Attila Dogan Construction v. AMEC Americas Limited, 2011 ABQB 794

Court of Queen ’ s Bench of Alberta Citation: Attila Dogan Construction v. AMEC Americas Limited, 2011 ABQB 794 Date: 20111215 Docket: 0701 09436 Registry: Calgary Between: Attila Dogan Construction and Installation Co. Inc Plaintiff - and - AMEC Americas Limited, formerly AMEC E & C Services Limited and AGRA Monenco Inc. Defendants _______________________________________________________ Reasons for Judgment of the Honourable Chief Justice Neil Wittmann _______________________________________________________ 1. The Applications

[ 1 ] The Defendant, AMEC Americas Limited (“AMEC”) has applied for direction and assistance with respect to approximately 25,000 records claimed as privileged by AMEC, and for an Order directing that the Plaintiff, Attila Dogan Construction and Installation Co.

Inc. (“AD”) be required to pay the cost of translating to English an estimated 20,000 to 25,000 records (“the Turkish Documents”) produced by AD in the Turkish language. [ 2 ] The Plaintiff, A.D., has cross-applied for an Order to compel AMEC to provide a detailed description of the records over which AMEC has claimed privilege, and further seeks production of AMEC’s “Key Learning Records” and “Review Records”. 2.

Background Facts [ 3 ] In October 1998 AMEC and AD (“the Joint Venture”) entered into an agreement (“the Joint Venture Agreement”) in order to bid on a contract to design and build a magnesium oxide plant (“the Project”) in the Kingdom of Jordan for the Jordan Magnesia Company Limited (“JorMag”). Under s.2.1 of the Joint Venture Agreement, all work on the Project was divided into three scopes of work. AMEC’s scope of work was detailed engineering, project management, commissioning and start up services. AD’s scope of work was fabrication, construction and bulks. Procurement was designated a shared scope of work.

Section 4.2 of the Joint Venture Agreement set out the division of profits, losses and liabilities: 4.2 Profits, Losses and Liabilities (

a) Shared Responsibility for Shared Scope of Work Subject to sections 4.2(

b) and 4.2(c), the Members shall share in the profits and losses of the Joint Venture and in any liabilities relating to the Joint Venture and its operations in accordance with their Proportionate Shares. In respect of any such shared losses and liabilities, each Member shall indemnify and hold the other harmless from bearing more than its Proportionate Share. For the purpose of sections 4.2(

a) and 4.2(b), liabilities include, without limitation, any liabilities arising under or in connection with any bond (or collateral instrument), consent of surety, guarantee, letter of credit or similar instrument issued for the benefit of the Joint Venture with the consent of the Members. (

b) Individual Responsibility for Member’s Scope of Work Each Member will be fully responsible for performing its Scope of Work in accordance with all of the terms and conditions of this Agreement and of the Contract which are applicable to its Scope of Work. Each Member will be entitled to all profits attributable to its Scope of Work, and shall bear all losses and liabilities (including without limiting the foregoing, warranty claims and liquidated damages) attributable to performance of its Scope of Work, and shall indemnify and hold the other Member harmless from and against any such loss or liability.

The subcontracting of any portion of a Member’s Scope of Work shall not relieve that Member from full responsibility or obligation for the proper performance of its entire Scope of Work. Where materials, equipment, structures, or other work supplied or performed by a Member under its Scope of Work fail to meet the warranties and/or performance guarantees contained in the Contract, or are not supplied or performed in accordance with the

Schedule or the time requirements of the Owner, or do not meet any other requirements of the Contract, each Member shall be responsible for making any necessary corrections of items applicable to its Scope of Work, but the entire cost of correcting such defects or deficiencies, including the cost of modification, if any, of the work of the other Member made necessary as a result of or in connection with such correction, or of bringing the Work back on

Schedule or into compliance with the time requirements of the Owner, or in all cases including all damages (including liquidated damages) or other amounts payable to the Owner under the terms of the Contract, shall be borne by the Member who was the cause of the defect, deficiency or delay; provided that if both Members are the cause, then such responsibility shall be shared in proportion to the respective contributions to the cause by each Member. (

c) Certain Losses and Liabilities Not Shared

If a loss or liability is attributable to any breach of this Agreement by a Member, the other Member shall not share in such loss or liability to the extent that it is attributable to such breach, and the Member that has breached the Agreement shall be responsible for, and shall indemnify and hold the other Member harmless from, such loss and liability to the extent that it is attributable to such breach. [ 4 ] Pursuant to s.5.2 of the Joint Venture Agreement, AMEC was designated the Leader of the Joint Venture.

In this regard, AMEC was charged with the responsibility for leading all contract negotiations with JorMag and for the execution or enforcement of any claim against JorMag arising out of either AMEC or AD’s scope of work, and for the prosecution of any such claim. [ 5 ] The Joint Venture’s bid was accepted. On March 1, 1999 it entered into an agreement with JorMag (“the Design-Build Agreement”) and thereafter commenced work. The planned date for completion was December 31, 2000, but the Project was plagued by problems and delay.

In August 2001 AMEC, in its capacity as Project Leader, submitted an interim claim to JorMag for work variations (“the Interim Claim”), in essence alleging that the problems with the project to date had been caused by a variety of factors, including errors and omissions in the original invitation to bid, that were outside of the Joint Venture’s hands. The Interim Claim was prepared with the assistance of Ronald Jutras of JDC Consulting Limited. Jutras had previously been employed by AMEC as in-house legal counsel.

The Interim Claim was rejected by JorMag on November 8, 2001. [ 6 ] On January 2, 2002, AD wrote to AMEC and took the position that it had incurred losses as a result of delays in AMEC’s engineering and procurement activities and formally requested $28,277,456 from AMEC in compensation.

AD indicated that failure to compensate it for its alleged losses would result in the initiation of proceedings in the Alberta Courts. [ 7 ] In early 2002, AMEC began to give instructions to the law firm Hammond Sutters Edge (“Hammonds”) with regard to another claim against JorMag for variations to the work under the Design-Build Agreement (“the Claim”). After the Design-Build Agreement was terminated by JorMag on July 7, 2002, Hammonds continued to work on the Claim.

In a memorandum dated July 17, 2002, Simon Palmer, a lawyer at Hammonds, recorded the instructions that he had received, indicating that “The JV wishes to know whether it should and could take any action at this stage to recover ... withheld monies ...” and ultimately recommending that “the JV should begin to use its rights regarding interest and dispute procedure right away.” In an August 13, 2002 email to Michael Strong, a solicitor at AMEC, Palmer wrote: The initial issue is the identity of the instructing company.

I believe that in the strict sense I have been instructed solely by the Leader of the JV, although the advice sought relates to the JV’s position on termination, claims etc. [ 8 ] In an opinion letter dated September 18, 2002, and addressed to principals of both AMEC and AD, Palmer set out a number of conclusions regarding the Claim, including his assessment of the overall objective of the Claim, the major issues, and the appropriate strategy.

The September 18, 2002 opinion letter refers at all times to a single, Joint Venture claim against JorMag, and does not distinguish between the claims of AMEC and AD. [ 9 ] It is AMEC’s position that AD failed to cooperate with AMEC and Hammonds in the preparation of the Claim. The prospect of litigation between AMEC and AD appears to have been an obstacle.

In correspondence dated October 18, 2002, AD indicated that “it is more than obvious that the Joint Venture should get prepared for and concentrated on taking the appropriate the legal actions against [JorMag]”, that “it is beneficial for the Joint Venture members to settle their disputes amicably so that the dispute against [JorMag] can be pursued efficiently”, and further advised that AD remained “willing and ready to contribute to its share of efforts towards such a dispute”.

AD attached a “framework for final settlement” between AMEC and AD. [ 10 ] In correspondence dated November 14, 2002, AMEC advised AD that it could not “proceed with prosecuting and evidencing claims against [JorMag] without the full cooperation of [AD]”. AMEC rejected the terms of the proposed framework for a settlement between AMEC and AD, but advised: ... at this stage it is in the best interests of Attila Dogan to assist AMEC with the preparation of the final claims document so that the Joint Venture can evidence their entitlements to the benefit of both partners.

The positions of the Joint Venture members having been stated, these differences do not need to be resolved at this point. Accordingly, we have proposed that the Joint Venture members agree to set these issues aside until the issues with JorMag are resolved. Until such time, neither Attila Dogan’s nor AMEC’s claims should, by binding agreement, be prejudiced by any lapse of time or delay or by the co-operation, one with the other, in defence or prosecution of

claims made by or against Jormag. [ 11 ] The parties were unable to agree on a method whereby they could set aside their own disagreement and proceed with the claim against JorMag for some time. Hammonds continued to prepare the Claim, taking instructions from AMEC and, in March 2003, pressing AD for further information and cooperation. In correspondence to AMEC dated April 21, 2003, AD reiterated its view that the cause of the parties’ failure to work together on preparation of the JorMag claim was the ongoing failure to conclude a settlement agreement in respect of the issues between them.

AD further advised: Another fact is that AD has seen nothing related to the claim that AMEC has unilaterally prepared. The documents you have sent to AD are far from explaining the justifications behind the claim or lacking the details for us to understand how the documents from AD will be utilized or how the JV’s case will be defended. Although you stated that AD has seen no comment or action from AMEC on such documents, either.

Since the beginning of the undesirable events that were initiated by Jormag, AMEC has unilaterally assigned Hammonds as the legal counsel and presumably other individuals or companies for other tasks without informing or getting consent from AD. You have also set your own timetable without asking for our comments. This situation necessarily implies that AMEC’s actions are arbitrary with respect to the preparation of the claim documents. Therefore, we should not force ourselves to conform to the deadline of early May that you set but we should find the way to compile the strongest claim file.

It is a must that the claims of both parties are included since the claim is the JV’s claim and the JV is composed of the two companies; otherwise, the claim will be only a one party claim, which should not be the case legally and it would be less stronger [sic] than it should be. [ 12 ] Notwithstanding this ongoing failure to cooperate, a claim for $61 million was submitted by the Joint Venture to JorMag on June 6, 2003, attached to correspondence indicating that in the absence of satisfactory proposals from JorMag, the Joint Venture would commence arbitration proceedings.

The June 6, 2003 correspondence was signed by Barry Casselmen as project leader for the Joint Venture. At paragraph 33 of the Claim, the Joint Venture’s position is set out as follows: 33. The JV has a claim for approximately US$61 million. This is based on changes to the scope of works, wrongful call of bonds, wrongful termination of contract and other contractual claims ... [ 13 ] AD and AMEC eventually entered into an “Agreement on Procedures Concerning Claims”, (“the Claims Agreement”) on November 17 2003.

Pursuant to s. 4.1 of the Claims Agreement, the parties agreed to fully support the Joint Venture and each other and to engage in the exchange of information necessary for the prosecution or defence of claims made against or by JorMag. The relevant sections of the Claims Agreement provide: 2.

No Waiver Nothing contained in this Agreement, unless so expressly stated, shall modify, waive, alter or compromise the rights or obligations of either of AMEC or Attila Dogan with respect to one another or with respect to the Joint Venture, arising from the Joint Venture Agreement and the performance by the Joint Venture of the Design and Build Agreement. 4.2 Notwithstanding the provisions of paragraph 4.1, but subject to the provisions of clause 5 hereof, in the first instance, AMEC shall be responsible for retaining outside legal counsel and any experts for and on behalf of the Joint Venture and AMEC agrees that in the first instance, it shall pay Attila Dogan’s Joint Venture member’s share of any and all such third party costs required to prosecute or defend those claims or actions set out in paragraph 4.1 hereof; Provided, however, nothing in this agreement shall obligate AMEC to make any payment for or on behalf of Attila Dogan of any judgment, award or cost award against the Joint Venture, the responsibility for which will be determined by and in accordance with the terms of the Joint Venture Agreement. 6.2 All correspondence or documents sent on behalf of the joint venture to [JorMag] in prosecution or defence of the claims made by or against [JorMag] shall be prepared by or on the instructions of AMEC.

AMEC agrees to provide to Attila Dogan copies of all formal pleadings and submissions and all correspondence to or from [JorMag] in which the position of the joint venture with respect to the resolution of such claims is discussed. AMEC will also provide copies of any correspondence to the legal team, arbitrators, third parties and copies of internal progress reports. 7. All correspondence or documents sent on behalf of the Joint Venture to JMC in the prosecution or defense of the claims made by or against JMC shall be prepared by or on the instructions of AMEC.

AMEC agrees to provide Attila Dogan copies of all formal

pleadings and submissions and all correspondence to or from JMC in which the position of the Joint Venture with respect to theresolution of such claims is discussed. AMEC will also provide copies of any correspondence to the legal team, arbitrators, third partiesand copies of internal progress reports. [14] On July 31, 2006 the arbitration panel rendered an interim decision dismissing most of the Joint Venture’s claims andallowing some of JorMag’s counterclaims.

In April 2007, the Joint Venture entered into a settlement agreement under which the JointVenture agreed to pay $41 million to JorMag and to release it from all claims. On July 30, 2007 AD brought this action against AMEC,claiming damages arising out of the failure of the Project. AMEC has counterclaimed and seeks 50% of the Litigation Costs pursuant tothe terms of the Claims Agreement. Those litigation costs include $22,458,591.62 paid to legal firms, including Hammonds, and$7,872,793.26 paid to experts. 3.

The AMEC Privilege Application [15] AMEC claims privilege over three categories of records generated in connection with and preparation of the Claim: 1. Communications between AMEC and external legal counsel, unless copied to AD; 2. Communications with experts and documents compiled and forwarded to experts, including work product sent to or received fromexperts, unless copied to AD; and 3. Internal AMEC communications and work product not sent to in-house or external legal counsel or to experts. In addition, AMEC claims privilege over the “Lessons Learned” Documents as described below. (

a) Solicitor Client Privilege over Communications with External Legal Counsel [16] AMEC claims solicitor client privilege over communications between AMEC and Hammonds and JDC Consulting Limited inpreparation of the Claim and the JorMag Litigation, unless copied to AD. It is AMEC’s contention that AD did not participate in thepreparation of the Claim and or the JorMag litigation until after the Claims Agreement was signed, and that until that time allcommunications between AMEC and its solicitors were for the benefit of AMEC alone, and should therefore remain privileged in thisaction.

AMEC further contends that solicitor-client privilege was not waived as a result of the Claims Agreement and that thereafterHammonds effectively acted for AMEC and AD as independent entities. [17] Solicitor-client privilege arises where there has been: “(

i) a communication between solicitor and client; (ii) which entails theseeking or giving of legal advice, and (iii) which is intended to be confidential by the parties”: Solosky v. Canada, (SCC),[1980] 1 S.C.R. 821, at p. 837. Unlike litigation privilege, solicitor-client privilege continues to apply after the litigation in respect ofwhich the communication arose has ended: Blank v. Canada (Minister of Justice), [2006] 2.

S.C.R. 319, at para. 32. [18] The issue is not whether communications between AMEC and Hammonds and JDC would be privileged as against outsideparties, or whether that privilege would continue to apply once the litigation with JorMag was settled. There is no question thatcommunications between AMEC and Hammonds and JDC Consulting Limited were communications between solicitor and client whichentailed the seeking and giving of legal advice.

The issue is whether privilege can be asserted by AMEC against AD, its partner in theJoint Venture. [19] The common interest exception to solicitor-client privilege is described in R v. Dunbar (1982), (ON CA),

138 D.L.R. (3d) 221 (Ont. C.A.), at p. 245: The authorities are clear that where two or more persons, each having an interest in some matter, jointly consult a solicitor, theirconfidential communications with the solicitor, although known to each other, are privileged against the outside world. However, asbetween themselves, each party is expected to share in and be privy to all communications passing between each of them and theirsolicitor.

Consequently, should any controversy or dispute arise between them, the privilege is inapplicable, and either party maydemand disclosure of the communication .... [20] Dunbar was cited in Pritchard v. Ontario (Human Rights Commission), 2004 SCC 31 , [2004] 1 S.C.R. 809, whereDickson J. went on to say, at para. 24: The common interest exception originated in the context of parties sharing a common goal or seeking a common outcome, a “selfsameinterest” as Lord Denning M.R. described it in Buttes Gas & Oil v. Hammer (No.3) ...

It has since been narrowly expanded to cover thosesituations in which a fiduciary or like duty has been found to exist between the parties so as to create common interest. These includetrustee-beneficiary relations, fiduciary aspects of Crown-aboriginal relations and certain types of contractual or agency relations ... [21] There are no retainer agreements or invoices for legal advice in evidence.

It is clear, however, that both JDC ConsultingLimited and Hammonds were retained to assist in the preparation of a first the Interim Claim and then the Claim against JorMag, byAMEC in its capacity of Project Leader under s. 5.2 of the Joint Venture Agreement. The July 17, 2002 memorandum prepared byPalmer refers to instructions and describes remedies available to the Joint Venture as a single entity. Palmer’s email of August 13, 2002describes the instructing company as AMEC but describes the claim itself as a Joint Venture claim, and does not distinguish between theinterests of AMEC and AD.

There is no evidence that Hammonds or JDC Consulting Limited prepared separate accounts for AD andAMEC.

Indeed, AMEC in its Counterclaim seeks 50% of the legal costs associated with the preparation of the Claim and the JorMaglitigation, presumably on the basis that no separate accounting of the work done to prepare AD’s share of these costs is available. [22] AMEC argues that, while it was advancing the Claim as Leader of the Joint Venture against JorMag, the Claim includedidentifiable scopes of work for each of AMEC and AD, and therefore AMEC should be entitled to maintain a claim of privilege inrelation to documents created in pursuit of remedies in respect of its own scope of work.

This is not consistent with the correspondence inevidence nor with the manner in which the Claim was ultimately put to JorMag.

Moreover, such an arrangement would have put thesolicitors retained to act for the Joint Venture in the impossible position of having to distinguish between communications in respect ofthe claim as a whole and communications in respect of discrete portions of the claim, and then being required to keep some of thosecommunications confidential as against a client to whom they owed fiduciary obligations. [23] AMEC further contends that the authorities cited by AD in respect of joint retainer may be distinguished on the basis that inthose cases, unlike here, litigation between the parties jointly retaining the solicitor was not anticipated at the time that the solicitor wasretained.

But a further exception to the common interest exception, which would impose upon a solicitor the obligation to withholdrelevant information from a client, is not a workable solution in these circumstances. If AMEC had wanted to retain privilege against ADover communications with its solicitor in the JorMag litigation, it had the option of attempting to negotiate a means by which AMEC andAD could retain separate counsel. Alternatively, AMEC might have considered the issue when it agreed to the provisions of the JointVenture Agreement. [24] Hammonds was initially contacted and instructed by AMEC.

I agree with AMEC that the correspondence in evidencesuggests that both AMEC and Hammonds experienced difficulties in receiving assistance from AD in the preparation of the Claim, atleast until the execution of the Claims Agreement on November 17, 2003. But inadequate cooperation from AD does not change thenature of the retainer. Hammonds was retained to represent the interests of the Joint Venture as a whole in the dispute with JorMag. [25] Nor am I persuaded that the provisions of the Claims Agreement affect the nature of the retainer in any way.

AMEC points tothe “no waiver” provisions of s. 2 of the Claims Agreement, but is not the execution of the Claims Agreement that operated to waivesolicitor-client privilege over AMEC’s communications with the solicitors retained to prepare the claims against JorMag, but rather thefact that those solicitors were retained - prior to the execution of the Claims Agreement - to act on behalf of the Joint Venture, whichencompassed both AMEC and AD.

Section 2 of the Claims Agreement speaks to rights arising from the Joint Venture and Design andBuild Agreements, not to the joint retention of counsel.

[ 26 ] JDC Consulting and Hammonds were retained to act on behalf of both of the Joint Venture participants in advancing the claim against JorMag. Communications between AMEC, JDC Consulting and Hammonds fall within the Joint Retainer exception to solicitor client privilege and are therefore not privileged as against AD. (

b) Litigation Privilege over Communications with Experts [ 27 ] The purpose of granting privilege over documents made in anticipation of litigation is to allow a party to freely prepare its case: Alberta Treasury Branches v. Ghermezian , 1999 ABQB 407 , 242 A.R. 326. It applies to all records created after litigation between the parties has become a prospect, and that are created with the dominant purpose of assisting with the prospective litigation. The privilege ends when the litigation ends.

What is at issue is whether documents created by AMEC in connection with the JorMag litigation retain their privilege against AD. [ 28 ] The parties are agreed that, for litigation privilege to attach to a document, its dominant purpose must have been to assist in litigation. It is not sufficient if the litigation is but one of several purposes: Whitehead v. Braidnor Construction Ltd. , 2001 ABQB 994 , 304 A.R. 72, at para. 5 . It is AMEC’s position that the litigation in the present case encompasses both the claim against JorMag and the claims between the parties to the Joint Venture.

In other words, the two claims are so closely connected that documents prepared by AMEC in preparation for the JorMag litigation retain their privilege in the case at bar. In this regard AMEC points to Ghermezian , wherein Moore C.J.Q.B. held at para. 28: The Canadian cases have held that privilege exists not only for the specific litigation for which it was developed, but it is also for future litigation which is even remotely connected to the original litigation. [ 29 ] AMEC points to what it suggests is the analogous case in GS Hitech Controls Inc. v. York Realty Inc. , 2005 ABQB 769 .

In that case, the defendant sought production of certain documents prepared by the plaintiff in the course of an earlier action the plaintiff had brought against its insurer. The plaintiff’s claim against its insurer and the subsequent claim against the defendant had arisen out of the same set of circumstances, namely a fire originating on the defendant’s premises.

Slatter J. concluded at para. 16, that the claim against the insurer and subsequent claim against the defendant were more than “remotely connected” and that the privilege over documents prepared for the dominant purpose of litigation would not expire until both pieces of litigation were resolved. [ 30 ] In my view, the law is correctly stated in Ghermezian and applied in GS Hitech . I agree that, when considering the issue of dominant purpose, the scope is not “this litigation” narrowly, but also connected litigation.

Had AMEC and AD contracted separately with JorMag in respect of the Project, and had AD and AMEC retained separate counsel and experts to pursue independent claims against JorMag before proceeding with litigation against one another, the circumstances would be analogous.

Instead, AMEC in its capacity as Leader of the Joint Venture retained JDC Consulting, Hammonds, and various experts to represent the interests of the Joint Venture as a whole in its dispute with JorMag, and proceeded to share documents with the same lawyers, consultants and experts who were expected to act on behalf of AD as well. [ 31 ] AMEC could not have expected to maintain privilege over communications and records provided to jointly retained experts.

Indeed, s. 7 of the Claims Agreement specifically provided that AMEC would provide to AD copies of any correspondence “to the legal team, arbitrators [and] third parties ...”. AMEC’s contention that s. 2 of the Claims Agreement operates to preclude any waiver is unconvincing.

Section 2 speaks to the rights and obligations of the parties arising from the Joint Venture and Design and Build Agreements. Privilege is not a right arising from these agreements; it arises from the nature of and the circumstances surrounding, the communications in question. (

c) Litigation Privilege over Internal AMEC Communications and Documents [ 32 ] AD contends that documents created by AMEC in preparation for and in the course of the JorMag litigation, but not shared with legal counsel or experts, are also not subject to privilege because they were created for the dominant purpose of litigation against JorMag, not AD.

AD further argues that joint interest privilege applies not only to documents shared with counsel and experts, but to all records coming into existence at the time that the joint interest in the subject matter of the communication exists. [ 33 ] AD relies upon the discussion of joint interest privilege in Ziegler Estate v. Green Acres (Pine Lake) Ltd. , 2008 ABQB 552 ,

456 A.R. 244. In that case, the plaintiff alleged that the solicitor involved in the preparation and execution of a unanimous shareholders agreement could be compelled by the plaintiff shareholder to answer questions about the unanimous shareholders agreement because the shareholders and corporation had a joint interest. Hughes J. noted at para. 47 that Canadian jurisprudence “eschews the notion that shareholders are privy to privileged communications between a corporation and its solicitor” and therefore the joint interest exception to solicitor-client privilege did not apply in the circumstances.

In considering the issue, Hughes J. referred to Bankim Thanki, The Law of Privilege (Oxford: Oxford University Press, 2006) and held at paras. 28-30: The exact meaning of “joint interest privilege” is a matter of some confusion in the jurisprudence. Specifically, there is disagreement as to when joint interest privilege arises ... Thanki notes at 270 that joint privilege has two forms: joint retainer and joint interest.

The former arises “[w]here two (or more) parties jointly retain the same lawyer.” As a result of this joint retention, the parties have no confidence against one another; “each party is entitled to benefit from any privilege communication arising out of that retainer.”... Joint interest privilege arises “[w]here, even though the parties have not jointly retained a lawyer, they have a joint interest in the subject matter of the communication at the time that it comes into existence” (Thanki at 260).

One condition necessary to invoking joint interest privilege is that the joint interest exist at the time of the communication. This condition is affirmed in the English case Commercial Union Assurance Co. Plc v. Mander, [1996] 2 Lloyd’s Rep. 640, [1997] C.L.C. 32 (Eng.

Q.B.). [ 34 ] At para.31, Hughes J. noted that, in the Law of Evidence in Canada , 2d ed. (Toronto: Butterworths Canada Ltd., 1999) Sopinka et. al. do not distinguish between “joint retainer privilege” and “joint interest privilege”, instead referring simply to “joint interests” as follows at para. 14.46: Joint consultation with one solicitor by two or more parties for their mutual benefit poses a problem of relative confidentiality. As against others, the communication to the solicitor was intended to be confidential and thus is privileged.

However, as between themselves, each party is expected to share in and be privy to all communications passing between either of them and their solicitor, and, accordingly, should any controversy or dispute subsequently arise between the parties, then, the essence of confidentiality being absent, either party may demand disclosure of the communication ...

Moreover, a client cannot claim privilege as against third persons having a joint interest with him or her in the subject-matter of the communications passing between the client and the solicitor. [ 35 ] Similarly, in Solicitor-Client Privilege in Canadian Law (Toronto: Butterworths Canada Ltd., 1993) Mason & Silver write at p. 64: Where a third party has a joint interest with the client in the subject matter of the communication, no privilege attaches to the solicitor-client communication as between themselves.

It is not necessary to establish a particular kind of relationship (e.g., a partnership, or shareholder in a company, or of trustee and cestui que trust.) As long as the relationship is one created by the joint interest, privilege will not attach. [ 36 ] It is worth noting that, in contrast to Thanki, the Canadian authors refer specifically to a joint interest exception only in the context of solicitor-client privilege.

The parties have not cited, and I could not locate, any authority applying the joint interest exception to a claim of litigation privilege over internal documents that were not shared with the jointly retained solicitor. AD suggests that the exception should also apply to litigation privilege because it does not “have the same stature” as solicitor-client privilege, but I find the discussion of the relative “stature” of the two forms of privilege unhelpful. Solicitor-client privilege and litigation privilege exist to protect different forms of communication and are based on related but distinct principles.

Solicitor-client privilege protects the right to access legal advice on a confidential basis and fosters candid communication between clients and counsel.

Litigation privilege exists to allow a party to prepare its case without fear that the results of its own investigations or inquiries will be disclosed. [ 37 ] In view of the fundamental principles underlying the solicitor-client and litigation privileges, there is no distinction to be drawn between documents prepared by AMEC and provided to jointly retained solicitors and experts in preparation for the JorMag litigation and AMEC’s internal documents, not shared with those solicitors and experts, provided the dominant purpose was to assist in the Jormag litigation.

All parties have a right to consultations with counsel unencumbered by the fear that those consultations could subsequently be disclosed. At the same time, they must recognize that the solicitors and experts retained to act jointly for both parties

cannot properly fulfill their function unless both parties are entitled to all of the information provided to the solicitors and experts. As against one another no privilege may be claimed by AMEC or AD in respect of communications to and from the jointly retained solicitors and experts. Both AMEC and AD must be afforded the “zone of privacy”, described in Blank at para. 34, necessary to freely prepare for the litigation against one another. But that zone of privacy is available only jointly with regard to documents prepared for the dominant purpose of the Jormag litigation.

Consequently, only documents prepared in contemplation of and for the dominant purpose of, this litigation by both AMEC and AD, remain privileged. (

d) The “Lessons Learned ” Documents [ 38 ] At some point in the course of this litigation, AD sought to question for discovery Alan O’Brien, a former employee of AMEC with significant involvement in the Project. As a result of this contact with O’Brien, AD came into possession of a chain of email correspondence regarding a “lessons learned” analysis conducted by various AMEC employees.

By email dated August 29, 2001, (the “Key Learnings Document”) O’Brien provided his views on lessons that AMEC could learn from the difficulties encountered by the Joint Venture in respect of the Project to Michael Strong, AMEC’s in-house legal counsel. The following day, Strong forwarded the email to Roddy Grant, a senior executive of AMEC. [ 39 ] After reviewing the documents provided by O’Brien, AD’s counsel forwarded them to counsel for AMEC, who expressed concern that some of the documents were privileged communications that should not have been disclosed by O’Brien to AD.

The issue here is not whether the Key Learnings Document and Strong’s email about solicitor-client privilege are, in principle, subject to a joint interest exception to litigation privilege and therefore must be disclosed. The issue instead is whether, given what is known about the origin and content of the lessons learned document, privilege has been properly claimed by AMEC. [ 40 ] AD contends that the Key Learnings Document does not on its face appear to be privileged and was routed through legal counsel for the sole purpose of improperly asserting solicitor-client privilege.

As AD points out, channelling otherwise non-privileged documents through legal counsel does not, in and of itself, clothe the documents with privilege. Conversely, the fact that the document was sent by O’Brien to Strong, on his advice that doing so would “clothe it with solicitor-client privilege” does not show definitively that it is not privileged. To put it another way, there is nothing inherently pernicious about indicating that a document has been clothed with privilege unless this reflects an indication to shield a document that would not otherwise have been privileged.

What is determinative is the circumstances surrounding the creation of the document. [ 41 ] In The Blood Tribe v. Canada (Attorney General) , 2010 ABCA 112 , 487 A.R. 71, the Alberta Court of Appeal described the scope of solicitor-client privilege as follows at para. 26: The appellant also argues that even if some of the documents contain legal advice and so are privileged, there is no evidence that all of the documents do so.

For example, the appellant argues that minutes of meetings, emails and miscellaneous correspondence between Justice Canada lawyers and the Department of Indian and Northern Affairs may not contain any actual advice, or requests for advice, at all. The solicitor-client privilege is not, however, that narrow. As the court stated in Balabel v. Air India , [1988] Ch 317, [1988] 2 All E.R. 246 at p. 254 (C.A.) : Privilege obviously attaches to a document conveying legal advice from solicitor to client and to a specific request from the client for such advice.

But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client ... here information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach.

A letter from the client containing information may end with such words as “please advise me what I should do.” But, even if it does not, there will usually be implied in the relationship an overall expectation that the solicitor will at each stage, whether asked specifically or not, tender appropriate advice. Moreover, legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context. [ 42 ] I have reviewed the Key Learnings Document prepared by O’Brien.

It contains a somewhat candid assessment of a number of problems with the Project from AMEC’s perspective, with significant legal implications. In assessing whether the Key Learnings Document is subject to a valid claim of privilege by AMEC, it may have been helpful to set out the entire document, which is not lengthy, in these reasons. However, I will refrain from doing so, knowing that the Key Learnings Document is part of the record, on the basis that this decision may be reviewed by another Court.

[43] The Key Learnings Document contains two parts of an e-mail string. The first

part in time sent August 29, 2001 at 4:14 p.m. isfrom Alan O’Brien to Michael Strong. Strong, was the In-House Legal Counsel for AMEC. O’Brien at the time of the e-mail was SeniorVice-President, International and Operational Strategy for AMEC. [44] Before analyzing the content of the O’Brien message, it is helpful to indicate that the Key Learnings Document was sent by e-mail by O’Brien to Strong with the note “Please forward to Roddy Grant as discussed”. Grant was, at the time, a Senior Executive inAMEC and I infer that he was senior to O’Brien.

Strong, then simply forwarded O’Brien’s e-mail on to Grant on August 29, 2001 at 5:49p.m. with the caption “Roddy, Al mentioned he was forwarding this lessons learned to you, so we agreed he would send it via me toclothe it with solicitor-client privilege.’” [45] AMEC’s position is that it is apparent that Strong gave “actual legal advice” in connection with the Key Learnings Document.AMEC argues that this is “apparent from the document sent by O’Brien to Strong, marked “Privileged and Confidential” and issupported in its position because the request to Strong was to forward to Roddy Grant “as discussed”. [46] The position of AD is that the Key Learnings Document and any records leading to its creation are not subject to the solicitor-client privilege because they do not “on their face ... entail seeking or giving legal advice and reveal nothing more than AMEC’s mereattempts to clothe otherwise producible documents with solicitor-client privilege.” AD cites as authority Mitsui & Co. (Point Aconi) Ltd.v.

Jones Power Co., 2000 NSCA 96 at paras. 35-36. In delivering her judgment in Mitsui, Roscoe J.A. at para. 35 agreed with thestatement found in International Minerals & Chemicals Corp. (Canada) v. Commonwealth Insurance Co. (1990), (SKKB), 89 Sask. R. 1 (QB), where Halvorson J. stated that: ... the simple expediency of channelling all communications through legal counsel does not of itself shield the communications fromdisclosure. [47] There is no evidence before me as to the circumstances surrounding the preparation of the Key Learnings Document, or thereason for its creation, independent of the document itself.

For example, there is no evidence from O’Brien that would assist the Court toconclude definitively that he was preparing the document in order to seek legal advice, or for that matter, the dominant purpose oflitigation.

Aside from the “as discussed” comment in the document, there is nothing to assist the Court to determine what was discussed.Perhaps it was simply a discussion that the document would be channelled through Strong rather than being sent directly to Grant. [48] The Key Learnings Document itself, does not assist the Court in determining whether it was sent to Strong or discussed withStrong in terms of any expectation of receiving legal advice.

The essence of the document on its face is to describe extremely brieflysome areas of the Joint Venture Project that went wrong, why they went wrong and what could be learned from that activity. [49] The party claiming privilege must prove it on a balance of probabilities: W. Hubbard, Susan Magotiaux & Suzanne M.Duncan: The Law of Privilege in Canada, (Aurora: Canada Law Book, 2009) at 11.3 - 11.4.1. AMEC has not done that here.

Thereforethe Key Learnings Document is not a proper subject of solicitor-client privilege, nor is there any suggestion that it is the subject oflitigation privilege as between AD and AMEC. AMEC must produce it. 4. The AD Application [50] AD seeks to compel AMEC to provide answers to undertakings asking for certain particulars in respect of more than 28,000documents over which AMEC has claimed privilege. At issue are 18 undertakings given by AMEC at the cross-examination of DavidLeonard’s Affidavit of Records on February 14 and 15, 2011.

AD had sought specific information relating to the grounds of privilege,such as authors, recipients and dates. Similar information was sought by AMEC from AD at the cross-examination of Gokhan Dogan onFebruary 15 and 16, 2011, and was subsequently provided by AD. [51] Rule 5.8 provides:

5.8 Each record in an affidavit of records that a party objects to produce must be numbered in a convenient order, and the affidavitmust identify the grounds for the objection in respect of each record. [52] It is AD’s submission that Rule 5.8 sets out only the minimum requirements for listing privileged records and does notprohibit a more detailed description if it would be consistent with the foundational Rules, which emphasize timeliness and cost-effectiveness. AD further contends that the decision of the Alberta Court of Appeal in Dorchak v.

Krupka (1997), 1997 ABCA 89, 196 A.R. 81 (C.A.), which limited the amount of information a party had to provide in respect of privileged records in anaffidavit of records is both distinguishable and inconsistent with the new Rules of Court which came into force November 1, 2010. [53] In Dorchak, Cote J.A. set out a number of principles governing the description of privileged records in an affidavit of records.The first principle is “seeing whether one can unequivocally say of a given piece of paper whether its existence has been disclosed in theaffidavit or not”: para. 34.

Secondly, the system of listing or describing privileged documents must not give away privileged information:para. 36. Thirdly, because the disclosure of dates, contents or parties to the documents may reveal privileged information, the descriptionof privileged documents need not include these particulars: para. 43.

Finally, the grounds for objection to each document should beprecise and provide the basis for privilege, and the affidavit must therefore indicate which numbered documents come within each typeof privilege claimed: para. 67. [54] The key principle from Dorchak at issue here is described by Côté J.A. at paras. 46-47: Occasionally one will find a decided case suggesting briefly that the description of individual privileged documents in an affidavit ofdocuments must be full enough to let the court or the opponent assess whether privilege is properly claimed in respect of each document...

In my view, that suggestion of law is wrong. The description of the documents in the

schedule need not corroborate privilege. [55] As AD points out, the practice is different in other jurisdictions. Rules 7-1(6) and (7) of the British Columbia Supreme CourtRules require a description of documents sufficient to allow other parties to assess the validity of the claim of privilege. Similarly Rule30.03(2) of the Ontario Rules of Civil Procedure requires the party swearing the affidavit of records to both list and describe documentsover which privilege is claimed. In Segnitz v. Royal Sun Alliance Insurance Co. of Canada, [2003] O.J.

No. 78 (S.C.), the Ontario Rulewas interpreted, at para. 45 to mean: Documents that are privileged do not have to be produced but the plaintiffs are entitled to have the document listed with sufficientparticularity to enable the privilege to be challenged if they are so advised.

This will require, at a minimum, disclosure of the date andnature of the document as well as the privilege claimed and the grounds. [56] AD contends that, in view of the very large number of documents over which AMEC has claimed privilege, and consideringthe new Alberta Rules of Court, a “strict and narrow” approach to Dorchak is not appropriate. AD argues that, pursuant to Rules 1.4 and4.14, I have the authority to fashion a method that will allow the parties to narrow the issues as to which privileged records ought to bechallenged.

AD asks that I compel responses to a number of undertakings seeking information regarding the dates, authors and parties todocuments identified as privileged and that I compel AMEC to provide a Further and Better Affidavit of Records containing thisinformation. [57] I agree with AMEC that the language employed in Rule 5.8 does not suggest a departure from the practice under the old Rule187.1(2) as set out in Dorchak. There is nothing in Rule 5.8 that would suggest that privileged documents should be identified in amanner that would allow the opposing party to assess the claim of privilege.

I further agree that Dorchak is not distinguishable on thebasis of the number of privileged records in question, nor the complexity of the lawsuit. It is clear that in Dorchak the Court of Appealintended to establish a set of principles that would guide the identification of privileged documents in all litigation in Alberta, not merelylitigation involving a small number of documents and a low level of complexity. Complex actions involving many thousands ofdocuments were not unknown to the Courts of this Province in 1997, when Dorchak was decided.

In any event, as evidenced by theAMEC application, there are mechanisms for addressing the issues arising out of privilege claims that do not involve requiring the Courtto review many thousands of records, and my Order that AMEC produce a Further and Better Affidavit of Records to comply with mydecision regarding AMEC’s privilege claims should go some way to addressing AD’s concerns.

[58] AD further seeks production of what it categorizes as Key Learning, Mediation and Review Records. The privilege claim overKey Learning records has been addressed in the context of the AMEC application. To the extent that additional Key Learning documentsexist, they should be produced only if they were not generated as part of the process of consulting with AMEC’s legal counsel for thepurpose of obtaining legal advice.

With respect to the Mediation Records, AMEC advises that one of the documents cited by AD hasalready been produced, one was generated in connection with obtaining legal advice from AMEC’s in-house legal counsel and the thirdwas addressed directly to Ron Jutras. If Jutras was operating in his capacity as an external consultant retained to assist with the claimagainst JorMag, this latter document is not properly subject to a claim of privilege but would presumably be encompassed within thescope of my order in the AMEC application.

To the extent that other “Review Records” and “Mediation Records” exist, I would expectthat they would be produced, or would remain subject to a claim of privilege, in a manner consistent with my determination of theAMEC application, which is to say that records or communications exchanged between AMEC and any external experts, lawyers orconsultants in the course of the preparation and hearing of the JorMag litigation are not privileged as against AD, nor are documentscreated internally for the dominant purpose of the Jormag litigation. 5.

Translation Costs [59] The Affidavit of Records produced by AD contains a very significant number of Turkish Documents. The exact number ofTurkish Documents has not been determined, but AMEC’s estimate is that it is in the 20,000 to 25,000 range. AMEC has provided threeestimates of the cost to translate all of these documents. The first estimate, which is based on translation by Turkish speakers, in Turkey,who “happen to know English” and would likely yield translations suitable only for obtaining a general idea of what the documents say,is $945,500.

The other estimates, which would yield translations sufficient for use in litigation, are in the $1.5 million range. [60] AMEC contends that, since the law of Alberta was identified as the choice of law in the Joint Venture Agreement, the partiesintended for any potential litigation to be in the English language and therefore AD should be required to produce English versions of allrelevant documents.

In the alternative, AMEC proposes that the costs of translation be shared equally between the parties, or if AMEC isrequired to pay for translation costs, AD should be required to eliminate all clearly irrelevant or duplicate records included in theirproduction. [61] AD contends that the law is clear that there is no obligation on the party producing documents to translate them into English,and that this is the sole responsibility of the party intending to lead the evidence at trial. AD relies upon Kellogg Co. v. Imperial Oil Ltd.(1996), (ON SC), 29 O.R. (3d) 70 (Gen.

Div.), wherein Kitely J. held that correspondence and other written materialsrelevant to the issue of confusion between two trademarks in foreign countries should be produced, and further noted, at para.46, “Thereis no obligation on the party producing the documents to translate them into English; that will be the responsibility of the party wholeads the evidence at trial.” Similarly, in Bilfinger Berger (Canada) Inc. v. Greater Vancouver Water District, 2010 BCSC 1104, [2010]B.C.J.

No. 1586, Griffin J. held at paras.17 and 19: In my view, absent agreement between the parties, the Metro Vancouver [defendants] cannot transfer the burden of hiring their owninterpreter if they wish to translate to English the documents produced to them. They can hopefully manage that cost by having aninterpreter assist them with an informal translation without necessarily having a formal certified translation of each German languagedocument.

When, through the use of their interpreter, the Metro Vancouver parties determine which documents are most relevant to theircase, they may wish to confirm their translation of those documents by agreement or through the examination for discovery process. ... I further observe that these parties were in a sophisticated commercial relationship. These types of contracts often anticipate litigationand have agreements as to a court’s jurisdiction or arbitration, for example. The Metro Vancouver parties knew that they were enteringinto a contractual relationship with a party that had many German employees.

Metro Vancouver did have the opportunity to request acontractual term that if litigation between them did ensue Bilfinger Berger would be required to translate any of its German documentsinto English. Presumably solicitors in the future may wish to consider such a term. [62] AD has provided a number of authorities from the U.S. Federal Courts. While in Stapleton v.

Kawasaki Heavy Industries Ltd.(1975), 69 F.R.D. 489 it was held that foreign companies should consider the cost of translating documents into English for the purposeof litigation as part of the “cost of transacting business” in the United States, that approach has fallen out of favour and instead thegeneral rule is that, consistent with the principle that each party must bear the burden of financing their own suit, the cost of translatingdocuments is to be borne by the party intending to use them: In re Puerto Rico Electric Power Authority (1982), 687 F. 2d 501; Cook v.

Volkswagen of American Inc . (1984), 101 F.R.D. 92. [ 63 ] Ultimately, absent exceptional circumstances, any expenses incurred in the translating of documents in this action will be a taxable disbursement to be included in the Bill of Costs of the prevailing party. The issue is which of these parties should bear the cost in the interim. The authorities suggest that this should be the party seeking the documents, which is AMEC. But these authorities are neither binding nor particularly helpful. This action is at the disclosure stage.

What is needed is a practical solution which furthers the management of the case. [ 64 ] On March 17, 2011, I ordered that AD post security for costs to the end of questioning in the amount of $1.6 million, and further directed that when AMEC incurs a disbursement for an expert fee prior to the conclusion of questioning, the Court would consider adding to the security upon proof of that disbursement: Attila Dogan Construction v. AMEC Americas Limited, 2011 ABQB 175 .

Given the very significant costs associated with the translation of documents and the large number of documents involved, in my view it is appropriate to add the costs of translating documents to those disbursements for which security may be ordered. Therefore, upon proof by AMEC of disbursements associated with the translation of the Turkish Documents, AD will be required to post additional security for costs in the amount of those disbursements. AD has determined these records material and relevant and producible.

It is therefore prima facie reasonable that AMEC translate them, if they have not yet been properly translated. [ 65 ] I wish to add at this point some direction, and hopefully assistance to the parties, because AMEC’s application asked for an Order providing “direction and assistance”. It is to be remembered that this decision is part of case management. To manage, is to organize and regulate, often with limited resources.

The concept is entirely consistent with the new Rule 1.2(1) which states as follows: 1.2(1) The purpose of these rules is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way. [ 66 ] On the issue of translation and the Turkish Documents, it occurs to me that Calgary counsel for AD are not fluent in the Turkish language.

Therefore, perhaps the approximate 25,000 Turkish Documents, deemed relevant and material, by virtue of, and in accordance with, Rule 5.6(1)(b), must have already been translated and reviewed for compliance with this rule by Calgary counsel. So, if AD wishes to avoid putting up further security for costs for the disbursements incurred by AMEC for translation of the Turkish Documents in their entirety, copies of the translated Turkish Documents in English, if they exist, could be sent to AMEC and AMEC could then decide whether to accept the documents as translated.

To the extent that the Turkish Documents, already translated into English, by agreement, might constitute a valid translation, the purpose articulated in Rule 1.2(1) quoted above is furthered. It would avoid the possibility of two different translations into English being presented, or worse still, disputed later, or at the trial. [ 67 ] There may however, be some documents which AMEC wishes to test in terms of the validity of the translation done by AD.

If that process is engaged, AMEC would then bear the cost of testing the translation, subject to any further Order of the Court, depending on the result of the test. [ 68 ] The bottom line is that it is in neither parties’ interest to be litigating the Turkish Documents from anything other than a common English translation, that is valid and acceptable to both parties. 5.

Conclusion and Costs [ 69 ] AMEC is ordered to produce a Further and Better Affidavit of Records including in its production all communications and documentation provided to or received from experts, consultants and legal counsel retained to act on behalf of the Joint Venture in connection with the JorMag claim, including, but not limited to, JDC Consulting Limited and Hammonds Sutters Edge. AMEC is also ordered to include internal communications prepared for the dominant purpose of the Jormag litigation.

In addition, AMEC must produce the Key Learnings Document and assess the Review Records and Mediation Records in accordance with para. 58 of these reasons. [ 70 ] AD will produce copies of any of the Turkish Documents in its Affidavit of Records, already translated into English, to AMEC for review by AMEC. AMEC may then notify AD if it requires any of the Turkish Documents, in the Turkish language, and

thereupon AD will provide AMEC with copies of the Turkish Documents in the Turkish language. AMEC may, if it sees fit, test the validity of the translation into English, of any of the Turkish Documents. Either party may thereafter make application to this Court for a determination as to which of the Turkish Documents translated into English are appropriate for use in the litigation, absent agreement.

AMEC must bear its own costs with regard to any such testing, subject to further Order of the Court. [ 71 ] To the extent that it is necessary to translate any remaining Turkish Documents, AMEC must bear its own costs, but upon proof of disbursements for translation into English, AD will be required to post additional security for costs in the amount of these disbursements. [ 72 ] Costs of these applications may be spoken to. [ 73 ] The parties may speak to costs of this application. Heard June 8-9, 2011. Dated at the City of Calgary, Alberta this 15 th day of December, 2011. Neil Wittmann C.J.C.Q.B.A.

Appearances: John N. Craig / George M. Vlavianos Bennett Jones LLP Attila Dogan Construction and Installation Co. Inc. A. Webster Macdonald Jr., Q.C. and David Tupper Blake, Cassels & Graydon LLP for AMEC Americas Limited, Formerly AMEC E&C Services Limited and Agra Monenco Inc.