Marus et al. v. Canaccord et al.

2007 BCSC 1321 Marus et al v. Canaccord et al

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Marus et al. v. Canaccord et al., 2007 BCSC 1321 Date: 20070831 Docket: S055633 Registry: Vancouver Between: Jeff Marus and Valerie Marus Plaintiffs And Canaccord Capital Corporation and Lauren Alexa Notar Defendants Before: Master Scarth Reasons for Judgment Counsel for the Plaintiffs: T. Manson Counsel for the Defendants: J.R. Shewfelt Date and Place of Hearing: August 15, 2007 Vancouver, B.C. [1] The action is for damages for investment losses. The defendant Ms. Notar was the investment adviser at the defendant Canaccord Capital Corporation ("Canaccord") who handled the plaintiffs' investment account. On this application, the plaintiffs seek disclosure of documents over which the defendants claim privilege, as well as an affidavit from a Mr. Maranda at Canaccord as to documents which Canaccord says are no longer in its possession or control. Privilege [2] Ms. Notar was terminated by Canaccord in October, 2005. Ms. Notar consulted counsel who wrote to Canaccord. Mr. Maranda responded on behalf of Canaccord. The letters are dated October 18, 19 and 20, 2005. [3] The defendants, now represented by the same counsel, have included the correspondence between Ms. Notar's previous counsel and Canaccord in Part III of their fourth supplementary list of documents. They submit that the correspondence concerns the subject matter of this

action and claim common interest privilege as set out in Buttes Gas and Oil Co. v. Hammer (No. 3), [1980] 3 All E.R. 475. [4] The plaintiffs submit that no common interest privilege can arise here. They submit that common interest privilege does not apply to letters exchanged between counsel for a terminated employee and a former employer. Further, they submit, there was no "common interest" at the time the letters were exchanged. The plaintiffs further submit that, on the basis of fairness, the correspondence should be disclosed so that they can test what they say is conflicting evidence as to the circumstances of Ms. Notar's termination. [5] Common interest privilege is "justifiable on the basis of preserving confidentiality of documents containing legal advice, or documents prepared for the purpose of obtaining legal advice, that are disclosed to third parties" in circumstances where the courts have held that the privilege attaching to such advice or documents has not been waived: Fraser Milner Casgrain LLP v. Canada (Minister of National Revenue), 2002 BCSC 1344, at para.

16. Those circumstances may include a common interest in litigation or in the completion of a transaction: see Buttes (supra); Fraser Milner (supra). [6] In my view, it is fair to assume that Ms. Notar and Canaccord had a common interest in anticipated litigation by the plaintiffs at the time the correspondence was exchanged. However, I have reviewed the letters for which privilege is claimed and am satisfied that, while the pending litigation by these plaintiffs is mentioned, there was no exchange of information or advice which would be protected by either solicitor-client privilege or litigation privilege. Absent any underlying privilege, the defendants' claim of common interest privilege is not made out. Accordingly, the plaintiffs' application for disclosure is allowed. Affidavit of Documents [7] The plaintiffs also seek an order pursuant to Rule 26(3) that Mr. Maranda, as Canaccord's representative, provide an affidavit: stating whether the notes and other records maintained by the defendant Notar during her employment concerning matters in issue are or have been in the possession, control or power of the defendant Canaccord, and if not, when such class of documents ceased to be in the Defendants' possession, control or power and what became of such documents. [Notice of Motion, July 20, 2007] [8] The evidence of Ms. Notar is that she kept notes of her conversations with

clients on steno pads. These notes are listed on the defendants' fourth supplementary list of documents under Part II - documents which were but are no longer in possession or control of the defendants. Mr. Maranda deposes that he conducted investigations to locate the notes and records, but no documents have turned up. [9] The plaintiffs submit that it is appropriate to order the affidavit sought because the defendants have not provided an adequate explanation as to what happened to the notes. [10] The defendants submit that, at his examination for discovery and by way of affidavit, Mr. Maranda has provided his evidence as to the fruitless attempts to find the notes and that a further affidavit would be repetitious. It is likely, they say, that the notes were simply discarded. [11] During the course of submissions, counsel did not cite any authority to me dealing with Rule 26(3). The case law which I have since reviewed confirms that the purpose of the subrule is to enable a party in the position of the plaintiffs to require that every reasonable effort has been made by the opposing party to disclose all relevant documents that are or have been in their possession: Foundation Co. of Canada Ltd. v. Burnaby (District) [1978] B.C.J. No. 557 (S.C.). Legg, J. in Foundation stated: When some documents which are significant to the defence or claim of one party, have, for whatever

reason, been omitted from any list delivered under Rule 26(1), in the absence of any adequate explanation or reason for such omission, an order directing the delinquent party to deliver an affidavit verifying the list of discovered documents ought, in my view, to be made. [para. 7] [12] Here, the documents have been included on Part II of the fourth supplemental list and there is evidence as to the search undertaken without success. In my view, there is no basis for an order requiring an affidavit of the nature sought by the plaintiffs. The application for an affidavit from Mr. Maranda is therefore dismissed. [13] Costs in the cause. Master Scarth