Full disclosure of relevant information is a fundamental principle of the Canadian legal system. But, where it serves an overriding public interest, disclosure is subject to the limitations and exceptions in the form of privilege. One of the most common types is litigation privilege, which protects certain documents, communications or information from being disclosed if they were created for or in anticipation of litigation. The overriding public interest attached to litigation privilege is to ensure the effectiveness of the adversarial process by creating a safe space or “zone of privacy” where parties to an action can investigate and prepare for legal proceedings without interference or fear of premature disclosure.
The General Rule
The authoritative case on litigation privilege in Canada is Blank v Canada (Minister of Justice)[1] (“Blank”), which was recently restated in Lizotte v Aviva Insurance Company Canada.[2] Blank confirmed the two-part test for determining whether a particular document is covered by litigation privilege. Namely, a document must have been created:
- in contemplation of litigation which is “in reasonable prospect”;[3] and
- for the “dominant purpose” of use in litigation.
The “reasonable prospect” step of the two-part test was established in Himalainen v Sippola[4] and is, typically, not difficult to satisfy.
The “dominant purpose” step of the two-part test stems from the House of Lords in England,[5] and has since been adopted in Canada in a number of cases,[6] of which Blank is the culmination. A document will be protected by litigation privilege, and therefore excluded from inspection, if it was produced or brought into existence for the sole or dominant purpose of existing or contemplated litigation.[7]
The “Dominant Purpose”
To determine whether a document was created for the sole purpose of litigation, a non-exhaustive number of factors must be considered: for example, the nature of the document and the timing of its creation,[8] or the usual practice or policy of information-gathering following an incident.[9] If the document in question was prepared in the ordinary course of business, including expert reports, or would have come into existence regardless of litigation, it does not fall under the protection of litigation privilege.[10]
Of particular note: the mere fact that legal counsel is the recipient of a particular document or communication is not, by itself, sufficient to determine litigation privilege.[11]
Litigation privilege is applied narrowly, and so the mere prospect of litigation at the time a document is created is not enough to trigger it. This is the case if even one of the purposes of the document is litigation support, no matter how substantial.[12]
Even in cases where litigation is a reasonable prospect from the time a claim first arises, there is naturally a preliminary period where the parties are attempting to discover the cause of the incident. There is a “continuum”, and so the point at which the dominant purpose shifts to litigation needs to be determined by the facts of each case.[13]
Disputes over Litigation Privilege
Where a dispute arises over claimed litigation privilege of a document, the onus is on the party claiming privilege to make its case. They must produce material that addresses the nature of the document and all the facts relevant to the “dominant purposes” test. The bald assertion that a document was created for the dominant purpose of litigation will not be sufficient to discharge the party’s evidentiary onus.[14]
Example Cases
TransAlta Corporation v Market Surveillance Administrator, 2015 ABQB 180 (“TransAlta”)
This was the case in TransAlta. In 2011, the independent watchdog of Alberta electricity and natural gas markets, the Market Surveillance Administration (the “MSA”), began investigating TransAlta to determine whether it had staged outages at its coal-fired power plants at peak/high-usage times to create demand and allow it to charge “surge” or inflated rates. TransAlta disclosed more than 250,000 records in the course of litigation and claimed privilege over 800 of them. 400 documents were submitted to the Court for review.
TransAlta asserted that the documents over which it had claimed litigation privilege and on which the application to the Court was based, included records of meetings and emails between trading group members, members of the regulatory board and legal counsel regarding responses to the investigation, as well as draft documents for employee review and review by in-house and/or outside legal counsel. The Court noted, however, that TransAlta provided very little information as to who the senders and recipients were and how they fit into the company’s wider organization. They also did not provide any specific evidence to support its privilege claims. It made only general statements or “bald assertions” that all of documents were prepared for the purpose of litigation, namely the MSA investigation.
In a number of letters, MSA requested – “quite properly”, according to the Court – descriptions of the records that would assist it in assessing the validity of the claimed privilege but without revealing information that is privileged. It suggested, for example, that the description include at a minimum the type of record, date, time, sender, recipient/addressee(s) and subject matter. MSA indicated that they were open to discussing any complexities or issues that may have arisen in properly describing these records. TransAlta’s replies continued to be only general, blanket statements about the law of litigation privilege, and they provided no further evidence to support their claims.
Understandably, the Court was unimpressed with TransAlta’s position on litigation privilege and its “spurious” approach to disclosure of the contested documents, which included – in some cases – blank emails accepting meeting requests and email exchanges about missed phone calls between employees.
Ultimately, the Court determined that that less than 100 documents and emails were properly protected by litigation privilege because they were related to the information gathering process (specifically seeking TransAlta’s opinion on the nature of the outages) and contained commentary about the nature and circumstances of the outages. In assessing these documents and making its decision on privilege, the Court focused on whether the “zone of privacy” was breached or impacted. Of the remaining 300 documents it was tasked to review, the Court found that they were either disclosable or, in the majority instance, entirely irrelevant to the matter.
TransAlta is a good lesson in how not to approach litigation privilege, and the Court rightly took counsel for TransAlta to task for not being more precise or considered in their approach to claiming litigation privilege.
Waissmann v. Calgary (City) 2018 ABQB 131 (“Waissmann”)
The Court of King’s Bench case, Waissmann, also focused on documents arising from an investigation. Courts have typically held that purely factual records or “a report of facts” – usually arising from investigations – are not automatically privileged.[15]
The Plaintiff, Mr. Waissmann, was a passenger on a City of Calgary bus when it struck a curb and a light post, causing him personal injuries. Following the collision, Occurrence Reports were created by the driver and his supervisor, and over which the Defendant City claimed litigation privilege.[16]
In support of its claim, the City pointed to its Calgary Transit Bus Operating Rule Book and Procedure Manual, which required the production of the reports which are then forwarded to the City Solicitor’s officer and the Claims Department of Calgary Transit. The City claimed that the reports are prepared in contemplation of litigation and for the instruction of counsel.
The Court accepted the City’s position that it has almost 3,000 claims that it must deal with per year, and that, as the nature of the business involves carrying passengers, any accident involves at least the potential for a personal injury claim by one or many passengers, as well as potentially any involved pedestrians or operators of other motor vehicles. The Court was ultimately persuaded that, even without the significant number of claims regularly advanced against the City, litigation would be contemplated in this case regardless. Even though other uses of the report might have later arisen, the dominant purpose of the report was to instruct counsel with the contemplation of litigation and so it was deemed privileged.
This is in contrast to the British Columbia Court of Appeal case, Mathew v. Delta School District #27,[17] where the Plaintiff, Mr. Mathew, slipped and fell on some ice on school property. Incident reports in the form of informal notes were prepared by employees of the District within a few days of the incident, and over which the District claimed privilege.
Here, the employees who made the notes were the school’s principal, a teaching assistant and the custodial lead hand. Only the teaching assistant saw the Plaintiff fall. All three stated that they expected the incident to lead to a lawsuit and, for that reason, prepared their notes, but there were no policies or procedures that required it of them.
The Court found that the notes were made at the (albeit short) investigatory stage and served a dual purpose – to facilitate reporting on the incident if required and to assist in the conduct of litigation should it ensue. However, it was unable to conclude that the dominant purpose was in contemplation of litigation and the notes were ordered disclosed.
Conclusion
Ultimately, whether a particular document is protected by litigation privilege will turn on the specific facts of each case. The Courts are clear that there are some instances where litigation privilege cannot automatically be assumed to exist, and so the onus is on the party claiming privilege to establish the foundations for it. The Courts are likewise clear that litigation privilege cannot be used as a blanket claim to limit disclosure, either for strategic or for idle purposes. Rather, documents must be considered in turn and with all due diligence. A strong claim of privilege – or a well-placed challenge to one – can make all the difference in disclosure of information in legal proceedings.
Written by Jeremy Ellergodt with contribution from Caelin Robinson.
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[1] 2006 SCC 39
[2] 2016 SCC 52
[3] “Reasonable prospect” is defined as when a reasonable person, which all the relevant information, would conclude that a claim is unlikely to resolve without litigation.
[4] (1991), 62 BCLR (2d) 254 (CA)
[5] Waugh v British Railways Board [1979] 2 All ER 1169
[6] See, for example, Voth Bros. Construction (1974) Ltd. v North Vancouver School District No. 44, 1981 CanLII 506 (BC CA); Caterpillar Tractor Co. v Ed Miller Sales & Rentals Ltd., 1988 ABCA 282; Gower v Tolko Manitoba Inc., 2001 MBCA 11 (https://canlii.ca/t/1fl6p); etc.
[7] There are narrow and clearly defined exceptions to litigation privilege, which include criminal communications, innocence of an accused person, public safety and evidence of abuse of process. These are not explored here.
[8] Ottawa (City) v Lauzon, 2013 ONSC 2619
[9] R v Husky Energy Inc., 2017 SKQB 383
[10] Canada Southern Petroleum Ltd. v Amoco Canada Petroleum Co., 1995 CanLII 9236 (AB KB)
[11] Canadian Natural Resources Limited v ShawCor Ltd., 2014 ABCA 289
[12] TransAlta Corporation v Market Surveillance Administrator, 2015 ABQB 180
[13] Himalainen v Sippola, supra
[14] Thiara v Potrebenko, (1991), 64 BCLR (2d) 37 (BCSC)
[15] See, for example, Wirick (Re), 2002 BCSC 1355; Taylor Ventures Ltd. (Re), 1999 CanLII 5475 (BC SC); and Re Ontario Securities Commission and Greymac Credit Corp., [1983] OJ No 2986 (QL)
[16] The driver report was prepared immediately after the collision, whereas the supervisor report was prepared a number of months later.
[17] 2010 BCCA 233