Legal Blog

Privilege

Just because you are conversing with a client, do not assume that your words, opinions, and strategies will never see the light of day. The solicitors for the bankrupt in Re Dylex Ltd., an unreported 2002 decision of the Ontario Superior Court of Justice, are now experiencing an unexpected glare of scrutiny.

Fraud

The applicants alleged that the Hardof Wolf Group purchased Dylex and then used Dylex’s corporate funds to benefit itself to the detriment of the proper interests of Dylex’s creditors.

Since the motions judge held that there was a prima facie case to support that allegation of fraud, the solicitor-client privilege that would normally have applied to the acquisition of the control of Dylex no longer applied.

This exposure may have no impact whatever or it could be embarrassing to the solicitors and, if there is any evidence of untoward behaviour on their part, could result in the solicitors being embroiled in legal actions.