Judgments

[1995] 2 F.C. 762

A-472-94

Chief Victor Buffalo acting on his own behalf and on behalf of the other members of the Samson Indian Nation and Band and The Samson Indian Band and Nation (Plaintiffs) (Respondents)

v.

Her Majesty the Queen in Right of Canada, The Honourable Pierre Cadieux, Minister of Indian Affairs and Northern Development, The Honourable Michael Wilson, Minister of Finance and Donald Goodwin, Assistant Deputy Minister, Department of Indian Affairs and Northern Development (Defendants) (Appellants)

T-1386-90

Chief Jerome Morin acting on his own behalf as well as on behalf of all the members of Enoch’s Band of Indians and the Residents thereof on and of Stony Plain Reserve No. 135 (Plaintiffs) (Respondents)

v.

Her Majesty the Queen in Right of Canada (Defendant) (Appellant)

T-1254-92

Chief John Ermineskin, Lawrence Wildcat, Gordon Lee, Art Littlechild, Maurice Wolfe, Curtis Ermineskin, Gerry Ermineskin, Earl Ermineskin, Rick Wolfe, Ken Cutarm, Brian Lee, Lester Fraynn, the elected Chief and Councillors of the Ermineskin Band and Nation suing on their own behalf and on behalf of all the other members of the Ermineskin Indian Band and Nation (Plaintiffs) (Respondents)

v.

Her Majesty the Queen in Right of Canada, The Honourable Thomas R. Siddon, Minister of Indian Affairs and Northern Development and The Honourable Donald Mazankowski, Minister of Finance (Defendants) (Appellants)

Indexed as: Samson Indian Nation and Band v. Canada (C.A.)

Court of Appeal, Pratte, MacGuigan and Décary JJ.A.—Vancouver, April 4; Ottawa, May 12, 1995.

Practice — Privilege — Solicitor-client privilege — Privilege now extending broadly to include any consultation for legal advice, whether litigious or not — Litigation privilege not limited to advice — As to general solicitor-client privilege in case involving alleged trust relationship between Crown, Indians, Crown’s responsibility to all Canadians to be taken into account — Privileged documents not ordered disclosed for reasons of equity, openness — No implied waiver of privilege.

Native peoples — Crown asserting solicitor-client privilege for documents in breach of trust actions — Alleged trust relationship between Crown, Indians not superseding privilege claim — Practices covering private trusts not automatically applicable to Crown trusts — Crown acting not only for Indians — Accountable to all Canadians — Solicitor-client privilege not ousted by equity, openness considerations.

Crown — Trusts — Crown asserting solicitor-client privilege for documents in breach of trust actions brought by Indian Bands — Whether alleged trust relationship superseding privilege — Practices relating to private trusts not automatically applicable to Crown trusts — Crown not ordinary “trustee” — Acting in interest of Indians but accountable to all Canadians.

In three actions for breach of trust, the Crown claimed privilege, inter alia, with respect to documents a) on the basis of solicitor-client privilege in litigation and b) on the basis of a general solicitor-client privilege, the legal professional privilege. The Motions Judge allowed the Crown’s claim with respect to documents for which solicitor-client privilege in litigation was claimed but only to the extent that they were initiated for the “dominant purpose of advising in the conduct of this litigation”. The Motions Judge ordered the production of the documents for which the legal professional privilege was claimed, “subject to objection by [the Crown] to production where [its] concern is more than reliance on general solicitor-client privilege”. This was an appeal from that decision.

Held, the appeal should be allowed.

The recognition of privileged communications between lawyers and their clients, originally only an exemption from testimonial compulsion, today includes communications exchanged during other litigation, those made in contemplation of litigation, and, ultimately, any consultation for legal advice, whether litigious or not. The privilege has gradually been given a particularly broad scope. Solicitor-client privilege, therefore, is not to be interfered with except to the extent absolutely necessary, and any conflict should be resolved in favour of protecting confidentiality.

With respect to the litigation privilege, the Motions Judge has unduly restricted its scope when he used the words “documents … initiated for the dominant purpose of advising in the conduct of this litigation”. Privilege in relation to litigation is not limited to advice. And it extends to communications in respect of any litigation, actual or contemplated. The order will therefore be amended to read: “documents … initiated for the dominant purpose of the conduct of litigation”.

With respect to the general solicitor-client privilege or legal advice privilege, the respondents invoked the alleged trust relationship between the Crown and the Indians to argue that this relationship superseded the claim of privilege. The first condition for the application of the trust principle (that the legal advice sought by the trustee belongs to the beneficiaries) at the discovery stage is fulfilled: whatever may be the precise nature of the relationship between the Crown and the Indians, it would prima facie qualify as a trust-style relationship for this purpose. However, the rules and practices developed with respect to private trusts do not apply automatically to Crown “trusts”. The Crown is no ordinary “trustee”. It acts not only on behalf or in the interest of the Indians, but it is also accountable to the whole Canadian population. It is engaged in many regards in continuous litigation. Considering the Crown’s many “clients” or “beneficiaries”, one cannot assume that all documents at issue concern the respondents.

It is preferable to err on the side of caution and protect privilege, particularly since the respondents will have the opportunity before a motions judge to challenge the claim of privilege document by document.

Reasons of equity and openness cannot found an order of disclosure of privileged documents.

There was no basis to the argument that where a fiduciary puts its state of mind at issue by pleading that it had acted honestly and reasonably there is an implied waiver of privilege and all documents relating to the alleged breach of its legal obligations must be disclosed. This is certainly so where, as here, the pleadings do not expressly allege reliance on legal advice.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Canada Evidence Act, R.S.C., 1985, c. C-5, s. 39.

Federal Court Rules, C.R.C., c. 663, RR. 448 (as am. by SOR/90-846, s. 15), 450 (as am. idem).

CASES JUDICIALLY CONSIDERED

APPLIED:

Solosky v. The Queen, [1980] 1 S.C.R. 821; (1979), 105 D.L.R. (3d) 745; 50 C.C.C. (2d) 495; 16 C.R. (3d) 294; 30 N.R. 380; Descôteaux et al. v. Mierzwinski, [1982] 1 S.C.R. 860; (1982), 141 D.L.R. (3d) 590; 70 C.C.C. (2d) 385; 28 C.R. (3d) 289; 1 C.R.R. 318; 44 N.R. 462; Re Ballard Estate (1994), 20 O.R. (3d) 350 (Gen. Div.); Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335; (1984), 13 D.L.R. (4th) 321; [1984] 6 W.W.R. 481; 59 B.C.L.R. 301; [1985] 1 C.N.L.R. 120; 20 E.T.R. 6; 55 N.R. 161; 36 R.P.R. 1; R. v. Sparrow, [1990] 1 S.C.R. 1075; (1990), 70 D.L.R. (4th) 385; [1990] 4 W.W.R. 410; 46 B.C.L.R. (2d) 1; 56 C.C.C. (3d) 263; [1990] 3 C.N.L.R. 160; 111 N.R. 241.

DISTINGUISHED:

R. v. Stinchcombe, [1991] 3 S.C.R. 326; (1991), 120 A.R. 161; [1992] 1 W.W.R. 97; 83 Alta. L.R. (2d) 93; 68 C.C.C. (3d) 1; 8 C.R. (4th) 277; 130 N.R. 277; 8 W.A.C. 161.

REFERRED TO:

R. v. Littlechild (1979), 19 A.R. 395; 108 D.L.R. (3d) 340; [1980] 1 W.W.R. 742; 51 C.C.C. (2d) 406; 11 C.R. (3d) 390 (C.A.); Susan Hosiery Ltd. v. Minister of National Revenue, [1969] 2 Ex. C.R. 27; [1969] C.T.C. 353; (1969), 69 DTC 5278; Weiler v. Canada (Department of Justice), [1991] 3 F.C. 617 (1991), 37 C.P.R. (3d) 1; 46 F.T.R. 163 (T.D.); Balabel v Air-India, [1988] 2 All ER 246 (C.A.); Crompton (Alfred) Amusement Machines Ltd v Commissioners of Customs and Excise (No 2), [1973] 2 All ER 1169 (H.L.); Shell Canada Ltd. (In re), [1975] F.C. 184; (1975), 55 D.L.R. (3d) 713; 22 C.C.C. (2d) 70; 18 C.P.R. (2d) 155; 29 C.R.N.S. 361 (C.A.); IBM Canada Limited-IBM Canada Limitée v. Xerox of Canada Limited, [1978] 1 F.C. 513 (1977), 32 C.P.R. (2d) 205; 15 N.R. 11 (C.A.); Canada (Minister of Industry, Trade and Commerce) v. Central Cartage Company et al. (1987), 10 F.T.R. 225 (F.C.T.D.).

APPEAL from an order of the Motions Judge (Samson Indian Band v. Canada, [1994] F.C.J. No. 1448 (T.D.) (QL)) on claims of solicitor-client privilege with respect to documents which the Bands wanted the Crown to produce at the discovery stage of actions for breach of duty in the administration of a trust.

COUNSEL:

Barbara Ritzen for defendants (appellants).

Edward H. Molstad, Q.C. and Owen Young for plaintiffs (respondents) (Chief Victor Buffalo and The Samson Indian Band and Nation).

L. Leighton Decore for plaintiffs (respondents) (Chief Jerome Morin and members of Enoch’s Band of Indians and the Residents therof on and of Stone Plain Reserve No. 135).

Marvin R. V. Storrow, Q.C. and Maria A. Morellato for plaintiffs (respondents) (Chief John Ermineskin, Lawrence Widcat, Gordon Lee, Art Littlechild, Maurice Wolfe, Curtis Ermineskin, Gerry Ermineskin, Earl Ermineskin, Rick Wolfe, Ken Cutarm, Brian Lee, Lester Fraynn).

SOLICITORS:

Deputy Attorney General of Canada for defendants (appellants).

Molstad, Gilbert, Edmonton for plaintiffs (respondents) (Chief Victor Buffalo and The Samson Indian Band and Nation).

Biamonte, Cairo & Shortreed, Edmonton, for plaintiffs (respondents) (Chief Jerome Morin and members of Enoch’s Band of Indians and the Residents thereof on and of Stone Plain Reserve No. 135).

Blake, Cassels & Graydon, Vancouver, for plaintiffs (respondents) (Chief John Ermineskin, Lawrence Widcat, Gordon Lee, Art Littlechild, Maurice Wolfe, Curtis Ermineskin, Gerry Ermineskin, Earl Ermineskin, Rick Wolfe, Ken Cutarm, Brian Lee, Lester Fraynn).

The following are the reasons for judgment rendered in English by

MacGuigan and Décary J.J.A.: This appeal relates to three actions, T-2022-89, T-1386-90, T-1254-92, in which the statements of claim are very similar and the issues at law and of fact are the same. The actions are to be tried together on common evidence.

The various respondents in these proceedings (“Samson Band”, “Enoch Band”, and “Ermineskin Band”, respectively) commenced action against the various appellants (hereinafter referred to as “the Crown”) on the basis of a breach by the Crown of trust, trust-like, fiduciary or other equitable obligations owed to the respondents in respect of natural resources of and royalties from Indian reserves, moneys paid in trust to the Crown in relation to royalties, and moneys for programs and services.

As required by subsection 448(1) of the Federal Court Rules [C.R.C., c. 663 (as am. by SOR/90-846, s. 15)] the Crown filed affidavits of documents in respect of the respondents’ actions. Pursuant to subsection 448(2) [as am. idem], the Crown identified, in a separate list, all those documents which are or were in the possession, power or control of the Crown and for which privilege is claimed.

By notice of motion the respondents sought an order requiring production of 1,000 or more documents over which the Crown had claimed privilege. The Motions Judge [[1994] F.C.J. N^o 1448 (T.D.) (QL)] ordered the Crown to file an amended affidavit of documents, pursuant to Federal Court Rules, Rules 448 and 450 [as am. idem], identifying in separate lists the following five categories of documents in respect of which privilege had originally been claimed by the Crown: (A) those already produced or agreed to be produced to the respondents; (B) those to be certified by production of a certificate pursuant to section 39 of the Canada Evidence Act[1]; (C) those claimed to be privileged on the basis of solicitor- client privilege in litigation; (D) those which the Crown claims are irrelevant to these actions; (E) those which the Crown claims are subject to a general solicitor and client privilege, the legal professional privilege.

No order was made by the Motions Judge with respect to group A. With respect to group B he held that the Crown had not complied with section 39 of the Canada Evidence Act, and gave directions as to compliance, which have not been appealed. With respect to class D, he held that the Court would not order the production of irrelevant documents, but that the onus was on the Crown to establish irrelevance, and that the Court would review the documents if necessary. The Crown’s appeal to this order relates to classes C and E, which read as follows (Appeal Book, Vol. III, at pages 415-416):

Schedule IIC—Documents for which solicitor and client privilege is claimed on the ground they were initiated for the dominant purpose of advising in the conduct of this litigation. If there is any question or dispute the Court will examine the documents and rule in each case whether it is privileged or is to be produced.

…

Schedule IIE—Documents, which are relevant, for which the defendants claim solicitor and client privilege. These documents shall be produced forthwith to the plaintiffs, subject to objection by defendants to production where the defendants’ concern is more than reliance on general solicitor and client privilege. If objection not be resolved by agreement, any party may apply for disposition of the matter by the Court.

It should be noted that the parties have signed a confidentiality document which restricts the use of all documents to the purposes of this litigation only.

Solicitor and client privilege: description

The recognition of privileged communications between lawyers and their clients, as fundamental to the due administration of justice, dates back some four centuries, and originally was only an exemption from testimonial compulsion. The privilege has gradually been extended to include communications exchanged during other litigation, those made in contemplation of litigation, and, ultimately, any consultation for legal advice, whether litigious or not.

Today, it is generally recognized that there are two distinct branches of solicitor and client privilege: the litigation privilege and the legal advice privilege. The litigation privilege protects from disclosure all communications between a solicitor and client, or third parties, which are made in the course of preparation for any existing or contemplated litigation. The legal advice privilege protects all communications, written or oral, between a solicitor and a client that are directly related to the seeking, formulating or giving of legal advice; it is not necessary that the communication specifically request or offer advice, as long as it can be placed within the continuum of communication in which the solicitor tenders advice; it is not confined to telling the client the law and it includes advice as to what should be done in the relevant legal context.

The principles relating to solicitor and client privilege apply in both civil and criminal cases, and they apply regardless of whether the solicitor is in private practice or is a salaried or government solicitor.[2]

In recent years the privilege has been given a particularly broad scope. In Solosky v. The Queen, Dickson J. (as he then was) stated:[3]

Privilege is no longer regarded merely as a rule of evidence which acts as a shield to prevent privileged materials from being tendered in evidence in a court room. The courts, unwilling to so restrict the concept, have extended its application well beyond those limits.

In the subsequent case of Descôteaux et al. v. Mierzwinski, the Supreme Court, per Lamer J. (as he then was), went on to say:[4]

It is quite apparent that the Court in that case [Solosky] applied a standard that has nothing to do with the rule of evidence, the privilege, since there was never any question of testimony before a tribunal or court. The Court in fact, in my view, applied a substantive rule, without actually formulating it, and, consequently, recognized implicitly that the right to confidentiality, which had long ago given rise to a rule of evidence, had also since given rise to a substantive rule.

It would, I think, be useful for us to formulate this substantive rule, as the judges formerly did with the rule of evidence; it could, in my view, be stated as follows:

1.   The confidentiality of communications between solicitor and client may be raised in any circumstances where such communications are likely to be disclosed without the client’s consent.

2.   Unless the law provides otherwise, when and to the extent that the legitimate exercise of a right would interfere with another person’s right to have his communications with his lawyer kept confidential, the resulting conflict should be resolved in favour of protecting the confidentiality.

3.   When the law gives someone the authority to do something which, in the circumstances of the case, might interfere with that confidentiality, the decision to do so and the choice of means of exercising that authority should be determined with a view to not interfering with it except to the extent absolutely necessary in order to achieve the ends sought by the enabling legislation.

4.   Acts providing otherwise in situations under paragraph 2 and enabling legislation referred to in paragraph 3 must be interpreted restrictively.

Contrary to the contention of the respondent Samson Band, solicitor-client privilege, therefore, is not to be interfered with except to the extent absolutely necessary, and any conflict should be resolved in favour of protecting confidentiality.[5]

Appeal with respect to class C (the litigation privilege)

With respect to the third class (the litigation privilege, Schedule IIC of the order), the Crown’s contention is that the privilege was unduly restricted by the Motions Judge when he used the words “documents … initiated for the dominant purpose of advising in the conduct of this litigation” (our emphasis).

We accept that contention. On the one hand, privilege in relation to litigation is not limited to advice. On the other hand, it extends to communications in respect of any litigation, actual or contemplated.[6] It would therefore seem more accurate to amend the Motions Judge’s statement in the first sentence of Schedule IIC to read: “documents … initiated for the dominant purpose of the conduct of litigation”.

The Crown appears to have been particularly concerned about the revelation of documents from this case in other similar pending cases and from related completed cases in this case. Counsel for the Enoch Band, which appears to be the only respondent having such an issue, disclaimed before us any intention to challenge the Crown on this point, so that it may be regarded here as a non-issue. In any event the amendment above should take care of that problem, if it arises.

Appeal with respect to class E (the legal advice privilege)

It is settled law that where there is a trust relationship, no privilege attaches to communications between a solicitor and the trustee as against the beneficiaries who have a joint interest with the trustee in the subject-matter of the communications. The matter was recently canvassed by Lederman J. in Re Ballard Estate, where it was said:[7]

Both counsel recognized the principle that communications passing between an executor or trustee and a solicitor are not privileged as against beneficiaries who are claiming under the will or trust. The rationale was set out in the classic statement of Lord Wrenbury in O’Rourke v. Darbishire, [1920] A.C. 581 at pp. 626-27, [1920] All E.R. Rep. 1 (H.L.), as follows:

If the plaintiff is right in saying that he is a beneficiary, and if the documents are documents belonging to the executors as executors, he has a right to access to the documents which he desires to inspect upon what has been called in the judgments in this case a proprietary right. The beneficiary is entitled to see all trust documents because they are trust documents and because he is a beneficiary. They are in this sense his own. Action or no action, he is entitled to access to them. This has nothing to do with discovery. The right to discovery is a right to see someone else’s documents. The proprietary right is a right to access to documents which are your own. No question of professional privilege arises in such a case. Documents containing professional advice taken by the executors as trustees contain advice taken by trustees for their cestuis que trust, and the beneficiaries are entitled to see them because they are beneficiaries.

Lederman J. added that (at page 353):

When Lord Wrenbury used the phrase “proprietary right” he was saying no more than the documents in question are in a sense the beneficiary’s and is therefore entitled to access them. They are said to belong to the beneficiary not because he or she literally has an ownership interest in them but, rather, because the very reason that the solicitor was engaged and advice taken by the trustees was for the due administration of the estate and for the benefit of all beneficiaries who take or may take under the will or trust.

The Court continued (at page 356):

Moreover, the cases have stated that, whatever approach to the claim of privilege is taken, in actions where the beneficiary is alleging lack of good faith or breach of fiduciary duty, this information is to be made available to him or her. In Froese v. Montreal Trust Co. of Canada, [1993] B.C.J. No. 1529 (B.C. Master), leave to appeal refused [1993] B.C.J. No. 1847, the Master put it this way at para. 27:

I am of the opinion that in the context of litigation in which the plaintiff alleges breach of duty in the administration of a trust and the documents which are sought to be examined are relevant to that issue the plaintiff may succeed on the basis of proprietary right if he makes out a prima facie case that he is a beneficiary of the trust and establishes that the documents are documents obtained or prepared by the trustee in the administration of the trust and in the course of the trustee carrying out his duties as trustee. In my view, to require the plaintiff to pursue and complete an action to determine this preliminary issue before documents relevant to the issue of the breach of the alleged trust can be produced would not promote the economical and expeditious resolution of disputes and would not be in the interests of justice.

The respondents rely on what we shall refer to as the “trust principle” to argue that the alleged trust relationship between the Crown and the respondents, if established on a prima facie basis, supersedes the claim of privilege. The Motions Judge refused to decide the issue on that basis for the following reason (at pages 14-15):

Determination of the relationship between the parties, and the responsibilities arising in that relationship, is a key to resolution of these actions by the plaintiffs. As noted by counsel for the plaintiffs there are references in relevant statutes that support the concept of a trust relationship of the Crown to aboriginal peoples or to their bands, but ultimately determination of the relationship and attendant responsibilities in this case, in my opinion, must await the hearing of evidence and argument by the trial judge. At this stage there is inadequate basis for that relationship to be determined, or for a decision on production of documents to be based upon a presumption of that relationship.

He nevertheless decided in favour of the respondents on what were, essentially, reasons of equity and openness which cannot, in our respectful view, found an order of disclosure of privileged documents. Indeed, before us, the respondents, while obviously supporting the order of the Motions Judge, did so essentially on the basis of the “trust principle”.

In order for the trust principle to apply at the discovery stage of an action for breach of duty in the administration of a trust, two conditions, in our view, must be fulfilled: the alleged trust relationship must be established on a prima facie basis, and the documents allegedly belonging to the beneficiaries must be documents obtained or prepared by the trustee in the administration of the trust and in the course of the trustee carrying out his duties as trustee. We have here little concern with respect to the first condition. Our concern is, rather, with the second one.

We are prepared, because of the very special relationship between the Crown and the Indians[8] and because the Crown is to be held to “a high standard of honourable dealing with respect to the aboriginal peoples of Canada as suggested by Guerin et al. v. The Queen et al.”[9], to accept that whatever may be the precise nature of the relationship between the Crown and the Indians, it would prima facie qualify as a trust-type relationship for the purposes of the application of the trust principle at the discovery stage.

That being said, however, it does not necessarily flow that the rules and practices developed with respect to private trusts apply automatically to Crown “trusts” such as those alleged in the present proceedings.

The basis of the trust principle, as appears from Mr. Justice Lederman’s reasons in Re Ballard Estate, is the assumption, in cases of private trusts, that legal advice sought by the trustee belongs to the beneficiaries “because the very reason that the solicitor was engaged and advice taken by the trustees was for the due administration of the estate and for the benefit of all beneficiaries who take or may take under the will or trust”[10].

That assumption cannot be applied to Crown “trusts”. The Crown can be no ordinary “trustee”. It wears many hats and represents many interests, some of which cannot but be conflicting. It acts not only on behalf or in the interest of the Indians, but it is also accountable to the whole Canadian population. It is engaged in many regards in continuous litigation. It has always to think in terms of present and future legal and constitutional negotiations, be they with the Indians or with the provincial governments, which negotiations, it might be argued, can be equated in these days and ages with continuous litigation. Legal advice may well not have been sought or obtained for the exclusive or dominant benefit of the Indians, let alone that of the three bands involved in these proceedings. Legal advice may well relate to policy decisions in a wide variety of areas which have nothing or little to do with the administration of the “trusts”. It is doubtful that payment of the legal opinions given to the Crown is made out of the “private” funds of the “trusts” it administers ….

There being many possible “clients” or “beneficiaries”, there being many possible reasons for which the Crown sought legal advice, there being many possible effects in a wide variety of areas deriving from the legal advice sought, it is simply not possible at this stage to assume in a general way that all documents at issue, in whole and in part, are documents which were obtained or prepared by the Crown in the administration of the specific “trusts” alleged by the respondents and in the course of the Crown carrying out its duties as “trustee” for the respondents.

As noted by Dickson J. (as he then was) in Solosky[11], “privilege can only be claimed document by document”. We have not seen the documents at issue; we do not know what argument nor what line of argument, if any, may be developed by the parties with respect to each of the documents and, eventually, to a class of them. Furthermore, we cannot rely on any practical precedent in the case law, for this is an approach to the law of privilege which is peculiar to the yet unsettled relationship between the Crown and the Indians. It is not possible in the abstract to resolve the conflict between the alleged right of the Crown to privilege and the alleged right of the respondents to disclosure otherwise than in the manner suggested by the Supreme Court in Descôteaux[12], i.e. in favour of protecting privilege.

It would be ill-advised for a court of appeal, in the circumstances, to blindly order the production by the Crown of the documents listed in class E, albeit in the presence of a confidentiality order. We would rather err on the side of caution, particularly so when one considers that the respondents will have the opportunity before a motions judge to challenge the claim of privilege document by document.

By the same token, and unfortunately for the motions judge, we are not prepared, so early in these proceedings and so early in this type of litigation, to set out specific guidelines without having seen the documents, without knowing what line of argument will be developed with respect to each document or with respect to classes of documents and without learning from the motions judge’s experience and reasoning in dealing with the issue on a document by document basis.

We would therefore rephrase as follows the Motions Judge’s order with respect to Schedule IIE:

Documents for which the defendants claim solicitor and client privilege on the ground that they are protected by the legal advice privilege. If there is any question or dispute the Court will examine the documents and rule in each case, in light of the unique status of the Crown as “trustee” and in light of the unique relationship between the Crown and the Indians, whether it is privileged or is to be produced.

Implied waiver

A word, in closing, on the argument of implied waiver of privilege raised by the respondents. Counsel argue that where a fiduciary puts its state of mind at issue by pleading, in effect, that it has acted honestly and reasonably, all documents relating to the alleged breach of its legal obligations must be disclosed. That may be so where the pleadings expressly allege reliance on legal advice, but certainly is not so in the absence of any such express pleading. Counsel has cited no authority, and we know of none, to the effect that by simply alleging good faith a party waives the privilege which attaches to its communications with its solicitor.

We would allow the appeal and replace Schedules IIC and IIE of the Motions Judge’s Order by the following:

Schedule IIC: Documents for which solicitor and client privilege is claimed on the ground they were initiated for the dominant purpose of the conduct of litigation. If there is any question or dispute the Court will examine the documents and rule in each case whether it is privileged or is to be produced.

Schedule IIE: Documents for which the defendants claim solicitor and client privilege on the ground that they are protected by the legal advice privilege. If there is any question or dispute the Court will examine the documents and rule in each case, in light of the unique status of the Crown as “trustee” and in light of the unique relationship between the Crown and the Indians, whether it is privileged or is to be produced.

We would make no order as to costs.

Pratte J.A.: I agree.

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