Schwartz Estate v. Kwinter, 2011 ABQB 169

Court of Queen ’ s Bench of Alberta Citation: Schwartz Estate v. Kwinter, 2011 ABQB 169 Date: 20110315 Docket: 0501 17525 Registry: Calgary

Between: Elaine Gayle Myron, Executrix of the Estate of William Schwartz Applicant - and - Shelley Rae Kwinter, Alyse Schwartz, Justin Kwinter Respondents - and - Susan Finfer, Ian Lawrence Myron and Adam Spencer Myron Non-Defendants/Defendants - and - Shelley Rae Kwinter Plaintiff by Counterclaim - and - Elaine Gayle Myron, Executrix of the Estate of William Schwartz, Elaine Gayle Myron, Trustee of the William Schwartz Alter Ego Trust, and Elaine Gayle Myron Defendants by Counterclaim _______________________________________________________ Memorandum of Decision of the

Honourable Mr. Justice W.A. Tilleman _______________________________________________________ Introduction [ 1 ] The Applicant and Respondent Ms. Kwinter, are two sisters who return to Court yet again regarding the sizable estate of their father William Schwartz. That estate includes Metrowest Developments Ltd. The only issue remaining is costs of a discontinued action to prove their father’s Will. [ 2 ] The Applicant renews her request to compel Ms. Kwinter to answer approximately 100 questions that were objected to during the cross-examination on her Affidavit occurring on June 15-16, 2010. [ 3 ] The Applicant is seeking costs under s. 90 (

h) of the Surrogate Rules , Alta. Reg. 130/1995 where a Court may: (

h) direct the payment of costs, including penalizing any person who required formal proof of the will if it became clear during the proceedings that (

i) the application was frivolous or vexatious, (ii) the person caused undue delay, or (iii) the person had no substantial basis for requiring the scrutiny of the court; As such, it is the Applicant’s position that if the Court does not compel Ms. Kwinter to answer the objected questions then it “will be hampered in making a fair and just decision with respect to the Cost Applications”: Amended Notice of Motion to Compel para. 36(f). [ 4 ] The Respondents categorically disagree.

They claim that this matter has already been decided by the Court in a nearly identical application previously made by the Applicant which was dismissed by Justice Clark in Myron v. Kwinter , 2009 ABQB 128 ; upheld in Schwartz Estate v. Kwinter , 2009 ABCA 217 . On this basis the Respondents “respectfully request that this Court re-assert control over its process in this matter, and direct that the issue of costs be determined without further motions-within-motions and without further massive waste of judicial and party resources”: para. 12 Respondent’s brief.

Justice Clark’s Previous Decision [ 5 ] In the previous application before Justice Clark, the Applicant sought to compel the mother, Ms. Schwartz to answer a number of questions objected to during previous examinations. Some questions were objected to on the basis of relevance while the majority were objected to on the basis of solicitor-client or litigation privilege. [ 6 ] The general thrust of the objected questions was to give the Plaintiff “access to the files of Webster J.

McDonald, Q.C., then counsel to the Defendants, to review all of his files for the purpose of determining whether or not the advice that he gave to his clients was appropriate”: Justice Clark’s decision at para. 10. [ 7 ] It was the Applicant’s position that certain paragraphs in Ms. Kwinter’s Affidavit waived any privilege that existed because she discussed having sought and received legal advice. [ 8 ] Justice Clark held that “the mere reference to the receipt of legal advice does not constitute waiver.

It requires not simply disclosing that legal advice was obtained, but pleading reliance on that advice”: para. 25.

[9] In coming to his decision, Justice Clark cited Moseley v. Spray Lakes Sawmills Ltd. (1996), 1996 ABCA 141 , 39Alta L.R. (3d) 141 (ABCA) at para. 21: The rationale for litigation privilege provides an essential guide for determining the scope of its application. Its purpose is to protect fromdisclosure the statements and documents which are obtained or created particularly to prepare one’s case for litigation or anticipatedlitigation. It is intended to permit a party to freely investigate the facts at issue and determine the optimum manner in which to prepareand present the case for litigation.

As a rule, this preparation will be orchestrated by a lawyer, though in some cases parties themselveswill initiate certain investigations with a view to providing information for the “lawyer’s brief”. The litigation may already be pending orsimply contemplated. There may even be relatively rare situations where a party intends to represent himself or herself throughoutlitigation proceedings, and gathers statements and documents specifically for the contemplated litigation. Privilege may well attach tosuch material, even where no lawyer is to be “briefed”.

That question, however, is not at issue in this case, and need not be decided now.Thus at the time of creation, preparation for litigation must be the dominant purpose. He then cited Alberta Treasury Branches v. Ghermezian, 1999 ABQB 407 at para. 28, where Chief Justice Moore held that: ...The Canadian cases have held that privilege exists not only for the specific litigation for which it was developed, but it is also forfuture litigation which is even remotely connected to the original litigation. [10] Justice Clark ruled, at para. 21, that: With respect to litigation privilege, Mr.

Leitl quite correctly argues that in this case the litigation is not at an end because there is still acost application to be heard. Solicitor-client privilege continues where even remotely related litigation remains outstanding. So long asthere is continuing litigation between the two sisters with respect to or touching upon the Estate, solicitor-client privilege and litigationprivilege continue where even remotely related litigation remains outstanding. [Emphasis added]. [11] Justice Clark also ruled that in the alternative where privilege can be said to have been properly waived by Ms.

Kwinter “itappears to be a settled law that where multiple parties to an action share a solicitor, all share in the resulting solicitor-client privilege andone party cannot waive that privilege without the consent of the others”: para. 29. [12] The Applicant unsuccessfully appealed Justice Clark’s decision: Schwartz Estate v. Kwinter, 2009 ABCA 217. Abuse of Process [13] The Court can refuse to rehear matters where rehearing them would be an abuse of process. Though the Court in Talbot v. PanOcean Oil Corp. (1977), 1977 ALTASCAD 176 , 5 A.R. 361, 3 Alta.

L.R. (2d) 354 (C.A.) held that the principles of resjudicata and issue estoppel do not apply to interlocutory applications, our same Court of Appeal in Pocklington Foods Inc. v. Alberta(Provincial Treasurer) (1995), 1995 ABCA 111 , 165 A.R. 155, 123 D.L.R. (4th) 141 held at para. 8 that “the court is notpowerless to deal with attempts to re-litigate issues already decided by it.” Instead, it has discretion to refuse to rehear matters in order“to avoid re-argument and re-litigation of issues already dealt with by the Court and in respect of which an order has been taken out.

Suchre-litigation is unfair to the other party and wastes the valuable and scarce resources of the Court”: Pocklington at para. 9. [14] The facts in Pocklington were described by the Court, at para. 14, as exactly the type of situation the abuse of process ruleswere meant to avoid: It appears to us that [these facts are] exactly what rules dealing with issue estoppel — res judicata or judicial control of proceedings ongrounds of an abuse of the court process and frivolous and vexatious litigation are intended to avoid — a second opportunity for counselto explain what counsel ought to have properly explained on the first occasion, and, if not then, at least before the Court of Appeal.

We

do not agree that counsel, having made an application, argued it, and having taken out the order, should be permitted to re-argue the application on the basis that this time he might do a better job. It appears to us that to permit a party to reopen a decision on the merits on such a ground would merely encourage counsel to try again and to engage in re-litigation which is unfair to the other party and a waste of the valuable resources of the court. If the first argument failed, then another tactic might work. If the first argument failed before one judge, it might work in a slightly modified form before another.

The case against permitting such process becomes even stronger when the party seeking review of the decision has appealed and has been unsuccessful in the appeal. Where the second application seeks only to re-argue the first application, or to make arguments which were available at the time of the first, it should be dismissed as an abuse of the court process, or as frivolous and vexatious. [ 15 ] With the exception of one argument that I will deal with below, the Applicant’s application is an abuse of process. The Applicant has sought a second opportunity to argue waiver of litigation privilege by Ms.

Kwinter: see Amended Notice of Motion to Compel at para. 36(g). This argument was made before Justice Clark and it was dismissed. It was also made before the Court of Appeal and it was dismissed. And now the Applicant seeks to reopen it before me, a new Judge, in a slightly modified form, and it easily fails. [1] This is exactly the type of abuse of process described in Pocklington . [ 16 ] The Applicant must live with the decision given by this Court and the Court of Appeal.

Absent fraud or freshly discovered dispositive evidence, [2] an adverse ruling between the same parties does not invite re-litigation in the same court: see Toronto (City) v. C.U.P.E., Local 79 , 2003 SCC 63 , [2003] 3 S.C.R. 77; see also Calgary (City) v. Alberta (Human Rights and Citizenship Commission) , 2011 ABCA 65 . [ 17 ] For Ms. Myron, losing the decision in front of Justice Clark was likely disheartening.

But once our Court of Appeal ruled against her on appeal, she should have proceeded to the costs application under the procedural directions of the case manager, Justice Kent. [ 18 ] Protecting scarce judicial resources through principles of finality and litigation integrity, are not ambiguous judicial principles. They are the quintessence of those principles. The Present Application [ 19 ] To keep her application alive, the Applicant claims that there are two important changes justifying this hearing.

First, the Applicant claims that the related oppression and breach of trust actions involving the Estate have been dismissed and discontinued, respectively. Second, the Applicant claims that the recent case of Mahe v. Boulianne , 2010 ABCA 74 has changed the law such that litigation privilege does not extend where only costs remain in issue. [3] On this basis, it is the Applicant’s position that there are no other related actions to support continued litigation privilege and that, given Mahe , Justice Clark’s decision is no longer a correct statement of the law.

Is Related Litigation Ongoing? [ 20 ] There is related litigation and it is abundantly clear that it is not nearing an end. There is still an oppression action. [4] In that action the case manager, Justice Sullivan, said this, in an oral decision (unreported): What is clear is that the defendants have undertaken a course of conduct to prevent Ms. Kwinter from receiving any income, dividends, or benefit arising from her 50 percent beneficial interest and have used Metrowest funds to seek to deny Ms.

Kwinter entitlement to her shareholding rights, including to the eve of potentially catastrophic tax implications arising from their intransigence. This is a continuing series of actions making up one course of conduct ... [Emphasis added] Though Justice Sullivan was discussing the application of a limitation period, read another way his statement strikes perfectly at the heart of the matter. Without doubt, the length and cost of this litigation, with its numerous causes of action and interlocutory applications made by the various parties, demonstrates that the parties intend to fight it out until the bitter end.

I will not get into the argumentation as to the legal nexus of the actions. Such an analysis is not necessary. The fact is that all of the costly litigation between the parties arises from the Schwartz family business and the lawsuits are a manifestation of the sisters’ bitterness for one another’s positions. Ironically,

the familial ties, weak as they appear between these sisters, link all of these actions together. [ 21 ] In any event, I agree with my brother Justice Clark when he said at para. 21 that: With respect to litigation privilege, Mr. Leitl quite correctly argues that in this case the litigation is not at an end because there is still a cost application to be heard. As I will detail below, litigation privilege extends to costs applications. Has Mahe v.

Boulianne Changed Litigation Privilege? [ 22 ] If I am wrong as to ongoing related litigation, I find that the Court of Appeal in Mahe did not change the law regarding litigation privilege. [ 23 ] In Mahe the Court of Appeal ruled at paras. 8 and 9: ...Offers of settlement are always privileged, which means they cannot be entered into evidence as admissions or otherwise: Leonardis v. Leonardis , 2003 ABQB 577 , 50 Alta. L.R. (4th) 56, 36 C.P.C. (5th) 82, 43 R.F.L. (5th) 144 at para. 3 ; Holizki Estate v. Alberta (Public Trustee) , 2009 ABQB 260 , 462 A.R. 127, 75 C.P.C. (6th) 133 at para. 60 .

Rule 173 [new rule 4.28] confirms that they are not to be disclosed to the court until all questions excepting those relating to costs have been decided. The privilege over settlement offers is subject, however, to an exception that they can be referred to when costs are addressed. Not all privileges are of perpetual duration. For example, the litigation privilege ends when the litigation (and any collateral litigation) is over: Blank v. Canada (Minister of Justice) , 2006 SCC 39 , [2006] 2 S.C.R. 319.

The primary purpose of the “without prejudice” settlement privilege is to encourage efforts to resolve the dispute, by giving assurances that any concessions of fact or liability in the negotiations and the offer will not be shown to the trier of fact. Once the litigation (and any related litigation) is concluded, the reason for the privilege is ordinarily spent. As the Court held in Blank at para. 34 with respect to litigation privilege: “Once the litigation has ended, the privilege to which it gave rise has lost its specific and concrete purpose - and therefore its justification”.

So absent any specific agreement between the parties (or other special circumstances) the “without prejudice” privilege is presumed to expire once the merits of the dispute have been decided. [Emphasis added]. [ 24 ] I do not read Mahe as creating a general rule for litigation privilege. First, the Court refers to both litigation privilege and “without prejudice” privilege, instead of lumping both together. Second, by discussing ‘without prejudice’ privilege by citing the rule in Blank v.

Canada (Minister of Justice) , 2006 SCC 39 , [2006] 2 S.C.R. 319 the Court was specifically explaining that the privilege attached to settlement offers is an aspect of litigation privilege governed by unique policy considerations created by the double costs rules: see Rule 4.29 of Alberta Rules Of Court , Alta. Reg. 124/2010. For Rule 4.29 to operate the Court must be informed as to what the offer actually was. Mahe speaks to the privilege concerning “without prejudice” settlement discussions.

Section 90 (

h) of the Surrogate Rules [ 25 ] Similarly, s. 90(

h) does not help Ms. Myron.

Section 90 (

h) of the Surrogate Rules applies to allow the Court to levy costs against an unreasonable litigant where the impropriety of her claim becomes clear to the court “during the proceedings”. The wording of this

section limits the court to considering evidence on the record. As such, the provision does not allow a Judge to pierce privilege and extend his reach beyond the record into the realm covered by solicitor-client or litigation privilege. The benefits of opening up the record to dig into privileged materials do not offset the greater harm to protected areas of privilege created by the common law, long, long ago.

Conclusion [ 26 ] I refuse to hear the issue as to waiver of litigation privilege. This matter has already been decided by this Court and the Court of Appeal. [ 27 ] There is ongoing litigation between the parties - - the related oppression action and the costs application. As such, the questions were properly objected to on the basis of solicitor-client or litigation privilege. [ 28 ] As Mr.

Breitman informed the Court that only these objected questions remained to be asked before his client was ready to proceed to the costs application, I direct that the parties proceed to the costs application. [ 29 ] The phrase ‘everybody gets her day in court’ is tempered by the limits a court must put in place to ensure finality, respect for other parties, and deference to the court process. For Ms. Myron, on these issues, that day has come and gone. Costs [ 30 ] For the reasons stated above regarding abuse of process, I use my discretion under Rule 10.31(3) (

b) of the Alberta Rules Of Court , Alta. Reg. 124/2010 to award multiple column costs of the specific application in front of me, against the Applicant. I do this after considering the enumerated factors that I may consider under Rule 10.33, most notably 10.33(2)(a), 10.33(2)(b), and 10.33(2)(d). She is directed to pay double

schedule C costs. Heard on the 4 th day of March, 2011. Dated at the City of Calgary, Alberta this 15 th day of March, 2011. W.A. Tilleman J.C.Q.B.A. Appearances: Ariel Z. Breitman and Renée Reichelt for the Applicant Steven H. Leitl, Karl R. Seidenz, and Jennifer Blanchard for the Respondents

[1] The Applicant argues, inter alia , that now that it is Ms. Kwinter and not Ms. Schwartz refusing to answer questions that the situation is now different. Additionally, the Applicant argues that the Court of Appeal only ruled that Kwinter had not waived privilege and not whether litigation privilege existed for Kwinter. However, any ruling regarding the waiver of privilege obviously presupposes that privilege exists in the first place. [2] In saying this, I am not delineating concrete rules as the Court of Appeal has said this is a hard task. See Wilson v.

Medicine Hat , 2000 ABCA 247 at para. 49 . [3] See also Dhala v. Dhala , 2010 ABQB 176 [4] Shelley Rae Kwinter v. Metrowest Developments Ltd. et al . , Action No.: 0601-02495