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Evidence - Privilege - Solicitor-Client - Crime-Fraud Exception. Sakab Saudi Holding Company v. Al Jabri
In Sakab Saudi Holding Company v. Al Jabri (Ont CA, 2026) the Ontario Court of Appeal dismissed an appeal, here brought against a Divisional Court appeal ruling that mostly upheld a Superior Court ruling that dismissed a motion "requiring the respondents to produce two categories of information", these being law firm trust ledgers and unredacted bank statements.
The court considers the 'broad concept' of criminal fraud, here in the context of assessing the crime-fraud exception to solicitor-client privilege:The Broad Concept of Fraud in Criminal Law
[87] Given the breadth of the concept of fraud in criminal law, it is also unnecessary to import other uses of the term into the exception in order for the exception to have sufficient breadth to remain faithful to its rationale – that certain communications fall outside the proper scope of employment of a lawyer such that they are not privileged, because attaching privilege to them would undermine the administration of justice.
[88] Section 380(1) of the Criminal Code, R.S.C. 1985, c. C-46 provides that everyone commits fraud “who, by deceit, falsehood or other fraudulent means … defrauds the public or any person … of any property, money, or valuable security or any service”. “Defrauds” is not defined in the Criminal Code and “[c]ourts, for good reason, have been loath to attempt anything in the nature of an exhaustive definition of ‘defraud’ but … two elements are essential, ‘dishonesty’ and ‘deprivation’”: R. v. Olan et al., 1978 CanLII 9 (SCC), [1978] 2 S.C.R. 1175, at p. 1182. This criminal concept of fraud is broader than fraudulent misrepresentation, such as that required to establish deceit or civil fraud: Olan, at p. 1181; Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, [2014] 1 S.C.R. 126, at para. 21.[7]
[89] Accepting that “it is no part of the professional duty of a solicitor either to take part in the concoction of fraud, or to advise his client how to carry through a fraud” (Campbell, at para. 59, citing O’Rourke, at p. 621), a communication about how to concoct or carry out a fraud would fall within the exception as it would fall within the criminal law’s broad understanding of that term. Indeed, it is difficult to imagine a client communicating to a lawyer that they would like advice to concoct a fraud, but only a civil one. And since, as explained below, the exception applies to the communication, it does not matter what type of proceeding later occurs.
Communications Intended to Facilitate the Breach of a Court Order Have a “Criminal Purpose” Within the Meaning of the Exception
[90] Applying the exception to communications intended to facilitate a breach of a court order also does not require broadening the exception beyond the Supreme Court’s boundaries, as such communications have a sufficiently “criminal purpose” to fit within it.
[91] In Campbell, Binnie J., at para. 62, suggested that the exception would apply to communications to facilitate a regulatory (i.e., a quasi-criminal) offence. The Supreme Court has described contempt of a court order as “quasi-criminal”. Defiance of a court order goes beyond a private wrong and “involves an element of public law … because respect for the role and authority of the courts, one of the foundations of the rule of law, is always at issue”: Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., 1992 CanLII 29 (SCC), [1992] 2 S.C.R. 1065, at p. 1075. The Supreme Court has also held that the gravity of the punishment mechanism — a contempt order — “is underscored by the criminal law protections afforded to the person against whom such an order is sought”, as well as by the sanctions that follow, which can include imprisonment or any other sanction available for a criminal offence. Thus “both the process used to issue a declaration of contempt and the sanction bear the imprint of criminal law”: Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, [2006] 2 S.C.R. 612, at para. 35.
[92] Accordingly, as long as the other preconditions to the application of the exception are met, communications that are intended to facilitate a future breach of a court order come within the exception as communications that are intended to further a criminal purpose.
The Exception Applies Regardless of the Type of Proceeding in Which Privilege is Claimed
[93] Finally, it is important not to confuse the scope of the exception with the type of case in which a privilege claim comes to be adjudicated. Although the motion judge and the Divisional Court were correct to describe the exception’s scope as limited to communications criminal in themselves or intended to further a criminal purpose, that did not mean that the exception was off the table simply because the action is one for civil fraud, as the courts below held.
[94] The “‘crime requirement’ …. does not require the laying of actual criminal charges”: Adam Dodek, Solicitor-Client Privilege (Markham: LexisNexis Canada Inc., 2014), at para. 3.81. The applicability of the exception turns on the nature and purpose of the communications between the client and the lawyer, not the nature of the proceeding in which privilege is claimed or challenged.
[95] Put differently, a client who seeks advice from a lawyer as to how to carry out a future fraud, or enlists the lawyer as a conspirator in that fraud, or seeks to use the lawyer-client relationship to facilitate a breach of a court order, never enjoys privilege over the communications whether charged criminally or only pursued civilly. . Sakab Saudi Holding Company v. Al Jabri
In Sakab Saudi Holding Company v. Al Jabri (Ont CA, 2026) the Ontario Court of Appeal dismissed an appeal, here brought against a Divisional Court appeal ruling that mostly upheld a Superior Court ruling that dismissed a motion "requiring the respondents to produce two categories of information", these being law firm trust ledgers and unredacted bank statements.
Here the court considers the 'crime-fraud' exception to solicitor-client provilege:[1] Solicitor-client privilege — the right to confidentiality over communications made within a lawyer-client relationship — is fundamental to the justice system in Canada. The privilege is construed broadly. In some circumstances, even seemingly neutral information is rebuttably presumed to be privileged because of what could be deduced from it. On the other hand, exceptions to the privilege are interpreted narrowly. One “extremely limited”[1] exception – the crime-fraud exception – exists because certain communications form no part of the proper professional role of a lawyer. To cloak them with confidentiality would undermine the administration of justice, the very reason the privilege exists.
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[10] I agree with the courts below that binding Supreme Court of Canada jurisprudence holds that the nature of the crime-fraud exception is extremely limited in nature and removes, from the ambit of privilege, any communication between a client and lawyer that is criminal in itself or is intended to further criminal purposes. But I disagree with the courts below to the extent that they held that the exception could not be applied in a civil action for fraud or where breach of a court order is or may be alleged. The exception focuses on the nature and purpose of the communication, not the nature of the legal proceeding ultimately brought. Fraud has a very broad meaning in criminal law. Where a communication is intended to further a fraud within that broad meaning, the communication is not privileged no matter the type of proceeding, civil or criminal, in which disclosure of the communication is later sought. And contempt, even in a civil context, is “quasi-criminal”. A communication intended by a client to use the lawyer-client relationship to facilitate contemptuous disregard of a court order is not privileged.
[11] However, the crime-fraud exception is subject to strict preconditions, including that the party seeking to apply it must demonstrate, on a prima facie basis, that communications took place that had the character that takes them within the exception. The Divisional Court conducted an alternative analysis and concluded that even if communications intended to facilitate civil fraud or breach of a court order were sufficient to attract the exception, the appellants had not made out a prima facie case for either. I see no reversible error in that conclusion. ....
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i. Overview of the Exception
[64] In Blood Tribe, at para. 10, Binnie J. described the scope of the exception in the following terms: “A rare exception ... is that no privilege attaches to communications criminal in themselves or intended to further criminal purposes” (citations omitted). In Crime Stoppers, at para. 26, Moldaver J. described the exception in similar terms: “The rule of solicitor-client privilege thus recognizes that in exceptional circumstances — where communications between a lawyer and client are criminal or where legal advice is sought for the purpose of facilitating a crime — the privilege does not exist”.
[65] The parties differ on the accuracy or completeness of these descriptions of the scope of the exception and the implications of that for the determination of this appeal. Before addressing the dispute about scope specifically, I describe certain features of the exception that are not in controversy.
ii. The Rationale for the Exception
[66] The crime-fraud exception has an accepted rationale. It exists because communications that fall within its scope cannot be part of the professional employment of a lawyer: Crime Stoppers, at para. 25; R. v. Campbell, 1999 CanLII 676 (SCC), [1999] 1 S.C.R. 565, at para. 55, citing Solosky, at pp. 835-36. Put differently, on certain topics a lawyer could never be properly retained and consulted, nor could a client reasonably expect to be able to do so. An exception to privilege must be recognized because “otherwise it would undermine the interests of justice and thus the very reason for granting the privilege in the first place”: Crime Stoppers, at para. 26.
iii. The Preconditions to the Application of the Exception
[67] The exception has the following preconditions:(i) The exception does not encompass good-faith legal advice. Consulting a lawyer to determine whether or not a course of action is legal is not caught by the exception, even if the action is later found to be illegal: Campbell, at para. 56; Markson v. MBNA Canada Bank, 2011 ONSC 871, 16 C.P.C. (7th) 332, at paras. 58, 65.
(ii) The client must be seeking to advance conduct which is clearly wrong and which it knows or should know is unlawful. The focus is on the knowledge and intent of the client, who must intentionally be using the lawyer-client relationship to facilitate unlawful conduct: Campbell, at para. 57 (citations omitted); Industrial Alliance Securities Inc. v. Kunicyn, 2020 ONSC 3393, 151 O.R. (3d) 3026, at para. 28.
(iii) The communications must be about future conduct. Communications about past wrongs are privileged: Industrial Alliance, at para. 28; David M. Paciocco, Lee Stuesser & Palma Paciocco, The Law of Evidence, 8th ed. (Toronto: Irwin Law, 2020), at p. 306; Campbell, at para. 56.
(iv) The burden of proof lies with the party asserting that the exception applies. The burden is not satisfied by pointing to wrongdoing and to the fact that a lawyer was consulted. “[D]estruction of the privilege takes more than evidence of the existence of a crime and proof of an anterior consultation with a lawyer… [there] must be something to suggest that the advice facilitated the crime or that the lawyer otherwise became a ‘dupe or conspirator’” of the client: Campbell, at para. 62. The party asking for the exception to apply must demonstrate a prima facie case of a communication that falls within the exception: Industrial Alliance, at para. 29. A mere allegation will not suffice. As the House of Lords observed in O’Rourke v. Darbishire, [1920] A.C. 581, at p. 604:[T]here must be, in order to get rid of the privilege, not merely an allegation that [communications between client and lawyer] were made for the purpose of getting advice for the commission of a fraud, but there must be something to give colour to the charge. The statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact. See also: R. v. Swearengen (2003), 2003 CanLII 16208 (ON SC), 68 O.R. (3d) 24 (S.C.), at paras. 13-16; Sperry Corp. v. John Deere Ltd. (1984), 1984 CanLII 5875 (FCTTD), 82 C.P.R. (2d) 1 (F.C.T.D.), at p. 17; Silverman v. Morresi (1982), 28 C.P.C. 239 (Ont. H.C.), at pp. 5-6; Canbook Distribution Corp. v. Borins (1999), 1999 CanLII 14842 (ON CTGD), 7 C.B.R. (4th) 121 (Ont. Gen. Div.), at pp. 127, 129-30; Re Goodman and Carr et al. v. Minister of National Revenue (1968), 1968 CanLII 340 (ON HCJ), 2 O.R. 814 (H.C), at p. 816; Bruno Appliance and Furniture Inc. v. Cassels Brock & Blackwell LLP, 2008 CanLII 63181 (Ont. S.C.). iv. The Scope of the Exception
[68] The Divisional Court noted that “a group of non-appellate cases and commentaries from here and elsewhere ... suggest that the exception should apply to any intentional dishonest[y] or deceit, including a claim for civil fraud or breach of a court order.” Like the motion judge, it rejected the applicability of those authorities, holding they were contrary to binding Supreme Court jurisprudence. Under that jurisprudence, according to the Divisional Court, “for the exception to apply, the communications must be criminal in themselves or intended to further a criminal purpose.” Accordingly, the Divisional Court agreed with the motion judge that “a claim for civil fraud is not enough”, nor is “breach of a court order”.[5]
[69] Primary reliance was placed by the Divisional Court on Blood Tribe, at para. 10, where Binnie J. described the exception as attaching “to communications criminal in themselves or intended to further criminal purposes” (emphasis added). In the Divisional Court’s view, that language was especially significant, given that Binnie J. described the exception as “rare” and of an “extremely limited nature” consistent with keeping the privilege “as close to absolute as possible”.
[70] The Divisional Court rejected the argument that Blood Tribe’s limitation of the exception to criminal conduct is inconsistent with earlier Supreme Court jurisprudence setting out the scope of the exception. It added that other Supreme Court decisions, decided before and after Blood Tribe, had imposed the same limitation:The Supreme Court’s emphasis on criminal conduct was also underscored in [Descȏteaux] at p. 881. Lamer J., as he then was, noted the requirement that the communications must be criminal in themselves or intended to further a criminal purpose ... .
More recently, in [Crime Stoppers] at para. 25, the Supreme Court described the exception as applying to communications between a lawyer and a client that are criminal or else made with a view to obtaining legal advice to facilitate the commission of a crime.... [71] In this court, the appellants argue that the Divisional Court’s reliance on Blood Tribe cannot be reconciled with earlier Supreme Court authority, such as Campbell, which they say described the exception as applying to tortious conduct – and therefore at least to fraud outside of the criminal context. They stress references in Solosky and Descȏteaux to “crime or fraud”, and note the brief reference to the exception as involving “unlawful conduct” in Pritchard v. Ontario (Human Rights Commission), 2004 SCC 31, [2004] 1 S.C.R. 809, at para. 16.
[72] Alternatively, the appellants argue that the scope of the exception is unsettled in Canadian law, and developments in other jurisdictions, and sound policy, lead to the conclusion that the exception should apply to unlawful conduct that is not criminal. The appellants note that, as English law has developed, what is now referred to as the “iniquity exception” applies “equally to legal advice privilege and litigation privilege”, and “is not confined to fraudulent or criminal purposes, but extends to fraud or other equivalent underhand conduct which is in breach of a duty of good faith or contrary to public policy or the interests of justice”: Al Sadeq v. Dechert, [2024] E.W.C.A. Civ. 28, at paras. 54-55 (citations omitted).
[73] In other words, from either starting point, the appellants argue that the scope of the exception must include communications in furtherance of civil fraud and breaches of a court order, and although unnecessary for the ultimate determination of their case, they urge an interpretation that would sweep communications in furtherance of all unlawful conduct into the exception.
[74] I do not agree with the appellants that the exception could extend “beyond fraudulent or criminal purposes”. Like the courts below, I view Blood Tribe and Crime Stoppers as foreclosing such a wide interpretation of the exception. However, given the broad meaning of fraud in criminal law, the “criminal purpose” properly attributed to a communication made to facilitate the breach of a court order, and the fact that the applicability of the exception depends on the nature and purpose of the communication—not on the type of proceeding in which privilege is claimed—that wide interpretation is not necessary to determine this case.
Blood Tribe and Crime Stoppers Are Authoritative and not Inconsistent with Prior Authority
[75] The recent statements of the Supreme Court on the scope of the exception in Blood Tribe and Crime Stoppers are authoritative, as in each case they were integral to the court’s reasoning: R. v. Henry, 2005 SCC 76, [2005] 3 S.C.R. 609, at para. 57.
[76] The issue in Blood Tribe was whether open-textured legislative language permitting the Privacy Commissioner to compel production of documents should be read as allowing it to compel production of solicitor-client privileged documents. In deciding that issue, the Supreme Court was directly concerned with the scope of, and limits on, solicitor-client privilege. The statement in Blood Tribe that solicitor-client privilege must be “as close to absolute as possible”, the description of the exception as “rare” and “extremely limited”, and the description of the scope of the exception as applying to communications that are criminal in themselves or in furtherance of a criminal purpose, are integrally related to each other and to the decision in the case – that the legislation would not be interpreted to override privilege. As Binnie J. put it, at paras. 10-11:A rare exception, which has no application here, is that no privilege attaches to communications criminal in themselves or intended to further criminal purposes…. The extremely limited nature of the exception emphasizes, rather than dilutes, the paramountcy of the general rule whereby solicitor-client privilege is created and maintained “as close to absolute as possible to ensure public confidence and retain relevance”.
To give effect to this fundamental policy of the law, our Court has held that legislative language that may (if broadly construed) allow incursions on solicitor-client privilege must be interpreted restrictively. The privilege cannot be abrogated by inference. Open-textured language governing production of documents will be read not to include solicitor-client documents …. This case falls squarely within that principle. [Citations omitted; emphasis in original]. [77] Similarly, the issue in Crime Stoppers was informer privilege, which the Supreme Court held did not apply to persons acting to subvert the law: at para. 23. In reaching that conclusion, Moldaver J. described, and analogized to, the crime-fraud exception to solicitor-client privilege and its underlying rationale, at para. 26:The rule of solicitor-client privilege thus recognizes that in exceptional circumstances — where communications between a lawyer and client are criminal or where legal advice is sought for the purpose of facilitating a crime — the privilege does not exist, because otherwise it would undermine the interests of justice and thus the very reason for granting the privilege in the first place. Likewise, informer privilege does not exist where it would compromise the underlying rationales for the rule. [78] Not only are they authoritative in themselves, the description of the scope of the exception in Blood Tribe and Crime Stoppers – communications criminal in themselves or intended to further criminal purposes – does not understate the breadth of the exception adopted in the earlier cases of Solosky, Descȏteaux, Campbell, and Pritchard.
[79] In Solosky, at p. 835, Dickson J. (as he then was) made two statements concerning the scope of the exception, one that referred to crime or fraud, and the other to in furtherance of a criminal purpose. He stated:More significantly, if a client seeks guidance from a lawyer in order to facilitate the commission of a crime or fraud, the communication will not be privileged and it is immaterial whether the lawyer is an unwitting dupe or knowing participant. The classic case is R. v. Cox and Railton, in which Stephen J. had this to say (p. 167): “A communication in furtherance of a criminal purpose does not ‘come in the ordinary scope of professional employment’. [Emphasis added; footnote omitted.] There is nothing in Solosky that suggests any daylight between the two descriptions.
[80] In Descȏteaux, at p. 873, Lamer J. (as he then was) stated that “[c]ommunications made in order to facilitate the commission of a crime or fraud will not be confidential either” (emphasis added). But that reference was followed by other passages that refer to the exception applying to communications criminal in themselves or made for the purpose of obtaining legal advice to facilitate the commission of a crime: at pp. 881, 893. Again, nothing suggests that one description was intended to be broader than the other.
[81] In Campbell, at para. 55, Binnie J. stated “[i]t is well established ... that there is an exception to the principle of confidentiality of solicitor-client communications where those communications are criminal or else made with a view to obtaining legal advice to facilitate the commission of a crime” (emphasis added). References by Binnie J. to authorities from other jurisdictions that contained broader descriptions of the exception were made in specific contexts and for limited purposes. Nothing suggests he was accepting those broader descriptions to define the scope of the exception for Canadian law.
[82] For example, at para. 58 of Campbell, in considering whether the client must “knowingly” be pursuing a “criminal” object, Binnie J. cited an American authority, “The Future Crime or Tort Exception to Communications Privileges” (1964) 77 Harv. L. Rev. 730, where the authors stated: “The attorney-client privilege has always been subject to the qualification that protection is denied to communications wherein a lawyer’s assistance is sought in activity that the client knows to constitute a crime or tort.” However, although agreeing with that view for the purpose of knowledge of the criminal object, he did not state that he agreed with extending the exception to any tort.
[83] At para. 59 of Campbell, Binnie J. also cited O’Rourke (an English civil case) at p. 621, where the following statement is made: “[P]rivilege does not attach where a fraud has been concocted between a solicitor and his client, or where advice has been given to a client by a solicitor in order to enable him to carry through a fraudulent transaction.” But he did so in connection with a discussion of the public policy aspect of the exception – that it is not part of a lawyer’s role to concoct fraudulent transactions: see Campbell, at paras. 58-59. He did not otherwise discuss the type of fraud to which the exception applied or suggest that it applied to a broader category of tortious conduct.
[84] In Pritchard, Major J. stated that the privilege does not extend to “communications … that have the purpose of furthering unlawful conduct”: at para. 16, citing Solosky, at p. 835 (emphasis added). There was no other discussion of the exception, and nothing suggests that Major J. intended to extend the exception beyond the type of unlawful conduct referred to in Solosky, the only case he cited.
[85] Reconciling all of the descriptions of the scope of the exception that appear in Solosky, Descȏteaux, and Campbell, and bearing in mind that exceptions to privilege are interpreted narrowly, it is unlikely the references to crime or fraud were intended to open the exception up to a wide array of unlawful conduct. It is more likely that the references to crime or fraud in some of the formulations, and to criminal conduct or a criminal purpose without a separate reference to fraud in others, were mutually reinforcing — indicating that criminal conduct or a criminal purpose is required and identifying a particular type of criminal conduct or purpose — fraud — as a useful example of what the exception aims at. Indeed, an intended fraud is the poster child of the type of criminal conduct or criminal purpose that easily fits all of the requirements of the exception, as it involves future, knowingly wrongful conduct of the sort that a disreputable client might seek to concoct with or through a lawyer.
[86] Importantly, Solosky and Descȏteaux are cited in Blood Tribe, at para. 10, and Crime Stoppers, at para. 25, where the exception was described as extremely limited in nature and rare, or exceptional, and was cast in terms of criminal conduct or a criminal purpose. Even if it were possible to read the earlier cases more than one way, it is not possible to do so after Blood Tribe and Crime Stoppers.[6]
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