Date: 20000124
Docket: T-2022-89
BETWEEN:
T-2022-89
CHIEF VICTOR BUFFALO acting on his own behalf and on behalf of all of the other members of the Samson Indian Nation and Band and the
SAMSON INDIAN BAND AND NATION
Plaintiffs
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT,
AND THE MINISTER OF FINANCE
Defendants
REASONS FOR ORDER
MacKAY J.
[1] This is an application, brought in the course of case management proceedings prior to trial of the plaintiffs' action, for
| (1) an Order declaring that certain documents, identified in the Affidavit of Clifford Potts filed in support of this motion with the Motion Record, are without prejudice and privileged as between the Samson Plaintiffs and Her Majesty the Queen in Right of Canada, and may only be included by Her Majesty in her list of documents for which privilege is claimed; and |
| (2) an Order that the Motion Record containing the said Affidavit of Clifford Potts and Exhibit "C" of the said Affidavit, filed separately, be sealed by this Honourable Court as part of the confidential pre-trial and case management proceedings in this action, pending this Court's decision on the within motion and any appeals therefrom and that, following this Court's decision on the within motion and the decision of any appeal therefrom or upon the expiration of the appeal period from this Court's decision, the said Motion Record and Exhibit "C" (and any copies thereof) be returned by the Registrar to the Samson Plaintiffs along with all copies thereof. |
[2] The application arises because the defendant, Her Majesty the Queen (the "Crown") has advised that it is intended to treat as documents without any claim to privilege, and admissible at trial of the action, certain documents which the plaintiffs ("Samson") consider to be privileged as being "without prejudice" communications which passed between the parties having been created during the course of this action with a view to settlement or resolution of certain issues. Not all of the documents in question are marked or described, on their face or in their texts, as "without prejudice", though many of them, particularly many originating with the plaintiffs are so marked or described. They are, nevertheless, documents exchanged between the parties in the course of their efforts to resolve some of the issues that are raised by the plaintiffs' action.
[3] By its statement of claim as amended Samson seeks relief of various sorts in relation to moneys held by the Crown for Samson, including ordering the transfer of all such moneys to Samson after an accounting. The bulk of the moneys in question was and continues to be derived by the Crown from the leasing of rights to exploit oil and gas resources situate in reserve lands. The essence of Samson's claims in this regard is the fiduciary duty said by Samson to be owed to it by the Crown in relation to the management and control of the moneys, including determination of the rate of return earned, which control is said to be exclusively exercised, but improperly, by the Crown. Similar claims are raised in another action, T-1254-92, by the Ermineskin Band, an action to be tried with this one, but which is not involved in the application here discussed even though some of the discussion by the Crown in its submissions refers to correspondence originating with Ermineskin.
[4] It is not in dispute that virtually from the serving of the statement of claim, and even before then, there were discussions between the Crown and Samson with a view to resolving differences between them concerning the transfer of moneys. Discussions have since taken place, not consistently, but on-going with some change in emphasis, including efforts at mediation in recent months. Discussions were given particular impetus by a consent order, dated January 17, 1992, by then Associate Chief Justice Jerome, directing the parties to make their best efforts to agree upon arrangements to transfer "to the control of Samson the moneys currently being held or credited, and in future to be received for deposit, for the benefit of the Samson Band in the revenue and capital accounts...". After those efforts were unsuccessful renewed impetus for discussions arose from proposals by Samson for an interim transfer pending trial of the issues.
[5] The Crown urges that in the action the plaintiffs seek to establish a broadly based fiduciary duty on the part of Her Majesty the Queen, by asserting total control by the Crown in the management of the moneys at issue. In its defence the Crown pleads its actions have been within the legislation applicable, that the policy underlying the legislation is reasonable, and that it has proposed transfer of the moneys on conditions but those proposals have not been pursued or taken up by the plaintiffs. In its view the documents here in question are relevant to the allegations of the plaintiffs of total control and failure to transfer moneys by the Crown, and also to the latter's affirmative defence.
[6] Of course, relevance is not the issue raised by the plaintiffs' motion. Rather, the plaintiffs urge that even if relevant the documents in question are subject to privilege, on the basis of without prejudice privilege.
[7] Nor is the issue before me whether the documents in question would be admissible at trial. The Crown urges that it is a determination of admissibility that the plaintiffs here seek but I am not persuaded the motion before me concerns that question. I agree with the Crown that it would be inappropriate for this Court, in case management proceedings, to make such a determination, unless this were an application pursuant to Rule 220 for a determination that certain evidence is not to be admitted at trial, which this application is not. Apart from any application under Rule 220, the determination of admissibility is a matter for the trial judge.
[8] The principal issue raised by the plaintiffs' motion is whether this Court should order that certain documents which the Crown indicates it proposes to adduce in evidence are subject to without prejudice privilege and should be listed, on the Crown's affidavit of documents only as documents subject to privilege. Much of the Crown's argument concerns the question whether the documents concerned should be admissible at trial. As indicated, I am not persuaded that the motion raises for determination an issue of admissibility at trial of the documents in question. Nor am I persuaded that there is merit in the Crown's view that this Court does not provide the proper forum for disposition of the motion on its merits, or that the matter, raised by the motion, should be left to be dealt with at trial. I do not here deal with the question of admissibility at trial of any of the documents exchanged between the parties. I agree with the plaintiffs' submission that this Court in case management proceedings may order an accurate or complete affidavit of documents to be served (see: Rule 227(b)).
[9] An initial question is whether the documents in question qualify as subject to without prejudice privilege. It is the Crown's view that many of those in question do not qualify for they are not concessions of weakness by Samson in its own case. It is urged that the policy underlying the privilege is a narrow one, simply to avoid disclosure at trial of such concessions made in efforts to settle matters. I am not persuaded that the privilege or its underlying policy is so narrow. Rather, where the documents are created with a view to reconciliation or settlement respecting a matter in dispute in litigation between the parties, the documents are without prejudice and privileged (see Sopinka, Lederman and Bryant, The Law of Evidence in Canada, 2nd ed. (1999) at pp. 807-809). If a document is made for the purpose of settlement or reconciliation of issues in litigation it matters not whether it is marked or described as "without prejudice"; it will be so classed either by its description or by implication.
[10] It may well be that one party who has engaged in settlement discussions and exchange of documents to facilitate these, can at some point withdraw and create documents for the record, without a claim of privilege. Yet that cannot be done, in my opinion, by producing a document that responds, expressly or implicitly to proposals advanced without prejudice by the other party, unless that other party accepts, or in the circumstances ought reasonably to accept, that the document in response is to be on the record. In short, communications that follow exchanges that are clearly without prejudice, continue to be so classed, unless the parties to the exchange agree or in the circumstances ought to be seen to accept that further exchanges are not, or are no longer, to be without prejudice.
[11] I am satisfied from examination of the documents in exhibit "C" to the affidavit of Clifford Potts, that the documents here in question were created and were intended to facilitate settlement of issues, concerning the transfer of moneys, arising in the suit between the parties. It is true that there was no intent by plaintiffs to settle their claims in relation to money management issues in their entirety. Indeed those claims would remain to be determined but with reference to the time period that would end by transfer of the moneys. The claims are continuing and if transfer had occurred, the claims would disappear with respect to the time period after transfer. That, in my view, in the case of a continuing claim, does constitute possible settlement of certain aspects of the claims raised by the plaintiffs. At the least, if the discussion and exchanges had led to agreement on transfer of moneys that would have mitigated or reduced the plaintiffs' claim to damages.
[12] I am satisfied also that the efforts to reconcile or settle for the future the plaintiffs' claims in respect to money management by transfer of the funds in question, commenced soon after the action was begun, if not before, that the documents here in issue, included in exhibit "C" of the Potts affidavit, were all documents subject to without prejudice privilege. I include in the documents, a letter dated October 16, 1996 from counsel for the Crown to counsel for Samson, referring to the interim transfer proposal and indicating that the Crown might seek to use certain correspondence, in evidence, while acknowledging that plaintiffs considered the discussions to be without prejudice. I also include a letter of April 18, 1997 which was said to have been sent by counsel for the Crown after advising Samson counsel it was intended as a "For the Record offer". I class that letter as subject to without prejudice privilege because it is but one further document in a series exchanged between counsel following the initiation of discussions for resolving the transfer of moneys issues at least on an interim basis. Those discussions in my view were initiated by without prejudice correspondence from Samson counsel to Crown counsel by letter dated February 21, 1996.
[13] They were at a further stage in discussions generally with a view to resolving the issue of the transfer of moneys, an issue which the Court had earlier ordered, in 1992, on consent, that the parties seek to resolve, an issue that has remained outstanding, notwithstanding the efforts of both parties to seek agreement on arrangements for transfer of the moneys. Where the parties have been so engaged, it is the policy of the law to treat the documents exchanged for these purposes as privileged and without prejudice, not to be used in evidence against either party, unless admitted by the trial judge. If it were otherwise, the objective of fostering settlement of disputes and litigation would be frustrated. That objective is of importance in the current milieu of administering justice; it is an objective that the revised Rules of this Court's procedures, adopted in 1998, are intended to foster.
[14] The defendant suggests that any settlement privilege is subject to exceptions and the Court should be hesitant to conclude that any exchange not expressly held on a without prejudice basis is a settlement negotiation subject to privilege, as Mr. Justice Hugessen said in Bertram v. M.N.R. (1995), 191 N.R. 218 at 223 (F.C.A.). In that case there was no expression at the time of the exchange that it was on a without prejudice basis; here, although not all correspondence was expressly so declared, much of it was, particularly by the plaintiffs and that which was not was clearly response to, or continuing discussion of, matters earlier raised on a without prejudice basis. Moreover, in the Bertram case the document principally in issue was considered to be put forward in a manner that demonstrated less than honest dealing, and there is no such exceptional circumstance here suggested.
[15] Both parties acknowledge there are exceptions to the claim of without prejudice privilege. The plaintiffs say that none of the accepted exceptions apply in this case. The Crown urges that the exceptions are not limited to those suggested by the plaintiffs, rather they are a result of applying the policy underlying the general rule supporting the privilege that documents exchanged "without prejudice and written bona fide to induce the settlement of litigation are not to be used against the party sending them" (see Waxman and Sons Ltd. v. Texaco Canada Ltd., [1968] 1 O.R. 642 at 656 (Ont. H.C.) per Fraser J. quoting Boyd, C. in Underwood v. Cox (1912), 26 O.L.R. 303 at 315). In the Waxman case at the same page, Fraser J. wrote:
| In my opinion the privilege as so often stated is intended to encourage amicable settlements and to protect parties to negotiations for that purpose. It is in the public interest that it not be given a restrictive application. |
[16] In the Crown's view the general rule permits the use of documents, such as those in question, where their use is other than to demonstrate the weakness of the plaintiffs' claim or to refute their assertion that they have been frustrated by the Crown though they are legally entitled to transfer of the moneys. Here, the proposed use by the defendant is for the purpose of establishing the Crown's defence to the claim by Samson that it had no opportunity to manage moneys it claims as its own. Without deciding the matter, I am not persuaded that the claim the Crown seeks to defend is one advanced directly by Samson in the action, or if it is a claim advanced, that use of the documents does not go directly to support alleged weakness in such a claim. Whether the use of documents proposed by the Crown is to be permitted at trial is a matter for the trial judge to decide, and thus I decline to determine whether the purpose for which the Crown claims the documents are admissible is one permitted by the policy of privilege for the documents, that I find were exchanged without prejudice with a view to resolution of a matter at issue between the parties in this action. That question I leave for the trial judge, though I note in passing that the Crown's argument, in my view, gives little or no weight to the intent of the party creating a document at the time it is created, while emphasizing the intent for use of the document by the other party at a later time.
[17] While it has no significance for the argument here raised, I note that the matter of settlement discussions and offers may have significance at trial for the limited purpose of assessing costs following determination of liability and the relief to be granted in an action (see Rules 420, 422).
[18] Thus far, these reasons have concerned documents, claimed as without prejudice and privileged, which concern proposals for the transfer of moneys claimed by Samson as its own. There are other documents referred to in the affidavit of Mr. Potts which concern other issues between the parties. First are two letters exchanged between them in May 1997 which concern possible resolution of another issue between the parties, that is, the fate of moneys held by the Crown for members of the Samson Cree Nation who are minors. Second, the Crown has indicated its intention to treat certain other documents as not privileged, though these were created in discussions between Samson and the Crown with regard to an unspecified dispute between them which discussions led to an agreement dated March 25, 1999 that is expressly said to be
| "without prejudice to their respective positions in any litigation involving the Samson Cree Nation and Her Majesty the Queen in right of Canada..." |
[19] I have not seen the documents concerning the first of these matters, i.e., moneys held for minors, but I am prepared to assume Samson's claim that these are subject to without prejudice privilege is a reasonable claim. I have seen the documents in question that concern the 1999 agreement between the parties which were included in the defendant's Further Supporting Materials. In my view the latter documents, relating to transfer of moneys, are subject to without prejudice privilege, as claimed by Samson. In the circumstances, I am left to conclude that at this stage the only useful direction I can give is that any of the documents in issue, created by one party which it claims is subject to without prejudice privilege, and any document responding to that which the recipient considers as subject to the same privilege shall be listed in an affidavit of documents of each of the parties as privileged and without prejudice. Again, I emphasize I make no determination whether any of these documents are admissible at trial.
Conclusion
[20] For the reasons set out an Order issued on January 21, 2000 allowing the application of the Samson plaintiffs and ordering that the documents in question, as identified in the affidavit of Clifford Potts, particularly in exhibits "A" and "B" to that affidavit, are subject to without prejudice privilege. The Order directs that, since both parties are aware of the documents and of the plaintiffs' claims to privilege, and since the claim to privilege is that of the plaintiffs, each party shall produce a separate affidavit of documents including the identified documents as subject to without prejudice privilege claimed by the plaintiffs. Whether any of those documents are admitted at trial is a question for the trial judge, unless there be a motion pursuant to Rule 220 determined by the Court in advance of trial. The Order issued also directs that Samson's materials filed on the motion, and in addition the Crown's Further Supporting Material, be sealed as confidential in the Court's case management file pending possible appeal of this order and if appealed, disposition of that appeal. Thereafter, all copies are directed to be returned to the parties, except one copy that is to be retained, sealed as confidential in the Court's case management file, pending any further order by a judge of the Court.
(signed) W. Andrew MacKay
JUDGE
OTTAWA, Ontario
January 24, 2000.