IN
THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20100218

Docket:
No. S075471

Registry: Vancouver

Between:

Frank Peters

Plaintiff

And

Steven Paterson and James Killer
doing business as

Killer’s Cove Marina, and the said
Killer’s cove Marina,

Harrison Hot Springs Resort &
Spa Corporation

doing business as Harrison Resort
Adventure Park,

Kamalpreet Gill, Arvinder Kaler,
Parmjit Dhillon, Sukhbir Brar,

and John Doe

Defendants

Kamalpreet Gill, Arvinder Kaler, Parmjit Dhillon and Sukhbir Brar

Third Parties

Before: Master Taylor

Reasons for Judgment

[1]            
This action arises out of a serious accident
which occurred on Harrison Lake on or about August 16, 2005 between a motorboat
and a wind surfer.  The plaintiff was aboard his windsurfer.  The defendants,
Kamalpreet Gill, Arvinder Kaler, Parmjit Dhillon and Sukhbir Brar were the
occupants of a motor boat (the “motorboat defendants”) which was involved in a
collision with the windsurfer operated by the plaintiff.

[2]            
On or about August 17, 2005, a lawyer was
retained to represent the interests of Steven Paterson in the event a claim was
brought against him by Frank Peters.  Mr. Paterson, who is now the first named
defendant in this action, is alleged to be the operator of Killer’s Cove Marina.
It is also alleged that the motor boat was rented from Killer’s Cove Marina.

[3]            
That lawyer acted with alacrity and retained an
independent adjuster to interview the motorboat defendants.  Those interviews,
which were reduced to writing and signed by each of the motorboat defendants,
were conducted in August and September, 2005.  The statements taken were then
provided to the lawyer for Paterson.

[4]            
This action was commenced by Peters against all
the named defendants on or about August 14, 2007.

[5]            
On September 20, 2007 an appearance was entered
by Shelley Chapelski on behalf of Steven Killer.  Ms. Chapelski entered an
appearance on October 9, 2007 on behalf of Steven Paterson.  Ms. Chapelski was
the lawyer who commissioned the independent adjuster to obtain statements from
the motor boat defendants.

[6]            
On October 3, 2008, Ms. Chapelski filed a Notice
of Change of Solicitor on behalf of Harrison Hot Springs Resort & Spa
Corporation doing business as Harrison Resort Adventure Park.  These defendants
plus Paterson & Killer doing business as Killer’s Cove Marina are referred
to collectively as the “Renter Defendants”.

[7]            
The defendant, Paterson, issued third party
proceedings against the motorboat defendants on November 4, 2008.

[8]            
By notice of motion dated December 29, 2009, the
plaintiff seeks an order that the defendants, Steven Paterson, James Killer and
Harrison Hot Springs Resort & Spa Corporation (the “Marina defendants”)
produce copies of all statements or summaries of evidence provided by or taken
from the defendants Gill, Kaler, Dhillon and Brar in the possession or control
of the defendants Paterson, Killer and Harrison Hot Springs Resort & Spa
Corporation.

[9]            
The plaintiff also seeks an order that the
defendant, Killer, be compelled to answer question 130 from his examination for
discovery.

[10]        
The renter defendants are opposed to the
plaintiff being provided with copies of the statements made to the independent
adjuster by the motor boat defendants and rely on the principle of Common
Interest Privilege to deny the production of the requested statements.

The Privilege Issue

[11]        
 The respondents have acknowledged that
litigation privilege does not usually apply to statements taken from opposing
parties as is the case at bar.

[12]        
Accordingly, the central issue for
determination, therefore, is whether or not in the circumstances, the principle
of common interest privilege applies such that the statements taken from the
motorboat defendants by the renter defendants are protected by privilege and
not producible to the plaintiff.

[13]        
Common interest privilege is said to be an
extension of the privilege against disclosure of solicitor-client
communications.  As Wigmore defines it:

The chief
instance occurs when the same attorney acts for two parties having a
common interest, and each party communicates with him.  Here the communications
are clearly privileged from disclosure at the instance of a third person.  Yet
they are not privileged in a controversy between the two original parties,
inasmuch as the common interest and employment forbade concealment by either
from the other.  (Wigmore’s emphasis)

[14]        
The defendants take the position that the
statements in this case are covered by common interest privilege, which, they
submit, applies to an exchange of confidential information between individuals
who have a common interest in anticipated litigation.  The defendants cite Buttes
Gas and Oil Co. v. Hammer (No. 3), [1980] 3 All E. R. 475 (C.A) in support
of their position where Lord Denning says:

There is a
privilege which may be called a “common interest” privilege.  That is a
privilege in aid of anticipated litigation in which several persons have a
common interest.  It often happens in litigation that a plaintiff or defendant
has other persons standing alongside him – who have the self-same interest as
he – and who have consulted lawyers on the self-same points as he – but these
others have not been made parties to the action…All exchange counsel’s
opinions.  All collect information for the purpose of litigation.  All make
copies.  All await the outcome with the same anxious anticipation – because it
affects each as much as it does the others.

[15]        
The defendants maintain that common interest
privilege can apply to witness statements and in fact has been so applied in a
number of Canadian cases.

[16]        
On the other hand, the plaintiff asserts that
the case at bar is distinguishable from other cases in that there is no suggestion
by the defendant or their counsel that counsel has ever worked in conjunction
with the motorboat defendants to jointly advance the interests of all the
defendants.  As well, the plaintiff maintains, there has not been any evidence led
to indicate the motorboat defendants understood the reason for giving their
statements, the uses their information would be put to, or that their
statements would be kept privileged from the plaintiff.  In fact, in the
instant case, two of the motorboat defendants have signed authorizations to
release their statements to the plaintiff.

[17]        
In the recent decision in Maximum Ventures
Inc. v. De Graaf, 2007 BCCA 510, Mr. Justice Mackenzie discussed the test
for maintaining privilege between parties at paragraph 14:

Recent
jurisprudence has generally placed an increased emphasis on the protection from
disclosure of solicitor-client communications, including those shared in
furtherance of a common commercial interest.  In the instant case the [solicitor’s]
draft was produced within the recognized solicitor-client privileged
relationship.  The common interest privilege issues arise in response to a plea
of waiver of that privilege.  The common interest privileges is an extension of
the privilege attached to that relationship.  The issue turns on whether the
disclosures were intended to be in confidence and the third parties involved
had a sufficient common interest with the client to support extension of the
privilege to disclosure to them….Where legal opinions are shared by parties
with mutual interests in commercial transactions, there is 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.

[18]        
And, at paragraph 16, Mackenzie, J.A. made the
following finding:

The interests of
the clients of the three solicitors were not identical but they were common to
the extent that financing of the Western exploration of the Mongolian
properties was beneficial to all of them.  They also shared an interest in
assessing the invalidity of Maximum’s claims.

[19]        
The defendants maintain that even though two of
the defendants have signed authorizations addressed to counsel for the
defendants directing that their statements be released to counsel for the
plaintiff, they cannot, in these circumstances, create a waiver over the common
interest privilege by so doing.

[20]        
In my view, that argument begs the question for
two reasons.  Firstly, were the persons from whom the statements taken to
request copies of their statements, surely they would be entitled to receive
copies of them as no privilege attaches to one’s own statement in the hands of
a third party?  It would then be open to each of those parties to deliver a
copy of their statements directly to the plaintiff.  Secondly, the defendant,
Paterson, has issued third party proceedings against the four individual
motorboat defendants for which he seeks judgment against the motorboat defendants,
or indemnity from them in the event a judgment is rendered against Paterson.

[21]        
The Third Party Notice contains the following
allegations:

a. The plaintiff’s windsurfer struck the
port side of the motorboat;

b. The motorboat defendants represented that
Arvinder Kaler would be the person operating the motorboat;

c. While Paterson does not know who was
operating the boat at the time of the accident, it has been represented to
Paterson that Sukhbir Brar was operating the motorboat at the time of the accident;
and

d. the accident
was caused solely by the negligence of the operators of the motorboat.

[22]        
In the circumstances, two things are apparent. 
One, that the allegations made in the Third Party Notice are likely the result
of information gleaned from the motorboat defendants, and, two, the defendant,
Paterson, alleges the accident was caused solely by the negligence of the
motorboat defendants, which creates the question: where is the commonality of
interest between the renter defendants and the motorboat defendants such that a
privilege continues to exist over the statements taken from the motorboat
defendants?

[23]        
In my view, by the very nature of the Third
Party Notice and the allegations made in it, there has been a severing of the
commonality of interest of the defendants.  In the result, therefore, there is
no common interest privilege which can be maintained, and, accordingly, the
statements taken from the four motorboat defendants are no longer privileged
and must be turned over to the plaintiff.

The Examination for Discovery Issue

[24]        
The plaintiff seeks an answer to the questions
from the examination for discovery regarding the steps that were taken or
required to be taken by the defendant, Killer, to determine if a prospective
renter was qualified to operate a power boat prior to renting the vessel.

[25]        
Mr. Killer owned and operated the boat rental
business prior to selling it to his step son, Steven Paterson on January 1, 2002. 
The motor boat was rented to the defendants on August 16, 2005.

[26]        
The defendant, Killer, submits that Question 130
from the examination for discovery held on August 11, 2009, has no potential
relevance to the issues in this proceeding because the question relates to Mr.
Killer’s policy for boat rentals when he was in charge of the business up to
when he sold it to his step son.

[27]        
Question 130 from the transcript of the
examination of James Killer reads as follows:

130      Q  Okay.  So go
back to my question.  Up until 2002, when you were owning – the owner and the operator
of the boat rental business, what was your policy with respect to renting – renting
out the boats to people – people on the street?  What role did you play in
those rentals?  Tell me how it worked.

[28]        
In Forliti (Lit. Guard. Of) v. Woolley, 2002
BCSC 858m the court reviewed principles from authorities applicable to
questions asked on examinations for discovery at paragraph 9, and in
particular, subparagraph (b):

(b) On an
examination for discovery, questions are limited to relevant issues (relevance
being broadly defined, in this context, by the judgment in Cominco Ltd. v.
Westinghouse Canada Ltd. (1979), 11 B.C.L.R. 142 (B.C.C.A.)) between the
party conducting the discovery and the party being examined.  In other words,
questions may not be put which are relevant only to issues between the party
conducting the discovery and another party (not being examined).

[29]        
In my view, the question asked of Mr. Killer is
relevant only to the issues between the plaintiff and Mr. Paterson. 
Accordingly, question 130 need not be answered by Mr. Killer.

“AWD”
for Master Taylor