2019 NLCA 52, 2019 NLCA 52

Federation of Newfoundland Indians (applicant/appellant) v.Shawn Benoit, Matthew Anderson, Marie Tapp Melanson,Bobbie Tapp Goosney, Paul Bennett and Jennifer Sue Le Roix(first respondents) and Her Majesty the Queen (Canada)(second respondent) (19/55) Indexed As: Federation of Newfoundland Indians v. Benoit 2019 NLCA 52 4 C.A.N.L.R. 730 Court of Appeal of Newfoundland and Labrador Hoegg J.A. August 19, 2019

Summary: The Federation of Newfoundland Indians applied for a stay of enforcement of the applications judge’s order that the Federation hadwaived solicitor-client privilege over two documents. The documents in question had been acquired by the first respondents from anAmerican website and were subsequently published on the personal Facebook account of one of the first respondents. Held: Application granted. Hoegg J.A.: The issue of whether the Federation had waived its privilege over the documents in the unique circumstances of this casewas a serious issue to be tried on appeal (paragraphs 8-11).

There was a potential for irreparable harm to the Federation associated with the continued and future use of the information in thedocuments that could not be compensated with monetary damages (paragraphs 12-18). The potential harm to the Federation if the stay was not granted outweighed the inconvenience associated with delaying the firstrespondent’s case. It was incumbent on the Court to proceed with caution given the importance of solicitor-client privilege to the legalsystem. The test for a stay of enforcement was met and the stay was granted (paragraphs 19-21). Cases cited: RJR MacDonald Inc. v.

Canada (Attorney General), (SCC), [1994] 1 S.C.R. 311 Rees v. Royal Canadian Mounted Police, 2005 NLCA 4 Weir’s Construction Limited v. Warford Estate, 2016 NLCA 65 Tremblett v. Tremblett, 2013 NLCA 53 E.M. v. Y.C., 2018 NLCA 21 King v. King, 2015 NLCA 54 Livent Inc. v. Deloitte & Touche, 2016 ONCA 395

Counsel: Philip J. Buckingham and Adam Ronan, for the applicant/appellant; Keith S. Morgan, for the first respondents; No appearance by the second respondent. The application was heard and judgment rendered orally on July 3, 2019 by Hoegg J.A. The following reasons for decision were filed on August 19, 2019 by Hoegg J.A. ______________________________________________________________ Hoegg J.A.: [1] In Benoit v.

Federation of Newfoundland Indians (Federation), 2019 NLSC 116, a Supreme Court Justice ordered that twodocuments listed in Benoit’s List of Documents were solicitor-client privileged, but that Federation had waived its privilege over them. [2] The two documents in question had been acquired by counsel for Benoit several months before he filed Benoit’s list ofdocuments. Counsel had acquired them in May 2018 after learning of their availability on an American website to which internet usershad access. Also in May 2018, one of the listed plaintiffs, Ms.

Marie Tapp Melanson, advised Federation’s President and several of itsboard members that the two documents were available on the website. Around the same time, Ms. Melanson acquired the documentsherself and posted them on Facebook. Upon receipt of that information from Ms. Melanson, Federation took no action respecting theavailability of the two documents nor did it advise Ms.

Melanson that it was asserting privilege over them. [3] After Benoit filed its List of Documents in November 2018, Federation applied to the Supreme Court of Newfoundland andLabrador for a declaration that the documents were solicitor-client privileged and various other remedies, including the staying ofBenoit’s action as an abuse of process and removal of Benoit’s counsel.

As noted above, the Judge found that Federation had waived itsprivilege over the documents. [4] Federation accepts the Justice’s order that the two documents were privileged, but appealed the Justice’s order that it waived itsprivilege over them. [5] Federation then applied to this Court to stay enforcement of the Justice’s order that it waived its privilege over the twodocuments pending determination of its appeal. At the hearing, Federation asserted that it met the three-part test for a stay establishedby the Supreme Court of Canada in RJR MacDonald Inc. v.

Canada (Attorney General), (SCC), [1994] 1 S.C.R. 311and applied by this Court in Rees v. Royal Canadian Mounted Police, 2005 NLCA 4, Weir’s Construction Limited v. Warford Estate,2016 NLCA 65, and Tremblett v. Tremblett, 2013 NLCA 53. [6] In determining whether a stay ought to be granted, the onus is on the applicant, in this case Federation, to address the threecriteria set out in the above-noted test: (1) that there is a serious issue to be tried on appeal; (2) that irreparable harm will result if a stay is not granted; and (3) that the balance of convenience favours a stay.

In this case, that means that the harm suffered by Federation would exceed theharm suffered by Benoit should a stay not be granted. [7] Generally, if there is no serious issue to be tried on appeal, the stay application is dismissed (E.M. v. Y.C., 2018 NLCA 21 andKing v. King, 2015 NLCA 54). If there is a serious issue to be tried on appeal and irreparable harm has not been established, a stayapplication is generally dismissed without the need to consider the balance of convenience. If an applicant establishes irreparable harm,a court must go on to assess the balance of convenience as between the parties.

Some case law suggests that a weak case for irreparableharm can be resolved by considering it together with the balance of convenience (Livent Inc. v. Deloitte & Touche, 2016 ONCA 395). Serious Issue to be Tried [8] Federation argues that its appeal raises serious issues related to the preservation of solicitor-client privilege in the age of theinternet. In particular, Federation asserts that whether it waived its privilege in the circumstances of this case and what constituteswaiver of privilege generally in the age of the internet are novel and important issues which should be adjudicated by an appellate court.

Federation also asserts that its appeal concerns the obligations of a solicitor who comes into possession of privileged documentsbelonging to an adverse party which were disclosed by persons unknown and which are available to the public on the internet. [9] Benoit argues that Federation has not identified any basis on which the Judge erred in her determination that Federation hadwaived privilege over the two documents. [10] I agree with Benoit that Federation has not specifically alleged error on the part of the Judge.

In this regard I note that justbecause the Court of Appeal of Newfoundland and Labrador Rules no longer require grounds of appeal to be specifically stated does not

mean that error does not have to be alleged on a stay application. It is preferable that specific error be alleged on a stay application. That said, Federation’s filings and argument show that it does not accept the Justice’s reasoning respecting her finding of waiver because, in Federation ’s view, it is wrong in law. In effect, Federation argues legal error. [ 11 ] In all of the circumstances, I was of the view that whether Federation waived its solicitor-client privilege in the unique circumstances of this case is a serious issue to be tried on appeal.

Questions respecting what a privilege holder must do to guard against a finding of waiver or acquiescence, and whose burden it is to establish waiver or acquiescence, are also engaged. As well, the potential impact on the administration of justice, if a court prevents privileged documents from being used in its process when those documents are widely available and their contents widely known, is also a serious issue. Irreparable Harm [ 12 ] “Irreparable” refers to the nature of the harm suffered rather than its magnitude.

It is harm which cannot be cured by money damages or which cannot be cured because one party will not be able to collect money damages from the other ( RJR MacDonald, at paragraph 64). [ 13 ] Federation argues that the use to date of the information and advice contained in the two documents has already constituted irreparable harm to it, saying at paragraphs 32 and 33 of its factum: Benoit have already utilized the information in the Documents, the factual underpinnings therein analysis and legal advice given by FNI’s solicitor and contained within the Documents, which now rest with Benoit.

This information and insight can neither be unseen, undone, extracted nor rectified. It is the flow of information to the opposing side that it ought not possess that results in irreparable harm to FNI. What has been seen, analyzed and put to use already cannot be erased. Counsel for Benoit cannot discard the knowledge and insight gleaned from the Documents (should the appeal be successful). Even a declared willful attempt at suppression of known privileged information may not prevent particulars, tidbits, and fragments of that information from seeping, without intent, into counsel’s thought-process.

It is not beyond reasonable consideration that privileged information that my find its way into a brief, strategy or questions posed during the course of discovery. Should an appeal be successful a stated declaration to abandon the advantage gained from the Documents is of little comfort to FNI, and of no remedy at all. [ 14 ] Federation also argues that continued and future use of the information and advice contained in the two documents will result in further irreparable harm.

In this regard Federation maintains that the information contained in the two documents informed the Interrogatories Benoit recently sent to Federation , and answers to them would require divulging further privileged information. Federation maintains that the privileged information has no pecuniary value, and harm resulting to Federation from its divulgence and use cannot be compensated by money damages. [ 15 ] For its part, Benoit argues that Federation has not exhausted its remedies and therefore a stay is not available to it.

Benoit says that the documents have been available on the internet since at least May 2019 and they remain publicly available for ongoing use and dissemination. Benoit asserts that the only issue is how Benoit may use the information in the two documents in advancing its case, and whether such use would negatively affect Federation . Benoit argues that the proceeding is case managed, and maintains that the case management Justice can direct how information in the documents can be used henceforth, including whether the Interrogatories Benoit recently sent to Federation need be answered and if so how.

Benoit points out that the Justice made no decision on admissibility of the documents. Further, Benoit says that its “joint interest privilege” argument remains to be decided. This issue was argued on the application before the Justice, but she did not find it necessary to decide given her decision respecting waiver. [ 16 ] I agree with Benoit, insofar as future use of the information contained in the two privileged documents is concerned, that all potential remedies available to Federation may not be exhausted.

In this regard, it is open to Federation to refuse to answer the Interrogatories and therefore place the issue of use of the privileged information before the Court again. As well, the “joint interest privilege” issue, while separate in law from waiver of privilege, is a serious issue which could be determinative of Federation’s position. [ 17 ] While I agree that a short answer may be for Federation to decline to respond to some or all of the Interrogatories, this answer addresses only a discrete part of the larger issue to be heard on appeal.

Such an answer does not address the pressing issues of what use Beniot may make of the information at present and going forward. Moreover, such an answer would doubtless spawn ongoing, piecemeal legal battles without resolving the main issue. [ 18 ] Accordingly, in my view of the circumstances, irreparable harm which cannot be compensated by money damages could result if this Court accepts Federation’s position on appeal. Balance of Convenience [ 19 ] The convenience to Federation is to have the Justice’s ruling on waiver determined on appeal before further harm to it, if any, occurs.

Doing so results in an inconvenience to Benoit because of the delay associated with an appeal, which prevents Benoit from proceeding with its litigation in a timely manner. I note that pretrial procedures are not completed and that no trial date has been set. In these circumstances, I saw the potential harm to Federation , should this Court grant its appeal, as outweighing the harm associated with delaying Benoit’s case. [ 20 ] Solicitor-client privilege is very important to our legal system.

I am therefore of the view that it was incumbent on the Court to be cautious about proceeding given the thorny facts of this case. [ 21 ] For the above reasons, I granted a stay of the Justice’s decision that Federation had waived its privilege over the two documents in issue pending the decision of this Court respecting Federation’s appeal. Application granted.