The Minister requested an order prohibiting the taxpayer from using documents containing legal advice from the Department of Justice to CRA which CRA had inadvertently disclosed to the taxpayer in 2005 as part of the production to him of 70,000 documents. D'Arcy J. found that the documents were privileged, but that the Minister had waived privilege when it failed to object in a timely manner to their inclusion in court records. The Minister was aware of the inadvertent disclosure in 2006, but failed to object in 2007 when the taxpayer attached some of the documents to an affidavit in the course of criminal proceedings against the taxpayer, and failed to object in 2009 when some of the documents were put to a CRA official in 2009 in discovery for the present proceedings.
Before so concluding, D'Arcy J. noted that, in contrast with early common law, an inadvertent disclosure of a document will not necessarily strip the document of privilege. He quoted Robertson J. in Chapelstone Developments Inc. v. R., 2004 NBCA 96, [2004] G.S.T.C. 162, who stated (at para. 55):
[I]nadvertent disclosure of privileged information does not automatically result in a loss of privilege. More is required before the privileged communication will be admissible on the ground of an implied waiver. For example, knowledge and silence on the part of the person claiming the privilege and reliance on the part of the person in receipt of the privileged information that was inadvertently disclosed may lead to the legal conclusion that there was an implied waiver.