Redhead Equipment Ltd. et al. v. Canada (Attorney General), 2016 SKCA 115

• Judge: Jackson, Ottenbreit and Ryan-Froslie, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: September 02, 2016
• Jurisdiction: Saskatchewan
• Citations: 2016 SKCA 115;(2016), 485 Sask.R. 108 (CA)

Redhead Equipment v. Can. (A.G.) (2016), 485 Sask.R. 108 (CA);

    676 W.A.C. 108

MLB headnote and full text

Temp. Cite: [2016] Sask.R. TBEd. SE.027

Redhead Equipment Ltd., GLR Consulting Ltd. and Gary L. Redhead (appellant) v. Attorney General of Canada (respondent)

(CACV2564; 2016 SKCA 115)

Indexed As: Redhead Equipment Ltd. et al. v. Canada (Attorney General)

Saskatchewan Court of Appeal

Jackson, Ottenbreit and Ryan-Froslie, JJ.A.

September 2, 2016.

Summary:

Redhead Equipment Ltd. was involved in a corporate restructuring in 2009-2010, creating a partnership (Redhead Equipment) comprising a number of companies. The partners obtained legal advice from their lawyers and accounting advice from Redhead Equipment's chartered accounting firm. The Canada Revenue Agency served Redhead Equipment and two others (the applicants) with a formal request to provide information and documents under s. 231.1 of the Income Tax Act, specifically seeking un-redacted copies of legal invoices and all planning documents concerning specific transactions involving the applicants and all planning documents respecting the creation of the partnership. A second s. 231.1 formal request was served respecting planning documents involving other transactions in 2009 and 2010. At issue was which of the over 600 documents, and their contents, were protected from disclosure by solicitor-client privilege.

The Saskatchewan Court of Queen's Bench, in a judgment reported at (2014), 448 Sask.R. 109, determined which documents and/or their contents were protected by solicitor-client privilege, and what information had to be produced pursuant to the s. 231.1 requests. Redhead Equipment appealed.

The Saskatchewan Court of Appeal dismissed the appeal with the exception of one document which the trial judge found to be not privileged. That document was privileged.

Evidence - Topic 4110

Witnesses - Privilege - General - Appeals - General - Standard of review - The Saskatchewan Court of Appeal stated that "the standard of review with respect to determinations of privilege respecting particular documents is palpable and overriding error" - See paragraph 21.

Evidence - Topic 4241

Witnesses - Privilege - Lawyer-client communications - Privilege - General - At issue was solicitor-client privilege respecting communications between a client and his lawyer for the purpose of obtaining legal advice where litigation was not contemplated - The Saskatchewan Court of Appeal stated that "The nature or content of the communication must involve legal advice. A lawyer must be acting as a lawyer giving legal advice rather than in some other non-legal capacity. ... Purely business or policy advice, as opposed to legal advice, is not privileged ... Documents of an accounting or factual nature or those providing strategic business direction are not privileged ... Documents which simply come into the possession of a lawyer that are not related to the provision of legal advice are not privileged ... A document that is clothed with no privilege does not acquire privilege simply because it goes into the hands of a lawyer. Where the timing, format and/or nature of the factual information provided would not allow the nature of the legal advice being sought to be discerned, the communication is not privileged ... The privilege is not confined to telling the law but includes advice regarding what should be done in the relevant legal context ... It is not necessary that the communications specifically request or offer advice as long as it can be placed within the 'continuum' of communication in which the solicitor tenders advice" - See paragraphs 33 to 34.

Evidence - Topic 4242

Witnesses - Privilege - Lawyer-client communications - Privilege - Communications between lawyer and third party - [See Evidence - Topic 4344 ].

Evidence - Topic 4244

Witnesses - Privilege- Lawyer-client communications - Privilege - Communications with clients's agent or lawyer's agent - [See Evidence - Topic 4344 ].

Evidence - Topic 4344

Witnesses - Privilege - Particular relationships - Accountant-client - At issue was whether communications between the applicants and their chartered accountants were protected by solicitor-client privilege - The Saskatchewan Court of Appeal stated that "some principles regarding communications with and of third parties such as accountants can be extracted: (a) communications of accountants are not in themselves privileged; (b) facts and figures are not in themselves privileged but may be if they are part of a communication which is privileged; (c) whether a communication is privileged depends on the function served by the third party in relation to the communication; (d) the privilege extends only to communications in furtherance of a function essential to the solicitor-client relationship or the continuum of legal advice provided by the solicitor, for example: (i) a channel of communication between solicitor and client; (ii) a messenger, translator or transcriber of communications to or from the third party by the solicitor or client; (iii) employing expertise to assemble information provided by the client and explaining the information to the solicitor; and (e) no privilege attaches to a communication to an accountant who must consider it and provide his or her own accounting opinions." - See paragraph 45.

Income Tax - Topic 9281

Enforcement - Lawyer-client privilege from disclosure - General - Redhead Equipment Ltd. was involved in a corporate restructuring in 2009-2010, creating a partnership (Redhead Equipment) comprising a number of companies - The partners obtained legal advice from their lawyers and accounting advice from Redhead Equipment's chartered accounting firm - The Canada Revenue Agency served Redhead Equipment and two others (the applicants) with a formal request to provide information and documents under s. 231.1 of the Income Tax Act, specifically seeking un-redacted copies of legal invoices and all planning documents concerning specific transactions involving the applicants and all planning documents respecting the creation of the partnership - A second s. 231.1 formal request was served respecting planning documents involving other transactions in 2009 and 2010 - At issue was which of the over 600 documents, and their contents, were protected from disclosure by solicitor-client privilege - The documents included documents in the applicants' files, as well as in the files of their lawyers and accountants - The trial judge, after discussing the nature and scope of solicitor-client privilege in this context, determined which documents and/or their contents were protected by solicitor-client privilege, and what information had to be produced pursuant to the s. 231.1 requests - Redhead Equipment appealed - The Saskatchewan Court of Appeal dismissed the appeal with the exception of one document which the trial judge found to be not privileged - That document was privileged - See paragraphs 50 to 81.

Counsel:

Kurt G. Wintermute, for the appellant;

Brooke Sittler, for the respondent.

This appeal was heard on October 30, 2015, before Jackson, Ottenbreit and Ryan-Froslie, JJ.A., of the Saskatchewan Court of Appeal.

On September 2, 2016, Ottenbreit, J.A., delivered the following judgment for the Court of Appeal.