In Smith v. Air Canada 2014 BCSC 1648, on appeal from an order of a Master of the Supreme Court of British Columbia, the defendant, Air Canada sought to overturn an order that the company disclose an incident report prepared by Air Canada personnel. The report was prepared following an incident during the boarding of a flight scheduled to depart from Vancouver to Toronto.
The plaintiff, Ms. Smith, suffered damages when a passenger failed to store a bag securely in the overhead compartment allowing it to fall on Ms. Smith. An incident report was prepared by an Air Canada employee, and the Court was to consider whether this document properly fell within the scope of documents subject to privilege.
The legal principles regarding the claim of privilege over documents are well-established, and were reiterated by the Court.
6 In respect of the production of documents over which privilege is claimed the legal principles to be applied on such an application are succinctly reviewed by Master Bouck in Beer v. Nickerson, 2010 BCSC 718, paras. 17-18:
 The legal principles to be applied on this application are well-settled and set out in Hamalainen (Committee of) v. Sippola (1991), 62 B.C.L.R. (2d) 254, and Stevanovic v. Petrovic, [2007 BCSC 1392]. Those principles are as follows:1. The party withholding disclosure bears the onus of establishing a claim for privilege over a document.
2. The test for considering whether litigation privilege is established is two-fold:(a) Was litigation a reasonable prospect at the time the document in dispute was created?
(b) If so, was the dominant purpose of the document's creation for use in litigation? (commonly known as the "dominant purpose" test.)3. Litigation can properly be said to be in reasonable prospect when a reasonable person, possessed of all the pertinent information including that particular to one party or the other, would conclude that it is unlikely that the claim for loss will be resolved without it.
4. However, the prospect of litigation alone is not sufficient to meet the claim of privilege. Nor does the denial of liability alone mean that all documents produced thereafter are subject to a claim for privilege. As stated by the court in Hamalainen v. Sippola:Even in cases where litigation is in reasonable prospect from the time a claim first arises, there is bound to be a preliminary period during which the parties are attempting to discover the cause of the accident on which it is based. At some point in the information gathering process the focus of such an inquiry will shift such that its dominant purpose will become that of preparing the party for whom it was conducted for the anticipated litigation. In other words, there is a continuum which begins with the incident giving rise to the claim and during which the focus of the inquiry changes. At what point the dominant purpose becomes that of furthering the course of litigation will necessarily fall to be determined by the facts peculiar to each case.
6. It is not incumbent upon the court to accept without question the opinion of either deponent on one of the very issues that is to be decided. Whether or not litigation was a reasonable prospect is a matter for the court to decide on all the evidence.
Applying these principles to the order under review, the Court found that Air Canada did not clear the first part of the established test. Despite affidavits asserting that the dominant purpose of the incident report was to provide information regarding the event to Air Canada’s legal department, this did not require consideration, as the Court found that litigation was not a reasonable prospect at the time the incident report was created, in the first place. To these principles I would add that the dominant purpose test is consistent with "the more contemporary trend favouring increased disclosure": Blank v. Canada (Department of Justice), 2006 SCC 39 at paras. 60-61.
24 As noted, the first part of the test, whether the document was prepared in contemplation of litigation, must be satisfied before the court goes on to consider the dominant purpose of the creation of the document. Master Baker considered the first part of the test in light of the affidavits that were provided and as a matter of fact. He properly considered, in my view, that when Ms. Soroka prepared her incident report she was attempting to discover the cause of the accident, whether there were witnesses, and the nature of the injuries sustained by Ms. Smith. She said that her first concern was customer safety.
25 As with any claim of privilege, the trier of fact must assess whether the assertion that the document was prepared in contemplation of litigation is reasonable. He cannot simply rely on the statement that the document was prepared in contemplation of litigation. If that were so the mere assertion would determine whether the document was privileged.
26 Master Baker assessed the circumstances at the time the report was written and concluded that it was not reasonable to accept that Ms. Soroka prepared the incident report in contemplation of litigation.
27 As I stated, the Master applied the appropriate test and reached a reasonable conclusion. The Master's view that litigation was not a reasonable prospect at the time the incident report was created is not clearly wrong.
Air Canada further suggested that the Master had not properly considered that the company was particularly vulnerable to liability claims arising from incidents on board their aircrafts, and that this fact further demonstrates that incident reports are created in reasonable contemplation of litigation. The Court dismissed this assertion, pointing out that it is only at the time that a claim becomes a matter of litigation that the incident report is forwarded to Air Canada’s legal counsel.
30 I do not accept that the document is privileged because of the vulnerability of Air Canada to litigation claims from its passengers. Air Canada has a specific department to deal with claims, of which Mr. Gilchrist is the manager. Despite the presence of the claims department within the law department of Air Canada, it is clear that the claims department deals with claims until the matter becomes a matter of litigation. It is then that the incident report is forwarded to Air Canada's legal counsel. This too does not establish that the document was prepared in contemplation of litigation.
Given the Court’s finding that the incident report had not been created in reasonable contemplation of litigation, and thus that the Master’s view was not clearly wrong, the application for review of the Master’s decision was dismissed, and the document was to be produced to Ms. Smith and her counsel.
A.C. Richard Parsons and Nicholas Peterson of Collette Parsons Harris acted for the Plaintiff.
The trial Judge's full reasons can be viewed at the link provided above.
posted by Collette Parsons at 9:29 AM