Brass v. Canada

Brass v. Canada
Court (s) Database
Federal Court Decisions
Date
2012-07-24
Neutral citation
2012 FC 927
File numbers
T-3134-91
Decision Content
Federal Court
Cour fédérale
Date: 20120724
Docket: T-3134-91
Citation: 2012 FC 927
Ottawa, Ontario, July 24, 2012
PRESENT: The Honourable Mr. Justice Russell
BETWEEN:
ALPHEUS BRASS, FLOYD GEORGE,
RALPH THOMAS, RAYMOND CATT,
STEVE YOUNG, WILLIAM JOHN THOMAS, SAM GEORGE, DORIS GEORGE,
REGINALD WALKER, ROBERT WALKER, FRANK TURNER, ALBERT PACKO
AND CLARENCE EASTER, SUING ON THEIR OWN BEHALF AND ON BEHALF OF ALL OTHER MEMBERS OF THE CHEMAWAWIN FIRST NATION, AND THE CHEMAWAWIN FIRST NATION (NOW KNOWN AS CHEMAWAWIN CREE NATION)
Plaintiffs
and
HER MAJESTY THE QUEEN
Defendant
and
THE GOVERNMENT OF MANITOBA
Third Party
REASONS FOR ORDER AND ORDER
[1] This is an appeal of the decision of a Prothonotary Lafrenière, dated September 30, 2011, pursuant to Rule 51 of the Federal Courts Rules.
[2] The motion before the Court concerns three files: Brass et al v. HMTQ (T-3134-91) (brought by the Chemawawin Cree Nation (Chemawawin)); Ross et al v. HMTQ (T-299-92) (brought by the Opaskwayak Cree Nation (OCN)); and Mercredi et al v. HMTQ (T-300-92) (brought by the Grand Rapids First Nation (Grand Rapids)). For ease of reference, the proceedings shall be referred to as Brass, Ross and Mercredi in these reasons. Chemawawin, OCN and Grand Rapids shall jointly be referred to as either the Plaintiffs or the First Nations.
BACKGROUND
[3] The background and framework of the dispute between the parties are summarized by Prothonotary Lafrenière in his decision and, with a few minor adjustments, I can do no better than set out his account here for convenience.
The Decision
[4] During the course of a protracted discovery process, the Plaintiffs came into possession of almost 100 documents alleged to be privileged by the Defendant, Her Majesty the Queen (Canada). Canada maintains that the majority of the documents were inadvertently produced after being included in Schedule I of Canada’s Affidavit of Documents. The balance of the documents are said to have been obtained by the Plaintiffs by other, unknown means.
[5] Canada sought an order for the return of all its privileged documents. The Plaintiffs in turn brought their own motion for an order requiring Canada to produce a number of other documents over which Canada has claimed privilege and has not produced.
[6] Both motions were heard together by Prothonotary Lafrenière on common evidence.
[7] The Prothonotary concluded that the Plaintiffs’ motion should be dismissed, and that Canada’s motion should be allowed in part. In summary, while Canada failed to properly establish litigation brief or settlement privilege for certain documents produced to the Plaintiffs, the Prothonotary ordered all documents subject to solicitor-client privilege returned to Canada.
[8] Since it appeared to the Prothonotary that documents were produced by Canada through inadvertence, he also found that there was no waiver of privilege, and certainly no implied waiver, requiring further production of privileged materials. Further, he held that the Plaintiffs could not rely on their “illegitimate possession” of privileged documents to justify further production.
[9] An order disposing of both motions, consistent with his reasons, was issued by the Prothonotary in each file.
Facts
[10] This case’s history is long and is divided into two distinct periods. The first is the time period between 1960-1992 leading up to actual litigation, where the parties were both dealing with the fallout of the Manitoba Rapids Hydro Project (Hydro Project). The dispute in this appeal centers on the relationship between the parties, how and if information was shared, and the intent behind the creation of a significant number of documents. The second period began in 1992, when the Plaintiffs filed a claim against Canada. During this time, significant issues arose regarding the production of documents, specifically why privileged documents were produced by Canada to the Plaintiffs, how the Plaintiffs managed to obtain other privileged documents, and whether they should have access to more.
1960-1992
[11] The genesis of the dispute originated over half a century ago. While the basic facts are not contentious, how they should be interpreted is at the crux of the dispute over documents. In the 1960s, Manitoba Hydro undertook to build a dam on the Saskatchewan River. At that time it was known that the dam would cause flooding to reserve land held by Canada for what is now the OCN (previously known as The Pas Indian Band), the Chemawawin and the Mosakahiken Cree Nation (known then as the Moose Lake Indian Band). During construction of the dam, the Province of Manitoba (Manitoba) wanted to extend a provincial highway and run a transmission line through the reserve of the Grand Rapids First Nation (also known as the Misipakisik Cree Nation).
[12] Canada required Manitoba and Manitoba Hydro to enter into compensation agreements with the affected bands for the use of the lands and the negative effects which flowed from that use. These negotiations took place during the early 1960s. The agreements reached were contained in letters of intent. Canada, acting through the Department of Indian Affairs and Northern Development (DIAND), arranged the necessary expropriations of land and formalized additions to reserves pursuant to the compensation arrangements. In the case of Grand Rapids, some arrangements were made without the involvement of Canada.
[13] Almost immediately after the deal closed, the First Nations involved made it known that they felt the arrangements were not satisfactory and that all the negative effects of the Hydro Project were not being compensated. In order to seek a better deal, the First Nations secured funding from Canada for, at the very least, research and related activities. A Contribution Agreement outlined the conditions attached to this funding.
[14] Some level of negotiations between the First Nations, Manitoba and Manitoba Hydro took place. The First Nations set up the Special Forebay Committee (SFC) to represent their interests. The SFC’s purpose was to act in a variety of capacities, including negotiation, litigation and the provision of information. At first, Canada had some role in the negotiations, but by the time they broke down, Canada was no longer involved.
[15] In May of 1980, the First Nations filed a statement of claim against Manitoba and Manitoba Hydro. Canada was notified by the First Nations in a letter dated May 2, 1980, that Manitoba and Manitoba Hydro intended to file Third Party Claims against Canada.
[16] Around this time, the First Nations obtained legal counsel through Mr. John Wilson, who is the principal affiant for the Plaintiffs. In March 1982, Mr. Wilson authored a formal legal opinion received by both the First Nations and Canada. The parties disagree as to who actually retained him to do this. While indicating that he was retained to institute an action against Manitoba and Manitoba Hydro, Mr. Wilson states in his legal opinion that “the Federal Government is without a doubt a responsible party and in all likelihood must be joined as a defendant in the action by the first two defendants on a third party notice...”: Exhibit G to the Affidavit of Glenn A. Bloodworth affirmed on September 23, 2009 (Bloodworth Affidavit).
[17] Over this period, there were a number of other indications, via letter, position papers and other communications, that the First Nations considered Canada to be liable. Without avoiding involvement in the affair completely, Canada continued to maintain that it was not liable. For instance, in a letter dated December 23, 1983, the Minister of DIAND responded to concerns recently expressed in a position paper submitted by the First Nations: Bloodworth Affidavit, Exhibit J. In his letter, the Minister underlined the need for negotiations, designating a member of Parliament, a government lawyer, Mr. Craig Henderson, and Mr. Glenn Bloodworth as federal representatives, who could assist the Bands in bringing resolution to the issue. The Minister also wrote that “Should definitive evidence arise during the negotiations proving a failure by Canada to fulfill its legal obligations, the Federal Government will negotiate a reasonable and just redress with the Forebay Bands”. The Minister indicates, however, that he does not believe Canada has an obligation to participate in any ultimate compensation settlement since Canada was not a party to the Hydro Project.
[18] Around the time that Mr. Wilson’s legal opinion was shared, Canada created the Manitoba Northern Flood Agreement Office (later called Manitoba Resource Developments Impact Office) (MRDIO), whose mandate included support to First Nations implementing compensation agreements with third parties.
[19] Three of the First Nations chose to incorporate the SFC on April 6, 1984. Although OCN did not join the incorporation, it remained involved as a member band.
[20] In 1985, the SFC obtained new counsel, Mr. Morris Kaufman, and other professionals to advise them, including E. E. Hobbs and Associates (E. E. Hobbs). The principal of E.E. Hobbs was a former DIAND employee.
[21] On May 30, 1985, the SFC asked Canada to “stop the running of time” so that the statute of limitations would not apply to the time then being spent in negotiations. DIAND’s Deputy Minister wrote that Justice Canada had advised that the government could not contractually waive such provisions. However, this should not preclude continuing negotiation: Bloodworth Affidavit, Exhibit N.
[22] Further studies, correspondence and position papers were pursued and exchanged. The theme continued - the First Nations produced reports from consultants and lawyers which said Canada was liable in this matter and had failed in its fiduciary duty. The government denied liability, but stated it was committed to supporting the negotiation process. Again, the Minister reiterated that if definite evidence were to arise showing Canada’s liability, Canada would investigate and negotiate a resolution. At this time, Canada was also producing internal documents - both from lawyers and lay employees - on this issue. Throughout the process, lawyers from the Department of Justice had been providing legal opinions to Canada, their client, having received requests from a range of officials in DIAND. They were also present during meetings with the First Nations and their counsel. The most notable figure was Mr. Craig Henderson, lead counsel from 1980-2003, although he was assisted by others, including Ms. Barbara Shields (from 1984-1986). Mr. Ian Gray, with DIAND Legal Services, Ottawa, also provided opinions in the late 1980s and early 1990s.
[23] Eventually, talks with Manitoba and Manitoba Hydro resumed, and new agreements were signed with the Chemawawin, OCN and Grand Rapids in 1990 and 1991. Canada was not directly involved in negotiations at this point. Statements of Claim were filed against Canada shortly thereafter: Chemawawin on December 18, 1991, and OCN and Grand Rapids on February 5, 1992.
Plaintiffs’ Interpretation of the Events Leading to Litigation
[24] Nearly all the Plaintiffs’ evidence relates to the pre-litigation period. As stated earlier, Mr. Wilson, the First Nations’ counsel, was their principal affiant. The other witness for the Plaintiffs, Ms. Patricia Turner, was the president of the SFC and then Chief of the Misipawik First Nation during the 1980s. Her affidavit echoes Mr. Wilson’s beliefs as to the common interest of the parties and the consequences of Canada’s failure to disclose to the First Nations the information promised.
[25] The First Nations and their two deponents characterize this period as one of cooperation between the parties. Mr. Wilson repeatedly states that his understanding was that Canada would share with them all relevant information; in other words, the First Nations say there was no expectation of confidentiality. Mr. Wilson suggests that he himself was retained by Canada, which would explain why Canada received a copy of his opinion in 1982. He also notes that all the funding for his retainer and fees was obtained from Canada. In effect, he says the legal opinion sought for the First Nations had to be shared with Canada.
[26] The Plaintiffs interpret this sharing of factual and legal information to be evidence of the development of a joint strategy that Canada was a full partner in their negotiations. The Plaintiffs assert that Canada had opened all its files to them and that lawyers met to share opinions. They point to the Minister’s commitment that, if it was eventually established that Canada was legally liable, a resolution of Canada’s responsibility would be effected through negotiation rather than litigation.
[27] The Plaintiffs’ deponents also allege that, throughout the period of cooperation and unknown to them at the time, Canada was keeping legal opinions and other relevant facts from them. Their evidence for this stems from the privileged documents which are at the centre of this appeal. The Plaintiffs stress that Canada knew, and complained, about the inadequacy of the initial settlement shortly after its completion without notifying the First Nations. Specifically, they say that Canada felt that the letters of intent were vague and band counsel was not adequately informed.
[28] The Plaintiffs also believe that the documents they now possess show that during this period Canada was in possession of opinions and briefing notes which indicated it was aware of a fiduciary duty to the First Nations. Despite this, Canada told them that it was not liable - information the First Nations claim they relied on to their detriment.
[29] Finally, the Plaintiffs emphasize that they received funding from Canada and that this is evidence there was no contemplated litigation. In the words of Patricia Turner, they were not apt to “bite the hand that feeds them”.
Canada’s Interpretation of the Events Leading to Litigation
[30] Canada’s principal affiant for this period is Glenn A. Bloodworth, a former employee of DIAND. He occupied various positions within DIAND, including the positions of Director of what became MRDIO in 1982, and the Director of the Indian Environmental Protection Branch from 1986-1992. Significantly, all of his positions involved flooding issues in Manitoba.
[31] Canada submits that the facts show that 1979 to 1991 was a pre-litigation period when Canada acted with the belief that litigation was impending. Canada’s motive during this time was two-fold: to help the First Nations come to an adequate agreement with Manitoba and Manitoba Hydro and to protect itself from liability. There was thus a dynamic tension: the First Nations continually advised Canada as to their position that Canada was liable for flooding damages and Canada refused to accept it. Canada says there was no agreement regarding the alleged liability.
[32] Mr. Bloodworth states that in order to justify the continued funding pursuant to the Contribution Agreement, the First Nations had to show that they had a legitimate complaint. They provided DIAND with a plan regarding research, investigation and representation, and were required to provide an up-to-date legal opinion. Mr. Wilson was the designated representative of the First Nations. The legal opinion provided to Canada was on instruction of the First Nations.
[33] There is a fundamental rift between the parties on the openness of Canada’s files. Canada disputes that any promises were made to share all information, including legal opinions. Mr. Bloodworth asserts that there was no expectation that confidentiality and privilege would be waived, or that there would be no restrictions on the sharing of information. As an example, he states that in 1985, when E.E. Hobbs and Associates sought access to DIAND’s archives, this access was limited and steps were taken to ensure that legal opinions and confidential information were not made available: Bloodworth Affidavit, paragraph 46. He further notes that no Department of Justice files were made available to the Plaintiffs and that a former deputy minister informed the SFC that such opinions were for DIAND’s own information. Mr. Bloodworth maintains that privileged documents cannot be released without the consent of the client, which means the upper echelons of management within DIAND.
[34] In short, Canada’s characterization of its relationship with the First Nations is very different from the Plaintiffs? Canada denies that there was any explicit fiduciary duty in relation to this issue. Any obligations were simply related to the fact that reserve lands had been negatively impacted and Canada had programs to assist First Nations in dealing with those impacts and in securing compensation.
1992 – Present
[35] Litigation was commenced against Canada by Chemawawin in December 1991, followed by OCN and Grand Rapids in February 1992. Over twenty years have passed and the parties are still at the discovery stage. A number of procedural events have transpired, including the threat of dismissal for delay. In fact, the proceedings were dismissed in December 1998, but reinstated by the Court of Appeal in March 2000. Relevant to the present appeal before me, however, are the events surrounding the production of documents. Almost all the evidence as to the events of this post-litigation period are found in the affidavit of Mr. André Bertrand, case manager with the DIAND Litigation Management and Resolution Branch (LMRB) who has been assigned to these files since April 2008.
[36] A brief overview of the history of documentary discovery in the proceedings is required to place the appeal in context.
[37] In Brass, affidavits of documents were sworn in 1997 and 1998. Ross and Mercredi, which were represented by different counsel, had a slower start. Discovery of documents did not begin until 2000. The Plaintiffs’ affidavits of documents in Mercredi and Ross were served on Canada on December 7, 2001. Copies of documents were included in the Plaintiffs’ Schedule I throughout the summer and fall of 2002. Affidavits of documents for these two matters were served by Canada on the Plaintiffs on July 18, 2002, and copies of documents from Schedule I were provided on September 26, 2002. Examinations for discovery were only conducted in Ross, running from 2002 to 2005.
[38] In 2004, Mr. Schachter took over as counsel of record in both Ross and Mercredi.
[39] In January 2005, the Plaintiffs served unsworn Amended Affidavits of Documents for both matters. Canada swore supplementary affidavits in both matters on February 24 and 25, 2005, and served the Plaintiffs on March 30, 2005. Copies of documents in Schedule 1 were provided electronically and in hard copy.
[40] Meanwhile, in Brass, actual production of documents did not occur until June, 2004, when Canada received the “Chemawawin Document Record.” At that time, counsel for the Plaintiffs advised that over 300 of the documents had gone missing, at least two of which appeared to contain privileged material belonging to Canada. Another document, not included in counsel’s letter, also appeared privileged.
[41] From 2004 to 2006, no active steps were taken in Ross and Mercredi while settlement discussions were being pursued. In Brass, a stay of proceedings was in effect from 2000 to 2006 for similar reasons. On September 22, 2006, Canada advised that it saw no further basis to discuss settlement.
[42] In March 2007, Mark Underhill assumed conduct of the Brass file from previous counsel, Jack London, and advised Canada that his clients wanted to proceed expeditiously.
[43] In May 2007, the Plaintiffs all agreed to waive the implied undertakings rule so that relevant documents disclosed by Canada in one case could be shared with all. That same month, the Plaintiffs in Brass asked for production of Schedule I documents from Canada for the first time. Same was provided electronically in October 2007 and in hard copy in November 2007.
[44] An Amended Statement of Claim was filed in Mercredi on November 21, 2007 (which Canada contested), and in Ross on November 18, 2008 (which Canada did not contest). On December 3, 2008, Canada advised that it planned to file a motion for summary judgment based on latches and the expiration of the limitation period. This was the catalyst for the motions before the Prothonotary and the present appeal.
[45] During a case management conference on December 16, 2008, it was determined that Canada’s motion for summary judgment could not be heard until an updated list of privileged documents was provided by Canada and the Plaintiffs were given an opportunity to raise any objection. Canada reviewed its privileged documents in Schedule II and moved some to Schedule I (unprivileged) with redactions, serving the unsworn affidavits on the Plaintiffs on March 19, 2009.
[46] On June 3, 2009, the Plaintiffs in both Mercredi and Ross filed a notice of motion to compel documents. The Plaintiffs in Brass did the same on August 6, 2009.
[47] On September 24, 2009, Canada filed an amended Affidavit of Documents to make clear all the documents over which Canada claimed privilege.
Discovery That Privileged Documents Were Included in Schedule I
[48] Upon service of the Plaintiffs’ motions, Canada went on to review the documents in Schedule I and discovered that some of the documents contained therein were covered by privilege, yet had been produced. All but six were included in their original Affidavit of Documents, sworn in 2002. Having already made a phone call, counsel for Canada wrote to counsel for Mercredi and Ross on July 17, 2009, requesting their return. The Plaintiffs refused, denying that any privilege was attached and alleging that, to the extent there was, it had been waived.
[49] On conducting a similar privilege review in relation to the Brass files, Canada confirmed that those Plaintiffs were also in possession of several privileged documents inadvertently included on their Schedule I list. Counsel wrote asking for their return on July 29, 2009.
[50] Canada filed motions before the Prothonotary seeking a declaration that the documents in question were privileged and requiring their return in respect of all the files.
Documents Not Disclosed Yet in the Plaintiffs’ Possession
[51] In addition to the above documents, there were some documents belonging to Canada which the Plaintiffs obtained despite the fact that they had, apparently, not been produced on discovery. The first indication of this appears to be when production was requested in Brass in 2004.
[52] Responding to a letter discussing an upcoming meeting, counsel for Canada wrote on May 13, 2004 expressing concern that Canada had not received the documents in Schedule I. Counsel also noted that the Plaintiffs had referenced a document authored by Caroline Marion dated July 25, 1991, and entitled “Proposed Departmental Position - Grand Rapids Forebay” (Marion Paper), which was included in the Plaintiffs’ Schedule of Documents, but not in any of the affidavits from Canada. Mr. Bloodworth asserts in his affidavit that this had been authored by a regional employee in response to settlement proposals which had been submitted by the Chemawawin and Masakahiken at the time. He also notes that to his knowledge the Marion Paper never received approval from the Deputy or the Minister.
[53] Counsel for Canada asked for a copy of the document, concerned that it might be privileged. In a phone conversation on May 18, 2004, Mr. London, counsel at the time, told her he did not know how it was obtained. Canada’s then counsel left on early maternity leave in July 2004, and the issue was not resolved.
[54] At the end of 2006, the Marion Paper came up again at a meeting, where counsel representing all of the Plaintiffs were present. Again, Mr. London denied knowing how it was obtained.
[55] The debate continued into 2008, after Mr. Mark Underhill had assumed conduct of the Brass file. It came to Canada’s attention that the Plaintiffs in Brass had another privileged document when Mr. Underhill wrote to advise that he believed many of the documents in Schedule I were not privileged: Bertrand Affidavit, Exhibit Q. Further, Mr. Underhill indicated that privilege had been waived over a number of documents that would otherwise be protected. He referred to a summary which described legal opinions by various Justice and First Nations lawyers and maintained that Canada had waived privilege by making the substance of these opinions known. He went on to reason that, notwithstanding the summary document, the substance of these opinions had also been disclosed in other documents produced during discovery and, therefore, the full opinion had to be produced in either case. Finally, Mr. Underhill noted that he was in possession of two opinions not in Schedule II of Canada’s Affidavit of Documents, suggesting it was incomplete. One opinion was that of Ian Gray, a government lawyer.
[56] Canada responded immediately, requesting clarification as to the documents described and how they came to be in the possession of the Plaintiffs. Counsel reminded the Plaintiffs that privilege was claimed over the Marion Paper in the other two matters and that Jack London had already been asked how he came to have it.
[57] Mr. Underhill wrote to confirm that the legal opinions were “stand alone” and that he did not know how they, or the other documents, had come into the Plaintiffs’ possession. He also later confirmed that the summary document had no production number and provided it, with advice to his client, redacted to counsel for Canada.
[58] Once the motion to produce documents was filed in June of 2009, the Plaintiffs attached the entire Marion Paper and the summary of legal opinions to their motion records. Canada again wrote each party, noting that they had never seen those documents together at any time. Again, clarification was sought as to how the documents had been obtained. No answer was forthcoming.
THE PROTHONOTARY’S CONCLUSIONS
[59] The Prothonotary found that the motions before him engaged two major questions:
a. Are the documents at issue privileged?
b. If they are, was there a waiver of privilege by Canada?
[60] For reasons given in his orders, the Prothonotary concluded that
a. Those documents which describe communications between a solicitor and its client, DIAND, whether or not they were communicated through staff, are subject to solicitor client privilege notwithstanding any disclosure to the Plaintiffs;
b. The documents that were disclosed to the Plaintiffs are no longer protected by litigation brief or settlement privilege;
c. Litigation and settlement privilege was validly asserted by Canada over the undisclosed documents, or parts thereof;
d. There was no waiver of solicitor client privilege, litigation brief privilege, or settlement privilege;
e. There was no implied waiver of solicitor client privilege, litigation brief privilege or settlement privilege;
f. No form of privilege had been vitiated in any other way, such as estoppel, fraud, equitable fraud, bad faith, breach of trust or fiduciary duty, or bad faith.
THE APPEAL
[61] Canada does not challenge the Prothonotary’s findings that the disclosed documents are no longer protected by litigation brief or settlement privilege.
[62] The appeal by the Plaintiffs is that the Prothonotary was wrong in finding that the documentation in dispute attracted any kind of privilege or, even if it did, that privilege has not been waived or otherwise vitiated by the conduct of Canada.
[63] The grounds and arguments advanced by the Plaintiffs are many and complex. I propose to deal with each in turn but, first of all, it is necessary for me to decide the proper standard of review for this appeal.
STANDARD OF REVIEW
[64] Unsurprisingly, there is no agreement between the parties on this issue. Canada says that the effect of the Prothonotary’s orders is not vital to the final issue in the case, so that the only question is whether the Prothonotary’s decision is clearly wrong, in the sense that it is based upon a wrong principle or misapprehension of the facts. Because the decision is not clearly wrong in this sense, Canada says that the Prothonotary’s exercise of his discretion should not be disturbed. Canada also says that even if I consider the matter de novo the result is the same.
[65] The Plaintiffs say that the orders are vital to the final issue and/or are clearly wrong and I should consider the matter de novo.
[66] The Plaintiffs’ position is that the result of the privilege motions is vital to the final resolution of the issues in dispute. Those issues are both the limitations and laches issues, which the Plaintiffs face in the upcoming motion by Canada to strike their claim, as well as the issue of Canada’s ultimate liability to the Plaintiffs for its conduct in relation to the Hydro Project and its fallout.
[67] Canada says that the test for vitality is a stringent one and the Court should not come too hastily to the conclusion that a question, however important, is vital to the final outcome. Relying upon R.v Aqua-Gen Investments Ltd., [1993] 2 FC 425, 39 ACWS (3d) 59 at paragraphs 43 and 67, Canada says that the critical question is whether the decision of the Prothonotary will preclude the hearing of the case on its merits, and the emphasis has to be on the subject of the orders, and not their effect. See Aqua-Gem at paragraph 100. Canada points out that the subject of the orders is production of documents and not the merits of the claims.
[68] Canada emphasizes that the Plaintiffs’ argument is essentially that, without Canada’s privileged documents, all relevant information will not be in front of the Court when it is called upon to rule on the merits of their fiduciary claim or on Canada’s intended motion for summary judgment. Canada says that, in R v National Post, 2010 SCC 16, [2010], 1 SCR 477 at paragraph 42, the Supreme Court of Canada clearly rejected this line of argument:
At common law, privilege is classified as either relating to a class (e.g. solicitor and client privilege) or established on a case-by-case basis. … Class privilege necessarily operates in derogation of the judicial search for truth and is insensitive to the facts of the particular case.
[69] More specifically, Canada refers to the Plaintiffs’ argument that the result of the privilege motions is vital to the final outcome of the case because information contained in the documents is allegedly relevant to their plea of equitable fraud and estoppel as a bar to limitations. However, Canada says that the Plaintiffs cannot, by their own pleadings, place Canada’s privileged documents into issue. Moreover, the specific arguments Canada will make on limitations are not before this Court. The Plaintiffs’ arguments about the vital nature of these 1980’s document are, at best, premature.
[70] The leading case on equitable fraud in the limitations context is Guerin v Canada, [1984] 2 SCR 335, but there is no suggestion in that case that privilege was superceded in order to get all relevant information before the Court.
[71] In any event, Canada says it is not open to the Plaintiffs to argue that the contents of the documents in question make them vital to the final issue or outcome, since that improperly focuses on the subject of the documents rather than the subject of the motion.
[72] Moreover, the Plaintiffs should not be able to rely on privileged documents improperly retained in order to make that point.
[73] Lastly, Canada says that the Plaintiffs’ argument calls for very specific determinations as to the relevance and weight of the documents in question, since privilege (especially solicitor client privilege) should not be over-ridden on anything less. Such determinations are beyond the purview of the Court in assessing whether the established threshold for review of a prothonotary’s decision is met.
[74] Canada asserts that the questions raised in the motions before the Prothonotary were not vital to the final issue in the case. This has also been the finding in other cases concerning disputes over privileged information or access to documents, and should clearly be the finding in this case as well.
[75] In considering these arguments and authorities, I think I have to acknowledge that the denial of further discovery will rarely be vital to the final outcome of the case (see Roman v Canada (2005), 2005 CarswellNat 1103, 2005 FC 474), and that it will also be a rare case when it can be shown that the denial of further documents will be vital to the final outcome: see Galerie au Chocolat Inc. v Orient Overseas Container Line Ltd., 2010 CarswellNat 678, 2010 FC 327. This suggests, however, that rare cases may arise where the denial of further document may be vital. So is this that rare case and, if it is, should the fact that the documents are excluded as a result of privilege make a difference?
[76] In addressing this issue, I take note of the guidance provided by my colleague, Justice Michael Phelan, in Lac Seul Band of Indians v Canada 2011 FC 351 at paragraph 23:
There is some question in this Court as to what may be “vital” (see Ridgeview Restaurant Ltd. v Canada (Attorney General), 2010 FC 506). A number of cases have held that generally unless the decision concludes some part or all of the case at this early stage, the decision is not vital. Other cases have seen the issue of “vital” as applying to questions that somehow go to the root of a case; jurisdiction would be an example. What may be “vital” depends on the circumstances of each case. Rigid categorization is not helpful.
[77] I do not think, to quote the Supreme Court of Canada in National Post, above, because “Class privilege necessarily operates in derogation of the judicial search for truth and is insensitive to the facts of the particular case” that this disposes of the “vital” issue. The fact that a finding of privilege might prevent the Court from ascertaining the full facts required to make a determination is not, in my view, dispositive of whether a particular finding of privilege is vital to the final issue. I am not here concerned with the necessary operation of class privilege, but with whether, on the facts of this case, a finding of privilege is vital to the final issue.
[78] What the Plaintiffs are saying, in effect, is that access to the documents in question, and their deployment in either defending the anticipated motion to strike or in establishing their case at trial in itself makes the documents vital to the case. It seems to me that this begs the question of whether the contents of the documents will assist the Plaintiffs in the way they claim. But I do not think that “vitality” in this context can be assessed on the basis of the relevance or weight that a particular document might have for assisting the Plaintiffs. In addition, of course, unless I review the full record and hear full argument on the anticipated strike motion at trial, I am not in a position to say what value any particular document might have for the Plaintiffs. For example, a solicitor’s advice to his or her (defendant) client that liability may or may not exist, depending upon the other evidence available, may be vital for establishing that the client did not negotiate in good faith, but I do not think this can mean that, at the discovery stage, and on an appeal from a prothonotary, such as has come before me, that I can assess “vitality” on the basis of how significant a privileged document might be in assisting the Plaintiffs to make their case.
[79] I think the jurisprudence is clear that a discretionary order of a prothonotary should only be reviewed de novo on appeal if the questions raised in the motion are vital to the final issue in the case, or the orders are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts.
[80] In the present case, Prothonotary Lafrenière was asked to decide whether particular documents should attract privilege. This is what he did decide. It seems to me that whether or not a particular document is privileged cannot, per se, be vital to the case. And whether or not a particular privileged document might turn out to be vital cannot be determined by this Court on appeal. This is why, I think, Gallerie, above, establishes that it will be a rare case when it can be shown that the denial of further discovery or further documents will be vital to the final outcome.
[81] In their presentations, the Plaintiffs have emphasized the need to examine documents on an individual basis when assessing privilege. On the issue of “vitality”, it would seem that the Plaintiffs would have to show how each individual document is vital to the final outcome of their case. They have not done that. In the normal course, this would be impossible because the document remains privileged and need not be produced. The Plaintiffs have been able to mount some kind of argument for vitality in the present case because they have seen some privileged documents that were inadvertently disclosed to them. Even so, I do not think the Plaintiffs have established that “rare case” for any particular document or for any particular class of documents.
[82] Nor do I think the Plaintiffs have established that the Prothonotary’s discretion was based upon a misapprehension of the facts. This dispute has a long history and there is competing affidavit evidence. The Plaintiffs say that the Prothonotary should have preferred their evidence and their view of the facts. However, I can find nothing wrong with the Prothonotary’s weighing of evidence or with his assessment of the material facts.
[83] The Plaintiffs also argue, in places at least, that the Prothonotary applied a “wrong principle” to the facts. There is some complexity with regard to these issues and, in a long judgment, it is not possible for the Prothonotary to refer to all “principles” which the Plaintiffs think he should have specifically mentioned. Without concluding that the Prothonotary was wrong in these instances, I have simply looked at the documents again, de novo and taking into account the Plaintiffs’ concerns and criticisms together with my own view of the applicable law.
[84] In fact, even though I do not think that “vitality” is established, and even in those instances where I do not think a wrong principle was applied, or where there was no mistake as to facts, I have as an alternative examined the evidence and the documents in question, de novo to see if I would reach a different conclusion from the Prothonotary’s. As my reasons show, even if examined on a de novo basis, I see no reason to change the Prothonotary’s conclusions.
THE ISSUES
[85] I think the issues before me are as follows:
a. Are the documents at issue privileged?
b. If any of the documents at issue are privileged, has Canada waived privilege?
c. If the documents are privileged and there has been no waiver of privilege, has privilege been vitiated for any of the other reasons put forward by the Plaintiffs, i.e. estoppel, fraud, equitable fraud, bad faith, breach of trust or fiduciary duty?
Solicitor Client Privilege
[86] First of all, I agree with the Plaintiffs on the legal requirements for solicitor and client privilege and the required approach to assessing documents to determine whether they attract that privilege.
[87] The elements of a proper claim to solicitor client privilege are not in dispute. They require:
a. A communication between solicitor and client;
b. Which entails the seeking or giving of legal advice; and
c. Which is intended to be confidential by the parties.
[88] Secondly, I agree that the Court must consider each document individually and decide whether the