Confidentiality is an essential component of the solicitor-client relationship. However, in some unique and rare circumstances, this right can be waived. A recent decision from the Court of Appeal of Alberta considered this delicate balance in the context of a bankruptcy matter.
In Milot Law v Stiller, 2025 ABCA 72, the plaintiff sued their respondent lawyer for breach of solicitor-client privilege. The plaintiff had commenced bankruptcy proceedings. The respondent lawyer disclosed information and records to the bankruptcy trustee, which he obtained while representing the plaintiff in a pre-bankruptcy tax litigation. The chambers judge found that the respondent lawyer did not breach any duties of privilege or confidentiality, except regarding a failure to redact certain sections of a disclosed email that was found to have contained legal advice.
The plaintiff appealed, arguing that voluntary disclosure of their financial information and other impugned documents to the trustee was a breach of their solicitor-client and litigation privilege. The disclosure included confidential details of their shareholdings, share transfers, property ownership, corporate account, corporate financial statements and interests, and a private contract family trust. The respondent sought to submit new evidence on a cross-appeal, most significantly the unredacted version of the impugned email.
The appeal was dismissed, and the cross appeal was allowed. The Court of Appeal affirmed that clients cannot cloak financial records and business records under solicitor-client privilege. While information known to third parties is never privileged, in some circumstances, it can be considered confidential. In this, a lawyer cannot voluntarily disclose to others any facts which they learned while representing a client. However, in the case at bar, the respondent lawyer sought to reveal limited confidential information to the trustee to collect the legal fees he was owed. He properly contacted the Law Society of Alberta to seek professional advice regarding disclosure, and was properly advised that it would not breach his fiduciary duty of confidentiality to disclose limited information and records. Regarding the disclosure of the email, upon review of the unredacted version, the Court found that the impugned version did not include any legal advice. Therefore, disclosing it did not breach solicitor-client privilege.
This decision raises several interesting considerations regarding the duty legal practitioners have to their clients and provides guidance on the rare instances where these duties can be waived. For a more detailed discussion of the Court of Appeal’s reasoning in Milot Law v Sittler, read the complete decision here.
