The Plaintiffs in a mortgage fraud Action sued the real estate transaction lawyers for their part in the alleged fraud. The Plaintiffs demanded that the lawyers disclose and produce files which were not related to the Action, but involved some of the same parties. A Master and Queen’s Bench Justice both ordered that the disputed documents must be disclosed by the lawyers, but not that they be produced. The Plaintiffs appealed. The two main issues on Appeal were whether collateral client files were “relevant and material”; and whether those collateral client files were under the “control” of the lawyers.

The Court of Appeal surveyed authorities relating to records that illuminate similar fact evidence at the production stage of the litigation under Rule 5.2, noting that the Respondents need only show a “plausible line of argument” to compel production. The Court of Appeal went on to note that the production standard of “secondary” or “tertiary” relevance is not helpful when determining whether records relating to circumstantial or similar fact evidence ought to be produced. Further, it is no answer to a disclosure request that the same information could potentially be obtained from some public registry.

The lawyers argued that the mere listing of client files in an Affidavit of Records was a breach of privilege, and that the records were third party documents which should be produced using the processes in Rule 5.13. The Court of Appeal noted that the Rules made a distinction between disclosure and production. Records must be disclosed under Rule 5.6, and Rule 5.6(2)(b) mandates disclosure of all records, even if there is a valid basis to deny their ultimate production. Rule 5.8 provides that if a party objects to production, the records must still be identified and disclosed. Rule 5.11(1)(b) then permits the Court to rule on any Claim of privilege before the record is actually produced. The Court of Appeal also noted that the Master’s Order provided for anonymous listings to protect the identities of the clients. The Court of Appeal commented further that Rule 5.33 exists to protect any concerns in regard to the confidentiality of lawyer’s files; the implied undertaking rule exists for this exact purpose.

When assessing “control” of the records, the Court of Appeal noted that control has a wide meaning under the Rules of Court and extends far beyond mere legal ownership. Control can extend to a multitude of parties all at the same time. The lawyers argued that the ownership of a lawyer’s file rests with the client and not a lawyer. The Court of Appeal noted that the physical file at all times remains in “control” of the lawyer, regardless of proper ownership. If a client ultimately wished to object to the production of his or her file in litigation involving their lawyer, the objection ought to be brought forward and decided at the production stage of the process, not the disclosure stage. The Court of Appeal dismissed the Appeal and upheld the Master’s Order for disclosure of the records.