Ontario Court of Justice addresses evidentiary issue in trial arising from funds’ misappropriation
The Ontario Court of Justice found that solicitor-client privilege would protect certain evidence in a case involving a secretary who pleaded guilty to fraud and admitted to taking funds from a law firm’s accounts by issuing cheques in her benefit.
In R. v. Chevis, 2025 ONCJ 389, a woman began working in 2007 at a law office with a sole legal practitioner. She served as a secretary with bookkeeping responsibilities until the termination of her employment in 2017.
After she left, the lawyer retained a certified public accountant to help the firm perform its monthly reconciliations as required by the Law Society of Ontario. The CPA noticed a manipulation of accounting records and issues with trust cheques and bank deposits.
Upon being informed, the lawyer reached out to the firm’s former secretary to ask her about these concerns. The secretary confessed that she had stolen some money amounting to $60,000 to $70,000 the previous year.
The lawyer notified the law society regarding the misappropriation of client funds. A forensic accountant’s investigation confirmed the misappropriation of funds from the firm’s general and trust accounts.
Police arrested the secretary in 2022. In December 2024, the secretary pleaded guilty to one count of fraud over $5,000.
At a Gardiner hearing during sentencing, the parties disagreed on the fraud’s full quantum. The Crown wanted to provide evidence establishing its theory that the secretary’s fraud exceeded $800,000.
An evidentiary issue arose regarding the scope of potential solicitor-client privilege, the extent of its applicability, and the possibility of piercing that privilege.
The Ontario Court of Justice found that solicitor-client privilege would protect communications between the law firm and its clients, exchanged during the seeking of legal services.
However, the court said the privilege might not continue to cover public-facing legal instruments such as wills, powers of attorney, or private mortgages, which have entered the public sphere and been acted on.
The court noted that:
The court added that the parties agreed that it appeared illogical for the privilege to encompass the existence of these public-facing instruments.
Next, the court said solicitor-client privilege would protect the identity of a client consulting a lawyer and confidentially disclosing their identity.
However, the court found that the privilege would not cover the identity of a client who engaged the firm’s services to effect a legal instrument involving third parties, once the instrument has been actioned.
The court ruled that it was prepared to permit the secretary to give or elicit relevant evidence:
The court added that the secretary could submit that she was a mortgagor or beneficiary under one of these legal instruments.
The court acknowledged the secretary’s supposed dual capacity as a party to some instruments and an employee of the firm who supported its provision of legal advice.
The court accepted that the secretary might have knowledge regarding the clients’ identities, the existence of legal instruments, and communications between the firm and those clients regarding the purpose of obtaining legal advice.
The court held that solicitor-client privilege would protect the communications to which the secretary was privy as an employee at the firm. The court told counsel to refrain from posing questions that could elicit evidence within the privilege’s scope.
