Jim Lepore

The appellant commercial landlord appealed from the Divisional Court's order quashing a motion judge's production order that had found the respondent tenants had impliedly waived solicitor-client privilege over legal advice received when entering into a commercial lease.

The Court of Appeal allowed the appeal, finding three errors by the Divisional Court: applying a correctness standard of review instead of palpable and overriding error, misreading the motion judge's reasons as based on the original rather than amended pleadings, and failing to recognize that even the amended defence still placed reliance on the respondents' understanding of their legal position.

The court clarified that deemed waiver of privilege does not require explicit reference to legal advice and provided a five-point summary of the applicable legal principles.

The appellants appealed an interlocutory order requiring them to produce their former lawyers' file based on a deemed waiver of solicitor-client privilege.

The motion judge had found that the appellants waived privilege by pleading they signed a lease extension 'without legal advice', and that they could not 'unwaive' this privilege by subsequently amending their pleadings to remove that assertion.

The Divisional Court allowed the appeal, holding that the motion judge erred in law by failing to apply the test for deemed waiver to the amended pleadings, which no longer made the absence of legal advice a material issue.

The moving parties brought a motion for leave to appeal the order of Wilson J. dated August 24, 2023.

The Divisional Court granted the motion for leave to appeal, with costs reserved to the panel hearing the appeal.

The plaintiff, One York Street Inc., brought a motion seeking production of the former counsel's file for the defendants, 2360083 Ontario Limited and LCIL Ltd., and other discovery-related orders.

The defendants had initially pleaded lack of legal advice regarding a lease and its extension, but later withdrew this pleading.

The plaintiff argued that the defendants had waived solicitor-client privilege by asserting affirmative defenses of misrepresentation and placing their state of mind in issue.

The court applied a two-step test for deemed waiver of privilege, finding that the legal advice was relevant to the defendants' reliance on alleged misrepresentations and that the defendants had made the receipt of advice an issue through their pleadings.

The court granted the motion for production of the Fogler's file, deeming privilege waived due to fairness considerations.