QUEEN’S BENCH FOR SASKATCHEWAN

Citation: 2011 SKQB 479

Date: 2011 12 19
Docket: DIV. 149/2010

2011 SKQB 479 (CanLII)

Judicial Centre: Regina, Family Law Division

BETWEEN:

JENNIFER HOGAN
PETITIONER
- and -

MICHAEL HOGAN

RESPONDENT

Counsel:
James J. Vogel for the petitioner
Gerald B. Heinrichs for the respondent

JUDGMENT MCINTYRE J.
December 19, 2011

[1] The petitioner seeks an interim distribution of family property and that the
respondent disclose the amount of money in his chequing account and the Future House
Company bank account. The parties separated in September, 2009. The family home was
sold in September, 2010 for $330,000.00.

[2] The petition was issued in March, 2010. The parties attempted to settle
matters through the collaborative law process and had meetings from March, 2010 until
March, 2011. The petitioner decided they were unlikely to achieve settlement through the
 -2-

collaborative law process and as a result, she retained new counsel and took steps to
move matters forward.

2011 SKQB 479 (CanLII)

[3] By way of the petitioner’s calculations, she and the respondent own total
property with a value in excess of three million dollars, the vast majority of which the
respondent has.

[4] The petitioner says the respondent and she own 30% of the value of shares
of an operating company called TMC. They also own 100% of the value of Future House
shares which she describes as a holding company which receives salary or dividends from
TMC.

[5] As part of the petitioner’s affidavit material, she includes a draft unsigned
property statement of the respondent which was provided to the petitioner and her counsel
in the collaborative law process. The document contains various handwritten notations
which appear to have been made by the parties’ counsel during the collaborative law
process. There is also a draft and unsworn financial statement of the respondent which
was provided during the collaborative law process to which was attached the respondent’s
2009 tax return. There was also a bank statement for Future House Enterprises Ltd. which
was again provided by the respondent to the petitioner in the collaborative law process.
There was also attached to her affidavit a copy of the 2010 collaborative and interim
interspousal contract which dealt with the proceeds of the sale of the family home.

[6] The respondent brought a motion seeking to strike out the petitioner’s
materials in its entirety or alternatively striking the draft property statement, draft
 -3-

financial statement, the Future House bank account together with paras. 15, 16 and 25 of
her affidavit.

2011 SKQB 479 (CanLII)

[7] Pertinent provisions of the collaborative law contract signed by the parties
include:

4.5 We agree not to discuss what transpires in our group session with
anyone not involved in the Process, unless both parties and both lawyers
have agreed to the sharing of information. In addition, no statement,
comment or disclosure made by either party, an expert, consultant or one of
the lawyers during the Process shall be disclosed in any Court process.

...

14.5 If this Process ends, JENNIFER and MICHAEL understand that they
will have to retain new lawyers from different law firms to represent them
in any Court proceedings. JENNIFER and MICHAEL further understand
that their Collaborative lawyers shall not release any portion of their file to
them and shall not discuss any aspect of the client’s case with their new
lawyer, unless both JENNIFER and MICHAEL have specifically and
jointly agreed, in writing, to the contrary. Everything which occurred or was
shared or acquired during the Collaborative Law Process is considered
“without prejudice” and confidential and is not to be referred to or relied
upon outside of the Collaborative Law Process. Neither JENNIFER and
MICHAEL may refer to any statement, comment or disclosure made by
party, an expert, consultant or one of the lawyers during the Process to the
Court for any purpose. The parties understand that the purpose behind this
is:

• To allow each of them to be comfortable sharing all

information requested or not, even if the same would
not be shareable in the Court process;

• To encourage each of them to make compromise

with a view to reaching a settlement.

[8] The respondent seeks a ruling with respect to the admissibility of the items
in question before filing a response on the merits of the application.
 -4-

[9] While the issue in Banerjee v. Bisset, 2009 BCSC 1808, [2009] B.C.J. No.
2643 (QL) was whether a party to a collaborative law process could seek to rely upon

2011 SKQB 479 (CanLII)

evidence of what transpired in that process to establish an oral agreement to settle issues,
the court did comment on the nature of the collaborative law process in paras. 17 and 19
as follows:

17 While the Alexander Agreement is, regrettably, not as clear as it should

be with respect to the formal requirements of any agreements reached by the
parties, particularly given that one of the goals of such agreements is to
avoid litigation, I am satisfied that the whole of the agreement, read with its
purpose in mind, means that any and all evidence of the parties' negotiations
from the parties or their lawyers, including any notes made by the parties
or their lawyers, are protected by the confidentiality provisions of the
Alexander Agreement. Clause 16, although inelegantly drafted, must be
interpreted as requiring that any agreement, whether temporary or final,
must be put in writing before either party can enforce the agreement.

...

19 In choosing to participate in the collaborative law process, and signing

the Brakeley and Alexander Agreements, the parties agreed to have a
confidential process; they agreed to forego access to court unless either or
both of them withdrew from the collaborative law process; and they agreed
that no agreements would be enforceable unless they were agreements in
writing. They also, necessarily, agreed to forego disclosing negotiations
which stopped short of a written agreement for the purpose of trying to
prove that an oral agreement was made and should be enforced. In other
words, they agreed to a different set of rules than apply to normal litigation.

[10] Banerjee does not speak to the issue of whether documents exchanged by the
parties in the collaborative law process can be used in court once the collaborative law
process breaks down. In my view, the principles applicable to this question are those
which apply to disclosure and solicitor/client privilege in the litigation process. The
decision in Economical Mutual Insurance Co. v. Italian Village Ltd. et al. (1981), 121
D.L.R. (3d) 195 (N.S.C.A.), 45 N.S.R.(2d) 280, involved an interlocutory ruling to the
 -5-

effect that the entire file of an insurance adjuster was subject to solicitor/client privilege.
On an appeal of that ruling, the court observed:

2011 SKQB 479 (CanLII)

5 The principles governing a solicitor and client privilege were reviewed
recently by this court in Davies v. Harrington, 39 N.S.R.(2d) 258; 71
A.P.R. 258, where Macdonald, J.A., speaking for the court referred to the
decision of the House of Lords in Waugh v. British Railways Board, [1979]
3 W.L.R. 150, in which it was held that the privilege only extended to
documents if the dominant purpose for which they were prepared was that
of submitting it to a legal adviser for advice and use in litigation. He said at
p. 268:

"Across the years courts in this country have followed

the judgment in Birmingham, [[1913] 3 K.B. 850
(C.A.)]. The accepted principle in that case now
having been overruled by the House of Lords in
Waugh it is my opinion that the latter is the authority
this court should follow in determining the issue here
raised. ...

...

8 In our opinion the trial judge erred when he found that the entire file was
subject to a solicitor-client privilege without having reviewed the entire file.
The proper test that should have been applied was to determine which
documents had been prepared or brought into existence with the dominant
purpose being their use in contemplated litigation or for legal advice. We
would therefore grant leave to appeal but dismiss the appeal with costs in
the cause.

[11] The principle enunciated in Waugh v. British Railways Board, [1979] 2 All
E.R. 1169 (H.L.) is summarized in the head note as follows:

The court was faced with two competing principles, namely that all relevant
evidence should be made available for the court and that communications
between lawyer and client should be allowed to remain confidential and
privileged. In reconciling those two principles the public interest was, on
balance, best served by rigidly confining within narrow limits the privilege
of lawfully withholding material or evidence relevant to litigation.
Accordingly, a document was only to be accorded privilege from
 -6-

production on the ground of legal professional privilege if the dominant

purpose for which it was prepared was that of submitting it to a legal
advisor for advice and use in litigation. Since the purpose of preparing the

2011 SKQB 479 (CanLII)

internal enquiry report for advice and use in anticipated litigation was
merely one of the purposes and not the dominant purpose for which it was
prepared, the board’s claim of privilege failed and the report would have to
be disclosed. The appeal would therefore be allowed (see p 1173 b to d, p
1174 b to d, p 1175 f to p1176 c and f to j, p 1178 a to d, p 1182 f to p 1183
d and j and p 1184 b to e, post).

[12] Applying those principles to the circumstances at hand, the draft property
statement and the draft financial statement were prepared for the purposes of the
collaborative law process and as a result falls within the confidentiality provisions of the
collaborative law contract and cannot be used in the subsequent litigation process. To be
clear, the 2009 tax return attached to the draft financial statement does not fall within the
confidentiality provisions of the collaborative law contract. The predominant purpose for
which the tax return was prepared was not that of the collaborative law process. The same
applies to the bank statement for Future House Enterprises Ltd. To hold otherwise would
mean that a tax return or a bank statement exchanged in the collaborative law process
could not be used in subsequent litigation should the collaborative law process break
down.

[13] As a result there will be an order striking exhibits A and B to the petitioner’s
affidavit with the exception of the 2009 tax return. Paragraphs 15 and 25 will also be
struck.

[14] I must observe that the sworn property statement of the respondent which was
filed in these proceedings is inadequate. With respect to the Future House Shares, it
indicates the estimated market value is unknown. The respondent seeks to be evasive on
 -7-

this issue. The respondent is expected to file properly completed financial and property
statements within 14 days.

2011 SKQB 479 (CanLII)

[15] The substantive motion may be put back on the chamber list on 14 days
notice. In the circumstances there will be no order as to costs with respect to the
application to strike.

J.
D.E.W. MCINTYRE