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Joint Retainers May be Deemed to have Ended Upon the Start of an Adversarial Relationship

In the recent decision of Capital Sports v. Trinity, 2022 ONSC 6128, the Divisional Court has examined the limits of solicitor-client privilege with regards to an joint retainer in the context of a joint venture. The court found that an implied joint retainer may end once the joint venture partners become adverse to each other. The Court made this finding in the context of the joint venture continuing past the period of adversity.

Capital Sports Management Inc. recently appealed a decision1 and further addendum2 ordering production of certain solicitor-client documents relating to a failed joint venture between Capital Sports and Trinity Development Group Inc.

The Joint Venture

In 2014, Capital Sports retained Gowling WLG Canada LLP (“Gowlings”) as its lawyer for the development project that gave rise to the joint venture. The joint venture began in 2015 and the motion judge found there was an implied joint retainer of Gowlings by Capital Sports and Trinity.

A period of adversity between the parties began in May, 2016. During this adversity period, the issue of Gowlings’ role arose. Trinity took the position that Gowlings had a conflict of interest and could not act against it. Capital Sports disagreed. Trinity threatened to, but did not, take steps to remove Gowlings.

In November of 2018, Capital Sports commenced its lawsuit against Trinity and others. During discoveries, on the basis of solicitor-client privilege, Capital declined to produce some communications with Gowlings. Trinity moved to obtain them, arguing there could be no secrets in a joint retainer.

The Production Motion

The motion judge, Ryan Bell J, decided that all communications relating to the joint venture, including those between Capital and Gowling, post May 2016, were not protected from Trinity by solicitor-client privilege and must be produced. The motion judge bases their decision on the premise that a reasonable person in the position of a party with knowledge of the facts would reasonably form the belief that Gowlings was acting for both Capital Sports and Trinity in relation to Joint Venture for the entire period from July of 2015 until the action was commenced in 2018.

The Divisional Court Appeal

The issue on this appeal relates to whether the implied joint retainer also continued throughout the period of adversity and forward, as found by the motion judge.

The Divisional Court, per W Matheson J, joined by E Stewart J, granted the appeal. The reasoning turned on acquiescence, and the court concluded that no documents since the parties became adverse need be produced by Capital to Trinity:

[T]he motion judge erred in regard to acquiescence. Trinity did acquiesce and cannot now seek production of documents when the parties were adverse, commencing in May 2016. There is then the later period of time, when Gowlings took some steps for [the joint venture]. Again, Trinity acquiesced to Gowlings being put forward in that way despite acting for Capital Sports against Trinity. Mr. Ruddy’s reason for not objecting is consistent with these events. He decided not to object because he was intent on keeping the joint venture alive.

The order for production of documents shall be amended to exclude documents post-May 2016. The other issues raised need not be addressed.[3]

Leiper J dissented and would have granted the appeal in part, concluding that a concurrent retainer of Gowlings by Capital (found on facts before the motion judge) operated alongside the implied joint retainer. Leiper J would order some documents to be produced since the parties became adverse, but not those subject to the privilege arising from Capital's non-joint concurrent retainer of Gowlings in its adversity with Trinity.

Concluding Thoughts

It will be beneficial for parties to rely on clear, comprehensive joint retainers to avoid situations such as this from arising. Relying on implied joint retainers may result in forfeiting rights that can be solidified through a clear joint retainer.

We will be closely monitoring developments as they arise.

For more information please contact our authors, or reach out to any the McCarthy Tétrault litigation team.


Case Information

Capital Sports v. Trinity, 2022 ONSC 6128

Docket: 272/22

Date of Decision: December 15, 2022


[1] Capital Sports Management Inc. v. Trinity Development Group Inc., 2022 ONSC 2657.

[2] Capital Sports Management Inc. v. Trinity Development Group Inc., 2022 ONSC 3509.

[3] Capital Sports v. Trinity, 2022 ONSC 6128 at para 83-84.



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