T-2816-84
Jules John Lapointe and Pisces Marine Ltd. on
behalf of themselves and the crew of the commer
cial fishing vessel Resolution 11 (Plaintiffs)
v.
Minister of Fisheries and Oceans and the Direc-
tor-General, Fisheries and Marine Service, Pacif
ic and Yukon Region of the Department of Fisher
ies and Oceans (Defendants)
INDEXED AS: LAPOINTE V. CANADA (MINISTER OF FISHERIES
AND OCEANS)
Trial Division, Cullen J.—Vancouver, October 20
and 22, 1986.
Practice — Privilege — Legal opinions — Application for
order requiring defendants to provide answers and documents
arising from examination for discovery — Allegation defen
dants acted without authority in cancelling fishing licences
Fisheries officials securing legal opinions before taking action
— Defendants say acting in belief actions authorized by law
and on basis of facts as believed by them — Whether, by so
pleading, defendants waiving privilege re legal opinions
Rogers v. Bank of Montreal (1985), 62 B.C.L.R. 387 (C.A.)
authority for proposition that by raising defence of reliance on
legal opinion defendant making its knowledge of law relevant
to proceedings — American decision to effect party waiving
protection of attorney-client privilege when voluntarily inject
ing into suit question of his state of mind — Impossible to
judge whether defendants' actions in good faith without access
to legal opinions — Order defendants produce opinions
Access restricted to parties for confidential use — Third
parties seeking access to apply to Court — Federal Court
Rules, C.R.C., c. 663, R. 465(18) — Fisheries Act, R.S.C.
1970, c. F-14.
Practice — Discovery — Production of documents — Com
munications between solicitor and client — Legal opinions —
Privilege lost when waived by client in raising defence of
reliance on legal opinion where plaintiff's allegation defendant
acting maliciously — Judging truth of defences requiring
access to legal opinions — Access to opinions ordered for
confidential use of parties only.
CASE JUDICIALLY CONSIDERED
APPLIED:
Rogers v. Bank of Montreal (1985), 62 B.C.L.R. 387
(C.A.).
COUNSEL:
J. R. Pollard for plaintiffs.
G. O. Eggertson for defendants.
SOLICITORS:
Richards Buell Sutton, Vancouver, for plain
tiffs.
Deputy Attorney General of Canada for
defendants.
The following are the reasons for order ren
dered in English by
CULLEN J.: This is an application by the plain
tiffs for an order pursuant to Federal Court Rule
465(18) [C.R.C., c. 663] that the "defendants
provide answers and documents arising from the
Examination for Discovery of Alan Gibson held
June 25, 1986".
The nature of the claim in this action is that the
defendants acted without authority to cancel cer
tain fishing licences. Paragraphs 11, 12 and 16 of
the statement of claim, if I may paraphrase, state
that the defendants acted without authority in
cancelling and suspending certain fishing licences
(these were ordered re-instated by Rouleau J. on
September 27, 1984 [see (1984), 9 Admin. L.R. 1
(F.C.T.D.)]). The allegation is that the defendants
breached the rules of natural justice, their servants
acted maliciously in requesting the Minister of
Fisheries and Oceans (Minister) to cancel the
licences, and later claim damages for loss of profits
and consequential and punitive damages. In a
nutshell, Mr. Lapointe one of the defendants was
charged and convicted of an offence under the
Fisheries Act [R.S.C. 1970, c. F-14], and penalties
were imposed. He was fined $5,000, a request was
made for suspension of fishing privileges and later
the Minister suspended or cancelled certain
licences, and also agreed to permanent cancella
tion of the Roe Herring Seine Licence and can
celled the Personal Commercial Fishing Licence
and Commercial Fishing Vessel Certificate for
1985 and 1986.
Legal opinions were secured by officials before
making their recommendations to the Minister.
Exhibit E to the affidavit of J. Raymond Pollard,
counsel for the plaintiff, reads in part as follows:
Mr. Paul Partridge, a legal advisor from the Department of
Justice in Vancouver, subsequently expressed his opinion that it
is not within our jurisdiction to cancel Mr. Lapointe's existing
licence, but rather the appropriate action would be to refuse to
issue new licences for 1985. Mr. Asselin has been apprised of
this and has advised us that Mr. Partridge may be correct, and
that our previously agreed course of action, i.e. cancellation,
could be found invalid by a court of law.
We have been notified that Mr. Lapointe intends to appeal
the Judge's decision, although as of yesterday notice to appeal
had not been served and it is not known upon what grounds an
appeal is being made. Mr. Asselin has recommended that
should Mr. Lapointe in fact appeal the decision, the cancella
tion of his licences should not be implemented until the appeal
process has been completed.
It should be noted that the Minister's decision has already
been announced and a notice of intent to cancel the licences has
been sent to Mr. Lapointe. Furthermore, it should be noted that
failure to cancel the licence immediately could permit Mr.
Lapointe to escape many of the effects of the cancellation by
entering into licence lease arrangements. Finally, and most
important, the potential negative impact of an appearance by
Mr. Lapointe in the fishery this year on industry co-operation
with our fisheries managers is enormous.
Thus I propose that Mr. Shinners be instructed today to
cancel Mr. Lapointe's licence as planned. Should Mr. Lapointe
appeal the Judge's decision, he may also request that the
Minister reconsider the cancellation, i.e. reissue his licences. It
would be my recommendation in this case that the request be
refused. This would leave the Department liable for damages
should his appeal be upheld, but no matter what the outcome
the Department's credibility with industry will have been
maintained.
Thus there is little doubt that legal opinions
were sought from Mr. Partridge. Similarly, there
is no argument that these legal opinions were
privileged and that is conceded by counsel for the
plaintiffs. However, counsel for the plaintiffs con
tends that the privilege has been waived, due to
defences raised in the amended statement of
defence, and particularly paragraphs 4, 15 and 22.
Paraphrasing again, the defence alleges actions
taken were done in the exercise of their power
pursuant to appropriate legislation. Similarly,
employees were acting within the scope of their
employment as servants of Her Majesty the
Queen. There is a denial of acting maliciously in
requesting certain actions by the Minister. And
finally, in paragraph 22, it is stated that the
defendants and each of them were acting in the
belief that they and each of them were entitled in
law and on the basis of the facts before them and
as believed by them and each of them to do what
they did.
By pleading as they have in paragraph 22, I am
satisfied that the defendants have waived the privi
lege, and each and every opinion given by legal
counsel must be made available to the plaintiffs.
The Department received legal advice about laying
charges and also about the course of action that
should be followed in the event of an appeal. How
can anyone fairly judge whether the defendants or
either of them or their servants, or agents acted
maliciously, or whether they acted in belief that
they were entitled in law in acting as they did
unless one has access to the legal opinions?
I agree with counsel for the plaintiffs, that the
defendants have raised the matter in their
pleading.
Rogers v. Bank of Montreal (1985), 62 B.C.L.R. 387 (C.A.).
In [this case there was] an action for damages for the
wrongful appointment of a receiver under a debenture given by
the plaintiff's company, the receiver claimed indemnification
from the bank in third party proceedings. The bank in its
defence alleged that it had relied on the professional advice of
the receiver respecting the lawfulness of the appointment and
the timing of the demand for payment. The receiver obtained
an order exclusively permitting it to discover documents dis
closing advice the bank received from its solicitors concerning
the appointment of a receiver. The bank and another debenture
holder that was a party to the action appealed. The receiver
cross-appealed concerning a restriction on the disclosure of
communications from the bank to its solicitors.
Held—Appeal dismissed; cross-appeal allowed.
By raising the defence of reliance on the legal opinion of the
receiver respecting its appointment and the timing of the
demand for payment, the bank made its knowledge of the law
relevant to the proceedings. The bank's right of solicitor-client
privilege respecting the advice it received from its solicitors
concerning those matters ought, therefore, to be removed for
the purposes of the application. However, the restriction in the
order to documents given to the bank by its solicitors was not
justified and the order was extended to include disclosure of
communications from the bank to its solicitors.
Mr. Justice Hutcheon at page 390 quoting the
Trial Judge:
In ordering production, the judge said this [at p. 243]:
All that must now be produced are documents, or portions
of documents, communicating or recording advice given to
the bank by its solicitors, at any time prior to the receiver
taking possession, concerning the right of the bank to have a
receiver put in under the debenture without notice, or the
timing of demand or length of notice which might be regard
ed as appropriate or advisable. No other party will be
entitled to such disclosure except by special order.
And then:
The judge found [at p. 242] that "the bank's assertion that it
relied on legal advice given by the receiver necessarily puts in
issue the rest of the bank's knowledge of the relevant law and
therefore the nature of the legal advice it received from others".
Later at pages 392 and 393:
The issue in this case is not the knowledge of the bank. The
issue is whether the bank was induced to take certain steps in
reliance upon the advice from the receiver on legal matters. To
take one instance, the receiver, according to the bank, advised
the bank that it was not necessary to allow Abacus time for
payment before the appointment of the receiver. A significant
legal decision had been rendered some months earlier to the
opposite of that advice. The extent to which the bank had been
advised about that decision, not merely of its result, is impor
tant in the resolution of the issue whether the bank relied upon
the advice of the receiver.
There do not appear to be any decided cases in Canada that
raise the facts that we have in this case. Cases have been
referred to us from jurisdictions in the United States and I have
found one decision in particular to be persuasive. I refer to U.S.
v. Exxon Corp., 94 F.R.D. 246 (1981), a decision of the
District Court of Columbia. At p. 247, the judge said:
Exxon has asserted the attorney-client privilege with
respect to 395 documents sought by the government in
interrogatories 9-19 and document requests 1 and 2. In this
motion to compel, plaintiff claims that these documents are
not privileged because Exxon waived the attorney-client
privilege by interposing the affirmative defense of good faith
reliance on the government's regulations and communica
tions.
At p. 248:
Most courts considering the matter have concluded that a
party waives the protection of the attorney-client privilege
when he voluntarily injects into the suit the question of his
state of mind. For example, in Anderson v. Nixon, 444 F.
Supp. 1195, 1200 (D.D.C. 1978), Judge Gesell stated that as
a general principle "a client waives his attorney-client privi
lege when he brings suit or raises an affirmative defence that
makes his intent and knowledge of the law relevant."
And, finally, at p. 249:
Exxon's affirmative defenses necessarily revolve around
whether Exxon did, in fact, primarily or solely rely upon a
particular DOE regulation or communication when the com
pany made its pricing decisions. Thus, the only way to assess
the validity of Exxon's affirmative defenses, voluntarily
injected into this dispute, is to investigate attorney-client
communications where Exxon's interpretation of various
DOE policies and directives was established and where
Exxon expressed its intentions regarding compliance with
those policies and directives. There is no other reasonable
way for plaintiff to explore Exxon's corporate state of mind,
a consideration now central to this suit.
Mr. Chiasson sought to distinguish that decision on the basis
that the defence of good faith was one peculiar to the United
States law. I do not think that to be a valid distinction. What
underlines both that defence and the defence in this case is that
the party claiming the privilege relied upon the advice, in one
case of the government, and in the other case of the receiver,
and, acting on that reliance, took certain steps. That necessarily
involves an inquiry into the corporate state of mind of the bank
when it was induced and decided to act. Nor do I think that the
law of solicitor-client privilege, as outlined by the Supreme
Court of Canada in Descôteaux and Solosky is in this respect
any different from the law that is expressed in U.S. v. Exxon
and in other cases cited to us by Mr. Hordo.
I am of course aware of the necessity for and the
importance of a solicitor/client privilege. Counsel
for the defendants quite properly and accurately
emphasized the singular need for this privilege,
and that it should not be set aside without strong
conviction for the need to do so. Personally, I have
strong reservations against revoking a solicitor/cli-
ent privilege, and with the production of Exhibit E
to Mr. Pollard's affidavit I frankly considered if it
were really necessary in the circumstances here to
require that the legal opinions be made available
to the plaintiffs. However, without the knowledge
of the contents of the legal opinions given, the
counsel for the plaintiffs would be hard pressed to
see to it that his client's rights were advanced as
they should be. Arguments will be made and deci
sions given at trial about the conduct of the
defendants, but to have the complete story it is
essential that the defendants produce the legal
opinions they received prior to taking action.
I am however imposing a restriction, namely
that access to the opinions shall be available only
to the parties to this issue for their confidential
use. Access to these opinions requested from any
other person may be given only after application to
this Court.
Two questions, number 152 and number 290
remain to be answered, and counsel for the defen
dants indicates that the person most able to answer
these questions, if they can be answered, is out of
the country until November 3, 1986. I will there
fore order that these questions be answered on or
before November 17, 1986, with costs in the cause.
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.