CITATION: Sakab Saudi Holding Company v. Al Jabri, 2025 ONSC 35

DIVISIONAL COURT FILE NO.: 211/24 DATE: 20250110

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Sachs, Matheson and Jarvis JJ.

BETWEEN:

SAKAB SAUDI HOLDING COMPANY, ALPHA STAR AVIATION SERVICES COMPANY, ENMA AL ARED REAL ESTATE INVESTMENT AND DEVELOPMENT COMPANY, KAFA’AT BUSINESS SOLUTIONS COMPANY, SECURITY CONTROL COMPANY, ARMOUR SECURITY INDUSTRIAL MANUFACTURING COMPANY, SAUDI TECHNOLOGY & SECURITY COMPREHENSIVE CONTROL, COMPANY, TECHNOLOGY CONTROL COMPANY and NEW DAWN CONTRACTING COMPANY

Plaintiffs/Appellants

– and –

SAAD KHALID S AL JABRI, DREAMS INTERNATIONAL ADVISORY SERVICES LTD., 1147848 B.C. LTD., NEW EAST (US) INC., NEW EAST 804 805 LLC, NEW EAST BACK BAY LLC, NEW EAST DC LLC, JAALIK CONTRACTING LTD., NADYAH SULAIMAN A AL JABBARI, personally and as litigation guardian for SULAIMAN SAAD KHALID AL JABRI, KHALID SAAD KHALID AL JABRI, MOHAMMED SAAD KH AL JABRI, NAIF SAAD KH AL JABRI, HISSAH SAAD KH AL JABRI, SALEH SAAD KHALID AL JABRI, QFIVE GLOBAL INVESTMENT INC., GOLDEN VALLEY MANAGEMENT LTD., TEN LEAVES MANAGEMENT LTD. NAGY MOUSTAFA, HSBC TRUSTEE (C.I.) LIMITED, in its capacity as Trustee of the Black Stallion Trust, HSBC PRIVATE BANKING NOMINEE 3 (JERSEY) LIMITED, in its capacity as a Nominee Shareholder of Black Stallion Investments Limited, BLACK STALLION INVESTMENTS LIMITED, NEW EAST FAMILY FOUNDATION, NEW EAST INTERNATIONAL LIMITED, and 2701644 ONTARIO INC.

Defendants/ Responding Parties

Munaf Mohamed KC, Jonathan G. Bell and Douglas A. Fenton, for the Appellants

John J. Adair and Sean Pierce, for the Responding Party, Saad Khalid S Al Jabri

Greta Hoaken, for the Responding Party, Mohammed Saad KH Al Jabri

HEARD at Toronto: October 29, 2024

REASONS FOR JUDGMENT

Matheson J.

[1] The appellants appeal the decision of Cavanagh J. dated March 18, 2024[^1] regarding the production of documents and related claims of solicitor/client privilege (the “Decision”). The motion judge dismissed the appellants’ motion to compel the production of law firm trust ledgers and redacted bank statements in unredacted form.

[2] I would dismiss this appeal for the reasons set out below, with the exception of the issue of the redacted bank statements. Leaving aside that issue, the documents are privileged and the appellants cannot rely on the “future crimes and fraud” exception to solicitor/client privilege. I would remit the issue of the request for production of unredacted bank statements back to the motion judge to be decided in accordance with these reasons for decision.

Background

[3] These proceedings arise from a claim of civil fraud. Gilmore J. granted an ex parte mareva injunction against the respondent Saad Aljabri and others on January 22, 2021, with reasons for decision dated January 27, 2021 (the “Saad Mareva”). As summarized in her reasons for decision, the appellant/plaintiff corporations allege that they are the victims of a massive international fraud, orchestrated by a former Saudi cabinet minister – the respondent/defendant Saad Aljabri – through which USD 3.5 billion has been stolen, misappropriated or misdirected. That alleged fraud took place in the period from 2008 to 2017. In granting the ex parte mareva injunction, Gilmore J. found that on the record before her there was a strong prima facie case of fraud and a significant risk of the continued dissipation of assets.

[4] The respondents have since defended the claim. They allege that Saad Aljabri established the appellant/plaintiff corporations at the direction of Saudi Minister of the Interior (and later Crown Prince) Mohammed Bin Nayef to serve as front-companies in the Kingdom of Saudi Arabia’s counterterrorism program. The respondents allege that as a result of a coup in 2017, Crown Prince Bin Nayef was ousted and replaced by Crown Prince Bin Salman, who undertook a campaign of persecution against his political enemies, including Saad Aljabri. The respondents allege that Crown Prince Bin Salman expropriated the ownership of the appellant companies, after which the appellant companies commenced this litigation. The respondents deny the alleged fraud.

[5] There has been a myriad of interlocutory steps regarding the Saad Mareva with related interlocutory orders. The merits of the civil action have not yet proceeded to trial or other summary disposition.

[6] Gilmore J. granted a Norwich order dated January 22, 2021, in connection with the Saad Mareva (the “Norwich Order”). That order required the production of documents from certain non-parties, including financial institutions. Through direct enforcement of the Norwich Order on non-parties in Canada, the appellants obtained unredacted copies of bank statements from Canadian financial institutions. However, the bank statements from foreign banks that were eventually produced by the respondents were redacted.

[7] Saad Aljabri was cross-examined on the asset declarations he delivered in response to the Saad Mareva. At that time, he testified that he had gifted all his worldwide assets other than certain bank accounts to his son Mohammed Aljabri in 2017 by way of a written deed of gift. He later stated that the gift was done through verbal instructions, with the written deed of gift created later. This gift and the written deed of gift are the subject of substantial dispute in this litigation. Gilmore J. found that for the purposes of a jurisdiction motion, there was substantial evidence that the written deed of gift was a ruse.[^2] Both Gilmore J., and the Court of Appeal, in its decision on the jurisdiction issue, noted that the validity of the gift was a matter for trial.[^3]

[8] The appellants brought a motion to vary the Saad Mareva. Koehnen J. granted the motion on August 9, 2021, extending the mareva injunction against Mohammed Aljabri (the “Mohammed Mareva”). Koehnen J. found that there was a strong prima facie case that there was no valid transfer of assets from Saad Aljabri to Mohammed Aljabri. Koehnen J. further found that the course of conduct before him suggested a reluctance to comply with the disclosure obligations in the Saad Mareva, giving rise to justifiable concerns about further asset dissipation.

[9] The appellants brought a contempt motion against both Saad and Mohammed Aljabri alleging breach of the Saad Mareva. A related issue about compelled testimony was decided by this Court in April 2023[^4], after which the contempt motion proceeded. By decision rendered in March 2024, Cavanagh J. concluded that there was reasonable doubt that the Saad Mareva had clearly and unequivocally applied to all the assets at issue.[^5] He further found that the evidence put forward by the appellants did not prove that the Saad Mareva was breached because frozen assets were used to fund living or legal expenses. The contempt motion was dismissed.

Decision under Appeal

[10] The appellants brought a motion for production of law firm trust ledgers and for answers to certain undertakings, giving rise to the Decision under appeal. The Fresh as Amended Notice of Motion sought, among other things, an order requiring that Saad and Mohammed Aljabri produce trust ledgers from any law firm in respect of funds received and sent, for legal and non-legal purposes, and funds currently held in trust on their behalf. The records were requested for time periods that began in June 2017 (after the core time period for the alleged fraud) and up to the present time.

[11] The production motion sought “specified information”. The specified information included the quantum of the funds (in aggregate and/or for each transaction), the date sent and/or received, and the identity of the source or recipient of the funds including the name of the relevant institutions and account numbers.

[12] The motion also sought unredacted copies of the bank statements from foreign banks that had been produced with redactions.

[13] The other relief sought on the motion is not the subject of this appeal.

[14] The motion judge dismissed the motion to produce the trust ledgers and unredacted bank statements. In doing so, the motion judge found as follows:

a) Following the Supreme Court of Canada decision in Canada (National Revenue) v. Thompson, 2016 SCC 21, solicitor-client privilege is a substantive right and a principle of fundamental justice (Decision, at para. 9).

b) Following the Supreme Court of Canada decision in Canada (Attorney General) v. Chambre des notaires du Québec, 2016 SCC 20, [2016] 1 S.C.R. 336, a law firm’s administrative information and accounting records relating to the solicitor and client relationship, including records showing the identity of persons paying the lawyer’s bills, are presumptively privileged (Decision, at para. 26).

c) The appellants therefore bore the onus of proving that disclosure of the requested information from the law firm trust ledgers was not subject to solicitor-client privilege and they failed to do so (Decision, at paras. 27, 41).

d) The redacted bank statements that had already been produced contained privileged information and did not need to be re-produced in unredacted form because the privilege had not been waived by making payments to lawyers using ordinary bank mechanisms (Decision, at paras. 76-77).

e) The future crime or fraud exception to solicitor/client privilege did not apply, following the principles of horizontal stare decisis and Wintercorn v. Global Learning Group Inc., 2022 ONSC 4576, motion for leave to appeal dismissed, 2023 ONSC 199, for the principle that the exception does not apply to civil wrongs, including civil fraud (Decision, at para. 68).

[15] As discussed below, I would grant this appeal only with respect to the privilege finding regarding the redacted bank statements and not the waiver finding.

Issues and Standard of Review

[16] The issues on this appeal are whether or not the motion judge erred as follows:

a) in refusing to order production of the law firm trust ledgers;

b) in refusing to order production of unredacted copies of the bank statements that had been produced in redacted form; and,

c) in finding that the future crime or fraud exception to solicitor/client privilege did not apply.

[17] The appellate standard of review applies, as set out in Housen v. Nikolaisen, 2002 SCC 33, at paras. 8, 10, 36. On questions of law, the standard of review is correctness. On questions of fact, the standard of review is palpable and overriding error. On questions of mixed fact and law, the standard of review is also palpable and overriding error except for extricable errors of law, which are reviewed on the standard of correctness.

Analysis

[18] The following well-settled principles provide the backdrop to the issues in this appeal.

[19] The importance of solicitor/client privilege has been repeatedly confirmed by the Supreme Court of Canada. It is fundamental to the proper functioning of the legal system: Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44, [2008] 2 S.C.R. 574, at para. 9; Smith v. Jones, [1999] 1 S.C.R. 455, at paras. 45-46; Solosky v. The Queen, [1980] 1 S.C.R. 821, at p. 833; R. v. Cunningham, 2010 SCC 10, [2010] 1 S.C.R. 331, at para. 26.

[20] The underlying principles were well-summarized by the motion judge, who held that the “obligation of confidentiality that springs from the right to solicitor-client privilege is necessary for the preservation of a lawyer-client relationship that is based on trust, which is indispensable to the continued existence and effective operation of Canada’s legal system”: Decision, at para. 9, quoting from Canada (National Revenue) v. Thompson, 2016 SCC 21, [2016] 1 S.C.R. 381, at para. 17.

[21] In turn, the Supreme Court has repeatedly underscored that solicitor/client privilege must be as close to absolute as possible: Chambre des notaires du Québec, at para. 82, citing R. v. McClure, 2001 SCC 14, [2001] 1 S.C.R. 445, at para. 35; Blood Tribe, at para. 9, citing R. v. McClure and Lavallee, Rackel & Heintz v. Canada (Attorney General), 2002 SCC 61, [2002] 3 S.C.R. 209, at para. 36; Pritchard v. Ontario (Human Rights Commission), 2004 SCC 31, [2004] 1 S.C.R. 809, at para. 18, citing Lavallee and R. v. McClure.

[22] “[A]ny impediment to open candid and confidential discussion between lawyers and their clients will be rare and reluctantly imposed”: R. v. McClure, at para. 61; Pritchard, at para. 18.

Law firm trust ledgers

[23] As set out by the Supreme Court in Chambre des notaires du Québec, at para. 72, it is well established that the accounting records of lawyers are presumptively privileged. They are “inherently capable of containing information that is protected by professional secrecy”.

[24] “Whether a document or the information it contains is privileged depends not on the type of document it is but, rather, on its content and on what it might reveal about the relationship and communications between a client and his or her notary or lawyer. If lawyers’ fees can reveal privileged information, it is difficult to see why this could not also be the case for accounting records. Such records will not always contain privileged information, of course, but the fact remains that they may contain some, so their disclosure could involve a breach of professional secrecy.”: Chambre des notaires du Quebec, at para. 73.

[25] Both the appellants and respondents on this appeal rely on the resulting legal test, which was correctly cited by the motion judge at paras. 26, 28-9 of the Decision, as summarized in Kaiser (Re), 2012 ONCA 838, at para. 30:

Law firm administrative information is presumptively privileged, but the presumption may be rebutted by the party seeking disclosure. The presumption may be rebutted by evidence showing the following:

a) that there is no reasonable possibility that disclosure of the requested information will lead, directly or indirectly, to the revelation of confidential solicitor-client communications; or,

b) that the requested information is not linked to the merits of the case and its disclosure would not prejudice the client.

[26] The appellants submit that because their notice of motion refers to law firm records about transactions for non-legal purposes, the motion judge erred in applying the presumption to that part of the document request. This submission overlooks the strong message in Chambre des notaires du Québec that where there is a request for administrative records of a law firm, the presumption applies.

[27] The motion judge did not err in applying the above test to the entire request for law firm trust ledgers. The motion judge found that information in the trust ledgers could provide meaningful information regarding privileged relationships. No reviewable error has been shown in that regard. The moving parties would have to rebut the presumption.

[28] The appellants then submit that the motion judge erred in regard to the question of whether the presumption was rebutted in this case.

[29] The appellants submit that the motion judge erred in not finding that the presumption was rebutted because the sought-after information is highly relevant to this fraud claim and erred by not giving appropriate weight to the alleged bad behaviour of the respondents that gave rise to the mareva injunctions. This amounts to saying that relevance is the test, which it is not, and that allegedly bad people do not have solicitor/client privilege, which is also incorrect.

[30] The appellant further submits that the presumption is rebutted because, in other contexts, this information would be disclosed. The appellants mainly focus on a different type of motion, submitting that the respondents ought to have brought a motion for permission to pay their living and legal expenses from the frozen funds. The appellants submit that if the respondents had done so, they would have needed to make disclosure that included payments to their lawyers. However, that type of motion did not give rise to the Decision. When such a motion is brought, it will be decided on the law that applies to it including any required disclosure to support the motion. The appellants’ reliance on this and other contexts does not rebut the presumption.

[31] The appellants further suggest that the motion judge did not address their request for disclosure of the amounts held in trust and dealt only with the amounts paid for legal fees, based on an isolated passage in the reasons for decision. However, the motion judge set out the full scope of the requested disclosure and, read as a whole, the reasons for the Decision address all requested amounts in the law firm records.

[32] The appellants had the onus to rebut the presumption on the evidentiary record before the motion judge. They therefore had to show that there was no reasonable possibility that the requested disclosure would lead, directly or indirectly, to the disclosure of confidential information. This is a question of mixed fact and law and there is no extricable error in principle in the Decision. The motion judge considered the impact of the requested disclosure, concluding that privileged information could readily be calculated from the information sought on the motion. The appellants must show palpable and overriding error to displace those findings and they have not done so.

Redacted bank statements

[33] With respect to the redacted bank statements, the appellants broadly submit that bank statements cannot be privileged. That broad submission is not well-founded and need not be the basis for this ground of appeal. I agree with the more focused submission that bank statements for bank accounts other than a law firm’s are not presumptively privileged. The presumption applies to a lawyer’s administrative records, not the records of someone else. In this case, the redacted statements were for bank accounts of the respondents.

[34] The appellants submit that the motion judge erred by proceeding on the basis that since the law firm records were privileged, so too were the redacted entries in the other bank statements. The motion judge then held that the privilege had not been waived by using the ordinary mechanisms facilitated by banks or other financial institutions.

[35] No error has been shown regarding waiver. But I agree that an error arises by, essentially, importing the presumption of privilege into non-law firm bank accounts without more. On the record before this Court there is nothing more than an assertion that the redacted entries are transactions with law firms. They cannot establish privilege over those entries by merely asserting it: Wintercorn, at para. 45(vi), and the cases cited in it.

[36] The presumption does not apply to entries in non-law firm bank accounts based on an assertion only. The respondents may assert privilege over entries in their bank statements but they must demonstrate that those entries are privileged to the satisfaction of the court.

[37] I agree with the appellants that, otherwise, substantial problems arise since bank statements are routinely ordered produced in litigation. A bank is not, and practically should not be, routinely required to investigate into whether or not each and every entry on a bank statement might include privileged information before producing a bank statement in response to a court order. It is for the party asserting the privilege to do so and to prove it as may be necessary in the particular circumstances.

[38] The motion judge therefore erred in importing the presumption in the circumstances of this motion. Instead, the question should have been whether the respondents had sufficiently proved their privilege claim over the specific entries that were redacted from the non-law firm bank account documents. I make no comment on whether the privilege claim to the redacted portions of the bank statements would be upheld because they show transactions with their lawyers, or otherwise. That part of the motion must be addressed again, without assuming that the redacted entries are what they were claimed to be.

Future Crime or Fraud exception

[39] Lastly, the appellants submit that even if the documents at issue are privileged, they should be disclosed under the exception that the Supreme Court has called the “future crimes and fraud” exception to solicitor/client privilege. The appellants submit that the motion judge erred in declining to apply that exception because this is a case of civil fraud. This would be an expansion of this rare exception to privilege as articulated by the Supreme Court of Canada.

[40] Before embarking on the analysis of the jurisprudence, I note one aspect of the exception that is not disputed. The exception applies to communications with respect to a future event, not a past one. For obvious reasons, the exception does not apply to communications with lawyers about past misdeeds. Otherwise, for example for accused criminals, their solicitor/client privilege would be gutted.

[41] Here, the documents requested are communications with counsel which occurred after, not before, the alleged massive fraud that took place when Saad Al Jabri allegedly used his high-ranking government position to orchestrate a fraud commencing in 2008. The appellants plead that Saad Al Jabri was stripped of his rank in 2015 and fled the Kingdom of Saudi Arabia to Canada in mid-2017. The time period for the requested document production begins in 2017 and comes forward to the present time. The alleged fraud that is the centerpiece of the litigation had already taken place. Perhaps for that reason, the appellants also submit that an alleged breach of a court order (the mareva injunctions) would also be sufficient to fall within this exception and vitiate solicitor/client privilege.

[42] Moving to the Supreme Court jurisprudence, in Blood Tribe, at paras. 9 - 10, Binnie J. (for the Court) summarized these fundamental principles regarding solicitor/client privilege and the exception at issue on this appeal:

a) Solicitor-client privilege 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.

b) The complex legal rules and procedures are such that, realistically speaking, they cannot be navigated without a lawyer’s expert advice. It is said that anyone who represents himself or herself has a fool for a client, yet a lawyer’s advice is only as good as the factual information the client provides. Experience shows that people who have a legal problem will often not make a clean breast of the facts to a lawyer without an assurance of confidentiality “as close to absolute as possible”.

c) It is in the public interest that this free flow of legal advice be encouraged. Without it, access to justice and the quality of justice in this country would be severely compromised.

d) While the solicitor-client privilege may have started life as a rule of evidence, it is now unquestionably a rule of substance applicable to all interactions between a client and his or her lawyer.

e) A rare exception is that no privilege attaches to communications criminal in themselves or intended to further criminal purposes.

f) The extremely limited nature of the exception emphasizes, rather than dilutes, the paramountcy of the general rule whereby solicitor-client privilege is created and maintained “as close to absolute as possible to ensure public confidence and retain relevance”.

[Emphasis added.]

[43] The appellants submit the weight of the authority does not support the above summary of the exception by the Supreme Court, particularly the requirement that the communications be criminal in themselves or intended to further criminal purposes. I disagree. Blood Tribe was preceded by a series of Supreme Court decisions that consistently focused on the requirement that, for the exception to apply, the communications must be criminal in themselves or intended to further a criminal purpose.

[44] The appellants rely on R. v. Campbell and Shirose, [1999] 1 S.C.R. 565. Binnie J. (for the Court) discussed the above exception in the context of a reverse sting operation giving rise to drug trafficking charges. The police had engaged in illegal activity and relied on their legal advice to show good faith. Although the decision was made based upon waiver, the Court commented on the “future crimes and fraud” exception to solicitor/client privilege. The articulation of the exception in this case does not assist the appellants. The Supreme Court again said that “there is an exception to the principle of confidentiality of solicitor-client communications where those communications are criminal or else made with a view to obtaining legal advice to facilitate the commission of a crime”, at para. 55.

[45] The appellants rely on a quote in R. v. Campbell and Shirose from Solosky v. The Queen, [1980] 1 S.C.R. 821, at pp. 835-36. In Solosky v. The Queen, the Supreme Court refers to the exception in this way: “if a client seeks guidance from a lawyer in order to facilitate the commission of a crime or a fraud, the communication will not be privileged and it is immaterial whether the lawyer is an unwitting dupe or knowing participant.” The appellants submit, based upon this quote, that the fraud need not be a crime. However, that paragraph should be read as a whole. Binnie J. goes on to quote from a criminal fraud case, R. v. Cox and Railton (1884), 14 Q.B.D. 15. As put in that case, and adopted by the Supreme Court, the client must have a criminal object. The communications must be “in furtherance of a criminal purpose”: Solosky v. The Queen, at p. 835-836, as referenced in R. v. Campbell and Shirose, at para. 55.

[46] The Supreme Court’s emphasis on criminal conduct was also underscored in Descȏteaux v. Mierzwinski, [1982] 1 S.C.R. 860, at p. 881. Lamer J., as he then was, noted the requirement that the communications must be criminal in themselves or intended to further a criminal purpose, also citing R. v. Cox and Railton.

[47] More recently, in R. v. Durham Regional Crime Stoppers Inc., 2017 SCC 45, [2017] 2 S.C.R. 157, at para. 25, the Supreme Court described the exception as applying to communications between a lawyer and a client that are criminal or else made with a view to obtaining legal advice to facilitate the commission of a crime, citing the above authorities.

[48] In my view, the Supreme Court of Canada has set clear principles that apply to what is a rare exception to the fundamental right to solicitor/client privilege. For the exception to apply, the appellants must show that the communications with the law firm were criminal in themselves or intended to further a criminal purpose.

[49] The appellants cite a group of non-appellate cases and commentaries from here and elsewhere that suggest that the exception should apply to any intentional dishonestly or deceit, including a claim for civil fraud or breach of a court order. Based upon those cases, the appellants submit that a civil fraud, and the breach of a court order, are sufficient to invoke the exception. They also note that both fraud and the breach of a court order have a parallel criminal offence.

[50] There have been a number of non-appellate decisions that touch on this issue, some of which support the appellants’ view and others that do not. Beginning with those that support the appeal, one example is the decision of Perell J. in Dublin v Montessori Jewish Day School of Toronto (2007), 85 O.R. (3d) 511 (S.C.J.) and the cases cited in that decision. In Perell J.’s view, there was no reason why the exception should not include communications perpetrating tortious conduct that may become the subject of civil proceedings: at para. 39. Perell J. expressly acknowledged that his view may be contentious: at para. 47. Other cases go so far as to say the exception should extend to any intended unlawful conduct, including breach of contract claims: 1784049 Ontario Ltd. v. Toronto (City of) (2010), 2010 ONSC 1204, 101 O.R. (3d) 505 (S.C.), at para. 35, quoting from Goldman Sachs and Co. v. Sessions, [1999] B.C.J. No. 2815, 38 C.P.C. (4th) 143.

[51] I accept that there are cases put forward by the appellants, including the above cases, which would allow for what would be a very substantial broadening of what is intended to be a narrow exception to solicitor/client privilege. Those comments sometimes appear in obiter where the issue is waiver: e.g., Dublin; Mizzi v. Cavanagh, 2021 ONSC 1594; BMO v. Iskenderov, 2019 ONSC 3567; CanBook v. Borins.

[52] There is also non-appellate authority that is contrary to the appellants’ position. The motion judge followed the recent decision in Wintercorn. In contrast to the cases relied upon by the appellants, Wintercorn follows the above Supreme Court of Canada jurisprudence, concluding as follows at para. 50:

…the fraud exception applies only in situations where a client has engaged in fraud (either with counsel or by deceiving counsel) through impugned communications which were “criminal in themselves or intended to further criminal purposes”. It does not apply to fraud by the client on the lawyer to engage in a civil wrongful act, such as the civil fraud and other wrongful conduct alleged in the present case. [Citations omitted.]

[53] In Wintercorn, Glustein J. correctly sets out both the principles that apply to solicitor/client privilege, and the principles that apply to the exception at issue here, citing and following the above binding cases from the Supreme Court of Canada. In doing so, Glustein J. finds as follows, at paras. 59-78:

a) that the exception is very limited and is rare;

b) that it applies only when the client engaged in fraud with or on the lawyer through impugned communications that were “criminal in themselves or intended to further criminal purposes”;

c) that it is the “criminal” object of the client that results in the fraud exception;

d) that the exception applies only if the client conspires with the lawyer or deceives the lawyer to advance the “future crime”;

e) that the privilege is not destroyed merely because an act is later deemed improper or illegal;

f) that the restriction of the fraud exception to the “rare” and “extremely limited” circumstances of “communications criminal in themselves or intended to further criminal purposes” is consistent with the sanctity of solicitor-client privilege;

g) that to permit a party to access solicitor-client communications because a client is alleged to have deceived a lawyer with respect to a civil fraud or other unlawful civil conduct would significantly weaken the privilege; and,

h) that the above mandate by the Supreme Court of Canada, limiting the exception, has been followed by the Ontario courts (citing Carroll v. The Toronto-Dominion Bank, 2022 ONSC 2395; Whitty v. Wells, 2016 ONSC 7716, leave to appeal refused, 2017 ONSC 3682; Brome Financial Corporation v. Bank of Montreal, 2013 ONSC 4816).

[54] I agree with the analysis in Wintercorn, applying the binding principles set out by the Supreme Court of Canada. Contrary to the appellants’ submissions, a claim for civil fraud is not enough. The proposed application of the exception where there is a breach of a court order seeks an even greater expansion of this very limited exception. The submissions of the appellants invite the very balancing of interests on a case-by-case basis that has been specifically rejected by the Supreme Court.

[55] Wintercorn also considered the issue of whether or not the plaintiffs had established the necessary foundation for the exception if it could apply to a claim for civil fraud. As summarized at para. 50, “even if the fraud exception applied in the civil context, the plaintiffs have not led sufficient evidence to establish a prima facie case that [the client] had the requisite intent to defraud counsel in order to commit an unlawful act”.

[56] In considering this next step, Glustein J. used the threshold test as set out in the above case law that allowed for this exception to apply in civil claims. He set out that test, at para. 80, as follows:

if the exception is available in the case of unlawful civil conduct, the plaintiff must establish, on a prima facie basis, that

(i) the challenged communications related to proposed future conduct;

(ii) the client sought to advance conduct that it knew or should have known was unlawful; and

(iii) the wrongful conduct under contemplation was clearly wrong.

[57] The threshold test, as articulated by the appellants, also sets a high bar. They submit that the exception will apply where there is evidence that the client knew or ought to have known that the communications with their lawyer were in furtherance of an unlawful purpose and conduct that was clearly wrong.

[58] In the present case, the notice of motion is very general. It does identify what is a very lengthy time period – commencing in 2017 and forward to the present time. As noted above, that time period means that the core alleged fraud cannot be the future unlawful activity under the exception. The notice of motion then seeks the trust ledgers for “any” law firm. It does not identify any of the law firms said to have been used to facilitate a future fraud or breach, nor does it identify what step or steps were the future fraudulent steps that those law firms allegedly facilitated. No specific transactions are identified in the request for production from “any” law firm. The evidence on the motion contains ad hoc references to law firms, without tying a firm to a later fraudulent transaction let alone providing prima facie evidence that meets the knowledge requirement or other aspects of the above test.

[59] The appellants rely on the finding of a strong prima facie case for fraud on the original ex parte mareva injunction, including findings that Saad Aljabri was adept at moving money around the world and continued to do so. However, on this motion the appellants have not identified the steps taken commencing in 2017, after the core fraud had taken place, and forward to the present time. Instead, they submit that transactions with law firms subsequent to the mareva injunctions in 2021 and 2022 were taken in breach of those mareva injunctions. They submit that this is the intentional and dishonest conduct falling within the exception. They further submit that we should infer that there were breaches of the mareva injunctions since the respondents must have used frozen funds to pay their lawyers.

[60] I have difficulty with these very general submissions. First, if the exception could apply, the appellants were still obliged to meet an evidentiary threshold to show it applies to the documents request. Second, the finding of prima facie fraud was made ex parte and on a record that does not appear to have been before the motion judge and appears to have been focused on events that predate the time period for the document request. Third, there was a contempt motion regarding the alleged breach of the Saad Mareva (including the sought after inference that it was breached to pay lawyers), which was dismissed in 2024, as set out above. The alleged wrongful activity was not sufficiently proved. Fourth, given the fundamental importance of solicitor/client privilege, general submissions and sought-after broad inferences are not enough to displace the privilege for “any” law firms for a period from 2017 to the present time. Therefore, if I had concluded that the exception could apply to this civil claim, I would still have dismissed this appeal.

[61] I acknowledge that the appellants may not have all the information about law firms and transactions, but this is not a question about examinations for discovery. It is a request to displace a fundamental right. The appellants have the burden and have gathered a considerable amount of information in their investigation. To benefit from this rare exception, there must be evidence showing that the above criteria are met on a prima facie basis. As noted in Wintercorn, if the appellants do not have the evidence, they could try again when they get more.

Disposition

[62] I would grant this appeal in part. With respect to the Decision regarding the redacted bank statements, I would set it aside and remit that request for production of the unredacted documents back to the motion judge to be decided in accordance with these reasons for decision. I would dismiss the rest of the appeal. Given divided success, I would make no order as to costs.

Matheson J.

I agree:

Sachs J.

I agree:

Jarvis J.

Date: January 10, 2025

CITATION: Sakab Saudi Holding Company v. Al Jabri, 2025 ONSC 35

DIVISIONAL COURT FILE NO.: 211/24 DATE: 20250110

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Sachs, Matheson, Jarvis JJ.

BETWEEN:

SAKAB SAUDI HOLDING COMPANY, ALPHA STAR AVIATION SERVICES COMPANY, ENMA AL ARED REAL ESTATE INVESTMENT AND DEVELOPMENT COMPANY, KAFA’AT BUSINESS SOLUTIONS COMPANY, SECURITY CONTROL COMPANY, ARMOUR SECURITY INDUSTRIAL MANUFACTURING COMPANY, SAUDI TECHNOLOGY & SECURITY COMPREHENSIVE CONTROL, COMPANY, TECHNOLOGY CONTROL COMPANY and NEW DAWN CONTRACTING COMPANY

Plaintiffs/Moving Parties

– and –

SAAD KHALID S AL JABRI, DREAMS INTERNATIONAL ADVISORY SERVICES LTD., 1147848 B.C. LTD., NEW EAST (US) INC., NEW EAST 804 805 LLC, NEW EAST BACK BAY LLC, NEW EAST DC LLC, JAALIK CONTRACTING LTD., NADYAH SULAIMAN A AL JABBARI, personally and as litigation guardian for SULAIMAN SAAD KHALID AL JABRI, KHALID SAAD KHALID AL JABRI, MOHAMMED SAAD KH AL JABRI, NAIF SAAD KH AL JABRI, HISSAH SAAD KH AL JABRI, SALEH SAAD KHALID AL JABRI, QFIVE GLOBAL INVESTMENT INC., GOLDEN VALLEY MANAGEMENT LTD., TEN LEAVES MANAGEMENT LTD. NAGY MOUSTAFA, HSBC TRUSTEE (C.I.) LIMITED, in its capacity as Trustee of the Black Stallion Trust, HSBC PRIVATE BANKING NOMINEE 3 (JERSEY) LIMITED, in its capacity as a Nominee Shareholder of Black Stallion Investments Limited, BLACK STALLION INVESTMENTS LIMITED, NEW EAST FAMILY FOUNDATION, NEW EAST INTERNATIONAL LIMITED, and 2701644 ONTARIO INC.

Defendants/Responding Parties

REASONS FOR JUDGMENT

MATHESON, J.

Date: January 10, 2025

[^1]: 2024 ONSC 1601 [^2]: 2021 ONSC 4443, at para. 49. [^3]: 2022 ONCA 496, at paras. 5-6. [^4]: 2023 ONSC 2488. [^5]: 2024 ONSC 1347, at para. 37.