Universal Sales Limited v. Edinburgh Assurance Co. Ltd.

The plaintiffs (the insureds) sought indemnity from the defendants (the insurers) for a settlement payment made by the plaintiffs to the federal government related to the sinking and raising of the “Irving Whale”. The insurers denied coverage alleging the settlement was made without their consent contrary to the terms of the policy. In these applications the plaintiffs/insureds sought production of various letters between the defendants/insurers and their counsel relating to coverage advice. The plaintiffs said the documents were relevant in that they might show the decision to deny coverage pre-dated the settlement with the government. The plaintiffs applications were dismissed both at first instance before a Prothonotary and on appeal. It was held that the documents were protected by solicitor-client privilege and that such privilege had not been waived.