Alberta court upholds solicitor-client privilege

Employer wanted access to legal files from a motor vehicle accident during wrongful dismissal fight with former employee
|employmentlawtoday.com

An Alberta employer has lost its bid to gain access to legal files relating to one of its former workers in a case that shows courts are leery to destroy solicitor-client privilege.

Centennial Optical Ltd. hoped to gain access to a litigation file held by Nan Harychan’s former lawyer. The file related to a claim, settled in 1999, that Harychan made for damages arising from a motor vehicle accident.

The company said the file relating to the motor vehicle accident was relevant to a wrongful dismissal suit it was fighting against Harychan. The company said the emotional and psychological harm alleged to have been suffered by Harychan were caused by the motor vehicle accident and not the dismissal from employment.

Centennial Optical had hoped to get the file in order to determine whether Harychan discussed psychological harm with her former lawyer and whether she received advice from counsel about the cause of her alleged injuries.

Solicitor-client privilege waived: employer

The company argued Harychan had waived solicitor-client privilege over the motor vehicle accident in two ways:

•by claiming damages for emotional harm in the wrongful dismissal action at the same time as she recovered damages for emotional harm arising out of the motor vehicle accident; and

•by disclosing communications from the motor vehicle accident file within the wrongful dismissal action.

The Alberta Court of Queen’s Bench said one of the issues to be determined was whether the motor vehicle accident file was relevant to the wrongful dismissal action. Justice Acton said any discussion between Harychan and her former counsel would not be relevant. The only relevant information is the medical evidence contained in the file.

The court then turned its attention to solicitor-client privilege and whether or not Harychan had waived privilege as Centennial Optical contended.

Solicitor-client privilege protects any communication between a legal advisor and his client, the court said. In

Solosky v. Canada

, a 1980 decision, the Supreme Court of Canada set out the modern test. It said, essentially, that when legal advice of any kind is sought from a professional legal advisor, working in that capacity, the communications are instantly and permanently protected from disclosure unless that protection is waived.

The employer argued that protection had been waived in this case because Harychan had put her emotional well-being in front of the court as part of her wrongful dismissal claim against Centennial Optical.

In determining whether Harychan had waived that protection, the court cited

Petro Can Oil & Gas Corp. v. Resource Service Group Ltd.

, a 1988 decision by the Alberta Court of Queen’s Bench. In that case the court said:

“The underlying rationale for finding implied waiver in such circumstances is based on fairness. It would be unfair to permit a party who has set up a claim or defence based on privileged communications to preclude his opponent from discovering against that claim by relying on privilege. If privilege were successfully raised, the opponent would be left with no reasonable method of exploring the validity of the claim or defence.”

In

Ed Miller Sales and Rentals Ltd. v. Caterpillar Tractor Co.

, a 1992 decision, the Alberta Court of Queen’s Bench said the common ingredient in waiver cases is reliance by one party on the words or conduct of the opposite party, which voluntarily injects into the suit the question of the relying party’s state of mind and renders relevant an exploration of that party’s reliance upon legal advice. In such circumstances, solicitor-client privilege is waived.

But Justice Acton said the

Harychan

case was not the sort of case where waiver should be implied by virtue of the plaintiff’s pleadings.

“(Harychan’s) claim for emotional and psychological damage is not predicated on her reliance on legal advice,” said Justice Acton. “It is simply a claim for damages that may be disputed at trial on the basis of causation. As pointed out by counsel for (Harychan), this is not an unusual situation and cannot be allowed to become the basis for waiver of privilege.”

The court also said there was no unfairness to Centennial Optical in this case — the employer could effectively test Harychan’s claim without reference to privileged communications. The company already had all the relevant medical information from the motor vehicle accident file and could proceed to challenge the claim with that information, the court said.

Some disclosure does not waive privilege

Centennial Optical argued that by disclosing certain information from the motor vehicle accident, Harychan had waived solicitor-client privilege over the entire file. (The information that had been disclosed included the medical records and the amount for which the action was settled.)

But the court said waiver of certain documents in a privileged file does not necessarily mean privilege has been waived with respect to the entire file. Justice Acton agreed with the following statement from a 1995 court decision:

“The waiver rule must be applied if there is an indication that a party is attempting to take unfair advantage or present a misleading picture by selective disclosure. However, a party should not be penalized or inhibited from making the fullest possible disclosure. In my view, too ready application of the waiver rule will only serve to inhibit parties to litigation from making the fullest possible disclosure.”

Justice Acton said it did not appear Harychan was attempting to take any unfair advantage or was engaging in selective disclosure.

“She has, as I understand it, disclosed all of her medical documentation relating to the motor vehicle accident,” said Justice Acton. “Whether or not (Harychan) and her former counsel had discussions with respect to that documentation is of no relevance to the matters in issue in this action and indeed is precisely the kind of communication that solicitor-client privilege is intended to protect.”

The court’s decision

The court said it had no choice but to rule in favour of Harychan and refuse to override solicitor-client privilege in this case.

“In my view, it would potentially create a great mischief if the court in this case directed that previous counsel from a past personal injury claim was required to produce their privileged litigation file because (Harychan) has commenced a new action that involves similar injuries,” said Justice Acton.

The court said the notion of implied waiver of solicitor-client privilege may be appropriate in some cases, but certainly not in this one.

“(Harychan) has not put in issue her reliance on legal advice,” said Justice Acton. “Furthermore, while the (company) suspects that the motor vehicle accident was the cause of (Harychan’s) emotional and psychological distress, those suspicions can be addressed by reviewing the medical evidence from the earlier litigation. (The employer) does not require the production of the entire motor vehicle accident file in order to defend the action before the court.”

In any event, whatever advice Harychan’s previous counsel gave her would have “no bearing” on the causation issue in this wrongful dismissal action, the court said.

For more information see:

Harychan v. Centennial Optical Ltd.

, 2005 CarswellAlta 763, 2005 ABQB 395 (Alta. Q.B.)

Solosky v. Canada,

1979 CarswellNat 630, 1979 CarswellNat 4 (S.C.C.)

Petro Can Oil & Gas Corp. v. Resource Service Group Ltd.

, 1988 CarswellAlta 65 , 59 Alta. L.R. (2d) 34 (Alta. Q.B.)

Ed Miller Sales & Rentals Ltd. v. Caterpillar Tractor Co.

, 1991 CarswellAlta 134, 3 C.P.C. (3d) 223 (Alta. Q.B.)

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