Allen v. Royal Canadian Legion, 2010 NSSC 451

IN THE SUPREME COURT OF NOVA SCOTIA Citation: Allen v. Royal Canadian Legion, 2010 NSSC 451 Date: 20101209 Docket: Hfx. No. 264961 Registry: Halifax Between: Donald Allen , a member of the Royal Canadian Legion and the branch thereof formerly chartered under the name “Scotia” Branch, and a representative of a number of persons who are former members of the Scotia Branch, Royal Canadian Legion Halifax, Nova Scotia Plaintiff v. Nova Scotia - Nunavut Command , a Provincial Command of the Royal Canadian Legion Defendant v. The Dominion Command of the Royal Canadian Legion , incorporated under

Chapter 84 of the Statutes of Canada, 1948, as amended from time to time. Defendant Judge: The Honourable Justice N.M. Scaravelli. Heard: November 10, 2010, in Halifax, Nova Scotia Counsel: Allen C. Fownes, Esq.,, for the plaintiff David A. Cameron, Esq., for the defendants By the Court : [ 1 ] The plaintiff, Mr. Allen commenced this action as a member of the Royal Canadian Legion’s Nova Scotia Branch # 25 [Branch #25] and as representative of some other Branch #25 members. The plaintiff has filed two Motions before the Court.

The first Motion seeks an order confirming the plaintiff as a representative plaintiff in the proceedings. The second Motion seeks an order granting further disclosure of documents.

Background [ 2 ] The Royal Canadian Legion is a statutory entity and its Dominion Command, Provincial Commands and Local Branches are governed by the general by-laws of the Legion. The Dominion Command has ultimate jurisdiction over Provincial Commands and Branches. Provincial Commands have jurisdiction over Branches in their respective Provinces. Jurisdiction of Branches are limited to internal operations of the Branch.

Pursuant to the by-laws Nova Scotia-Nunavut Command [NSNU], appointed trustees to take over administration of Scotia Branch # 25 located at Cunard Street, Halifax [Cunard Street Property] which the Defendant alleges was due to financial and other difficulties in the Branch. The trustees ultimately decided to sell the Cunard Street Property. This was followed by a decision to revoke the charter of Branch # 25. Pursuant to the by-laws, all property of Branch # 25 vested in NSNU. Subsequently, NSNU sold its headquarters located at Rainnie Drive, Halifax [Rainnie Drive Property] to the same third party purchaser.

The plaintiff states that surplus monies from the sale of both properties were ultimately intended to fund construction of new NSNU headquarters. [ 3 ] The plaintiff alleges the sale of the properties amounted to a form of conspiracy for the benefit of NSNU and that Branch #25 was closed down in bad faith. The plaintiff claims, among other things, the defendants improperly revoked Branch #25 charter, improperly sold assets and misappropriated these assets and proceeds of sale.

Included in the plaintiff’s claim for relief is the re- instatement of the charter and an accounting. [ 4 ] As part of its defence, the defendants claim the plaintiff is not representative of persons who were members of Branch # 25. That the plaintiff has no pecuniary or propriety interest in Branch # 25. Representative Plaintiff [ 5 ] I dismissed this Motion at the time of the hearing.

The plaintiff brought the Motion for “an order confirming the role of the plaintiff, Donald Allen, in the proceeding as a representative plaintiff to have his status updated to conform to Civil Procedure Rules (209) and the Class Proceeding Act , SNS 2007 c. 228". [ 6 ] In his Motion, the plaintiff relied upon Civil Procedure Rule 36 and the Class Proceeding Act. [ 7 ] In support of the Motion, the plaintiff filed an affidavit attaching as an exhibit, a copy of a petition purportedly signed by some of the members of Branch # 25 in favour of the plaintiff acting as representative in a legal action to re-instate the Charter and obtain a full accounting. [ 8 ] Rule 36 of the Civil Procedure Rules as well as the Class Proceedings Act of Nova Scotia as referenced in the Notice of Motion, have no application to these proceedings.

Rule 36 applies to those individuals appointed as outlined in 36.01(1), such as those individuals appointed through a private or public instrument or by the Court. Moreover, Rule 36.01(2) provides that this Rule has no application to a Class Proceeding or the appointment of a person to represent a group under Rule 68-Class Proceeding. The Class Proceedings Act sets out its own procedures to be followed for proceedings under that legislation. For these reasons the Motion would be dismissed. [ 9 ] This representative action was commenced in 2006, prior to comprehensive legislation.

Rule 5.09 of the Civil Procedure Rules (1972) allows a person having the same interests as other persons to commence and continue proceedings on behalf of all unless otherwise ordered by the Court. Under this Rule, the common law determination of whether the proper criteria has been met to establish representative proceedings often follows a Motion by the defendant to strike the representative claim. The defendant in this case takes the position that this issue is both procedural and substantive and should be determined at trial.

In any event, there is insufficient evidence before the Court to make a determination.

[ 10 ] The current Civil Procedure Rule 68.08(2) allows the Court to appoint a representative in an action started without an appointment where all the criteria set out in Rule 68.08(1) are met. The plaintiff’s Motion does not specifically seek an order under Rule 68.02 nor does the affidavit filed by the plaintiff meet the required criteria. Production of Documents [ 11 ] The plaintiff’s Motion seeks disclosure of all materials relating to the sale of the Rainnie Drive Property including particulars of legal advice sought and obtained in regard to the sale of that property.

The plaintiff also seeks file materials relating to the evaluation of the condition of the Rainnie Drive Property from 2002 forward. Contained in the plaintiff’s brief [and draft order] is a request for disclosure of further documents relating to the Cunard Street Property which was not included in the Notice of Motion and which, the plaintiff concedes is subject to solicitor-client privilege.

At the hearing the defendant consented to an amendment of the Motion to include privileged materials relating to the Cunard Street Property. [ 12 ] The plaintiff submits that solicitor-client privilege does not apply where the interests of the party seeking the information are the same as the interests of the party who first obtained the information.

That this “common interest” exception includes a situation where a fiduciary duty exists between the parties. [ 13 ] The defendant submits that all relevant documents relating to the sale of the Cunard Street and Rainnie Drive Properties, with the exception of any documents over which privilege is maintained, have been disclosed to the plaintiff. Further, that the common interest exception to solicitor-client privilege has no application to these proceedings. Privileged Documents [ 14 ] Solicitor-client privilege and the common interest exception are reviewed in Pritchard v.

Ontario (Human Rights Commission) , 2004 SCC 31 . 15. Dickson, J. outlined the required criteria to establish solicitor-client privilege in Solosky v. Canada (1979) , 1979 CanLII 9 (SCC) , [1980] 1 S.C.R. 821 (S.C.C.), at p. 837, as “(

I) a communication between solicitor and client; (ii) which entails the seeking or giving of legal advice, and (iii) which is intended to be confidential by the parties.” Though at one time restricted to communications exchanged in the course of litigation, the privilege has been extended to cover any consultation for legal advice, whether litigious or not: see Solosky , supra, at p. 834. 16. Generally, solicitor-client privilege will apply as long as the communication falls within the usual and ordinary scope of the professional relationship.

The privilege, once established, is considerably broad and all-encompassing. In Descôteaux c.

Mierzwinski, 1982 CanLII 22 (SCC) , [1982] 1 S.C.R. 860 (S.C.C.), the scope of the privilege was described, at p. 893, as attaching “to all communications made within the framework of the solicitor-client relationship, which arises as soon as the potential client takes the first steps, and consequently even before the formal retainer is established.” The scope of the privilege does not extend to communications (1) where legal advice is not sought or offered, (2) where it is not intended to be confidential, or (3) that have the purpose of furthering unlawful conduct: see Solosky , supra, at p. 835. . . . 18.

In R v. Lavallee, Rackel & Heintz, [2002] 3 S.C.R. 209, 2002 SCC 61 (S.C.C.) , this Court confirmed that the privilege must be nearly absolute and that exceptions to it will be rare. Speaking for the Court on this point, Arbour, J. reiterated what was stated in McClure, supra: ... solicitor-client privilege must be as close to absolute as possible to ensure public confidence and retain relevance. As such, it will only yield in certain clearly defined circumstances and does not involve a balancing of interests on a case-by-case basis. [emphasis in original].

(Arbour J. in Lavallee, supra, at para. 36, citing Major J. in McClure, supra, at para. 35) . . . 23. The common interest exception to solicitor-client privilege arose in the context of two parties jointly consulting one solicitor. See R v. Dunbar (1982), 1982 CanLII 3324 (ON CA) , 138 D.L.R. (3d) 221 (Ont. C.A.), per Martin J.A. at p. 245: The authorities are clear that where two or more persons, each having an interest in some matter, jointly consult a solicitor, their confidential communications with the solicitor, although known to each other, are privileged against the outside world.

However, as between themselves, each party is expected to share in and be privy to all communications passing between each of them and their solicitor. Consequently, should any controversy or dispute arise between them, the privilege is inapplicable, and either party may demand disclosure of the communication... 24. The common interest exception originated in the context of parties sharing a common goal or seeking a common outcome, a “selfsame interest” as Lord Denning M.R. described it in Buttes Gas & Oil v. Hammer (No. 3), [1980] 3 All E.R. 475 (Eng. C.A.), at p. 483 .

It has since been narrowly expanded to cover those situations in which a fiduciary or like duty has been found to exist between the parties so as to create common interest. These include trustee-beneficiary relations, fiduciary aspects of Crown-aboriginal relations and certain types of contractual or agency relations, none of which are at issue here. [ 15 ] The relationship between Branch #25 and defendant is governed by the General By-laws of the Royal Canadian Legion.

Section 419 of the by-laws authorizes the Dominion Command to appoint trustees to act on behalf of a Branch where its charter has been revoked.

Section 420 directs that the property of the Branch be used to cover liabilities of the Branch with any surplus to vest in the Provincial Command in trust to be disposed of in accordance with

Section

Section 124 allows the Provincial Command to dispose of any surplus as it sees fit having regard to any “wish” of the Branch for use of the surplus for the benefit of the community where the Branch is located. Members of a Branch, where a charter has been revoked, are not entitled to benefit from any surplus. [ 16 ] In this case the surplus funds of Branch # 25 vested in NSNU following the revocation of the charter and the sale of the Cunard Street Property. Although the property vests in trust, there is no provision that Branch # 25 is a beneficiary of the trust that may indicate a common interest.

The only interest of the Branch at this stage is the right to express its wish that the surplus be used for the benefit of the community where the Branch is located. I am not satisfied that the plaintiff has established a fiduciary relationship sufficient to create a common interest as an exemption to solicitor-client privilege. Certainly, there was no joint retainer between the Branch, its former members and the defendants. [ 17 ] Although not material to my decision, I note that quotations from authorities cited in the plaintiff’s brief, namely, O’Rourke v.

Darbishire , [1920] A.C. 581 and Ontario (Attorney General) v. Balard Estate 1994 CanLII 7513 (ON SC) , [1994] 20 O.R. (3d) 350 were not accurate quotations upon review of the decisions themselves which were not provided to the Court. [ 18 ] I conclude the common interest exception to solicitor-client privilege does not apply to these proceedings. As a result the plaintiff is not entitled to disclosure of privileged documents relating to the Cunard Street and Rainnie Drive Properties.

Non-Privileged Documents [ 19 ] The plaintiff also seeks disclosure of non-privileged documents relating to the sale of the NSNU Rainnie Drive Property as well as documents relating to the evaluation of the condition of the property from 2002 forward. The defendant submits it has disclosed materials relating to the sale of the Rainnie Drive Property under the old Rule “semblance of relevance test”. Moreover, requests for further information relating to the condition of the Rainnie Drive Property amounts to a fishing expedition and does not meet the requirement of “trial relevance” under the new Rules.

[ 20 ] The affidavit as to disclosure filed by Stephen Wessel, Chairman of NSNU, states in part : 24.

As part of the ongoing litigation between the Plaintiff and Defendants, I have assisted in searching for, preparing and disclosing 22 large Volumes of documents on behalf of the Defendants and subsequent supplementary productions. 25 Among other things, these documents include disclosure of full NS/NU Provincial Command’s Council minutes between May 6, 2000, and October 16/17, 2004 committee reports between 1997 and 2004, Sub-Executive Council minutes between September 28, 2000 and September 25, 2004, documents relating to the sale of the Cunard Street Property, and documents relating to the sale of the Rainnie Drive Property. 26.

To the best of my knowledge, and after a diligent search, there are no further documents, other than possible documents over which solicitor-client privilege would attach, relating to Scotia Branch #25 or the sale of the Rainnie Drive Property. [ 21 ] Our Civil Procedure Rules relating to disclosure of relevant evidence prior to trial are intended to ensure the parties are fully informed, will not be subject to surprise and to encourage settlement of disputes.

This is in keeping with the objects of the Rules for a “just, speedy and inexpensive” determination of proceedings. [ 22 ] Rule 15.02 imposes a duty upon the parties to disclose relevant documents. Rule 14.12 authorizes the Court to order delivery of trial relevant documents. Relevance has been determined to mean evidence that assists in proving (or disproving) a fact in issue. ( Halifax-Dartmouth Bridge Commission v.

Walter Construction Corp. (2009), NSSC 403.) Rule 18 allows for discovery of witnesses as to relevant evidence and also for information likely to lead to relevant evidence. [ 23 ] Disclosure and discovery examination have been completed in these proceedings. There is no evidence before me that any witness was questioned regarding materials relating to the existence of evaluation of the condition of the Rainnie Drive Property. As a result, I am not satisfied that materials relating to this issue even exists, leaving aside the issue of relevance. The Rules are not intended to be used as a fishing expedition.

Under the circumstances, I am unable to grant the plaintiff’s Motion for disclosure. [ 24 ] Accordingly the Motions are dismissed. I award costs to the defendants in any event of the cause payable at the end of the proceeding. J.