Court File and Parties

COURT FILE NO.: CV-15-123408 DATE: 20190607 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

1778077 Ontario Limited, formerly o/a Chili’s Grill & Bar Plaintiff – and – The Economical Insurance Group, Intact Insurance Company, New World Insurance Services (Ontario) Limited o/a New World Insurance, Joe Than, SCM Insurance Services Inc. o/a Claimspro, SCM Insurance Services GP Inc. o/a Claimspro, Jimmy Ta, Ivan Brosbell, Belfor (Canada) Inc. o/a Belfor Restoration Services and 1192901 Ontario Ltd. o/a Newtron Group Defendants – and – Heritage Food Service Group of Canada Limited o/a R.G. Henderson Third Party

Counsel: Veronica S. Marson for the Plaintiff/Responding Party, 1778077 Ontario Limited, formerly o/a Chili’s Grill & Bar Beau S.M. Chapman for Defendants, The Economical Insurance Group, SCM Insurance Services Inc. o/a Claimspro, SCM Insurance Services GP Inc. o/a Claimspro, Jimmy Ta and Ivan Brosbell Jeff Van Bakel for the Defendant/Moving Party, Belfor (Canada) Inc. o/a Belfor Restoration Services No one appearing for the Defendants, New World Insurance Services (Ontario) Limited o/a New World Insurance, Joe Than or 1192901 Ontario Ltd. o/a Newtron Group No one appearing for the Third Party, Heritage Food Service Group of Canada Limited o/a R.G. Henderson

HEARD: May 31, 2019

REASONS FOR DECISION

CHARNEY J.:

Introduction

[1] This motion relates to an action for damages claimed by the plaintiff, 1778077 Ontario Ltd. formerly o/a Chili’s Grill & Bar (Chili’s), arising out of a flood that occurred at Chili’s restaurant in Woodbridge, Ontario on July 27, 2014.

[2] The defendants named in the Statement of Claim are the plaintiff’s insurance companies, insurance brokers and insurance adjuster, as well as Belfor (Canada) Inc. o/a Belfor Restoration Services (Belfor), which carries on business as a property restoration company, and 1192901 Ontario Ltd. o/a Newtron Group (Newtron), a company that carries on business as a commercial equipment restoration company.

[3] In its Statement of Claim, Chili’s alleges that as a result of the negligence of its insurance broker, the defendant New World Insurance Services (Ontario) Limited (New World), it had inadequate business interruption insurance. Chili’s also alleges that as a result of substantial delay and substandard conduct of the defendants Belfor and Newtron, the restaurant was not able to re-open “in a timely manner” and Chili’s was forced to close its business in March 2015.

[4] Heath Everett, the principal of Chili’s, maintained at his examination for discovery that he intended to re-open his restaurant following the flood, but due to delay and negligent work of the defendants, coupled with the inadequate business interruption insurance, he was ultimately compelled to sell the restaurant to “Shoeless Joe’s” in March 2015.

[5] The moving party, the defendant Belfor, brings this motion for an order for a declaration that certain audio recordings made by Mr. Everett are not subject to privilege.

[6] The audio recordings at issue are recordings made by Mr. Everett of his conversations with his former lawyers, Ross & McBride LLP (Ross & McBride). These 24 recordings all post-date the flood and are dated between August 18, 2014 and February 20, 2015.

[7] On April 20, 2017, these 24 recordings were produced by the plaintiff’s counsel to the defendants’ counsel on a CD containing 233 recordings.

[8] The moving party takes the position that the plaintiff has waived solicitor client privilege with respect to these audio recordings, or, in the alternative, the recordings are not privileged because Ross & McBride was the plaintiff’s “transactional lawyer” for the sale of the business and not the plaintiff’s litigation counsel.

[9] The plaintiff takes the position that the audio recordings of the Ross & McBride conversations were inadvertently produced, and that privilege was not waived. Moreover, Ross & McBride was first retained by Chili’s in August, 2014 - following the flood - to assist the plaintiff in dealing with the settlement of its insurance claim and its position that New World was negligent in providing it with inadequate business interruption insurance. This dispute with New World is one of the central issues of the present litigation, and Mr. Everett’s discussions with Ross & McBride regarding that issue and its potential settlement are directly related to this litigation.

Facts

[10] The plaintiff’s property loss occurred on July 27, 2014 as a result of flooding at its Chili’s restaurant in Woodbridge, Ontario.

[11] In August 2014, the plaintiff realized that it did not have adequate business interruption insurance coverage and retained the law firm of Ross & McBride to deal with various legal issues that arose as a result of the flood, including rent abatement, the alleged business interruption insurance errors involving the defendant New World, and possible sale of the business. Ross & McBride was involved in exchanging settlement offers with the plaintiff’s insurance brokers regarding the business interruption insurance coverage issue.

[12] The Chili’s restaurant was never reopened and finally closed in March 2015. A Proof of Loss was submitted on March 30, 2015.

[13] The Statement of Claim was issued on July 16, 2015. The law firm Singer Kwinter was retained as the plaintiff’s lawyers for the issuance of the Statement of Claim. The Claim seeks damages of $806,423 for losses to its business and lost profit, and a further $3 million in damages for negligence and/or breach of contract.

[14] Paragraph 19 of the Statement of Claim alleges:

The Plaintiff claims that as a result of the substantial delay and the substandard conduct of all of the Defendants, the Plaintiff was unable to resume operation of the Business in a timely manner, incurred substantial financial losses and was forced to close the Business in March 2015.

[15] The Statement of Claim makes no reference to the plaintiff obtaining or relying on any legal advice or to the plaintiff’s state of mind.

[16] The defendants deny any negligence and deny that the plaintiff suffered “the damages alleged, or any damages at all”.

[17] The plaintiff delivered an unsworn affidavit of documents in the name of Heath Everett on June 29, 2016. The plaintiff’s affidavit of documents includes a Schedule “B” listing documents the plaintiff objected to producing on the grounds of privilege. This list included a reference to “Audio Recordings – July 30, 2014 – November 25, 2014 – Litigation Privilege”.

[18] Mr. Everett was examined for discovery over four days in March and April 2017.

[19] Mr Everett’s evidence at discovery was that when he discovered that he had inadequate business interruption insurance coverage in August of 2014, he retained the services of Ross & McBride to advise him on this issue. While it was his intention to re-open Chili’s, he realized that he might have to sell his business if the inadequate insurance issue could not be settled in his favour. Mr. Everett acknowledged that he was approached by Shoeless Joe’s regarding the potential sale of Chili’s in October or November 2014. Mr. Everett acknowledged that he had been approached on a number of occasions prior to the flood about selling Chili’s. The plaintiff gave an undertaking to produce all documentation related to the sale of the business.

[20] At Mr. Everett’s examination for discovery the defendants were advised that Mr. Everett had made audio recordings of his conversations with the defendants and other parties. Mr. Everett refused to answer any questions about whether any of the audio recordings were of conversations with his lawyers. Plaintiff’s counsel refused to produce the audio recordings on the basis that they were covered by litigation privilege. However, plaintiff’s counsel did state: “I may decide to give you all of the recordings, I haven’t yet decided…I fully appreciate what you are saying, and I will provide what I believe is relevant and requires production.”

[21] The defendants took the position that they would not produce the remaining defendants for discovery without first receiving the plaintiff’s audio recordings of the defendants.

[22] On April 13, 2017, counsel for the plaintiff sent counsel for the defendants a CD “containing all audio recordings listed in the plaintiff’s Schedule “B”, which is being served upon you pursuant to the Rules of Civil Procedure”.

[23] On April 20, 2017, counsel for Belfor received the CD from plaintiff’s counsel. The CD contained all of the audio recordings listed in the Schedule B. There were a total of 233 recordings dated from July 28, 2014 to April 2, 2015, ranging in length from one minute to over 1.5 hours. The recordings were grouped together in folders labelled primarily by company.

[24] On April 25, 2017, counsel for Belfor listened to a number of the recordings from the file labelled “Belfor”, and a select few other files. One of the files was labelled “Ross_McBride”. This file contained 24 separate recordings. Counsel for Belfor listened to one of the recordings in the “Ross_McBride” folder and concluded that it might be covered by privilege.

[25] On April 28, 2017, counsel for Belfor wrote to counsel for the plaintiff and acknowledged receipt of the CD. To his credit, counsel for the defendant sought to confirm that the plaintiff intended to waive privilege over the Ross & McBride recordings, stating:

During the examination of Mr. Everett, you were asked to produce the file of Ross & McBride LLP relating to the sale of the Chili’ assets however you refused and/or took that request under advisement. We now note that the audio recordings produced include a number of the recordings of conversations between Mr. Everett and lawyers from Ross & McBride. As a result, we presume that you are no longer asserting privilege with respect to these recordings, or the Ross & McBride file, and therefore look forward to receipt, at your earliest convenience, of a copy of the Ross & McBride file, along with the answers to the other undertakings given by Mr. Everett.

[26] Counsel for Belfor has confirmed that that he has disposed of any notes he made when he listened to the Ross & McBride recording on April 25, 2017, and that he has not listened to any of the Ross & McBride audio recordings since April 25, 2017. One of the other counsel for the co-defendants listened to a portion of the Ross & McBride audio recording but has no recollection of the information in the recording and did not keep any notes. None of the other counsel for the co-defendants has listened to the recordings at issue.

[27] Counsel for Belfor received no response to this letter, and on May 29, 2017, sent an email to counsel for the plaintiff, including a copy of the April 28, 2017 letter, asking “when we can expect to receive the answers to your client’s undertakings, including a copy of the file of Ross & McBride LLP”.

[28] Counsel for Belfor received no response to this email.

[29] On September 12, 2017, Counsel for Belfor wrote to counsel for the plaintiff stating:

It is my position that your client has waived any privilege that might attach to these recordings as a result of their production and that this waiver has been confirmed by your lack of response to my correspondence coupled with no immediate attempt to retrieve said recordings. If you disagree that privilege has been waived by your client with respect to these recordings, please advise immediately so that we can bring a motion to have the issue determined by a Judge prior to the continued examinations.

Please provide the answers to your client’s undertakings, as well as your position with respect to the Ross & McBride audio recordings within thirty (30) days of the date of this correspondence…If we do not receive your position with respect to the Ross & McBride audio recordings, within that time, we will proceed on the basis that you agree that privilege has been waived by your client.

[30] At this point, counsel for the plaintiff finally woke up, and on September 29, 2017, wrote to counsel for the defendants, apologizing for the delay in responding to the defendant’s earlier correspondence, explaining “our office has been going through some changes of late and as a result, some of our communications have been delayed”. She confirmed that the Ross & McBride audio recordings had been sent to the defendants in error and maintained the claim to privilege with respect to the Ross & McBride file:

With respect to the Ross & McBride file, Mr. Kwinter communicated to you at discovery that our position was that the file was subject to privilege. That is still our position.

From my review of the file, it appears that in an effort to ensure that counsel was provided with all of the recordings involving their clients prior to the next discovery date, some additional recordings that were not intended to be sent were inadvertently included. We apologize for this error.

We ask that you please destroy the CD that was previously sent to you. We will provide you with a new CD and a summary of the material facts on the recordings shortly.

[31] Counsel for Belfor replied on October 16, 2017, advising that it was his position that the plaintiff:

… has waived any privilege that may attach to these recordings. As a result we will not be destroying the disc that has been provided to us and instead will be bringing a motion for a declaration that any privilege has in fact been waived and therefore these recordings may be relied upon as evidence in the proceedings.

[32] Counsel for Belfor confirmed that, despite its position “we will not listen to them pending the decision on our Motion”.

[33] Rule 30.04(6) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, authorizes the court to inspect any document where privilege is claimed to determine the validity of the claim. In order to facilitate this inspection, counsel for The Economical Insurance Group arranged to have a transcript of the Ross & McBride audio recordings made by a transcriptionist. The transcript that was prepared was filed under seal with the Court. None of the defendants have listened to the subject recordings or have viewed the transcripts.

[34] On May 6, 2019, counsel for the plaintiff served counsel for the defendants with a new CD containing all of the recordings which were included in the original CD, minus the recordings with Ross & McBride. Also excluded are recordings with the National Fire Adjustment over which litigation privilege is claimed, and which is not an issue on this motion. Plaintiff’s counsel reiterated their position that counsel for the defendant should destroy the CD sent to them on April 13, 2017.

Analysis

i) Has the plaintiff waived solicitor client privilege?

[35] The defendants’ first position is that the plaintiff’s recording and disclosure of his telephone conversations with Ross & McBride indicate an intention to waive any claim of solicitor client privilege he might otherwise have had. His counsel’s protestation that the disclosure was inadvertent is too late. Moreover, since the plaintiff alleges that he relied on the defendant Belfor to complete the remediation and repairs of his restaurant in a reasonable time, he has put his “state of mind” in issue, and is deemed to have waived any privilege in relation to legal advice received from Ross & McBride.

Deemed Waiver

[36] Communications between a lawyer and his or her client are privileged where they involve the giving or seeking of legal advice and where the parties intend them to be confidential: Solosky v. The Queen, [1980] 1 S.C.R. 821, at p. 837. The client, not the lawyer, holds the privilege and only he or she can waive it: R. v. McClure, 2001 SCC 14, at para. 37.

[37] The defendants acknowledge the oft-cited principle that solicitor client privilege is a “cornerstone of our justice system”: Roynat Capital Inc. v. Repeatseat Ltd., 2015 ONSC 1108, at para. 1. However, Roynat also states, at para. 1, that “solicitor client privilege is not absolute and is subject to exception when it is deemed to have been waived.”

[38] The issue of “deemed waiver” was extensively reviewed by the Divisional Court in its 2015 decision in Roynat. The issue in Roynat was whether a party who received legal advice had to expressly make receipt of the legal advice an issue in the claim or defence before the principle of “deemed waiver” could apply.

[39] The Court began its analysis with the following statement by Perell J. in Guelph (City) v. Super Blue Box Recycling Corp. (2004), 2004 ONSC 34954, at paras. 26 – 30 (citations omitted):

Thus, if a party places its state of mind in issue with respect to its claim or defence and has received legal advice to help form the state of mind, privilege will be deemed to be waived with respect to such legal advice…

There, is however, a subtle and profound point here about when a party must answer questions about the occurrence of legal advice in the factual narrative of a case. The subtle and profound point is that there is no waiver of the privilege associated with lawyer and client communications from the mere fact that during the events giving rise to the claim or defence, the party received legal advice, even if the party relied on the legal advice during the events giving rise to the claim or defence. For a party to have to disclose the legal advice more is required.

But the materiality of the legal advice, while necessary to make questions about it relevant, is still not sufficient to justify the compelled disclosure of the legal advice. To justify a party being required to answer questions about the content of privilege communications, the party must utilize the presence or absence of legal advice as a material element of his or her claim or defence. The waiver of the privilege occurs when the party uses the receipt of legal advice as a material fact in his or her claim or defence. While the waiver is a deemed waiver, it requires the intentional act that the party makes legal advice an aspect of his or her case. In Simcoff v. Simcoff, 2009 MBCA 80, Justice Steel made the point neatly at para. 27, where he stated:

[27] However, mere reference to the receipt of legal advice does not constitute waiver. Waiver must involve something more. It requires not simply disclosing that legal advice was obtained, but pleading reliance on that advice for the resolution of an issue.

[40] Based on these legal principles, Perell J. articulated a two-step test.

Thus, a deemed waiver and an obligation to disclose a privileged communication requires two elements; namely: (1) the presence or absence of legal advice is relevant to the existence or non-existence of a claim or defence; which is to say that the presence or absence of legal advice is material to the lawsuit; and (2) the party who received the legal advice must make the receipt of it an issue in the claim or defence.

[41] It is clear that if this two-part test articulated by Perell J. applied to the present case, there could be no deemed waiver of solicitor client privilege. The “presence or absence of legal advice” is wholly irrelevant to the plaintiff’s claim that it relied on Belfor to complete the remediation and repairs of its restaurant in a reasonable time, nor has Chili’s made “the receipt of [legal advice] an issue in the claim or defence”.

[42] The issue “at the heart” of Roynat related to the applicability of the second requirement enunciated by Perell J: whether (at para. 42 of Roynat): “the party who received the legal advice [in this case the plaintiffs] must make the receipt of it an issue in the claim or defence.” The defendant argued that this requirement did not apply, or applied differently, in a case of reliance.

[43] The Divisional Court concluded that reliance on legal advice does not have to be specifically pleaded in order for state of mind to be in issue to create a waiver of privilege. That said, the Court did not dispense with the first step (the presence or absence of legal advice is relevant to the lawsuit), and held that the second step could be satisfied even if the receipt of the legal advice was implicit in the claim or defence. The Court stated, at paras. 58 and 59:

Applying the two step test, this negligent misrepresentation claim advanced by the plaintiffs makes (1) the presence of legal advice relevant to the plaintiffs’ allegation of reliance; and (2) the party who received the legal advice [in this case the plaintiffs] made the receipt of the legal advice an issue in this claim as the plaintiff must prove that relying on the defendants’ alleged representations was reasonable.

The line of cases relied upon by the defendants confirms that there are limited circumstances where waiver of solicitor client privilege may apply: if a party places its state of mind in issue, alleges reliance on representations made by the adverse party, and obtained legal advice with respect to that representation.

[44] Belfor argues that Chili’s has placed its state of mind in issue in this litigation because Chili’s claims that it relied on the defendant Belfor to complete the remediation and repairs of the restaurant in a reasonable time, and that Belfor’s failure to do so forced the plaintiff to close its business and sell to Shoeless Joe’s. This, Belfor argues, puts the plaintiff’s “state of mind” at issue, because it raises the question of when the plaintiff made its decision to sell the assets of its business. Disclosure of the plaintiff’s discussion with its lawyers might reveal that Mr. Everett’s decision to sell Chili’s to Shoeless Joe’s was unrelated to the flood or delayed repairs. Belfor wants disclosure of the Ross & McBride file for one purpose only: to find out when Mr. Everett made his decision to sell the assets of his business.

[45] In making this argument, Belfor skips over the first step of the deemed waiver analysis: the presence or absence of legal advice must be relevant to the existence or non-existence of a claim or defence. In this case, there is no suggestion that the presence or absence of legal advice had any bearing on the plaintiff’s claim that Belfor’s failure to complete the remediation and repairs of the restaurant in a reasonable time led to the closure of Chili’s.

[46] To the extent that the decision to sell Chili’s to Shoeless Joe’s is relevant to this case, it is the timing of the sale and negotiations leading to the sale that is relevant. The legal advice obtained in relation to the sale is irrelevant. The evidence related to the timing of the negotiations and sale will be dealt with by disclosing all documentation related to the sale of the business, including any negotiations, for which an undertaking has already been given.

[47] No doubt the plaintiff received some legal advice in relation to the terms of the agreement for purchase and sale, but there is no basis for suggesting that legal advice relating to the terms of the agreement with Shoeless Joe’s is relevant to the plaintiff’s claim against Belfor.

[48] Acceding to Belfor’s position would mean that every time a plaintiff claimed that it relied on the defendant to comply with a term of an agreement and suffered damages as a result of the defendant’s failure to comply, the plaintiff would be deemed to put his state of mind in issue and to have waived solicitor client privilege. That is not the kind of “reliance” that was being considered in the Roynat case.

[49] The legal advice received from Ross & McBride has not been put in issue, either explicitly or implicitly, by anything pled by the plaintiff in this case, and there can be no deemed waiver of solicitor client privilege on this basis.

Implied Waiver

[50] Counsel for the defendant argues that the fact that Mr. Everett recorded his conversations with his lawyer is evidence from which the court can infer that Mr. Everett did not intend that the legal advice remain confidential. By producing an audio recording, Mr. Everett was putting the conversation in a form in which it could be used as evidence in a future proceeding, and counsel for the defendant submits that the court should draw an adverse inference from Mr. Everett’s failure to adduce any evidence to explain why he recorded his conversations with his lawyer.

[51] In my view, the fact of recording alone is insufficient evidence from which it can be inferred that Mr. Everett intended to use the recordings as evidence in some future case or other forum. It matters not whether Mr. Everett chose to maintain a record of the legal advice he obtained by writing notes of the conversation or by means of an audio recording. Either way, Mr. Everett was entitled to record the conversations for his own use, and it would be nothing more than speculation to infer that he intended to use the recordings as evidence in some other proceeding.

[52] The defendant also takes the position that the plaintiff’s actions in this case, and, in particular, its lawyer’s disclosure of the Ross & McBride audio recordings on a CD containing 233 recordings, coupled with the 4 ½ month delay in responding to the April 28, 2017 correspondence seeking clarification of whether solicitor client privilege was being claimed, indicate an intention to waive privilege notwithstanding plaintiff’s counsel’s September 29, 2017 correspondence expressly stating that the Ross & McBride audio recordings were disclosed through inadvertence of counsel.

[53] In Mandeville v. Manufacturers Life Insurance Co., 2004 CarswellOnt 9988 Nordheimer J. (as he then was) discussed the proper approach when counsel claims to have mistakenly disclosed a privileged document. He stated, at paras. 14-16:

It is an almost inevitable fact of large complex litigation, such as this, that mistakes in the production of documents will occur. Usually the situation will be resolved by counsel, acting professionally and in the best interests of the Bar, simply returning the inadvertently produced documents…

I do not accept that the passage of time itself is sufficient to constitute waiver of the privilege. In my view, it depends on what has occurred during that passage of time. If the documents have been used in some fashion, for example, by being referred to during the examination for discovery of a party or in some other similar way, then it would likely be concluded that a waiver had occurred. However, that is not the case here. There is no evidence that the documents have been used in such a way. Rather, it appears that the argument is essentially that plaintiff’s counsel have read the documents and know what they say. I do not agree that in such situations a waiver should be found…

Another inevitable fact of large complex litigation is that documents produced at one point may not be once again reviewed for many months. It is not at all surprising then that a mistake made in the production of documents might not be realized for a period of time. To allow the passage of time, by itself, to operate as a waiver would be an unduly harsh result, especially for the blameless client to whom, it should be remembered, the privilege actually belongs. (Emphasis added)

[54] In the present case, counsel for Chili’s has sworn an affidavit stating that the Ross & McBride audio recordings were inadvertently produced to the defendants on April 13, 2017, and confirming that he was never provided with any instructions from his client regarding the waiver of solicitor client privilege. Counsel has also stated that his law firm’s delay in responding to the April 28, 2017 and May 29, 2017 correspondence from Belfor’s counsel was inadvertent, and has provided an explanation for this error. Counsel for Chili’s was not cross-examined on this affidavit, and there is no basis on the record to question these sworn statements. There is nothing in the record of correspondence to suggest that counsel for the plaintiff intentionally disclosed the Ross & McBride audio recordings, or purported to waive privilege. All correspondence from the plaintiff’s counsel states the opposite.

[55] In R. v. Ward, 2016 ONCA 568, the Ontario Court of Appeal, at para. 35, set out the factors to be considered in deciding whether inadvertent disclosure has led to implied waiver:

Inadvertent disclosure does not necessarily mean that privilege has been waived. While waiver of solicitor-client privilege can be express or implied, whether privilege has been waived by inadvertent disclosure is a fact-specific inquiry, which may include consideration of the following factors:

• The way in which the documents came to be released;
• Whether there was a prompt attempt to retrieve the documents after the disclosure was discovered;
• The timing of the discovery of the disclosure;
• The timing of the application;
• The number and nature of the third parties who have become aware of the documents;
• Whether maintenance of the privilege will create an actual or perceived unfairness to the opposing party; and
• The impact on the fairness, both actual or perceived, of the processes of the court.

[56] While counsel for the plaintiff failed to act promptly to retrieve the documents once alerted to their disclosure by counsel for Belfor, the fault for this failure lies exclusively with counsel, and this is not sufficient reason to punish, in the words of Nordheimer J. “the blameless client to whom, it should be remembered, the privilege actually belongs.”

[57] Moreover, it is my view that maintenance of the privilege will not create any actual or perceived unfairness to the opposing party or to the process of the court. In this regard I rely on my analysis above, that the presence or absence of legal advice is not material to the issues in the lawsuit, and that the factual information sought by the defendants will be available to them when the documents relating to the negotiation and sale of Chili’s to Shoeless Joe’s are disclosed pursuant to the undertaking given at discovery.

[58] Finally, Belfor’s counsel argues that the Ross & McBride audio recordings may include business advice rather than legal advice. For example, he asserts that “an intention to make an insurance claim for business interruption losses while simultaneously engaging in a plan to sell the assets of the Business, is not legal advice over which the plaintiff can claim privilege”.

[59] I reject this premise. Mr. Everett was candid in his examination for discovery in acknowledging that, as early as August 2014, he recognized that if he did not have sufficient business interruption insurance coverage to cover his losses while the restaurant was closed for remediation and repair, he might have to sell his business. The legal issues relating to the sufficiency of his business interruption insurance, the duration of closure while the restaurant was being remediated, and the potential sale of the business, were all interrelated. Mr. Everett was entitled to seek and obtain confidential legal advice in relation to all of these issues. The fact that the legal advice sought related to his business does not transform legal advice into business advice.

Review of Transcripts

[60] Following the drafting of these Reasons, I decided, out of an abundance of caution, and pursuant to Rule 30.04(6), to review the sealed transcripts of the Ross & McBride audio recordings filed on this motion. I should indicate that counsel for Belfor requested that I review the transcripts, while counsel for Chili’s objected to my reviewing them on the basis that they were clearly covered by solicitor client privilege and therefore the review was unnecessary.

[61] Having reviewed these transcripts, I am satisfied that Mr. Everett was at all times seeking legal advice and the lawyers at Ross & McBride were at all times providing legal advice in their capacity as lawyers. They were not acting as business counsellors or in some other non-legal capacity. As such, all of these transcripts are protected by solicitor client privilege.

Conclusion

[62] For the foregoing reasons, there was no deemed or implied waiver of solicitor client privilege, the defendants’ motion is dismissed, and the plaintiff’s claims of solicitor client privilege in relation to the Ross & McBride audio recordings are upheld.

[63] As such, the Ross & McBride audio recordings may not be used in this proceeding, and the defendants must return to the plaintiff the original CD provided with the plaintiff’s April 13, 2017 letter (the CD). The defendants are to destroy any copies of the CD in their possession and any transcripts of the Ross & McBride audio recordings, and any notes or other work product related to the content of the CD.

[64] If the defendants seek leave to appeal from this decision within 15 days from the date of this decision, this order is stayed until the final resolution of the leave application or the appeal, if leave is granted.

[65] If the parties are not able to agree on costs, the plaintiff may file costs submissions within 20 days of the release of this decision, and the defendants may file reply submissions within 15 days thereafter. All costs submissions are to be limited to 3 pages plus costs outline and any offers to settle.

Justice R.E. Charney Released: June 7, 2019