Executive Summary: Key Legal and Evidentiary Issues

• Scope and application of legal advice privilege over communications involving external advisors and legal counsel were central to the dispute.

• The court scrutinized whether settlement privilege applied to in-contract negotiations and communications between the parties.

• Determination of case-by-case privilege for confidential task force documents required balancing public interest and confidentiality.

• The functional role of third-party advisors in the solicitor-client relationship was analyzed to assess privilege claims.

• The court addressed the severability and redaction of privileged information within otherwise disclosable documents.

• Admissibility of documents for interpreting contractual agreements and the exceptions to privilege were key evidentiary considerations.

Facts of the case

Acciona Wastewater Solutions LP, through its general partner AWS General Partner Inc., initiated proceedings against the Greater Vancouver Sewerage and Drainage District (GVS&DD) following disputes arising from the design, construction, and partial financing of the North Shore Wastewater Treatment Plant (NSWTP). Acciona was responsible for designing and building the facility, while GVS&DD, as part of Metro Vancouver’s governing body, entered into a project agreement (PA) with Acciona on April 5, 2017. The project was terminated by GVS&DD in January 2022, leaving the facility only partially completed. The litigation is complex, involving multiple parties and counterclaims, and centers on the management, contractual obligations, and financial aspects of this large public infrastructure project.

Legal advice privilege and the role of external advisors

A significant portion of the dispute revolved around whether communications between Metro Vancouver, its legal counsel (Norton Rose Fulbright Canada LLP), and external expert advisors (notably AECOM Canada Ltd. and Deloitte LLP) were protected by legal advice privilege. The court examined whether these advisors were integral to the solicitor-client relationship or merely provided technical or financial information incidental to legal advice. The analysis required a functional approach, considering if the advisors stood “in the shoes of the client” when seeking or receiving legal advice. The court found that, in many instances, the involvement of AECOM and Deloitte was essential due to the technical complexity of the project, and thus privilege was properly claimed. However, where their input was merely technical or could be separated from legal advice, those communications were not privileged and were ordered disclosed, sometimes with redactions.

Settlement privilege and contract negotiations

The court also addressed whether settlement privilege applied to communications and documents generated during negotiations between Acciona and GVS&DD. While GVS&DD argued that all in-contract negotiations were protected as “without prejudice” settlement discussions, the court held that such privilege only applies when litigation is a reasonable prospect and the communications are aimed at resolving a litigious dispute. Routine contract administration and negotiations, even if labeled “without prejudice,” were not protected by settlement privilege unless formal dispute resolution procedures under the PA were triggered. The court ordered that these documents be disclosed if relevant, except where they could be used to interpret the existence or scope of settlement agreements, which may fall under an exception to privilege.

Case-by-case privilege and task force confidentiality

A further issue concerned documents and minutes from closed-door meetings of a special task force established by Metro Vancouver to consider options and costs for completing the NSWTP after the termination of the PA. The court applied the Wigmore criteria for case-by-case privilege, weighing the need for confidentiality against the public interest in disclosure. It found that, given the sensitive nature of the deliberations and the public interest in candid discussions about a major taxpayer-funded project, confidentiality should be protected in these circumstances. As a result, certain task force documents were found to be privileged on a case-by-case basis.

Outcome and ruling

The court issued a nuanced decision, granting some of Acciona’s requests for disclosure and rejecting others. It ordered GVS&DD to produce specific documents previously withheld under claims of privilege, with some requiring redaction to protect genuine legal advice. Other documents, particularly those related to the task force, were found to be privileged and need not be disclosed. The court did not determine any monetary damages or award costs in this decision, noting only that the parties could address the issue of costs in a future hearing if necessary. Thus, Acciona Wastewater Solutions LP was the successful party in this application, but no specific amount was ordered or awarded in its favor at this stage.