Waiver Of Privilege: The Danger Of Pleading Lack Of Informed Consent

In a case that highlights the importance of carefully drafted pleadings, the Alberta Court of Appeal recently split over the question of whether pleading a lack of informed consent to an agreement resulted in the waiver of privilege over legal advice received during the negotiation of that agreement. In Goodswimmer v Canada (Attorney General), the majority of the Court of Appeal found that the appellant had waived solicitor-client privilege by voluntarily placing its reliance on legal advice into issue in its Statement of Claim and by selectively disclosing certain privileged communications. The dissenting Justice engaged in an interesting analysis of the requirements to imply a waiver of privilege and would have characterized the appellant's claim in a way that would not put the content of the legal advice that it received into issue.

Background and Decision Below

In 1990, the Sturgeon Lake Indian Band entered into a Treaty Land Entitlement Agreement with the Crown in order to resolve some or all of its land claims. The Band was assisted by two law firms and the Agreement contained a clause acknowledging the Band's receipt of independent legal advice.

In 1997, a new action for additional treaty claims was filed on behalf of the Band. The claim included allegations that the Crown obtained the Band's consent to the 1990 Agreement without fully informing the Band of the impact of the Agreement on its members' rights.

The Band's document production included 150 records involving communications with its external solicitors. The Crown also produced a draft account from the Band's law firm, which detailed services provided to the Band in connection with the Agreement.

During discovery Questioning, the Crown requested 13 undertakings relating to the activities of the Band's lawyers before and after the signing of the Agreement. The Band objected on the basis of solicitor-client privilege.

The Case Management Judge ordered the undertakings to be answered. She found that the Band had voluntarily put its legal knowledge into issue by pleading a lack of informed consent to the Agreement, which had been entered into with the benefit of legal advice, and that "it would be unfair to permit a party who had set up a claim based on privileged communications to preclude his opponent from discovering against that claim by relying upon privilege."

The Band appealed, including on the grounds that the undertakings were not relevant and material to the claims...