Further to my many posts on the topic of discovery, when parties are involved in a lawsuit in the BC Supreme Court the Rules of Court require the parties to disclose certain information to the opposing side. Generally all relevant information needs to be disclosed however there are exceptions to this and one such exception is ‘privilege‘.
Generally speaking (this is not an exhaustive list), privileged documents are documents that were created with an expectation of confidentiality between a party and his/her lawyer or documents that were created with the dominant purpose of advancing the parties interests in court.
The purpose behind the privilege exception to disclosure is to permit individuals to freely discuss their legal matters and work with their lawyers to advance their interests without the fear that these conversations/actions can come back to hurt the individuals interests later on.
The law recognizes an extension of privilege between one client and their lawyer to multiple people and that lawyer if the conversations took place in anticipation of a lawsuit and the multiple parties have a common interest. This type of privilege is sensibly called ‘common interest privilege‘. Reasons for judgement were released today discussing this area of law and highlighting some of the limitations of common interest privilege.
In today’s case (Peters v. Paterson) the Plaintiff was seriously injured while windsurfing when he was involved in a collision with a motorboat. He eventually sued multiple parties including the people alleged to have been operating the boat (the “Motorboat Defendants”) and the people alleged to have rented the boat to the Motorboat Defendants (the “Renter Defendants”).
Before the lawsuit started one of the Renter Defendants apparently feared a potential lawsuit and retained the services of a lawyer. That lawyer retained an adjuster who immediately took statements from a handful of people including the people who would later turn out to be the Motorboat Defendants.
After all the Defendants were sued by the Plaintiff the Renter Defendant who initially hired the lawyer issued a Third Party Notice against the Motorboat Defendants (a Third Party Notice is a document which alleges that if a certain defendant is found at fault and has to pay that the Third Party has to indemnify that defendant for the judgement).
The Plaintiff then asked for the statements of the Motorboat Defendants to be produced. The Lawyer for the Renter Defendants refused citing ‘common interest privilege‘. Ultimately an application was brought to court to force disclosure and the application succeeded. Master Taylor of the BC Supreme Court, Vancouver Registry, held that the Third Party Notice took away any claim to common interest privilege. The key reasons were as follows:
[13] Common interest privilege is said to be an extension of the privilege against disclosure of solicitor-client communications. As Wigmore defines it:
The chief instance occurs when the same attorney acts for two parties having a common interest, and each party communicates with him. Here the communications are clearly privileged from disclosure at the instance of a third person. Yet they are not privileged in a controversy between the two original parties, inasmuch as the common interest and employment forbade concealment by either from the other. (Wigmore’s emphasis)
[14] The defendants take the position that the statements in this case are covered by common interest privilege, which, they submit, applies to an exchange of confidential information between individuals who have a common interest in anticipated litigation. The defendants cite Buttes Gas and Oil Co. v. Hammer (No. 3), [1980] 3 All E. R. 475 (C.A) in support of their position where Lord Denning says:
There is a privilege which may be called a “common interest” privilege. That is a privilege in aid of anticipated litigation in which several persons have a common interest. It often happens in litigation that a plaintiff or defendant has other persons standing alongside him – who have the self-same interest as he – and who have consulted lawyers on the self-same points as he – but these others have not been made parties to the action…All exchange counsel’s opinions. All collect information for the purpose of litigation. All make copies. All await the outcome with the same anxious anticipation – because it affects each as much as it does the others.
[15] The defendants maintain that common interest privilege can apply to witness statements and in fact has been so applied in a number of Canadian cases.
[16] On the other hand, the plaintiff asserts that the case at bar is distinguishable from other cases in that there is no suggestion by the defendant or their counsel that counsel has ever worked in conjunction with the motorboat defendants to jointly advance the interests of all the defendants. As well, the plaintiff maintains, there has not been any evidence led to indicate the motorboat defendants understood the reason for giving their statements, the uses their information would be put to, or that their statements would be kept privileged from the plaintiff. In fact, in the instant case, two of the motorboat defendants have signed authorizations to release their statements to the plaintiff.
[17] In the recent decision in Maximum Ventures Inc. v. De Graaf, 2007 BCCA 510, Mr. Justice Mackenzie discussed the test for maintaining privilege between parties at paragraph 14:
Recent jurisprudence has generally placed an increased emphasis on the protection from disclosure of solicitor-client communications, including those shared in furtherance of a common commercial interest. In the instant case the [solicitor’s] draft was produced within the recognized solicitor-client privileged relationship. The common interest privilege issues arise in response to a plea of waiver of that privilege. The common interest privileges is an extension of the privilege attached to that relationship. The issue turns on whether the disclosures were intended to be in confidence and the third parties involved had a sufficient common interest with the client to support extension of the privilege to disclosure to them….Where legal opinions are shared by parties with mutual interests in commercial transactions, there is a sufficient interest in common to extend the common interest privilege to disclosure of opinions obtained by one of them to the others within the group, even in circumstances where no litigation is in existence or contemplated.
[18] And, at paragraph 16, Mackenzie, J.A. made the following finding:
The interests of the clients of the three solicitors were not identical but they were common to the extent that financing of the Western exploration of the Mongolian properties was beneficial to all of them. They also shared an interest in assessing the invalidity of Maximum’s claims.
[19] The defendants maintain that even though two of the defendants have signed authorizations addressed to counsel for the defendants directing that their statements be released to counsel for the plaintiff, they cannot, in these circumstances, create a waiver over the common interest privilege by so doing.
[20] In my view, that argument begs the question for two reasons. Firstly, were the persons from whom the statements taken to request copies of their statements, surely they would be entitled to receive copies of them as no privilege attaches to one’s own statement in the hands of a third party? It would then be open to each of those parties to deliver a copy of their statements directly to the plaintiff. Secondly, the defendant, Paterson, has issued third party proceedings against the four individual motorboat defendants for which he seeks judgment against the motorboat defendants, or indemnity from them in the event a judgment is rendered against Paterson.
[21] The Third Party Notice contains the following allegations:
a. The plaintiff’s windsurfer struck the port side of the motorboat;
b. The motorboat defendants represented that Arvinder Kaler would be the person operating the motorboat;
c. While Paterson does not know who was operating the boat at the time of the accident, it has been represented to Paterson that Sukhbir Brar was operating the motorboat at the time of the accident; and
d. the accident was caused solely by the negligence of the operators of the motorboat.
[22] In the circumstances, two things are apparent. One, that the allegations made in the Third Party Notice are likely the result of information gleaned from the motorboat defendants, and, two, the defendant, Paterson, alleges the accident was caused solely by the negligence of the motorboat defendants, which creates the question: where is the commonality of interest between the renter defendants and the motorboat defendants such that a privilege continues to exist over the statements taken from the motorboat defendants?
[23] In my view, by the very nature of the Third Party Notice and the allegations made in it, there has been a severing of the commonality of interest of the defendants. In the result, therefore, there is no common interest privilege which can be maintained, and, accordingly, the statements taken from the four motorboat defendants are no longer privileged and must be turned over to the plaintiff.
