Executive Summary: Key legal and evidentiary issues

• Whether certain questions refused on cross-examination related to issues raised in the 2025 affidavit

• Determination of the scope of cross-examination on a motion to dismiss versus broader issues in the application

• Whether litigation privilege applied to questions about the corporation’s contractual commitments with Resolute

• Whether solicitor-client privilege applied given the joint retainer between the corporation and majority shareholders

• Clarification of minority shareholders’ rights to information through corporate counsel in shareholder disputes

• Whether prior affidavits from earlier related litigation could be used to expand the scope of cross-examination

• Whether applicants were entitled to compel disclosure of documents before respondents had answered the main application

• Court’s direction that certain questions be answered but broader disclosure was premature

Facts of the case

Rainy River First Nations and Naicatchewenin First Nation are two of six shareholders of Rainy Lake Tribal Resource Management Inc. The other four shareholders are Couchiching First Nation, Mitaanjigamiing First Nation, Nigigoonsiminikaaning First Nation, and Seine River First Nation. In 2019, the respondent First Nations resolved to distribute funds received from Resolute Forest Products to themselves, excluding the applicants. The applicants brought a 2019 application seeking to restrain those payments, resulting in some funds being held in trust. Additional funds received since 2021 have also been partially held in trust, now totaling $748,000.

In January 2025, the applicants brought a new application seeking release of the trust funds to themselves. The respondents brought a motion to dismiss this new application as duplicative and abusive. In response, the respondents filed a 2025 affidavit from their lawyer, Mr. Strickland. On cross-examination of this affidavit, the applicants asked various questions, some of which Mr. Strickland refused to answer on grounds of solicitor-client privilege, litigation privilege, or scope. The applicants brought this motion to compel further answers, as well as disclosure of documents related to the corporation’s dealings with Resolute and internal governance.

Outcome

The court ruled that two specific questions about the existence of contractual commitments between the corporation and Resolute were within the proper scope of cross-examination on the motion to dismiss and must be answered. The court found that litigation privilege did not apply, as the agreements predated the litigation. Solicitor-client privilege could not be asserted on these questions because Mr. Strickland was acting as lawyer for the corporation as well as the majority shareholders, and minority shareholders were entitled to such corporate information.

However, the court held that other categories of questions—about specific agreements, earlier affidavits, or the lawyer’s retainer—were beyond the scope of the cross-examination on the motion to dismiss and were properly refused. The applicants’ request for broad disclosure of documents from the corporation was denied as premature, since the respondents had not yet responded to the 2025 application. The applicants were not permitted to ask further questions arising from the two answers to be provided. The costs of this motion were left to be determined by the judge hearing the motion to dismiss.