Hudye Inc v Rosowsky, 2016 ABQB 724

Court of Queen’s Bench of Alberta Citation: Hudye Inc v Rosowsky, 2016 ABQB 724 Date: 20161220 Docket: 1401 02217 Registry: Calgary Between: James Rosowsky and James Rosowsky Professional Law Corporation Applicant - and - Hudye Inc., Hudye Inc. As Administrator Acting on Behalf of the Trustee of the Hudye Group Trust, Hudye Soil Services Inc., Hudye Farms Inc., Hudye Energy Inc., Hudye Energy Llc, Hudye Group Lp, Hudye Management Llc, Hudye Farms Us Inc., and Nutri Rx Inc. Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice M.

David Gates _______________________________________________________ [ 1 ] This is an application to compel production of a document. The Applicant (Defendant/Plaintiff by Counterclaim), James Rosowsky, is seeking an order directing the Respondent (Plaintiff/Defendant by Counterclaim) to produce a document alleged to have been used by their witness, Greg Hudye, to refresh his memory of past events in conjunction with his questioning on April 15, 2016.

The Respondent argues that the document is not producible because it is privileged. [ 2 ] This application was heard on November 9, 2016, at the conclusion of which I reserved my decision. These are my reasons for decision. I. Facts

[ 3 ] The Applicant, Mr. Rosowsky, filed an affidavit swearing that on April 14, 2016 he was being questioned by the Respondent’s counsel at the Respondent’s counsel’s office. After exiting the room, the Applicant observed the Respondent, Mr. Hudye, sitting in the reception area “reviewing” the contents of a file. [ 4 ] On April 15, 2016, Mr. Hudye was questioned. The Applicant was present for the questioning. [ 5 ] During the questioning, Mr. Hudye had an 8.5" x 11" piece of paper in front of him on top of a file. The 8.5" x 11" piece of paper was face up and contained typewritten notes.

The Applicant swears in his Affidavit that the file that was underneath the notes appeared to be the file that the Applicant observed Mr. Hudye reviewing one day earlier. [ 6 ] Applicant’s counsel, Mr. Klym, questioned Mr. Hudye on the notes and the file that were in front of him and the following exchange took place: Q: Now, Mr. Hudye, you’ve got some notes in front of you. A: M-hm. Q: Can you tell me what those notes relate to? A: Just my own notes. Just... Q: You prepared those notes yourself? A: Yes [ 7 ] At this point in the questioning Mr. Klym asked to mark the notes as an exhibit, and Mr.

Hudye’s counsel, Mr. Stein, objected and stated: “No, they were prepared as a part of his preparation, at my request, and they won’t be marked, and they won’t be referred to, and that’s the end of that matter.” Mr. Stein then turned the notes over so that they were face down in front of Mr. Hudye. [ 8 ] Mr. Klym continued questioning Mr. Hudye on the notes: Q: Now, did you prepare those notes yourself, sir? A: Yes. Q: And what did you prepare them from? A: Just from – from a – my own self. Q: All right. Did you prepare them utilizing other documents? A: Yes. Q: What documents were those, sir?

A: Just – just things that I thought I’d get asked on. [ 9 ] Mr. Klym then asked Mr. Hudye questions about the file that was underneath the notes: Q: Okay. Are those documents – the file folder that has now gone from you, down to the other end of the table, did it contain information that was provided to you by your counsel? A: It – it contained information that you have, everybody has. Q: Okay. So it wasn’t information given to you by your counsel? A: No. [ 10 ] There is then a discussion between Mr. Klym and Mr. Stein over whether the notes and file are producible and Mr. Hudye interjects: A: Excuse me.

During today’s questioning, not once did I look down at those notes. Not once. [ 11 ] During the hearing of this application I asked to inspect the notes and have reviewed their contents. II. Issues [ 12 ] The issues in this application are: (

a) Whether the notes attract either solicitor-client or litigation privilege? (

b) If the notes are privileged, whether privilege has been waived such that the notes are producible? (

c) If the notes are not privileged, whether the notes are producible?

III. Parties’ Positions A. The Applicant [13] The Applicant brings this application based on a suspicion and a concern that the notes were prepared by someone other thanMr. Hudye. [14] The Applicant submits that the notes are not protected by solicitor-client or litigation privilege. The Applicant asks the courtto draw an adverse inference that the notes are not privileged because the Respondent has failed to tender any evidence to support theirposition that the notes are privileged. If the notes are not privileged, then based on the Applicant’s Affidavit that Mr.

Hudye appeared tohave “reviewed” the notes the day prior to his questioning, the Applicant should be able to cross-examine Mr. Hudye on the notes. [15] If the notes are privileged, the Applicant submits that the privilege was waived when Mr. Hudye used the notes to refresh hismemory on the day prior to his questioning. They submit that the test for whether privilege is waived is whether the witness referred tothe notes any time before or during questioning to refresh his memory, relying on R v Fast, 2009 BCSC 1671. The Applicant, again, asksthe court to draw an adverse inference that Mr.

Hudye used the notes to refresh his memory before the questioning because theRespondent failed to adduce any evidence to support their position that the notes were not used by Mr. Hudye to refresh his memory. [16] Finally, the Applicant says that evidence that the notes are privileged, and that the Respondent did not refer to the notes torefresh his memory on the day prior to his questioning, is easily obtainable – the Respondent could have filed an affidavit to that effect –but they did not do so despite having several months to prepare such evidence. B.

The Respondent [17] In its written submissions, the Respondents contend that the notes were prepared by Mr. Hudye reflecting discussions with hiscounsel and are therefore subject to solicitor-client privilege. [18] During oral argument, the Respondent’s position was that the notes properly attract litigation privilege. The Respondentsubmits that the notes were prepared on the basis of documents that were produced during discovery and that those documents wereprovided to Mr. Hudye through his counsel. The Respondent contends that the mere fact that Mr.

Hudye was given documents fromeither the Plaintiff or the Defendant’s Affidavit of Records is sufficient for any notes made by Mr. Hudye referencing those documents toattract litigation privilege. (I would, however, note that the Respondent provided no authority for such a proposition.) [19] Assuming the notes are privileged, the Respondent argues that privilege is only waived if the notes were referred to duringthe course of questioning.

The Respondent relies on Bradley v Eastern Platinum Ltd, 2015 ONSC 108, for the proposition that awitness must refer to the document during questioning to refresh his memory in order for the document to be producible. The questioningtranscript shows that Mr. Hudye stated under oath that he did not look at the notes during questioning. [20] If the notes are not privileged, the Respondent argues that the notes are not relevant and therefore not producible. [21] In regards to the evidence, the Respondent argues that the Applicant’s Affidavit contains pure speculation that (

a) the file hesaw on April 14, 2016 is the same file that was in front of Mr. Hudye on April 15, 2016, and (

b) the notes were part of the file viewed onApril 14, 2016. In the result, according to the Respondent, there is simply no evidence that the material in Mr. Hudye’s possession at thetime of questioning was the same material he was observed to be reading the previous day. IV. The Law [22] In R v Fast, 2009 BCSC 1671, while testifying during his trial for driving under the influence, the accused admitted to usingnotes to refresh his memory a few days before testifying in court. The trial judge ordered that the notes be produced.

On appeal the courtstated the following regarding privilege (at paras 30-31): A person claiming privilege must do more than just make a bare assertion of privilege; evidence must substantiate the claim: R. v. Chan,2002 ABQB 753, 325 A.R. 208 at para. 41. When deciding the type of privilege the communication falls under, the judge should applythe “dominant purpose test”: Blank v. Canada (Minister of Justice), 2006 SCC 39, [2006] 2 S.C.R. 319.

Therefore, in the case at bar,before solicitor-client privilege could protect the refresh document, the appellant had to satisfy the judge that he created it and gave it tocounsel for the purpose of obtaining legal advice. Likewise, before litigation privilege could protect the document, the appellant had tosatisfy the judge that he created the document for the purpose of either preparing for trial or facilitating conversations with a lawyer inanticipation of litigation: R. v. Abeyewardene, [2008] O.J. No. 5749 (Sup. Ct.) (QL).

Alternatively, if the appellant created the document to serve as an aide memoire, that is, to be used by him to refresh his memory at trial,the document would not privileged: Attorney-General for Ontario v. C.E.C. Edwards Construction et al. (1987), (ONSC), 60 O.R. (2d) 618, 23 C.P.C. (2d) 61 (Sup. Ct.). The reasoning here is that a witness who creates a document purely for futurerefresh purposes cannot be said to have an expectation that the notes would be kept confidential, a hallmark of privilege, since thewitness created them in the first place “for the express purpose of making use of them at trial” (C.E.C.

Edwards at 622). [23] Solicitor-client privilege applies to (

a) a communication between solicitor and client; (

b) which entails the seeking or giving oflegal advice, and (

c) which is intended to be confidential by the parties: Solosky v Canada, (SCC), [1980] 1 SCR 821 at837. [24] In Fast, the court noted the following with respect to the relevant time-frame to determine whether there has been waiver of

privilege (at para 24): In my view, when a witness refreshes, evidence about the degree to which their reading of the document has refreshed (or influenced)their memory is the governing question for the exercise of the judge’s discretion on the question of whether the witness has refreshedtheir memory. Evidence about when the witness reviewed the document is an important consideration in deciding that question, but it isnot conclusive, and the timing of the refresh is only on factor, albeit an important one, to consider.

Restricting the question to the timingof the refresh unduly fetters the evaluative exercise of the judge’s discretion. While Fast was a criminal case, the court surveyed authorities on this topic from civil law cases and concluded (at para 45): Civil law cases divide over the question whether a refresh beyond a mere glance before or during examination for discovery constitutes awaiver.

However, in the case of a witness who refreshes (beyond a mere glance) during or before giving testimony at trial, the civil lawweighs strongly in favour of a finding that the witness has waived privilege over the refresh document [citations omitted]. [25] In Olivito v Dominion of Canada (2006), 41 CCLI (4th) 146 (Ont Master), the Master held that notes that were made during ameeting between the witness and her counsel, brought into the questioning by the witness, but never referred to during the examination,were privileged and the privilege was not waived. [26] In Bot Construction v Dumoulin, 2010 ONSC 6569, the witness had handwritten notes in front of him during his examinationfor discovery.

The witness claimed that the notes were intended to be private notes between himself and his solicitor, and therefore thenotes were privileged. The court held that the notes were not producible because (

a) the court accepted the witness’ evidence that thewitness intended to bring the points in the notes to his lawyer’s attention, and (

b) there was no evidence that the witness referred to thenotes “on his discovery” to refresh his memory (at para 24). [27] In Bradley v Eastern Platinum Ltd, 2015 ONSC 108 the respondent had materials (affidavits, some highlighting, and notes)in front of him during questioning that he claimed were properly the subject of litigation privilege.

As there was no evidence that thewitness used the materials to refresh his memory, the court held that the privileged materials were not producible. [28] In Thyssen Mining Construction of Canada Ltd v Kamad Silver Co (NPL), [1977] 1 ACWS 760 (BC SC), notes were foundto be subject to solicitor-client privilege because they were prepared by the corporate defendant’s solicitor after meeting with the witnessin the course of litigation (at paras 6-13). The corporate defendant’s solicitor filed an affidavit explaining why the notes were privileged(at para 6).

The court held that a mere glance at a document is not sufficient to waive privilege (at paras 16, 18). [29] At paragraph 15 of Thyssen the court cites McColl Frontenac Oil Co v McIntosh, [1956] Que QB 195, at 197 where JusticeMcDougall held that the file at issue in that case was not privileged, stating: “[t]he mere statement by counsel that ‘this is a confidentialfile, it belongs to Charles Warnock and Company’, is not sufficient.” [30] In Wroniak v Allstate Insurance Co of Canada, [1997] OJ No 544 (Ct J (Gen Div), the plaintiff, who was seeking an orderfor production of handwritten and computer printed notes, conceded that the notes were made in contemplation of litigation andaccordingly privileged communication between the witness and his solicitors.

The court held that reference to privileged documents inpreparation for examination for discovery does not waive privilege (at para 14). The court also held that there was no difference insubstance to a review of notes one month prior to examination for discovery and a review of notes during the course of the examinationfor discovery (at paras 13-14).

In addition, the court held that the manner in which the witness was questioned directed him to refer to hisnotes (at para 15). [31] In HD Linn Development Services Inc v Darwall Enterprises Ltd (1985), (SK KB), 37 Sask R 235 (QB),the witness referred to notes during questioning. The notes were a compilation of information gleaned from minutes, records and thewitness’ memory, and were prepared on the instructions of counsel. During questioning, the witness stated that the notes were preparedfor counsel at counsel’s request.

The court held that the notes were privileged because they were made on a “confidential basis for theexpress purpose of enabling counsel to defend the existing litigation” (at para 5). However, the court held that privilege had been waivedwhen the witness referred to the notes to refresh his memory during questioning. V. Analysis Are the Notes Privileged? [32] The Respondent relies on numerous authorities where courts have considered an application similar to this one. However,none of these authorities address the threshold issue of whether the notes are in fact privileged.

All of the cases that the Respondentrelies on are cases where the court found that the document at issue was privileged. [33] The burden is on the Respondent to establish that the notes are privileged: R v Chan, 2002 ABQB 753 at para 41. A bareassertion that the notes are privileged is insufficient, evidence is required: Chan at 41. The Respondent failed to advance any evidencebefore the court that the notes are privileged. [34] All of the evidence relevant to the issue of privilege is contained in the questioning transcript of Mr. Hudye. In the transcript,Mr.

Hudye states that he prepared the notes himself by looking at documents that “everybody has”, about “things” he thought he wouldget asked about. When asked whether any of the documents that were in front of him during the questioning were documents provided tohim by his lawyer he answered “no”. Based on the entirety of the transcript I accept that when Mr. Hudye said that he looked atdocuments that “everybody has” he was referring to documents that were part of the disclosure. [35] The Respondent relies on Mr. Stein’s assertion during questioning that the notes are privileged. In my view, this assertion by

counsel during the course of questioning is not evidence, and is insufficient to establish privilege: McColl cited in Thyssen. [36] With respect to solicitor-client privilege, there is no evidence that the notes (

i) are a communication made between Mr. Hudyeand his counsel, (ii) entail the seeking or giving of legal advice, and (iii) are intended to be confidential. The Respondent stated in theirbrief that the notes were prepared by Mr. Hudye reflecting discussions with his counsel. During oral argument, the Respondent statedthat the notes were prepared by Mr. Hudye at the request of counsel. I am satisfied that both of these statements are inconsistent with Mr.Hudye’s evidence during questioning. [37] The Respondent contends that because Mr.

Hudye is a director of the Plaintiff corporation his notes are protected by solicitor-client privilege. The Applicant, on the other hand, submits that Mr. Hudye cannot claim privilege because he is an employee of theRespondent corporation. In light of the fact that the notes do not meet the Solosky criteria, it is not necessary for me to address this issueto resolve the application before me.

I would, however, point out that it is clear from the Supreme Court’s decision Solosky that solicitorclient privilege must be established for each document: Solosky at 837. [38] With respect to litigation privilege, the Respondent argues that because Mr. Hudye prepared the notes on the basis ofdocuments from the Respondent’s Affidavit of Records the notes are privileged. The Respondent cites no authority for this proposition.The test for whether litigation privilege attaches to a document is whether the document was created for the dominant purpose oflitigation: Blank v Canada (Minister of Justice), 2006 SCC 39.

The test is not whether the document was prepared with reference toother documents produced in the course of litigation. [39] As previously indicated, there is no affidavit from Mr. Hudye before me. Rather, the Respondents rely entirely on thecontent of Mr. Hudye’s questioning to support the various positions they advance on this application. I agree with the Applicant thatevidence to establish privilege, solicitor-client privilege and/or litigation privilege, was likely easily obtainable through an affidavitsworn by Mr.

Hudye: see Talisman Energy Inc v Flo-Dynamics Systems Inc, 2015 ABQB 561 at paras 11-12 cited in Alberta v SuncorEnergy Inc, 2016 ABQB 264 at para 60. The absence of such evidence supports, in my view, the Applicant’s contention that noprivilege attached to these notes. [40] I am satisfied that the dominant purpose for the preparation of these notes was to assist Mr. Hudye by refreshing his memoryduring questioning, and, as such, are not protected by litigation privilege: Fast at para 31; see also Gilchrist v Oatway (1994), (AB KB), 159 AR 334 (QB) at para 17.

There is no evidence that the notes were created at the request of counsel or thatthey were intended to be shared with counsel. Mr. Hudye testified under oath that he created the notes on his own initiative relative tomatters he anticipated he would be asked about during questioning. There is nothing in the evidence to suggest that the notes were inanyway intended to assist in the ongoing litigation beyond refreshing Mr. Hudye’s memory. Mr. Hudye prepared the notes for thepurposes of assisting him give evidence at questioning.

Under these circumstances, I am not persuaded that any form of privilegeattached to the notes, and they are therefore producible.

If the Notes Were Privileged, Has the Privilege Been Waived? [41] If I am wrong and the notes are in fact privileged, I find that privilege has been waived and the notes are producible. [42] The burden is on the party seeking disclosure to establish that privilege has been waived: Goodswimmer v Canada (AttorneyGeneral), 2015 ABCA 253 at para 43, leave to appeal to SCC refused [2015] SCCA No 394. [43] The parties agree that privilege can be waived when a witness refers to notes for the purpose of giving evidence atquestioning.

The parties disagree, however, on the relevant time frame that must be considered in determining whether the witnessreferred to notes for the purpose of refreshing their memory. Relying on Fast, the Applicant advances a broad

interpretation, i.e. that itis sufficient for a witness to have referred to the notes anytime “during or before” the questioning. The Respondents, relying on Bradley,advance a narrow

interpretation, specifically that the witness must refer to the notes during the questioning. [44] I accept the reasoning in Fast that the issue is the degree to which the witness has relied on the document to refresh theirmemory, and the time frame within which the notes were prepared and/or reviewed is relevant, though not conclusive.

It is reasonable toassume that the closer in time to their testimony a witness refers to a document to refresh their memory, the higher their degree ofreliance is on that document. [45] Whether a witness refreshes their memory a minute before entering the room for examination for discovery, or during thediscovery itself should not be determinative of the issue. The principle that a witness waives privilege once they refresh their memory isgrounded in the governing principle of trial fairness (Fast at para 46).

If the witness provides evidence that is not a true recollection, butrather a recollection “refreshed” through reference to a pre-prepared document, the opposing party is entitled to cross-examine thewitness on that document to test the credibility and reliability of the witness’ memory. Making a distinction between refreshing one’smemory prior to an examination and refreshing one’s memory during an examination serves no purpose towards advancing trial fairness. In reaching this conclusion, I am mindful that the adoption of too broad an

interpretation would too easily defeat privilege. (See alsoCopeland (Litigation Guardian of) v Fry, [2002] OJ No 1356 at para 8, where the court applied similar reasoning.) [46] The Applicant’s evidence is unchallenged: the Applicant saw Mr. Hudye reviewing a file the day before his questioning andthe file appeared to be the same file that was face up in front of him during his questioning. The Applicant did not, and could not, swearthat the contents of the April 14, 2016, file were the same as the contents of the April 15, 2016 file. In the absence of any evidence fromMr.

Hudye, however, the Applicant’s observations support a reasonable inference that they were in fact the same file. [47] Given the Applicant’s observations and Mr. Hudye’s own evidence, I find that Mr. Hudye relied on the notes to refresh hismemory notwithstanding the fact that he did not look at the notes during questioning on April 15, 2016. Are the Notes Producible?

[ 48 ] Having found that the notes are not privileged, the Respondent argues that the notes are not producible because they are not relevant. Mr. Hudye’s own evidence is that the notes pertain to “things” he thought he would “get asked on” at questioning. I fail to see any merit to the Respondent’s suggestion that the notes are not relevant. Conclusion [ 49 ] For the foregoing reasons, the application is allowed with costs. Heard on the 9 th day of November, 2016. Dated at the City of Calgary, Alberta this 20 th day of December, 2016. M. David Gates J.C.Q.B.A. Appearances: William S. Klym Lee McMillan for the Applicant Taryn C. Burnett for the Respondent