The dispute in the case at bar required the chambers judge to follow both the line of cases, including this Court’s recent decision in Donell, requiring solicitors to disclose records of trust transactions, and the line of cases including Descôteaux and Maranda, that extend solicitor-client privilege to information concerning lawyers’ bills including the client’s ability to pay the lawyer and any other information which a lawyer is reasonably entitled to require before accepting the retainer. The appellants say the judge erred in striking a balance between competing interests in the case at bar. The amount paid for legal fees may be deduced from the information the firm has been ordered to disclose; that being the case, the order intrudes upon privileged communications. The appellants say the courts have recently and strongly reaffirmed the rule that solicitor-client privilege must be rigorously protected. It should not be balanced against competing interests in disclosure.

[36]         In my view, the chambers judge was correct to say there is no presumption that the information in a solicitor’s trust ledger is privileged. Making such a presumption would be inconsistent with this Court’s decision in Donell. The chambers judge cited extensively from the majority judgment in Donell and rightly, in my opinion, found in that judgment an answer to the appellant’s objections to production of the ledger.

[37]         In that case, the court-appointed receiver’s application for production of a law firm’s records of the business, affairs or property of the respondents was dismissed. The chambers judge found solicitor-client privilege attached to all of the files and documents in the possession of the firm. On appeal, the majority noted that in R. v. Joubert (1992), 7 B.C.A.C. 31, 69 C.C.C. (3d) 553, this Court, at 569, concluded that a record of money paid into and out of a lawyer’s trust account was not subject to solicitor-client privilege. In response to the argument that trust accounts had historically been disclosed because they were considered to record facts, rather than communications, and the argument such a distinction had been done away with in Maranda, Chiasson J.A. noted in Donell:

[43]      Much has been made of LeBel J.’s treatment in Maranda of the distinction between communications and actions or facts. In this province there has been debate as to whether Maranda did away with the distinction. In my view, it did not.

[44]      It is important to remember that the issue before the Supreme Court concerned the production of a lawyer’s bill for fees and disbursements. This was the issue that was placed into the context of the distinction between communications and facts.

[38]         A lawyer’s bills are presumptively privileged because they are ordinarily descriptive; by recording the work done by the solicitor, they disclose the client’s instructions, which the client cannot be compelled to divulge and the confidentiality of which the solicitor is obliged to protect. Chiasson J.A. noted:

[49]      I see nothing in Maranda that erodes generally or does away with the distinction between facts and communications. The case concerned a specific type of document ‒ a lawyer’s fee account ‒ which is intrinsically connected to the solicitor-client relationship and the communications inherent to it; to repeat LeBel J.’s formulation, “[t]he existence of the fact consisting of the bill and its payment arises out of the solicitor-client relationship and what transpires within it”. As noted by LeBel J., what transpires within that relationship is communication for the purpose of enabling clients to obtain legal advice; it is that communication that is protected by solicitor-client privilege.

[39]         The privilege extends to administrative facts tending to reveal the nature or extent of legal assistance sought and received. However, there is good reason not to extend the presumed privilege to the trust ledger. The entries in a trust account record the possession of and movement of funds which the client may be compelled to disclose. Insofar as the entries record the payment of funds to parties who do not owe a duty of confidence to the client, the client cannot have expected the fact of payment to remain confidential as between himself and his counsel.

[40]         After concluding that the trust leger was not presumptively privileged, the chambers judge correctly engaged in the exercise described in Donell by considering whether the entries on the trust ledger would contain information ancillary to the provision of legal advice. In Donell, the Court noted:

[51]      In the present case, we are not concerned with a lawyer’s bill. The Receiver seeks production of trust ledgers. Generally, such documents record facts, not communications, and are not subject to solicitor-client privilege, but I would not favour a blanket endorsement of the automatic production of such records. In my view, while the analysis in Maranda did not dispose of the distinction between facts and communications, it requires the court to ensure that entries on a trust ledger do not contain information that is ancillary to the provision of legal advice.

[41]         In other words, Maranda restates the importance of ensuring that disclosing factual information, such as administrative facts recorded in the lawyer’s file, does not give the recipient insight into protected communications he is not entitled to receive. The determination that the information sought is factual does not bring an end to the analysis.

[42]         In the case at bar, in my opinion, the chambers judge rightly held that disclosure of a redacted trust ledger would not violate the client’s right to communicate in confidence with his legal advisor. That is precisely the exercise endorsed by Chiasson J.A. for this Court in Donell, where he wrote:

[55]          I adopt the reasoning of the Alberta Court of Appeal [in Wyoming Machinery Co. v. Roch, 2008 ABCA 433, [2009] 3 W.W.R. 433]. In my view, whether the financial records of a lawyer are subject to solicitor-client privilege depends on an assessment of the connection between the record in issue and “the nature of the relationship in question” (Maranda at para. 32). As was held in Maranda, a lawyer’s bill arises out of the solicitor-client relationship and generally will be protected. This is because bills flow out of communications between the solicitor and the client seeking legal advice. In Greymac, the court held that generally evidence of deposits to and transfers from a lawyer’s trust account is evidence of facts, not of communications. The court held that such records are not privileged, adding the caveat that the “advice and communications from the client relating to advice” must be expunged (para. 22).

[43]         While in some cases knowing the amount spent on legal services in relation to a particular matter or issue will give the recipient of that information some insight into the solicitor-client relationship, no significant insight is gained by the disclosure ordered in this case. It cannot be said that deductive reasoning will permit the recipient of the records of trust transactions in the period from August 1, 2011 to July 31, 2013 to learn anything of value with respect to the solicitor-client relationship. The solicitors were first retained in 2007. They had opened an undetermined number of litigation files. The order requires disclosure of records for a discrete period. The recipient of the records may be able to determine, by deduction, how much was paid, in total, for legal services from trust in the relevant period but will not be able to determine what amount was paid for services actually provided to Mr. Luu by the firm during the period from August 1, 2011 to the July 31, 2013, because the records will disclose only payment of accounts, not when the work was done. Some payments may be for work performed before the August 1, 2011. Some of the work performed in the period may have been billed or paid after July 31, 2013. Disclosure of the trust records will not even permit the recipient to determine what fees were billed for legal work during the period because the recipient will learn only what accounts were paid from the trust account. Last, the recipient will not be able to determine which of the litigation files handled by the firm were billed and paid from trust during the period covered by the order.

[44]         The subsequent decisions of this Court and the Supreme Court of Canada in Federation of Law Societies of Canada v. Canada (Attorney General), 2013 BCCA 147, varied 2015 SCC 7, and the recent decision of the Québec Court of Appeal in Canada (Procureur général) c. Chambre des notaires du Québec, 2014 QCCA 552, leave to appeal granted February 9, 2015, [2014] S.C.C.A. No. 234, restate the fundamental importance of solicitor-client privilege as a substantive rule of law, as established in Solosky; Descôteaux; Smith v. Jones, [1999] 1 S.C.R. 455 at 474‑476; Lavallee; Pritchard v. Ontario (Human Rights Commission), 2004 SCC 31 at paras. 14 to 21; Goodis v. Ontario (Ministry of Correctional Services), 2006 SCC 31 at paras. 12 to 25; and Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44 at paras. 9 to 11. In my view, however, the decisions do not detract from the approach described in Donell to determining what information, with respect to financial transactions in the hands of solicitors, is privileged.

[45]         As the Québec Court of Appeal noted in Chambre des notaires du Québec, after discussing the “quasi-absolute privilege” described by the Supreme Court of Canada:

[50]      That said—and it is also borne out by the aforementioned case law—not all information that passes between a client and his or her legal adviser is subject to professional secrecy, of course. So, what is subject to it must be distinguished from what is not. How can this be done? Per LeBel J. in Foster Wheeler [2004 SCC 18], we must “use an analytical method that upholds professional secrecy while allowing us to resolve difficulties of this sort”.

[Unofficial English translation provided by Société québécoise d’information juridique (SOQUIJ).]

Failing to Consider Alternate Remedies

[46]         The appellants say the chambers judge erred by ordering production of documents from the records of the solicitors when there was another source of the same information: Mr. Luu himself. In my view, there is no merit to this submission. While evidence should not routinely be sought in a client’s lawyer’s office and all reasonable alternatives to doing so must be canvassed, the application before the chambers judge in this case was not an end-run around a more appropriate procedure. The solicitors were not being used as a shortcut to evidence better sought elsewhere.

[47]         Mr. Luu is a party to these proceedings. Murray Jamieson continues to act for Mr. Luu in his personal capacity. He is not separately represented on this appeal, nor was he separately represented before the chambers judge. In effect, it is Mr. Luu advancing the claim for privilege and resisting the production of the information now in the hands of his solicitors. It is fair to presume he would oppose production of the information sought by asserting the same privilege if an application were brought in Hong Kong. The claim is properly determined here.

Will Drafters File Privileged In Wills Variation Cases

privileged in wvaPlaintiff’s counsel invariably want to obtain and review the will drafters file in wills variation, but in wills variation cases the lawyer’s file is usually privileged,  confidential and not compellable , ( but not so when the validity of the will itself is in question.

Chang v Lai Estate 2014 BCSC 128 involved 3 daughters of the deceased and residuary beneficiaries of their mother`s estate, consulted with lawyer T re probating the will.

Unhappy with the will`s provisions however, the same 3 sisters also obtained advice from the same lawyer T re a wills variation action.

Some time later, the plaintiffs renounced their positions as executors and commenced a wills variation action.

The defendants  claimed a right to review the lawyer T`s entire  file .

Justice Bruce held that the defendants were only entitled to that portion of the file concerning the administration of the estate ( ie the assets, debts and proposed distribution ) and not any portion of the file relating to the advice given on the  variation of the will, it being privileged.

 

DECISION

[16]         It is well established that a beneficiary has a proprietary interest in and a right to production of any document relating to advice sought and obtained by an executrix or trustee in connection with the administration of an estate. The executrix cannot claim solicitor-client privilege over such documents because they have a commonality of interest with the beneficiaries in the administration of the estate. The advice taken by the executrix is for the benefit of all beneficiaries under the will. There is no need to protect solicitor-client communications from disclosure because the beneficiaries and the executrix have a joint interest in the advice: Re Ballard Estate at p. 354. The same principle applies to legal opinions the executrix obtains regarding the proper administration of the estate. No solicitor-client privilege applies because the legal opinion sought by the executrix was to further the interests of the beneficiaries under the will: Re Ballard Estate  1994 20 O.R.(3d) 350at p. 354.

[17]         The beneficiary is not, however, entitled to production of all communications between legal counsel and the executrix. Where there is an adversarial relationship between a trustee and a beneficiary, there is no “joint interest” that compels disclosure of communications that would normally be protected by solicitor-client privilege. As Lederman J. says in Re Ballard Estate at p. 354:

… there is no need to protect the solicitor-client communication from disclosure to those very persons who are claiming under the estate. The communications remain privileged as against third parties who are strangers or are in conflict with the estate, but as was stated in Stewart v. Walker, supra, not those who are claiming under the estate. And that is because the trustee and beneficiary have a joint interest…

[18]         The requirement for a joint or commonality of interest was recognized in MacPherson 2005 BCSC 207, where Humphries J. says at para. 18:

Both sides cited cases which stand for the same basic proposition:  A beneficiary has a proprietary interest in and is entitled to production of documents relating to advice sought and obtained by a trustee in connection with the administration or management of, for instance, a pension plan, or an estate (see Froese v. Montreal Trust Co. of Canada [1993] B.C.J. No. 1529 (S.C.), aff’d [1993] B.C.J. No. 1847 (C.A.); Re Ballard Estate [1994] O.J. No. 2281 (Gen. Div.); Cooke et al v. Canada Trust  (Van. Reg. No. S011763, October 22, 2004; leave to appeal granted); Merritt v. Imasco Enterprise Inc. [1992] B.C.J. No. 2011; Thomas v. Secretary of State for India in Council (1870) 18 W.R. 312 (Ch.)), but not to documents that arise in the course of an adversarial relationship between the trustee and beneficiary.

[19]         There are clearly conflicting principles in this case. On the one hand, it is of the utmost importance to protect solicitor-client communications from disclosure. The law has consistently upheld the confidential nature of such communications and strictly construed the circumstances that may be regarded as an implicit waiver of the privilege. On the other hand, the beneficiaries of a trust are entitled to production of documents that fall broadly within the category of administration of the estate.

[20]         Balancing these conflicting principles, I find that the issue in this case must be resolved in favour of the plaintiffs. The underlying basis for exempting from solicitor-client privilege those documents that relate to advice sought in connection with the administration of the estate is the joint or common interest of the trustee and the beneficiary. It follows that where the beneficiary is in an adversarial relationship with the executrix, solicitor-client privilege remains in place to preserve the confidentiality of those communications. In this case the defendants do not have a common or joint interest with the plaintiffs regarding the wills variation action. Their interests are clearly in conflict due to the variation of the will sought by the plaintiffs. Thus legal advice sought and received for that purpose remains privileged.

[21]         Furthermore, the fact that the plaintiffs retained the same legal counsel to act for them in regard to the wills variation action and the administration of the estate does not amount to a waiver of solicitor-client privilege. Regardless of whether Mr. Takahashi was in a conflict of interest position (and in light of the practice in estate law this is questionable), the plaintiffs cannot be taken to have waived solicitor-client privilege because he acted in both capacities. The fact that Mr. Takahashi kept the same file for both the wills variation litigation and the administration of the estate is unfortunate; however, it does not evidence a waiver of solicitor-client privilege by his clients qua plaintiffs in the wills variation action.

Client Privilege and the Wills Cases Exception

wills exception

Client privilege and the wills cases exception are the few line of cases that will not remain privileged after death.

It is very frequent in estate litigation that for various reasons, the disinherited parties often wish to obtain the wills files of the solicitor who drafted the wills on behalf of the deceased.

This frequently causes contested chambers application as to whether or not privilege will continue to apply to the files after the death.

 

As a general rule, all communications between a lawyer and his or her client, in the course of the lawyer client relationship, are privileged and that privilege remains forever unless the client waives it.

That solicitor client duty  to claim privilege applies to former or deceased clients, subject to the exception that on death, the deceased’s instructions concerning a will, which were privilege during his or her lifetime, may be disclosed.

 

Fawcett v Steiner and Fawcett Estate 21 ETR (2d) 686, provides a good summary of the leading principles that apply with respect to solicitor client privilege as it relates to wills:

 

  1. Once the lawyer client relationship arises, the privilege becomes permanent, unless the client waives it (Descoteaux v. Mierzwinaki,    [1982] 1 S.C.R. 860) and a solicitor’s duty to claim the privilege applies to former or deceased clients, subject to the exception that on death, the deceased’s instructions concerning a will, which were privileged during his or her lifetime may be disclosed.

 

2. By extension, the exception for wills cases permits posthumous disclosure of the settlors’ instructions concerning the creation of an inter vivos trust containing life and remainder interests {Geffen  v. Goodman Estate [1991] 2 S.C,R, 353

 

3. Legal professional privilege, or solicitor/client privilege, can be waived and that privilege belongs to the client, so the client is the party who can waive the privilege.  Until the client waives the privilege, the awyer owes a duty to assert it on the client’s behalf (Bell   v.   Smith,     [1968] S.C.R. 664 (Ont.).

 

4.With respect to waiver of privilege, although the privilege continues after the client’s death, an executor may waive it on behalf of a deceased client                 {Goodman  v. Geffen,    [1991] 5 W.W.R. 389 at 409-414 (S.C.C.).

 

5.the prerequisites of a valid waiver are that the client must know of the privilege and the right to claim it, and intend to relinquish it, and appreciate the consequences of doing so.

 

6. Where the purpose for seeking disclosure of the confidential communications between lawyer and client was for the purpose of attempting to defeat the testator’s true intentions, as opposed to determining the true intentions of the testator, then the application (for production of the solicitor’s file) will be dismissed

Gordon  v.   Gilroy,    [1994] B.C.J. No. 1927 (B.C.S.C. Was applied.

In that case, the court concluded that the purpose of seeking disclosure of the confidential information was not for the purpose of determining the testator’s true intentions, or even the reasons for them which were fully stated in the will itself, but rather for the purpose of attempting to defeat those intentions.

He found that the plaintiffs were seeking disclosure of the confidential communications in an attempt to overturn the will and defeat the testamentary wishes of the deceased.

That decision was a wills variation action, and stands for the proposition that a solicitor’s will file is not compilable and remains privileged in such actions, unless the validity of the document is in question.