COURT FILE NO.: CR15900003350000 DATE: 201703 21
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN Applicant – and – YUSUF PANCHBHAYA Respondent
Counsel: Damien Frost, for the Crown Malcolm McRae, for the Respondent Yusuf Panchbhaya
HEARD: December 12, 2016, and March 10, 2017
CLARK J.
Introduction
[1] The applicant, Public Prosecution Service of Canada (“PPSC”), is prosecuting the respondent, Yusuf Panchbhaya and a co-accused, Omar Kalair, for fraud and related offences. The applicant seeks production of a file held by Panchbhaya’s former solicitor, Shahzad Siddiqui, contending that the respondent waived solicitor-client privilege respecting all communications between him and Siddiqui during the life of the retainer. The respondent resists the application, contending that the respondent did not waive privilege to the extent the applicant contends.
Background
[2] The co-accused, Kalair, was the president and Chief Executive Officer of two companies, UM Financial Inc. (“UMF”) and UM Capital Inc. (“UMC”). The companies provided financing for Muslim clients who, by virtue of a tenet of Sharia law forbidding usury, could not avail themselves of conventional mortgaging. UMF and UMC would buy houses with monies borrowed from a lender then known as Credit Union Central of Ontario (“CUCO”), and resell them to the ultimate purchasers pursuant to Musharakah Home Financing Agreements. They would, in turn, recover the purchase price from the purchaser in a manner that did not involve the payment of interest per se, thereby avoiding conflict with the religious proscription.
[3] In late 2010, concerned that remittances were not forthcoming from UMF and UMC in a timely fashion, CUCO sought the appointment of a receiver under the provisions of the Bankruptcy and Insolvency Act (“BIA”).
[4] On September 19, 2011, at a time when the receivership application was still before the court, Panchbhaya incorporated Multicultural Consultancy Canada Inc. (“MCCI”); corporate documents list him as a director of the corporation. The purported raison d’être of this corporation was to consult with and approve financing arrangements between UM and the ultimate purchasers of these homes. Immediately after having incorporated MCCI, the respondent retained Siddiqui to seek intervenor status for MMCI in the BIA proceedings.
[5] At some point after CUCO commenced the receivership application, Kalair commenced a law suit against CUCO, seeking $50,000,000.00 in damages on behalf of the corporations.
[6] In May of 2015, Siddiqui was called a Crown witness at the preliminary inquiry in this matter. With advice from his then counsel, who also appeared on this application, the respondent waived solicitor/client privilege over his communications with Siddiqui and was examined by Crown counsel and both defence counsel concerning those communications. The written waiver filed at the preliminary read as follows:
I, Yusuf Panchbhaya, DOB: June 1, 1958, of 7229 Darcel Ave, Mississauga, do hereby waive my right to solicitor/client privilege relating to my verbal communications with my counsel, Shazhad Siddiqui, relating to my retainer of his services on or between June 1, 2011–November 10, 2011.
I do this for the purpose of Mr. Siddiqui being cross-examined in relation to those communications at my Preliminary Hearing commencing May 4, 2015 and scheduled to be completed, May 29, 2015.
[7] When asked about the whereabouts of the file, Siddiqui indicated that it was in storage. When asked where it was stored, he at first said that it was in his home, but, when asked where he lived, he declined to answer, citing concerns that the police would execute a search warrant on his house. He asked for time to obtain legal advice and the matter was adjourned so that he could seek such advice. When the matter resumed the following day, Siddiqui indicated that the file was not at his home, as he had earlier attested, but, rather, at his mother’s home.
[8] Pursuant to the agreement of counsel, a subpoena was issued requiring Siddiqui to bring the file to court and, on an earlier occasion, the file, which fills one banker’s box, was delivered to this court, where it was ordered to be sealed.
[9] After hearing argument on the application on December 12, 2016, I examined the file and, pursuant to the agreement of call counsel [1] wrote to Mr. McRae. As I indicated in my letter to, to say that the box of material is in disarray is to indulge in understatement. It consists, for the most part, of what I estimate to be several thousand loose pages. There is no list of contents. There is little apparent organization of the materials. The material in the banker’s box includes material that predates Panchbhaya having retained Siddiqui and it appears to be a co-mingling of the respondent’s file with materials that relate to work Siddiqui did for Kalair.
[10] I advised Mr. McRae that I had found three documents that appeared to me to fall within the ambit of the application. I included copies of the documents and, since in my view the documents did not harm his defence in any way, I asked whether his client would be prepared to waive privilege respecting them.
[11] By letter dated January 17, 2017, [2] Mr. McRae advised that he was asserting privilege over the two of the documents. As for the third, he advised that, since it had been disclosed in the BIA proceedings, he was no longer asserting privilege in relation to it. That document has since been disclosed to the applicant.
Position of the Parties
[12] On the original hearing of this application, applicant’s counsel asserted that all privilege had been waived respecting the contents of the file. Counsel for the respondent asserted that the waiver had been restricted to what the solicitor would discuss orally during his evidence at the preliminary inquiry.
[13] On March 10, 2017, I heard further submissions. At that time, having examined the contents of the banker’s box, I reiterated the opinion I expressed in my December 21, 2016, letter that, irrespective of whether the remaining two relevant documents were privileged, the respondent could waive privilege with respect to them without harming his defence in any way. I also indicated that, in my opinion, the documents would do nothing to advance the prosecution’s case. Notwithstanding those remarks, counsel for the respondent indicated that the respondent was still asserting privilege and counsel for the applicant asserted that he was entitled to production of the documents. For his part, Mr. Frost asserted that he does not seek the documents in question to advance the prosecution’s case, but, rather, to ensure that he is in a position to honour his obligations to the co-accused, Kalair, to disclose all relevant materials: R. v. Stinchcombe, [1991] 3 S.C.R. 326.
[14] From my perusal of the file, the only two documents that to my mind are relevant and not already in the public domain are (i) a document containing an email Panchbhaya sent Siddiqui on November 4, 2011, and Siddiqui’s November 23, 2011, email response and (ii) Siddiqui’s handwritten memorandum to file, dated December 12, 2011, respecting the subject matter of the emails. Both the emails and the memorandum refer to a meeting at which matters pertinent to the subject matter of the present litigation were discussed.
Discussion
General Principles
[15] “The right to communicate in confidence with one's legal adviser is a fundamental civil and legal right, founded upon the unique relationship of solicitor and client”: Solosky v. The Queen, [1980] 1 S.C.R. 821.
[16] Solicitor-client communications are presumed inadmissible: R v. McClure, 2001 SCC 14 at para. 28. Only the client who can waive the privilege: McClure at para. 37. See also R. v. Ward, [2016] O.J. No. 3816, 2016 ONCA 568, at para. 31.
[17] In Fraser v. Houston, 2002 BCSC 1378, [2002] B.C.J. No. 2204 (C.A.) the court held that “[s]olicitor-client privilege should be interfered with only to the extent necessary to achieve a just result: Descôteaux v. Mierzwinski, [1982] 1 S.C.R. 860 . . .”
[18] In Descôteaux, at p. 875, the Court set out a number of precepts to be considered when dealing with waiver of solicitor/client privilege, of which the following is apposite this discussion:
- When the law gives someone the authority to do something which, in the circumstances of the case, might interfere with that confidentiality, the decision to do so and the choice of means of exercising that authority should be determined with a view to not interfering with it except to the extent absolutely necessary in order to achieve the ends sought by the enabling legislation.
[19] In Bone v. Person, [2000] M.J. No. 107, 185 D.L.R. (4th) 335 (C.A.), at para. 10, the court discussed the nature and extent of waiver:
The first issue relates to the nature and extent of the waiver of solicitor/client privilege. Was it limited and, if so, to what extent? The law is clear that a party to legal proceedings may voluntarily waive solicitor/client privilege on a limited basis, that is to say with respect to a particular defined subject matter. See, for example, Power Consolidated (China) Pulp Inc. v. British Columbia Resources Investment Corp., [1988] B.C.J. No. 1960 . . . However, a reasonable balance must be struck so that the court and the other parties are not misled. The party making the disclosure cannot pick and choose between the favourable and the unfavourable. In Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co., [1995] O.J. No. 3886 . . . Sharpe J., as he then was, put the matter this way, at paras. 41-42:
It is plainly not the law that production of one document from a file waives the privilege attaching to other documents in the same file. It must be shown that without the additional documents, the document produced is somehow misleading.
The waiver rule must be applied if there is an indication that a party is attempting to take unfair advantage or present a misleading picture by selective disclosure.
The Principles Applied
[20] The respondent asserts that, since his explicit waiver refers only to oral communications and it purported to limit the purpose for which it was being given, namely, for purposes of examination at the preliminary inquiry, by its terms, it precludes disclosure of any written record of those communications and any further use of the communications.
[21] The applicant argues that waiver pertains to the subject matter of solicitor/client communications not to the form in which they are recorded, such that by taking this position the respondent is trying to limit his waiver in a way that is impermissible. To permit the respondent to shield the contents of his solicitor’s file by this means, Mr. Frost argues, offends the rule that the doctrine of limited waiver cannot be used to preclude production of documents in a solicitor’s file if doing so would mislead the tribunal concerning the communications respecting which privilege has been waived.
[22] The memorandum to file is dated outside the period the waiver covered, as is Siddiqui’s November 23, 2011, email. For that reason alone it seems to me there was no waiver of their contents. As for Panchbhaya’s November 4 email to Siddiqui, it falls within the period to which the waiver applies.
[23] The meeting mentioned in the documents at issue was discussed by the solicitor in his evidence at the preliminary inquiry. There is nothing in the documents that, to my mind at least, would cast any different light on what the solicitor said in his evidence concerning the meeting. Having read the documents, I am of the view that their content is innocuous and it would not offend the rule not to disclose them. I am satisfied that there is no risk that, by upholding the claim of privilege, opposing counsel or the court will be in any way misled.
[24] The matter is complicated by the fact that the co-accused, Kalair, was present at that meeting. The presence of a third party can sometimes mean a communication is not protected by privilege, but that is not necessarily so; e.g.: there is no waiver where the third party’s presence is required in the client’s interests: Hannis v. Tompkins, [2001] O.J. No. 5583. Moreover, the test for preserving the privilege is not high, and will include situations where the client wants to have a friend or relative present, either so s/he feels more comfortable or because s/he wants to ensure s/he understands the advice: Hannis, at para. 45.
[25] Further complicating the matter is the fact that, at some point in time, [3] Siddiqui acted for Kalair in connection with matters directly related to the present litigation. Whenever the solicitor/client relationship ended, it is trite to observe that privilege survives the end of the relationship. That said, Kalair has never waived privilege respecting any of his communications with Siddiqui.
[26] Mr. Frost contends that his principal reason for seeking access to the documents is so that he can honour the respondent’s Stinchcombe obligation to Kalair. In my view, the content of the banker’s box, at least as it relates to Panchbhaya, would not be material that the respondent would be obliged to disclose per Stinchcombe; rather, if Kalair wants disclosure of any of Panchbhaya’s file, he would be obliged, in my view, to bring a McClure application.
[27] Solicitor/client privilege should be interfered with only to the extent necessary to achieve a just result: Descôteaux v. Mierzwinski, [1982] 1 S.C.R. 860. That said, since:
(i) the material is innocuous;
(ii) the parties in this case were clearly not ad idem concerning the extent of the waiver;
(iii) Kalair was present at the meeting that is the subject matter of the documents in question;
(iv) Kalair never waived solicitor/client privilege respecting his communications with Siddiqui;
(v) it is unclear when Kalair’s retainer of Siddiqui ended;
(vi) Kalair can have access to the content of the file that pertains to him as of right, if he so chooses; and
(vii) Kalair can make a McClure application if he wants access to Panchbhaya’s file;
I am of the view that Panchbhaya’s claim of solicitor/client privilege should prevail.
[28] An issue arose during this hearing concerning what should become of the banker’s box of material, which, as noted above, has become an exhibit on this application.
[29] Counsel for the applicant suggests that the box should remain in the custody of the court because the state in which the court found it may have implications for Siddiqui’s credibility should he be called as a witness at the trial of this matter. Counsel for the respondent agrees, but for a different reason, to wit: that the state of disarray in which the court found it may become significant to his client’s defence. Counsel for Kalair, on the other hand, suggests that, insofar as there is a considerable amount of material in the box that pertains to his client, the box should be returned to Siddiqui.
[30] In my view, there is no pressing reason why the banker’s box ought to be returned to Siddiqui and good reason why it ought not to be.
Result
[31] In the result, the application for production is hereby dismissed.
[32] The banker’s box of materials will remain in the custody of the court and will remain sealed subject to any further order of a judge of this court.
R. Clark J.
Released: March 21, 2017
COURT FILE NO.: CR15900003350000 DATE: 20170321 ONTARIO SUPERIOR COURT OF JUSTICE HER MAJESTY THE QUEEN Applicant – and – YUSUF PANCHBHAYA Respondent REASONS FOR JUDGMENT R. Clark J. Released: March 21, 2017
[1] See Appendix 1: Letter dated December 21, 2016 to Mr. McRae. In a letter dated the same day, I copied Mr. Frost on this correspondence appropriately redacted.
[2] Mr. McRae first responded to my letter of December 21 by a letter dated the same day, at which time he asked for some further time to consider his position. He then wrote me on January 17, 2017. All of his correspondence will be sealed until further order of this court.
[3] I use the expression “at some point” advisedly because it is not entirely clear when the solicitor/client relationship between Kalair and Siddiqui ended.