Canada: Revisiting Settlement Privilege In Canadian Law: Three Case Studies

Last Updated: February 26 2014
Article by Justin R. Seitz

The Supreme Court of Canada's (SCC) latest word on settlement privilege was delivered in the June 2013 decision of Sable Offshore Energy Inc. v Ameron International Corp., 2013 SCC 37 (Sable). The SCC upheld settlement privilege and denied the disclosure of the plaintiff's settlement agreement with one of the numerous defendants, finding that the remaining defendants' reasons for disclosure did not outweigh the public interest in promoting settlement.

In a blog post published in August 2013, I discussed this decision and the merits of maintaining settlement privilege, mainly to promote access to justice by encouraging early settlement. In this post I revisit Sable and see how the Canadian courts have subsequently treated the decision as it applies to settlement privilege. All three cases address settlement privilege in different contexts – a personal injury matter, an estate matter, and an arbitration matter – and each suggest settlement privilege is alive and well in Canadian jurisprudence.

Fillmore v Estate of Earl Ivan Trenholm, 2013 NBQB 400

This case dealt with the administration of the estate of Earl Ivan Trenholm who died intestate. One of the deceased's daughters brought an application to have the Letters of Administration revoked on the grounds that the current Administrators, the deceased's wife and other daughter, failed to fulfill their responsibilities as Administrators by misleading the court in their application for appointment.

At the initial hearing of the matter objections were raised with respect to numerous paragraphs in affidavits that were filed which contained references to "without prejudice" communications and attempts to settle the matter. The Court went through the affidavits with Counsel for the parties and portions of the affidavits were struck. Briefs were to be submitted and oral submissions were to be made in court regarding the admissibility of the paragraphs in the affidavits relating to settlement. It was the Applicant's position that since administrators fall into the category of fiduciary who hold the estate property in trust for the beneficiaries, of which she was one, they are held to a high standard of care and their actions are reviewable by the beneficiaries; therefore settlement privilege is precluded.

The Court relied on the numerous authorities supplied by the parties, including Sable. As was acknowledged in Sable there are exceptions to settlement privilege (at para. 19). The Applicant referred to Lederman, J.'s comment in additional reasons in Ballard Estate Attorney General of Ontario et al. v Stavro et al. (1994) O.R. (3d) 350, which stated that, "[n]o privilege attaches to communications between solicitor and client as against person having a joint interest with the client in the subject matter of the communication". The Court acknowledged that this kind of 'all or nothing' approach was altered by authorities such as Haydu v Nagy 2012 BCSC 1870, which is in line with Sable, and stands for the position that there can be a selective waiver of privilege (at para. 30).

The Court concluded that "settlement negotiations fall into the category of privilege which must be protected, while any other correspondence which relates to how the administrators are managing the estate do not fall into the privilege category" (at para. 19). This is in line with the Sable decision.

Hermitage-Kilkenny v Morris, 2013 NBQB 407

As with the Fillmore case, at issue was whether an exception to settlement privilege existed in the circumstances. Ms. Hermitage-Kilkenny (the Plaintiff) and the Defendants were in a motor vehicle accident and she sued for damages. Prior to the accident the Plaintiff was also involved in two other separate motor vehicle accidents in which Consent Orders for Discontinuance were filed; both accidents were settled by global sums being paid with no apportionments amongst the various heads of damages. The Defendant was seeking disclosure of the global sum settlements and the Plaintiff was claiming settlement privilege to deny disclosure.

The Defendant argued that the settlement amounts were relevant to the present action and should be disclosed to prevent double-recovery (at para. 7). After reviewing the relevant case law, particularly Sable, the Court acknowledged that that there are exceptions to settlement privilege but that the issue before the Court came down to relevancy (at para. 12). At paragraph 12 the Court quoted The Law of Evidence in Canada, Sopinka, Lederman and Bryant, 3rd ed., which states that "[...] it must be established that disclosure of the communication is necessary, either to achieve that agreement of the parties to the settlement or to address a compelling or overriding interest of justice".

The Court concluded that "settlements in personal injury cases are not relevant enough to warrant an exception to settlement privilege" (at para. 13).

Thomson v University of Alberta, 2013 ABQB 410

At issue in this case was whether a letter written by the Chair of the Department of Medicine in a grievance process initiated by the Association of Academic Staff University of Alberta was producible. The Master found that the letter was privileged and therefore not producible because it was part of the grievance process, which is in effect, a settlement negotiation process. Furthermore, the Master found that there had been no waiver of the privilege and no exceptional circumstances applied to lift the privilege. The Plaintiff appealed.

Essentially the Court held that the Master applied the rule of settlement privilege too widely (at para. 5). Both parties agreed that the correct test which sets out when settlement privilege attaches to any form of communication was given in Costello v City of Calgary (1997) 53 Alta. L.R. (3d) 15, 2009 A.R. 1 (C.A.); The three conditions that must be complied with are:

  1. there is a litigious dispute;
  2. the communication was made with the intention that it would not be disclosed to the Court; and
  3. whether the purpose of the communication is to attempt a settlement (at para. 8).

It was the third test which was at issue. With reference to precedent the Court stated that the correspondence must be reviewed and determine whether it invites compromise, outlines approaches towards settlement, recognizes weaknesses, or makes admissions (at para.11). To put another way, as was stated in Bellatrix Exploration Ltd. v Penn West Petroleum Ltd. 2013 ABCA 10 at para. 2, there must be "at least a hint of potential compromise or negotiation" in the correspondence (at para.11). The Court mentioned and supported the Sable decision in that the negotiated amount in that case, to which privilege attached, was found to be a key component of the "content of a successful negotiation" (at para. 11).

The Court found that the correspondence "should not be cloaked with privilege" as there was no hint of potential compromise; it was basically an unconditional assertion of rights (at para. 15).

Canadian Courts Will Continue to Favour Settlement Privilege in Negotiations

As with any class privilege there are exceptions as the above cases have noted. When it comes to determining whether an exception is warranted each case will have to be examined on its facts. Given the increasing cost of legal fees and the corresponding effect of limiting access to justice for those who cannot afford lawyers, I suspect that the Canadian courts will continue to promote and protect settlement privilege. This is indeed an welcomed trend.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.