T-249-84
Double-E, Inc. (Plaintiff)
v.
Positive Action Tool Western Limited, Douglas
H. Shearer, Samuel D. Martin, Donald E. Sable,
Donald E. Sable II, John T. Bertagnolli, Ross
Macfarland (Defendants)
INDEXED AS: DOUBLE-E, INC. V. POSITIVE ACTION TOOL
WESTERN LTD.
Trial Division, Muldoon J.—Calgary, June 7;
Ottawa, June 14, 1988.
Practice — Privilege — Solicitor-client — Copy of drawing
of device allegedly infringing patent produced — Handwritten
notations by solicitor, retained by defendants' solicitors for
advice on patent and copyright law, inadvertently included —
Court ought not permit loss of privilege by inadvertence —
Notations not objective 'facts", but opinions for defendants'
solicitors' brief — Not 'facts" known to defendants before or
when defence first formulated — No order according privilege
without affidavits confirming counsel's allegations.
Practice — Costs — Defendants potentially successful in
obtaining order on question of solicitor and client privilege —
Denied costs — Had counsel persisted with unfounded slur on
professional ethics of plaintiffs lawyers concerning conduct at
examination for discovery, punitive costs may have been
imposed.
The plaintiff sought the Court's direction on a matter of
privilege. The defendants produced a copy of a drawing of the
device which was alleged to infringe the plaintiff's patent. The
original drawing had had notations made by a Toronto solici
tor, retained by the defendants' solicitors to give patent and
copyright advice, attached to it on yellow self-stick papers.
These were inadvertently left on when the drawing was
photocopied. The defendants claimed privilege with respect to
certain of those notations, but did not file sworn affidavits
supporting the facts upon which privilege was based.
Held, the defendants were not obliged to leave the yellow
self-stick papers on the drawing to be photocopied. However, an
order granting the privilege sought will not be made until
affidavits are filed confirming what was alleged by counsel at
the hearing.
Certain British cases have held that evidence, no matter how
obtained, is admissible if relevant, despite solicitor-client privi
lege. Such notion has been repudiated by the Charter, even if it
has no specific application in these circumstances. Having
practically eliminated trial by ambush through discovery pro
ceedings, the Court ought not resort to permitting loss of
privilege by inadvertence.
Nor could the notations written on the self-stick papers be
used as a basis for questions on discovery as they were not
objective "facts" which were known to the defendants before or
when their defence was first formulated. They were the
Toronto solicitor's opinions for the defendants' solicitors' brief.
The defendants must file affidavits setting out the evidenti-
ary basis for their claim of privilege before moving for the
order sought pursuant to Rule 324.
Although the defendants may succeed on the issue of privi
lege, they should not be awarded costs. Had counsel persisted in
his unfounded aspersions concerning the professional ethics of
plaintiff's solicitors and counsel, punitive costs may have been
awarded. The plaintiff's solicitors had acted honourably in
seeking the Court's directions concerning conduct upon
discovery.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Alberta Evidence Act, R.S.A. 1980, c. A-21, s. 23(1).
Canada Evidence Act, R.S.C. 1970, c. E-10, ss. 10(1), 37.
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.).
Evidence Act, R.S.B.C. 1979, c. 116, s. 13.
Federal Court Rules, C.R.C., c. 663, R. 324.
CASES JUDICIALLY CONSIDERED
NOT FOLLOWED:
Rolka, Richard C. W. v. Minister of National Revenue,
[1963] Ex.C.R. 138.
APPLIED:
Solosky v. The Queen, [1980] 1 S.C.R. 821; Kulchar v.
Marsh and Beukert, [1950] I W.W.R. 272 (Sask. K.B.);
Susan Hosiery Ltd. v. Minister of National Revenue,
[1969] 2 Ex.C.R. 27.
NOT FOLLOWED:
Pfeil v. Zink (1984), 60 B.C.L.R. 32 (B.C.S.C.); Cal-
craft v. Guest, [1898] 1 Q.B. 759; [1895-9] All E.R. Rep.
346 (C.A.); Kuruma v. The Queen, [1955] A.C. 197
(P.C.); Cansulex Ltd. v. Vancouver Wharves Ltd. (1976),
68 D.L.R. (3d) 565 (B.C.S.C.).
AUTHORS CITED
Cross, Sir Rupert and Tapper, Colin, Cross on Evidence,
6th ed. London: Butterworths, 1985.
Sopinka, John and Lederman, Sidney N. The Law of
Evidence in Civil Cases, Toronto: Butterworths, 1974.
COUNSEL:
Patrick J. McGovern for plaintiff.
T. Thomas Mudry and Michael B. Niven for
defendants.
SOLICITORS:
Parlee McLaws, Calgary, for plaintiff.
McCaffery & Company, Calgary, for defen
dants.
The following are the reasons for order ren
dered in English by
MULDOON J.: In the midst of one of those
melancholy motions to compel a plethora of
answers from the foot-dragging defendants herein,
the plaintiff also sought the Court's direction on a
matter of privilege in regard to certain writings
shown on a produced copy of the drawing of the
very device in regard to which patent infringement
is alleged by the plaintiff. The motions came on for
hearing in Calgary, Alberta, on June 7, 1988.
The plaintiff's solicitor, having largely succeed
ed on his composite motion, was directed to draw
the order to implement the Court's numerous con
clusions discussed and expressed during the hear
ing. Therefore, there is no need here to dispose of
those matters, or the costs already awarded. There
is need only to dispose of the issue of privilege,
upon which the adverse counsel made their respec
tive arguments.
There was some exchange between the parties'
respective solicitors of copies of production docu
ments. With regard to exhibit D-1 drawings of the
device whose alleged patent's alleged infringement
is at the centre of this litigation, there are certain
notations appearing on the photocopies which the
defendants' solicitors forwarded to the plaintiff's
solicitors. The defendants' solicitors now seek to
assert privilege with respect to certain of those
notations. In order to help the Court's comprehen
sion of the matter, the plaintiff's counsel appended
to his written submissions, pages 150 through 152
and 156 through 158 of the transcript of the
examination for discovery of John Thomas
Bertagnolli.
When the defendants' counsel produced to the
Court and to the plaintiff's counsel the drawing
from which the defendants produced the photo
copy, the claims of privilege became manifestly
clear. The writings for which privilege is claimed
appear on yellow paper bearing an adhesive band
along one border. Sometimes called "removable
self-stick notes" or "feuillets autoadhésifs amo-
vibles" as with, for example 3M's Post-it TM
/Notocollant MC, they were aptly described by the
defendants' counsel as "yellow stickies". It was on
those removable, movable adhesive papers that the
subject notations were written when the drawing,
dappled with them, was photocopied for produc
tion to the plaintiff's solicitors.
In written submissions on this issue, the defen
dants' counsel had notionally widened the areas of
written notations by averring:
With respect to Exhibit D.l the Defendants are asserting
privilege for all of the handwritten notations on the copy of that
document forwarded to the solicitors for the Plaintiff. All of the
handwritten notations on that document were, as stated on the
record at the time of the Examinations for Discovery by
Counsel for the Defendants, made by Mr. Sheldon Burshtein,
who at all relevant times was practising as a barrister and
solicitor in Toronto with the firm of Hayhurst, Dale and Deeth,
Barristers and Solicitors, Toronto, Mr. Burshtein is now prac
tising with the Toronto law firm of Blake, Cassels and Graydon
and at all relevant times has been retained as special counsel
for the Defendants for the purpose of providing advice and
direction in the areas of patent and copyright law. When Mr.
Burshtein examined the Defendants' drawings, including
Exhibit D.l, soon after this litigation commenced he was doing
so in his capacity as a barrister and solicitor and the advice
communicated by his handwritten notations was made by Mr.
Burshtein to the solicitors in Calgary for the Defendants,
McCaffery & Company. M. Burshtein could not have been
practising in any other capacity than as a barrister and solicitor
because it was only this year (1988) that Mr. Burshtein became
a Patent Agent. Mr. Burshtein was only contacted through the
medium of the Defendants' Calgary solicitors McCaffery &
Company and was not retained directly by the Defendants.
The Defendants have not waived the privilege which attaches to
the handwritten notations on the Exhibit D.1 or which attaches
to any other of Mr. Burshtein's handwritten notations on any
other exhibits.
It is all very well to state the above matters as
an officer of the Court, but counsel so far has
failed to produce sworn affidavits or solemn affir
mations by Mr. Burshtein and a member of the
defendants' firm of solicitors respectively, in order
to establish the facts. A claim of privilege will not
so easily be made without the appropriate persons
at least pledging their oaths or solemn affirma
tions.
The plaintiff's counsel, who sought the resolu
tion of this matter, led off by citing the judgment
of the Supreme Court of Canada in Solosky y.
The Queen, [1980] 1 S.C.R. 821. Eight of the nine
judges spoke through the reasons for judgment
delivered by Mr. Justice Dickson, now Chief Jus
tice of Canada whom the plaintiff's counsel quoted
(at pages 829 and 837) thus:
... —it is not every item of correspondence passing between
solicitor and client to which privilege attaches, for only those in
which the client seeks the advice of counsel in his professional
capacity, or in which counsel gives advice, are protected.
Without the evidentiary connection, which the law now
requires, the appellant cannot invoke the privilege.
As Mr. Justice Addy notes, privilege can only be claimed
document by document, with each document being required to
meet the criteria for the privilege—(i) a communication be
tween solicitor and client; (ii) which entails a seeking or giving
of legal advice; and (iii) which is intended to be confidential by
the parties.
No doubt the principles enunciated are absolutely
correct, and applicable here to the defendants'
claim of privilege. The case itself dealt with the
opening, for security reasons, of a penitentiary
inmate's letters to and from a solicitor. There is
nothing instructive here to be found in the circum
stances of the Solosky case.
The plaintiff's counsel also cited a decision of
the British Columbian Supreme Court, Pfeil v.
Zink (1984), 60 B.C.L.R. 32 in which the head-
note runs thus [at page 32]:
Through inadvertence the plaintiff's former solicitor provided
the counsel for the defendant with copies of notes taken by him
in an interview with the plaintiff. The defendant's solicitor
sought to cross-examine the plaintiff on the communications
contained in those documents pursuant to s. 13 or s. 14 of the
Evidence Act. The plaintiff objected to this questioning on the
grounds of solicitor-client privilege.
Held—Order accordingly.
If a third party comes into possession, either openly or
covertly, of documents which would otherwise be privileged, no
privilege attaches to them. Greater weight is given to the policy
of full disclosure of facts at trial than to the desirability of
complete openness of communication between a solicitor and
his client.
The defendants' counsel passes off the Pfeil deci
sion as being "from a lower Court located extra-
provincially ... not ... relied upon in any subse
quent decisions". One can hardly characterize the
Superior Court in British Columbia as a "lower
Court" and certainly not lower [or "higher"] than
the Trial Division of this Court. Counsel is too
casual in his off-handed manner of attempting to
disregard the Pfeil decision.
This Court, first of all, must take heed of the
laws of Canada, not the least of which, in these
circumstances, is the Canada Evidence Act, R.S.C.
1970, c. E-10 and amendments thereto. This stat
ute makes the following provision:
37. In all proceedings over which the Parliament of Canada
has legislative authority, the laws of evidence in force in the
province in which such proceedings are taken, including the
laws of proof of service of any warrant, summons, subpoena or
other document, subject to this and other Acts of the Parlia
ment of Canada, apply to such proceedings.
Accordingly one must look to discover if there be
some nexus between this case, the above-cited
statute, the Alberta Evidence Act, R.S.A. 1980, c.
A-21 and perhaps even the Pfeil decision.
In the Pfeil case the judge made reference to the
Evidence Act, R.S.B.C. 1979, c. 116 and in par
ticular section 13 thereof. As it happens that provi
sion evinces exactly the same opening text as
subsection 23(1) of the Alberta Evidence Act and
a text practically of the same meaning as subsec
tion 10(1) of the Canada Evidence Act. That is,
the provision of the Albertan statute is:
23(1) A witness may be cross-examined with regard to previ
ous statements made by him in writing, or reduced to writing,
and relative to the matter in question, without the writing being
shown to him.
The federal statute, in this regard, specifies "upon
any trial" for the same provision. Now, these
provisions settle one aspect of this matter. Exami
nation for discovery is undertaken in preparation
for trial, but is not itself the trial, and more
important perhaps, it is not a cross-examination of
any sort. Further the plaintiff here cannot examine
the writer of the notations on the copy of exhibit
D-1 for discovery, since it appears that he might
be a solicitor of Toronto.
Now, it appears that great seminal authority is
accorded to the judgment of the English Court of
Appeal in Calcraft v. Guest, [1898] 1 Q.B. 759;
[1895-9] All E.R. Rep. 346. Such status seems to
be accorded unquestioningly by Sopinka & Leder-
man in The Law of Evidence in Civil Cases
(Toronto: Butterworths, 1974) at page 175 in a
passage quoted in the Pfeil reasons. That is the
notorious proposition that evidence, no matter how
obtained (save by means of contempt of court
only) is admissible if relevant, despite any possible
solicitor-client privilege. (Naturally, communica
tions intended to facilitate fraud or other crime are
bereft of privilege.) The Calcraft case provided
one of the principal philosophical bases for what
appears as the monstrous injustice permitted by
the Judicial Committee of the Privy Council in
Kuruma v. The Queen, [ 1955] A.C. 197. This
connection is related without disapproval in Cross
on Evidence, 6th ed. (London: Butterworths, 1985)
at page 432, footnote 20.
While the decision of the British Columbian
Supreme Court in Cansulex Ltd. v. Vancouver
Wharves Ltd. (1976), 68 D.L.R. (3d) 565 appears
to be similar in fact to the matter at hand, the
decision is based almost entirely on pre-Charter
criminal law cases, including Kuruma, which can
now in Canada be considered out-of-date. The
ratio of the decision appears to be that the defend
ant's counsel believed the document was being
voluntarily produced, which hardly seems germane
to either admissibility or privilege.
This Court is unwilling to accept the incredibly
unjust notion which includes just any means of
obtaining evidence, including the illegal, to be a
proper jurisprudential basis for overcoming the
solicitor-client privilege. For that reason the judi
cial wilful blindness propounded in Rolka, Rich-
ard C.W. v. Minister of National Revenue, [1963]
Ex.C.R. 138 should also be considered out-of-date.
It is a notion which has been repudiated by the
Charter [Canadian Charter of Rights and Free
doms, being Part I of the Constitution Act, 1982,
Schedule B, Canada Act 1982, 1982, c. 11
(U.K.)], even if that constitutional instrument has
no specific application in these circumstances. The
notion is no longer a fit proposition for Canadian
jurisprudence.
However both Cross at page 401 et seq. and
Sopinka & Lederman at page 175 et seq. reveal
that the client may have a remedy in equity, or on
the basis of the proper administration of justice, to
enjoin third parties (i.e. "third" to the solicitor and
client) from utilizing the privileged material or
breaching the confidence. There has, then, been a
parallel common law theme which is more conso
nant with propriety in Canadian jurisprudence
than the notion imported in the English jurispru
dence.
Preferable are Canadian decisions of relatively
long standing, which do not evince a self-blinded
Justitia, but rather an alert and reasonable muse.
The judgments of the Court of King's Bench of
Saskatchewan in Kulchar v. Marsh and Beukert,
[1950] 1 W.W.R. 272, and of the Exchequer
Court of Canada in Susan Hosiery Ltd. v. Minis
ter of National Revenue, [1969] 2 Ex.C.R. 27
demonstrate a more clear-sighted vision of solici-
tor-client privilege.
In the Kulchar case, above cited, the following
passage from the reasons of Mr. Justice Thomson
adequately sets out sufficient facts and the princi
ple, at pages 275-276, thus:
It is, however, contended that the intended plaintiff, by
setting forth in his affidavit the instructions which he says he
gave to his former solicitor, opened the matter up and waived
the privilege, which would otherwise attach to the advice he
received and the communications which passed between himself
and the said solicitor. I am not called upon in this case to
decide what would have been the result if the intended plaintiff
had disclosed the advice which he received from his former
solicitor because he made no such disclosure. His affidavit is
entirely silent as to that. Furthermore, he did not disclose any
of the communications which passed between him and the said
solicitor before he gave his alleged instructions to take such
steps as might be necessary to recover damages. The law
applicable in a case of this kind is concisely stated by Lamont,
J.A., in Western Canada Inv't. Co. v. McDiarmid [1922] 1
WWR 257, at 261:
"Waiver implies the abandonment of some right that can
be exercised, or the renouncement of some benefit or advan
tage which, but for such waiver, the party relinquishing
would have enjoyed. 40 Cyc. 258; Crump v. McNeill, 14 Alta
LR 206, [1919] 1 WWR 52."
"To constitute waiver, two essential prerequisites are in
general necessary. There must be knowledge of the existence
of the right or privilege relinquished and of the possessor's
right to enjoy it, and there must be a clear intention of
foregoing the exercise of such right."
In this case there is no indication that the intended plaintiff
ever heard of or knew anything about the privilege in question
and certainly there is no evidence that he ever intended to
relinquish or forego any benefit or advantage thereby conferred
upon him. It follows, therefore, that the privilege has not been
waived by the intended plaintiff. The privilege, attaching the
privileged communications passing between a solicitor and his
client, is a matter of public policy adopted in the interests of
justice and should be given effect to by the Court: Re United
States of America v. Mammoth Oil Co. (1925) 56 OLR 635,
Hodgins, J.A., at 646.
In my opinion the former solicitor of the intended plaintiff
should never have made the disclosures set forth in his affida-
vit. On the other hand, the solicitors for the intended defen
dants should never have attempted to obtain the said affida-
vit—or, having obtained it, to make any use of it. I, therefore,
hold that the said affidavit cannot be used on this application.
Having, through the canons of thorough discovery
proceedings, practically eliminated trial by
ambush, the Court ought not, as it did not in
Kulchar, resort to permitting loss of privilege by
inadvertence.
The Susan Hosiery decision was rendered by
President Jackett after reviewing the jurispru
dence, including Calcraft and Rolka. There, the
Minister's counsel had obtained a copy of a privi
leged memo made, without the taxpayer's permis
sion or even knowledge, by a departmental auditor.
The Minister's counsel attempted to examine the
plaintiffs officer on discovery, but the plaintiffs
counsel advised the officer not to answer. Leaving
the use of the filched information at trial to the
disposition of the Trial Judge, as is the very same
case here, Jackett P., at page 42 concluded:
Assuming that the respondent may (am I am not to be taken
as expressing any doubt with regard thereto) adduce evidence
as to the communications that took place between the appellant
and its solicitors if it has such evidence available at the trial
and it is relevant to the material facts, the appellant is none the
less entitled to rely on its privilege not to disclose such com
munications either by itself or its solicitors either on discovery,
or at trial, or otherwise. Having come to the conclusion that the
balance of probability is that the meeting between Mr. Pal, Mr.
Wolfe and Mr. Goodman on December 10, 1964, was part of
the process whereby Mr. Pal and Mr. Wolfe, as representatives
of the appellant, were obtaining legal advice for the appellant
from Mr. Goodman, and that the appellant is therefore entitled
to a privilege against producing a memorandum of what
occurred at that meeting, it seems clear to me that the same
privilege extends to answering any questions as to what was or
is contained in that memorandum.
Finally, with regard to Questions 175 and 176, it follows
from my conclusion that Mr. Pal was one of the representatives
of the appellant for obtaining legal advice that the appellant is
privileged from producing, or giving evidence as to the contents
of, a letter written by Mr. Pal as part of the process of
obtaining such advice.
It is apparent that the notion of suppressing solici-
tor-client privilege on that wilfully blind theory of
insouciant admissibility no matter how the alleged
evidence is obtained, is a rather loose canon when
compared with the cogent and sensitive reasoning
expressed by Thomson J. and Jackett P.
There is yet another reason why the notes writ
ten on the photocopied, yellow self-stick papers
ought not on principle to be admitted on discovery
as a basis for questioning the persons put forth for
discovery. In the passive acceptance of the notion
expressed in Calcraft which is revealed at pages
175-176 of Sopinka & Lederman's opus earlier
above cited, and repudiated herein, it is stated:
Nevertheless, the courts have placed greater weight upon the
competing policy interest that all relevant facts be disclosed to
the court and have not extended the protection of the privilege
to communications intended to be passed between a solicitor
and his client, but which have gone astray and have fallen into
the hands of another. [The client, however, may have a remedy
in equity to restrain the third party by way of injunction from
breaching the confidence: see Lord Ashburton v. Pape, [1913]
2 Ch. 469; Butler v. Board of Trade, [1971] Ch. 680.]
It is notable that the authors and the jurisprudence
rightly emphasize that the litigant may not conceal
known relevant facts from the adversary on discov
ery. That is true. The adversary is quite entitled to
discover facts relevant to the other side's claim or
defence as the case may be. The Toronto solicitor's
notes are not objective facts, but rather his opin
ions for the defendants' solicitors' brief. Nor do
those notes constitute objective facts which were
even known to the defendants before or when their
defence was first formulated. They were, most
clearly, not entitled to obliterate any part of the
drawing when photocopying it for discovery. The
defendants were obliged to make full relevation,
and to accord full discovery, of the drawing. But
they were not obliged to leave the so-called "yel-
low stickies" to be photographed on and with the
drawing, which photocopy they produced to the
plaintiff's solicitors. The drawing itself and its
produced photocopy are without doubt relevant
facts. The Toronto solicitor's unremoved notes
inadvertently left to be photocopied are the solici
tor's commentaries for the defendants' solicitors;
but they are not objective facts and hence not
relevant facts, and not "facts" at all. They are
privileged in the manner found by President
Jackett in the Susan Hosiery case. So this Court
holds in the present case.
The defendants' counsel's suggestion that the
plaintiff's solicitors' desire to examine for discov
ery on the Toronto solicitor's commentaries is
somehow unethical, is quite spurious. The plain
tiff's solicitors are quite entitled to proceed as the
law permits them on discovery. That, indeed, is
precisely why they honourably raised the issue so
as to elicit the Court's directions. The defendants'
counsel wisely desisted from such imputations
before the Court imposed punitive costs for such
an unfounded slur on the plaintiff's solicitors' and
counsel's professional ethics. Even although poten
tially successful on this matter of privilege no costs
will be awarded to the defendants in the Court's
discretion in this regard.
The defendants' solicitors' inadvertent failure to
remove the movable bits of adhesive yellow paper
can be, and is, overcome on and for all purposes of
discovery, as asked. Alas for the defendants, their
solicitors failed to adduce the requisite evidentiary
basis for their claim of privilege, which failure was
earlier noticed herein. They must file affidavits to
support what their counsel alleged at the hearing
of this proceeding, if there be conscientious depo-
nents—including the Toronto solicitor—to do it.
This was a grave oversight on their part for which
the plaintiff's solicitors might yet discover the
defendants' evidence to be inadequate.
No order according the defendants the privilege
which their counsel seeks for them will be pro
nounced unless and until sufficient affidavits be
filed and served on the plaintiff's solicitors. Then
the defendants' solicitors may move for the order
sought pursuant to Rule 324 [Federal Court
Rules, C.R.C., c. 663], again effecting service on
the plaintiff's solicitors. The plaintiff's solicitors
are not obliged to respond if the defendants'
affidavits be sufficient.
The plaintiff has already been awarded costs of
and incidental to these proceedings in any event of
the cause, as will be provided in the order to be
drawn to implement the conclusions expressed at
the hearing. There is no need to put more costs in
contention, for costs can be awarded and denied.
Those are considerations for the plaintiff's solici
tors when weighing the sufficiency of the affidavits
which the defendants' solicitors are hereby permit
ted to file after the event, and required to file if
they are to preserve the privilege they assert for
the defendants.
The affidavits should be drawn, sworn (accord-
ing to the true facts, but carefully without diluting
the privileged material) and filed as soon as rea
sonably possible, to support the motion to be made
pursuant to Rule 324. Needless to emphasize all
the defendants' costs in these unfinished matters
will be borne, if not by the defendants, then, and
even more appropriately, by their solicitors.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.