Executive Summary: Key Legal and Evidentiary Issues

• Settlement negotiation privilege was at the center of this dispute, specifically whether a plaintiff's mediation brief shared with defense counsel was protected from disclosure to third parties.

• Defense counsel forwarded the plaintiff's mediation brief to a private investigation firm, Lodge & Associates Investigations Ltd., which then conducted video surveillance of the plaintiff.
• At issue was whether the video surveillance evidence — obtained through use of the privileged mediation brief — should be admitted at trial.
• No recognized exception to settlement negotiation privilege applied, as sharing the brief with a private investigator did not constitute a compelling public interest sufficient to override the privilege.
• Admitting the evidence risked deterring parties from engaging openly in future settlement negotiations and mediations.
• The court's ruling turned on the scope and purpose of settlement negotiation privilege as a matter of public policy.

Facts of the case

Thomas William Taylor (plaintiff) commenced an action against Malinder Singh Brar, First West Leasing Ltd., and Jasr Homes Ltd. (defendants). On January 2, 2025, the plaintiff issued a notice to mediate, and the parties subsequently scheduled the mediation for May 28, 2025. On May 4, 2025, plaintiff's counsel provided the plaintiff's mediation brief to defense counsel. However, on May 20, 2025, defense counsel informed plaintiff's counsel that the defendants would not be participating in the scheduled mediation.

Two days later, on May 22, 2025, defense counsel wrote to Lodge & Associates Investigations Ltd. to retain it for private investigation and surveillance services concerning the plaintiff. The letter included background information as well as a copy of the plaintiff's mediation brief. Lodge & Associates Investigations Ltd. subsequently conducted video surveillance of the plaintiff. The plaintiff objected to the admission of this video surveillance evidence at trial on the ground that it was obtained, in part, through a breach of settlement negotiation privilege.

Settlement negotiation privilege

Settlement negotiation privilege — also referred to as the privilege protecting "without prejudice communications" — is a class privilege that protects discussions conducted for the purpose of settling a dispute, where the parties intend that those communications not be disclosed or used against them if negotiations fail. As described by Paciocco, Paciocco, and Stuesser in The Law of Evidence, 8th ed. (Toronto: Irwin Law, 2020), the privilege exists "primarily as a matter of public policy to encourage litigants to settle their disputes without the need to go to trial," and it protects communications from disclosure not only between the negotiating parties but also to third parties. The privilege may be overridden where the existence or terms of a settlement are at issue, where the negotiations give rise to a cause of action, or where a compelling public interest requires it.

The court's reasoning and analysis

Justice Funt accepted the plaintiff's submission that the appropriate remedy could not be limited simply to striking the mediation brief from the record. Because the investigators from Lodge & Associates Investigations Ltd. had been provided with the plaintiff's full case theory, his discovery testimony, and his mediation brief before conducting the surveillance, they were not neutral observers — they were directed and briefed on what the plaintiff was expected to say, what his asserted limitations were, and which head of damage was most heavily contested. The resulting surveillance was therefore the product of that targeted, privileged information.

The court also expressed a broader policy concern: parties considering mediation might become less willing to participate openly if they sensed that sensitive information could be shared outside the mediation room. Justice Funt noted that mediations occur across almost all areas of law and can involve sensitive financial information, technological advances, and personal health matters, including psychological and psychiatric matters. Crucially, private investigations and video surveillance can readily be undertaken without access to an opposing party's mediation brief, meaning there was no compelling reason to override the privilege in this case.

Ruling and overall outcome

The court ruled in favor of the plaintiff, Thomas William Taylor. Justice Funt held that sharing the opposing party's mediation brief with a private investigator did not engage any compelling public interest sufficient to override settlement negotiation privilege, and that admitting such evidence would discourage litigants from engaging in candid settlement negotiations for fear of disclosure. Accordingly, the video surveillance evidence and any related testimony from the private investigation conducted by Lodge & Associates Investigations Ltd. were excluded from trial. No monetary award or damages amount was ordered or specified in this ruling.