Estate litigation often involves disputes about a person’s understanding of their legal rights and obligations. Beneficiaries, estate trustees, attorneys for property, and attorneys for personal care may all advance positions based on what they believed they were entitled to do or understood a legal document to mean. In some circumstances, doing so may result in a waiver of solicitor-client privilege.
The Ontario Court of Appeal recently considered this issue in One York Street Inc. v. 2360083 Ontario Limited, 2026 ONCA 176
The Decision
The case arose from a commercial lease dispute. The respondents alleged that they entered into the lease in reliance on representations made by the other party and asserted that those representations affected their understanding of their rights under the lease. The respondents had also received legal advice in connection with the transaction.
When production of the legal file was sought, the respondents asserted solicitor-client privilege. Although they later amended their pleadings to remove explicit references to not understanding the transaction and not having received legal advice, the Court concluded that the substance of their position continued to rely on their understanding of their legal rights under the lease.
The Court restored an order requiring production of the legal file.
The Law
The Court emphasized that solicitor-client privilege is a fundamental right. However, privilege may be lost through implied or deemed waiver where a party’s litigation position is inconsistent with maintaining confidentiality over legal advice.
Importantly, the Court confirmed that privilege is not waived simply because legal advice was obtained. Nor is privilege waived every time a party’s state of mind is relevant to the dispute.
Rather, the key question is whether the party has placed its understanding of its legal position in issue. The Court summarized the principle as follows:
“For a deemed waiver to arise, a party must place reliance in its claim or defence on its understanding (or lack of understanding) of its legal position about an issue in the litigation.”
Where a party relies on its understanding of its legal rights while having received legal advice on the same issue, fairness may require disclosure of that advice. The Court held that a party cannot advance a position based on its understanding of its legal rights while shielding legal advice that may bear on that assertion.
Relevance to Estate Litigation
Although not an estates case, the decision has potential relevance to estate disputes. Allegations concerning the interpretation of wills, trusts, powers of attorney, settlement agreements, or an estate trustee’s authority often involve assertions about a party’s understanding of their legal rights and obligations.
The decision serves as a reminder that litigants should carefully consider whether their pleadings, affidavits, or discovery evidence place their understanding of their legal position in issue. If they do, privilege over related legal advice may become vulnerable to challenge.
Takeaway
The decision confirms that implied waiver does not arise merely because legal advice exists. The focus is on whether a party has chosen to rely on its understanding, or lack of understanding, of its legal position as part of its claim or defence. Where that occurs, fairness may require disclosure of otherwise privileged communications.
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