The Federal Court of Appeal allowed an appeal brought by the Aboriginal plaintiffs, and ordered that Canada disclose certain documents in the litigation. The Court of Appeal held that the chambers judge erred in finding that one category of documents were protected by litigation privilege. In regards to allegedly privileged documents disclosed by Canada during the discovery phase, the Court of Appeal held that Canada had waived the privilege as there was insufficient evidence that the disclosure was inadvertent.

The underlying action concerns the fallout of the Manitoba Rapids Hydro Project in the 1960s. The reserve lands of the plaintiff Bands were affected through flooding and the construction of works such as a provincial highway and a transmission line. Manitoba and Manitoba Hydro entered into compensation agreements with the Indian bands affected by the Hydro Project, including the plaintiffs The Pas Indian Band (now the Opaskwayak Cree Nation), the Chemawawin Cree Nation, and the Grand Rapids First Nation. The First Nations subsequently took the position that the compensation arrangements were not satisfactory, and brought a claim against Manitoba and Manitoba Hydro in 1980. At the same time, they notified Canada that Manitoba and Manitoba Hydro intended to file Third Party claims against Canada.

The First Nations did not file a claim against Canada until late 1991. In the intervening years, Canada assisted the plaintiffs through funding and other arrangements. Throughout this time, Canada took the position that it was not liable to the plaintiffs, but the plaintiffs indicated that they considered Canada to be liable. Canada’s position was that it would negotiate a reasonable and just redress if definitive evidence arose that proved a failure by Canada to fulfill its legal obligations.

The plaintiffs brought separate claims against Canada. They were filed between December 1991 and February 1992. The litigation has proceeded very slowly since that time. Documents were exchanged in 1999 and 2002. In the summer of 2009, the plaintiffs brought a motion to compel further document production from Canada. It was a result of this motion that Canada discovered that privileged documents had been inadvertently disclosed to the plaintiffs in 2002. Canada also discovered that the plaintiffs had come into possession of other privileged documents. The plaintiffs would not return the documents to Canada, and counsel for the plaintiffs could not determine how some of the documents came into their possession. Canada then filed a motion for the return of the documents.

In September 2011, Prothonotary Lafreniere allowed Canada’s motion to compel the plaintiffs to return the privileged documents: 2011 FC 1102. The Court held that the documents were privileged, and such privilege had not been expressly or impliedly waived. In July 2012, the Federal Court upheld this order. The chambers judgment, reported as Brass v. Canada, 2012 FC 927, was summarized in our e-Newsletter of 24 October 2012.

The Court of Appeal first identified the documents that were at issue. The appellants had not challenged the findings of the chambers judge that certain undisclosed documents were protected by either legal advice privilege or settlement privilege. The remaining documents at issue were either documents that Canada asserted to be protected by litigation privilege, or privileged documents that Canada claimed had been inadvertently disclosed to the plaintiffs. With respect to the latter category of documents, certain documents had only been disclosed to the plaintiff Chemawawin Cree Nation. Since this plaintiff did not pursue a waiver argument, such documents were exempt from disclosure.

The Court of Appeal held that the chambers judge erred in accepting that documents were protected by litigation privilege. The evidence put forward by Canada was insufficient to prove that the “dominant purpose” for the creation of the documents pertained to litigation. Dawson J.A. noted that “an attempt to avoid litigation does not equate with receiving legal advice or aiding in the conduct of litigation”. There was an awareness of a possibility that Canada would be involved in litigation, but that is distinct from being a dominant purpose. Dawson J.A. also disagreed with Canada that it was clear on the face of the documents that the dominant purpose was litigation. She concluded:

To conclude, the evidence before the Judge was insufficient to demonstrate on a document by document basis that each of the undisclosed documents was created for the purpose of seeking legal advice or aiding in the conduct of litigation.

The Court of Appeal also held that the chambers judge erred in finding that Canada had not waived privilege over the documents disclosed to the plaintiffs. The evidence was insufficient to prove that the disclosure was “inadvertent”. Dawson J.A. made the following remarks about the evidence proffered by Canada:

Missing from the affidavit is evidence of the sort one would expect to find in the case of inadvertent disclosure of privileged documents: namely, evidence of shock, efforts to find the cause of the error and demands for the immediate return of the documents.
There was no direct evidence that Canada did not intend to waive privilege, and the chambers judge erred in finding that the disclosure was inadvertent. Canada neglected to press for the prompt return of the documents, and was “obliged to provide more cogent evidence that it did not intend to waive its claim to privilege”.

There were four remaining documents at issue, obtained by the plaintiff Chemawawin Cree Nation “through unknown means”, which Canada claimed were privileged. (It is unclear from the Reasons for Judgment as to whether Canada was claiming legal advice privilege, “litigation brief” privilege, or some other form of privilege). The Court of Appeal held that any privilege had been waived to three of the documents, but a redacted portion of the fourth document was protected by legal advice privilege. Dawson J.A. was satisfied that the redacted portions contained communications from a lawyer involving legal advice.

The appeal was therefore allowed with costs:


Scott Kerwin


Aboriginal Law