Goodswimmer v Canada (Attorney General), 2014 ABQB 726

Court of Queen ’ s Bench of Alberta Citation: Goodswimmer v Canada (Attorney General), 2014 ABQB 726 Date: 20141205 Docket: 9703 06332 Registry: Edmonton Between: Chief Melvin Goodswimmer and Jerry Goodswimmer, Walter Goodswimmer, Francis Goodswimmer, Pierre Chowace, Mildred Chowace and Donald Badger, Councillors of the Sturgeon Lake Indian Band and on behalf of the Sturgeon Lake Indian Band and the Sturgeon Lake Indian Band Plaintiffs - and - The Attorney General of Canada and Her Majesty the Queen in Right of Alberta Defendant - and - The Attorney General of Canada and Her Majesty the Queen in Right of Alberta Third Party _______________________________________________________ Reasons for Judgment of the

Honourable Madam Justice D.A. Sulyma _______________________________________________________ Introduction [1] These parties have been under my case management for a number of years. This application is made by the Defendants whohave been named by me in other judgments as “Canada” and “Alberta”.

The application is made regarding undertakings that wererefused by the Plaintiffs (“SLIB”) on the basis of solicitor-client privilege or settlement privilege. [2] For these many years of case management, issues of Examination for Discovery (now called “Questioning”) were, at mydirection, focussed on the defence of the two Defendants that a Treaty Land Entitlement agreement in 1990 (the “1990 TLE”)constituted a full answer as a defence to any of the claims being pursued in this action.

The SLIB has pled that the TLE was entered into;however, SLIB did not provide informed consent regarding extinguishment of land entitlement. Further, that Canada obtained theconsent of SLIB through breach of trust, breach of fiduciary duty, equitable fraud, deceit or negligent misrepresentation, without fullyinforming SLIB of the impact of the 1990 TLE on their rights.

Further, that associated releases in favour of Canada and Alberta weregiven without informed consent with respect to any rights being ceded to Canada and Alberta and as such are not binding on SLIB. [3] The 1990 TLE agreement provided that “for consideration given” SLIB released and forever discharged Her Majesty,(Canada) from all Treaty 8 obligations and waived future rights or causes of action (my words). It further provided that covenants werein total satisfaction of all obligations of Her Majesty relating to land.

And, importantly at paragraph 11 provided: The Band acknowledges it has had independent legal advice on all aspects of this settlement agreement. Position of the Parties 1.

Position of Her Majesty the Queen in Right of Alberta [4] The allegations in the Amended Statement of Claim that the 1990 TLE and associated releases in favour of Alberta andCanada should not be binding as SLIB did not give informed consent, because its members were never fully informed with respect to thelegal effect or impact of the TLE agreement. [5] In essence, SLIB alleges that its members did not understand the nature or legal effect of the document signed, but thenclaims solicitor-client privilege to prevent Alberta from accessing any information that SLIB and its members may have received fromits advisors. [6] Further, that solicitor-client privilege can be waived or lost by a party asserting a claim which puts into issue that party’sknowledge of the law.

Ed Miller Sales & Rentals Ltd. v Caterpillar Tractor Co., 1992 6132 (AB QB); Alberta Wheat Pool v Estrin(1986), (AB KB), 75 AR 348; Ermineskin Indian Band and Nation v Canada, 2011 FC 1091. [7] Alberta submits that the law provides that, when a party asserts that they did not understand the nature or legal effect ofdocuments signed, solicitor-client privilege will be lost with respect to the legal advice received.

That party can no longer assert privilegeto prevent inquiry into its understanding of the documents in the relevant law: Nowak v Sanyshyn (1979), 23 OR 2(d) 797; Reklitis vWhitehall Estates Ltd. (1993), 17 CPC (3d) 193; Burlington Associates v Osadchuk (1993), 114 Sask. R. 133. Alberta submits thatsolicitor-client privilege does not extend the very matter at issue in an action: Ed Miller (supra) at para. 8; Nowak (supra) at paras. 7and 9.

Alberta notes that solicitor-client privilege is also lost where a party pleads that it relied on the advice of an adverse party as to the legaleffect or consequence of an action. Solicitor-client privilege cannot be asserted to prevent investigation into whether the party wasinduced to act by the advice of the adverse party: Rogers v Bank of Montreal, (BC CA), [1985] 4 WWR 508; DomanForest Products Ltd. v GMAC Commercial Credit Corp.- Canada 2004 BCCA 512.

Alberta further submits that solicitor-clientprivilege is lost over the entire subject matter or topic once a party brings into issue their knowledge of the law. Selective waiver is notpermitted: Ed Miller (supra); Iozzo v Weir, 2004 ABQB 259. [8] Applying that law to the facts here, Alberta submits that the advice that SLIB received about the 1990 TLE is at the heart ofthis litigation, such that if SLIB was fully advised before signing the agreement, the action regarding the agreement should fail.

Also, asSLIB alleges that it relied on information and advice received from Alberta and Canada with respect to the nature and effect of theagreement and then alleges that such was inadequate or otherwise inappropriate necessarily put into issue the Plaintiffs knowledge of therelevant law and therefore the nature of the legal advice it received from others. In this case, their own legal advice.

The facts here areanalogous to those in Rogers where the Alberta Court of Appeal found that solicitor-client privilege was waived by the bank bringinginto issue what advice or information persuaded the bank to act as it did. [9] As SLIB has alleged that its members relied on the information and advice from Alberta and Canada and did not provideinformed consent, SLIB cannot engage in selective waiver. [10] Alberta submits that SLIB has lost the protection of solicitor-client privilege by directly putting into issue its understandingand knowledge of the law and by claiming reliance upon the advice of the Defendants as to the legal effect of the 1990 TLE.

Therefore,SLIB’s refusal to answer 13 undertakings on the basis of solicitor-client privilege is improper. Alberta submits that this evidence is notsufficient to uphold the claim of privilege.

[11] Alberta submits also that in now claiming solicitor-client privilege to prevent Alberta from discovering what the Plaintiffs didknow and what they were told about the ramifications of their agreements on their rights, the solicitor-client privilege must be found tobe waived under the test of fairness. 2. Position of Attorney General of Canada [12] Canada notes the extent of documentary production that has taken place in this action.

Canada points out that SLIB’sproduction indicates 150 of the produced 697 documents show a member of the Blaney McMurtry law firm as either the author orrecipient of having received a copy. Canada refers to examples. I summarize the examples as referencing the law firm’s retainer to assistin the outstanding treaty land entitlement claim of SLIB and such as matters as “agreement in principle reached on the Sturgeon LakeBand land claim”.

Canada’s production includes a document identified as a draft account issued by the law firm in 1989 which detailsthe services provided to SLIB include the following: To the initial drafting of the treaty land entitlement settlement agreements; . . .

To ongoing telephone communications and correspondence with Chief Sunshine regarding the form and content of the Memorandum ofIntent and the draft agreements; To further preparation for the meetings scheduled between ourselves on behalf of the Sturgeon Lake Indian Band, the Province ofAlberta and the Government of Canada in Toronto with respect to the final draft of the Memorandum of Intent; To drafting and attending to the execution of the appropriate Band Council Resolutions authorizing Mr. Potts’ execution of theMemorandum of Intent; . . .

To drafting of the settlement agreement between the Band and Canada; . . . To extensive revisions of the settlement agreement; . . . To the attendance of our Mr. Potts and Ms. Opekokew at the information session held for the members of the Sturgeon Lake IndianBand to inform them of the settlement agreements in Sturgeon Lake on March 21, 1989 and at that time making submissions inconjunction with Mr.

Kennedy; [13] In addition to the 697 documents identified and produced, SLIB has advised the Court that there are an additional 12 bindersover which they claim privilege. [14] Canada references correspondence dated December 5, 2002, where the Department of Justice wrote to the parties indicatingCanada’s view that the documents leading up to the execution of the 1990 TLE agreement were properly producible and invited the otherparties to raise any objections.

No response was received. [15] Canada references my own comments in my decision of Goodswimmer v Canada, 2005 ABQB 479 at paragraphs [23] and[24] as an accurate assessment of the law. [16] Canada acknowledges that a party can assert solicitor-client privilege, litigation privilege or settlement privilege; however,such privilege can also be waived either expressly on implicitly. The principles applicable to waiver of solicitor-client privilege are setout by Berger, J. in Ed Miller: [7] The applicable principles, in my view, are the following: 1.

The solicitor-client privilege does not extend to the very issue of an action: Nowak v. Sanyshyn (1979), (ON SC),23 O.R. (2d) 797, 9 C.P.C. 303 (H.C.); 2. A party may waive privilege by a pleading as well as by actually giving evidence of a privileged communication: Rogers v. Bank ofMontreal, 1985 397 (BC SC), (BC SC), [1985] 4 W.W.R. 503, 61 B.C.L.R. 239, 57 C.B.R. (N.S.) 251 (S.C.); 3. Privilege is waived when a party, by his testimony or pleading, voluntarily raises a defence or asserts a claim which makes hisknowledge of the law relevant: Alberta Wheat Pool v. Estrin, (AB KB), 49 Alta.

L.R. (2d) 176, [1987] 2 W.W.R. 532,14 C.P.C. (2d) 242, (sub nom. Alberta Wheat Pool v. Dawson Resources Ltd.) 75 A.R. 348 (Q.B.); Nowak v. Sanyshyn. In this regard, I respectfully agree with the comments of Mason J. in Petro Can Oil & Gas Corp. v. Resource Service Group Ltd. 19883474 (AB QB), (1988), (AB KB), 59 Alta. L.R. (2d) 34, 90 A.R. 220, 32 C.P.C. (2d) 50 (Q.B.), at p. 54 [C.P.C.]: The underlying rationale for finding implied waiver in such circumstances is based on fairness.

It would be unfair to permit a party whohas set up a claim or defence based on privileged communications to preclude his opponent from discovering against that claim byrelying upon the privilege. If privilege were successfully raised, the opponent would be left with no reasonable method of exploring thevalidity of the claim or defence … 4. A party asserting reliance upon legal advice will not be permitted to engage in selective waiver. Such an assertion places in issue all of

the party’s knowledge of the relevant law, however derived. The analogous principle is that of completeness. See also Great Atlantic Insurance Co. v. Home Insurance Co., [1981] 1 W.L.R. 529, [1981] 2 All E.R. 485 ; 8 Wigmore, para. 2327, p. 636. [ 17 ] Canada further notes that the Court in the Ed Miller (supra) decision referenced with approval Nowak v. Sanyshyn (supra) at paragraph 6. The Court stated: The issue -- perhaps the only issue -- in the case at bar is the advice obtained by the plaintiff before she signed the documents. If she was advised fully her action will fail; if she was not it may succeed.

It would, in my mind, be a distortion of the purpose of the rule to permit it to be used to prevent any inquiry into the matter by the defendants. [ 18 ] Further, the principle that privilege is waived when a party makes his knowledge of the law relevant is based on fairness: O’Scolai v Antrajenda , 2003 ABQB 77 . Further, procedural fairness is critical for a proper determination of the matters at issue.

This is confirmed in Lax Kw’alaams Indian Band v Canada (Attorney Canada) , 2011 SCC 56 where the Supreme Court of Canada specifically confirmed the rules of civil procedure that had to be observed in Aboriginal rights litigation to ensure a hearing that is fair to all stakeholders. [ 19 ] Here, Canada submits any privilege that could be asserted by SLIB in this litigation has been waived. The allegations in the fourth Amended Statement of Claim put squarely at issue the advice they received from Blaney McMurtry concerning the 1990 TLE agreement. The matter has been put at issue by Canada’s defence as well.

SLIB has identified as relevant and produced an extensive collection of records to or from or copied to Blaney McMurtry. The Affidavit of Carlene Scott filed in support of this application similarly exhibits correspondence and documents involving Blaney McMurtry. Canada submits that fairness prevents SLIB from picking and choosing among the records involving their lawyers and only relying upon those which they choose to rely. [ 20 ] Canada references 12 more binders on which privilege is claimed as being significant given that SLIB has only produced 16 binders of records. 3. Position of the Plaintiffs [ 21 ] Mr.

Freeman, on behalf of the Plaintiffs notes that although the onus starts on the Plaintiffs that it can be shifted. Then, in response to whether the pleadings themselves open the issue of waiver, Mr. Freeman distinguishes words in the pleadings “informed consent” from words used in the authorities, “legal advice”. [ 22 ] Mr.

Freeman in his brief states that as Alberta was not a party to the TLE that the legal advice given to the Plaintiffs is not material to the dispute with Alberta in this action. [ 23 ] He further submits that Alberta here is attempting to blame the lawyers when that is not what the Plaintiffs claim. At the heart of this submission, he submits that courts have said waiver only occurs where the party raises reliance on legal advice in its claim. The Plaintiffs here have not claimed reliance on legal advice. Further, that waiver of solicitor-client privilege only occurs to the extent fairness requires.

He refers to the long procedural history here and the consequence of the disclosure of the solicitor-client records being sought. Analysis [ 24 ] I have quoted my own

summary of the law of privilege in my previous decision in this action. I am of the view that the

summary remains current. Clearly, the detailed review of applicable principles set out by Berger J in Ed Miller applies as do the principles set out above. [ 25 ] Here, to begin with, I do not accept the Plaintiffs’ submission that as Alberta is not, according to the Plaintiffs, a party to the 1990 TLE that the

interpretation of the release contained therein and consequently legal advice given to the Plaintiffs is not material to the dispute with Alberta in this action. The Plaintiffs, in the many times Amended Statement of Claim, at paragraph 69, refer to the same releases as being given without informed consent with respect to the rights being ceded to Canada and Alberta and that as such are not binding on the Plaintiffs. Alberta was eventually added as a defendant to the Goodswimmer action.

In my view, these allegations on their own establish the relevance of the issue between Alberta and the Plaintiffs. [ 26 ] I further do not agree that this application is an improper attempt of Alberta to blame the lawyers. I also do not agree that by raising this issue the Defendants have in some manner overlooked other facts that are pled in this action, including such things as the referendum on the TLE not being in accordance with law and matters of Bill C31’s effect and improper voting. Clearly, there are many matters raised by these prolific pleadings.

That does not in any manner make any individual issue raised within the pleadings irrelevant as a matter of questioning. [ 27 ] I have great regard to the importance of the protection of solicitor-client privilege.

I also have great regard to the fact that fairness is in issue and fairness requires that any waiver be limited to what is necessary. [ 28 ] I cannot accept that in this case as the pleadings referred to informed consent rather than legal advice that that distinguishes the facts here from other cases where the latter phrase was used. [ 29 ] I am of the view, as submitted by Alberta and Canada, that here, the Plaintiffs by their pleadings have voluntarily asserted a claim which makes the Plaintiffs’ knowledge of the law relevant. As stated by Mason J. in Petro Can Oil & Gas Corp. v Resource

Service Group Ltd.(1988), (AB KB), 32 CPC (2d) 50 and adopted by Berger J. in Ed Miller, it would be unfair topermit a party who has set up a claim based on privileged communications to preclude his opponent from discovering against that claimby relying upon the privilege. Further, that indeed fairness would dictate disclosure here. [30] I am cognizant of the fact that the Plaintiffs did not themselves raise privileged communications, as can be stated occurred inother cases.

However, they did plead the lack of informed consent and in regards to Canada, reliance on adverse representation and bytheir own and Canada’s production here communications with Blake McMurtry have already been disclosed. [31] Canada has argued this issue somewhat differently from Alberta. Canada argues that in all of the circumstances, no claim ofsolicitor-client privilege can be made.

Alberta submits that any solicitor-client privilege has been waived by the pleadings. [32] In my view, the pleadings in their entirety do put the Plaintiffs’ knowledge of legal issues and the circumstances of theirentering into the 1990 TLE and associated releases as being executed with informed consent or not, into issue. Thus, the Plaintiffs havenot met the onus upon them of making out the privilege or that it applies here. [33] I am not of the view that all questions contemplated, and not before me, would be opened by this ruling.

I am also aware thatfacts on the ground have changed as I have reserved this decision for some time and the upcoming application for

summary judgment inJanuary has been the goal of Canada in this protracted proceeding. Thus, the Plaintiffs will answer questions previously refused thatrelate to legal advice. The parties can continue to come back to me within the context of case management should the Plaintiffs be of theview that this judgment has not covered any future questions directed at the Plaintiffs’ representative or, for clarification of this judgmentas it relates to the outstanding questions. Heard on the 22nd day of April, 2014. Dated at the City of Edmonton, Alberta this 4th day of December, 2014. D.A. Sulyma J.C.Q.B.A.

Appearances: Jeffrey Rath and Mark Freeman, Rath & Company for the Plaintiffs Linda Maj and Sheila M. Read, Department of Justice Canada for the Defendant, the Attorney General of Canada Lisa Semenchuk and Doug Titosky, Alberta Justice, Aboriginal Law for the Defendant, Her Majesty the Queen in Right of Alberta