T-1005-89
Risi Stone Ltd. and Unites Prefabriques St-Luc
Limitee (Plaintiffs)
v.
Groupe Permacon Inc. (Defendant)
INDEXED AS: RISI STONE LTD. V. GROUPE PERMACON INC.
(T.D.)
Trial Division, Reed J.—Toronto, December 18,
19 and 20, 1989; Ottawa, March 6, 1990.
Practice — Privilege — Solicitor-client — Patent infringe
ment action — Defendant's affidavit referring to lawyer's
opinion letter to demonstrate acted in good faith — Waiver of
privilege — Prothonotary erred in ordering disclosure of entire
document — Correct procedure to file copy of document with
Judge determining whether privilege exists — Reference to
English, Canadian texts as to extent of disclosure required
Purpose for requiring disclosure — Degree of certainty, not
accuracy, of counsel's opinion is at issue — Two aspects of
communication severable — Claim for privilege regarding
undisclosed portions properly made.
This was an appeal from the prothonotary's decision that an
opinion letter sent to the defendant by its solicitors be disclosed
in its entirety to the plaintiffs. An officer of the defendant had
referred to the opinion letter in his affidavit to show that the
defendant had acted in good faith in producing and selling its
Minitalus building blocks which are used in constructing
retaining walls. The reference was made in response to the
allegation that the defendant was purposefully infringing the
plaintiffs' patent. The defendant produced the opinion letter
with a number of deletions. Disclosure was ordered to enable
counsel for the plaintiffs to answer the defendant's claim that
the undisclosed parts of the document were privileged. The
issue was the extent to which solicitor-client privilege had been
waived by making reference to the opinion letter in an affidavit.
Held, the appeal should be allowed.
Where solicitor-client privilege is claimed, a document
should not be ordered disclosed to the other side for the
purposes of argument as to the document's privileged status.
The appropriate procedure is for the claiming party to file a
copy of the document with the Court. The Court should then
determine whether privilege exists without disclosing the docu
ment to counsel opposing the claim. Sometimes such a determi
nation can be made without filing a copy of the document, for
example on the basis of the title of the document alone.
Whether or not a copy must be seen is for the Court to
determine.
The purpose for requiring disclosure of an entire document,
is to prevent the unfairness that would result if one side were to
cite only those portions of a document which were in its favour.
The same subject-matter rule was enunciated in the Great
Atlantic Insurance case where the Court could not determine
the relevance of the excised parts of the document in the
absence of argument by counsel. Here, the legal opinion is
being put forward to show good faith on the part of the
defendant. What is relevant to that issue is the degree of
assurance which the defendant received from its solicitors; any
statements in the letter which would contradict or qualify the
conclusions which appear in the parts of the opinion letter
which have been disclosed would be relevant to that issue. The
legal reasons upon which the solicitor reached his conclusions
are not relevant. Such reasons can be considered to be a
separate subject-matter. It is not the accuracy of counsel's
opinion which is in issue, but the degree of certainty which
counsel communicated to the defendant in giving his opinion.
The two aspects of the communication to the defendant by its
solicitors could be severed and the defendant had accurately
done so.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Charter of Human Rights and Freedoms, R.S.Q. 1977,
c. C-12, s. 9.
Code of Civil Procedure, R.S.Q. 1977, c. C-25.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Great Atlantic Insurance Co v Home Insurance Co,
[1981] 2 All ER 485 (C.A.).
CONSIDERED:
Lapointe v. Canada (Minister of Fisheries and Oceans),
[1987] 1 F.C. 445; (1986), 6 F.T.R. 134 (T.D.); Rogers
v. Bank of Montreal, [1985] 4 W.W.R. 508; (1985), 62
B.C.L.R. 387; 57 C.B.R. (N.S.) 256 (B.C.C.A.); Doland
(George) Ltd v Blackburn Robson Coates Et Co (a firm),
[1972] 3 All ER 959 (Q.B.); Burnell v. British Transport
Commission, [1956] 1 Q.B. 187 (C.A.).
REFERRED TO:
Risi Stone Ltd. v. Omni Stone Corp. (1989), 23 C.P.R.
(3d) 398 (Ont. S.C.); Nowak v. Sanyshyn et al. (1979),
23 O.R. (2d) 797; 9 C.P.C. 303 (H.C.); Kennedy et al. v.
Diversified Mining Interests (Canada) Limited et al.,
[1948] O.W.N. 798 (H.C.); Crysdale et al. v. Carter-
Baron Drilling Services Partnership et al.; Jones et al.;
Third Parties (1987), 61 O.R. (2d) 663; 22 C.P.C. (2d)
232 (S.C.).
AUTHORS CITED
Phipson, Sidney L. Phipson on Evidence, 13th ed.,
London: Sweet & Maxwell, 1982.
Sopinka, John & Lederman, Sidney N., The Law of
Evidence in Civil Cases, Toronto: Butterworths, 1974.
COUNSEL:
Weldon F. Green, Q.C. and W. Lloyd Macll-
quham for plaintiffs.
Daniel J. Gervais and Robert Brouillette for
defendant.
SOLICITORS:
Weldon F. Green, Q.C., Toronto, for plain
tiffs.
Clark Woods Rochefort Fortier, Montreal,
for defendant.
The following are the reasons for order ren
dered in English by
REED J.: The defendant appeals a decision of
the prothonotary, Mr. Giles, ordering that the full
text of an opinion letter sent by solicitors to the
defendant be disclosed to counsel for the plaintiffs.
As I understand that decision, the disclosure was
ordered to enable counsel for the plaintiffs to
properly prepare argument to answer the defend
ant's claim that the undisclosed parts of the docu
ment are privileged.
The argument took a slightly broader approach
before me. Both counsel addressed the question of
whether there had been a waiver of privilege with
out reference to the limitation which I understand
to be inherent in Mr. Giles' order. That is, the
argument of counsel was not directed to whether
the full text of the document should be disclosed to
counsel to enable him to argue that the undisclosed
parts did not retain their privileged character.
Rather, the argument before me was on the sub
stance of the issue, that is, whether the parts of the
letter in question were in fact still privileged or
whether a waiver had occurred. This argument
proceeded without counsel for the plaintiffs having
access to the full text of the letter.
With respect to the procedure for dealing with
claims of solicitor-client privilege, I would first of
all note, that, it is my practice not to allow disclo
sure of a privileged document to counsel for the
other side for the purposes of argument with
respect to the document's status. It is my practice
to require that a copy of the document be made
available to the Court for review without disclo
sure to the other side. This does hobble counsel
who is opposing a claim for solicitor-client privi
lege in making argument. However, in general
claims of this nature can be determined by the
judge without extensive argument thereon and dis
closure to counsel, even for the purposes of argu
ment only, can render any subsequent finding that
the document is privileged academic.
In my view, when a claim for solicitor-client
privilege is being considered, whether it be by a
judge or by a prothonotary, the appropriate proce
dure is for the claiming party to file a copy of the
document with the Court. The Court, then, should
make a determination as to whether privilege
exists without disclosing the document to the coun
sel opposing the claim. Sometimes such a determi
nation can be made without filing a copy of the
document with the Court, for example, on the
basis of the title of the document alone. Whether
or not a copy is required for review is, of course, a
matter for the Court to determine in each case.
I turn then to the substantive issue before me.
As noted, counsel agree that the letter in question
was originally privileged. The issue is the extent to
which that privilege has been waived. In addition,
representations were made that there is a differ
ence between the nature of solicitor-client privilege
in Ontario (under the common law) and in Quebec
(under the Code of Civil Procedure [R.S.Q. 1977,
c. C-25] and the Quebec Charter of Human
Rights and Freedoms [R.S.Q. 1977, c. C-12] sec
tion 9). It was argued that while at common law
the concept of solicitor-client privilege is a rule of
evidentiary exception only, in Quebec the rule is a
substantive right. It was argued that the Quebec
rule applies in this case and that under that rule
waiver is not possible.
I do not need to deal with the interesting ques
tions raised respecting the possible differences be
tween the law of Quebec and the common law if,
in any event, under the latter the circumstances
here in question do not constitute a waiver. I
accordingly will consider that issue first.
Waiver of the solicitor-client privilege which
existed in the letter is claimed because Mr. Cas-
tonguay, an officer of the defendant, in an affida
vit dated July 26, 1989, stated:
[TRANSLATION] 10. However, before marketing Minitalus
blocks Permacon, concerned about the rights of third parties,
asked for and obtained from its counsel an opinion on potential
infringement of third parties' patents or industrial designs. This
opinion reassured Permacon that the Minitalus block was not
infringing any patent or industrial design currently valid and in
effect in Canada, in particular those of Risi mentioned in the
plaintiffs pleadings. [Underlining added.]
And, in response to the plaintiffs' request that the
legal opinion given to the defendant, on which this
assertion was based, be produced, counsel for the
defendant provided the plaintiffs with a copy of
the opinion letter, with a number of deletions
made therefrom:
[TRANSLATION]
January 17, 1989
GROUPE PERMACON INC.
7811, boul. Louis-H. Lafontaine
Bureau 210
Ville d'Anjou (Quebec)
H1K 4E4
Attention Mr. Alain Ratte
RE: Opinion on infringement of patent No. 1,182,295 and
industrial design No. 51,313
Title: RETAINING WALL SYSTEM
Our file: 527-8
Dear Mr. Ratte
You requested an opinion regarding infringement of the
aforementioned Canadian patent and industrial design. In par
ticular, you want to know whether the manufacture and/or sale
of the building block shown in Appendix 1 ("Block A") in
Canada would be an infringement of this patent and industrial
design.
CONFIDENTIAL [portion of letter deleted]
Canadian patent 1,182,295
Before considering the patents and industrial designs found
in detail, the field of protection offered by the claims of patent
'295 must be determined. The first claim of this patent reads as
follows:
"1) In an interlocking block for a retaining wall structure
wherein like blocks are laid in horizontal courses one
upon the other in end to end relation with the upper
blocks interlocking with the lower blocks and displace-
able therealong is sliding fit and therebeyond to overlap
the adjacent ends of the lower blocks and to extend
upwardly as such wall structure is erected at a selected
uniform inclination to the vertical said block having;
an axis terminating in spaced apart end walls and
bounded by generally flat top and bottom walls
arranged in parallel relation to said axis and to each
other and by front and rear facings extending from end
wall to end wall and so separated as to provide a
substantially uniform cross section throughout the axial
extent of same;
— projecting means upstanding from said top wall and
extending axially of said block between said and walls
and spaced inwardly from said front facing to present an
uninterrupted flat top wall portion therebetween
— said bottom wall having recess means therein likewise
spaced inwardly from said front facing and extending
axially of said block between said end walls;
— said projecting means and said recess means having a
configuration and extent so as to matingly interlock in
sliding fit when such blocks are disposed in horizontal
courses one upon the other and in overlapping relation
to present said projecting means upwardly;
— said projecting means being spaced rearwardly in rela
tion to said axis a selected extent exceeding that of said
recess means whereby each overlying horizontal course
is automatically uniformly set back from the next below
horizontal course so as to define a uniformly inclined
wall structure at a selected angle to the vertical."
[TRANSLATION] For there to be a literal infringement of a
claim, each component of the claim must be present in the
object in question.
CONFIDENTIAL [portion of letter deleted]
There is thus no literal infringement of this claim.
CONFIDENTIAL [portion of letter deleted]
We consider there is thus no infringement by applying the
theory of equivalents.
CONFIDENTIAL [portion of letter deleted]
Industrial design 51,313
It must be borne in mind that an industrial design protects the
ornamental or esthetic aspect of an object, not its utilitarian
characteristics.
The extent of the monopoly is determined by considering the
designs and description. The description is supposed to relate to
whatever distinguishes the industrial design from what is
known.
Consequently, for there to be an infringement of the said
industrial design, the object in question must have essentially
the same characteristics as those mentioned in the description
and shown in the designs.
CONFIDENTIAL [portion of letter deleted]
In our opinion the visual characteristics of our block are so
different as not to be an infringement of industrial design
51,313.
CONFIDENTIAL [portion of letter deleted]
Do not hesitate to get in touch with Robert Brouillette or the
undersigned if further information is required.
Yours truly,
CLARK, WOODS
per: Louis Dube
The plaintiffs argue that the reliance by Mr.
Castonguay, in his affidavit, on the legal opinion
which was provided to the defendant, Permacon,
constitutes a waiver and that the defendant must
disclose the opinion letter in its entirety. As I
understand the reason for the defendant's refer
ence to the legal opinion, it was made by Mr.
Castonguay to demonstrate that the defendant had
acted in good faith in producing and selling its
Minitalus blocks. It was given in response to the
plaintiffs' allegation that their patent was being
purposefully infringed by the defendant and that
punitive damages should therefore be awarded
against the defendant.
There is really no dispute that there has been a
waiver of solicitor-client privilege in the legal opin
ion which was given to the defendant, the question
is whether the defendant is required to disclose the
contents of the opinion letter in its entirety. The
plaintiffs rely on jurisprudence which has applied
the principle that when a privileged communica
tion is pleaded or relied upon by one party, the
entire document as well as documents relating
thereto must be disclosed: Lapointe v. Canada
(Minister of Fisheries and Oceans), [1987] 1 F.C.
445 (T.D.), per Cullen J.; Risi Stone Ltd. v. Omni
Stone Corp. (1989), 23 C.P.R. (3d) 398 (Ont.
S.C.), per Master Garfield; Nowak v. Sanyshyn et
al. (1979), 23 O.R. (2d) 797 (H.C.), per Grange
J.; Kennedy et al. v. Diversified Mining Interests
(Canada) Limited et al., [1948] O.W.N. 798
(H.C.), per LeBel J.; Crysdale et al. v. Carter-
Baron Drilling Services Partnership et al.; Jones
et al.; Third Parties (1987), 61 O.R. (2d) 663
(S.C.), per Master Peppiatt.
In the Lapointe case, Mr. Justice Cullen dealt
with a situation where the defendants had pleaded
that they had acted as they had because they were
of the belief that they were entitled in law and on
the basis of the facts to do so. Mr. Justice Cullen
held that by so pleading the defendants had waived
the solicitor-client privilege with respect to the
legal advice they had received. He ordered that
each and every legal opinion given to the defend
ants by legal counsel should be made available to
the plaintiffs [at page 448]:
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?
Mr. Justice Cullen referred to Rogers v. Bank of
Montreal (1985), 62 B.C.L.R. 387 (C.A.) where it
was held that [at pages 448-449 F.C.]:
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.
• • •
... "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".
The other decisions referred to by counsel for
plaintiffs are to a similar effect.
I was not referred, by counsel for the plaintiffs
to any Canadian cases which discussed the extent
of disclosure which must be made. Phipson on
Evidence, 13th ed., (London: Sweet & Maxwell,
1982) contains the following passage at pages
305-306:
The [solicitor-client] privilege may, however, as we have
seen, (Ante, § 15-06) be waived by the client (though not by
the solicitor), either expressly or impliedly—e.g. by the client
being examined by his counsel as to the privileged matter. It
has been suggested that if the witness is examined only as to
part of the document, he cannot be cross-examined as to the
residue, (Bate v. Kinsey, 1 C.M. & R. 38; M'Donnel v. Conry,
Ir. Cir. Rep. 807; R. v. Leverson, 11 Cox 152; Lyell v. Kennedy,
27 Ch. D. 1), but this is clearly incorrect if the residue deals
with the same subject matter. The effect of cross-examining on
the residue is to make the whole document evidence. (Post §
33-42.) Cross-examination does not necessarily bring in other
statements mentioned in the document .... Merely to refer to a
document in a pleading is not tantamount to waiving privilege
in respect of it (though it is otherwise if the terms of the
document are set out). (Butter Gas & Oil Co. v. Hammer (No.
3), [1980] 3 All E.R. 475 (C.A.)).
• • •
The court will permit severance of the various parts of the
document, and thus the retention of privilege for the concealed
part, only if the subject-matter is wholly distinct. [Underlining
added.]
In Sopinka and Lederman, The Law of Evidence
in Civil Cases, at page 182, the following is found:
If the holder of the privilege does waive it, then the solicitor
will be compelled to disclose the confidential communication.
Waiver of the legal professional privilege, however, will not,
without more, result in the waiver of another corresponding
privilege. In George Doland Ltd. v. Blackburn Robson Coates
& Co. et al., the plaintiff company called their solicitor to
testify about a telephone conversation between him and its
managing director. Geoffrey Lane J. ruled that although that
constituted waiver of the solicitor-client privilege, it did not in
addition vitiate the plaintiff's privilege relating to documents
subsequently prepared for the purposes of litigation. [Footnote
omitted.]
The Doland [Doland (George) Ltd v Blackburn
Robson Coates Et Co (a firm), [1972] 3 All ER
959 (Q.B.)] case referred to in Sopinka and Leder-
man dealt with a situation in which the plaintiff
admitted evidence concerning a telephone conver
sation which had taken place between the manag
ing director and the plaintiff's solicitor. It was held
that the defendant's counsel could cross-examine
on any matter contained in the telephone call but
not with respect to documents which came into
existence subsequently or with respect to subse
quent oral conversations.
The purpose behind requiring disclosure of the
whole document when part has been disclosed was
discussed in Burnell v. British Transport Commis
sion, [1956] 1 Q.B. 187 (C.A.) [at page 190]:
It would be most unfair that cross-examining counsel should
use part of the document which was to his advantage and not
allow anyone, not even the judge or the opposing counsel, a
sight of the rest of the document, much of which might have
been against him. [Underlining added.]
In Great Atlantic Insurance Co v Home Insur
ance Co, [1981] 2 All ER 485 (C.A.), several
paragraphs of privileged document were read into
the record. The Court held [at pages 490-492]:
The second question is whether, the whole of the memoran
dum being a privileged communication between legal adviser
and client, the plaintiff may waive the privilege with regard to
the first two paragraphs of the memorandum but assert privi
lege over the additional matter. In my judgment severance
would be possible if the memorandum dealt with entirely
different subject matters or different incidents and could in
effect be divided into two separate memoranda each dealing
with a separate subject matter. The judge with the experience
of 14 days of the trial and after reading the whole of the
memorandum came to the conclusion that the first two para
graphs of the memorandum and the additional matter dealt
with the same subject matter. Knowing far less about the
circumstances, I would be slow to come to a different conclu
sion. Having read the whole memorandum, I agree with him.
Indeed the affidavit of the plaintiffs' English solicitors makes
this plain.
Counsel for the plaintiffs argued that severance is permissi
ble where the part disclosed is only an account of a discussion
which itself is not privileged. But, once it is decided that the
memorandum deals with only one subject matter, it seems to
me that it might be or appear dangerous or misleading to allow
the plaintiffs to disclose part of the memorandum and to assert
privilege over the remainder. In the present case the suspicions
of Heath which have not unnaturally been aroused by the
disclosure of only part of the memorandum can only be justi
fied or allayed by disclosing the whole. It would be undesirable
for severance to be allowed in these circumstances. In my
judgment, the simplest, safest and most straightforward rule is
that if a document is privileged then privilege must be asserted,
if at all, to the whole document unless the document deals with
separate subject matters so that the document can in effect be
divided into two separate and distinct documents each of which
is complete.
• • •
It is true that in the present case the first two paragraphs can
be divided from the remainder of the memorandum but they
deal with the same subject matter. Waiver of part of a docu
ment is bound to lead to grave difficulties for all parties and to
many unjustified suspicions.
. .
In Nea Karteria Maritime Co Ltd v Atlantic and Great Lakes
Steamship Corpn (11th December 1978, unreported) decided
by Mustill J the judge succinctly summarised the position as
follows:
`I believe that the princile underlying the rule of practice
exemplified by Burnell v British Transport Commission is
that, where a party is deploying in court material which
would otherwise be privileged, the opposite party and the
court must have an opportunity of satisfying themselves that
what the party has chosen to release from privilege repre
sents the whole of the material relevant to the issue in
question. To allow an individual item to be plucked out of
context would be to risk injustice through its real weight or
meaning being misunderstood. In my view, the same princi
ple can be seen at work in George Doland Ltd v Blackburn
Robson Coates & Co in a rather different context.'
I agree and would only add that it would not be satisfactory
for the court to decide that part of a privileged document can
be introduced without waiving privilege with regard to the
other part in the absence of informed argument to the contrary,
and there can be no informed argument without the disclosure,
which would make argument unnecessary.
Counsel for the plaintiffs attempted to distinguish the deci
sions in Burnell v British Transport Commission and George
Doland Ltd v Blackburn Robson Coates & Co on the grounds
that it was necessary in those cases for the whole statement to
be disclosed in order that the consistency of the testimony of a
witness could be scrutinised. In my judgment, however, the rule
that privilege relating to a document which deals with one
subject matter cannot be waived as to part and asserted as to
the remainder is based on the possibility that any use of part of
a document may be unfair or misleading, that the party who
possesses the document is clearly not the person who can decide
whether a partial disclosure is misleading or not, nor can the
judge decide without hearing argument, nor can he hear argu
ment unless the document is disclosed as a whole to the other
side. Once disclosure has taken place by introducing part of the
document into evidence or using it in court it cannot be erased.
[Underlining added.]
It must be noted, then, that the purpose for
requiring disclosure of a whole document, when
part only is released, is to prevent unfairness to the
other party, to prevent one side citing only those
portions of a document which are in its favour.
The reason the Court enunciated, what I will call,
the same subject-matter rule in the Great Atlantic
Insurance case was because it was of the view that
the relevance of the excised parts of the document
could not be determined by the judge, in the
absence of argument by counsel thereon.
In the present case, the legal opinion tendered is
being put forward to show good faith on the part
of the defendant. What is relevant to that issue,
then, is the degree of assurance which the defend
ant received from its solicitors; any statements in
the letter which would contradict or qualify the
conclusions which appear in the parts of the opin
ion letter which have been disclosed would be
relevant to that issue. If the defendant acted in the
face of a qualified opinion or in defiance of an
opinion which indicated that there was no right to
do so (despite the portions of the letter which have
been disclosed indicating otherwise) then those
other portions would have to be disclosed. The
legal reasons upon which the solicitor reached his
conclusions however, (e.g. amount of prior art
searched) are not relevant to this issue. In my
view, such reasons can be considered to be a
separate subject-matter. It is not the accuracy of
counsel's opinion which is in issue but the degree
of certainty which counsel communicated to the
defendant in giving an opinion.
In my view, the two aspects of the communica
tion to the defendant by its solicitors (the qualified
or unqualified nature of the opinion and the legal
grounds therefor) can be severed and counsel for
the defendant has accurately done so. This is not a
case where there is need for argument from coun
sel before it is possible for a judge to determine the
relevance of the severed portions and whether they
address the same or different subject-matters. In
my view, the defendant has disclosed portions of
the communication connected to the aspect of that
communication which was put in issue by the
waiver. The claim for privilege with respect to the
undisclosed portions is properly made.
While the matter is being dealt with on motion,
as a preliminary issue, that does not preclude the
Trial Judge reconsidering the issue should evi
dence at that stage be such as to indicate that this
would be appropriate. Accordingly, the copy of the
letter will be placed in a sealed envelope marked
confidential—for the eyes of the Court only. In the
absence of further order of the Court, it will
remain so.
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.