Ontario Superior Court of Justice

Court File No.: CV-25-0019-000
Date: 2025-05-05

Between

Rainy River First Nations and Naicatchewenin First Nation
Applicants

M. Holervich, for the Applicants/Moving Parties on Motion

and

Couchiching First Nation, Mitaanjigamiing First Nation, Nigigoonsiminikaaning First Nation, Seine River First Nation and Rainy Lake Tribal Resource Management Inc.
Respondents

D. Somerville, for the Respondents/Responding Parties on Motion

Heard: April 17, 2025, at Thunder Bay, Ontario

Justice: R.A. Lepere

Decision on Motion

Factual Background

[1] The two Applicants and the four Respondent First Nations are the six shareholders of the Respondent, Rainy Lake Tribal Resource Management Inc. (the “Corporation”).

[2] In 2019, the Respondent First Nations convened a shareholder’s meeting and used their majority position to resolve that the Corporation distribute funds received from Resolute Forest Products Inc. (“Resolute”) to themselves, not including the Applicants, on the basis of “contractual commitments” with Resolute.

[3] In response, the Applicants commenced an application bearing Court File No. CV-19-0302 (the “2019 Application”). Within the 2019 Application, the Applicants immediately moved for an order to restrain the payment of any money out of the Corporation to any of the shareholders (the “Motion to Restrain”). The Respondents responded to the Motion to Restrain and in doing so, Mr. Strickland, the lawyer for the Respondents, swore an Affidavit on June 12, 2019 (the “2019 Affidavit”).

[4] The Respondents paid 2/6ths of the money to be distributed into their lawyer’s trust account at Buset LLP. The Motion to Restrain was dismissed and it was ordered that the monies paid into trust would remain pending unanimous consent of all shareholders or a further order of the Court.

[5] From 2021 to 2023, Resolute made further payments to the Corporation, and the Respondent First Nations made further distributions of money from the Corporation to themselves. Each time they distributed money they paid 2/6ths into trust at Buset LLP.

[6] In January 2025, the Applicants commenced this application (the “2025 Application”) seeking an order that the funds held in trust at Buset LLP be paid to the Applicants, which now equals $748,000.00.

[7] In response to the 2025 Application, the Respondent First Nations and the Corporation delivered a Notice of Appearance appointing Buset LLP as lawyer of record for all of the Respondents, and brought a motion to dismiss the 2025 Application on the grounds that the 2025 Application is duplicative of the 2019 Application, an abuse of process, and highly prejudicial to the Respondents (the “Motion to Dismiss”).

[8] The Respondents delivered an Affidavit sworn by Mr. Strickland on February 19, 2025 (the “2025 Affidavit”) in response to the Motion to Dismiss.

[9] Mr. Strickland was cross-examined on the 2025 Affidavit. He refused to answer several questions on the grounds that the information sought was subject to solicitor-client privilege and/or that the questions were beyond the scope of the cross-examination and went to the merits of the 2025 Application.

[10] The Applicants have now brought this motion to compel Mr. Strickland to re-attend the cross-examination, answer the refusals, and answer further questions arising from the answers to the refusals (the “Motion to Compel”).

[11] Both the Motion to Compel and the Motion to Dismiss were before me today. The parties agreed that only the Motion to Compel would proceed.

Relief Requested – Paragraph 1(b) of the Amended Notice of Motion

[12] I decline to make an order declaring that Buset LLP are the lawyers of record for, and have been jointly retained by, the Respondents, including the Corporation in the 2025 Application. The order sought is unnecessary in the circumstances. It is clear that Buset LLP is the lawyer of record for the Respondents pursuant to the Notice of Appearance delivered in the 2025 Application. It is also clear from the Law Society of Ontario’s Rules of Professional Conduct that when a lawyer acts for more than one client it is a joint retainer.

Relief Requested – Paragraph 1(c) of the Amended Notice of Motion

[13] The Applicants seek an order declaring that Chief Wayne Smith of the Applicant, Naicatchewenin First Nation, has been one of the six directors of the Corporation since 2012.

[14] The Applicants filed evidence on this motion confirming that Chief Wayne Smith has been a director and officer of the Corporation since April 20, 2012. It is the position of the Respondents that there is no dispute as to who the directors of the Corporation are further to the records of the Corporation.

[15] I do not believe that there is a need for the order sought by the Applicants in paragraph 1(c) of the Amended Notice of Motion. However, if I am wrong in that respect, I find that Chief Wayne Smith has been a director of the Corporation since April 20, 2012.

Relief Requested – Paragraph 1(d) of the Amended Notice of Motion

[16] The Applicants seek an order requiring the Respondents and Buset LLP to disclose any documents, communications, or information relating to the issues in this proceeding, including documents in relation to any contractual commitments with Resolute Forest Products.

[17] In support of their request, the Applicants assert that Buset LLP is representing the Corporation and the Respondent First Nations, which must be further to a joint retainer. Since it is a joint retainer, Buset LLP cannot keep information provided by one client from another client. As such, information obtained from the Respondent First Nations cannot be kept confidential from the Corporation, and vice versa. Since the Applicants are shareholders of the Corporation, they are entitled to disclosure of the information requested from Buset LLP, as the lawyer for the Corporation.

[18] The Respondents assert that the Applicants are shareholders of the Corporation and do not have a right to the information requested on this motion. They also assert that evidence regarding the contractual commitments will be provided in due course when/if they respond to the 2025 Application pending the outcome of the Motion to Dismiss.

[19] I decline to make the order requested by the Applicants at paragraph 1(d) of the Amended Notice of Motion. The information requested is not relevant to the Motion to Dismiss. The Respondents have not yet responded to the 2025 Application. I would expect that their response to the 2025 Application will include disclosure of the contractual commitments on which they are relying to assert entitlement to the funds held in trust, failing which that subject matter can be canvassed on cross-examinations in the 2025 Application. The Applicants’ request for the noted disclosure on the Motion to Dismiss is premature.

Relief Requested – Paragraph 1(e) of the Amended Notice of Motion

[20] In paragraph 1(e) of the Amended Notice of Motion, the Applicants seek an order compelling Mr. Strickland to re-attend at his cross-examination on the Motion to Dismiss to answer the refusals and to answer further questions arising from the answers to the refusals.

[21] The Applicants have prepared a chart of the Refusals from Mr. Strickland’s cross-examination on March 26, 2025, which is attached as Appendix A (the “Refusals”).

[22] Mr. Strickland did not answer the Refusals at the cross-examination for two reasons. Firstly, the questions were outside of the scope of the cross-examination, as they were not relevant to the Motion to Dismiss. Secondly, he was bound by solicitor-client privilege. In argument on this motion, he also asserts a claim of litigation privilege.

[23] In order to determine whether Mr. Strickland should be compelled to re-attend at his cross-examination and answer the Refusals, I must determine firstly whether the Refusals were within the scope of the cross-examination on the Motion to Dismiss. Secondly, I must determine whether Mr. Strickland was correct in asserting solicitor-client privilege and/or litigation privilege as a basis for the refusals.

A. Scope of Cross-Examination

[24] Generally, the scope of cross-examinations on an interlocutory motion will be limited to questions relevant to the issues on the particular motion, not to issues relevant to the larger proceeding between the parties: see Coburn v. Toronto (City), paras. 10–11.

[25] However, if a matter is raised in, or put in issue by the deponent in his or her affidavit, the opposing party is entitled to cross-examine on the matter even if it is irrelevant and immaterial to the motion before the Court: see Ontario v. Rothmans Inc., 2011 ONSC 2504, para. 143.

[26] When dealing with refusals from a cross-examination on a motion, the court should consider each question refused on the basis of the following criteria:

(a) Does it relate to an issue raised in the affidavit?
(b) Does it relate to an issue raised by the motion?
(c) Does it relate to the witness’ credibility?

If the answer to any one of these is “yes” the question must be answered, subject to privilege: see Coburn, at paras. 12–13.

[27] Further to the three Coburn questions, the Refusals do not relate to issues raised on the Motion to Dismiss and do not relate to Mr. Strickland’s credibility. The only basis on which the Refusals can be within the proper scope of the cross-examination on the Motion to Dismiss is if they relate to an issue raised in the 2025 Affidavit.

[28] The Refusals can be broken into subsets or categories. I will address each subset or category below, along with my findings regarding whether the Refusals relate to an issue raised in the 2025 Affidavit such that they were, therefore, within the scope of the cross-examination.

Category 1 - Questions 25 and 72 – General Inquiries about the Existence of Contractual Commitments

[29] At paragraph 6 of the 2025 Affidavit, Mr. Strickland states that the 2019 Shareholder Resolution was based on contractual commitments with Resolute Forest Products. Therefore, questions about the existence of any contractual commitments between Resolute and the Corporation on which the 2019 Shareholder Resolution was based are within the scope of the cross-examinations as they relate to an issue raised in the 2025 Affidavit.

[30] These questions ought to have been answered by Mr. Strickland, subject to privilege.

Category 2 - Questions 28, 29 and 32, 36-7, 38, 29, 41-3, 51, 75, 78, 80 – Questions about Specific Contractual Commitments between the Corporation and Resolute

[31] The only reference to contractual commitments between the Corporation and Resolute in the 2025 Affidavit is found at paragraph 6, which states the following:

“I am informed by Peter Moen, an employee of the Corporation, and do verily believe that all shareholders and all parties to this application attended a shareholders meeting on June 6, 2019, where it was resolved that an allocation of free cash flow payments of $472,696.00 were to be made to four of the six shareholders of the Corporation, based upon the contractual commitments with Resolute Forest Productions...”

[32] I view this as a general statement articulating the position of the Respondents on the 2025 Application to provide the Court with some context on the Motion to Dismiss. There is no further information provided in the 2025 Affidavit about the content or specifics of these contractual commitments. I would expect that evidence regarding these contractual commitments will be filed when the Respondents respond to the 2025 Application. That information is not necessary to determine the Motion to Dismiss.

[33] When reviewing the transcript from the cross-examination of Mr. Strickland, these questions arose from the content of the 2019 Affidavit. The details about the contractual commitments, including copies of certain agreements, were filed in response to the 2019 Application and the Motion to Restrain. There is no reference in the 2025 Affidavit to the 2019 Boundary Agreement or the 2020 Memorandum of Agreement. The general comment made in the 2025 Affidavit about contractual commitments does not expand the scope on the cross-examination on the Motion to Dismiss to questions regarding specific agreements or contractual commitments.

[34] These questions were properly refused as being outside of the scope of the cross-examination on the Motion to Dismiss.

Category 3 - Questions 44-7, 65, 66 – Questions Flowing from the 2019 Affidavit

[35] Based on a review of the transcript, these questions flow from the content of the 2019 Affidavit. The 2019 Application and the 2025 Application are separate proceedings. They have not been consolidated. There is no basis on which Mr. Strickland should have been asked questions on the cross-examination on the Motion to Dismiss about the content of the 2019 Affidavit. These questions are not within the scope of the cross-examination on the Motion to Dismiss as they do not relate to issues raised in the 2025 Affidavit.

[36] These questions were properly refused as being outside of the scope of the cross-examination on the Motion to Dismiss.

Category 4 - Questions 48-9, 50 – Questions about Buset LLP’s Retainer with the Respondents

[37] There is no reference in the 2025 Affidavit to the retainer agreement between Buset LLP and the Respondents. As such, these questions do not arise from an issue raised in the 2025 Affidavit.

[38] These questions were properly refused as being outside of the scope of the cross-examination on the Motion to Dismiss.

[39] Further to the above, Questions 25 and 72 were within the scope of the cross-examination on the Motion to Dismiss. Whether Mr. Strickland ought to answer these questions is subject to a determination of whether Mr. Strickland was correct in asserting privilege over the answers, which I will discuss below.

B. Solicitor-Client Privilege / Litigation Privilege

[40] The next question I must determine is whether Mr. Strickland ought to be compelled to answer Questions 25 and 72, or whether same are subject to solicitor-client and/or litigation privilege.

[41] I find that litigation privilege is not relevant to the issues before me. Litigation privilege protects from the disclosure of documents and information created for the dominant purpose of existing or anticipated litigation. It aims to create a zone of privacy for litigants to prepare their cases without premature disclosure to the opposing side: see Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52, paras. 19–20.

[42] Litigation privilege cannot attach to the answers to Questions 25 and 72 or, more specifically, to the existence of contractual commitments between the Corporation and Resolute. These agreements were created outside of and independent from any litigation between the parties as part of the normal day to day business operations of the Corporation.

[43] The issue of whether solicitor-client privilege applies to Questions 25 and 72 is more difficult because of Mr. Strickland’s joint representation of the Respondents in this matter, and the fact that the Applicants are shareholders of the Corporation, which is one of Mr. Strickland’s clients.

[44] The following comments in Mottershead v. Burdwood Bay Settlement Co., pp. 3–4, address some of the concerns that arise with joint representation in shareholder disputes:

“In my view, it is clear that Mr Davies and his law firm are in a conflict of interest. As corporate solicitor and counsel for the Company, Mr Davies’ duty is to the Company; as counsel for the three personal defendants, who are also the majority shareholders, his duty is to those individuals. The best interests of the Company are not necessarily those of the majority shareholders and directors. The Company is a separate legal entity and it is no answer for Mr Davies to say that his instructions are from the individual majority shareholders as personal defendants are one and the same as those instructions which they provide as majority directors of the Company. The duty of the solicitor for the Company is to advise all of the directors so that they may make an informed decision as a board with respect to the interests of the Company.

In shareholder litigation, there exists a potential conflict of interest between the personal interests of the individual parties both plaintiffs and defendants as shareholders and their fiduciary duties as directors of the Company. A solicitor acting both for the majority shareholders and for the Company on the sole basis of the instructions of that same majority personifies that conflict.

Moreover, a solicitor owes a duty of confidentiality to his or her client and information received from the majority shareholders in their capacity as personal defendants would be privileged. Surely a conflict arises when that solicitor receives privileged information in his capacity as solicitor for the majority shareholder defendants and declines to advise the board of directors which includes the minority shareholders of that information notwithstanding his role as corporate solicitor and counsel for the defendant Company.”

[45] As the lawyer only for the Corporation, Mr. Strickland would have to disclose litigation related documents or other information about the Corporation to minority directors and shareholders and could not avoid same based on solicitor-client privilege. However, as the lawyer for only the Respondent First Nations in the shareholder dispute, he could assert privilege over information obtained from his clients and would not be permitted to disclose that information to the Applicants.

[46] The issue in this case is that, because he represents both, there effectively needs to be a determination as to whether the information sought by the Applicants, being the answers to Questions 25 and 72, are within the knowledge of Mr. Strickland because of his representation of the Corporation or because of his representation of the Respondent First Nations, being the majority shareholders.

[47] I find that the information sought pursuant to Questions 25 and 72, being general information about the existence of contractual commitments between Resolute and the Corporation, is within the knowledge of Mr. Strickland because he is the lawyer for the Corporation. As such, he cannot assert solicitor-client privilege over same in relation to requests for that information by the Applicants, who are minority shareholders. As the lawyer for the Corporation, he has a duty to all shareholders to inform them as to the dealings of the Corporation.

[48] As such, I find that Questions 25 and 72 are not subject to litigation privilege and/or solicitor-client privilege and ought to be answered by Mr. Strickland.

Disposition

[49] I make the following Orders on this motion:

(a) Mr. Strickland shall answer Questions 25 and 72 from the Refusal Chart. The Applicants can choose to obtain the answers further to an attendance by Mr. Strickland at a continuation of his cross-examination or in writing.

(b) With respect to the above order, the Applicants shall not have the right to ask further questions arising from the answers to Questions 25 and 72. The details regarding those agreements and/or the drafting or signing of same are not relevant to the Motion to Dismiss. The parties have expended substantial time and resources on the Motion to Dismiss and now this Motion to Compel on issues that will have no bearing on the determination of the Motion to Dismiss. The Applicants will have the opportunity to revive this information and ask questions about same once responding materials are filed in the 2025 Application.

(c) With respect to the Motion to Dismiss, if it will take more than one hour to argue, a special date for same should be obtained from the Trial Co-Ordinator following the release of this decision. Otherwise, it can be placed on a Regional Motions Court List on a date agreed to by the parties.

Costs

[50] The costs of the Motion to Compel shall be determined by the judge hearing the Motion to Dismiss.

“original signed by”
R.A. Lepere

Released: May 5, 2025