T-888-75
Canadian National Railway Company (Plaintiff)
v.
Dennis Douglas George Milne and Duncan Wil-
liam Carmichael (Defendants)
Trial Division, Addy J.—Vancouver, January 21
and 22, 1980.
Practice — Production of documents — Privilege — Expro
priation — Application to require defendants to produce an
appraisal report covering an expropriated property —
Appraisal report ordered shortly after receipt of notification of
expropriation — Notification contained no mention of price —
As most expropriation cases settled without litigation, defend
ants cannot rely on bald statement that the report was ordered
because of probable litigation — No evidence of "reasonable
expectation of litigation" or of litigation being dominant force
behind ordering the report — Determination of expropriated
land's value was the overwhelming reason for ordering the
report — Application allowed — Federal Court Rule 455.
Canadian National Railway Co. v. McPhail's Equipment
Co. Ltd. [1978] 1 F.C. 595, followed. R. v. Hawker
Siddeley Canada Ltd. [1977] 2 F.C. 162, followed.
APPLICATION.
COUNSEL:
V. Orchard for plaintiff.
D. B. Kirkham for defendants.
SOLICITORS:
Ladner Downs, Vancouver, for plaintiff.
Owen, Bird, Vancouver, for defendants.
The following are the reasons for order ren
dered in English by
ADDY J.: The plaintiff is applying for an order
pursuant to Rule 455 of the Federal Court Rules
to require the defendants to produce an appraisal
report ordered by the latter covering a property
which they owned and which was expropriated by
the plaintiff.
The facts briefly are as follows:
(1) The defendants are both lawyers;
(2) Their lands were expropriated on the 5th of
November 1974;
(3) On the same day they received a letter
advising them of the expropriation;
(4) No mention of any kind as to price was
made;
(5) No further communications of any kind
took place between the parties or their repre
sentatives before the report in issue was ordered;
(6) The appraisal report was ordered shortly
after the 5th of November 1974;
(7) The report was received on the 4th of
December 1974;
(8) Counsel was first consulted by the defend
ants in March of 1975;
(9) One of the defendants in an affidavit dated
the 16th of January 1980, stated "Upon receipt
of Exhibit "A", (Notice of Expropriation) it was
immediately apparent to me that litigation to
determine the amount of compensation to which
we were entitled was a probability, and in con
sultation with my partner, I decided that an
appraisal was required".
Although in the case of Canadian National
Railway Company v. McPhail's Equipment Com
pany Ltd. [1978] 1 F.C. 595 it was the expropriat
ing party who was seeking to have an appraisal
report exempted from production, I can see no
reason why the tests mentioned by Heald J.A. at
pages 598 and 599 of the above mentioned report
of the case would not be applicable to the expro
priated party.
There is obviously an onus on any person claim
ing privilege, to establish positively that the privi
lege should be granted. That onus extends to
establishing not only that the report was obtained
for the purpose of submitting it to counsel for
advice but also for the purpose of litigation exist
ing or in contemplation at the time that the report
was ordered.
As stated by Le Dain J.A. in delivering the
judgment of the Federal Court of Appeal in the
case of The Queen in right of Canada v. Hawker
Siddeley Canada Ltd. [ 1977] 2 F.C. 162 at page
166 "A party should bring himself clearly within
the requirements of a claim for privilege. It is in
the interests of justice that there be the fullest
possible disclosure of all relevant material capable
of throwing light upon the issues in a case."
In the Hawker Siddeley case, there was already
a dispute between the parties and an exchange of
correspondence regarding the dispute had
occurred. There was also affidavit evidence to the
effect that it was already apparent that it would be
necessary to take legal proceedings and that one of
the purposes for obtaining the evidence would be
to instruct legal advisers. Yet the Court denied the
appeal and affirmed the Trial Court's decision to
order production.
Having regard to the facts in the case at bar,
because as in the McPhail's Equipment case, judi
cial notice can be taken of the fact that most
expropriations are settled without litigation being
instituted, it is not sufficient in order to discharge
the onus to rely on a bald statement by the expro
priated party that it was his view at the time that
litigation was a "probability". There is absolutely
nothing to indicate "a reasonable expectation of
litigation" which, according to the McPhail case
should be established before privilege from pro
duction can be claimed. A mere subjective test is
not sufficient. There must be some clear evidence
justifying the conclusion.
From the facts, it appears that on or about the
5th of November and shortly thereafter, there
could only exist a possibility of litigation and that
possibility would be quite remote and very far
from a probability.
The remote possibility of litigation might have
existed and therefore to some extent might be said
to have contributed to the reason for ordering the
report, but in my view the overwhelming reason
was merely to obtain an estimate as to value for
negotiation purposes. This latter reason was cer
tainly the dominant purpose for ordering the
report immediately after the expropriation if in
fact the other purpose existed at all. The defend
ants, in my view, have failed to discharge the onus
of establishing that there was in fact a reasonable
probability of litigation and that it was in part
because of this that the report was ordered.
It is interesting to note the very radical change
to the existing law in England brought about by
the decision of the House of Lords in the case of
Waugh v. British Railways Board (H.L.) reported
in [1979] 3 W.L.R. 150 where it was unanimously
held that, although one of the material purposes
for the preparation of a report might clearly be for
submitting it to legal advisers in order to receive
legal advice in reasonable anticipation of legal
proceedings, privilege could not be claimed unless
that was the "dominant" purpose for which the
report was prepared. Lord Wilberforce with whose
reasons Lord Keith of Kinkel concurred went so
far as to cite with approval the 1976 Australian
decision of Grant v. Downs 135 C.L.R. 674 where
it was held that the privilege must be confined to
cases where the evidence was brought into exist
ence for the "sole" purpose of submission to legal
advisers for advice or use in legal proceedings.
In the Waugh case the House of Lords reviewed
previous English jurisprudence which had also
been followed by Canadian courts in the recent
cases of Northern Construction Co. v. B.C. Hydro
and Power Authority (1970) 75 W.W.R. 21;
Vernon v. Board of Education for the Borough of
North York [1976] 9 O.R. (2d) 613; The Queen in
right of Canada v. Hawker Siddeley Canada Ltd.
(supra). They agreed that the law of England up
to that time as established by a long line of cases,
granted privilege where "one of the purposes" was
the obtaining of legal advice or the instructing of
legal advisers in regard to existing or reasonably
apprehended legal proceedings. Yet the House of
Lords held that such was no longer the law of
England and laid down very firmly the principle of
"dominant" purpose.
In my view, the Canadian courts will most likely
be adopting a similar rule in the future having
regard to the tendency of our courts in recent
years to enlarge the areas where disclosure can be
ordered.
The motion is allowed with costs.
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.