R. v. Clarke (B.E.), (2015) 355 N.S.R.(2d) 227 (SC)

Judge:Coady, J.
Court:Supreme Court of Nova Scotia
Case Date:January 30, 2015
Jurisdiction:Nova Scotia
Citations:(2015), 355 N.S.R.(2d) 227 (SC);2015 NSSC 26

R. v. Clarke (B.E.) (2015), 355 N.S.R.(2d) 227 (SC);

    1123 A.P.R. 227

MLB headnote and full text

Temp. Cite: [2015] N.S.R.(2d) TBEd. FE.001

Her Majesty the Queen v. Bruce Clarke, R. Blois Colpitts and Daniel Potter (defendants/applicants) and The Nova Scotia Securities Commission (respondent)

(CRH 346068; 2015 NSSC 26)

Indexed As: R. v. Clarke (B.E.) et al.

Nova Scotia Supreme Court

Coady, J.

January 30, 2015.


The accused were charged with fraud and conspiracy to commit fraud for allegedly manipulating the share price of Knowledge House Inc. over an 18 month period in 2000 and 2001. An extensive R.C.M.P. investigation commenced in 2003 with the assistance of an expert (Evans). Evans' 2010 report supported the Crown's theory and he would be a critical Crown witness at trial. The accused sought Crown disclosure of two drafts of Evans' report and an unredacted copy of an electronic Task 335 folder, which contained all R.C.M.P. discussions with Evans and any materials forwarded to him. The Crown claimed solicitor-client and litigation privilege respecting the redacted portions of the folder. The accused also sought particulars of the alleged offences to ensure that they would be able to make full answer and defence.

The Nova Scotia Supreme Court, in a judgment reported (2012), 319 N.S.R.(2d) 384; 1010 A.P.R. 384, ordered that the Crown disclose the two draft reports and the unredacted copy of the Task 335 folder. The court declined to order further particulars, other than ordering the Crown to advise the accused whether they intended to lead evidence from other conspirators beyond the 13 identified. One of the accused (Colpitts) applied for an order that the Crown breached its duty under R. v. McNeil (SCC) to make reasonable inquiries respecting relevant material known to be in the possession of the Nova Scotia Securities Commission and to attempt to obtain those materials. Colpitts sought disclosure or, alternatively, access to the materials.

The Nova Scotia Supreme Court, in a judgment reported (2013), 344 N.S.R.(2d) 10; 1089 A.P.R. 10, held that the Crown breached its McNeil obligation. Since Colpitts already had the materials (but was precluded by court order from accessing them), the appropriate order was to permit Colpitts access to the materials. Colpitts now applied for disclosure of all e- mails/correspondence between the Crown and the Securities Commission after the date the indictment was preferred. The Crown, which possessed the information, had declined to disclose it on the ground that the communications were not relevant.

The Nova Scotia Supreme Court, in a judgment reported (2014), 349 N.S.R.(2d) 352; 1101 A.P.R. 352, ordered that the e-mails/correspondence be disclosed. Given the previous McNeil application, there was a reasonable possibility that the e-mails/correspondence contained relevant information. The Crown's bald statement that the information was irrelevant was an assertion only. The court was satisfied that the information could reasonably assist all of the accused in advancing a defence or defining their trial strategy. The accused applied to have the judge recuse himself, alleging both actual bias and a reasonable apprehension of bias based on remarks made in two case management conferences and in the prior decision on third party production (i.e., unable to adjudicate the matter impartially).

The Nova Scotia Supreme Court, in a judgment reported (2014), 353 N.S.R.(2d) 355; 1115 A.P.R. 355, dismissed the recusal application. Colpitts then brought an O'Connor application for the Securities Commission to disclose third party documents for which privilege was claimed. Of the 19 third parties given notice, only one (National Bank) responded by advising that it had a possible interest in 125 of the thousands of documents. A hearing was held to determine which of the documents were privileged. Once the privilege issue was resolved, the court would then determine the "likely relevance" of the remaining non-privileged documents as directed by O'Connor and McNeil.

The Nova Scotia Supreme Court determined which documents were privileged.

Crown - Topic 2208

Crown privilege or prerogative - General - Cabinet discussions - [See Crown - Topic 2209 ].

Crown - Topic 2209

Crown privilege or prerogative - General - Public interest privilege - The Nova Scotia Supreme Court referred to an explanation of the evolution of the cabinet/ministerial privilege, now more commonly known as public interest immunity - See paragraph 28.

Evidence - Topic 4241

Witnesses - Privilege - Lawyer-client communications - Privilege - General - [See Practice - Topic 4577 ].

Practice - Topic 4577

Discovery - What documents must be produced - Privileged documents - Attorney-client communications (legal advice privilege) - The Nova Scotia Supreme Court stated that "Solicitor-client privilege attaches to communications between a lawyer and client where: A client seeks advice from a lawyer; A lawyer provides advice in his or her professional capacity; The communication between the client and the lawyer is made in confidence. ... Not all communications between a lawyer and a client are protected by privilege. Advice that is non-legal in nature is not protected by privilege. Solicitor-client privilege is waived if the communication is shared with a third party. ... The law recognizes that solicitor-client privilege can be engaged by documentary communications that do not expressly address legal advice if the documents forms part of the necessary exchange of information for the ultimate objective of the provision of legal advice. ... Further, solicitor-client privilege cannot be claimed for all documents that have passed between solicitor and client for the purpose of obtaining legal advice unless the documents were brought into existence for this purpose." - See paragraphs 13 to 15.

Practice - Topic 4578

Discovery - Documents - What documents must be produced - Privileged documents - Documents prepared in contemplation of litigation (litigation privilege or work product privilege) - The Nova Scotia Supreme Court stated that "Litigation privilege and work-product privilege are one and the same. It involves communications with third parties with existing or contemplated litigation in mind. ... Unlike solicitor-client privilege it is of temporary duration. It expires with the litigation of which it was born." - The court held that documents in regulatory proceedings that had come to an end "cannot be shielded by litigation/ work-product privilege." - See paragraphs 16 to 17.

Practice - Topic 4583.1

Discovery - What documents must be produced - Privileged documents - Common interest - The Nova Scotia Supreme Court referred to "common-interest privilege", which was rooted in solicitor-client privilege or litigation privilege - It was not a stand-alone privilege - If there was no underlying privilege, there could be no common-interest privilege - See paragraphs 25 to 26.

Practice - Topic 4590

Discovery - What documents must be produced - Settlement documents and other agreements - The Nova Scotia Supreme Court stated that "Settlement privilege wraps a protective veil around the efforts parties make to settle their disputes by ensuring that communications made in the course of those negotiations are inadmissible ... This privilege stands regardless of whether negotiations succeed or fail." - The court referred to the following possible categories of exceptions to settlement privilege: " (1) Whether without prejudice communications have resulted in a concluded compromise agreement; (2) To show that an agreement apparently concluded between the parties during the negotiations should be set aside on the ground of misrepresentation, fraud or undue influence; (3) Where a clear statement made by one party to negotiations, and on which the other party is intended to act and does in fact act, may be admissible as giving rise to an estoppel; (4) If the exclusion of the evidence would act as a cloak for perjury, blackmail or other unambiguous impropriety, but such an exception should only be applied in the clearest cases of abuse of a privileged occasion; (5) In order to explain delay or apparent acquiescence in responding to an application to strike out a proceeding for want of prosecution but use of the letters is to be limited to the fact that such letters have been written and the dates at which they were written; (6) Whether the claimant had acted reasonably to mitigate his loss in his conduct and conclusion of negotiations for the compromise of proceedings brought by him; and (7) Where an offer is expressly made 'without prejudice except as to costs'. Settlement privilege is based on a compelling public policy. Exceptions must be based on a more compelling public policy such as ones' ability to make full answer and defence and the right to a fair trial." - See paragraphs 18 to 20.

Practice - Topic 9867

Settlements - Disclosure - [See Practice - Topic 4590 ].

Cases Noticed:

R. v. McNeil (L.) (2009), 383 N.R. 1; 246 O.A.C. 154; 2009 SCC 3, refd to. [para. 5].

General Accident Assurance Co. et al. v. Chrusz et al. (1999), 124 O.A.C. 356 (C.A.), refd to. [para. 7].

Nova Chemicals (Canada) Ltd. v. Ceda-Reactor Ltd., [2014] O.J. No. 3284, refd to. [para. 7].

R. v. Basi (U.S.) et al., [2008] B.C.T.C. Uned. H05; 2008 BCSC 1858, refd to. [para. 13].

Pritchard v. Human Rights Commission (Ont.) et al., [2004] 1 S.C.R. 809; 319 N.R. 322; 187 O.A.C. 1, refd to. [para. 14].

Blood Tribe et al. v. Canada (Attorney General) (2010), 487 A.R. 71; 495 W.A.C. 71; 2010 ABCA 112, refd to. [para. 14].

Blank v. Canada (Minister of Justice), [2006] 2 S.C.R. 319; 352 N.R. 201; 2006 SCC 39, refd to. [para. 16].

Sable Offshore Energy Inc. et al. v. Ameron International Corp. et al. (2013), 446 N.R. 35; 332 N.S.R.(2d) 1; 1052 A.P.R. 1; 2013 SCC 37, refd to. [para. 18].

Brown v. Cape Breton (Regional Municipality) (2011), 302 N.S.R.(2d) 84; 955 A.P.R. 84; 2011 NSCA 32, refd to. [para. 19].

Meyers v. Dunphy (2007), 262 Nfld. & P.E.I.R. 173; 794 A.P.R. 173; 2007 NLCA 1, refd to. [para. 20].

Mitsui & Co. (Point Aconi) Ltd. v. Jones Power Co. et al. (2000), 188 N.S.R.(2d) 173; 587 A.P.R. 173 (C.A.), refd to. [para. 26].

Nova Scotia (Attorney General) v. Royal & Sun Alliance Insurance Co. of Canada et al. (2000), 189 N.S.R.(2d) 290; 590 A.P.R. 290 (S.C.), refd to. [para. 28].


James Martin, Mark Covan and Scott Millar, for the Crown;

Barry Whynot, for Bruce Elliott Clarke;

Tyler Hodgson, for R. Blois Colpitts;

Daniel Potter, self-represented;

Edward Gores, Q.C., for Nova Scotia Securities Commission;

Geoffrey Franklin, for National Bank Financial Ltd.

This matter was heard on January 15-16, 2015, at Halifax, N.S., before Coady, J., of the Nova Scotia Supreme Court, who delivered the following judgment on January 30, 2015.

To continue reading