On October 25, 2018, the Supreme Court of Canada refused leave to appeal in Canada (Revenue) v Iggillis Holdings, putting an end to a frontal attack on the so-called “deal privilege” in Canada. This attack began in 2016, when the Federal Court ruled that common interest privilege was only available in litigation scenarios, and did not extend to transactions. This ruling was a surprising and massive change to the law of privilege in Canada, and was swiftly reversed by the Federal Court of Appeal. The Federal Court of Appeal’s decision became final when the Supreme Court of Canada refused leave.
In this bulletin, we update our previous analysis of the Iggillis case and reflect on where the Supreme Court’s decision leaves us.
The Law of Common Interest Privilege in Canada
Despite its name, common interest privilege is not actually a freestanding type of privilege like solicitor-client privilege or settlement privilege. Instead, common interest privilege is a defence which protects an existing privilege from being waived via disclosure to third parties. In a practical sense, common interest privilege extends the scope of an existing privilege by bringing a limited number of third parties into the scope of protected communications.
While common interest privilege originated in the British common law courts, it is applied across Canada, including in Quebec.
Common Interest Privilege and Commercial Transactions
Common Interest Privilege ("CIP") originated in cases involving litigation, but has been applied more broadly by Canadian courts. In particular, several provincial courts have applied CIP to documents prepared as part of a commercial transaction involving mergers and acquisitions. These courts have ruled that since the parties to a commercial transaction have a “common interest” in completing the deal, they can share privileged documents like tax memos and other legal opinions without losing privilege over those documents. Thus, while there is no such thing as a freestanding “deal privilege” in Canada, common interest privilege has come to protect many aspects of commercial transactions, such as tax memos exchanged by the parties.
The Iggillis Holdings Saga
That protection was called into question by the trial judgment in Iggillis Holdings, where the Federal Court distinguished between common interest privilege in the context of litigation and in the context of commercial transactions, ruling that the latter was impossible. This was a sweeping ruling, since it meant that any exchange of privileged information in a transactional context would result in a waiver of that privilege.
The Federal Court of Appeal rejected this attempt to restrict common interest privilege, holding that any type of common interest is sufficient. In the commercial context before it, the Court ruled that “when dealing with complex statutes such as the Income Tax Act, sharing of opinions may well lead to efficiencies in completing the transactions and the clients may well be better served […].” This common interest in completing the transaction allowed the commercial parties to claim common interest privilege over the tax memos and resist disclosure to the Canada Revenue Agency.
So Where Are We Now?
When the Supreme Court denied leave, this effectively left the Federal Court of Appeal’s ruling as the last word on common interest privilege in a transactional context. As a result, it is now clear that common interest privilege can be invoked beyond litigation scenarios. This can allow commercial parties to share tax memos, compliance memos, and other types of privileged documents with their transactional counterparts without losing privilege.
However, there must always be a “common interest” which unites the parties. Absent this common interest, there can be no common interest privilege. Accordingly, consideration should be given to signing a formal common interest privilege agreement. Such agreements are not required for common interest privilege to arise, but can provide compelling evidence that the common interest exists, and can include additional protections in case the claim of common interest privilege fails.
 York Region Standard Condominium Corp No 1206 v 360 Community Management, 2018 ONSC 2859 at para 13 (Master).
 Pritchard v Ontario (Human Rights Commission), 2004 SCC 31 at paras 22-24.
 For the common law provinces: Pritchard v Ontario (Human Rights Commission), 2004 SCC 31. For Quebec: 3312402 Canada Inc c Accounts Payable Chexs, 2005 CanLII 31360; Ipso Média c Lamoureux, 2017 QCCS 5185 at para 86.
 452564 BC Ltd v Princeton Way Pub, 2016 BCSC 866 at para 21 and cases cited therein.
 See e.g. Maximum Ventures v De Graaf, 2007 BCCA 510; Fraser Milner Casgrain LLP v Canada (MNR), 2002 BCSC 1344; Anderson Exploration v Pan-Alberta Gas, 1998 ABQB 455; Archean Energy v Canada (MNR),  1 CTC 398, 1997 CanLII 14953 (ABQB). Several Federal Court decisions have also taken this position: Pitney Bowes of Canada Ltd v The Queen, 2003 FCT 214; St Joseph Corp v Canada (Public Works), 2002 FCT 274.
 Barrick Gold v Goldcorp, 2011 ONSC 1325 at para 19(3).
 Iggillis Holdings v Canada (MNR), 2018 FCA 51 at para 42.
 Indeed, the Iggillis case has been cited by provincial courts as authority on the scope of common interest privilege: Baazov c Autorité des marchés financiers, 2018 QCCQ 4449; R c Trépanier, 2018 QCCS 2632 at para 82.
 We typically include clauses dealing with limited waiver of privilege as an alternative means of protecting clients in these agreements.