Executive Summary: Key Legal and Evidentiary Issues

• Whether solicitor-client privilege applies to approximately 200 documents ISI shared with Integro during policy procurement and management.

• The legal sufficiency of ISI’s claim to common interest privilege (CIP) in preserving privilege over shared legal communications.

• Beazley’s entitlement to production of documents despite ISI’s privilege assertions under Civil Procedure Rule 14.05.

• Whether ISI's disclosure to Integro constituted a waiver of privilege or was protected by the common legal interest in procuring the policy.

• The Court’s refusal to inspect the documents under CPR 85.06 due to ISI’s prima facie establishment of privilege.

• The appropriateness of awarding lump-sum costs in favour of ISI due to the complexity and scope of the disclosure motion.

Background and facts of the case

Irving Shipbuilding Inc. (ISI) was selected by the Government of Canada as the prime contractor for the Arctic and Offshore Patrol Ships (AOPS) Project. This role required ISI to obtain highly specific insurance coverage. To meet these obligations, ISI engaged Integro (Canada) Limited (later succeeded by HUB International and Tysers) to act as its insurance broker. A Marine Professional Liability Insurance Policy (Policy No. B0391TV1301140) was ultimately issued by Beazley Syndicates AFB 2623 and AFB 623 at Lloyd’s. The policy was customized—described during submissions as “made to order”—and utilized “manuscript” language to address the Project’s unique needs.

Between 2012 and 2015, during both the “Definition Phase” and the “Implementation Phase” of the AOPS Project, ISI worked closely with Integro and its legal counsel (both internal and external) to ensure the policy met stringent requirements set by Canada. To this end, ISI shared legal advice and privileged information with Integro and involved them directly in communications with ISI’s counsel. A Non-Disclosure Agreement was signed in November 2012, and a Client Service Contract was executed in January 2015 to govern this relationship.

Following design issues with subcontractor Odense Maritime Technology (OMT), ISI initiated arbitration against OMT in June 2017. ISI prevailed completely, receiving an arbitral award of $170,573,824.03, plus interest and full indemnity for legal fees. However, Beazley, which had funded OMT’s counterclaim, refused to indemnify ISI for its legal costs. In 2023, ISI commenced legal proceedings against Beazley, seeking recovery of the full unpaid amount of the award.

The legal dispute and policy terms at issue

Beazley filed a motion seeking production of about 200 documents over which ISI had asserted solicitor-client and common interest privilege. ISI argued that the disclosures to Integro were essential to obtaining legal advice concerning the policy’s formation and did not constitute waiver. Instead, ISI maintained that a common interest privilege applied, preserving the confidentiality of communications shared in pursuit of the joint legal objective of placing the policy.

The Court confirmed that the communications originated from ISI’s internal and external counsel and were made in the course of obtaining legal advice regarding the insurance policy. The Court accepted that Integro’s role was not merely commercial but instrumental in assisting with legal understanding and compliance during the policy’s development. Justice Gabriel found that the privilege was not waived and that common interest privilege applied to these communications.

Court’s findings and analysis

In 2025 NSSC 52, the Court dismissed Beazley’s motion for production. It ruled that:

• ISI had established solicitor-client privilege over the documents.

• Sharing the information with Integro did not waive privilege because Integro shared a common legal interest with ISI in placing the policy.

• The communications were made in confidence, governed by binding confidentiality agreements.

• ISI provided sufficient evidence—principally through the affidavit of Adib Samaan, Director of Risk Management at J.D. Irving Limited—to justify its claims of privilege.

• There was no need for judicial inspection under CPR 85.06, as the documents were sufficiently described, and no compelling basis for review was shown.

The Court also held that a mistaken disclosure of one email to the wrong recipient did not constitute a waiver, as the error was immediately corrected. Two “common interest agreements” between ISI and Integro’s successors were also found to attract both common interest and litigation privilege.

Costs decision and case resolution on that issue

In 2025 NSSC 169, the Court ruled on costs following the dismissal of Beazley’s motion. ISI sought lump-sum costs of $45,000 plus $4,176.41 in disbursements, citing the complexity of the case and the disproportionate burden of responding to Beazley’s shifting positions.

ISI’s total discounted legal fees amounted to $201,910.95, and with disbursements, $206,087.36. The Court accepted that the motion involved significant complexity, including cross-referencing over 2,000 pages of materials, and was further complicated by Beazley’s last-minute request for an adjournment, which caused ISI’s counsel (who had already travelled to Halifax) to incur wasted time and expense.

Justice Gabriel concluded that a lump-sum award was warranted to do justice between the parties. He awarded ISI $30,250 in costs—representing 55% of reasonably incurred legal fees estimated at $55,000—plus the full $4,176.41 in disbursements. The Court also ordered that the costs be payable forthwith.

Conclusion

The decisions affirm that solicitor-client privilege can be preserved even when legal advice is shared with third parties, provided a genuine common interest exists. The Nova Scotia Supreme Court recognized the critical and integrated role of Integro in helping ISI understand and implement complex legal insurance requirements, thus validating the application of common interest privilege. The rulings also reflect the Court’s willingness to depart from standard tariff costs in exceptional cases where complexity and procedural conduct justify such treatment.