Facts
In 1992, Christopher’s mother, Margaret, passed away, leaving him as the estate trustee of her estate. Christopher was married to Gay (the “Plaintiff”) and had three siblings: Francis, Peter and Moninna.[1] In 2015, Christopher passed away and Gay was appointed as his estate trustee. It wasn’t until Gay began to administer Christopher’s estate that she realized Christopher had not concluded administering Margaret’s estate. Gay retained Nicol & Lanzier in 2015 to assist in the administration of both estates. Soon after, Gay passed the estate trustee position of Margaret’s estate to Mark and Francis (the “Defendants”), Christopher’s siblings.[2]
In 2019, the Defendants wrote to the Plaintiff stating there was $260,000 of Margaret’s estate that was unaccounted for between 1992-2000 while Christopher was acting as her estate trustee.[3] The defendants stated they would forgive a part of the various “unaccounted for debits” and withdrawals by Christopher. According to the defendants, after such forgiveness, as well as considering an executor’s fee, Christopher was credited with $97,025.60. However, the defendants created this compromise on the condition that Christopher forfeited his share of Margaret’s estate. In May of 2019, the defendants distributed the remaining $1,142,996.8 equally amongst the remaining siblings.[4]
In response, Gay’s counsel sent a letter demanding her share of Christopher’s share of Margaret’s estate. Such demand began the basis of Gay’s statement of claim against the defendants, in her capacity as estate trustee along with a request that Margaret’s estate be vested pending litigation, and a passing of accounts by the defendants.[5]
The Plaintiff counterclaimed as estate trustee of Margaret’s estate, claiming “against Gay in her personal capacity and as estate trustee of Christopher’s estate, asking for an order of equitable tracing and production of all of Margaret, Christopher, and Gay’s banking and financial records for the period June 28, 1992 to September 18, 2015”, among other things.[6]
Gay brought a motion for an order of disclosure of documents “contained in the solicitor’s file for the estate of Margaret Reardon or, in the alternative, production to the court for inspection in order to determine the validity of the claim of privilege.” The defendants asserted that they produced all documents necessary besides those protected by solicitor client privilege/ litigation privilege.[7]
Disputed Documents
The defendants asserted that except in respect of three exceptions, the documents “listed in Schedule B to their affidavit of documents” are covered by both solicitor client privilege and litigation privilege.[8]
The court stated that the disputed documents are part of two “broad” categories:
(i)Those that Gay says are from the time period when she was the client of Nicol & Lazier (document nos. 173-177); and (ii) Document nos. 1-170 and 178-205 in respect of which Gay says the defendants “have not differentiated between those documents pertaining to the administration of Margaret’s estate and those pertaining to the litigation involving Margaret’s estate”.
Solicitor Privilege
The court began its analysis on solicitor client privilege by stating it attaches to “communications between a lawyer and their client for the purpose of seeking or giving legal advice which is intended to be confidential: Sky Solar (Canada) Ltd. v. Economical Mutual Insurance.”[9]Additionally, a trustee may not claim solicitor client privilege over documents that relate to the estate, since there is a joint interest between both parties towards the administration of the estate.[10] However, there are two exceptions to this rule. Starting with the first, the court may not allow for unlimited entitlement by a beneficiary to “communication between a trustee and trustee’s counsel.”[11] The court stated:
The court will not allow the production of any documents related to “a separate and distinct estate matter in which the parties [are] adverse”: Whitell, at para. 20, citing Wells (Estate) v. The Society for Pastoral Counselling Research, at paras. 15-16;[8] Chang v. Lai Estate, at para. 17.[9] This is because where the beneficiary and the trustee are adverse in interest, there is no joint interest that compels the disclosure of communications that would normally be protected by solicitor-client privilege: Ballard Estate; Chang, at para. 17.[12]
The second exception, which the court stated had no bearing on this decision is a circumstance where there is a discretionary trust, and beneficiaries must be involved in the decision-making process.[13]
Litigation Privilege
The defendants claimed litigation privilege over the several disputed documents requested by the plaintiff. In the court’s review of the legal principles, it stated the following:
[23] A party asserting litigation privilege over a document must establish that litigation was contemplated at the time the document was created and the document for which privilege is claimed was created for the dominant purpose of the litigation: Sky Solar, at para 80.[14]
The court noted that litigation privilege may be applied when litigation “was clearly contemplated (or underway) when these documents were created and the involvement of litigation counsel makes plain that they were created for the dominant purpose of litigation”.[15]
Application
The court first reviewed documents 1-148 and 150-170 which collectively consisted of communications or correspondences between the defendant’s counsel and the defendants. The court asserted that such documents were both protected by solicitor client privilege because the parties were already adverse in interest.[16] Additionally, the court stated it was clear that the documents related to a topic “separate and distinct from the administration of the estate in general” and therefore were not required to be produced.[17]
There were additional documents that the court stated were covered by litigation privilege and therefore did not need to be produced by the defendants. It was evident that litigation was underway at the point that such documents were created.[18] These documents were made after the date that Gay had sent her demand letter in 2019.
On the other hand, documents 173-177, 149, 178 and 180-200 were required to be produced by the defendants to “determine the validity of the claim of privilege” because they were created between 2015-2018.[19]
Summary
Gay’s motion for disclosure of the solicitor files, as well as for the “production to the court for the inspection to determine the validity of the claim of privilege” was partially successful.[20] The court had ordered the production of documents 149, 173-177, 178, and 180-200 in order to determine the “validity of the claim of privilege”.[21]
Litigation privilege and solicitor client privilege is an important consideration especially where it concerns document production involving a beneficiary and an estate trustee as the decision of Reardon v. Reardon has demonstrated.
—
[1] Reardon v. Reardon, 2024 ONSC 1851 (CanLII)
[2] Ibid at para 5.
[3] Ibid at para 9.
[4] Ibid at para 10.
[5] Ibid at para 12.
[6] Ibid at para 13.
[7] Ibid at para 1.
[8] Ibid at para 14.
[9] Ibid at para 17.
[10] Ibid at para 18.
[11] Ibid at para 19.
[12] Ibid at para 19.
[13] Ibid at para 20
[14] Ibid at para 23.
[15] Ibid at para 39.
[16] Ibid at para 30.
[17] Ibid at para 27.
[18] Ibid at para 23.
[19] Ibid at para 37.
[20] Ibid at para 40.
[21] Ibid at para 40.
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Written by: Gabriella Banhara
Posted on: April 10, 2024
Categories: Commentary
Facts
In 1992, Christopher’s mother, Margaret, passed away, leaving him as the estate trustee of her estate. Christopher was married to Gay (the “Plaintiff”) and had three siblings: Francis, Peter and Moninna.[1] In 2015, Christopher passed away and Gay was appointed as his estate trustee. It wasn’t until Gay began to administer Christopher’s estate that she realized Christopher had not concluded administering Margaret’s estate. Gay retained Nicol & Lanzier in 2015 to assist in the administration of both estates. Soon after, Gay passed the estate trustee position of Margaret’s estate to Mark and Francis (the “Defendants”), Christopher’s siblings.[2]
In 2019, the Defendants wrote to the Plaintiff stating there was $260,000 of Margaret’s estate that was unaccounted for between 1992-2000 while Christopher was acting as her estate trustee.[3] The defendants stated they would forgive a part of the various “unaccounted for debits” and withdrawals by Christopher. According to the defendants, after such forgiveness, as well as considering an executor’s fee, Christopher was credited with $97,025.60. However, the defendants created this compromise on the condition that Christopher forfeited his share of Margaret’s estate. In May of 2019, the defendants distributed the remaining $1,142,996.8 equally amongst the remaining siblings.[4]
In response, Gay’s counsel sent a letter demanding her share of Christopher’s share of Margaret’s estate. Such demand began the basis of Gay’s statement of claim against the defendants, in her capacity as estate trustee along with a request that Margaret’s estate be vested pending litigation, and a passing of accounts by the defendants.[5]
The Plaintiff counterclaimed as estate trustee of Margaret’s estate, claiming “against Gay in her personal capacity and as estate trustee of Christopher’s estate, asking for an order of equitable tracing and production of all of Margaret, Christopher, and Gay’s banking and financial records for the period June 28, 1992 to September 18, 2015”, among other things.[6]
Gay brought a motion for an order of disclosure of documents “contained in the solicitor’s file for the estate of Margaret Reardon or, in the alternative, production to the court for inspection in order to determine the validity of the claim of privilege.” The defendants asserted that they produced all documents necessary besides those protected by solicitor client privilege/ litigation privilege.[7]
Disputed Documents
The defendants asserted that except in respect of three exceptions, the documents “listed in Schedule B to their affidavit of documents” are covered by both solicitor client privilege and litigation privilege.[8]
The court stated that the disputed documents are part of two “broad” categories:
(i)Those that Gay says are from the time period when she was the client of Nicol & Lazier (document nos. 173-177); and (ii) Document nos. 1-170 and 178-205 in respect of which Gay says the defendants “have not differentiated between those documents pertaining to the administration of Margaret’s estate and those pertaining to the litigation involving Margaret’s estate”.
Solicitor Privilege
The court began its analysis on solicitor client privilege by stating it attaches to “communications between a lawyer and their client for the purpose of seeking or giving legal advice which is intended to be confidential: Sky Solar (Canada) Ltd. v. Economical Mutual Insurance.”[9]Additionally, a trustee may not claim solicitor client privilege over documents that relate to the estate, since there is a joint interest between both parties towards the administration of the estate.[10] However, there are two exceptions to this rule. Starting with the first, the court may not allow for unlimited entitlement by a beneficiary to “communication between a trustee and trustee’s counsel.”[11] The court stated:
The court will not allow the production of any documents related to “a separate and distinct estate matter in which the parties [are] adverse”: Whitell, at para. 20, citing Wells (Estate) v. The Society for Pastoral Counselling Research, at paras. 15-16;[8] Chang v. Lai Estate, at para. 17.[9] This is because where the beneficiary and the trustee are adverse in interest, there is no joint interest that compels the disclosure of communications that would normally be protected by solicitor-client privilege: Ballard Estate; Chang, at para. 17.[12]
The second exception, which the court stated had no bearing on this decision is a circumstance where there is a discretionary trust, and beneficiaries must be involved in the decision-making process.[13]
Litigation Privilege
The defendants claimed litigation privilege over the several disputed documents requested by the plaintiff. In the court’s review of the legal principles, it stated the following:
[23] A party asserting litigation privilege over a document must establish that litigation was contemplated at the time the document was created and the document for which privilege is claimed was created for the dominant purpose of the litigation: Sky Solar, at para 80.[14]
The court noted that litigation privilege may be applied when litigation “was clearly contemplated (or underway) when these documents were created and the involvement of litigation counsel makes plain that they were created for the dominant purpose of litigation”.[15]
Application
The court first reviewed documents 1-148 and 150-170 which collectively consisted of communications or correspondences between the defendant’s counsel and the defendants. The court asserted that such documents were both protected by solicitor client privilege because the parties were already adverse in interest.[16] Additionally, the court stated it was clear that the documents related to a topic “separate and distinct from the administration of the estate in general” and therefore were not required to be produced.[17]
There were additional documents that the court stated were covered by litigation privilege and therefore did not need to be produced by the defendants. It was evident that litigation was underway at the point that such documents were created.[18] These documents were made after the date that Gay had sent her demand letter in 2019.
On the other hand, documents 173-177, 149, 178 and 180-200 were required to be produced by the defendants to “determine the validity of the claim of privilege” because they were created between 2015-2018.[19]
Summary
Gay’s motion for disclosure of the solicitor files, as well as for the “production to the court for the inspection to determine the validity of the claim of privilege” was partially successful.[20] The court had ordered the production of documents 149, 173-177, 178, and 180-200 in order to determine the “validity of the claim of privilege”.[21]
Litigation privilege and solicitor client privilege is an important consideration especially where it concerns document production involving a beneficiary and an estate trustee as the decision of Reardon v. Reardon has demonstrated.
—
[1] Reardon v. Reardon, 2024 ONSC 1851 (CanLII)
[2] Ibid at para 5.
[3] Ibid at para 9.
[4] Ibid at para 10.
[5] Ibid at para 12.
[6] Ibid at para 13.
[7] Ibid at para 1.
[8] Ibid at para 14.
[9] Ibid at para 17.
[10] Ibid at para 18.
[11] Ibid at para 19.
[12] Ibid at para 19.
[13] Ibid at para 20
[14] Ibid at para 23.
[15] Ibid at para 39.
[16] Ibid at para 30.
[17] Ibid at para 27.
[18] Ibid at para 23.
[19] Ibid at para 37.
[20] Ibid at para 40.
[21] Ibid at para 40.
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