Canada: No Waiver Of Privilege For Contractor Emails On Company Account

Last Updated: September 23 2016
Article by Dan Doliner

Can a company which provides a corporate e-mail account to a contractor, and then gets into a legal dispute with that contractor, use the contractor's emails in that corporate account in the litigation? The answer appears to be no, in certain circumstances.

The Facts

A company engaged a contractor who provided it with certain services, and in this context, the company provided the contractor a corporate e-mail account. The contractor used this corporate e-mail account to exchange e-mails with his lawyer about a legal dispute he had with the company. Can the company use these e-mails in the litigation with the contractor? This is the main question in a recent decision of the Ontario Superior Court of Justice, in Narusis v. Bullion Management Group, 2016 ONSC 4731 .

The defendant, Bullion Management Group Inc. ("BMG") employed the plaintiff, Nathan Narusis ("Narusis"), beginning in 2007. In December 2011, BMG and Narusis agreed that Narusis would continue to provide BMG with services, but as a contractor, through a corporation controlled by Narusis.

As an employee of BMG, Narusis was provided with a corporate e-mail account; he continued to use the same corporate account when he became a contractor. In January 2011 BMG distributed to its employees an "Employee Policy & Procedures Manual" (the "Policy"). This Policy states that e-mails exchanged through BMG's corporate e-mail account are not guaranteed to be private and could be subject to inspection. The Policy required all e-mail account users to sign an acknowledgement that they understood and would abide by the terms of the Policy. Narusis did not sign such acknowledgement.

In September 2012 BMG terminated the working relationship with Narusis. In connection with the termination, Narusis launched an action against BMG.

As part of discovery, BMG searched its corporate e-mail server for e-mail correspondence relating to Narusis. BMG sent copies of relevant e-mail communications to its counsel. BMG's counsel reviewed the e-mails and noticed that some of the e-mails were communications between Narusis and one or more of his lawyers. BMG's counsel immediately stopped reviewing those e-mails, and sealed them pending the determination of the court in their regard.

BMG filed a motion with the court, seeking an order deeming the e-mails not subject to solicitor-client privilege. After hearing the motion, a Case Management Master dismissed it. The Master determined that e-mails exchanged between Narusis and his lawyers, despite being sent through BMG's e-mail server, were subject to solicitor-client privilege, and therefore, could not be admitted as evidence.

BMG appealed, requesting the court to set aside the Master's decision.

The Court's Decision: Dismissal

In its appeal, BMG raised two key arguments:

  1. The court should apply the legal tests relating to protection of privacy, and thus find, on a balance of interests, that the interest of submitting evidence (in this case, Narusis's e-mail exchange with his lawyers) prevails over Narusis's right to privacy.
  2. Narusis waived solicitor-client privilege over his communications with his counsel by corresponding with his counsel via Narusis's corporate e-mail account, thus, making these e-mails available for BMG to review.

Privacy Protection Rules Do Not Apply to Solicitor-Client Privilege

The court determined that the e-mail exchange between Narusis and his lawyer was subject to solicitor-client privilege and therefore the legal tests relating to privacy were not applicable.

The court noted that solicitor-client privilege is distinguished from the more general protection of privacy. These two rights are related but not the same. Narusis' e-mail exchange with his counsel was an interaction in which counsel was engaged in providing legal advice or 'otherwise acting as a lawyer.'1 In addition (and as further discussed below), Narusis had a reasonable expectation that the e-mail exchange with his lawyer would remain confidential. Thus, the e-mails were subject to solicitor-client privilege.

Lederer J. noted that solicitor-client privilege is fundamental to the proper functioning of the Canadian legal system. Without solicitor-client privilege, access to justice and equality of justice would be compromised.2 The court further noted that 'solicitor-client privilege must be as close to absolute as possible to ensure public confidence and retain relevance.'3

Solicitor-Client Privilege: Sending E-mails Via Corporate E-mail Account Does Not Constitute Waiver

The court concluded that the facts of the case indicated that Narusis had not, implicitly or explicitly, waived his solicitor-client privilege over the e-mails.

BMG distributed the Policy to its employees, stating that e-mail transmitted through the corporate account is 'not guaranteed to be private'. The court found that the Policy did not forbid use of the corporate e-mail account for personal matters, and that despite the Policy 'not guaranteeing' privacy, Narusis had a reasonable expectation of privacy.

The court considered Narusis' particular circumstances: he refused to acknowledge the Policy; he was employed by BMG for several years at the time the Policy was circulated and used his corporate e-mail account according to existing practices; and he was not considered an employee at the time the relationship with BMG was severed.

Lederer J. found that Narusis did not show an intention to deliver the e-mails to anyone other than, or in addition to, his counsel. The release of Narusis' e-mail exchange with his counsel to BMG's review was inadvertent. In addition, there was no public disclosure of the e-mails. Once the court found that Narusis' e-mail exchange with his lawyer was subject to solicitor-client privilege, 'anything that purports to be a waiver that does not involve a conscious, deliberate decision, must be narrowly construed and applied.'4

Takeaways for Business

E-mail continues to be one of the most dominant technological tools in all aspects of business operations. Consequently, e-mail exchange will continue to play a significant role in legal disputes. This case reflects the importance of understanding the intricacies relating to the use of e-mail.

In this case, the court found that the circumstances before it do not constitute waiver of solicitor-client privilege. However, in its analysis, the court suggested that had Narusis been an employee, and/or signed the Policy, and/or personal e-mails been forbidden, the outcome may have been different. For a business, loss of solicitor-client privilege can be a detrimental blow in litigation.

The decision in this case illustrates the importance of having effective policies to administrate the use of corporate e-mail. Such policies should take into account the particular circumstances of the business by offering solutions to specific issues that are part of the environment in which the business operates. However, as shown by this case, many times a policy alone is not enough, and it must be supplemented by the appropriate management procedures and technologic tools, to allow effective control of the use of corporate e-mail.


1 Referring to Blood Tribe Department of Health v. Canada (Privacy Commissioner), 2008 S.C.C. 44, at para. 10.

2 Ibid, (Blood Tribe), at para. 9.

3 Referring to R. v. McClure, [2001] 1 S.C.R. 445, at para. 35.

4 Referring to Leggat v. Jennings, 2015 ONSC 237, at paras. 30-31.

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