COURT FILE NO.: CV-11-9417-OOCL

DATE: 20121128

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Farzaneh Abravani also known as Farzaneh Abravani-Ilkhchi, Aghadas Nasseri and 7538715 Canada Ltd., Applicants

AND:

Mohammad Petgar, Mohammad Mahmoudzadeh, Mohammad Javad Derakhishan, 2087392 Ontario Ltd. 2087398 Ontario Ltd., Mohammad Amin Tavakoli, Nissan Reyhanian, Vahid Derakhshan and 222 Finch Avenue West Inc., Respondents

BEFORE: L. A. Pattillo J.

COUNSEL:
Phillip Healey and Atoosa Mahdavian, for the Applicants

Stephen Turk, for the Respondents

HEARD: November 27, 2012

ENDORSEMENT

Privilege Ruling October 9, 2012

[ 1 ] At the outset of this trial of an issue, the respondent Mohammad Petgar (“Petgar”) brought a motion for an order requiring the applicant’s counsel to produce their file in relation to this matter in relation to three letters written by a partner in the firm on behalf of the applicant Farzaneh Abravani (“Abravani”).

[ 2 ] After argument, I dismissed the motion with very brief oral reasons and advised that I would provide more detailed reasons at a later date.

[ 3 ] The issue in this trial is who are the shareholders of the applicant 7538715 Canada Ltd. (“753”). 753 owns a 25% interest in the respondent 222 Finch Avenue West Inc. (“222”). 222 is currently completing the construction of a commercial/residential condominium at 222 Finch Avenue West.

[ 4 ] It is the applicants’ position that the shareholders are Abravani, her mother and her sister. It is Petgar’s position that he and Abravani each own 50% of 753.

[ 5 ] Abravani and Petgar are married to each other. Prior to commencement of the Application in September 2011, Abravani and Petgar had separated and were engaged in matrimonial proceedings. On July 7, 2011, Abravani’s counsel wrote to Petgar’s family lawyer. The first paragraph of that letter stated as follows:

I am a partner in the litigation group at Aird & Berlis LLP and have been retained by Ms. Farzaneh Abravani in the context of the interest she and Mohammad Petgar have in 7538715 Canada Inc., a 25% shareholder of 222 Finch Avenue West Inc.

[ 6 ] On July 6 and again on July 11, 2011, the same lawyer wrote letters to 222 requesting that 222 provide certain financial information to Abravani. In both letters, that author states: “In particular, through 753., my client and Mr. Petgar hold a 25% interest in 222 Finch Avenue West Inc.”

[ 7 ] In a reply affidavit filed by Abravani in the Application, after the letters had been put in issue by the respondents, she stated that the statement was a “mistake”.

[ 8 ] Petgar requested production of the lawyer’s file relating to the three July 2011 letters. Abravani has refused to produce the file claiming solicitor-client privilege.

[ 9 ] The Supreme Court has continually stated that solicitor-client privilege is fundamentally important to our judicial system and entitled to the utmost protection by the courts. That said, it is well understood that it is the client’s privilege and can only be asserted or waived by the client through his or her informed consent.

[ 10 ] Petgar submits that, by saying her lawyer made a mistake in the July 2011 letters in respect of the shareholdings of 753, Abravani waived her privilege over her lawyer’s file in respect of the letters.

[ 11 ] In Currie v. Symcor et al., 2007 35147 (ONSC), Master Sproat, following a decision of Malloy J. in AAA U-Store & U Move Inc. v. United Urban Corp. (2001), 15 C.P.C. (5 th ) 12 (S.C.J.), held that an allegation in a pleading that a reference in an agreement drafted by a lawyer was a mistake was sufficient to enable discovery of the facts surrounding the mistake. The learned Master stated at p. 25 of the decision:”It is unfair to allow the defendants to plead mistake and then shield the evidence going to mistake and thereby prevent Paul from knowing the evidence that he will be or may be faced with at trial.”

[ 12 ] In Biehl v. Stang et al., 2011 BCSC 213 (B.C.S.C.), the court held that by denying on discovery he instructed his former solicitor in respect of certain aspects of the statement of defence filed on both his behalf and the corporate defendants, the defendant impliedly waived the privilege in respect of any communications between himself and his former solicitor concerning approval of those portions of the statement of defence.

[ 13 ] Iozzo v. Weir et al., 2004 ABQB 259 (Q.B.) involved an admission in a pleading followed by a subsequent application to withdraw the admission supported by an affidavit from the lawyer who drafted the pleading. In discussing the issue of waiver of privilege, the court stated at paragraph 20:

20 In this case the individual Defendants allege that they made an admission in error. Since the admission was made on their behalf by their counsel, this must involve a loss of the privilege over any communications between their solicitor and themselves, and over any instructions given by them to their solicitor, that led up to the making of the admission. As the Court held in Souter v. 375561 B.C. Ltd. (1995), 1995 843 (BC CA), 130 D.L.R. (4th) 81 (B.C.C.A.) at pg. 85:

It does not require extended discussion to conclude that when a party identifies his solicitor as responsible for a material mistake in an affidavit sworn by that party and claims solicitor-client privilege in respect of his knowledge and that of the solicitor, he is using the confidentiality protected by privilege as a sword rather than as a shield.

In my view the same principle applies when the alleged error is in a pleading. In Land v. Kaufman (1991), 1 C.P.C. (3d) 234 (Ont. Ct. J.) the plaintiff applied to withdraw admissions in her pleading, relying on an affidavit of her solicitor deposing that she had made a mistake. The Court held at pg. 239:

In my view, it would cause injustice and unfairness to allow the solicitor for one side to plead that he or she misunderstood the client's instructions and then be permitted to hide behind solicitor/client privilege when the other side seeks to explore whether there is any merit to that claim of misunderstanding.

To the same effect is H.H. v. R.L. (1997), 1997 14786 (AB KB), 51 Alta. L.R. (3d) 177.

[ 14 ] In each of the cases relied upon by Petgar, the alleged error giving rise to the waiver arose in a pleading or affidavit in an action or application. In such circumstances, the law does not permit a litigant, by blaming counsel, to use privilege as a sword rather than a shield.

[ 15 ] In this case, the July 2011 letters were written prior to the Application being commenced. From the outset of the Application, Abravani has taken the position that she, her mother and her sister are the shareholders of 753, not Petgar. Because the statements in the letters predate the Application, they do not represent the withdrawal from a position taken by her in the Application. As a result, I do not consider Abravani’s statement, in response to the respondents’ reliance on the letters in the Application that the statement in the letters was a mistake to be a waiver or loss of the privilege. In the circumstances, Abravani is asserting privilege as a shield, not a sword.

[ 16 ] The position taken by Abravani’s counsel in the July 2011 letters relates directly to the issue in the Application as to who the shareholders of 753 are. It is for the applicants to respond to that evidence if they so choose. In that regard, Abravani has responded by simply saying that the statement in the July 2011 letters concerning the shareholders of 753 was a mistake. The weight to be given to that response must be measured against all of the other evidence on the issue.

[ 17 ] For the above reasons, I dismissed the motion.

L. A. Pattillo J.

Released: November 28, 2012