J. Date: 2002/01/18 Docket: S.H. No. 135399 IN THE SUPREME COURT OF NOVA SCOTIA [Cite as: Canada Life Mortgage Services Ltd. v. Leeside Estates Ltd. et al. and Canuck Holdings Limited et al., 2002 NSSC 030] BETWEEN: CANADA LIFE MORTGAGE SERVICES LTD., body corporate PLAINTIFF/DEFENDANT BY COUNTERCLAIM and LEESIDE ESTATES LTD., and BYUNG K. LEE of Kentville, Kings County, Province of Nova Scotia DEFENDANTS/PLAINTIFFS BY COUNTERCLAIM and CANUCK HOLDINGS LIMITED, CANUCK DEVELOPMENT SERVICES LIMITED, BRUCE CHRISTMAS, ANDREW COOKE, and CANADA MORTGAGE AND HOUSING CORPORATION DEFENDANTS BY COUNTERCLAIM HEARD BEFORE: The Honourable Justice David W. Gruchy (in chambers) PLACE HEARD: Halifax, Nova Scotia DATE HEARD: January 14, 2002 DECISION: January 18, 2002 (Orally) WRITTEN RELEASE: January 31, 2002 COUNSEL: John MacDonell and William Ryan, Q.C. for Canada Life Mortgage Services Ltd. Janet Stevenson for Leeside Estates Ltd. and Byung K. Lee Blair Mitchell for Canuck Holdings Limited, Canuck Development Services Limited and Bruce Christmas Barry Alexander for Canada Mortgage and Housing Corporation GRUCHY, J. (Orally): [1] The origin of this action was a mortgage foreclosure commenced by Canada Life Mortgage Services ("Canada Life") against Leeside Estates Ltd. and Byung K. Lee. According to the pleadings the defendants (and will refer to them collectively throughout this decision as "Lee", whether in their capacity as defendants or as plaintiffs by counterclaim) planned to construct an apartment complex at Kentville, Nova Scotia. Lee retained or became involved with Canuck Holdings Limited, Canuck Development Services Limited, Bruce Christmas and Andrew Cooke in the planning of the construction and financing of the project. Canada Life sought to insure the mortgage with Canada Mortgage and Housing Corporation (CMHC) through its mortgage insurance program. Lee also retained the services of Kentville lawyer R. Peter Muttart, Q.C. [2] The mortgage to Canada Life fell into arrears during construction of the apartment complex and Canada Life commenced this foreclosure action. Lee has defended the action on various grounds and has counterclaimed against Canada Life, CMHC, Canuck, Christmas and Cooke (collectively "Canuck"). Without getting into the fine points of the pleadings, Lee has essentially pleaded that Canada Life acted on appraisals negligently prepared, mishandled the advances on the mortgage and failed to abide by its contract with Lee, thereby unjustifiably increasing the liability of Lee. Lee denied (in his personal capacity) that he is mortgagor and denied liability as guarantor and in addition, has accused Canada Life of acting in such manner as to cause the failure of the project. [3] Lee's counterclaim against Canada Life and CMHC is for breach of contract, breach of fiduciary duty to Lee, or for negligence. Particularly relevant in the subject matter of this decision, Lee has claimed that Canada Life and CMHC, "by calculating, through their agent Christmas, the cost of the project in manner that was negligent, such that the costs calculated were one-half of the real anticipated costs known to Christmas (Canada Life) and CMHC, thereby knowing, without communicating that knowledge to Lee that the project would fail causing the assets to revert to (Canada Life) and CMHC through default, causing Leeside to lose its asset and Lee to be called on his guarantee". Lee has also claimed that Canada Life and CMHC breached their contract with Lee or their fiduciary duty to Lee "... by negligence in approving the calculations or representations of Christmas in circumstances where (Canada Life) knew or ought to have known that calculations or representations to have been blatantly inaccurate" and by "by approving mortgage loan financing for 100% of the cost of constructing improvements on the lands when (Canada Life) and CMHC knew, or ought to have known that the funds were insufficient for that purpose." Lee's claim against the other defendants by counterclaim includes negligent misrepresentation, breach of fiduciary duty, breach of contract, negligence. [4] Mr. Muttart acted for Lee in various legal aspects of the development. Initially Mr. Muttart defended Lee in the foreclosure action, but Lee is now represented by his present counsel. [5] In preparation for the trial the various parties convened the discovery of Mr. Muttart. will say more about this below. Certain disclosures were made by Mr. Muttart in the presence of all counsel, but the discovery was not completed and, am informed, only counsel for Christmas and Canuck conducted discovery. The discovery was discontinued due to lack of time. It is clear that the answers to certain questions put to Mr. Muttart were essentially left unresolved and certain other obvious questions not posed. [6] This application is made pursuant to Civil Procedure Rule 20.06 for an order requiring Lee to produce the following documents: 1. All documents pertaining to banking and financial services performed by the Toronto Dominion Bank or any predecessor or predecessor company from 1989 to 1997 for any one or more of Byung Lee or Mrs. J.K. Lee (in the case of Mrs. Lee, in respect of corporations or real property in which Byung Lee has beneficial interest), Canova Trading Limited, Leeside Estates Limited and Cankcorp.; 2. All documents pertaining to banking and financial services performed by the Royal Bank for Dr. Byung Lee or Mrs. J.K. Lee, (in the case of Mrs. Lee, in respect of corporations or real property in which Byung Lee has beneficial interest) Canova Trading Limited, Leeside Estates Limited and Cankorp; 3. All documents in the possession or under the control of the Canadian Food Inspection Agency and touching upon Byung Lee's exercise or performance of employment or professional responsibilities, regardless of when made or by whom made and whether with the Canadian Food Inspection Agency or with or under any predecessor agency or authority of the government of Canada; 4. All documents in the possession of or under the control of Peter Muttart, Q.C. former solicitor to the defendants pertaining to or obtained in the course of his representation of Byung K. Lee, Canova Trading Corporation, Leeside Estates and Mrs. J.K. Lee (in the case of Mrs. Lee, in respect of corporations or real property in which Byung Lee has beneficial interest) during 1995, 1996 and 1997. [7] Lee has objected to the timeliness of this application. They have referred particularly to Civil Procedure Rule 28.05(2) and (3) which reads as follows: 28.05(2) Any party who has filed notice of trial without jury and certificate of readiness pursuant to Subsection (1) of this Rule, or who has consented to the filing of such notice, shall not, after the filing of the notice, initiate or continue any interlocutory proceeding or form of discovery without leave of the court except discovery of expert witnesses within sixty (60) days of the issuance of the notice. (3) Leave of the court pursuant to Subsection (2) of this Rule shall be granted only in exceptional circumstances. [8] In view of subparagraph (3) it is necessary to examine the circumstances giving rise to this application. [9] On May 26, 2000 the parties appeared before Associate Chief Justice MacDonald at an appearance day and the defendants Canuck and Christmas were ordered to make application for further disclosure by August 21, 2000. Discoveries were to be completed by October 30, 2000. have no information directly before me in this application by way of explanation for any non-compliance. The parties, however, appeared before Justice Moir on October 26, 2001 and it was ordered that all discoveries were to be completed by December 21, 2001. The discovery of Mr. Muttart commenced on December 6, 2001. [10] see no exceptional circumstances which will justify granting the necessary leave to obtain the documents listed in paras. 1, and of the notice of this application. Counsel for Canuck has been aware of Lee's counterclaim and his position for period now approaching three years. Lee in his personal capacity and Mrs. Lee have been discovered and those discoveries were conducted many months ago. Counsel for Canuck has not advanced any information to this Court which would lead me to believe that there has been any exceptional circumstance which would justify leave to make the application for these particular documents. [11] In addition the documents sought appear to have at best tenuous relevance. While "fishing trip" in discoveries in Nova Scotia is permitted in certain circumstances (see Upham v. You (1986), 1986 CanLII 126 (NS CA), 73 N.S.R. (2d) 73 (N.S.S.C., A.D.)) the documents sought must touch upon matter relevant to the pleadings. do not see that the pleadings in this matter will justify or make relevant the documents sought. [12] The circumstances surrounding the documents requested in para.4 of the interlocutory notice are of different ilk. The discovery of Mr. Muttart was commenced within the time frame set by Justice Moir. Leaving aside the question of privilege for moment, the incomplete answers provided by Mr. Muttart or the incomplete information then available to Mr. Muttart appear to have taken the parties by surprise. After all, one of the purposes of discoveries is to root out and eliminate surprises. The circumstances surrounding the examination of Mr. Muttart were indeed exceptional and they give rise to my conclusion that such circumstances justify the entertainment this aspect of the present application. In doing so recognize that the trial is scheduled to commence in less than two months but the various defendants in the counterclaim have indicated to me that there remains sufficient time in which to address matters which may arise from positive decision. [13] Lee has submitted that the documents sought, and indeed all of Muttart's evidence, ought to be excluded on the basis that it is subject to solicitor-client privilege. Canada Life has agreed, and the other parties have not taken issue with the position, that prima facie the evidence of Mr. Muttart as the former solicitor of Lee is privileged. There are, however, other considerations arising from certain exceptions to solicitor-client privilege. STATE OF MIND [14] have mentioned above the portions of Lee's counterclaim which set forth the cause of action arising from negligent misrepresentation. Such plea raises the question not only of misrepresentation but also of reliance by Lee upon it. Reliance is state of mind. Linden's Canadian Tort Law (7th ed.) p.413 addresses this subject as follows: Today, the assumption-of-responsibility approach favoured by many academics appears to have been adopted by the House of Lords. In contrast, most Canadian cases subsequent to Hedley Byrne favoured the broader views endorsed in earlier editions of this book and did not insist upon an "undertaking" or something "equivalent to contract", as proposed by Lord Devlin. In Fletcher v. Manitoba Public Insurance Co., for instance, Madam Justice Wilson explained that duty of care would be owed if someone (i) relies on information, (ii) the reliance is reasonable, and (iii) the defendant knew, or ought to have known, that he or she could rely on the information. Madam Justice Wilson concluded in the case that the plaintiff was "neighbour", that the reliance was expected, and that compensation should therefore be awarded. Essentially, this is the approach endorsed by the Supreme Court in its most recent decision on point, Hercules Management Ltd. v. Ernst Young. As we shall see, as fuller understanding of the purposes of the special duty enquiry has developed over the years, there probably remains little difference in practice between the two approaches. [15] The requirements for negligent misrepresentation are clear, as Mr. Justice Iacobucci said in Queen v. Cognos Inc., 1993 CanLII 146 (SCC), [1993] S.C.R. 87 at p.110: The required elements for successful Hedley Byrne claim have been stated in many authorities, sometimes in varying forms. The decisions of this Court cited above suggest five general requirements: (1) there must be duty of care based on "special relationship" between the representor and the representee; (2) the representation in question must be untrue, inaccurate, or misleading; (3) the representor must have acted negligently in making said misrepresentation; (4) the representee must have relied, in reasonable manner, on said negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted. In the case at bar, the trial judge found that all elements were present and allowed the appellant's claim. [16] also note that at the time of the discovery of Mr. Muttart Lee's defence and counterclaim still alleged fraud (although at least aspects of it have now been withdrawn) on the part of the various defendants by counterclaim. Such an allegation would clearly bring into question the state of mind of the alleged victim of the fraud. [17] But will address the application on the present state of the pleadings. The state of mind exception to solicitor and client privilege was examined carefully and exhaustively in Lloyds Bank Canada v. Canada Life Assurance Co. (1991), 47 C.P.C. (2d) 157 (Ont. Ct., Gen. Div.). can do no better than to refer to paras. 14-32 of Madam Justice Van Camp's decision in that case where she addressed the question of whether "communications between the bank and its solicitors for the purpose of giving and receiving legal advice" ... "and communications between the bank or its auditors and communications between the bank or its auditors and the Inspector General of Banks" were privileged. Madam Justice Van Camp's decision is exhaustive and thorough and for the sake of brevity will not quote it at length. The headnote accurately summarizes the decision with respect to communications with solicitors as follows: "With respect to [this question], the defendants maintained that because the plaintiff pleaded that it had been induced by the defendants to make the loan and it had relied on the representations made to it by the defendants, they [the defendants] were entitled to all of the bank's knowledge of the relevant law and legal advice it had received with respect to the defendants' capacity to make commitments such as those contained in the comfort letters. There was not waiver of privilege in every instance where the state of mind of the person possessing the privilege was in issue. Privilege would not be waived where the person seeking disclosure of the legal advice raised the issue of reliance on legal advice. By pleading that the bank relied on the comfort letters, it waived its privilege and was to divulge whether it obtained legal advice before authorizing loan. Questions regarding legal advice or opinions provided to the bank on the security afforded by the comfort letters were to be answered. [18] In Allarcom Ltd. v. Canwest Broadcasting Corp. (1987), 1987 CanLII 2484 (BC SC), 19 B.C.L.R. (2d) 167 (S.C.), Justice Gibbs addressed the questions put to party designed "... to obtain disclosure of certain of the advice and opinions of the defendant's solicitor to solicit the opinions of the parties being examined on some of the provisions of an agreement, the construction of which is in issue in these proceedings, and to obtain the legal opinions of the parties being examined as to other disputes between various of the parties to this litigation." Justice Gibbs described the position of the plaintiff (at p.170) as follows: The plaintiff contends that, having put their state of mind in issue by pleading that they relied upon the plaintiff's conduct to their detriment, the defendants cannot now raise the barrier of solicitor-client privilege to prevent the plaintiff from showing that the defendants had advice and opinions which effectively negate the allegation of reliance upon the plaintiff's conduct. On the authority of the Court of Appeal in Rogers v. Bank of Montreal, (1985 CanLII 397 (BC SC), [1985] 61 B.C.L.R. 239) ... the plaintiff is on sound ground. Justice Gibbs continued to quote the British Columbia Court of Appeal in Rogers, starting at p.170: 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. 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 important 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 have found one decision in particular to be persuasive. refer to U.S. v. Exxon Corp., 94 F.R.D. 246 (1981), 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 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 communications. At p. 248: Most courts considering the matter have concluded that 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 general principle 'a client waives his attorney-client privilege 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 defences necessarily revolve around whether Exxon did, in fact, primarily or solely rely upon particular DOE regulation or communication when the company 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 not other reasonable way for plaintiff to explore Exxon's corporate state of mind, consideration now central to this suit. Mr. Chaisson sought to distinguish that decision on the basis that the defence of good faith was one peculiar to the United States law. do not think that to be 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 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. Justice Gibbs concluded by granting an order directing the witnesses to answer questions as to the advice and opinions received or given on what date was or was likely to be the expiry date under the agreement, and what action, if any, was taken to comply with that advice on those opinions. [19] Lee has cited Bell v. Smith, 1968 CanLII 17 (SCC), [1968] S.C.R. 664 and has quoted from the opinion of Spence, J. at p.671 as follows: Because the solicitor owes to his former client duty to claim the privilege when applicable, it is improper for him not to claim it without showing that it has been properly waived. Especially is this so when, as here, the circumstances are such as to make it most unlikely that waiver would be given. Also, because it is improper to induce breach of duty, have serious doubts about the propriety of putting to solicitor questions that involve the disclosure of confidential information without first bringing in evidence of proper waiver. In any case, because the client's privilege is duty owed to the Court, no objection ought to be necessary and the evidence in violation of the privilege should not be received. [20] As understand the situation giving rise to the examination of Mr. Muttart, prior to the examination Lee had expressly not waived privilege. Nonetheless, the arrangement was made whereby Muttart would present himself for examination in the presence of counsel, including Lee's counsel. The examination was then to proceed on question-by-question basis and apparently would be subject to specific objections by Lee's counsel. The discovery proceeded then without objection. In this factual situation I find that waiver may be reasonably inferred. [21] also refer to The Law of Evidence in Canada by Sopinka, Lederman and Bryant, 2nd ed., paras. 14.96 and following, especially paras. 14.96 and 14.97 as follows: 14.96 It was once thought that certain requirements should be established in order for waiver of the privilege to be established; for example, the holder of the privilege must possess knowledge of the existence of the privilege which he or she is forgoing, having clear intention of waiving the exercise of his or her right of privilege, and complete awareness of the result. But, as will be pointed out, other considerations unique to the adversarial system, such as fairness to the opposite party and consistency of positions, have overtaken these factors. 14.97 An obvious scenario of waiver is if the holder of the privilege makes voluntary disclosure or consents to disclosure of any material part of communication. Thus, the court in Frind v. Sheppard held that client had waived the privilege which attached to letters passing between himself and his solicitor because they had been read into the record in previous proceeding. In other cases, waiver was said to have taken place when documents over which privilege was claimed had been disclosed in proceedings in another jurisdiction or were referred to in an Affidavit of Documents and had been inspected. Similarly, if client testifies on his or her own behalf and gives evidence of professional, confidential communication, he or she will have waived the privilege shielding all of the communications relating to the particular subject-matter. Moreover, if the privilege is waived, then production of all documents relating to the acts contained in the communication will be ordered. find that in the circumstances as described to me and as appear from the portions of the discovery evidence submitted to me Lee has waived privilege. VOLUNTARY PARTIAL DISCLOSURE [22] Canuck has submitted for my consideration certain documents produced voluntarily by Lee, some of which contain handwritten notes by Muttart reflecting, apparently, advice given by Muttart to Lee. In Watkins v. Faught (1999), 179 N.S.R. (2d) 204 (S.C.) referred to some of the cases to which referred above and in final consideration said at para. [16]: Finally refer to Sopinka's The Law of Evidence in Canada where the learned author (as he then was) explored the notion of fairness in relation to solicitor-client privilege. Similarly, Sopinka and Lederman in The Law of Evidence in Civil Cases at p.182: Two essential elements must be present for waiver to be established. The holder of the privilege must possess knowledge of the existence of the privilege which he is foregoing and also clear intention of waiving the exercise of his right of privilege. Although waiver may be expressly given such cases are few. More frequent are those cases in which the waiver is by implication only. If the holder of the privilege makes voluntary disclosure or consents to disclosure of any material part of the communication, then there will be waiver. [23] Canuck argues that the disclosure of certain of the documents to which it has referred constitute partial disclosure. Regardless of whether those documents indeed constitute partial disclosure have concluded that the discovery as it was conducted by Canuck, in the absence of specific objection, constituted partial disclosure and need not concern myself as to whether the documents produced fell within that category. [24] It was clear in the circumstances that Lee knew of the privilege as it had been expressly addressed prior to the discovery and then by attending the discovery and in the absence of objection evinced an intention to partially waive it. [25] At p.666 and following in the first edition of Law of Evidence in Canada by Sopinka, Lederman and Bryant, the matter of waiver of solicitor-client privilege by implication is examined. The learned authors (at p.668) quote Professor Gary D. Watson as follows: It seems reasonably clear that the "fairness" test has emerged as the relevant principle for determining when solicitor and client privilege is waived by conduct in the course of the litigation. While the courts have not yet clearly embraced the view that the unilateral assertion of an issue by one party can lead to compulsory disclosure of the adverse party's solicitor-client communications, do not be surprised if the law moves in this direction; ultimately, the fairness test may be interpreted as meaning that solicitor-client privilege is waived whenever the communications between the solicitor and the client are legitimately brought in issue in the action. This observation by the learned author seems to reflect the same philosophy noted by Justice Van Camp in Lloyds Bank at paras. 33 and 34 as follows: Wigmore on Evidence Vol. (1961) at 635 defined what constituted waiver by implication as follows: "Judicial decision gives no clear answer to this question. In deciding it, regard must be had to the double elements that are predicated in every waiver, i.e., not only the element of implied intention, but also the element of fairness and consistency. privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective consideration that when his conduct touches certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or to disclose, but after certain point his election must remain final." In Processors Ltd. v. Campbell Avenue Herring Producers Ltd., 1983 CanLII 407 (BC SC), 35 C.P.C. 146, [1983] W.W.R. 762, 45 B.C.L.R. 218 (S.C.) McLachlin J. said [C.P.C. pp. 149-150]: "In the cases where fairness has been held to require implied waiver, there is always some manifestation of voluntary intention to waive the privilege at least to limited extent. The law then says that in fairness and consistency it must be entirely waived." [26] The transcript of the discovery evidence of Mr. Muttart leads me to believe that he may have warned Lee of problems with the proposed development at certain point in time. That advice to Lee if timely may ultimately go directly to the core of Lee's defence and counterclaim. Fairness would dictate that such information be disclosed to Lee's opposing parties. [27] The terms of Mr. Muttart's retainer by Lee are not clear to me. The documentary evidence sought may possibly clarify those terms. In the event that Muttart's advice to Lee was outside the terms of his retainer then the advice may not have been within the solicitor-client privilege. In Lloyds Bank (above), at para. 28, Madam Justice Van Camp said: In an unreported decision dated February 26, 1990 Potash Corp. of Saskatchewan Mining v. Saskatchewan Government Insurance [now reported (1990), 1990 CanLII 7499 (SK QB), 83 Sask. R. 19 (Q.B.)] Barclay J. of the Saskatchewan Queen's Bench ruled against the privilege as the communications with the solicitor were not for the purpose of securing legal services; the business advice given was not by him in the course of his professional duties as solicitor. In the alternative he held that there had been waiver by the plaintiff placing its state of mind in issue. He held that the case before him was analogous to the case in Allarcom Ltd. [28] In the Potash case the terms of the solicitor's retainer clearly did not include the business advice he gave to his client. This finding appears to be very similar to Mr. Muttart's position when he responded to questions on discovery as follows at p.39: Q. Well, to come back, Mr. Muttart, it sounds like very significant event in your relationship with Mr. Lee? A. It was, but on the one hand it was none of my business. My business was to give him legal advice, and this was actually quite outside my territory and hesitated very much to express the caution that did express. Q. And what made you hesitate to express that caution? A. Well because it wasn't any of my business. He chose whom he wanted to be in business with and that wasn't in my field whatsoever and so felt strongly enough about it that expressed my opinion. That's unusual enough in itself. Q. Okay. Now I'm going to assume that these events were fairly significant to you as Mr. Lee's lawyer whenever they occurred, is that fair to say? A. No, again you can assume what you wish, but what we've talked about is essentially two events. One was my concerns over the fact that the tail seemed to be wagging the dog. That was concern that was in essence none of my business, and whatever business relationship these people wanted to have was entirely up to them and indeed had already been forged. was simply questioning to determine whether anybody wanted to revisit it and it was clear that they didn't and so we moved on. CONCLUSION [29] On the basis of these various grounds I am prepared to order disclosure. TERMS OF ORDER [30] The extent of the production sought in this application is too broad. The production ordered will be Mr. Muttart's documents which relate to:(a) the terms of Mr. Muttart's retainer;(b) the content of Mr. Muttart's advice given to Lee and the timing of that advice with respect to:(i) the alleged failure by the plaintiffs and defendants by counterclaim to comply with the terms of a "commitment letter" as alleged by Lee, or any other perceived failure to comply with the terms of a contract as alleged by Lee; and(ii) any of the other allegations contained in para. 2 of the counterclaim herein. [31] During Mr. Muttart's discovery he referred to two "events" when he may have warned or questioned Mr. Lee about the transaction in question and in particular Mr. Lee's business relationship with Mr. Christmas. direct that Mr. Muttart shall release any narrative within his accounting records which bear upon the timing or content of that advice, but not including any of the financial details of Mr. Muttart's professional services rendered to Lee.
The borrower in a mortgage foreclosure action counterclaimed against the lender and joined the insurer of the mortgage and experts he had retained for advice in the development on the basis of negligent misrepresentation. During discovery of the borrower's former solicitor it was revealed that the solicitor may have given the borrower a warning that the financing arranged was inadequate. No privilege was claimed during the discovery process. The defendant brought an application for production of the solicitor's files and a copy of the borrower's employer and bank records intended to show his familiarity with business and financial affairs. Application allowed in part; solicitor's files with respect to terms of solicitor's retainer and non-legal advice or services are to be produced; employer's and banker's records not to be produced. The claim of negligent misrepresentation raised the question of reliance; evidence of knowledge would go to the borrower's state of mind and the solicitor's warning, if timely, would be relevant. The conduct of the borrower's present counsel in making no objection at the discovery amounted to waiver. There were no special circumstances existing with respect to the employer's and bank's records; the applicant made no effort to obtain the records until too late and the documents would have little, if any, relevance.