SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ELGNER v. FREEDMAN

2013 ONSC 7627

COURT FILE NO.: CV-12-451862

BEFORE: MASTER R.A. MUIR

COUNSEL: M. Solmon and J. Hannaford for the plaintiff/moving party

M. Kestenberg and A. Hershtal for the defendants/responding parties

HEARD: November 15, 2013

ENDORSEMENT

[1] The plaintiff brings this motion seeking answers to questions refused on several examinations carried out in connection with a pending motion for particulars brought by the defendants. A few of the issues on this motion were resolved prior to the hearing date. However, a great number of questions remain in dispute.

[2] The plaintiff seeks $20,000,000.00 in damages for breach of contract, professional negligence and other related claims. In 2007, the plaintiff separated from her spouse, Claude Elgner (“Claude”). Protracted matrimonial proceedings followed. The plaintiff claims that as a result of certain corporate reorganization transactions that took place while she was married to Claude, a very large portion of his assets were excluded from any claims she was able to make against her husband as part of the matrimonial proceedings. The plaintiff alleges, among other things, that the defendants were acting as both her lawyers and her husband’s lawyers at the time of the reorganizations. She alleges that the defendants breached various duties owed to her and were negligent in connection with their representation of her in the circumstances. The plaintiff alleges that she has suffered very significant damages as a result.

[3] This action was commenced on April 23, 2012. The statement of claim was served shortly thereafter. A brief delay took place while the defendants sorted out their retainer arrangements and while the defendants’ insurer considered certain coverage issues.

[4] The defendants served a demand for particulars on June 21, 2012. The defendants primarily sought particulars of the retainer agreements as alleged by the plaintiff, the involvement of the defendant Alana Freedman (“Alana”) in the reorganizations and Alana’s alleged failure to disclose documents to the plaintiff.

[5] The plaintiff responded to some of the particulars on June 27, 2012. Those answers did not completely satisfy the defendants. The defendants then brought a motion initially returnable on December 18, 2012 seeking the remaining particulars. In support of that motion, the defendants included an affidavit sworn on November 21, 2012 by Beverly Jusko, a lawyer in Mr. Kestenberg’s office. As part of her affidavit, Ms. Jusko deposed, on information and belief, that the defendants did not have knowledge of the particulars in question and were unable to plead to the statement of claim.

[6] Of course, one of the relevant issues on any motion for particulars is whether the information requested is within the knowledge of the party seeking the particulars. If it is, the court may decline to order particulars. See Pennyfeather v. Timminco Limited, 2011 ONSC 4257 (S.C.J.) at paragraphs 61 and 62.

[7] The plaintiff takes issue with the defendants’ assertions of lack of knowledge. The plaintiff argues that at the time of the swearing of the affidavit, the defendants were in possession of, or had access to, an enormous amount of information about the plaintiff’s claim. The plaintiff submits that such information was readily available from Harvey Freedman’s computer files, the public court files relating to the matrimonial litigation, a motion record in the matrimonial litigation that was served on Mr. Kestenberg’s firm in March 2012, various other files and documents within Alana’s possession or control and other information that may be in the possession of Mr. Kestenberg’s firm. This would appear to be one of the main arguments the plaintiff intends to make when the particulars motion is ultimately heard.

[8] Another argument the plaintiff intends to make is that the particulars motion is simply a delay tactic on the part of the defendants and amounts to an abuse of the process of this court. There is authority for the proposition that the court may consider such an argument as part of its determination on a particulars motion. See Sears Canada Inc. v. Pi Media Ltd., 2011 ONSC 2625 (Master) at paragraph 45.

[9] With this as the background to the examinations, the plaintiff has asked many questions that attempt to get at the knowledge of the defendants along with the deemed knowledge of the defendants that may be in the possession of Mr. Kestenberg and the lawyers in his firm. The questions asked are wide ranging and essentially amount to a request by the plaintiff that the defendants disclose all documents and information in the possession of the defendants and Mr. Kestenberg’s firm relating to the issues in this litigation. The plaintiff takes the position that by serving the affidavit of Ms. Jusko, the defendants have waived all lawyer/client or any other privilege that may have attached to the documents and information requested.

[10] The defendants, not surprisingly, take issue with the plaintiff’s position. They argue that the waiver of privilege resulting from the service of Ms. Jusko’s affidavit only relates to the knowledge of Ms. Jusko and the defendants with respect to the issues raised in the affidavit at the time Ms. Jusko’s affidavit was sworn. The defendants say they have produced all such documents. They submit that the tendering of the affidavit cannot amount to a total waiver of privilege over a lawyer’s entire file.

[11] I agree with the defendants. I begin by noting the importance of lawyer/client privilege and confidentiality in our system of justice. It constitutes a fundamental and substantive element of our legal system. It is a necessary and essential condition of the effective administration of justice. It should not be cast aside except when absolutely necessary and only in limited measure. See Blank v. Canada (Minister of Justice), 2006 SCC 39, [2006] 2 S.C.R. 319 at paragraph 26 and Lavallee, Rackel & Heintz v. Canada (Attorney General), 2002 SCC 61, [2002] 3 S.C. R. 209 at paragraphs 36 and 37. In my view, this principle must be the guiding factor on this motion.

[12] I certainly agree with the plaintiff that it would be unfair to allow a party to put forward portions of otherwise privileged documents or information for its benefit while withholding other related portions as privileged. However, in my view, that is not what the defendants are doing here. The defendants have disclosed the documents that relate to the issues raised in the affidavit relevant to the demand for particulars and the actual knowledge of Ms. Jusko and the defendants at the time Ms. Jusko’s affidavit was sworn. It is important to note that the portions of Ms. Jusko’s affidavit dealing with the knowledge of the defendants is entirely on information and belief from the defendants themselves and not based on any knowledge otherwise in the possession of Mr. Kestenberg’s firm.

[13] In my view, the scope of the waiver of privilege is limited to those items and nothing more. Should the defendants have done more to investigate and inform themselves of the details of the claim before serving their demand for particulars? Does that failing disentitle them to the relief they are seeking on the particulars motion? Perhaps. However, that is an issue to be determined on the particulars motion and not by me on this refusals motion. In my view, the plaintiff is fully capable of making that argument on the basis of the evidence and disclosure to date. It must be remembered that all of this arises within the context of a basic procedural motion relating to the content of a pleading. It will undoubtedly have very little impact on the substantive issues in this action.

[14] Moreover, I do not accept the plaintiff’s argument that the cut-off date should be later than the date of Ms. Jusko’s affidavit. The plaintiff submits that some of the information in the affidavit turned out to be incorrect and that the date for production of documents over which privilege has been waived should be extended to the date when that information was ultimately corrected. I see no logic to this assertion. In my view, the important date for challenging the defendants’ position on the refusals motion on the basis of actual knowledge is the date of the affidavit. Of course, what they could or should have known on that date is another matter for another time.

[15] In addition, I do not accept the plaintiff’s argument that the requested disclosure is necessary to allow her to advance her argument that the particulars motion is a delay tactic and an abuse of process on the part of the defendants. If that submission were accepted it would completely set aside the fundamental concept of lawyer/client privilege. No lawyer’s file would be safe from production. A simple abuse of process allegation would open the door. A party to an action cannot and should not gain access to her opponent’s privileged documents simply by alleging that a particular action by the other side is tactical in nature.

[16] I have reviewed all of the disputed questions with these principles in mind. I have come to the conclusion that all of the questions are either beyond the scope of the waiver of privilege or have been satisfactorily answered by the defendants as set out in their responding chart. In addition, I have reviewed the complete versions of the redacted documents produced by the defendants. In my view, all of the redactions are proper and in keeping with my findings as set out above. The defendants have made a good faith effort to produce those documents necessary to allow the plaintiff to argue the particulars motion while rightfully maintaining privilege over the balance.

[17] The plaintiff’s motion is therefore dismissed. The document filed by the defendants entitled “Brief of Unredacted Notes and Letters to Deliver to the Master Hearing the Plaintiff’s Motion Returnable November 15, 2013” shall be treated as confidential, sealed and not form part of the public record in accordance with section 137 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[18] The plaintiff included in her notice of motion a request for costs arising from the motion before Master Glustein on April 11, 2013. That motion dealt with the right of the plaintiff to examine Mr. Hershtal in connection with the particulars motion. The plaintiff has also requested costs thrown away in relation to the examination of Ms. Jusko, also in connection with the particulars motion. In my view, both of those requests are more properly dealt with as part of the costs arising from the particulars motion itself and not as part of this refusals motion. They will be reserved to the master hearing the particulars motion.

[19] If the parties are unable to agree on the issue of the costs of this motion, they shall provide the court with submission in writing by no later than January 17, 2014.

Master R.A. Muir

DATE: December 11, 2013