Misuse of Privileged Documents by Counsel May Lead to Disqualification

Misuse of Privileged Documents by Counsel May Lead to Disqualification

Phil Connors: Do you ever have déjà vu, Mrs. Lancaster?
Mrs. Lancaster: I don’t think so, but I could check with the kitchen.

(Groundhog Day, Columbia Pictures, 1993)

There are very few things in the legal profession that have hard and fast rules, but privilege is certainly one of them. 

To quote the Ontario Court of Appeal in Ontario (Auditor General) v. Laurentian University, 2023 ONCA 299, privilege is “sacrosanct” and is a “civil right of supreme importance”. Where the “legislature intends to abrogate privilege, it does so with clear and express language”.

As the case of De Cotiis Estate, 2024 BCSC 1024 illustrates, repeated misuse of privileged documents by counsel led directly to his and his firm’s disqualification from acting.

In De Cotiis Estate, one of the Deceased’s children (“DDC”) undertook an unauthorised search of the Deceased’s residence and removed a substantial quantity of documents belonging to the Deceased and scanned and distributed to others. All of the parties agreed that a number of the documents removed from the Deceased’s residence were subject to solicitor-client privilege and the Deceased had never waived privilege over these documents (the “Privileged Documents”).

DDC thereafter commenced an action seeking to vary the Deceased’s will. DDC amended his notice of civil claim to allege that Deceased’s will was invalid due to incapacity or as a result of undue influence. DDC’s counsel later wrote to the Deceased’s former solicitor and named executor (the “Executor”) and referred to and attached the Privileged Documents. The Executor immediately advised DDC’s counsel that he was asserting privilege over the Privileged Documents. Thereafter, the Executor repeatedly sought the return of the Privileged Documents and warned DDC’s counsel against their use.

Despite this assertion of privilege, however, DDC’s counsel advised the Executor that he “had no choice” and repeatedly used the Privileged Documents in subsequent court filings.

Following numerous exchanges of correspondence, DDC’s counsel assured the Executor in writing that he would not make any further use of the Privileged Documents until the issue was settled by the Court. DDC then commenced a new proceeding making use of and referring to the Privileged Documents

To determine whether counsel should be disqualified from acting in a particular case where counsel had wrongful access to materials covered by solicitor-client privilege, the British Columbia Supreme Court applied the six-part framework outlined by the Supreme Court of Canada in Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36:

  • How the documents came into the possession of the litigant or its counsel – It was incorrect for DDC’s counsel to assert that privilege had essentially been waived or lost because one of the Deceased’s children, who had shared the residence with the Deceased, facilitated DDC’s removal of the documents. Solicitor-client privilege is not waived simply because a person shares a residence with someone else and stores documents in that residence.
  • What the litigant and their counsel did upon recognition that the documents were potentially subject to solicitor-client privilege – DDC’s counsel had also improperly disseminated the privileged documents, prepared pleadings relying on them, attached them to affidavits and had them filed in court proceedings, then republished them repeatedly by referring to and attaching them in other proceedings. DDC’s counsel also provided the privileged documents to strangers to the Deceased’s Estate who then commenced a lawsuit filed by DDC’s counsel, despite knowledge of the privileged status of the documents.
  • The extent of review made of the privileged material – The onus was on DDC’s counsel to satisfy the Court what documents were reviewed on the basis of reliable, but the only explanation as to the extent of the documents reviewed were DDC’s counsel’s vague and conclusory statements.
  • The contents of the solicitor-client communications and the degree to which they are prejudicial – The prejudice was significant because the use and disclosure of the privileged documents were used to challenge the Deceased’s estate planning and were also used as the basis for an action against the Deceased;
  • The stage of the litigation – The litigation had not proceeded beyond the pleadings stage and was not complex; and
  • The potential effectiveness of a firewall or other precautionary steps to avoid mischief – DDC’s counsel did not propose any precautionary step to address potential mischief. Moreover, DDC’s counsel had involved an associate to argue the application.

Based on those findings, the Court disqualified DDC’s counsel and his firm from acting in the matter and any other related matter as counsel.  

It is also worth noting that the Court declined to rule on whether the “wills exception” and future fraud and crime exception applied in the circumstances given that DDC’s counsel was disqualified. In short, the way in which DDC’s counsel had dealt with the privileged material “tainted” the proceedings and the Court believed it appropriate to have this issue adjudicated under the proper procedure with new counsel.

Thanks for reading!

Aaron Chan