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Document
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MO-1736
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Institution/HIC
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District Municipality of Muskoka
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Summary
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NATURE OF THE APPEAL: The appellant, a construction company, made a request to the District Municipality of Muskoka (the Municipality) under the Municipal Freedom of Information and Protection of Privacy Act (the Act ) for records relating to payments made by the Municipality to a list of 11 claimants who had registered liens and claim money owing from the appellant, including records disclosing all such payments, and any documents exchanged relating to such payments. In its decision letter, the Municipality stated that no responsive records exist. The appellant appealed this decision. During the mediation stage of the appeal, the Municipality identified responsive records, and issued a new decision granting partial access to the records. The Municipality advised that it was denying access to records on the basis of the exemptions for third party information (section 10) and solicitor-client privilege (section 12). The appellant takes the position that the withheld records are not exempt from disclosure. I sent a Notice of Inquiry to the Municipality and seven companies (I was unable to locate an additional four companies), initially, outlining the facts and issues and requesting written representations. Only the Municipality and one of the companies (the affected party) submitted representations in response. The affected party advised that it consented to the disclosure of the records relating to it. I then sent a copy of the non-confidential portions of the Municipality's representations and the Notice to the appellant, who in turn provided representations. RECORDS: There are 51 records at issue, as described in an index prepared by the Municipality and provided to this office and the appellant. By way of background, in October 1999 the Municipality accepted a tender from the appellant to construct a water treatment plant in Port Carling, Ontario. The project was not completed. As a result, many sub-trades registered liens under the Construction Lien Act [the CLA ] against the Municipality's property and issued statements of claim against the Municipality and the appellant. In a number of its statements of defence in the lien actions, the appellant pleaded: [The appellant] states that [the lien claimant's] right to receive payment of any holdback it might be entitled to under the [ CLA ] is conditional upon [the Municipality's] prior release of the statutory holdback owing to the [appellant]. [The appellant] states that [the Municipality] is in possession of the holdback under the prime contract and therefore, that payment of the holdback must come from the [Municipality]. The Municipality explains: The holdback that [the appellant] states must come from [the Municipality] is the statutory holdback under the [ CLA ] that is in issue here . . . The purpose of the [ CLA ] is to keep a certain percentage of the job proceeds out of the hands of contractors so that subtrades to that contractor are paid at least some portion of the amounts owed to them . . . On or about August 31, 2000, [the appellant] requested payment of the order of $600,000.00 for equipment supplied by [two named subtrades/lien claimants]. . . . . . . . . It is the "general contractor fails to pay its subtrades notwithstanding receipt of funds by the general contractor from the owner" circumstance that the statutory holdback under the [ CLA ] is designed and intended to address. Under the [ CLA ], the Owner (in this instance [the Municipality]) is obliged to retain the statutory holdback for the benefit of the subtrades (in this instance the lien claimants). The general contractor (in this case [the appellant]) is thus prevented from taking the funds received from the Owner and not in turn paying his subtrades. The general contractor would only have a claim to funds if: all liens are fully resolved; and all issues between the Owner and the general contractor are resolved In the present instance, there are over $1.2 million in liens registered and [the Municipality] is suing [the appellant] for over $5,000,000.00 for default of contract. [The appellant] has no claim to the statutory holdback . . . As [the Municipality] attempted to negotiate a completion contract for completion of the work, it was made clear by [the appellant's] . . . subtrades that they would not complete the work without an arrangement being made. In order to mitigate its damages, [the Municipality] had an obligation to use the existing subtrades, if possible. [The appellant] is fully familiar with the concept of mitigation and, in fact, put [the Municipality] on notice of the desirability of utilizing existing subtrades . . . Thus, [the Municipality] was faced with three items: an entitlement by the unpaid lien claimants to a pro-rata distribution of the statutory holdback (section 80(1)(b) - [ CLA ] pleadings by [the appellant] in the lien actions that [the Municipality] was obliged to pay the statutory holdback to the lien claimants; and an obligation to mitigate through use of the existing subtrades in the completion contract if possible. DISCUSSION: SOLICITOR-CLIENT PRIVILEGE General principles The Municipality claims that all of the records at issue qualify for exemption under section 12 of the Act , which reads: A head may refuse to disclose a record that is subject to solicitor-client privilege or that was prepared by or for counsel employed or retained by an institution for use in giving legal advice or in contemplation of or for use in litigation. Section 12 contains two branches: the common law solicitor-client privilege, which includes both solicitor-client communication privilege and litigation privilege, and two analogous statutory privileges. The Municipality appears to be relying on the litigation privilege aspect of branch 1 and 2. Litigation privilege protects records created for the dominant purpose of existing or reasonably contemplated litigation [Order MO-1337-I; General Accident Assurance Co. ]. The purpose of this privilege is to protect the adversarial process by ensuring that counsel for a party has a "zone of privacy" in which to investigate and prepare a case for trial. The privilege prevents such counsel from being compelled to prematurely produce documents to an opposing party or its counsel [ General Accident Assurance Co. ]. Courts have described the "dominant purpose" test as follows: A document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection [ Waugh v. British Railways Board , [1979] 2 All E.R. 1169 (H.L.), cited with approval in General Accident Assurance Co. ; see also Order PO-2037, upheld on judicial review in Ontario (Attorney General) v. Ontario (Information and Privacy Co
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Legislation
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MFIPPA
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10(1)(a)
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10(1)(b)
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10(1)(c)
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Section 12
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Subject Index
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Published
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Jan 07, 2004
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Type
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Order
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2013
Information and Privacy Commissioner of Ontario. All Rights Reserved.
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