Date: 20010418
Docket: T-1608-97
Neutral Citation: 2001 FCT 340
Ottawa, Ontario, this 18th day of April, 2001
PRESENT: THE HONOURABLE MR. JUSTICE JOHN A. O'KEEFE
BETWEEN:
CARICLINE VENTURES LTD.
Plaintiff
- and -
ZZTY HOLDINGS LIMITED and
AZIM ZONE INC.
Defendants
Docket: T-1609-97
AND BETWEEN:
CARICLINE VENTURES LTD.
Plaintiff
- and -
FARSIDE CLOTHING LTD. and
FARSIDE SKATEBOARDS & SNOWBOARDS LTD.
Defendants
[1] On the third day of the trial, the defendants adduced evidence in the examination in chief of Hafis Devji about communications he made with Norman Bishop of the firm of Bishop & McKenzie regarding the applications for a registered trade-mark for "Farside" and other trade-marks. Bishop & McKenzie filed an application to register "Farside" in July, 1998 on behalf of 575726 Alberta Ltd. (the "numbered company").
[2] When Hafis Devji was asked questions on cross-examination concerning the knowledge of Mr. Bishop of the present actions when dealing with the "Farside" trade-mark application, the defendants objected on the grounds of privilege. Bishop & McKenzie are the solicitors of record for all of the defendants in this litigation.
[3] The only document relating to the trade-mark application for "Farside" that had been produced by the defendants prior to the Devji testimony was the amended application dated October 22, 1998.
[4] As a result of the Hafis Devji testimony, the plaintiff, on February 1, 2001, requested production of the defendants' entire file relating to the "Farside" application and also files of other trade-mark applications made by the defendants and the numbered company.
[5] The defendants agreed that there had been a waiver of privilege and the trial was adjourned for approximately one hour, during which time the defendants retrieved and produced a folder entitled "Bishop & McKenzie File for client 575726 Alberta Ltd." in relation to the matter name "Trade-mark" "Farside" to the plaintiff's counsel.
[6] A short time later, counsel for the defendants took the folder back stating that she wished to remove documents relating to the litigation which she had inadvertently produced. The plaintiff does not argue that the inadvertent production of the additional documents is a waiver of privilege.
[7] The Court has been informed by defendants' counsel that Bishop & McKenzie had maintained a single file for the application for the trade-mark "Farside" and the present litigation. Defence counsel also informed the Court that prior to production of the file to the plaintiff, she had removed documents that did not relate to the trade-mark application.
[8] The parties agree that no affidavit of documents with respect to the removed documents has been produced.
[9] Issues
1. What is the scope of the defendants' waiver of privilege? In other words, have the defendants waived privilege in respect of files directed to trade-mark applications made by the defendants or the numbered company other than the file relating to the "Farside" trade-mark application?
2. Have the defendants waived privilege over the entire contents of the combined litigation and trade-mark file in respect of "Farside" by combining documents relating to both matters in one file?
3. If there has not been a waiver of the entire combined file relating to "Farside", what is the proper procedure for the defendants to produce their files in order that the plaintiff may test whether proper production has been made?
[10] Issue 1
What is the scope of the defendants' waiver of privilege? In other words, have the defendants waived privilege in respect of files directed to trade-mark applications made by the defendants or the numbered company other than the file relating to the "Farside" trade-mark application?
During the trial of this matter, the defendants' witness, in order to clarify a matter, gave testimony that would have otherwise been privileged. This testimony related to the "Farside" trade-mark application. The defendants had made other trade-mark applications. The plaintiff claims that the defendants waived privilege to all of the trade-mark files. I do not agree that privilege was waived to all the trade-mark files. Only privilege in respect to the "Farside" trade-mark application has been waived.
[11] Solicitor client privilege is a most important part of our adversarial legal process and it should only be considered to be waived to the extent that will ensure that in this case, the plaintiff is treated fairly. The parties agree that there was waiver in relation to the "Farside" file. It would not be correct to hold that waiver occurred in other unrelated trade-mark files when the defendants, in my view, only waived privilege on the "Farside" file. As Cory J. stated in Smith v. Jones, [1999] 1 S.C.R. 455 at pages 474 - 476:
Clients seeking advice must be able to speak freely to their lawyers secure in the knowledge that what they say will not be divulged without their consent. It cannot be forgotten that the privilege is that of the client, not the lawyer. The privilege is essential if sound legal advice is to be given in every field. It has a deep significance in almost every situation where legal advice is sought whether it be with regard to corporate and commercial transactions, to family relationships, to civil litigation or to criminal charges. Family secrets, company secrets, personal foibles and indiscretions all must on occasion be revealed to the lawyer by the client. Without this privilege clients could never be candid and furnish all the relevant information that must be provided to lawyers if they are to properly advise their clients. It is an element that is both integral and extremely important to the functioning of the legal system. It is because of the fundamental importance of the privilege that the onus properly rests upon those seeking to set aside the privilege to justify taking such a significant step.
As Lamer C.J. stated in R. v. Gruenke, [1991] 3 S.C.R. 263, at p. 289:
The prima facie protection for solicitor-client communications is based on the fact that the relationship and the communications between solicitor and client are essential to the effective operation of the legal system. Such communications are inextricably linked with the very system which desires the disclosure of the communication.
The solicitor-client privilege was originally simply a rule of evidence, protecting communications only to the extent that a solicitor could not bee forced to testify. Yet now it has evolved into a substantive rule. As Dickson J. (as he then was) wrote in Solosky v. The Queen, [1980] 1 S.C.R. 821, at p. 836, "Recent case law has taken the traditional doctrine of privilege and placed it on a new plane. Privilege is no longer regarded merely as a rule of evidence which acts as a shield to prevent privileged materials from being tendered in evidence in a court room."
Lamer J. (as he then was) expanded on this statement in Descôteaux v. Mierzwinski, [1982] 1 S.C.R. 860, at p. 875, when he discussed the content of this substantive rule:
It is quite apparent that the Court in [Solosky] applied a standard that has nothing to do with the rule of evidence, the privilege, since there was never any question of testimony before a tribunal or court. The Court in fact, in my view, applied a substantive rule, without actually formulating it, and, consequently, recognized implicitly that the right to confidentiality, which had long ago given rise to a rule of evidence, had also since given rise to a substantive rule.
It would, I think, be useful for us to formulate this substantive rule, as the judges formerly did with the rule of evidence; it could, in my view, be stated as follows:
4. The confidentiality of the communications between solicitor and client may be raised in any circumstances where such communications are likely to be disclosed without the client's consent.
5. Unless the law provides otherwise, when and to the extent that the legitimate exercise of a right would interfere with another person's right to have his communications with his lawyer kept confidential, the resulting conflict should be resolved in favour of protecting the confidentiality.
6. When the law gives someone the authority to do something which, in the circumstances of the case, might interfere with that confidentiality, the decision to do so and the choice of means of exercising that authority should be determined with a view to not interfering with it except to the extent absolutely necessary in order to achieve the ends sought by the enabling legislation.
7. Acts providing otherwise in situations under paragraph 2 and enabling legislation referred to in paragraph 3 must be interpreted restrictively.
As the British Columbia Court of Appeal observed, solicitor-client privilege is the privilege "which the law has been most zealous to protect and most reluctant to water down by exceptions". Quite simply it is a principle of fundamental importance to the administration of justice.
Accordingly, I would hold that privilege was not waived with respect to the other trade-mark application files of the defendants or the numbered company. Privilege is waived only with respect to the "Farside" trade-mark application file.
[12] Issue 2
Have the defendants waived privilege over the entire contents of the combined litigation and trade-mark file in respect of "Farside" by combining documents relating to both matters in one file?
Information provided at the trial indicates that the defendants' law firm kept a combined file for the "Farside" trade-mark application and for the litigation matter now before the Court. The plaintiff claims that the trade-mark application documents and the litigation documents are in the same file. Thus, the defendant, by waiving the privilege in respect of the trade-mark matters, also waived privilege with respect to the litigation documents. In this case, it was the law firm that kept a combined file. There was no indication that the defendants had any part in deciding how the files were kept. As indicated in Smith v. Jones, supra, the privilege is that of the client not the lawyer. In this case, the plaintiff argues that the mere keeping of the litigation documents in the trade-mark file caused the defendants to lose their solicitor client privilege on the litigation file. I do not agree with this position. It is not where the document in question is kept, but it is whether the document is relevant and falls within the privileged category contemplated by Rule 223(2) of the Federal Court Rules, 1998, SOR/98-106. It is my finding that the defendants did not waive privilege over the entire contents of the combined litigation and trade-mark file in respect of "Farside" by combining documents relating to both matters in one file.
[13] Issue 3
If there has not been a waiver of the entire combined file relating to "Farside", what is the proper procedure for the defendants to produce their files in order that the plaintiff may test whether proper production has been made?
Since I have ruled that there has not been a waiver of privilege with respect to the entire combined file relating to "Farside", a process must be established to allow for a proper and fair production of the additional material. Since issues such as this usually arise during the trial, it is up to the trial Judge to fashion a process to allow for fair production. I am therefore of the view that a fair process would consist of the defendants filing a supplementary affidavit of documents in the manner required by Rules 223 and 224 of the Federal Court Rules, 1998, supra. The defendants should refer to paragraph 37 of the plaintiff's written argument as this may simplify the production. If the plaintiff believes further discovery is necessary after it sees the documents, then the parties may make representations to me with respect to further discovery.
[14] The costs of this motion shall be costs in the cause.
ORDER
[15] IT IS HEREBY ORDERED that:
8. Privilege was only waived by the defendants with respect to the "Farside" trade-mark files and not for the other trade-mark files of the defendants and numbered company.
9. The defendants did not waive privilege over the entire contents of the combined litigation and trade-mark file in respect of "Farside" by combining documents relating to both matters in one file.
10. The procedure to be used by the defendants to produce their "Farside" file is as outlined in paragraph 13 of this decision.
11. Costs of this motion shall be costs in the cause.
"John A. O'Keefe"
J.F.C.C.
Ottawa, Ontario
April 18, 2001
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1608-97
STYLE OF CAUSE:CARICLINE VENTURES LTD. v. ZZTY HOLDINGS LIMITED ET AL.
DOCKET: T-1609-97
STYLE OF CAUSE:CARICLINE VENTURES LTD. v. FARSIDE CLOTHING LTD. ET AL.
PLACE OF HEARING: EDMONTON
DATE OF HEARING: JANUARY 29, 30, 31 AND FEBRUARY 1, 2001
REASONS FOR ORDER AND ORDER OF O'KEEFE, J.
DATED: APRIL 18, 2001
APPEARANCES:
KEITH MITCHELL
J. KEVIN WRIGHT FOR THE PLAINTIFF
CARMEN PLANTE
MELODI ULKU FOR THE DEFENDANTS
SOLICITORS OF RECORD:
DAVIS & COMPANY
VANCOUVER FOR THE PLAINTIFF
BISHOP & McKENZIE
EDMONTON FOR THE DEFENDANTS