Canada: Transactional Common Interest Privilege: Can You Safely Share Privileged Documents With A Transacting Party?

Last Updated: April 25 2017
Article by Julia Lisztwan


Companies share privileged records with transaction counterparties for many different reasons — to optimize tax consequences of a restructuring or to conduct due diligence, for example. But once a company shares a document with a transaction counterparty, can it later assert privilege? Probably, but proceed with caution: while the heavy weight of authority favours transactional common interest privilege, the recent Federal Court case Iggillis Holdings Inc. v. Canada (National Revenue) (Iggillis) held that parties waive privilege if they share records without anticipated or pending litigation.1

What is Common Interest Privilege?

Normally, when a privileged record is disclosed to a third party, privilege is waived. Common interest privilege is an exception to that waiver.

To be protected by common interest privilege, the record must have been:

  1. privileged in the first place (for example, subject to solicitor-client privilege);
  2. only shared with a counterparty with a "common interest"; and
  3. shared with an expectation of confidentiality.2

Does Common Interest Privilege Apply in the Transaction Context?

While common interest privilege originated in the litigation setting, Canadian courts have clearly recognized the privilege in the context of commercial transactions. In Maximum Ventures Inc. v. de Graf, the British Columbia Court of Appeal stated that deal counterparties have "a sufficient interest in common to extend the common interest privilege to disclosure of opinions obtained by one of them to the others within the group, even in circumstances where no litigation is in existence or contemplated."3

Canadian companies with a presence in the United States will also need to consider the U.S. implications of sharing privileged materials. Unfortunately, the situation is more complex as transactional common interest privilege has not been uniformly recognized across the United States.

The rationale behind this recognition is facilitation of commercial transactions.4 If legal opinions can be shared without waiving privilege, parties can negotiate with a shared understanding of each other's legal position.5 They can also meet disclosure obligations with fewer risks: as one court noted, the disclosure required by securities legislation would be hard to achieve if companies were forced to waive privilege over sensitive material.6

How Much "Common Interest" Is Enough?

A common interest can be as simple as the shared goal of closing a deal.7 In Archean Energy Ltd. v. Minister of National Revenue,8 the Canadian Revenue Agency (CRA) sought production of legal opinions prepared by tax counsel to 19 corporations involved in a butterfly transaction. The Alberta Court of Queen's Bench determined the legal opinions were privileged given the parties' common interest "in seeing the deal done,"9 particularly because they shared common shareholders and management.10

In Anderson Exploration Ltd. v. Pan-Alberta Gas Ltd.,11 NOVA Corporation and TransCanada PipeLines Limited were in the process of merging when NOVA was sued by a number of gas producers. The producers tried to rely on a memo from NOVA's general counsel to NOVA's Board that NOVA had shared with TransCanada. The court held the memo was protected by transactional common interest privilege.12

Likewise, in Fraser Milner Casgrain LLP v. Minister of National Revenue,13 the privilege of tax advice was upheld where two groups of companies were negotiating a deal to form two partnerships, one Canadian and one American. A law firm acting for one group shared advice with the other on a number of legal matters of common interest to optimize the commercial and tax consequences of the transaction.

In these and other examples,14 the parties' common commercial end goal was sufficient for parties to maintain privilege. Their interests did not have to be identical,15 and could in fact be adverse in some respects.16

A Cautionary Note

The golden years of transactional common interest privilege may have come to an end. In December 2016, the Federal Court in Iggilis refused to apply common interest privilege in the transaction context.17

In Iggillis, the respondent companies asserted common interest privilege over a tax advice memo prepared by the purchaser's counsel and shared with them in a deal to buy shares in the respondents' corporations. The Federal Court acknowledged that common interest privilege in the commercial transaction context has broad acceptance across Canada, the United States and other common law countries.18 It nonetheless held that transactional common interest privilege was inconsistent with the doctrine and rationale underlying solicitor-client privilege. The Federal Court further expressed concern that extending common interest privilege to the transaction context would deprive courts of substantial amounts of evidence in commercial disputes.19 The Court ultimately concluded that privilege had been waived and ordered the memo's production to the CRA.

Whether the Iggillis decision represents a shift in Canadian jurisprudence on transactional common interest privilege remains to be seen: the decision is now on appeal, and has yet to be followed by another court.

But even if Iggillis's complete rejection of transactional common interest privilege is not followed, the decision may signal a reversal in the doctrine's broad application. As is, there is no guarantee that the mere existence of a commercial transaction will establish common interest: whether the privilege applies is assessed on a case by case basis.20 Going forward, courts may be less willing to recognize privilege in cases where parties are substantially adverse in interest.21

Is Common Interest Privilege Also Recognized in the United States?

Canadian companies with a presence in the United States will also need to consider the U.S. implications of sharing privileged materials. Unfortunately, the situation is more complex as transactional common interest privilege has not been uniformly recognized across the United States.

Even with an agreement in place, there is always a risk of waiver, so consider carefully whether it is worth disclosing particular records. And, for good measure, always mark disclosed documents privileged and confidential.

Whether a court will find privilege waived will depend on which jurisdiction privilege is challenged in. For example, New York's highest court held last year that common interest privilege did not extend to the transaction context unless litigation is anticipated or pending.22 By contrast, Delaware recognizes common-interest privilege in the context where parties' interest in a transaction is "so parallel and non-adverse" that they "may be regarded as acting as joint venturers."23 Accordingly, counterparties to a deal involving any U.S. jurisdiction should seek advice on the potential consequences of disclosing sensitive privileged materials.

Good Practice Going Forward: Set Out Your Agreement in Writing

Entering a written agreement will not establish privilege where none existed, nor will it guarantee that a court will recognize the common interest defence to waiver. But it may help prove your intention that privilege not be waived by disclosure: courts consistently look to the parties' expectations to determine whether they intended to keep communications confidential and to determine whether they disclosed the communications to further their common interest.24

With that in mind, it would be prudent to set out an agreement in writing, identifying:

  1. the scope, start date and termination of the agreement;
  2. the common interest served by sharing privileged records;
  3. confidentiality requirements; and
  4. limitations on who can receive privileged records.25

Even with an agreement in place, there is always a risk of waiver, so consider carefully whether it is worth disclosing particular records. And, for good measure, always mark disclosed documents privileged and confidential.


Iggillis is likely a one-off exception to the strong body of case law recognizing transactional common interest privilege, but it may signal a reversal of courts' willingness to recognize the privilege in most commercial transactions. Companies should insist on setting out any common interest privilege agreement in writing, and, until the Federal Court of Appeal issues its decision on Iggillis's appeal, should exercise an extra measure of caution in deciding which privileged records to disclose in a transaction.


1 2016 FC 1352. [Iggillis]

2 Trillium Motor World Ltd. v. General Motors of Canada Ltd., 2014 ONSC 1338 at para. 130.

3 2007 BCCA 510 at para. 14 [Maximum Ventures].

4 Fraser Milner Casgrain LLP v. Minister of National Revenue, 2002 BCSC 1344 at para. 14.

5 Pitney Bowes of Canada Ltd. v. R., 2003 FCT 214 at para. 20 [Pitney Bowes].

6 Anderson Exploration Ltd. v. Pan-Alberta Gas Ltd., 1998 ABQB 455 at para. 25 [Anderson].

7 See, e.g., St. Joseph Corp. v. Canada (Public Works & Government Services), [2002] FCJ No. 361 at para. 129; see also Canmore Mountain Villas Inc. v. Alberta (Minister of Seniors & Community Supports), 2009 ABQB 348 at para. 7; Imperial Tobacco Canada Ltd. v. R., 2013 TCC 144 at para. 66 [Imperial Tobacco].

8 [1997] A.J. No. 347.

9 Ibid. at para. 30.

10 Ibid.; see also Imperial Tobacco at para. 65 (noting that three companies were not adverse in interest as they were subsidiaries of the same parent, working towards the same economic and commercial goals).

11 Supra note 6.

12 Ibid. at para. 27. The court added that because NOVA and TransCanada's merger was an arrangement that required court approval, they also had a common interest in anticipated litigation. Ibid. at para. 26.

13 2002 BCSC 1344.

14 See, e.g., Maximum Ventures (upholding privilege of documents shared between the vendor, purchaser and underwriters for mining properties given their common interest in securing financing for exploration of those properties); supra note 7 and cases therein.

15 Barclays Bank PLC v. Devonshire Trust (Trustee of), 2010 ONSC 5519 at para. 12.

16 Pitney Bowes at paras. 18-22; see also CC&L Dedicated Enterprises, [2001] O.J. No. 637 at para. 30 [CC&L] (noting that privilege could apply even if the parties' interests became adverse down the road).

17 Supra note 1.

18 Ibid. at paras. 10-11.

19 Ibid. at para. 28.

20 See Pitney Bowes at para. 19.

21 Pinder v. Sproule, [2003] A.J. No. 32 at para. 62 (Alta. Q.B.).

22 Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 27 N.Y.3d 616 (2016).

23 See, e.g., 3Com Corp. v. Diamond II Holdings, Inc., 2010 WL 2280734, at *7 (Del. Ch. May 31, 2010) (internal quotations omitted).

24 See, e.g., St. Joseph Corp. v. Canada (Public Works & Government Services), 2002 FCT 274 at para. 129; Pitney Bowes at paras.18-22; CC&L at para. 31.

25 See, e.g., Anderson at para. 24 ("There is no evidence of an expectation that privilege would be waived in the exchange of information between NOVA and [TransCanada]. The evidence of officers of NOVA and [TransCanada] is quite the contrary in that the exchange took place subject to a confidentiality agreement.");

26 See, e.g., Minister of National Revenue v. Thornton, 2012 FC 1313 at para. 55 (commenting that the insertion of the words "Privileged and Confidential — Prepared Under the Expectation of Solicitor & Client Privilege" made it further apparent that two solicitors co-authoring a legal opinion for their respective clients intended that the document not be disclosed to anyone without a common interest in the transaction).

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions