Deemed Waiver: Protecting Your Solicitor-Client Privilege
Solicitor-client privilege is one of the most sacrosanct principles of our legal system. It is a principle of fundamental justice that enables clients to speak candidly with their lawyers, secure in the knowledge that those communications will remain confidential. While robust and a substantive right, the privilege is not absolute—courts have affirmed that it need only be “as close to absolute as possible.”
One of the most consequential, and often misunderstood, ways in which it can be lost is through what courts call “deemed waiver.” Deemed waiver occurs when a party’s pleadings implicitly put privileged information in issue, making its disclosure necessary for fairness in the litigation. Critically, it does not require any intention to give up the privilege.
In One York Street Inc. v. 2360083 Ontario Limited, 2026 ONCA 176, the Ontario Court of Appeal provided important guidance on when deemed waiver arises and why amending pleadings to walk back problematic language may not be sufficient to preserve the privilege.
In this case, a commercial landlord sued its tenants for unpaid rent and abandonment of a long-term lease. In their defence, the tenants alleged they were induced to sign the lease by the landlord’s extra-contractual guarantees about foot traffic in the shopping centre. Their original pleadings went further, explicitly stating they had not received legal advice and did not understand the lease extension, both of which turned out to be false. When confronted with a motion for production of their lawyers’ file, the tenants amended their pleadings to remove those explicit references, while continuing to rely on the extra-contractual guarantee argument.
The motion judge found that there had been a deemed waiver of the tenants’ solicitor client privilege in their lawyers’ file, and ordered production of the legal file. The Divisional Court reversed that finding, but the Court of Appeal restored it.
The Court of Appeal reiterated that deemed waiver requires two things: the presence or absence of legal advice must be relevant to the claim or defence, and the party must make that advice an issue in their claim or defence.1
The key distinction the Court drew is between putting one’s general “state of mind” in issue and putting one’s “state of mind with respect to their legal position” in issue. The latter can result in a deemed waiver. The Court distilled this into the following principles:
- Receiving legal advice, or having received it at the time of entering a contract, does not alone give rise to deemed waiver.
- A general allegation of misrepresentation, or putting state of mind in issue in a general sense, does not give rise to deemed waiver.
- Deemed waiver arises when a party relies in its claim or defence on its understanding — or lack of understanding — of its legal position on an issue in the litigation.
- Where a party does so, and received legal advice on that very issue at the relevant time, fairness and consistency require that the privilege over that advice be treated as waived.
- The burden to establish waiver rests on the party claiming it.2
Even after the tenants amended their pleadings, the Court found their defence still placed their understanding of their legal position in issue — by asserting reliance on extra-contractual “guarantees,” they were asserting a legal understanding of their rights under the lease. Allowing them to shield legal advice that they received at the time would grant them an unfair litigation advantage.
In short, the content of pleadings can have significant, unintended consequences for solicitor-client privilege. Before asserting reliance on a client’s understanding, or lack of understanding, of their legal rights, counsel must carefully consider whether doing so puts privileged advice in issue. If it does, after-the-fact amendment may not be sufficient to walk back the waiver.
[1] One York Street Inc. v. 2360083 Ontario Limited, 2026 ONCA 176 at para 41. [2] Ibid at para 95.