There is no rule in British Columbia to the effect that communications between adverse parties in the course of litigation are exempt from litigation privilege. In No Limits Sportswear Inc. v. 0912139 B.C. Ltd., the action alleged breach of confidence relating to the misappropriation of an business opportunity. Shortly after commencement of the action, the plaintiff undertook discussions with a group of defendants who had, unbeknownst to it, a falling out with their co-defendants who were still involved in the disputed business. While no settlement was reached with them, they provided evidence of the past goings on within the business, cooperated in the action, and engaged in discussions of strategy and tactics. Those discussions extended to what was transpiring in a separate action that was commenced against them by their former partners after the latter determined that the cooperating defendants were assisting the plaintiff. The plaintiff eventually discontinued the action against the cooperating parties and the remaining defendants sought disclosure of all communications between the plaintiff and the cooperating parties on the basis of an alleged exception to litigation privilege where communications are with an adverse party. The remaining defendants relied on principally two cases (Flack v. Pacific Press Ltd. et al and Cliff v. Dahl) in which witnesses gave statements to investigators, then after they had been named as parties were refused copies of their own statements. In its decision rendered May 4, 2015 the BC Court of Appeal held that litigation privilege could apply in respect of the correspondence and communications between the plaintiff and the cooperating former defendants as it had been shown that despite being initially named as defendants, they were in fact not adverse to the plaintiff and were adverse to the remaining defendants. The court put the Flack v. Pacific Press Ltd. et al. and Cliff v. Dahl cases into their proper context and confirmed that litigation privilege continues to extend to communications in which the dominant purpose of the communication is contemplated or impending litigation.

SMITHS IP represented the plaintiff in their successful appeal.