Solicitor-client privilege shields legal advice given to the client from disclosure, but it doesn’t extend to all facts contained in the lawyer’s file. Are the contents of a lawyer’s trust accounts more like legal advice or are they just facts?

Just facts in this case, said two out of three members of the BC Court of Appeal hearing Donell v GJB Enterprises Inc., 2012 BCCA 135. The client, GJB Enterprises, was a pyramid scheme in California with no legitimate business. Berke, its principal, found his way to British Columbia, where he retained the Farris Vaughn firm (FV). GJB’s California receiver applied to the BC court to obtain records in FV’s possession which related to GJB’s illegal conduct, which the receiver contended would identify the source of payments to Berke’s personal bank account in BC. The chambers judge concluded that the firm’s records were protected, the crime-fraud exception not coming into play because there was no evidence that FV’s communications with Berke involved participation in or counselling of any criminal activity. On appeal, the receiver narrowed the request to the firm’s trust account ledgers.

Chiasson JA (Neilson JA concurring) noted that while solicitor-client privilege is now a substantive right in Canada, with constitutional protection, the old distinction between facts and communications for the purposes of obtaining legal advice is still relevant. A lawyer’s bill will be privileged because it arises out of the lawyer-client relationship and ‘what transpires within it’, but trust account ledgers are not presumptively privileged. Where the ledgers reflect the solicitor-client relationship, privilege will attach; where they do not, it won’t.

Some of the ledger entries fell into the former category, but the ones the receiver wanted to see merely traced payments in and out and should be produced. Smith JA dissented: the fact of the payments did not arise independently of the solicitor-client relationship, with the result that privilege should attach.

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