Federal Court Of Appeal Confirms Common Interest Privilege Applies In Commercial Transactions

On March 6, the Federal Court of Appeal confirmed that common interest privilege (CIP) protects the sharing, between parties to a commercial transaction, of communications that are subject to solicitor-client privilege (SCP). IGGillis Holdings Inc. v. The Minister of National Revenue is among the clearest statements in support of the existence of such privilege in Canada.1

What You Need To Know

The decision restores certainty in this area of the law in Canada. Prior to the lower court's decision,2 Canadian courts had uniformly recognized the application of CIP to protect disclosure of SCP information that is shared between parties to a commercial transaction. The trial decision, which the Federal Court of Appeal overturned, had held that CIP should not apply in this context. IGGillis concludes explicitly that the law of CIP is uniform across Canada. CIP applies broadly. Many cases upholding the application of CIP involve M&A transactions where a target has shared privileged information about things such as asset or liability values or ownership. This case involves a tax dispute with the Minister of National Revenue, who sought to review legal advice shared between counterparties during negotiations over tax structuring issues. IGGillis confirms that CIP applies to legal advice given in the context of commercial transactions generally. Despite the apparent breadth of CIP, its limits are not yet known. The Federal Court of Appeal does not clarify the extent to which CIP can extend beyond...