2778-00-U Communications, Energy and Paperworkers Union of Canada, Local 774 and Individual Grievors listed on Schedule “A”, Applicants v. Communications, Energy and Paperworkers Union of Canada, Local 3264, Responding Party v. Beachville Lime Limited, Intervenor.

0738-01-U Communications, Energy and Paperworkers Union of Canada, Local 774 and Individual Grievors, Applicants v. Beachville Lime Limited and Communications, Energy and Paperworkers Union of Canada, Local 3264, Responding Parties.

BEFORE: Patrick Kelly, Vice-Chair.

APPEARANCES: S.B.D. Wahl and E. Dukes for Communications, Energy and Paperworkers Union of Canada, Local 774 and Individual Grievors; David Wright, Rick Cecchin and Roy McDonald for Communications, Energy and Paperworkers Union of Canada, Local 3264; and Rusty McLay, Suzanne Ritzer and Stephen Brookshaw for Beachville Lime Limited.

DECISION OF THE BOARD; October 22, 2001

Background

1. These are applications filed pursuant to section 96 of the Labour Relations Act, 1995, S.O. 1995, c.1 (“the Act”). Board File No. 0738-01-U is an unfair labour practice complaint in which the applicant (or “Local 774”) alleges violations of sections 70, 72 and 76 of the Act. The applicant in Board File No. 2778-00-U alleges that the responding party (“Local 3264”) breached its duty of fair representation, thereby violating section 74 of the Act, when, following a corporate amalgamation of two lime production businesses and the emergence of Local 3264 as the bargaining agent for all the union employees of the amalgamated enterprise, Beachville Lime Limited (“the employer”), Local 3264 advocated an “end-tail” rather than a “dove-tail” seniority system. Local 3264’s position on end-tailing, to which the employer ultimately agreed, had the effect of placing all former Local 774 members below the level of the former 3264 members on the combined seniority list. Grievances filed by the former 774 members in relation to the end-tailing of seniority were not processed by Local 3264 through the applicable grievance procedure.

Issue: Solicitor-Client Privilege

2. The hearing of evidence in these matters began on June 22, 2001, and has yet to conclude. During the course of the hearing on September 4, 2001 an issue arose concerning solicitor-client privilege in respect of the production of a certain document that is relevant and would be disclosed but for the claim of privilege. The Board directed that issue should be dealt with the following day, September 5, 2001. However, after taking submissions by the parties, it became apparent that the scope of the documents the applicant wished to have produced was broader than originally anticipated by the parties opposite. The Board directed the applicant to reduce its request for production to writing (which it did via correspondence dated September 10, 2001), and directed further that the motion for production would be dealt with at the resumption of the hearing on September 21, 2001.

3. In the letter of September 10, 2001, the applicant requests the following production order:

All documents, notes, meeting minutes, correspondence, memoranda, legal opinions and/or legal advice as to strategy relating to the matters at issue in these proceedings without limiting the generality of the foregoing, including but not limited to:

(a) any and all legal opinions and advice and/or notes thereof identified as:

(i) opinion letter from Caley & Wray dated October 18, 1999 (already produced);

(ii) legal opinion and letter of advice in November/December 1999 from Ryder, Wright, Blair & Doyle (identified at the hearings on September 4 and 5); and

(iii) legal opinions and advice identified in the Response filed on behalf of C.E.P. Local 3264 at Schedule “A”, paragraphs 11, 12, 13, 21, 22;

(iv) any other notes, memoranda, letters, correspondence or any other document whatsoever containing legal opinion or advice relevant to the matters at issue.

(b) all minutes of meetings including but not limited to general membership meetings and executive meetings and any other notes or memoranda relating thereto concerning the facts at issue and without limiting the generality of the foregoing, including but not limited to:

(i) all monthly general meeting minutes from July 1999 through to June 2001 insofar as they contain any notation relevant to the facts at issue including but not limited to notations with respect to legal advice received or strategy to be adopted in relation to the subject matter of this litigation; and

(ii) executive minutes, notes, memoranda and any other documentation including any notations of legal advice and/or strategy to be adopted, from July 1999 through to June 2001 relating to any of the matters at issue in this litigation.

(c) Any documents, memoranda, correspondence, letters, letters of understanding, agreements of any kind whatsoever between C.E.P. Local 3264 and Beachville Limited and any supporting documentation relating thereto including discussion papers and notes of any kind whatsoever relating to the subject matter of this litigation.

4. At the resumption of the hearing on September 21, 2001, Local 3264 indicated the extent of its resistance to the applicant’s request. Local 3264 has produced the October 18, 1999 opinion letter referred to above. There is also a December 13, 1999 opinion letter which Local 3264 is prepared to disclose insofar as it pertains to the right of Local 3264 to consider “end-tailing” of former Local 774 members on the combined seniority list. However, Local 3264 is not prepared to disclose those portions of that letter that disclose any advice given by counsel with respect to strategic options that Local 3264 might consider, including the positions it might take in negotiations with the employer and Local 774 throughout 1999 and 2000 with respect to the seniority issue. Similarly, Local 3264 is prepared to provide documents that reveal opinions concerning the applicability of the Local 3264 collective agreement to the seniority issue, but again, not those portions dealing with strategy options and negotiations. So too, with respect to minutes of union membership meetings at which the executive of Local 3264 conveyed legal opinions of counsel to the membership; Local 3264 is not prepared to disclose anything but the information specific to the question of the legality of seniority end-tailing. That is the position of Local 3264 with respect to all documents of the kind noted in Local 774’s request for production. At this point, Local 3264 does not contest the relevance of the documents, although it reserved its right to argue that point with regard to documents that post-date the filing of the section 74 complaint, which was filed on December 15, 2000.

The arguments of the parties

5. On the merits of its production motion, the applicant referred me to the following authorities in support: R. v. Campbell, 1999 CanLII 676 (SCC), [1999] 1 S.C.R. 565; Electrical Power Systems Construction Association, [1990] OLRB Rep. Sept. 930; Careful Hand Laundry and Dry Cleaners Limited, Kirlin Leasing Limited, [1995] OLRB Rep. May 627; Verney v. Great-West Life Assurance Company, 1998 CanLII 14668 (ON CTGD), [1998] O.J. No. 932; Land v. Kaufman, [1991] O.J. No. 1658; S. & K. Processors Ltd. v. Campbell Ave. Herring Producers Ltd., 1983 CanLII 407 (BC SC), [1983] B.C.J. No. 1499; Dufour and Teamsters Quebec, Local 106, [1998] C.L.R.B. 295; The Law of Evidence in Canada, Second Edition 755 (Butterworths).

6. The applicant’s position can be summarized briefly. It concedes that the communications between Local 3264 and its solicitors are of the kind that attract solicitor-client privilege. However, the applicant contends that Local 3264 waived its solicitor-client privilege in two ways. First, the applicant submits that Local 3264 waived its privilege when it disclosed the legal advice to its former members during membership meetings. That was akin to a public disclosure. (I note that none of the authorities cited above deals with that kind of fact situation.) Secondly, the applicant argues the privilege was waived when Local 3264 pleaded that it relied upon legal opinions with regard to the legality of end-tailing versus dove-tailing seniority lists, and that the waiver extends to all communications between Local 3264 and its solicitors concerning any and all aspects of the position taken by Local 3264 on the relative seniority of members of both locals throughout the period in question. That, the applicant says, includes any communication with respect to options that Local 3264 should consider in arriving at the decisions regarding seniority, or to any negotiating position taken by Local 3264 in discussions with the employer and the applicant on the issue of seniority. The rationale offered by the applicant is this. The applicant alleges that Local 3264 end-tailed the applicant’s former members for reasons that are arbitrary, discriminatory and in bad faith. Local 3264 denies the accusation. It contends it acted lawfully, and it relies in part on legal opinions for that assertion. Local 3264 has put in issue the bona fides of its decision-making in arriving at the conclusion that the applicant’s members should be end-tailed on the combined seniority list. Therefore, not only is Local 3264’s knowledge of its counsel’s views concerning the legality of end-tailing and dove-tailing critical to a determination of this matter, but so too is the manner in which the legal opinions were sought, considered and conveyed. For example, did the seekers of the advice fully inform their solicitors as to the underlying facts? To whom was the legal advice communicated, and how was it conveyed to the members of Local 3264 who are said to have ultimately provided their executive with the end-tailing mandate? How did Local 3264 go about implementing the advice of counsel (including any advice regarding strategic positions on seniority to be taken at the bargaining table)?

7. The applicant argued that the appropriate procedure in dealing with the production motion would be that the Board review the documents after hearing the submissions of the parties, determine what documents and/or portions thereof, if any, should be disclosed to the applicant, and order production of those, while returning to Local 3264 any privileged documented communications which, in the Board’s view, had not been subject to any waiver by Local 3264. The authority cited by the applicant for such a procedure is the Supreme Court of Canada decision in R. v. Campbell 1999 CanLII 676 (SCC), [1999] 1 S.C.R. 565.

8. Local 3264 acknowledged that there has been a waiver of solicitor-client privilege with respect to some communications, but it takes a narrower view of the scope of that waiver than does Local 774. The position taken by Local 3264 is grounded in its pleadings filed in these matters. In its response to the section 74 complaint, Local 3264 acknowledged the existence of the October 1999 legal opinion from Caley and Wray, and contended that that opinion “advised that it [Local 3264] would be entitled to insist on an end-tailed seniority list where those who are end-tailed faced job losses in any event”. The response goes on to refer to a series of tripartite negotiations in January and February 2000, throughout which “the executive of Local 3264 sought and obtained legal opinions respecting the right to end-tail seniority lists”. Finally, the response indicates that in the summer of 2000, Local 3264’s executive sought and obtained a legal opinion “that the language of their collective agreement supported end-tailing”. Local 3264 contends that all that it waived in respect of solicitor-client privilege was legal advice concerning the legality, and the application of the collective agreement in support, of end-tailing. It did not concede anything with respect to advice by counsel concerning strategy, tactics or negotiating positions that might be adopted by Local 3264, and that advice it says remains protected by the privilege. With respect to legal advice concerning the decision by Local 3264 not to process the seniority-related grievances of former Local 774 members, the pleadings make no mention of any effort by Local 3264 to obtain or rely upon such advice, and therefore there has been no waiver at all in regard to any communications of that sort.

9. In support of its position, Local 3264 relied upon the following authorities: Rogers v. Bank of Montreal et al, 1985 CanLII 397 (BC SC), [1985] B.C.J. No. 2716; Re Corporation of the City of Hamilton and Canadian Union of Public Employees, Local 167, (1978) 1978 CanLII 3408 (ON LA), 21 L.A.C. (2d) 110; Warren et al. v. Insurance Exchange Ltd. et al, (1982) 1982 CanLII 2012 (ON CA), 37 O.R. (2d) 716; and Careful Hand Laundry and Dry Cleaners Limited, supra.

10. The Careful Hand Laundry case involved an unfair labour practice complaint and a sale of business/related employer application. The unfair labour practice complaint (“the complaint”) dealt, in part, with an allegation of the layoff of employees for reason of their union affiliation, an allegation denied by Careful Hand Laundry and Dry Cleaners Limited (“the company”). The company alleged that the layoff was due solely to economic reasons. It offered the testimony of the lawyer who acted for the company during the events that gave rise to the complaint. The lawyer had been retained via a telephone conversation with a principal of the company in September 1994. The lawyer testified regarding several meetings he later attended, meetings which involved representatives of the company and the applicant (“the union”). In the course of one of those meetings, in December 1999, a company representative disclosed to the lawyer a conversation he had had with a union representative in furtherance of a settlement of the dispute. The lawyer testified as to the content of that conversation, and the advice he gave urging the company representative not to settle the dispute on the basis offered by the union. The purpose of disclosing the advice was to assist in the assessment of the propriety of entering into the settlement as proposed by the union. The lawyer did not disclose the existence or aspects of any other communication he may have had with the company before or after the December 1994 discussion. The company’s pleadings made no reference to, and did not seek to rely upon, solicitor-client communications for the purpose of demonstrating the company’s motives in laying off the employees.

11. In cross-examination, the union indicated its intent to seek information concerning the content of all communications between the lawyer and the company from the point he was retained in September 1994 until the filing of the complaint.

12. The Board permitted the union cross-examination of the company’s lawyer concerning the December 1999 communication on the basis that the company had waived its solicitor-client privilege with respect to that particular discussion, but no other. The company had not, through the evidence it adduced or its pleadings, sought to rely upon any other solicitor-client communications for the purpose of defending its position in the complaint, and therefore, the Board reasoned, those communications remained privileged.

13. Rogers v. Bank of Montreal et al., 1985 CanLII 397 (BC SC), [1985] B.C.J. No. 2716, a decision of the British Columbia Supreme Court, involved a motion in third party proceedings between the defendant bank (“the bank”) and the defendant receiver (“the receiver”) regarding whether or not the bank should be ordered to produce to the receiver documents disclosing the legal advice the bank received from its solicitors concerning the appointment of a receiver. The plaintiffs in the main action claimed a large monetary loss as a result of the appointment of the receiver by the bank, in whose favour a debenture was given by the plaintiffs’ corporation. The plaintiffs contended that their debtor corporation should have been given a reasonable opportunity to meet the debt demand of the bank before a receiver was appointed. The receiver claimed indemnification from the bank in respect of the plaintiffs’ loss. The bank contended in its pleadings that no such right of indemnification arose because it had relied upon the advice of the receiver in making the decision to appoint the receiver. That defense put in issue the rest of the bank’s knowledge of the relevant law and the nature of the legal advice it received from others.

14. The Court found that the bank waived privilege with the respect to its legal advice, but it stated at paragraph 16 and 17 that:

15. This does not, of course, mean that the bank must disclose communications from its solicitors concerning other matters in issue, or that parties to the action other than the receiver are necessarily entitled to similar disclosure, or that any communication from the bank itself need be revealed.

16. All that must now be produced are documents, or portions of documents, communicating or recording advice given to the bank by its solicitors, at any time prior to the receiver taking possession, concerning the right of the bank to have a receiver put in under the debenture without notice, or the timing of demand or length of notice which might be regarded as appropriate or advisable….

17. Local 3264 cited the Rogers case in support of the principle that waiver of privilege should be narrowly construed, and that the resultant disclosure that arises following waiver of privilege must be restricted to those communications specifically waived by the party entitled to the privilege, and nothing further. As I have indicated, Local 3264 contends that it waived its privilege only in respect of legal opinion concerning the legality of end-tailing, not in respect of other matters such as negotiating strategy. In this regard, Local 3264 referred me to Warren et al. v. Insurance Exchange Ltd. et al. 1982 CanLII 1837 (ON HCJ), [1982] 37 O.R. (2d) 717. In that decision of Master Peppiatt, the defendant in a civil lawsuit involving the sale of an insurance business to the defendant claimed that the plaintiff vendor failed to reveal certain important information about the value of the business sold, which resulted in an artificial inflation of the sale price. One of the main issues in the litigation was the extent of the defendant’s knowledge about the transaction. The defendant had retained legal counsel who received and generated a number of documents relating to the transaction. The plaintiff vendor sought production of those documents. Master Peppiatt determined that, insofar as they shed any light upon the defendant’s knowledge at the time of closing, the documents should be produced. However, the Master added that, to the extent the documents disclosed recommended courses of action that the defendant might take, those portions of the documents were not to be disclosed.

Decision

16. No party in this matter disputes that solicitor-client privilege is a most significant principle of law, essential to the proper functioning of our adversarial system of litigation. Nor did any party suggest that the privilege is absolute. There are exceptions which the interests of justice require. For example, disclosure of solicitor-client communications is permissible in circumstances where the client directly, or indirectly through its legal counsel, authorizes that disclosure by waiving the privilege. Waiver of privilege is often voluntary, but it can also arise by implication, in circumstances where it would be unfair, for example, for the holder of the privilege to attempt to effect only a partial waiver, thereby disclosing information that is beneficial to her position but shielding other, perhaps unfavourable information which would harm that position or enhance the position of a party opposite. The Board should be loath to widen the scope of a party’s narrowly expressed waiver unless it would create an unfair advantage to the holder of the privilege or visit unfairly a disadvantage on the other party or parties involved in the litigation.

17. At least in part, this case involves an assessment of the bona fides of Local 3264’s decision-making process with respect to end-tailing. The central question is, why did Local 3264 ultimately advance the merits of an end-tail seniority list. It contends in its pleadings that it did so for objective reasons based on a number of factors including the recent history of job losses within the former Local 774 bargaining unit and the likely future locations of, and prospects for, quarrying among the two businesses which had previously been in competition and were now joined by amalgamation in the new entity, Beachville Lime Limited. Local 3264 relies on the assertion that at various stages throughout the period covering the amalgamation and the labour relations activities that followed, it sought and obtained legal advice concerning end-tailing. Some or all of that advice was shared with its membership before Local 3264 conducted a final vote of its members, who voted in favour of end-tailing. Local 3264 has put into issue both the legal knowledge it acquired on the subject of end-tailing, and, armed with that knowledge, the factors it took into account and the things it did in the period leading up to its final decision to end-tail. By putting forward the defence that it relied on legal advice in the course of developing its positions regarding the combination of the seniority list, Local 3264 has, at least by implication, waived solicitor-client privilege in respect of such advice. It is apparent therefore that any assessment of the bona fides of Local 3264’s position on end-tailing requires disclosure not only of the legal opinions it received on end-tailing, but any other legal advice it obtained concerning recommended options, strategies and tactics in sorting out the seniority problem.

18. The Board in the Careful Hand Laundry decision, supra, construed the waiver in that case narrowly, but it bears noting that the disclosure of legal advice by the employer in that matter was not for the purpose of establishing the employer’s bona fide motivations or good faith in reaching the decision it did to lay off employees. The Careful Hand Laundry decision is, in my view, distinguishable from the fact situation that the Board faces here. So too are the Rogers and the Warren cases cited in support of Local 3264’s position. The issue in each of those matters was the state of mind of, or knowledge possessed by, a party with respect to a specific matter in light of the legal advice it received concerning that matter. The issues did not involve questions of the bona fides of a party’s conduct or actions. In my opinion, that distinction explains the more narrow view of the waiver of privilege taken in the cases cited by Local 3264. The matter before me involves different considerations, and justifies a more expansive determination on the scope of Local 3264’s waiver.

19. Given the basis upon which I have determined this motion, it is unnecessary to deal with Local 774’s contention that Local 3264 waived its solicitor-client privilege when it conveyed its counsel’s legal advice to its members during membership meetings.

20. I do not find it necessary to utilize the procedure suggested by Local 774 with respect to a Board review of the disputed documents before determining whether they should be produced. Local 3264’s pleadings are a sufficient basis for determining the scope of the production order. For this reason, and for those articulated elsewhere in this decision, the applicant is entitled to the production of, and Local 3264 is hereby directed to produce, copies of documents relating to all legal opinions and legal advice furnished to Local 3264 in respect of the issue of end-tailing or dove-tailing seniority, including any legal advice regarding recommended negotiating strategy, tactics and positions to be taken by Local 3264 in respect of end-tailing or dove-tailing seniority, dated up to, but not including, the day on which the section 74 application was filed, December 15, 2000. This includes those documents listed in paragraphs (a) and (b) of counsel for the applicant’s letter (reproduced at paragraph 3 of this decision) but does not include legal advice with respect to the disposition of the grievances that are the subject matter of this application. Local 3264 did not plead any reliance upon legal advice concerning the disposition of those grievances.

21. Local 3264 is directed to produce copies of the documents outlined in the paragraph above within ten days of the date of this decision.

22. On September 5, 2001, during the examination in chief of Mr. Rick Cecchin by counsel for Local 3264, Mr. Wright, the witness was asked about the nature of his consultations with the members of Local 3264 regarding draft agreements dealing with, among other things, resolution of the seniority issues between Local 3264 and Local 774. Counsel for the applicant, Mr. Wahl, objected to that line of questioning, arguing that there was nothing in Local 3264’s pleadings with respect to solicitation of its members’ reaction to these draft agreements. Moreover, Mr. Wahl pointed out, it had been earlier suggested by Mr. Wright to the witness for Local 774, Ed Dukes, that Mr. Cecchin would testify that an earlier version of the draft agreements had been jointly tabled with the employer by Local 774 and Local 3264 as a proposed final settlement. The evidence now being tendered by Mr. Cecchin with respect to subsequent membership consultation, claims Mr. Wahl, is inconsistent with that assertion.

23. I reserved my ruling on this objection, and now issue that ruling in advance of the continuation of this hearing on November 16, 2001.

24. The pleadings of Local 3264 do make reference to the wishes of the members of the Local. Moreover, the draft agreements refer to subsequent ratification by the membership of Local 774 and Local 3264. In my view, the area of inquiry by Mr. Wright with respect to consultations by Mr. Cecchin with his bargaining unit members is consistent with Local 3264’s pleadings, and not inconsistent with what was put to Mr. Dukes in cross-examination. Accordingly, at the resumption of the hearing in these matters, I am permitting Mr. Wright to continue with this line of questioning.

“Patrick Kelly”

for the Board