COURT FILE NO.: 94/07

DATE: 20070320

SUPERIOR COURT OF JUSTICE - ONTARIO

DIVISIONAL COURT

RE: Herman Wexler and Aneta Wexler (Plaintiffs) and Suncor Energy Products Inc. (Defendant)

BEFORE: Justice Cumming

COUNSEL: Dena Varah, for the Plaintiff

Martin Sclisizzi and Elissa Goodman, for the defendant

HEARD: March 8, 2007

E N D O R S E M E N T

CUMMING J.

The Motion

[1] The appellant, defendant, Suncor Energy Products Inc. (‘Suncor”), seeks leave to appeal the Order of Dyson J. dismissing Suncor’s appeal from the Order of Master Graham dated September 22, 2006. Master Graham denied Suncor leave to substitute Mr. Les Wojtanowski, Suncor’s Manager of Environmental Health and Safety, as its representative for examinations for discovery. The plaintiffs seek to examine Mr. Louis Biancolin, Senior Solicitor in Suncor’s in-house legal department. Master Graham concluded that Suncor had not met its onus under Rule 31.03(2)(a) and dismissed the motion. With detailed reasons, Master Graham upheld the prima facie right of the plaintiffs to examine Mr. Biancolin, their representative of choice in respect of the corporate defendant.

[2] Suncor appealed the decision of Master Graham. On November 22, 2006, Justice Dyson applied the agreed upon standard of review, concluding that Master Graham was not “clearly wrong” and that solicitor-client privileged information will be protected on discovery.

Background

[3] Suncor operated a retail gasoline station under lease from the plaintiffs. The plaintiffs allege in their statement of claim that upon the gas station’s closure, Suncor failed to return the subject property in a condition required by the terms of the lease and by regulatory obligations.

The Law

[4] The motion for leave to appeal at hand is governed by the test set out in Rule 62.02 (4) which reads:

(4) Grounds on which leave may be granted -- Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reasons to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted

[5] The onus to satisfy the requisite two conjunctive conditions within each of the alternative branches of (a) and (b) rests with the moving party (Suncor).

The first branch of Rule 62.02(4)(a)

First condition

[6] A conflicting decision is one where conflicting principles of law have been applied in the exercising of discretion.

[7] Suncor refers to the Alberta Court of Appeal holding in BTK Holdings Ltd. v. Greater Edmonton Development Corp. (1992), 1992 ABCA 238, 95 D.L.R. (4th) 573 (Alta. C.A.) [BTK] that an in-house counsel acting solely in that capacity could not be considered an “officer” of the corporation for the purposes of discovery under Rule 200 of the Alberta Rules of Court. The Court made this determination because it saw potential difficulties in separating privileged from non-privileged information.

[8] Later Alberta cases have stated that where privilege cannot be established, the lawyer can be examined for discovery. See Flynn v. Luscar Ltd., 2002 ABQB 799, [2002] A.J. No. 1084 (Q.B.) at paras. 64, 65 and 66; MacKenzie v. First Marathon Securities Ltd., 2004 ABQB 300, [2004] A.J. No. 454 (Q.B.) at paras. 39, 40, and 41, and Klemke Mining Corp v. Shell Canada, 2002 ABQB 1131, [2002] A.J. No. 1617 (Q.B.) at paras. 29, 30 and 31.

[9] Alberta Rule 200 (allowing the examination of more than one officer or employee) differs somewhat from Ontario Rule 31.03 (allowing the examination of only one “officer, director or employee”).

[10] There is common ground between the parties that Mr. Biancolin cannot be questioned about his legal advice to Suncor, the confidentiality of which is protected by solicitor-client privilege. See for example Global Petroleum Corp. et al. v. CBI Industries Inc. et al. (1998), 1998 NSCA 220, 172 D.L.R. (4th) 689 (N.S.C.A.) at paras 22 and 23; See also Horodynsky Farms Inc. v. Zeneca Corp., 2006 25345 (ON CA), [2006] O.J. No. 3012 (C.A.) at paras. 20 and 21.

[11] In my view, there is not any conflicting decision in respect of the decision of Dyson J. and, more specifically, the underlying decision of Master Graham and other court decisions in Ontario or elsewhere.

[12] The Alberta cases tend to look more at the role of the lawyer than at the specific information she/he has. In Ontario, the lawyer generally can be examined with the right, of course, to assert privilege in respect of specific questions.

[13] In my view, the slightly different approach in Alberta is a nuance relating only to the exercising of discretion by the court rather than representing a conflicting principle of law.

[14] This slightly different approach seen in Alberta in the exercising of discretion by the court as to who may be examined may be because the Alberta Rule allows for the examination of more than one person connected with a corporate party. As in BTK, the court may have the benefit of the evidence given in respect of the examination of a previous corporate officer when addressing the question as to whether the corporation’s lawyer can then also be properly examined.

[15] Suncor argues that any information acquired by an in-house counsel is shielded from discovery simply because he/she acquires the information in that capacity. Suncor argues that if the solicitor’s only knowledge of relevant information comes to him/her in his/her capacity as a lawyer, then he/she should not be subject to examination for discovery because the line between privileged communications and non-privileged information is easily blurred. There may be an intermingling of privileged and non-privileged information such that it is difficult to draw the line as to permissible questions.

[16] However, it is clear that in Ontario there is no blanket exclusion of lawyers from discovery simply because of the constraint of solicitor-client privilege.

[17] The approach in Ontario through Rule 31 is to prima facie leave the choice of the opposing corporate representative to the party seeking discovery. Solicitor-client privilege and/or litigation privilege attaches to specific documents and/or communications in given, discrete circumstances; privilege does not attach simply and generally in respect of information because the person receiving that information is a lawyer.

Second Condition

[18] In Alberta, there can be more than one corporate representative examined. Thus, the motion to prevent the examination of a lawyer often comes after some detailed knowledge has been gained from the earlier deponent examined as to the specifics of the lawyer’s role.

[19] In Ontario, given that only one individual can be examined there may be considerable uncertainty as to the role of the lawyer and his/her knowledge of relevant facts. The examining party must make his/her choice of deponent in this state of uncertainty. It cannot easily be presumed in advance of discovery as to the knowledge of relevant information of in-house counsel and whether privilege attaches to any such knowledge. The approach of the rule in not affording a blanket exclusion to lawyer witnesses is to avoid a shield to the fact finding process.

Second condition

[20] Nor in my view is there doubt such that it is desirable to give leave to appeal. The test is not the capacity in which Mr. Biancolin was acting, but whether he is in possession of material, discoverable facts. Swinton J. in Donoso v. Canac Kitchens Ltd. [2007] O.J. No. 83 (Div. Ct.) at paras. 7 and 8 stated aptly:

In my view, the moving parties have not met the test for leave under Rule 62.02. Their counsel did not take issue with the proposition that there is no blanket exclusion of lawyers as witnesses because they would be constrained by solicitor-client privilege….

Moreover, the test in Rule 62.02(4) has not been met, as I do not have good reason to doubt the correctness of the motion judge’s decision…. A party has a prima facie right to examine the representative of his or her choice…. If issues of privilege arise, they can be determined on a case by case basis.

The alternative, second branch of the test under Rule 62.02 (4) (b)

First condition

[21] While the decision under appeal is that of Dyson, J. the underlying decision at issue is that of Master Graham. In my view, there is no good reason to doubt the correctness of Master Graham’s decision. The party exercising the right to discovery has the prima facie right to name the particular officer or director for this purpose.

[22] The onus rests upon the opposing corporation, here Suncor, to demonstrate that the selection of the party seeking discovery is inappropriate. Master Graham reviewed and considered the relevant factors in making this determination, as set forth in Farris v. Stoubah, [2004] O.J. No. 3961 (Sup.Ct. Jus.) at paras. 3- 12. The record suggests that Mr. Biancolin has knowledge of the facts relating to the subject lease, its termination, and the decommissioning of the property. Although he may have acquired such information through his position as in-house counsel, that does not in itself shield him from discovery. He must be able to establish privilege in response to particular questions on discovery. This can only be dealt with at discovery, not through an asserted blanket exclusion in advance of his being examined.

[23] As stated above, privileged communications and documents are of course shielded from discovery.

Second condition

[24] Second, in my view the appeal does not involve matters of importance within the meaning of Rule 62.02(4). It does not raise issues of general importance beyond the interests of the immediate parties. The simple issue raised is whether a particular individual is to be produced for examination, given the facts of this discrete case.

Disposition

[25] For the reasons given, the motion for leave to appeal is dismissed.

[26] The parties have made submissions as to costs. Costs on a partial indemnity basis are fixed at $3,400.00, inclusive of GST and all disbursements, payable by the defendant to the plaintiffs forthwith.

CUMMING J.

DATE: March 20, 2007