By Sarah D. Pinsonnault
In Canada (National Revenue) v. Revcon Oilfield Constructors Incorporated, 2015 FC 524, on the grounds of solicitor-client privilege, the Respondent (“Revcon”) refused to produce the documents sought by the Minister of National Revenue as part of its audit of Revcon’s corporate restructuring. Among the documents it claimed privilege over were the “items that would identify Law Firm X, an undisclosed law firm which was retained by the Respondent’s counsel for the purposes of the restructuring transactions being audited” (para. 6). The Federal Court found this claim, along with others, to be largely unfounded and unsupported by any legal authority:
“ The Respondent has provided me with no authority to support the proposition that the Law Firm X and Nomenclature claims are valid bases upon which to claim solicitor-client privilege. The idea that the identity of a law firm or lawyer retained by a client to provide tax planning advice is privileged finds no support in the law. It does not matter whether the law firm was retained “indirectly” by another firm directly retained by the client. A communication revealing the name of a law firm or lawyer – without anything else, such as actual legal advice – is not a confidential communication made for the purpose of receiving legal advice from a lawyer acting in a legal capacity. The name of a law firm, without more, is not protected by solicitor-client privilege. Nor is the revelation of shorthand tax language used by tax planning advisors.” (emphasis added)
With respect to the last sentence, we are also reminded in this decision that there is no such thing as “accountant-client privilege” and that “tax planning communications” (i.e. accounting or business advice), fall outside the scope of solicitor-client privilege. As a result, attorneys must remember that only communications for the purpose of obtaining or receiving legal advice are protected and that any communications relating to business or transactional matters are not privileged.
To read this decision in its entirety and other elements discussed therein, click here.