Solicitor/Client Privilege: Be Careful What You Say…

Written by on August 22, 2008 in Employment Law Blog

Zesta Engineering Ltd. v. Cloutier – Ontario Superior Court of Justice – January 25, 2008

Communication that occurs before a retainer is received and in front of others who are not part of the relationship which puts the client’s state of mind at issue, containing documentation of unlawful conduct and including relevant facts to the case may not be protected by solicitor/client privilege.

The January 25, 2008 ruling in Zesta Engineering Ltd. v. Cloutier [2008] O.J. No. 304 (“Zesta”), dealt with the issue of whether or not to grant a motion requesting that notes taken during four meetings between a client and his solicitor be included in examinations for discovery. In rendering its decision, the Court found that these notes were not protected by solicitor/client privilege.

In Zesta, the employee was terminated from his position with the employer. An action was commenced by the employer asserting that the employee’s termination was justified based on the employee’s act of plotting to set up a competitor business with fellow employees, and for diverting business away from the employer’s supplier. In preparation for the action, the employer added the employee’s former lawyer to the list of defendants on the belief that the employee had informed his former lawyer of the conduct which caused the employee’s termination.

For the purposes of discovery, the employee’s former lawyer provided the employer with four handwritten notes from meetings between the former lawyer and the employee. However, the employer claimed that these notes had pertinent information left out of them. As a result of this, the employer filed a motion requesting that the former lawyer reproduce the notes in their entirety. The employee argued that this information was protected by solicitor/client privilege.

The Court decided in favour of the employer, finding that the information was not protected by solicitor/client privilege. In rendering this decision, the Court considered the policy reasons for the existence of solicitor/client privilege and found that it “encourages parties to feel free to communicate in a frank and candid manner with counsel to facilitate their having access to the best possible legal advice.” However, it does not exist in order to prevent the Court from knowing information that would be damaging to one’s position.

In supplying reasons for why the notes were not protected by solicitor/client privilege, the Court stated that some of the notes were written when the employee had not yet retained his former lawyer and therefore, could not have been protected by solicitor/client relationship at that time. Additionally, the notes were not restricted from discovery because they were from meetings conducted in front of individuals without any evidence indicating that their presence was either reasonable or necessary, demonstrating a lack of intention to keep the meetings confidential. The Court stated, “the fact that the notes were taken during a meeting that involved a group of people who were strangers to the action and whose presence…is unexplained impedes the formation of solicitor-client privilege.” The Court also found that, “any privilege that may have arisen with respect to the notes taken by [the employee’s former counsel] at meetings 1, 2 and 3 is deemed to have been waived by [the employee’s] reliance of legal advice to form his state of mind.” Lastly, the notes are not protected by privilege because they were recorded documentation of an unlawful act and contained relevant facts to the case. The Court commented that “the extent that solicitor-client privilege ever applied to the notes of the meetings, the notes of meetings 2, 3 and 4 fall within the –future crime and fraud’ exception to solicitor-client privilege, such that any privilege that may have arisen cannot protect the notes from being produced in their entirety.”

Determining what forms of communication are protected by solicitor/client privilege and which are not can be an extremely daunting task for clients, lawyers and the Courts. This case illustrates some of the limitations of solicitor/client privilege and can be used to guide both clients and lawyers as to whether their communications in such a relationship is protected or not.

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