Litigation Privilege

In Webasto Product North America Inc. v. Shasta Equities Ltd. and Lorne Shandro, the court dealt with an issue of litigation privilege over disputed documents regarding a boat that was damaged by fire. The respondents, Shasta and Shandro, claimed litigation privilege over the disputed documents. The appellant, Webasto, filed a motion requesting production of all of the disputed documents.

On the first hearing of the claim, the prothonotary ordered the production of all disputed documents. However, the motions judge overturned the prothonotary’s decision and found that one document was subject to solicitor-client privilege, while the remaining documents were subject to litigation privilege. The issue at the Federal Court of Appeal was whether the motions judge erred in setting aside the prothonotary’s decision.

The Federal Court of Appeal applied the general principles of litigation privilege when determining whether documents were subject to privilege or not. Litigation privilege requires the party claiming the privilege to establish, for each document, that:

(1) Litigation was ongoing or reasonably contemplated at the time the document was created; and

(2) The dominant purpose of creating the document was that for litigation.[1]

With regards to the second step, various considerations have been formulated by the courts in order to determine whether material was prepared for the dominant purpose of litigation. Relevant considerations include:

(1) The author and the authority upon whose direction a report is prepared;

(2) The dates on which the reports were produced;

(3) The date on which the insurers appointed counsel;

(4) The identity of the parties to whom the reports were addressed; and

(5) The content of the reports themselves.[2]

The Federal Court of Appeal allowed the appeal in part and set aside the order of the motions judge. The court found that two documents, a preliminary examination of what took place the day of the fire and a brief report that speculated various possible causes of the fire and contained pictures of the scene of the fire, were not privileged and therefore had to be disclosed. The remaining documents were protected by litigation privilege.

[1] Blank v. Canada (Minister of Justice), 2006 SCC 39 at 60.

[2] Jordan et al. v. Towns Marine Electronic Ltd. et al. (1996), 113 F.T.R. 226 at 12.