Executive Summary: Key Legal and Evidentiary Issues

• Nova alleged that its intellectual property in a medical device was assigned to MacuMira without shareholder approval, under an agreement it says was deliberately kept secret.
   
• Justice Neufeld dismissed Nova's application to disqualify Burnet, Duckworth & Palmer LLP as counsel for the MacuMira Defendants, finding no solicitor-client or near-client relationship existed between Nova and the firm.
   
• Costs on that disqualification application went to MacuMira, but at fifty percent of its reasonable legal fees and disbursements rather than on a full solicitor-client basis.
   
• Medical evidence submitted on behalf of Walter O'Rourke was found insufficient to excuse him entirely from oral questioning, leading the court to order a modified, accommodated procedure instead.
   
• Privilege over portions of Maverick Law's file was found to have been impliedly waived because the MacuMira Defendants' pleadings put their understanding of O'Rourke's authority in issue.
   
• Requests for broader disclosure covering litigation-strategy discussions and challenge assessments were refused as overly broad and insufficiently tied to the waiver that was found.
   

Facts of the case

Nova Oculus Canada Manufacturing ULC developed a medical device to treat age-related macular degeneration and held patents and patent applications related to it. Walter O'Rourke served as its president and chief financial officer from May 2017 to December 2022, while also acting, through Karmastar Consulting Inc. [spelled "Karmatar Consulting Inc." in the 2026 ABKB 616 case caption], as its chief executive officer. MacuMira Medical Devices Inc., led by its president Justin Sather, was originally a licensee of the device through a predecessor agreement. On October 27, 2020, O'Rourke and Sather negotiated an Assignment of Inventions and Related Patent Rights, under which MacuMira acquired ownership of the device in exchange for royalties and other payments. Nova was not represented by counsel in that transaction; MacuMira was represented by Maverick Law. An amended and restated version of the agreement followed on September 1, 2022, increasing the consideration payable to Nova. For that second negotiation, MacuMira retained Burnet, Duckworth & Palmer LLP ("BDP" in the 2024 decisions; "BD&P" in the 2026 decision), whose senior partner, Daryl Fridhandler [named "Darrell Fridhandler" in the 2024 ABKB 700 costs decision], attended meetings between the parties and prepared the agreement.

Nova's principals, including former director Peter Pocklington [described as "a former Nova Canada director" in the 2024 ABKB 517 decision, though a 2018 SEC complaint referenced in the 2026 decision identified him as a director of Nova at that earlier time], did not learn of the assignments until November 2022. O'Rourke was dismissed from his roles that December, and Nova commenced an action in February 2023 against O'Rourke, Karmastar [Karmatar], MacuMira, and Sather, seeking to set aside the assignments on the basis that they exceeded O'Rourke's authority and were never approved by shareholders. On March 1, 2023, Nova executed a Full and Final Release in O'Rourke's favour, followed the next day by a Memorandum of Understanding; Nova later treated both as void, and their validity remains an issue for trial.

Three decisions arose from this dispute. In August 2024, Nova applied to disqualify BDP as counsel for the MacuMira Defendants, arguing the firm had received confidential information from Nova during the 2022 negotiation and that Fridhandler was likely to be called as a trial witness. That application was dismissed, and costs were determined in a separate ruling that November. In 2026, two further applications came before the court: one by O'Rourke seeking to answer questioning by written interrogatories rather than orally, citing his declining health, and one by Nova seeking a declaration that MacuMira had waived privilege over parts of Maverick Law's file and seeking further disclosure.

Policy and legislative provisions at issue

The disqualification application turned on the common law test from MacDonald Estate v Martin, which asks first whether a lawyer received confidential information attributable to a solicitor-client relationship relevant to the matter, and second whether there is a risk that information will be used to the client's prejudice. Rule 3.4-6 of the Law Society of Alberta's Code of Conduct, which restricts a lawyer from acting against a former or prospective client where relevant confidential information was received, was also considered, though the court noted it was not strictly bound by the Code.

The costs decision applied Alberta's Rules of Court framework for costs, under which solicitor-client costs are the exception rather than the rule, reserved for cases involving blameworthy conduct such as litigation misconduct or fraudulent pretrial conduct. Partial indemnity costs, typically forty to fifty percent of reasonable fees, were treated as the more usual remedy for a successful party, assessed against the reasonableness factors in Rule 10.2.

The 2026 application concerning written interrogatories engaged Rules 5.22 to 5.24 and 5.3(1)(b) of the Alberta Rules of Court, which allow the court to waive or modify oral questioning where compliance would pose a grossly disproportionate danger or difficulty. The disclosure application engaged the doctrine of implied waiver of solicitor-client privilege, along with Rules 5.1, 5.6, 5.7, and 5.8 governing the content and adequacy of an Affidavit of Records, and the unlawful-conduct exception to privilege discussed in R v Fox.

Reasoning and analysis

On disqualification, Justice Neufeld applied the indicia from Jeffers v Calico Compression Systems and found no contract, retainer, billing relationship, or independent meetings existed between Nova and BDP; all information Nova provided to Fridhandler was also shared with Sather, and both O'Rourke and Sather testified that BDP acted solely for MacuMira. Because Nova was neither a client nor a near-client of the firm, the first branch of the MacDonald Estate test failed, making the second branch unnecessary to consider. On the question of Fridhandler as a potential witness, the court found it premature to disqualify BDP given the early stage of the litigation, the possibility of summary dismissal based on the Release, and the speculative nature of any eventual decision to call him. The administration-of-justice ground was likewise rejected, since the conflict alleged was not sufficiently acute absent clearer evidence that Fridhandler would testify.

On costs, Justice Neufeld held that Nova's allegations, while aggressive and rhetorically overstated, fell short of the reprehensible or outrageous conduct required for solicitor-client costs, particularly since some allegations were supported by evidence and by delays in BDP's document production. He nonetheless found the application had been fought with unusual thoroughness between two well-resourced commercial parties, warranting partial indemnity costs at the high end of the usual range, set at fifty percent of MacuMira's reasonable fees and disbursements, with reasonableness to be assessed by an Assessment Officer if the parties could not agree.

In the 2026 decision, Justice Dario addressed the interrogatories application by weighing the centrality of O'Rourke's evidence against the persuasiveness of the medical justification for excusing him. She found his testimony central to disputed issues of authority and representations made to MacuMira, and concluded that Dr. Garside's affidavit lacked detail on symptom severity, functional limitations, or why accommodations such as remote testimony, shorter sessions, or oxygen support would be insufficient. Comparing the record to Ms. R v WA, Gouin, and Grebely, she found the evidentiary threshold for excusing a central witness from live questioning had not been met, and instead ordered a hybrid process combining limited written interrogatories with accommodated oral questioning in short, scheduled intervals.

On the disclosure application, the court first found that any privilege over Maverick Law communications shared with or received by O'Rourke had already been waived through third-party disclosure, since no exception for inadvertent disclosure or common interest applied. On the broader question of implied waiver, the court reviewed the doctrine from Rumancik, JL Energy, and the Ontario Court of Appeal's decision in One York Street, concluding that MacuMira's pleaded reliance on O'Rourke's representations about his authority, and its pleaded good-faith belief in that authority, put its understanding of its legal position in issue. Because Maverick Law had potentially advised on the same issues, fairness required production of advice addressing shareholder approval, O'Rourke's authority, and any opinion concerning paragraph 12 of the draft 2020 agreement. The court declined to extend waiver to advice given after the 2020 agreement was executed, or to communications about litigation strategy and the likelihood of successfully defending a future challenge, finding those topics too broad and not sufficiently connected to the pleadings that triggered waiver. The unlawful-conduct exception to privilege was considered but not established on the present record.

Ruling and overall outcome

Across the three decisions, Nova was unsuccessful in removing BDP as counsel for the MacuMira Defendants, and MacuMira was awarded costs of the disqualification application, quantified at fifty percent of its reasonable legal fees and disbursements, with the final amount to be determined by an Assessment Officer if the parties cannot agree. On the 2026 applications, O'Rourke did not obtain the full exemption from oral questioning that he sought; the court instead directed a modified procedure combining written interrogatories on information-seeking matters with time-limited, accommodated oral questioning. Nova achieved partial success on disclosure: the MacuMira Defendants were ordered to produce communications already shared with O'Rourke, along with any Maverick Law advice addressing shareholder approval requirements, O'Rourke's authority to sign the 2020 agreement, and any opinion on paragraph 12 of that agreement, with a referee appointed to oversee production at Nova's initial cost. Nova's request for disclosure of advice concerning litigation strategy and the likelihood of successfully defending the assignments was denied. No monetary damages were awarded in any of the three decisions; costs of the 2026 applications were not fixed in the judgment and remain to be addressed separately.