Omega General Insurance Company v. Tsianos, 2017 ONSC 5179

CITATION: Omega General Insurance Company v. Tsianos, 2017 ONSC 5179

COURT FILE NO.: CV-13-00477350

MOTION HEARD: 2017-08-25

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Omega General Insurance Company, Plaintiff

AND:

Theodoros Tsianos, Ronald Fritz, and Canadian Underwriters For Licensed Establishments Inc. operating as Cule, Leeds Insurance Company Ltd., Leeds Insurance Brokers Inc., Defendants

BEFORE: Master Jolley

COUNSEL: Adam J. Wygodny, Counsel for the Moving Party Defendants Theodoros Tsianos, Canadian Underwriters For Licensed Establishments Inc. operating as Cule, Leeds Insurance Company Ltd. and Leeds Insurance Brokers Inc.

Samantha Gordon, Counsel for the Responding Party Plaintiff

HEARD: 25 August 2017

REASONS FOR DECISION

[1] As part of a recently delivered supplemental affidavit of documents, the defendants other than Ronald Fritz (hereinafter “the defendants”) produced a copy of the minute book of the defendant Leeds Insurance Company (“Leeds”) as well as correspondence relating to the insolvency of Leeds and draft financial information. Also in that minute book is a copy of minutes of a meeting of the board of directors of Leeds dated 16 January 2009 which contained a board resolution concerning the payment of a dividend to a Shareholder (the “Resolution”).

[2] The plaintiff has a motion pending to amend its claim based on what it will argue is the disclosure of new facts contained in the recently produced additional documents including the minute book and the Resolution. The plaintiff takes the position that the information contained in the newly produced documents did not come to light until it received the defendants’ supplemental affidavit of documents.

[3] The defendants intend to take the position on that motion that the amendment should be refused as the amendment pleads a new cause of action barred by the Limitations Act, 2002, S.O. 2002, c.24, Sched. B. They intend to argue that the plaintiff (or its agent Clarke Gittens and Farmer, a law firm in Barbados which the plaintiff had retained to review the status of Leeds in Barbados) (“CGF”), knew about the information including the Resolution likely in September 2011 but, in any event, some time outside the limitation period.

[4] To respond to the amendment motion, the defendants examined the plaintiff’s representative under Rule 39.03. It was admitted that CGF did review the Leeds minute book. It was also admitted that CGF provided the plaintiff with a summary of what it had reviewed in the Leeds minute book (the “CGF Report”) and that the CGF Report had reproduced extracts of information that CGF had found in the Leeds minute book.

[5] The plaintiff refused to produce the CGF Report or to produce copies of the documents, including any extracts from the Leeds minute book that CGF received during its inspection of the minute book or that it had given to the plaintiff or to advise what documents CGF had reviewed to prepare the CGF Report. The plaintiff advised that it did not receive copies of any documents from CGF other than the CGF Report. Ms. Lorimer, counsel for the plaintiff, advised the court and counsel for the defendants that CGF did not receive copies of any of the documents that it had reviewed.

[6] In argument, the defendants advised that, addition to production of the CGF Report, they wish to know what documents CGF saw or was given during its 2011 review, including whether it saw or was given a copy of the Resolution or any other document that referenced the dividend payment and whether it mentioned the Resolution or dividend in the CGF Report.

[7] The plaintiff objects to the requested production on the basis of solicitor and client privilege and litigation privilege.

[8] The defendants state that they are not seeking any privileged information. They advise that they are seeking production of the non-privileged portions of the CGF Report. On the listing or production of the reviewed documents, they take the position that they only wish to know what documents CGF received and reviewed as part of its minute book review. The plaintiff takes the position that that information itself is privileged.

[9] Pursuant to Rule 30.04(6) counsel for the plaintiff provided a sealed copy of the CGF Report to me, marked privileged, for my review on this motion to determine the validity of the claim for privilege.

Discussion

[10] Solicitor and client privilege applies to confidential communications between the client and the client’s solicitor. The privilege exists any time a client seeks legal advice from the client’s solicitor whether or not litigation is involved. The rationale for the privilege is to protect the underlying interest of all citizens to be able to access legal advice.

[11] Litigation privilege is broader than between a lawyer and the lawyer’s client and applies to communications of a non-confidential nature between the solicitor and third parties. Litigation privilege applies only in the context of litigation itself and its purpose is to permit parties to facilitate investigation and prepare a case for trial.

[12] The onus is on the party asserting the privilege to establish an evidentiary basis for it (General Accident Assurance Co. v. Chrusz 1999, 7320 (ON CA)).

[13] The defendants assert that solicitor client privilege does not apply to communications in which legal advice is neither sought nor offered. While this is so, the Supreme Court in Solosky v. The Queen, 1979 9 (SCC), [1980] 1 S.C.R. 821 at 835 has provided some context for that assertion stating:

“the privilege does not apply to communications in which legal advice is neither sought nor offered, that is to say, where the lawyer is not contacted in his professional capacity. Also, where the communication is not intended to be confidential, privilege will not attach [emphasis added].”

[14] In this instant, it is evident that CGF was contacted in its professional capacity. There is also some evidence that the parties intended to keep the communication confidential. The email correspondence which I have reviewed sending the CGF report to the plaintiff is described as being a “confidential message”.

[15] I am satisfied that the plaintiff has established the basis for asserting solicitor and client privilege over the CGF Report. On examination, the plaintiff stated that it had retained the law firm CGF to review the status of Leeds in Barbados. Determining the “status” of a corporate entity is not exclusively a fact finding exercise as suggested by the defendants, as it often involves the application of corporate legal principles and consideration of a party’s compliance with corporate other relevant areas of law.

[16] Having reviewed the CGF Report, there is information in it that could be broadly construed as “advice”. As such, there is enough to support a finding that the CGF Report itself is covered by solicitor and client privilege. Further, any notes prepared by CGF during the course of its review to provide its advice are similarly privileged.

[17] Had it been necessary, I would have found that the plaintiff had not established that litigation privilege applies. Other than references to the Leeds insolvency pleaded in a statement of claim, there is no evidentiary record to assert that litigation was anticipated or contemplated in September 2011 when CGF was retained to prepare the CGF Report (R. v. Dunn 2012 ONSC 2748 at para 20, quoting Kennedy v. McKenzie [2005] O.J. No. 2060).

[18] While that may dispose of the defendants’ motion for production of the entire CGF Report, it does not address the request for production of either the documents that CGF received from Leeds or a listing by CGF of the documents that it reviewed. I rely on the case of Tomasone v. Capo Sgro LLP 2014 ONSC 2922 not for the issue of waiver of privilege (as I find that the plaintiff did not waive privilege over the CGF Report as it has not made the legal advice received an aspect of its case – Creative Career Systems Inc. v. Ontario 2012 ONSC 6498 at paras 29 and 30) but for the issue of the scope of privilege. At paragraph 51 of that decision, relying on B (A) v Home of the Guardian Angel, 2008 NSSC 9, that court noted that questions relating to the existence of documents in a lawyer’s file are not covered by privilege and should be disclosed for the purpose of assessing the discoverability of a claim and I adopt that position. I find that the list of the documents reviewed by CGF is not covered by privilege. Those documents are simply facts referred to in the CGF Report and are otherwise discoverable and relevant (General Accident Assurance Co. v. Chrusz, supra, referenced in Mandeville v. Manufacturers Life Insurance Co., 2004 CarswellOnt 9988 (Ont. S.C.J. at para 6).

[19] The plaintiff brought a cross motion to strike an affidavit filed in support of the defendants’ motion that was sworn by Nadine Campbell, a law clerk in the office of counsel for the defendants. The plaintiff sought to strike the affidavit on the basis that her affidavit contained hearsay, contained contentious facts, was irrelevant and contained legal argument suitable for a factum rather than an affidavit. While time was not booked for this motion, it was agreed that it would nonetheless be heard at the same time as the defendants’ motion and further agreed that the thrust of the motion was that I not rely on the impugned paragraphs. We proceeded on that basis rather than treating the motion as a stand-alone motion and adjourning the more substantive motion until this cross motion could be dealt with.

[20] I do agree that the second hand information about the belief of the defendant Tsianos or the third hand information via Mr. Tsianos about the practice of the Leeds’ corporate secretary was of little weight when introduced this way. To that extent, I have placed no weight on paragraphs 6, 11 or 12 of the Campbell affidavit.

Conclusion

[21] I find that the CGF Report is privileged and the plaintiff has not waived privilege over it. It is not to be produced to the defendants.

[22] I find that there is no privilege attaching to the list of documents that CGF saw in the course of its review of the Leeds minute book. It is evident from the CGF Report what documents CGF reviewed and a list of those documents is to be provided to the defendants.

[23] If the parties are unable to agree on costs, they may file costs outlines and written submissions on costs no more than three pages in length within 10 days of this order.

[24] The CGF Report which the plaintiff provided to me shall be returned to the plaintiff, sealed.

Master Jolley

Date: 30 August 2017