In CIBC v. The Queen, 2015 TCC 280 (copy attached), the Tax Court of Canada considered several issues related to claims of privilege, and also decided whether numerous questions should be answered on discovery.  The main case involves CIBC’s deduction of $3 billion in payments made to settle litigation involving transactions with Enron Corp.  The Court’s decision is 99 pages in length, making a brief summary impossible.  Here are a few interesting points.

  • Proof of solicitor-client privilege: The person asserting solicitor-client privilege has the onus of proof.  Privilege cannot be established on inferences alone, however reasonable such inferences may be (see paragraph 33).
  • Facts not covered by privilege: Facts gathered by CIBC as part of its own internal investigations could be separated from the legal advice subsequently given to CIBC, and were not protected from disclosure (see paragraph 41).
  • Implied waiver: Solicitor-client privilege is waived if a person relies on the legal advice and puts that reliance in issue in the proceeding (see paragraph 59).
  • Partial waiver: Disclosing some portion of privileged information will not automatically lead to a waiver of all closely-related information, provided the disclosed information can stand alone (see paragraph 95) and is not misleading (see paragraph 102). 
  • Settlement privilege: Settlement negotiations arising in another proceeding are not privileged as regards a third party (i.e., the CRA), provided the third party is seeking the information for a purpose other than (1) establishing a person’s liability for conduct at the centre of the settlement negotiations, or (2) demonstrating the weakness of a person’s claim relating to that conduct (see paragraph 135).
  • Litigation privilege: Litigation privilege comes to an end upon the termination of the litigation that gave rise to the litigation privilege (see paragraph 177).  CIBC’s tax dispute with the CRA was “…not the same as the Enron litigation, and the cause of action is completely different” (see paragraph 178).
  • Full and open discovery:  The threshold of relevance on a discovery is low.  This allows both parties to fully assess the risk in proceeding beyond the discovery stage, and encourages proper and efficient trials (see paragraphs 270 and 362).