A-457-76
The Queen in right of Canada (Appellant)
v.
Hawker Siddeley Canada Ltd. and Chemi-Solv
Limited (Respondents)
Court of Appeal, Urie and Le Dain JJ. and
MacKay D.J.—Toronto, November 1 and 2, 1976.
Privilege — Party claiming privilege must prove that
requirements met — Affidavit evidence National Defence
Act, R.S.C. 1970, c. N-4, s. 42(1).
Appellant claims that the report of a Board of Inquiry set up
pursuant to section 42(1) of the National Defence Act is
privileged because the inquiry was instituted in order to prepare
a report that would assist the Department's legal advisors in
anticipated litigation.
Held, the appeal is dismissed. A party must bring himself
clearly within the requirements of a claim for privilege. The
possibility of litigation was undoubtedly contemplated at the
time the Board of Inquiry was established. However, section
42(1) of the National Defence Act makes no reference to
obtaining material for the purposes of litigation and the terms
of reference for the inquiry contain no reference to anticipated
litigation. The affidavits of the Board's legal advisor and of the
Deputy Judge Advocate General are without probative value on
the issue of fact.
APPEAL.
COUNSEL:
Derek H. Aylen, Q.C., and L. Holland for
appellant.
J. D. Holding, Q.C., for respondent Hawker
Siddeley Canada Ltd.
No one appearing for respondent Chemi-Solv
Limited.
SOLICITORS:
Deputy Attorney General of Canada for
appellant.
Borden & Elliot, Toronto, for respondent
Hawker Siddeley Canada Ltd.
Martineau, Walker, Allison, Beaulieu,
MacKell & Clermont, Montreal, for respond
ent Chemi-Solv Limited.
The following are the reasons for judgment of
the Court delivered orally in English by
LE DAIN J.: This is an appeal from a judgment
of the Trial Division' ordering the production for
inspection of the proceedings and report of a
Board of Inquiry established under the authority
of section 42(1) 2 of the National Defence Act,
R.S.C. 1970, c. N-4, to investigate the cause and
extent of corrosion damage to the propulsion ma
chinery and systems in the HMCS Restigouche.
The appellant opposes such production on the
ground that the proceedings and report are
privileged.
The appellant entered into a contract in 1970
with the respondent Hawker Siddeley Canada Ltd.
(hereafter referred to as "Hawker") for certain
work of conversion and refitting on the Restigou-
che, to be carried out at the Halifax Shipyards of
Hawker, and Hawker subcontracted the work of
cleaning the vessel's boilers to the respondent Che-
mi-Solv Limited. Upon discovery of the corrosion
damage referred to above, a letter dated July 4,
1972, was sent on behalf of the appellant to
Hawker, advising Hawker that it was being held
responsible for the damage. Hawker replied by
letter dated July 11, 1972, denying that it was
responsible for the damage and giving as its rea
sons for denial of responsibility that the decision to
"acid clean" the main boilers was taken by officers
of the Department of National Defence against
contrary advice, and that the process of cleaning
was carried out under the direction and supervision
of personnel of the Department. By order dated
August 4, 1972, Vice Admiral D. A. Collins, Chief
of Technical Services, Department of National
Defence, issued instructions providing for the
appointment of a Board of Inquiry to "investigate
the extent and cause of the corrosion damage
reported in the main and auxiliary machinery as
well as associated systems of HMCS RESTIGOU -
' [1977] 1 F.C. 463.
2 42. ( 1) The Minister, and such other authorities as he may
prescribe or appoint for that purpose, may, where it is expedi
ent that he or any such other authority should be informed on
any matter connected with the government, discipline, adminis
tration or functions of the Canadian Forces or affecting any
officer or man, convene a board of inquiry for the purpose of
investigating and reporting on that matter.
CHE ", and setting out its terms of reference. The
evidence to be gathered by the Board and the
findings and recommendations to be made by it
were specified as follows:
4. The board shall obtain statements from all available wit
nesses and in particular shall record evidence as to:
a. The possible alternative technical causes of the resultant
damage;
b. The actions both technical and administrative which may
have contributed to the most probable cause of the resultant
damage;
c. What persons were associated with the actions of b. above;
and
d. The full extent and cost of repair of the resultant damage.
5. Findings shall be made as to:
a. The most probable technical cause of the damage.
b. Administrative procedures which may have contributed to
the cause of the damage.
c. Repairs or treatment which are required and those that
may be required.
6. Recommendations shall be made on:
a. Technical procedures to avoid a recurrence of the damage
in all ships.
b. Administrative procedures to prevent a repetition of the
incident.
The terms of reference provide for attendance of
representatives of the respondent Hawker
(referred to as "Halifax Shipyards") as follows:
Representatives of the Department of Supply and Services,
Shipbuilding Branch, Ottawa, and of Halifax Shipyards should
be invited to attend the proceedings of the board.
On September 29, 1972, the Department of
National Defence issued a press release which
announced in general terms the findings of the
inquiry and contained the following statement:
The inquiry report, which runs to close to 400 pages, is being
studied intensively at National Defence Headquarters to deter
mine what further action may be necessary, including the
possibility of recovery action for the costs of repair.
The action was instituted by the appellant in
August 1975.
The appellant produced affidavit evidence to
support its claim of privilege for the proceedings
and report of the board. The affidavit dated May
1, 1976, of J. L. Scott Henderson, solicitor and
legal advisor to the Board of Inquiry, contains the
following statements:
5. The Board was aware, when it convened, through the letter
of Mr. W. E. Smith of Canadian Forces Headquarters
addressed to the plaintiffs, dated July 4, 1972, attached hereto
as Exhibit A, that a notice of claim had been made by the
Crown against Hawker Siddeley Ltd.
6. Accordingly the Board during its proceedings obtained
statements from witnesses and evidence which could be used in
support of a Crown claim against the parties legally responsible
for the damage of the ship.
7. It was expected by the Board that the evidence received by it
would be referred to the law officers of the Crown for use in
connection with legal proceedings arising out of the damages
incurred by HMCS Restigouche.
The affidavit dated June 8, 1976, of Roland F.
Barnes, Deputy Judge Advocate General of the
Canadian Armed Forces, contains the following
statements:
... it was apparent before the board of inquiry was convened
and while it was being conducted that a dispute had already
arisen between the plaintiff and the defendant Hawker and that
it would be necessary to take legal proceedings to recover the
cost of repairing the ship, and this has indeed proven to be the
case.
On May 6, 1976, I telephoned J. L. Scott Henderson from
Ottawa and spoke to him in Halifax and he informed me that
when the board of inquiry was convened it was contemplated by
himself and those connected with the inquiry that one of the
main purposes of the inquiry would be to obtain statements
from the potential witnesses and evidence that could be used to
support a claim against the defendants for the very substantial
cost of repairing the corrosion damage and it was contemplated
that the evidence so obtained would be delivered to the solici
tors who would represent the plaintiff in asserting a claim and
in taking legal proceedings and for these reasons statements
were obtained by the board and potential witnesses were identi
fied and asked to sign their statements.
The parties are not in significant disagreement
as to the applicable law in the present case. It is
conveniently stated in Williston & Rolls, The Law
of Civil Procedure, Vol. 2, p. 916, as follows: "All
documents and copies thereof prepared for the
purpose, but not necessarily the sole or primary
purpose, of assisting a party or his legal advisors in
any actual or anticipated litigation are privileged
from production." The respondent would insist, in
view of certain authority, 3 that if such purpose be
not the sole or primary one it must at least be a
substantial purpose for which the document is
prepared, but this emphasis would not appear to be
important in the present case. It is not essential, as
might be inferred from the reasons of the Trial
Judge, that the document be prepared at the
request of a legal advisor; it is sufficient if it be
prepared for such purpose by a party on his own
initiative.
The dispute in this case is as to whether, on the
documentary evidence, the appellant has dis
charged the burden of clearly showing that one of
the purposes for instituting the inquiry was the
preparation of a report that would be submitted to
legal advisors to assist them in anticipated litiga
tion. A party should bring himself clearly within
the requirements of a claim for privilege. It is in
the interests of justice that there be the fullest
possible disclosure of all relevant material capable
of throwing light upon the issues in a case.
We are all of the opinion that the appellant has
not discharged this burden in the present case. It is
no doubt reasonable to conclude that, at the time
the Board of Inquiry was established, the possibili
ty of litigation was contemplated in view of the
exchange of correspondence that had taken place
between the parties only shortly before the
appointment of the Board. The evidence does not
clearly show, however, that a purpose in setting up
the Board was to obtain a report that would be laid
before legal advisors to assist them with respect to
such litigation. The Board of Inquiry was to carry
out the instructions of Admiral Collins, and it is
his instructions that must determine the purposes
3 The Court was referred to the following decisions as
indicating the law. with respect to this privilege: Woolley v.
North London Railway Company (1869) L.R. 4 C.P. 602;
Cook v. North Metropolitan Tramway Company (1889) 6
T.L.R. 22; Birmingham and Midland Motor Omnibus Co. Ltd.
v. London and North Western Railway Company [1913] 3
K.B. 850; Blackstone v. The Mutual Life Insurance Company
of New York [ 1944] O.R. 328; Cook v. Cook and Kelterbourne
[1947] O.R. 287; Seabrook v. British Transport Commission
[1959] 2 All E.R. 15; Longthorn v. British Transport Commis
sion [1959] 2 All E.R. 32; Susan Hosiery Limited v. M.N.R.
[1969] 2 Ex.C.R. 27; Mitchell v. Canadian National Railways
(1974) 38 D.L.R. (3d) 581; Alfred Crompton Amusement
Machines Ltd. v. Customs and Excise Commissioners (No. 2)
[1974] A.C. 405.
for which it was established. Section 42(1) of the
National Defence Act, which confers the authority
for such an inquiry, makes no reference, explicit or
implicit, to preparing or obtaining material for
purposes of litigation. It is concerned with matters
"... connected with the government, discipline,
administration or functions of the Canadian
Forces or affecting any officer or man...." The
terms of reference for the inquiry contained in
Admiral Collins' order to the President of the
Board contain no reference to the requirements of
legal advisors or to anticipated litigation. They are
concerned with determining the cause and extent
of the damage and with recommendations as to
how such damage may be prevented in the future.
They reflect the administrative concern of the
Chief of Technical Services rather than the
requirements of anticipated litigation. Most sig
nificant in our opinion is the clearly expressed
intention that representatives of the respondent
Hawker be "invited to attend the proceedings of
the Board." There is nothing in the record to
suggest any limitation on this intended right of
attendance. The statement in the terms of refer
ence that "This investigation is classified CONFI
DENTIAL" does not, in our opinion, clearly qualify
the extent to which the respondent Hawker was to
be permitted to attend and follow the proceedings.
In our view, this expressed intention that the
respondent should have the right to attend is
inconsistent with a purpose to use the inquiry for
the preparation of a privileged document. As for
the affidavit evidence, not only is it not the best
evidence of what Admiral Collins intended when
he instituted the inquiry, but it does not even
constitute clear and unequivocal evidence of what
he, as distinct from the members of the Board or
its legal advisor, may have had in mind as a
purpose of the inquiry. We are therefore of the
opinion that these affidavits are without probative
value on the issue of fact calling for determination.
For all of these reasons we would dismiss the
appeal.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.