Court File and Parties
COURT FILE NO.: FS-16-414146 DATE: 20200303 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jennifer Montemarano AND: Robert Montemarano
BEFORE: J.T. Akbarali J.
COUNSEL: Jaret Moldaver and Jesse Rosenberg, for the Applicant Cheryl Goldhart, Gavin MacKenzie, and Maneesha Mehra, for the Respondent
HEARD: February 27, 2020
Endorsement
Background
1The parties to this matrimonial litigation are scheduled to commence a bifurcated trial in June 2020 to address the validity, or invalidity, of their marriage contract. The applicant wife claims the contract is invalid, arguing that the respondent husband failed to disclose material assets at the time the contract was negotiated.
2It is not disputed that the husband did not disclose certain assets at the time the parties signed the marriage contract, including an interest he had in two family trusts. The husband deposes that his financial affairs are complex and linked with his family’s business and other interests. He states he only learned of the existence of the undisclosed assets while he was preparing for the bifurcated trial.
3The husband deposes that he disclosed these previously undisclosed assets to the wife beginning in April 2019, in a timely way, as he learned about them. The wife questioned the husband about these previously undisclosed assets in December 2019. She then brought this motion for answers to undertakings, under advisements and refusals, and for further production.
4At the outset of the motion, I encouraged the parties to cooperate to narrow the issues in dispute. The parties were able to reach agreement on many of the items sought by the wife in her motion, although not with respect to the costs related to those items. I directed that a consent order be issued to reflect the terms of the parties’ agreement, and I reserved the issue of costs.
5The parties were unable to agree on the production sought by the wife, and three refusals. Fundamentally, all these items relate to the same issue – the husband’s claim of privilege over the file of his counsel related to the marriage contract, and specifically, the portion of that file related to the husband’s financial disclosure.
6The wife’s Notice of Motion describes the production she seeks as follows:
…any and all components or parts of the Marriage Contract file of Mr. Birnboim, and/or of his law firm, being, Chitiz Pathak [1], relating to the issue of Rob’s disclosure in terms of information and documentation contained therein, including, but not limited to, any form of document, whether physical or electronic, in addition to and including any notes and dockets, relating to any interest of Rob, and/or any asset of Rob, and/or any debt of Rob and/or any other liability of Rob, whether then present or whether then future, whether then vested or whether then contingent, in real or in personal property, and, whether held directly, indirectly, legally and/or beneficially, by Rob, from the inception of the retainer for services related to the making of or preparation of, negotiation of and up until and including the execution of, the Marriage Contract.
7In addition, the wife moves on the following refusals:
a. To ask Mr. Birnboim, inclusive of his law firm, if he has any documents in his file that would point to any assets or debts beyond what is listed in the Schedule A [2]. b. To produce Mr. Birnboim’s file up to the date of the signing of the Marriage Contract [3]. c. To ask Mr. Birnboim what information he may have, or that he may recall, about any of the above noted two trusts, or disclosure about these two trusts.
8The parties agree that, if a court determines that there was material non-disclosure of assets, whether the non-disclosure of assets was innocent or blameworthy may be a relevant factor to the court’s exercise of discretion in determining whether to set aside the marriage contract. Accordingly, I proceed on the basis that the evidence the wife seeks in her motion is relevant to the parties’ bifurcated trial.
9In support of her motion, the wife points to the husband’s evidence that he relied on his professional advisers, including his lawyer and accountant, to prepare his financial disclosure, particularly as it related to his trust and corporate interests. She argues that by giving this evidence, the husband has in effect tried to hide behind the actions of his advisers, tagging them with the responsibility for making full financial disclosure on his behalf at the time of the marriage contract, but not allowing her to see what they, in fact, knew or did. She argues that the husband has put the communications between himself and Mr. Birnboim in issue, because Mr. Birnboim must have acted on the husband’s instructions when preparing the husband’s financial disclosure. She argues that by putting the communications with Mr. Birnboim in issue, the husband has waived privilege. She also argues that the interests of fairness dictate that privilege be deemed to have been waived in these circumstances.
10The husband resists disclosure, relying on solicitor-client privilege. He states he has never expressly waived privilege and denies that this is a proper case to find an implied waiver of privilege. He states that all his evidence has confirmed is that he relied on his advisers, including Mr. Birnboim, to prepare his disclosure. He states that this is akin to saying he relied on his lawyer to do his job, and that such evidence does not constitute a waiver of privilege. He argues that if it did, privilege would be meaningless, and waived in nearly every case.
11I turn now to the analysis of whether the disclosure sought is protected by privilege or whether privilege has been waived.
Has the husband waived privilege over his communications with Mr. Birnboim?
12In R. v. Campbell, [1999]1 S.C.R. 565, 43 O.R. (3d) 256, at para. 49, the Supreme Court of Canada described solicitor-client privilege as follows:
Where legal advice of any kind is sought from a professional legal adviser in his capacity as such, the communications relating to that purpose, made in confidence by the client, are at his instance permanently protected from disclosure by himself or the legal adviser, exception the protection be waived.
13In R. v. Lavallee, Rackel & Heintz, 2002 SCC 61, [2002] 3 S.C.R. 209, at para. 36, Arbour J. underscored the importance of solicitor-client privilege, finding that it is fundamentally important to our judicial system, and concluding that it “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”.
14Solicitor-client privilege should be interfered with only to the extent necessary to achieve a just result: Descôteux v. Mierzwinski, [1982] 1 S.C.R. 860, 44 N.R. 462, at para. 27; Biehl v. Strang, 2011 BCSC 213, [2011] B.C.J. No. 274, at para. 39.
15In Biehl, at para. 39, the court set out the principles applicable to waiver of solicitor-client privilege, including that waiver of solicitor-client privilege may occur in the absence of an intention to waive, where fairness and consistency require it. Waiver of privilege as to part of a communication will be held to be waiver as to the entire communication. Similarly, where a litigant relies on legal advice as an element of his claim or defence, the privilege which would otherwise attach to that advice is lost.
16A party will waive the protection of solicitor-client privilege when it voluntarily injects into the proceeding the question of its state of mind, and, in doing so, uses as a reason for its conduct the legal advice that it has received: Biehl, at para. 39.
17To displace solicitor-client privilege, there must be an affirmative allegation which puts the party’s state of mind in issue: Biehl, at para. 39.
18In Benson v. Kitt, 2018 ONSC 7552, at para. 16, the court held that a deemed waiver and an obligation to disclose a privileged communication requires two elements: (i) the presence or absence of legal advice must be relevant and material to a claim or defence; and (ii) the party who received the legal advice must make the receipt of it an issue in the claim or defence.
19Privilege can be waived expressly, inferentially or by conduct: Biehl, at para. 42. A witness can implicitly waive privilege through their conduct including by putting the legal advice they received in issue, or by testifying about privileged communications. The guiding principles in an enquiry about whether privilege has been waived must be fairness and consistency: Spicer v. Spicer, 2015 ONSC 4175, at para. 13.
20The disclosure of receipt and reliance upon legal advice is not sufficient to give rise to a waiver of privilege. The question is whether the party disclosing the legal advice has opened an inquiry into whether the legal advice effected his state of mind. In the majority of cases, placing state of mind at issue will not amount to waiver. However, where a party has placed its state of mind at issue and given evidence that it received legal advice which, in part, formed the basis of that state of mind, the distinction between state of mind and the legal advice giving rise to it cannot be maintained: Spicer, at paras. 13-15.
21The wife seeks disclosure of the husband’s confidential communications with his lawyer wherein he gave instructions to his lawyer about disclosure; however, there is nothing in the husband’s evidence about his instructions to counsel. His evidence is that he relied on his advisers, including his lawyer, to prepare his disclosure.
22There is no suggestion that the husband has expressly waived privilege. The question is whether, by giving evidence that he relied on his advisers, including his lawyer, to make his financial disclosure during the negotiation of the marriage contract, the husband has waived privilege over his lawyer’s file.
23In my view, the husband’s evidence does not rise to the level of a waiver of privilege.
24Family law lawyers routinely prepare financial disclosure, whether in the context of proceedings arising after relationship breakdown or the preparation of a domestic contract. The fact that they do so, and that clients rely on them to do so, is not a disclosure of confidential communications. I agree with the husband that it is no different than a party saying they relied on their lawyer to do her job.
25If saying that one relied on one’s lawyer was enough to find a waiver of privilege, privilege frequently would be waived. In my view, such an approach to waiver of privilege would be inconsistent with the guidance from the Supreme Court of Canada that privilege must be as close to absolute as possible.
26I adopt the reasoning in Spicer, supra, to the effect that the mere disclosure of the receipt and reliance upon legal advice is not sufficient to give rise to a waiver of privilege. In this case, the husband has not given any evidence that legal advice he received when negotiating the marriage contract formed the basis of his state of mind, disclosed legal advice he received from his lawyer, or relied upon or put in evidence any legal advice he received. Simply saying he relied on his lawyer is not enough to waive privilege.
27Accordingly, the wife’s motion for production and for answers to the refusals identified at para. 7 herein is dismissed.
28I understand both parties intend to claim costs for the portion of the motion that was addressed on consent at the hearing. In addition, there may be a costs claim with respect to the adjudicated portion of the motion.
29I encourage the parties to resolve the issue of costs between themselves. If they cannot, I will receive costs submissions as follows:
a. Any party claiming any costs may deliver written submissions, not to exceed two pages in length, by March 20, 2020, together with their bill of costs and any relevant offers to settle. b. Responding submissions shall be no more than two pages in length, and shall be delivered by March 27, 2020. c. Reply submissions shall be limited to one page in length and shall be delivered by April 1, 2020.
30If the parties seek costs of the portion of the motion that was resolved on consent, they should be prepared to address in their submissions why bringing a motion on those issues, rather than seeking a summary disposition of those issues at a conference with their case management judge, was a proportionate procedure and consistent with the primary objective.
31Submissions may be delivered to my attention to the Family Law Office at 393 University Avenue.
J.T. Akbarali J. Date: March 03, 2020
[1] Mr. Birnboim of Chitiz Pathak acted for the husband with respect to the negotiation and drafting of the parties’ marriage contract. [2] I assume this refers to Schedule A of the marriage contract setting out the husband’s financial disclosure. [3] The wife’s counsel advises that she seeks only those documents consistent with her request for production. In other words, the scope of the request for production limits the scope of the refusal that she seeks to have answered.