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BARRISTERS AND SOLICITORS - Relationship with client - Confidentiality

Thursday, July 23, 2020 @ 9:45 AM  


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Appeal by the defendant Kunicyn from the dismissal of her motion seeking answers to refused questions and disclosure of certain documents. Between 2002 and 2010, Kunicyn worked as an associate at several investment dealers as part of Vitug’s investment advisory practice. In 2009, the Investment Industry Regulatory Organization of Canada (IIROC) found Vitug guilty of professional misconduct and barred him from registering as an investment representative. Vitug transferred his book of business to Kunicyn, who then moved to the respondent Industrial Alliance Securities (IAS). Kunicyn ran her IAS practice from an office space she subleased from Vitug. In October 2010, IAS and Kunicyn entered into an agency agreement. In March 2011, IIROC advised IAS that it was investigating Kunicyn’s transfer to IAS. IIROC was concerned with whether Kunicyn was having continued contact with Vitug, such that she was facilitating his ability to continue to act as an investment representative when he was barred from doing so. In February 2012, IAS terminated its agency agreement with Kunicyn and unsuccessfully demanded repayment of the outstanding balance of the amount IAS paid her upon entering into the agency agreement. According to IAS, the amount was a forgivable loan. Shortly before Kunicyn’s termination, Franch, a senior vice-president of IAS, told IIROC that Douville, the president of IAS, had long known of the office arrangements. In April 2012, counsel to Franch and IAS wrote to IIROC to correct Franch’s testimony (the correction e-mail). In December 2015, IAS commenced an action against Kunicyn in relation to the alleged loan. During his examination, Franch testified that he was coerced to change his IIROC testimony by Douville and that the contents of the correction e-mail were false. When Kunicyn’s counsel asked questions and sought further production concerning the communication between IAS and its law firm in relation to the correction e-mail, IAS refused to answer on the grounds of solicitor-client privilege. Kunicyn’s counsel then brought a motion for an order requiring the questions to be answered and the production made. The issue before the motion judge was whether the fraud/crime exception to solicitor-client privilege should be invoked to order the requested production. The motion judge decided that it should not. Kunicyn took the position that the motion judge erred in requiring proof of a crime in applying the test for the exception. She further argued that the motion judge erred in applying too high a standard of proof to the exception.

HELD: Appeal dismissed. The motion judge did not err in finding that Kunicyn did not meet the threshold for applying the fraud/crime exception, which was a narrow and limited exception to be invoked only when it was absolutely necessary. There was no evidence that met the prima facie standard that the communications were made in furtherance of a criminal or civil wrong. While there was prima facie evidence from Franch that the correction e-mail was a lie, there was no prima facie evidence to support Kunicyn’s allegation that the lie to the regulator had anything to do with harming her or protecting IAS.

Industrial Alliance Securities Inc. v. Kunicyn, [2020] O.J. No. 2537, Ontario Superior Court of Justice - Divisional Court, H.E. Sachs, N.L. Backhouse and L.G. Favreau JJ., June 8, 2020. Digest No. TLD-July202020008