The taxpayers' former counsel had reached a settlement agreement with the Minister, which the taxpayers argued had not been authorized by them. D'Auray J. found that the taxpayers could not assert privilege to prevent testimony from former counsel on questions regarding the existence and scope of the mandate the taxpayers had given. Privilege does not apply to questions about whether counsel has a mandates to settle.
D'Auray J. also found that the taxpayers had already waived privilege by allowing related testimony. He stated that "a party cannot waive solicitor-client privilege and subsequently reclaim it after a large part of the testimony has been given and a number of documents adduced into evidence" (para. 21).