Implied Waiver of Solicitor-Client Privilege by Strata Corporations

WHAT IS IMPLIED WAIVER OF SOLICITOR-CLIENT PRIVILEGE?

Implied waiver of solicitor-client privilege happens when a Strata Corporation gives up solicitor-client privilege through its own conduct, whether or not it intends to give up anything at all (S. & K. Processors Ltd. v. Campbell Ave. Herring Producers Ltd., 1983 CanLII 407 (BC SC), paras 6, 10). We have written about express waiver, where the Strata Corporation actually knows the privilege exists and chooses to disclose; implied waiver is a separate risk, and it is the more dangerous one, because a Strata can trigger it without anyone ever using the word "privilege."

The test has three elements, and all three must be satisfied before a court will find implied waiver:

1. The Strata must have put its own state of mind in issue.

2. The Strata must have obtained legal advice about the matter.

3. The Strata must have voluntarily injected that legal advice, or its understanding of the law, into a dispute in a way that is material to an issue in it (Long v. Red Branch Investments Limited, 2022 BCCA 293, para 26; , Soprema Inc. v. Wolrige Mahon LLP, 2016 BCCA 471).

Each element gets its own heading below, followed by what we consider the two situations most likely to catch a Strata by surprise: circulating a legal opinion to Owners officially, and discussing one informally.

WHEN DOES A STRATA CORPORATION PUT ITS OWN STATE OF MIND IN ISSUE?

A Strata Corporation puts its own state of mind in issue when the position it takes turns on what it believed, understood, or intended about its own legal position, not merely when its state of mind happens to be relevant to the facts (Doman Forest Products Ltd. v. GMAC Commercial Credit Corp., 2004 BCCA 512, paras 27-28). A claim that necessarily requires proof of a party's own state of mind, such as negligent misrepresentation, satisfies this element on its face (Soprema, paras 2, 17-18).

It is reasonable to assume that any dispute touching on a decision Council made would put the Strata Corporation's state of mind in issue, but that assumption is too broad. A mere denial of wrongdoing, or an assertion that Council acted "lawfully" or "in good faith," does not by itself satisfy this element; an Owner cannot force a Strata Corporation to waive privilege simply by alleging misconduct and inviting a response to the allegation (Camp Development Corporation v. South Coast Greater Vancouver Transportation Authority, 2011 BCSC 88, paras 88, 94-99, applying the Doman distinction). The state of mind that matters is the Strata Corporation's own understanding of its legal position, not a general claim about how it conducted itself.

IS OBTAINING LEGAL ADVICE ABOUT THE MATTER ENOUGH ON ITS OWN?

Obtaining legal advice about the matter is not enough on its own to waive privilege. It is the second of the three elements, and it is satisfied simply by showing the Strata Corporation received legal advice about the transaction or dispute in question (Soprema, para 6).

However, this element is rarely in dispute and never decides the question by itself. Nearly every Strata has obtained legal advice about significant decisions, and satisfying this element still leaves the third and most demanding element to be proven.

WHAT DOES IT MEAN TO VOLUNTARILY INJECT LEGAL ADVICE INTO A DISPUTE?

Voluntarily injecting legal advice into a dispute means the Strata Corporation itself puts the substance of that advice, or its own understanding of the law, forward to justify or explain a decision it made, in a way that is material to an issue the dispute must resolve. This is the element that does the real work: satisfying the first two elements is not enough, because "the weight of authority supports the proposition that a party must voluntarily inject ... legal advice it received or its understanding of the law before waiver can be implied" (Soprema, para 49).

Injection can come from a pleading, from evidence, or from argument, and it normally requires the Strata Corporation to assert reliance on the advice, not merely to have received it (H.M.B. Holdings Limited v. Replay Resorts Inc., 2018 BCCA 263, para 46). For example, a Strata Corporation that pleads it delayed a claim until it obtained legal advice on a limitation period has injected that advice, even without quoting a word of it. By contrast, a Strata Corporation that merely asserts it consulted a lawyer, without relying on what the lawyer actually said, has not — asserting the existence of legal advice is not the same as relying on its content (Peak Products Manufacturing Inc. v. Gross, 2023 BCCA 214, paras 57-59).

This is also where the "sword and shield" idea applies. Fairness and consistency require production when a Strata Corporation uses privileged advice as a sword, a positive reference to justify a decision, while also using it as a shield to stop an Owner from testing that justification (Huang v. Silvercorp Metals Inc., 2017 BCSC 795, paras 143-146). A Strata Corporation that claims "we imposed this Special Levy because our lawyer told us we had to" is using the advice as a sword; it cannot then refuse to produce the advice itself as a shield.

CAN ATTACHING A LEGAL OPINION TO MINUTES OR TO A NOTICE FOR A GENERAL MEETING WAIVE PRIVILEGE?

Attaching a legal opinion, or even a summary of one, to Strata minutes or to a notice for a general meeting can waive privilege over the whole of it. This risk does not come from the three-element test above; it comes from a separate, sibling doctrine of implied waiver that does not require a showing that state of mind was in issue or that anything was injected into a dispute at all — waiver of privilege as to part of a communication is waiver as to the entire communication (S. & K. Processors, para 6; Huang, paras 147-155).

A notice for a general meeting under s.45 of the Strata Property Act must describe the resolutions to be voted on, and a Strata that wants Owners to approve a Special Levy, or a bylaw amendment, on the strength of legal advice will often be tempted to attach the opinion, or quote its conclusion, to explain why. Doing so discloses the opinion to every Owner entitled to notice, not to a single trusted recipient, and quoting only the conclusion while withholding the reasoning behind it is exactly the partial disclosure this doctrine treats as unfair (Huang, paras 148-152). The same reasoning that supports a finding of waiver when a litigant discloses part of an opinion applies with at least as much force when a Strata attaches part of an opinion to a document every Owner will read.

DOES INFORMALLY DISCUSSING LEGAL ADVICE WITH OWNERS CREATE THE SAME RISK?

Informally discussing legal advice with Owners creates the same risk as attaching it to a written record, because the doctrine looks at what was actually disclosed, not the disclosure's format. A member of Council who tells Owners at an Annual General Meeting, or in a hallway conversation, that "our lawyer said we could do this" has disclosed the substance of the advice just as surely as if it had been printed in the minutes.

This is because privilege is not preserved by informality. An oral summary given in response to an Owner's question at a meeting, without a written record, still counts as a voluntary disclosure of the advice's substance, and if that summary is later relied on to justify Council's decision in an actual dispute, it can satisfy the voluntary-injection element as readily as a pleading would (Huang, paras 143-146). It is important for Council to understand that "we were just explaining our reasoning to the Owners" is not a defence; a court asks what was disclosed and why, not whether it happened in writing or in conversation.

STRATAS SHOULD TREAT ANY DISCLOSURE OF LEGAL ADVICE TO OWNERS THE SAME WAY THEY TREAT A DECISION TO WAIVE PRIVILEGE

Implied waiver does not require a Strata Corporation to intend anything. It can arise from the three-element test, when the Strata Corporation puts its own state of mind in issue, has obtained legal advice, and voluntarily injects that advice into a dispute to justify what it did. It can also arise, independently of that test, from partial disclosure alone, whenever the Strata discloses part of an opinion without the rest.

However, both routes converge on the same practical point once legal advice is shared with Owners, whether attached to minutes, or to a notice for a general meeting, or explained informally at a meeting. Our recommendation is that Council treat any disclosure of legal advice to Owners, official or informal, as a decision with the same consequences as a deliberate waiver, made by resolution and only after turning its mind to whether disclosure actually serves the Strata Corporation's own interests. Keeping that discipline is what allows a robust and resilient Strata Community to explain its decisions to Owners without giving up the protection its legal advice is supposed to provide.