There is a common misconception that all communications with a lawyer are privileged. A recent Federal Court case, Canada (National Revenue) v. Revcon Oilfield Constructors Incorporated, 2015 FC 524, is a reminder that not all communications with a lawyer are protected by solicitor-client privilege.
Specifically, the court pointed out that tax planning communications are not privileged. Tax planning communications in Revcon, that were not privileged, included merely accounting and transactional matters, including corporate transactions and restructures that were unrelated to obtaining legal advice.
The court was not saying that all tax planning communications are not protected, but rather that the privilege may not attach if you are receiving advice in a non-legal capacity or if the communications are unrelated to obtaining legal advice.
If, however, you were seeking advice from your lawyer on specific tax consequences of a business plan or income tax reporting requirements, for example, then the communications would be privileged. This is because under the solicitor-client privilege, you are “entitled to have all communications made with a view to obtaining legal advice kept confidential”. (Revcon)
“Solicitor-client privilege attaches to all interactions between a client and his or her lawyer when the lawyer is engaged in providing legal advice or otherwise acting as a lawyer, as opposed to acting as a business counsellor or in some other non-legal capacity”. Canada (Privacy Commissioner) v Blood Tribe Department of Health, 2008 SCC 44.
At the end of the day, Revcon changes very little and is simply a reminder of the requirements for the privilege to attach. The solicitor-client privilege covers communications related to obtaining legal advice, just as it always has, regardless of whether the legal advice is in respect of tax planning.
Revcon reminds us that so long as legal advice is sought from a professional legal adviser, the communication is related to that purpose, and the communications were made in confidence, then the communication will remain protected by the privilege. It is when communications are not within the view of obtaining legal advice that issues may occur.
Book a Consultation with a Lawyer