McKay v. Home Depot of Canada Inc., 2022 NSSC 73

SUPREME COURT OF Nova Scotia Citation: McKay v. Home Depot of Canada Inc. , 2022 NSSC 73 Date: 20220315 Docket: Hfx No. 488623 Registry: Halifax Between: Maureen M. McKay and Gordon Andrew McKay Plaintiffs and Home Depot of Canada Inc. Defendant and All Phase Construction Services Inc. Third Party DECISION Judge: The Honourable Justice Jamie Campbell Heard: March 7, 2022, in Halifax, Nova Scotia Counsel: Tracy Smith, for the Plaintiffs Richard Norman and Sarah Gray, for the Defendant Mitchell Fraser, for the Third Party (watching brief) By the Court: [ 1 ] This motion is about litigation privilege.

The litigation is about the installation of a bathroom shower and hardwood floor. The privilege is asserted over internal documents, communications and records created after March 16, 2018, and relating to the dispute. That was the date on which the Defendant, Home Depot says that one of the Plaintiffs, Maureen McKay threatened to sue them. The Documents in Dispute [ 2 ] Maureen and Gordon McKay have sued Home Depot about renovations done in their home in 2016.

The Third Party, All Phase Construction took no position on the motion. [ 3 ] The McKays wanted to get an accessible shower and hardwood flooring for the main floor of their home. They bought them from Home Depot. Home Depot sent an installer, who was an independent contractor, to do the work. The McKays were not satisfied with the quality of the work that had been done, so they contacted Joel Stenabaugh, the manager of the Dartmouth Home Depot in February 2017. There were discussions about the work and by August 2017, Home Depot had arranged for the replacement of the hardwood floor.

That left the shower. [ 4 ] The McKays contacted Home Depot in August 2017 to say that the shower seemed to have been forgotten. They had been told by a contractor about what they say were more deficiencies. They were then told by Home Depot that anything further would have to be

sent to head office. In October of 2017 Home Depot’s head office told the McKays that the complaint had been sent to the eastern Canadian installs team, which had done the hardwood floor replacement. Then the McKays heard nothing further from Home Depot. [ 5 ] Maureen McKay became increasingly frustrated. She contacted Mr. Stenabaugh, at the Dartmouth store, and Vince Fortino, the Regional Installations Manager in February and March 2018.

The emails express frustration but neither indicate an intention to commence legal action or to retain a lawyer. [ 6 ] On March 16, 2018, Maureen McKay put in a complaint with the customer service department at Home Depot. The complaint was handled by a person named Thi Nhu Hao Nguyen, who was employed by Home Depot at that time. That person is no longer employed by the company and can no longer be found. The affidavit of Anthony Wisdom, a manager at Home Depot responsible for “Resolutions Experience and Customer Recovery” says that Thi Nhu Hao Nguyen has “moved on to other endeavours”.

They kept a note about the call. The unredacted part of that note says, “Cx stated that she was going to send this to court if the problems cannot be fixed.” [ 7 ] Mr. Wisdom notes that when customers contact Home Depot to complain about a product or service their call is taken by a trained employee, such as Thi Nhu Hao Nguyen, who “attempts to address their concerns”. [ 8 ] Maureen McKay says that she was not aware of who she was speaking with at the time of the call. She thought that the person was essentially a “switchboard operator” who forwarded the call on.

She had just called customer care and spoke to the person who answered the phone. She does not recall the substance of the call so she cannot deny that she may have mentioned litigation to the person on the phone with her. She recalls that the person forwarded her to Janet Youkhana, and she dealt with Ms. Youkhana after that. Ms. McKay says that she recalled having a positive conversation with Ms. Youkhana and finished the conversation believing that the shower issue would be resolved. She says that she did not mention litigation in the conversation with Ms.

Youkhana. [ 9 ] Home Depot claims privilege over all customer care notes related to the McKays’ file from March 16, 2018 to January 28, 2019. [ 10 ] On March 28, 2018, Maureen McKay called Ms. Janet Youkhana for an update on the status of her complaint. Ms. Youkhana told Ms. McKay that further work on the shower had not been approved. [ 11 ] On April 4, 2018, Mr. Vince Fortino, the Regional Installations Manager phoned Maureen McKay and sent a follow up email. In that email Mr. Fortino said, “As per our conversation, Joel has reached out to me and we will get this fixed.

Joel will be in touch with you and setup an appointment with the installer to come and assess the work that needs to be done and we will make it right. Again I would like to apologize for the delay and appreciate your patience.” Joel Stenabaugh is the manager of the Dartmouth Home Depot. The McKays want to see the email exchange between Joel Stenabaugh and Vince Fortino. Home Depot claims privilege over it. [ 12 ] Then, on May 17, 2018, Ms. Youkhana called Maureen McKay to tell her that the shower claim had been denied. There appears to be a dispute about the nature of the repairs that were then being sought.

The McKays claim that Home Depot was operating on a misunderstanding about the deficiencies that they had identified. Maureen McKay says that she told Ms. Youkhana that she should contact the contractor who had been on site most recently to confirm the nature of the problem. [ 13 ] On May 17, 2018, Joel Stenabaugh sent an email to the McKays and copied it to Vince Fortino. In it he said that after meeting with “Jon”, a “respected renovation expert” he could not recommend any further action be taken.

The last sentence reads, “Vince I am at a standstill as to where to go from here.” [ 14 ] Maureen McKay says that on May 25, 2018, Ms. Youkhana told her that she had recently received an email from Joel Stenabaugh which said that the shower doors were “messy” and that she should get a quote for reinstallation of the shower doors. That was only part of the problem that the McKays had identified. [ 15 ] The McKays want disclosure of the emails from May 18 to May 31, 2018 among Joel Stenabaugh, Janet Youkhana, Jennifer Kane and Nairy Beremian.

Once again, Joel Stenabaugh was the manager of the Dartmouth Home Depot and Janet Youkhana was the customer service contact. Jennifer Kane replaced Vince Fortino as the Regional Installation Manager. There was no evidence filed to indicate who Nairy Beremian is or what that person’s job was at the time. Home Depot asserts litigation privilege over those documents. [ 16 ] On August 24, 2018, the McKays sent a quote to Home Depot for a full shower reconstruction. On August 27, 2018, Jennifer Kane called. She made an appointment to come and see the shower for herself on September 6, 2018.

She arrived at the home and took photographs. Home Depot asserts litigation privilege over those photographs and the emails between Joel Stenabugh and Jennifer Kane on that day. [ 17 ] Ms. McKay continued to send emails to Home Depot from October 31, 2018 to December 17, 2018. Home Depot employees continued to correspond about the matter among themselves during that time.

There are internal emails dated September 6, 2018, November 2, 2018, November 5, 2018, and November 6, 2018 and Home Depot claims litigation privilege with respect to each of them. [ 18 ] The McKays retained a lawyer in December 2018. [ 19 ] The documents about which there is a dispute are the following: 1. Customer Care Notes related to the McKays, from March 16, 2018 to January 28, 2019. 2. Email exchange dated April 4, 2018 between Joel Stenabaugh and Vince Fortino. 3. Emails from May 18 to May 31, 2018 among Joel Stenabaugh, Jennifer Kane, Nairy Beremian, and Janet Youkhana. 4.

Emails between Jennifer Kane and Joel Stenabaugh on September 6, 2018 and the photographs taken by Jennifer Kane that

day. 5. Email exchanges between Jennifer Kane, Janet Youkhana and Nairy Beremian dated November 5, 2018. 6. Email exchanges between Errin Janes, Janet Youkhana and Nairy Beremian dated November 6, 2018. Litigation Privilege [ 20 ] The law governing litigation privilege is set out in Hatch Ltd. v. Factory Mutual Insurance Co ., 2015 NSCA 60 . [ 21 ] The party asserting litigation privilege over a document bears the onus of establishing it. [ 22 ] Litigation privilege is not directed to communications between solicitor and client.

It deals with communications between the lawyer and third parties or, in the case of unrepresented litigants, between the litigant and third parties. Its purpose is to allow parties to litigation a scope of privacy within which they can prepare for that litigation. That may involve discussions within an organization or may involve gathering information from outside parties. It may happen before a lawyer is retained.

And it will often take place before litigation has been formally started. [ 23 ] If left at that general description, litigation privilege could serve to insulate corporate parties from the disclosure requirements that are a fundamental feature of civil litigation. The scope of privacy afforded to litigants is circumscribed by its purpose, litigation preparation. There are both time and content components to that. [ 24 ] Litigation privilege is asserted in the context of actual litigation. So, when it is claimed there is litigation that has by then been commenced.

With the benefit of hindsight any document can be said to have been created in anticipation of that eventuality. The document over which litigation privilege is asserted must be created in anticipation of litigation. Litigation need not be a certainty. But there must be a definite prospect of litigation. Ford Motor Co. of Canada v. Laconia Holdings Ltd ., [1991] N.S.J. No. 206 . It is not enough that litigation is possible or suspected.

And it is not enough that it actually, eventually, takes place. [ 25 ] The document must have as its “dominant purpose” obtaining legal advice or aiding in the conduct of litigation. The phrase “dominant purpose” suggests that a document may have more than one purpose. A document may be created as part of the process of objectively determining facts that will guide a course of action. It may be that a customer’s claim, for example, has merit and should be addressed or resolved through a negotiated compromise. A document may be created as part of the effort to prepare to defend against that customer’s legal claim.

One document may be created for both those purposes. The fact driven inquiry is which of those purposes is the dominant one. The Definite Prospect of Litigation [ 26 ] “Lawyering up” is indeed often a sign that litigation is about to happen. And it is certainly a factor. But it is not determinative. Mitsui & Co. (Point Aconi) Ltd. v. Jones Power Co ., 2000 NSCA 96 . Parties may be preparing for litigation before they retain counsel and may not retain counsel at all.

Or they may retain counsel while their main purpose is to negotiate a resolution to the matter, without recourse to court. [ 27 ] The expressed threat of litigation may also be a sign that there is a definite prospect of litigation. In this case, the notes from Home Depot’s customer service representative indicate that Maureen McKay told them that she would take the matter to court if the problems could not be fixed. The “threat” was not a declaration that the McKays had decided that this was a matter for litigation. In trying to resolve the matter it would have been a poor negotiating strategy for Ms.

McKay to have instead said that if the problems could not be fixed, she and Mr. McKay would just go away and forget the whole thing ever happened. Their issue is whether, at that time, there was a definite prospect of litigation or whether litigation remained just a possibility. [ 28 ] Maureen McKay was at that time frustrated by the fact that she had heard nothing from Home Depot since October 2017. It was then March 2018. She spoke very briefly with the person she now knows to have been Thi Nhu Hao Nguyen. That person’s note references litigation if the matter could not be resolved but Ms.

McKay has no recollection of the conversation. [ 29 ] The note refers to a threat of litigation that might be described as “conditional”. It was not a statement to the effect that the McKays were fed up and ready to go to court. It might also have been a declaration of the obvious. If a matter cannot be resolved, litigation may be an option. [ 30 ] Ms. McKay may have made the statement to Thi Nhu Hao Nguyen but there is no evidence to suggest that she said anything like that to Janet Youkhana or anyone else at Home Depot. [ 31 ] More importantly, the parties continued to talk, with a view to resolving the issues.

The content of that discussion was about the work that had been done on the shower. The parties were not engaged in a debate about legal liability or exchanging letters containing legal arguments or claims. The responses from Home Depot suggest that this was about making it right for a customer far more than resolving the real potential of a lawsuit. [ 32 ] Ms. McKay was clearly an angry and frustrated customer. The tone of her correspondence with representatives of Home Depot made that entirely evident.

But the fact that a customer was expressing frustration does not then serve to place the internal discussions within Home Depot within the scope of litigation privilege. This was a customer complaint. It was not prospective litigation, beyond being merely possible or suspected, until the McKays retained counsel. [ 33 ] While the threshold for determining whether litigation is a reasonable prospect is a low one, it is an objective test based on reasonableness. It requires a consideration of the situation from the perspective of a reasonable person.

The parties were at that time engaged in a dispute about the installation of a bathroom shower. There were potentially still some unresolved issues related to the

installation of the hardwood floor. The amounts involved would be such that if counsel were retained the legal fees and disbursements involved in litigation would represent a significant portion of the amount recovered or the amount required to respond to the claim. This was not a commercial dispute in the sense that it involved two corporate parties. Home Depot is a retailer. The McKays are retail consumers. Both would have substantial interest and incentive in settling the case without resort to litigation.

A reasonable third-party observer would not have anticipated, expected or predicted that this matter would go to litigation. Even though it did. Dominant Purpose [ 34 ] Even if at the time the documents were created litigation could be reasonably anticipated, the onus is on Home Depot to show that with respect to each document, it was prepared for the dominant purpose of litigation. Duchêne v. Merrill Lynch & Co. Canada Ltd ., 2000 NSCA 54 .

It may also have been prepared to resolve a customer complaint or concern, but the dominant purpose must have been to deal with the real and reasonable prospect of litigation. [ 35 ] Parties make inquiries and gather facts to allow them to assess the situation. That may enable them to make a good faith effort to respond to a legitimate complaint. That allows them to negotiate a resolution with a more complete understanding of the position that may be taken by the other side. That same information may be useful in litigation if it comes to that.

The party asserting the privilege must show that the document in question, which may have had more than one purpose, had as its dominant purpose litigation preparation. Following the process used in Colman v. AAA Plumbing and Heating Ltd. , 2020 NSSC 360 , Home Depot has provided to the court, for review, the documents over which litigation privilege has been claimed.

Those documents will not be made exhibits as part of this motion and will be placed in a sealed envelope as a Judge’s Exhibit, so that they will be available for purposes of appellate review. [ 36 ] The Customer Care Notes appear to deal with discussions between customer care employees and the customers. They would appear to be a form of diary of the interactions with the customer.

Anthony Wisdom, in his affidavit says that customer care at Home Depot involves “addressing and resolving any concerns expressed by Home Depot customers.” Customer care is about resolving complaints. [ 37 ] Those notes indicate that when Ms. McKay made reference to litigation the call was immediately escalated to Janet Youkhana. The notes from that point on were made by Janet Youkhana, Customer Care Escalation Specialist. None of the notes were created for the dominant purpose of litigation. They detail efforts made to satisfy the McKays concerns.

They were not created to record conversations to be used in the event of litigation. After all, Home Depot does not want to disclose them much less use them in any trial. They are not for, about, or related to, litigation or potential litigation. They are not subject to litigation privilege. [ 38 ] The email exchange between Joel Stenabaugh and Vince Fortino on April 4, 2018, has not been disclosed to the McKays. That exchange has been provided to the court for review. It does not relate to litigation or litigation preparation.

Once again, the exchange is between employees of Home Depot discussing quotes for work to be done and asking whether it might be covered under a warranty. That exchange does not relate to litigation and does not have litigation preparation as its dominant purpose. [ 39 ] The email exchanges from May 18 to May 31, 2018, among Home Depot staff involve discussions about the matter in dispute. They involve discussions about getting contractors involved to do work. They do not however involve any preparation for litigation, discussion of litigation strategy or gathering evidence for litigation.

In one email from Joel Stenabaugh to Customer Care at Home Depot, copied to Jennifer Kane and dated May 18, 2018, Mr. Stenabaugh noted that the customer had “threatened legal action” so that he would not discuss the file with them. He added, “Please open a Ticket so that we can get some resolution”. [ 40 ] Nothing in the emails from May 18 to May 31, 2018 can properly be characterized as having as a dominant purpose preparation for litigation. The dominant purpose is dealing with the customer complaint with a view to resolving it.

They are not subject to litigation privilege. [ 41 ] Jon Boone, of Jon Boone Contracting, sent an email to Joel Stenabaugh on June 26, 2018. It discusses his review of the work that had been done on the McKays’ property. It does not have as its dominant purpose litigation preparation. It is about the work that had been done and the kind of work required to fix it. Nothing indicates that Mr. Boone had been retained to assist in litigation preparation or in preparing a report to be used in litigation.

The email is not subject to litigation privilege. [ 42 ] On September 6, 2018, Jennifer Kane went to the McKays’ home and took pictures. She sent an email to Joel Stenabaugh. There is no evidence to support the assertion that the purpose of the photographs or emails was to respond to litigation more than it was to document the situation to effectively deal with a customer compliant. The employees were not concentrating on gathering information to use in a potential lawsuit. They were still trying to respond to the McKays’ complaints.

Neither the photographs nor the emails from September 6, 2018 are subject to litigation privilege. [ 43 ] The email exchanges among Home Depot employees on November 5 and 6, 2018 deal with this matter. They are mostly forwarding of portions of the customer file to others within Home Depot. They do not relate to preparation for litigation or the gathering of information to respond to potential litigation. Home Depot was at that stage still trying to reach a resolution of the matter and the dominant purpose of the exchanges to find a way to do that.

It did not involve the gathering of evidence to prepare for litigation or the discussion of litigation strategy or anything else related to litigation. [ 44 ] The documents in question are not subject to litigation privilege. [ 45 ] The Plaintiffs have been successful on the motion. Costs in the amount of $1,000 are awarded. Campbell, J.