Tag: solicitor client privilege

13 Mar

Common Interest Privilege

Paul Emile Trudelle Litigation Tags: , , 0 Comments

Communications between a client and litigation counsel may be considered privileged, and therefore may not be producible in the litigation.

This privilege can be extended to communications between parties and counsel to litigation who have a “common interest”.

“Common interest privilege” has been described as arising “where one party (party A) voluntarily discloses a document which is privileged in its hands to another party (party B) who has a common interest in the subject matter of the communication or in litigation in connection with which the document was brought into being.” The result is that the document is privileged in the hands of party B.

To put it another way, in the leading case of Iggillis Holdings Inc. v. Canada (National Revenue), 2018 FCA 51 (CanLII), (leave to the Supreme Court of Canada dismissed) the Federal Court of Appeal stated:

[S]olicitor-client privilege is not waived when an opinion provided by a lawyer to one party is disclosed, on a confidential basis, to other parties with sufficient common interest in the same transactions. This principle applies whether the opinion is first disclosed to the client of the particular lawyer and then to the other parties or simultaneously to the client and the other parties. In each case, the solicitor-client privilege that applies to the communication by the lawyer to his or her client of a legal opinion is not waived when that opinion is disclosed, on a confidential basis, to other parties with sufficient common interest in the same transactions.

Common interest privilege is not a “stand-alone privilege”: it extends an existing privilege to the receiving party. The communication must be otherwise privileged for common interest privilege to apply. For example, a document that is subject to privilege in the hands of party A may also remain privileged in the hand of party B, if there is a common interest at the time the document is disclosed.

The onus of establishing that a document is privileged from production rests on the party asserting the privilege. That party must provide evidence that supports the claim of privilege. If necessary, the court can review the documents in order to decide the validity of the claim: Rule 30.04(6) of the Rules of Civil Procedure.

The determination of whether the privilege exists depends upon objective evidence of the purpose and content of the communications and not the mere belief of the parties.

The concept is discussed at length in the matter of Ross v. Bragg, 2020 BCSC 337 (CanLII). There, the plaintiff made a claim against a number of defendants for damages relating to a lost business opportunity.

Correspondence between one of the defendants and their lawyer was shared with another defendant. If these documents contained legal advice, they would remain privileged in the hands of all of the defendants. The court reviewed the documents to determine whether they contained legal advice as not all documents from a lawyer are subject to privilege.

As an example of the application of the claim of privilege, the court ordered the production of minutes of a meeting between the defendants relating to discussions of the business opportunity, as these were not privileged, but refused to order production of the minutes relating to discussions of the defence to the litigation.

Thank you for reading.

Paul Trudelle

04 Feb

To Act or Not to Act: When is There a Conflict of Interest for a Lawyer?

Kira Domratchev Ethical Issues Tags: , , , , , , 0 Comments

As lawyers, we always have to consider whether we can act for someone before we are retained. Often, the question of whether we are in a conflict is a simple one; however, occasionally, it is more difficult to assess whether we can or more importantly, should, act for someone.

In a recent case, a Plaintiff moved to remove counsel for the Defendant due to a perceived conflict of interest (Gloger v Evans 2018 ONSC 4919).

Facts

Otillie and Jochen Gloger, whose children are the parties in this action retained a law firm, to prepare their Wills. Otillie died first and Jochen retained the law firm to prepare a survivorship application with respect to their joint property.

Jochen’s Will named both the Plaintiff and the Defendant in this matter as the Estate Trustees of his Estate and the Estate was divided equally between the Plaintiff and the Defendant.

In this action, following Jochen’s death, the Plaintiff sought to have the Defendant removed as Estate Trustee based on various allegations such as misappropriation of assets and breach of fiduciary duty.

The Defendant retained the law firm to represent her in this action. In turn, the Plaintiff alleged that the firm could not represent the Defendant because there were several conflicts of interest and more importantly, such representation would undermine public confidence in the administration of justice.

The Court considered the test set out in MacDonald Estate v Martin (1990) 3 SCR 1235, which requires that two questions be answered:

  1. Did the lawyer receive confidential information attributable to a solicitor client relationship relevant to the matter at hand?
  2. Is there a risk that it will be used to the prejudice of the client?

Because prejudice is difficult to prove, the “test must be such that the public, represented by the reasonably informed person, would be satisfied that no use of confidential information would occur…”.

Analysis and Decision

The Court held that, at its best, the Plaintiff’s evidence was that he and the Defendant initially retained the law firm but that, three days later, he retained his own lawyer. The Plaintiff never met with a lawyer at the law firm but he apparently had a telephone call with someone at the law firm while the Defendant listened in. However, he could not advise whom he spoke with, nor what that person’s occupation was. Furthermore, the Plaintiff did not sign a retainer agreement nor did he provide a retainer.

Given this evidence, the Court held that the Plaintiff did not retain the law firm and was therefore not a former client. Even if he was a former client, however, the Plaintiff stated at his cross-examination that he did not provide any confidential information to the law firm.

The Court did not believe that any confidential information provided by the Deceased, with respect to the Will which named both the Plaintiff and the Defendant as the beneficiaries and Estate Trustees of the Estate, was relevant to this action regarding trustee misconduct, given that the Will was not ambiguous, nor was there a challenge to the Will.

In making this decision, the Court also commented  on the importance of the right of the client to be represented by counsel of their choice and that a flexible approach must be taken.

In light of the foregoing, the Court did not consider the second step of the test and dismissed the Plaintiff’s motion for the removal of the law firm, as the Defendant’s counsel.

This case reminds us that it is important to consider whether you should act for someone in the circumstances of each individual case. The above-noted test helps one determine whether a potential conflict of interest may arise.

Thanks for reading!

Kira Domratchev

Find this blog interesting? Please consider these other related posts:

Solicitor’s Conflicts of Interest in an Estates Practice

Conflicts of Interest and the Bright Line Rule

The Lawyer’s Estate Planning Retainer With A Married Couple

12 Jun

Duty of disclosure – the unique rules for estates and trusts

Ian Hull Estate & Trust, Estate Planning Tags: , , , 0 Comments

We all know that lawyers have a duty to hold client information confidential – it’s one of the foundations of our legal system. But estates are a special matter. If we follow the letter of the law regarding confidentiality, a drafting lawyer would be unable to release the testator’s will following their death.

To overcome this potential problem, the common-law has developed what is known as the “wills exception” to the rules regarding confidentiality between a lawyer and their client. The “wills exception” lets the drafting lawyer divulge the existence and contents of a will to those with an interest in the estate. Easy – problem solved.

Of course, not all estates are straightforward, and matters can get complicated if a will is contested. During an estate dispute, many third parties may request that a drafting lawyer divulge certain information about the deceased’s estate planning. The purpose is to find information that can help shed light on the deceased’s true intentions in relation to their estate.

Since deceased individuals can’t speak for themselves and explain intentions or waive their rights, caselaw has made it clear that the estate trustee may step into the shoes of the deceased and waive confidentiality or privilege. However, the group of individuals who may have the drafting lawyer waive privilege or confidentiality could be quite diverse, including beneficiaries, next of kin, and potentially even creditors of the deceased.

Since it’s unlikely that this group of individuals will speak with one mind in an estate dispute and collectively decide to waive privilege or confidentiality, a lawyer who is faced with the issue of releasing confidential information or documents should seek the consent of all parties with a financial interest in the estate before releasing such documents. And in some cases, the drafting lawyer may wish to seek the guidance of the court on the issue of what, if any, documents they should release.

For a detailed discussion of the issue of solicitor client privilege in an estate context, this paper reviews many of the key cases.

Disclosure rules for trusts

The cases related to trusts are many, but a few rules have emerged in relation to disclosure duties related to trust arrangements.

  • Disclosure to a beneficiary: As a general rule, the beneficiaries of a trust may, on reasonable notice, require the trustees to produce for their inspection any trust document that the beneficiaries wish to see.
  • Disclosure to a discretionary beneficiary: While a discretionary beneficiary is entitled to view trust documents, they are not entitled to see any documents or information pertaining to why the trustee did (or did not) exercise their discretion in the trust.
  • Trustee obligation to inform: Generally, there is no positive obligation on the part of a trustee to give unsolicited information to beneficiaries. There are some exceptions however – most notably with minor beneficiaries. A trustee of a trust in which there are minor beneficiaries has a positive obligation to inform the minor beneficiary of the existence of the trust once they come of age, and to show the trust deed and any other relevant documentation that explains or sets out the basis of the trust.

For a more detailed examination of disclosure rules relating to trusts, this paper discusses many of the leading cases in this area. Thanks for reading.

Ian Hull

06 Mar

Does Solicitor/Client Privilege Extend to Trustees and Beneficiaries?

Ian Hull Estate & Trust, Estate Planning, Executors and Trustees, General Interest, Trustees, Wills Tags: , , , , , 0 Comments

Last week we considered the application of solicitor/client privilege to a deceased testator and their testamentary intentions. A further consideration in examining the passing of solicitor/client privilege upon death is whether the individual claiming privilege is a trustee, executor, or a beneficiary.

Trustees, executors, and beneficiaries are generally regarded as having a community of interest, which may entitle them to solicitor/client privilege. Under the common law, there is not a need to protect communications between solicitors and clients from disclosure to persons who are claiming under the estate where the executor (or trustee) and beneficiary have a joint interest in the advice. The common interest/joint interest provision applies so that no privilege will attach to communications between a solicitor and client against a person who has a joint interest with the client in the subject matter of the communication. There can be no privilege asserted against beneficiaries of a trust over communications between a trustee and a trustee’s solicitors regarding the business and affairs of the trust.

Re Ballard Estate, (1994), 20 OR (3d) 189 (Ont. Gen. Div.), held that documents will be said to belong to a beneficiary because the solicitor was engaged and giving advice in regard to the administration of the estate and for the benefit of all beneficiaries who take or may take under the will or trust.

Pursuant to paragraph 16 of Chang v Lai Estate, 2014 BCSC 128, “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.” As such, the advice taken by a trustee or an executor is for the benefit of all beneficiaries of the will, establishing a joint interest between the executrix and beneficiaries.

The aforementioned case further highlighted that a beneficiary is not entitled to the production of all communications between legal counsel and an executor. If there is an adversarial relationship between a trustee and a beneficiary, there is no joint interest that would compel disclosure of communications that would normally be protected by solicitor/client privilege. Where a beneficiary is in an adversarial relationship with the executor, solicitor/client privilege would appear to remain in place to preserve confidentiality

Moreover, if litigation is commenced against a third party on behalf of the trust, the trustee cannot generally claim privilege as against the beneficiary, as the beneficiary has an interest in the outcome of the litigation. However, pursuant to the case of Talbot v Marshfield [1865], if a trustee is in litigation against a beneficiary, and especially if the trustee is paying their own legal costs, the trustee can generally uphold privilege as against the beneficiary.

Thanks for reading,

Ian M. Hull

Other Articles You May Be Interested In

What Happens When an Estate Trustee Dies?

Anticipating Trustee Problems

How does Solicitor/Client Privilege Apply on the Death of a Testator?

27 Feb

How does Solicitor/Client Privilege Apply on the Death of a Testator?

Ian Hull Beneficiary Designations, Estate & Trust, Estate Planning, Executors and Trustees, General Interest, Litigation, Trustees, Wills Tags: , , , , , , 0 Comments

What happens to communications between a solicitor and a testator once the testator passes away? Can privilege be waived in order to determine the intentions of a testator?

As stated in R v McClure, 2001 SCC 14, “solicitor/client privilege must be as close to absolute as 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.”

It has been established that the beneficiary of privilege (i.e. the client) is able to pass on their privilege to established successors. Pursuant Bullivant v AG for Victoria [1901] (HL), a testator’s death does not destroy the privilege that can be asserted by an executor, and the heirs of the testator.

In Hicks Estate v. Hicks, (1987) 25 E.T.R. 271, the Ontario District Court (as it then was) was faced with the question of whether an Estate Trustee could step into the shoes of the deceased individual and waive privilege in the same fashion as the deceased. In this case, the court clarified that solicitor/client privilege exists for the benefit of the client, not the solicitor.

In Goodman v Geffen, [1991] 2 SCR 353, the Supreme Court of Canada established that there are situations where privilege does not arise where the interests of the party seeking information are the same as those of the individual who retained the solicitor. For example, the court may receive evidence from a solicitor of instructions given to the solicitor by a deceased testator in order to determine the testator’s true intentions. This principle has been further explained in the case of Stewart v Walker (1903) 6 OLR 495 (CA): “the reason on which the rule is founded is the safeguarding of the interest of the client, or those claiming under him when they are in conflict with the claims of third persons not claiming, or assuming to claim under him.” As such, upon the death of a testator, it is possible for the privilege between the testator and their solicitor to extend beyond death.

Aside from trying to determine the true intentions of the testator, the principle of solicitor/client privilege upon the death of a testator can be applied to the disclosure of legal opinions to a trustee, as a trustee is bound to act in the best interests of the beneficiaries and to further their interests. This will be discussed further next week.

Thanks for reading,

Ian M. Hull

Other Articles You May Be Interested In

Can an Estate Trustee Waive Privilege?

Waiver of the Solicitor and Client Privilege

Leaving an Inheritance: An Obligation or Privilege?

 

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