Power v RGMP, 2021 ABQB 877

Court of Queen’s Bench of Alberta Citation: Power v RGMP, 2021 ABQB 877 Date: 20211104 Docket: 160107471 Registry: Calgary Between: Lisa Power, Robert Power, Panglossian Investment Corp. and Beijing Investment Consultancy Ltd. Plaintiffs - and - Richardson GMP Ltd., Darren Harrold Defendants _______________________________________________________ Memorandum of Decision of the Honourable Justice April Grosse _______________________________________________________ INTRODUCTION [ 1 ] Two Applications arise out of disputes over record production and undertaking responses.

The main issue is the scope of solicitor-client privilege and “common interest privilege” in the context of a financing transaction.

FACTS AND PROCEDURAL CONTEXT [ 2 ] Lisa Power, Robert Power and corporations controlled by them (collectively, the “Power Plaintiffs”) have commenced two actions arising out of their participation in financing of CanAm Coal Corp. by way of shares and debentures. For the purpose of the Applications at bar, the key transaction is the issuance of debentures in or about May, 2014 (the “2018 Debentures”). CanAm had previously issued debentures known as the 2014 and 2016 Debentures.

The parties agree that on or about April 30, 2014, CanAm entered an agreement with Richardson GMP Limited (“RGMP”), pursuant to which RGMP would market the 2018 Debentures as agent for CanAm. [ 3 ] It is common ground that the subscription agreement(

s) the Power Plaintiffs [1] entered into to acquire the 2018 Debentures called for, among other things, certain steps to be taken in respect of securing those Debentures and the 2016 Debentures. The security was in the form of assets held by US subsidiaries of CanAm. The Power Plaintiffs claim, among other things, that the 2016 and 2018 Debentures were not secured as promised and that they have suffered a resulting loss. [ 4 ] Action 1601-04397 is the Power Plaintiffs’ action against CanAm and certain CanAm managers and directors. It sounds in breach of contract, misrepresentation and oppression.

In its Statement of Defence, CanAm pleads, among other things, that the Debentures were secured as required, but to the extent that was not the case, issues with security enforceability were caused or contributed to by delays or other failures on the part of RGMP. [ 5 ] In Action 1601-07471, the Defendants are RGMP and an RGMP employee Harrold. The Power Plaintiffs allege that along with acting as CanAm’s agent for the issuance of the 2018 Debentures, RGMP took on a dual agency role for the Power Plaintiffs in respect of their subscription for the 2018 Debentures.

They allege that RGMP breached fiduciary duties to them, including by failing to take adequate steps to ensure that the promised security was in place. The Power Plaintiffs also allege negligence and breach of contract. RGMP denies liability and among other defences, pleads that as between CanAm and RGMP, CanAm was contractually obliged to take certain steps to secure the debentures. [ 6 ] There are two other actions relating to these matters.

The parties entered into a Consent Order directing that all four actions proceed together, and that disclosure of information and questioning of witnesses proceed as if the actions were consolidated. All produced records and questioning may be used in each action and all interlocutory applications are filed in the RGMP Action. Accordingly, this decision is released under the RGMP Action number.

I am case manager for all the actions. [ 7 ] On February 21, 2020, the Power Plaintiffs filed an Application (the “Undertaking Application”) for an Order compelling certain CanAm Defendants to answer undertakings, two of which remain in issue: Undertaking 19: To produce weekly e-mails that were sent to RGMP to find out when the final security would be in place. Undertaking 28: To provide correspondence and communications between CanAm and counsel and RGMP and counsel to end of February 2015 and beyond.

The Undertaking Application arose because CanAm advised that there were documents responsive to these undertakings but withheld based on claims of privilege. [ 8 ] On April 19, 2021, the Power Plaintiffs filed a second Application (the “Production Application”) seeking production of a number of other records over which certain CanAm Defendants had claimed privilege in their Affidavits of Records. [ 9 ] I heard both Applications on June 18, 2021. By that time, the parties had exchanged further information and were able to narrow the list of records in dispute.

They essentially agreed that the records still at issue in the Production Application should be provided to the Court in unredacted form, which occurred on July 2, 2021. At my request, they also submitted a chart in the nature of a Redfern

schedule (the “Chart”), presenting each party’s specific comments on each record in one place, with a column for the Court to record its directions. [ 10 ] I do not have a specific list of records at issue in the Undertaking Application. [ 11 ] Although the Applications are in respect of CanAm’s record production and undertakings, they involve some records over which RGMP claims privilege. RGMP participated in the Applications. [ 12 ] The chart is well suited to recording specific directions on specific records.

This Memorandum of Decision is intended to set out the applicable legal principles, themes and some examples, so as to provide context and general reasoning for the detailed findings recorded on the Chart, which is released concurrently under a separate file endorsement. ISSUES [ 13 ] In a broad sense, the issue is whether the disputed records are producible or subject to a proper claim of privilege. The arguments of the parties give rise to the following sub-issues: (

a) Are the disputed records subject to solicitor-client privilege and common interest privilege? (

b) Have the CanAm Defendants and RGMP waived any privilege they would otherwise have over communication between them by putting the communications in issue in their Statements of Defence?

ANALYSIS A. Relevance and Materiality [14] A record is only producible if it is relevant and material. If not, privilege does not matter; the record is not producible. I havenot been asked to determine relevance and materiality in these Applications and have not done so. RGMP made some notes in the Chartquestioning relevance and materiality. However, my understanding is that all of the disputed records in the Production Application arelisted in

Schedule 2 of the Affidavits of Records of the applicable CanAm Defendants. In other words, they are listed as relevant andmaterial records over which there is an objection to produce on the basis of privilege. Similarly, I understand that the objection toproduce further records in the Undertaking Application is based on privilege alone. B.

Solicitor-Client Privilege [15] While the CanAm Defendants originally claimed solicitor-client and litigation privilege over some records, by the time theApplications were argued, all claims of litigation privilege were withdrawn. [16] Solicitor-client privilege is not merely a rule of evidence. It is recognized as a fundamental principle of substance, as close toabsolute as possible: R v McClure, 2001 SCC 14 at paras 2, 5 and 35. In order for a communication to be protected by solicitor-clientprivilege, it must: (

a) Be made between a lawyer and a client; (

b) Entail seeking or providing legal advice; and (

c) Be intended by the lawyer and client to be confidential. Canada v Solosky, (SCC), [1980] 1 SCR 821 at 837. [17] Although not all communications between legal counsel and a client are privileged, the Court does not engage in a line by linereview to identify “advice”. A “continuum of communications” between lawyer and client is necessary in order for the lawyer tounderstand the client’s circumstances and advise accordingly.

Communications are protected if they fall within that continuum, even ifthat particular communication does not itself specifically include advice or a request for advice: Blood Tribe v Canada (AttorneyGeneral), 2010 ABCA 112 at para 26. This is consistent with one of the underlying premises of solicitor-client privilege, being the needfor clients and lawyers to be able to communicate freely and candidly: McClure at para 2.

Undue parsing would thwart this objective.Where a corporation is the client, communications within the corporation for the purposes of discussing a request for advice, or advicereceived, or otherwise to obtain advice and instruct counsel, may be subject to solicitor-client privilege: Bank of Montreal v Tortora,2010 BCSC 1430 at para 12. [18] Whether a particular communication is privileged is contextual and must be decided based on the evidence in the case beforethe court: General Accident Assurance Co v Chrusz, (ON CA), 1999 CarswellOnt 2898 at paras 95-96, per DohertyJA, dissenting on other points.

The party asserting a privilege bears the onus of establishing the privilege: Alberta (Provincial Treasurer)v Pocklington Foods Inc, 1993 ABCA 69; 1993 CarswellAlta 312 at para 42. The Court may infer that some elements of the test are met,without specific evidence: Blood Tribe at para 19. For example, if a communication is clearly between a lawyer and client for thepurpose of giving or receiving legal advice, and there is no evidence that it was shared with any third party, an inference is readilyavailable that the communication was intended to be confidential. C.

Common Interest Privilege [19] Many of the records in dispute are not communications between one party and their counsel. Rather, they are communicationsbetween CanAm and RGMP, or between their respective transaction counsel, or some combination of parties and counsel. In cases wherethe communication is not between counsel and client, CanAm and RGMP argue that the records are subject to “common interestprivilege”.

They describe the communications as being “in furtherance of the transaction” or “for the purposes of completing theoffering” or similar descriptions. [20] “Common interest privilege” is not a stand-alone privilege. Common interest privilege only protects records that areotherwise protected by another privilege. In fact, it is frequently suggested that common interest privilege is not a privilege at all, butrather, an exception to the doctrine of waiver: Piney Bowes of Canada Ltd v R, 2003 FTC 214 at para 14; A Dodek, Solicitor-ClientPrivilege (LexisNexis Canada Inc, 2014) at §7.162.

Because confidentiality is an essential element of solicitor-client privilege, if a partyknowingly shares communication that would otherwise meet the test for solicitor-client privilege with a third party, the privilege is oftenwaived: see the

summary of waiver in Dodek, supra at §7.4.

Common interest privilege acknowledges that in some circumstances, theholder of the privilege and the third party may have sufficient common interest in the subject matter of the privileged communication,including an interest in maintaining confidence, that disclosure to the third party does not interfere with the communication’s privilegedstatus. [21] “Common interest privilege” was originally recognized in the context of parties with a common interest in the subject matterof anticipated litigation sharing advice or documents: Buttes Gas and Oil Co v Hammer (No 3), [1980] All ER 475 (Eng CA), varied[1982] AC 888 (HL).

It has been applied to both communication subject to solicitor-client privilege and to information subject tolitigation privilege. For the purposes of this decision, I need not address the distinctions between those two privileges and theirunderpinnings, and how those distinctions impact the application of “common interest privilege”: see Pinder v Sproule, 2003 ABQB 33at paras 54, 62. It is important that a party claiming “common interest privilege” articulate the basis on which the record is privileged

and how the “common interest privilege” applies to that particular record. [ 22 ] I note at this juncture that common interest privilege is not to be confused with joint client privilege. The latter applies where two parties retain the same counsel, or in other circumstances where the advice is deemed to be sought for the joint benefit of more than one party: Dodek, supra at §2.4. There is no claim of joint client privilege here. [ 23 ] Common interest privilege has now expanded beyond the context of litigation or anticipated litigation.

Canadian law recognizes that parties to a transaction may enjoy common interest privilege. [2] In Iggillis Holdings Inc v Canada (Minister of National Revenue) , the Federal Court of Appeal described common interest privilege in the transaction context as follows: “…solicitor-client privilege is not waived when an opinion provided by a lawyer to one party is disclosed, on a confidential basis, to other parties with sufficient common interest in the same transaction s”: Iggillis Holdings Inc v Canada (Minister of National Revenue) , 2018 FCA 51 at para 41 ; leave to appeal dismissed [2018] SCCA No 207 (QL). [ 24 ] Most of the commonly cited cases on common interest privilege in a transaction context involve substantive legal opinions shared by parties to a transaction, often on a specific legal point, such as foreign law or tax: for example, see Archean Energy Ltd v Minister of National Revenue , 1997 CarswellAlta 247 at para 30 ; Fraser Milner Casgrain LLP v Minister of National Resources , 2002 BCSC 1344 ; Pitney Bowes of Canada Ltd v R , 2003 FCT 214 ; Iggillis, supra .

Another confirmed example is disclosure of privileged records so as to permit the counterparty to do due diligence on the underlying subject matter: Anderson Exploration Ltd v Pan-Alberta Gas Ltd, 1998 ABQB 455 . D. Application to the Records in Issue 1. Production Application: Internal CanAm Communications and Communications with CanAm Counsel [ 25 ] There are a number of the disputed records in the Production Application that are, on the face of the description in the Chart, communications between CanAm representatives and CanAm counsel only.

The Affidavits of Records of the applicable CanAm Defendants do not fully establish the privilege in that they only refer to “communications and copies of communications between solicitor and client”, without mention of the communications entailing giving or receiving legal advice, or being confidential. The description should address all elements of the test of privilege, but the Power Plaintiffs do not make their challenge based on this gap in the Affidavit of Records.

There is nothing on the record in this case to suggest that any counsel were acting in any capacity other than legal, or that there was no confidentiality as between CanAm counsel and their own client. In fact, the Plaintiffs articulate no particular reason for questioning the claim of privilege over most of the records between CanAm counsel and CanAm.

In the final version of the chart, the Plaintiffs often comment, “any portion Court determines is privileged can be redacted.” [ 26 ] Because I was reviewing records anyway, I looked at these records in the package and have confirmed that they meet the test for solicitor-client privilege. Based on the content of the records themselves and the context, I can conclude that they are communications between a lawyer and client for the purpose of giving or receiving legal advice, intended to be confidential.

I have also confirmed that the internal CanAm communications over which privilege is claimed fall within the continuum necessary for giving and receiving legal advice. It should be clear, however, that the court’s role in record production is secondary and is limited to resolving legitimate disputes. The primary responsibility for record production lies with the parties.

It should not occur that one party makes sweeping claims of privilege, or that the other party makes sweeping challenges to privilege, on the understanding that the records can all just be packaged up and sent to a judge to decide where to draw the lines. 2.

Production Application: Communications Between RGMP and CanAm [ 27 ] The context permits an inference that the communications between RGMP and CanAm (and their respective transaction counsel) were made in confidence in the sense that neither expected the other to be broadcasting those communications to parties outside the transaction. [3] [ 28 ] I can also infer from the context that CanAm, RGMP and their respective lawyers all had a common interest in furthering and completing the 2018 Debenture offering.

There is an additional commonality because RGMP and CanAm were not mere counterparties; RGMP was CanAm’s agent for the offering. While the latter is relevant, the Defendants’ arguments on common interest privilege are based on “transactional common interest privilege” and not on the law of common interest privilege as it otherwise may apply to principals and agents. [ 29 ] Even with those inferences available, confidentiality and a general common interest in completing a transaction do not create a privilege, regardless of whether lawyers are involved.

There is no recognized class privilege protecting the transaction process, as there is, for example, protecting the adversarial litigation process: Blank at para 27. [ 30 ] The party claiming privilege has the onus of demonstrating the privilege. In order for any of the records in issue to be privileged from disclosure to the Power Plaintiffs, CanAm and RGMP must demonstrate that they meet the test for solicitor-client privilege. That is the only privilege claimed to support the further assertion of common interest privilege.

CanAm and RGMP have withdrawn any assertions of litigation privilege and they have not argued for a case by case application of what is commonly known as the Wigmore test. [ 31 ] Along with demonstrating the underlying solicitor-client privilege, CanAm and RGMP also have to demonstrate that any revelation of otherwise privileged communications was in fact intended to be a sharing of such communications in confidence, and that there was a sufficient common interest in respect of the particular shared communication(

s) in the context of the transaction. A general common interest in completing the transaction is not necessarily sufficient on its own. Most transactions require two or more willing participants who want to complete the transaction for one reason or another. Yet, disclosure of otherwise privileged communication in the context of the transaction is not automatically covered by common interest privilege: Pitney Bowes at para 19.

[ 32 ] I noted above that where communications are clearly between a lawyer and their client, the court often is able to infer that all elements of solicitor-client privilege are present without direct evidence, assuming no evidence to the contrary. Those same inferences are not necessarily available when the communication is, on its face, directed to another party. Parties claiming privilege in these circumstances should expect more scrutiny as to whether the communication meets all of the elements of solicitor-client privilege in the first place, and if so, whether common interest privilege applies.

On the latter point, I am aware that the onus to prove waiver is generally on the party claiming waiver. However, I have not seen any authority equating this to an obligation on the party challenging a claim of privilege to dis-prove a common interest privilege.

In the face of intentional sharing between independent parties, particularly where they are represented by counsel, it seems there is at least an evidentiary burden on the party claiming the benefit of a common interest privilege to establish the requisite circumstances. [ 33 ] In many of the commonly-cited authorities on transactional common interest privilege, it appears the application record included affidavits from parties or counsel involved in the transaction to support the claim of privilege. There are no such affidavits before me in this case.

The Power Plaintiffs filed two Affidavits of a legal assistant in support of the Applications; the Defendants did not file any evidence in response. I am not critical. There are many reasons for which a party might choose not to proffer evidence. I simply make my decisions on privilege on the application record as it stands, being the face of the disputed records themselves and the apparent context. a.

Not all communications involving opposing counsel share legal advice [ 34 ] I have concluded that for most of the records at issue in the Production Application, CanAm and RGMP have not demonstrated solicitor-client privilege and accordingly, they cannot be protected by common interest privilege. While common interest privilege is often part of a waiver analysis, for most of these records, I need not go that far. The records are simply not solicitor-client privileged communications to begin with.

Unlike the records at issue in many of the authorities, the disputed records here tend to be the actual communications between the parties and counsel, as opposed to underlying legal opinions that were forwarded or otherwise shared.

It is important to scrutinize whether a record is subject to solicitor-client privilege at all, before jumping to a common interest privilege or waiver analysis. [ 35 ] In considering the application of solicitor-client privilege and common interest privilege in this context, I see a distinction between a party conveying a position, or making a request or demand of the other party, and sharing legal advice. To take a general example, not at issue in this particular case, counsel may provide advice to a client that a certain form of indemnity would be in the client’s best interest.

Such advice is prima facie subject to solicitor-client privilege. However, if the client accepts that advice, and, in the course of negotiations with the counterparty, requests the inclusion of that indemnity, the request to the counter-party is not likely to be treated as sharing solicitor-client privileged information. The same is true whether the request for the indemnity is conveyed by the client or by counsel. Without more, the request for the indemnity is more akin to a statement of position, or a volley in the negotiations, than to a sharing of privileged legal advice.

If all such communications were protected under the umbrella of solicitor-client privilege and common interest privilege, just because they were based on legal advice, or because counsel was involved in the communication, it would amount, in effect, to the creation of a stand-alone transactional privilege for any deals involving counsel. No such privilege has ever been recognized. CanAm and RGMP do not expressly argue for any such recognition, but it would be the natural extension of their position. [ 36 ] Of course, the line may not always be clear, and each case turns on its own facts and record.

A series of similar communication could be found to be privileged in one case, and not in another, either because of differing surrounding circumstances, different specific content, different specificity of evidence before the court, or a myriad of other factors.

My reasons herein should not be taken as trying to draw hard and fast rules about certain types of records or patterns of communications in the context of every commercial transaction. [ 37 ] General descriptions of types of records that I have concluded are not privileged in the Production Application include: • Emails between counsel requesting or providing status updates. • Emails directly between counsel for one party and representatives of the other party requesting or providing factual information. • Communications between the parties discussing tasks to be completed and requesting or providing factual information.

In my view, an exchange as to who each party is retaining as counsel falls within this category and is not privileged, even where counsel is introduced by copying them. • Internal communications amongst CanAm personnel, not involving CanAm counsel, relating to gathering information to respond to a request for information from RGMP or RGMP’s counsel.

The face of the communications, context and evidentiary record do not establish that these are part of the continuum of communications for giving or receiving legal advice. [ 38 ] The issue with respect to the above records is not whether there was waiver saved by common interest privilege. Rather, they are not protected by solicitor-client privilege in the first place. They are communications between the parties or their counsel that do not amount to sharing of legal advice. [ 39 ] Record CAN445255 merits further explanation.

An RGMP representative asked CanAm’s counsel for an explanation of a particular aspect of the transaction. CanAm’s counsel responded. In theory, this type of communication could represent a situation where it was wasteful for each party to seek the advice of their own counsel, or where there was some other reason for CanAm’s counsel to provide advice to both parties in the common interest of advancing the transaction or on a limited scope joint client retainer. This is particularly plausible given the agency aspect to the CanAm/RGMP relationship.

However, there are also plausible characterizations that do not attract privilege, such as counsel explaining CanAm’s understanding on the point without giving legal advice. The content of the correspondence itself is not definitive one way or the other. For this particular record, neither CanAm nor RGMP specifies in its argument by way of the Chart which party allegedly has solicitor-client privilege over the correspondence. I cannot assume or infer a privilege for communications between RGMP and CanAm’s counsel absent the document itself, the context or some other evidence

establishing the privilege. CanAm and RGMP have not met their onus to demonstrate the privilege. b. Drafts and Comments [ 40 ] A number of the disputed records in the Production Application involve draft documents or comments on drafts. For the most part, only the covering correspondence and comment emails were listed and provided to me, not the attached drafts themselves. [ 41 ] As a starting proposition, I accept that in preparing a draft agreement, in commenting on a draft, or in proposing revisions to a draft, a lawyer usually brings to bear their legal experience and expertise.

Accordingly, when the draft, comments or proposed revisions are communicated to the lawyer’s client, they are usually subject to solicitor-client privilege. [4] [ 42 ] In a broad sense, all communications between counterparties or their counsel on drafts could be said to be made in confidence, and in furtherance of a common interest in improving and finalizing the transaction agreements.

To pick up on the words of Justice O’Reilly in Pitney Bowes , these communications could allow the parties to have an appreciation of the legal position of the others, as provided by a respected solicitor, allowing negotiations to proceed in an informed and open way: Pitney Bowes at para 20. However, unless the record itself, context and/or evidence demonstrate otherwise, these exchanges, even if collaborative in tone, are usually more akin to a statement of position, or otherwise “adversarial” communications wherein each party tries to achieve the best possible deal for itself: Pitney Bowes at para 19.

They are not privileged, even though the position may be based on, or even the same as, the legal advice communicated between the sending party and their own counsel. [ 43 ] Three particular draft/comment scenarios in the disputed records warrant a more robust explanation to the parties than I can practically fit in the Chart. The first is where counsel provided a draft or comments to their client on transaction documents, and then the client forwarded that communication to the other party or their counsel.

Even accepting that the underlying draft or comments were subject to solicitor-client privilege between counsel and client, without an evidentiary and/or contextual basis establishing that the forwarding was a sharing of legal advice in confidence, I find that the proper characterization of the forwarding communication is a statement of position to the other party. In essence, the party has adopted the lawyer’s advice and it has become their position.

That the party chose to simply forward the lawyer’s correspondence or work product instead of preparing their own communication based on the legal advice does not change the result. To the extent the underlying, forwarded communications are in issue, a waiver analysis applies. The reasonable inference in the circumstances before me is that privilege was waived by way of intentional disclosure of the privileged communication to the opposing party. There is no suggestion of inadvertent disclosure or that the forwarding party was unaware of the privilege.

The Defendants have not established that the disclosure was in furtherance of a common interest or to promote a common understanding on a particular point. Rather, the disclosure was simply a convenient way of communicating the party’s position. [ 44 ] The second variation involves counsel sending their draft, comments or revisions on transaction documents to the opposing party and/or opposing counsel concurrently with sending them to their own client for review.

Again, this type of correspondence could reflect counsel providing or sharing legal advice for the benefit of the group to advance and improve the transaction documents for all. However, there has to be a basis in the documents themselves, the context and/or the evidence to support that characterization; there is no such basis here. The correspondence is simply counsel communicating a preliminary or conditional position on behalf of the client. This is so even though the same communication sent only to the client would be prima facie privileged.

Between lawyer and client only, in the absence of evidence to the contrary, the readily available inference is that the draft or comments are confidential advice. The same inference is not available where the communication includes the counterparty. [ 45 ] Records CAN576488, CAN576547 and CAN576501present a slightly different scenario. They are distinct but all deal with the same underlying subject matter. CAN576488 is an email chain beginning with RGMP’s US counsel sending a draft financing statement to RGMP’s Canadian counsel for review.

The context allows me to infer that the draft document was not a transaction agreement to which both parties would be signatories. Rather, it was an ancillary document needed to give effect to the transaction. The covering email included some legal advice from US counsel. RGMP has a prima facie claim of solicitor-client privilege over this email from US counsel to Canadian counsel, and the attached draft document, in that context. [ 46 ] RGMP’s Canadian counsel then forwarded the email to CanAm’s Canadian counsel, asking if either counsel or CanAm want to review the attached draft financing statement.

The remainder of the chain CAN576488 consists of an exchange between RGMP Canadian counsel and CanAm Canadian counsel about who is going to review what, when. [ 47 ] At or about the same time, the same draft financing statement (CAN576501) was exchanged, and commented upon, under separate cover between US counsel for RGMP and US counsel for CanAm (CAN576547).

Does the draft financing statement remain the privileged work product of RGMP’s US counsel, communicated under solicitor-client privilege to RGMP’s Canadian counsel, and shared with US and Canadian counsel for CanAm in confidence pursuant to a common interest privilege to further the transaction? Or, in sending the draft to CanAm, did the draft become more of an unprivileged statement of RGMP’s proposed position on this particular document, with CanAM then expressing its position by way of comments?

What about the original covering email from RGMP US counsel to RGMP Canadian counsel when forwarded to CanAm Canadian counsel? [ 48 ] These records are more similar to the types of records over which transaction common interest privilege has previously been recognized than many of those addressed above: for example, see Pitney Bowes and Iggillis. In a general sense they are or include privileged communications shared with another party with a common interest in completing the transaction.

However, as set out above, not every disclosure of privileged communication with another party to a transaction is automatically covered by common interest privilege. In fact, the starting point for communication between counsel for independent parties to a transaction would be that it is not privileged and that to the extent it discloses otherwise privileged information, the privilege is waived.

Counsel are expected to understand privilege and waiver, and they may waive on behalf of a client: Dodek at §7.27. [ 49 ] The onus is on CanAm and RGMP to establish, by way of the records themselves, the context and/or evidence, that the draft financing statement, and advice related to it, were communicated between them as a sharing of legal advice in confidence, as opposed to some other purpose, and that they had a common interest in respect of that advice sufficient to warrant protection by common interest privilege.

I can imagine from context why CanAm and RGMP might have a common interest in sharing legal advice on the financing

statement. However, there is nothing on the face of the communications, the evidentiary record or for that matter, even the arguments of RGMP and CanAm, to actually establish this in the face of competing available inferences.

The communications could equally have been intended as statements of position, and any ancillary revelation of legal advice an express waiver, perhaps because the actual legal advice was limited and the convenience of simply “forwarding” prevailed. [ 50 ] Similarly, even if I assume the communications were intended to share legal advice to further the transaction, the context and evidentiary record (or lack thereof) do not permit me to infer that any common interest in respect of the financing statement was necessarily between RGMP and CanAm, to the exclusion of the Power Plaintiffs or other subscribers.

The financing statement is clearly intended to establish the subscribers as secured parties. RGMP may have been CanAm’s agent for the transaction, but pursuant to

section 8 of the Subscription Agreement, the subscribers also authorized RGMP to take various steps on behalf of the subscribers relating to completing the transaction. To the extent that the Agency Agreement might provide further clues, it is not before the Court. To be clear, I am not ruling on whether RGMP had a duty to the subscribers in respect of the financing statement.

Rather, the point for present purposes is that I cannot presume that there was a confidence and common interest as between RGMP and CanAm in respect of this financing statement that excluded the subscribers. [ 51 ] In the end, in the particular circumstances of this case, I am not satisfied that the Defendants have made out the claim of privilege over CAN576501, CAN576547 or CAN576488. c.

Forwarded Information Requests [ 52 ] The disputed records include email chains in which counsel has provided advice as to information or explanations required from the opposing party and counsel’s email is then forwarded to the counterparty requesting a response to the points raised by counsel. In those circumstances, on the record before me, I am unable to find that the communication to the counterparty is a sharing of legal advice in the common interest of furthering the transaction, as opposed to a request or statement of position from one party to the other.

The analysis is similar to the first draft scenario above. d. Burden on the party claiming privilege [ 53 ] I have considered whether my findings above ask too much of RGMP and CanAm. I am not convinced they do. There is no class privilege for transaction communications, whether between parties or counsel. There is no blanket common interest privilege over privileged communications disclosed in the context of a transaction. Solicitor-client privilege is a principle of substance and should be carefully guarded.

Even in the context of a time-sensitive transaction, where parties and counsel may be pulled in many directions, any disclosure of solicitor-client communication should be thoughtfully considered, with a clear understanding of why the privileged communication is being disclosed and on what basis.

If the disclosure is intended to be made in confidence, pursuant to a common interest without waiving privilege, then the parties should at the time have a reasonable basis for expecting confidentiality, and an ability to articulate the common interest they share in respect of the disclosure of the privileged communication. As such, later delineating and justifying the claim of common interest privilege should not create an undue hardship. 3. Undertaking Application [ 54 ] I do not have a list of records at issue in respect of the Undertaking Application, nor have I reviewed those records.

Based on the pleadings and the excerpts from Mr. De Smedt’s questioning before the Court, and the position of the Defendants to date, it is reasonable to presume that at least some of the communications over which privilege is claimed in the Undertaking Application may be in the nature of a statement of position or demand for action from one party to the other (whether directly or through counsel). For instance, Mr. De Smedt gave evidence that counsel for CanAm sent security documents to RGMP counsel in July 2014 and that “every week thereafter I chased them down”.

Without more detail or evidence to establish the claim of privilege, communications from CanAm or CanAm counsel asking RGMP or RGMP counsel for a status update on documents or demanding that RGMP take steps, are not privileged. [ 55 ] CanAm argues that it has already provided all weekly reminders between CanAm and/or their counsel to RGMP and/or their counsel up to February 6, 2015.

If, after review of this decision, issues remain in respect of particular records that would otherwise be responsive to Undertakings 19 and 28, but over which there is an ongoing dispute about privilege, the parties may seek further direction. [ 56 ] The materials reveal that there may have been some dispute about the scope of Undertaking 28, other than the claim of privilege. I have not considered any such issue at this time. E.

Waiver through Statement of Defence [ 57 ] The Plaintiffs argue that even if the communications in question in either of their Applications were originally privileged, CanAm and RGMP waived the privilege by putting those communications in issue in their pleadings. The Defendants acknowledge that implied waiver can occur where a party puts the otherwise privileged communication at issue by way of a pleading, and fairness and consistency require disclosure: see for example JL Energy Transportation v Alliance Pipeline Limited , 2021 ABQB 223 .

The Defendants deny that they have put privileged communications at issue by way of their pleadings in this case. [ 58 ] In my view, the real divergence between the parties on this issue is about what was privileged in the first place. If the scope of privilege is properly construed, I do not agree that the Defendants have necessarily put privileged communications in issue by way of their defences or evidence. Alleging that the other party took responsibility for something, was in breach, or did not take certain steps

does not necessarily put in issue legal advice on those or other topics. To be fair, the Plaintiffs’ argument on waiver was in the context of the broad net of privilege cast by the Defendants. [ 59 ] If, after reviewing these reasons, there are specific records over which the Defendants continue to assert common interest privilege, and the Power Plaintiffs continue to claim waiver by way of the pleadings, the parties may seek further direction. [ 60 ] COSTS [ 61 ] If the parties are unable to agree on costs, they may write to my office within 45 days to establish a procedure for submissions on costs.

Heard on the 18 th day of June, 2021. Dated at the City of Calgary, Alberta this 4 th day of November, 2021. April Grosse J.C.Q.B.A. Appearances: Rinud DeWaal and Luke Rasmussen for Applicants Lisa Power, Robert Power (as Plaintiff), Panglossian Investment Corp. and Beijing Investment Consultancy Ltd. Domenic Venturo, Lukas Frey and Darci Stanger for Respondents to the Applications CanAm Coal Corp, Jos de Smedt, Jonathan Legg, Timothy Bergen, and Scott Bolton Steven Leitl and Oz Douglas for Interested Party in the Applications, Richardson GMP Ltd.

Don Dear (Watching Brief) for Darren Harrold, Bryn Gardener-Evans, Matt Finlay and Rick Moore (not parties to the Applications) Andrew Wilson and Cassandra Sutter (Watching Brief) for Robert Power (as Defendant)