Oliva et al v. Dickson et al, 2019 ONSC 173

COBOURG COURT FILE NO.: CV-18-00082-00 DATE: 20190108 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Rose Oliva and Letterio Oliva Plaintiffs – and – Cindy Dickson and Russell Dickson Defendants

Counsel: Marc Whiteley, for the Plaintiffs Jason Schmidt, for the Defendants

HEARD: December 4, 2018

RULING ON MOTION

DE SA J.

Overview

1The Plaintiffs have brought a motion seeking answers to various undertakings and refusals. They are also seeking to amend their Statement of Claim, and to obtain a timetable for moving the action forward.

2The Defendant, Russell Dickson, is also seeking answers to various refusals in the context of the examinations for discoveries. He is also seeking access to a file in the possession of the Plaintiffs’ former solicitor, as well as leave to examine the solicitor pursuant to Rule 31.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. He takes the position that the Plaintiffs have waived any privilege in relation to the file and the advice given by the solicitor.

3I disagree with the Defendant. Apart from the legal letter itself, the privilege has not been waived in relation to the file, or the advice given by the solicitor. Accordingly, I will not grant the orders sought in relation to the file, and/or examination of the solicitor under Rule 31.10.

4The reasons for my decision as well as the particulars of the other items sought by the parties are outlined below.

Background Facts

5On or about May 31, 2016, the Plaintiffs issued a Notice of Action. On or about June 26, 2016, the Plaintiffs filed a Statement of Claim in this matter which alleged, inter alia, that the defendant Russell Dickson (“Mr. Dickson”) and his ex-wife, the defendant Cindy Dickson (“Ms. Dickson”), engaged in fraudulent concealment, fraudulent misrepresentation and/or negligent misrepresentation related to the condition of the subject property (the “Property”).

6On or about December 20, 2016, Mr. Dickson filed his Defence in this matter, including but not limited to a defence that the action is statute-barred by the expiry of the applicable limitation period. Ms. Dickson filed her Defence on December 21, 2016, and also took the position that the action was statute-barred.

7Discoveries proceeded between July 2017 and March 2018. On July 10, 2017, Mr. Dickson attended for an examination for discovery. On or about August 30, 2017, Ms. Dickson attended for an examination for discovery. On August 31, 2017, the plaintiff Letterio Oliva (“Mr. Oliva”) attended for an examination for discovery. On or about March 16, 2018, the plaintiff Rose Oliva (“Ms. Oliva”) attended for an examination for discovery.

8On or about October 31, 2018, the Plaintiffs served a motion record requesting answers to undertaking and refusals of both Mr. Dickson and Ms. Dickson.

9On or about November 15, 2018, Mr. Dickson served a cross-motion record also requesting answers to various undertakings, and seeking a declaration that solicitor-client privilege had been waived in relation to the file for which Mr. Oliva received legal advice.

The Alleged Waiver of Privilege

10The alleged waiver of privilege relates to a legal letter dated June 6, 2014 from Mr. Robertson, counsel at the time for the Olivas, outlining legal advice received by Mr. Oliva. Essentially, the letter references Mr. Robertson’s view on the risks faced by Mr. Oliva if an action were brought by Mr. Dickson regarding their dispute.

11Mr. Dickson attached at Tab 15 of his Affidavit of Documents a copy of that legal letter. This letter was provided to Mr. Dickson by Mr. Oliva during the course of their discussions prior to the commencement of the action. In the legal letter, Mr. Robertson states:

To summarise our meeting today, I have had the opportunity to review your liability regarding the property at 8393 Trotters Lane Cobourg, Russell Dickson, the promissory notes and the numbered company 1038395.

Any potential claim against you will face significant difficulties. Among the numerous issues are: the subject matter is excessively convoluted; you have considerable scope to offset any claim through your own counterclaim; the promissory notes are likely void for lack of any verifiable consideration; the identity of the plaintiff is not clear, is it the company? Who has responsibility for the company?; significant time limitations problems; considerable credits do not seem to have been applied to the debt… this list is not exhaustive, there were so many areas of concern it would take considerable time to work through everything and compile a comprehensive list. In short, it would be a litigation nightmare to try and pursue you on this matter.

12Mr. Dickson takes the position that the Olivas have waived any possible privilege to legal advice given by Mr. Robertson by disclosing the opinion letter. Mr. Dickson also argues that by disclosing the letter, the Olivas have waived the privilege to not only the letter, but the advice and information that forms the basis of the legal opinion.

13Mr. Dickson seeks an Order that the Plaintiffs produce Mr. Robertson’s complete file related to the legal letter. They also seek an Order that Mr. Robertson be produced for an examination for discovery pursuant to Rule 31.10.

Has there been a Waiver of Privilege?

The Nature of Solicitor-Client Privilege

14Solicitor-client privilege is part of and fundamental to the Canadian legal system. As the Supreme Court explained in R. v. McClure, [2001] 1 SCR 445, 2001 SCC 14, solicitor-client privilege has evolved into a substantive rule of law. The Supreme Court commented at para. 33:

The importance of solicitor-client privilege to both the legal system and society as a whole assists in determining whether and in what circumstances the privilege should yield to an individual’s right to make full answer and defence. The law is complex. Lawyers have a unique role. Free and candid communication between the lawyer and client protects the legal rights of the citizen. It is essential for the lawyer to know all of the facts of the client’s position. The existence of a fundamental right to privilege between the two encourages disclosure within the confines of the relationship. The danger in eroding solicitor-client privilege is the potential to stifle communication between the lawyer and client. The need to protect the privilege determines its immunity to attack. [Emphasis added].

15Solicitor-client privilege applies to communications:

1. Between a client and a solicitor,
2. Made during the course of seeking or giving of legal advice, and
3. Which are intended to be confidential by the client and the solicitor.

16The privilege may only be waived by the client. A person may waive privilege either expressly or implicitly. An express waiver of privilege will occur where a person: (1) knows of the existence of the privilege; and, (2) demonstrates a voluntary intention to waive it.

17A court may also find a person to have implicitly waived privilege where the voluntary conduct of that person indicates an implied or objective intention to waive it. See: R. v. Youvarajah, 2011 ONCA 654; Guelph (City) v. Super Blue Box Recycling Corp., 2004 CarswellOnt 4488 (S.C.J.); See also Ebrahim v. Continental Precious Minerals, 2012 ONSC 1123.

18Any concept of “implied waiver” obviously must take into account the special status afforded to the privilege. 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 the clearest of cases, and does not involve a balancing of interests.

19In Soprema Inc. v. Wolrige Mahon LLP, 2016 BCCA 471, Harris J.A. explained the starting point for understanding the test for implied waiver at para. 50:

… The starting point of an articulation of the test for implied waiver must recognize what the Supreme Court of Canada has made clear about the importance of solicitor-client privilege. In R. v. McClure, 2001 SCC 14 at para. 35, the Court said that 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” (emphasis added). Furthermore, the Court said (at para. 17) that solicitor-client privilege “is part of and fundamental to the Canadian legal system. ... [I]t has evolved into a fundamental and substantive rule of law.” This view was affirmed in Goodis v. Ontario (Ministry of Correctional Services), 2006 SCC 31 at paras. 20‑21, where the Supreme Court of Canada made clear that communications protected by privilege should be disclosed only where “absolutely necessary”, (emphasis added) applying “as restrictive a test as may be formulated short of an absolute prohibition in every case.”

20Caution must be exercised not “to treat implied waiver as ultimately a discretionary call about trial fairness.” The implication of waiver must be consistent with “the near absolute protection of solicitor-client privilege mandated by the Supreme Court.”: H.M.B. Holdings Limited v. Replay Resorts Inc., 2018 BCCA 263.

Application to these Facts

21The Plaintiffs consciously and purposefully provided the legal letter to Mr. Dickson, which they both confirmed during their examination for discovery, satisfying the threshold for express and/or implicit waiver of privilege over the legal letter. I agree with the Defendants that the Plaintiffs have voluntarily waived privilege over the letter. Accordingly, I will grant the request for a declaration in this regard.

22In this case, however, the Defendants also seek to obtain the entire solicitor file from Mr. Robertson and to examine Mr. Robertson under Rule 31.10 regarding the contents of the opinion. According to the Defendants, when a party waives privilege, such waiver extends to the entire subject matter of the communication. A party is not permitted to “cherry pick” privileged communications to disclose only what is helpful to their case and claim privilege over the remained.

23I disagree with the Defendants. The notion that they can obtain the entire solicitor’s file, and examine the Plaintiffs’ lawyer in this context treats the letter as an ordinary production, and approaches the issue as if the solicitor is an ordinary witness to the proceeding. It fails to recognize that the protections afforded to the privilege in the context of our law. It also ignores the limited basis upon which the legal opinion was disclosed.

24In Creative Career Systems Inc. v. Ontario, 2012 ONSC 649 at para. 31, the court explained:

Waiver does not occur because the party discloses that he or she received legal advice, nor does it occur because the party admits that he or she relied on the legal advice; it occurs because the party chooses to use the legal advice as a substantive element of his or her claim or defence. (emphasis added)

25In this case, the disclosure of the letter was not made with a view to putting the lawyer’s opinion in issue in the litigation. Accordingly, there is basis for implying a waiver of the underlying basis for that opinion.

26The advice is not being relied upon by the Plaintiffs as a substantive aspect of their claim. To the extent information has been disclosed in the opinion letter, it has been waived. However, the Defendants cannot further pierce the privilege with a view to discovering anything more regarding the nature of the legal advice. The privilege remains in place.

27To suggest that you can waive privilege entirely merely by disclosing a legal opinion would make the protections afforded by solicitor-client privilege precarious indeed.

28The Plaintiffs maintain their position that they are not willing to waive the privilege over anything other than the letter. In light of such, I will not grant the Defendants’ request for a waiver in relation to the file, and I will not permit Mr. Robertson to be called as a witness under Rule 31.10.

Undertakings and Refusals

29In addition to the waiver issue, a number of undertakings/refusals were raised by the parties in the context of the motion. I outline my position in relation to each below.

1) Motion brought by the Plaintiffs in relation to the Defendants

Ms. Dickson

1. Ms. Dickson is to check and disclose any relevant communications on electronic devices (computer, phones, texts, emails, etc.).
2. Ms. Dickson is to update her Schedule C to include a reference to the documents given to Mr. Dickson, and the nature of that documentation to the best of her recollection.
3. Ms. Dickson is to confirm that the spreadsheet disclosed to the Plaintiffs regarding costs of the project is the final spreadsheet and that there is no later electronic versions of the spreadsheet.

Mr. Dickson

1. Mr. Dickson is to produce current contact information for Debbie Reid. Ms. Reid is to produce the real estate file if it is in her possession.
2. Mr. Dickson’s Affidavit of Documents will be sworn and confirmed to be accurate and up to date.
3. Without prejudice to the Defendants’ ability to elaborate on their position in the future, Mr. Dickson’s counsel will provide further details regarding his position in relation to following: a) The basis for his assertion that principle of merger absolves Mr. Dickson from any liability for alleged negligent misstatements; b) Clarify the basis for allegation that “unclean hands” precludes the Plaintiffs from recovery; c) Further particulars relating to the claim of the statute of limitations defence.
4. All permits obtained in relation to Mr. Dickson’s work on the subject Property as well as any permits obtained in relation to his preceding build/renovation are ordered produced. I will not, however, order that Mr. Dickson provide permits and/or consent to inspect all other permits obtained in relation to prior builds. In my view, this request is not proportionate, and the information sought would be marginally relevant at best.
5. I will also not require contact information for Mr. Dickson’s daughter be provided as I do not find that the Defendants have established sufficient relevance. Obviously, if there is a basis to believe she may have relevant information, counsel for the Defendants are required to provide this information and her contact.

2) Cross-Motion brought by the Defendants

1. The Plaintiffs are to outline the precise basis for the calculation of $404,000 in damages. Mr. Oliva’s counsel takes the position that this is comprised of expenses paid to fix the Property as well as lost market value. However, according to the Defendants, any renovations conducted have increased market value. Accordingly, the Defendants are entitled to an explanation as to how the specific damages have been calculated. If the specific amount is based on the insurance amount paid in settlement of the claim to the insured, this should be made clear. It may be that there are amounts paid by the insurer in settlement that would not warrant relief as against the Defendants.
2. The Plaintiffs are to disclose the Mortgage File.
3. The Plaintiffs to outline and explain the exact amount they are saying they paid for the Property including any amounts that were provided to Mr. Dickson in the form of “work” on the Property.
4. Mr. Oliva is to provide proof that he or his wife had the “deposit” amount for purchasing the Property in his bank account. Any bank records which show that the funds were in their possession prior to the purchase of the Property should be disclosed.

Amendment to Statement of Claim

30The Plaintiffs have also sought leave to amend their Statement of Claim to reflect the draft Amended Statement of Claim attached to their Notice of Motion. The Defendants resist the amendment.

31Rule 26.01 of the Rules of Civil Procedure governs amendments to pleadings. It uses mandatory language. On motion at any stage of an action, the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

32To defeat a motion to amend, the party resisting the amendment must show that the non-compensable prejudice it relies on “would result” from the amendment. It must establish a link between the non-compensable prejudice and the amendment. It must show that the prejudice arises from the amendment: Iroquois Falls Power Corp. v. Jacobs Canada Inc., 2009 ONCA 517.

33In my view, there is no basis to infer prejudice on the basis of the proposed amendments. Accordingly, I will grant the Plaintiffs leave to amend the Statement of Claim in accordance with their draft.

Costs of the Aborted Examinations for Discovery on January 15, 2018

34Having reviewed the record and the materials filed, I am satisfied that while the aborted discovery was not the fault of the Defendants, the Plaintiffs are entitled to be compensated for reasonable costs incurred because of the unnecessary preparation. I leave it to the parties to work out an appropriate amount for costs thrown away. If they cannot agree on an amount, I will receive submissions on their respective positions as to the appropriate costs. The Plaintiffs to serve and file submissions of 2 pages in length within 21 days of this decision, and the Defendants to serve and file responding submissions of 2 pages in length within 14 days thereafter.

Timetable for Continued Discoveries

35Given my rulings above, the parties will now be in a position to work out a reasonable timetable for the completion of any outstanding productions, and to complete the discoveries. I will leave it to the parties to work out a timetable that makes sense for both sides and their schedules, contemplating that the action should be set down for trial no later than May 31, 2019.

36The parties can provide me with a timetable to endorse when they have had the time to address it.

Costs

37Given that the results of this motion are largely divided, each party is to bear its own costs of the motion.