AMLC Legal Insights - Before You Ask AI: Privilege, Confidentiality, and Waiver in BC

By Alex Mok

Your lawyer gives you legal advice. You trust your lawyer, but you still want to stress-test the advice. So you upload it to an AI platform. The platform identifies a few issues that may not have been addressed. You send those issues back to your lawyer to “perfect” the advice. 

You feel reassured because you have left no stone unturned. Your lawyer may feel differently. Reading your well-paragraphed and carefully formatted email, your lawyer realizes what has happened. The lawyer now has to ask: did uploading the advice to an AI platform waive privilege? And if privilege was waived, could the client be required in litigation to disclose not only that advice, but also related privileged communications?

Privilege, Confidentiality, and Waiver

A lawyer can help clients navigate the complexity of the law and advance their interests only if clients feel they are able to speak candidly with their lawyer in private. Privilege serves that important function; it creates a protected space for open and frank communications between lawyer and client.

The two most common forms of privilege are: (1) solicitor-client privilege which protects confidential communications between lawyer and client made for the purpose of seeking or giving legal advice; and (2) litigation privilege which protects communications and documents created for the dominant purpose of existing, contemplated, or reasonably anticipated litigation. 

Communications must be made in confidence and remain confidential in order to be considered privileged, and therefore protected from disclosure. If the confidentiality of legal advice is lost, the client may be found to have waived privilege. The effect of waiver can be more far-reaching than one might expect. In some circumstances, it may affect not only the specific communication disclosed, but also other related communications and advice concerning the same subject matter. 

Risk of waiver with the use of AI

Although it is not binding on BC courts, a recent U.S. decision illustrates the privilege risks that can arise when third-party AI tools are used in connection with legal matters. In United States v. Heppner, No. 25 Cr. 503 (S.D.N.Y.) the defendant used a publicly available generative AI tool to create documents concerning potential defence strategy and legal arguments. The defendant asserted privilege over those AI-generated materials. 

The court rejected the privilege claim. It emphasized that the AI platform was not counsel, was not part of the lawyer-client relationship, and was not acting as counsel’s agent. The court also considered the platform’s terms and privacy practices in assessing whether there was a reasonable expectation that the information would remain confidential. 

It is not necessary, for present purposes, to debate whether Heppner would be decided the same way in British Columbia. The practical point is narrow but important: where privileged information is voluntarily entered into an AI tool, an opposing party may argue that the information has been disclosed to a third party and that privilege has therefore been waived. Whether that argument succeeds will depend on the circumstances, likely including the platform’s terms of use, data retention practices, confidentiality protections, and the purpose and manner of the AI use. The risk should be addressed before the tool is used, not after a privilege challenge arises. 

Practical safeguard for clients and businesses

Before using AI in connection with legal matters, clients and businesses should first consider whether it is appropriate to do so and what steps are necessary to protect confidentiality and privilege. In particular, they should consider the following: 

• Do not input privileged or confidential information into public AI tools. Use anonymized or hypothetical facts where possible, while recognizing that anonymization may not be sufficient if the information still identifies the matter or reveals strategy. 

• Involve and consult counsel before using AI with legal materials, especially where the materials concern legal advice, litigation strategy, investigations, productions, or settlement positions. 

• Review the AI platform’s terms of use, privacy policy, and data controls, including whether prompts and outputs may be stored, reviewed, used for training, or disclosed. 

• Use approved or enterprise-grade tools where available, particularly tools with appropriate confidentiality settings, no-training controls, and administrative safeguards.

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AMLC Legal Insights are intended for informational purposes only and do not constitute legal advice or opinion.

AMLC Legal Insights - No oppression, no problem – resolving shareholder disputes under s. 324 of the Business Corporations Act

By Bryan Hicks & Luana Kodato

In a recent decision, the British Columbia Court of Appeal (the “Court”) confirmed that the Limitation Act does not apply to shareholder proceedings brought under s. 324 of the Business Corporations Act (“BCA”), unlike claims brought under s. 227 for the oppression remedy. 

Section 324 of the BCA provides that a court may order that a company be liquidated if it is “just and equitable to do so”.  This arises most commonly where the founders of a closely held company have had a falling out to the point where it is no longer viable that they continue to operate the business together.  Importantly, the court has discretion to grant any relief that would be available in oppression proceedings instead of ordering a liquidation (such as a buy-out) where the court is satisfied that it would be just and equitable to order a liquidation. 

This Court decision is a good illustration of why parties in closely held companies should consider seeking relief under s. 324 of the BCA, either instead of or in the alternative to the oppression remedy.

Background​

Golden Spigot Pub Ltd. v. Eddy Ng Management Services Ltd., 2026 BCCA 231 involves a dispute between the two principals of the Six Mile Pub in Victoria. 

Mr. Ng and Mr. Wong incorporated Golden Spigot to acquire the pub.  Although structured as a corporation, the business effectively functioned as a partnership between the two individuals.  Their relationship deteriorated over time.  Mr. Ng became less involved in the operations and was eventually removed as a director. 

Following Mr. Ng’s death, his estate and related companies (the “Petitioners”) sought to sell his shares in Golden Spigot but did not obtain an acceptable offer from the majority shareholders. The Petitioners then commenced litigation seeking relief under s. 227 of the BCA – the oppression remedy – or alternatively, under s. 324 on the basis that it would be just and equitable for the court to order that the company be liquidated. 

The trial judge found that the Petitioners failed to establish oppressive conduct but ordered that the company be liquidated under s. 324 of the BCA.  The majority shareholders appealed the liquidation order and the Petitioners cross appealed the dismissal of their oppression claim. 

The Court upheld the trial judge’s dismissal of the oppression claim and agreed that it was “just and equitable” for the court to grant relief under s. 324.  However, the Court modified the trial judge’s order to give the majority shareholders an opportunity to purchase the Petitioners’ shares at fair market value, failing which the company will be liquidated. 

As part of its analysis, the Court clarified that proceedings under s. 324 of the BCA are not subject to the Limitation Act since they do not constitute “claims” within the meaning of the statute. 

The Court’s decision to provide an opportunity for a buy-out so the business may continue as a going concern rather than proceeding directly to a liquidation is an illustration of the court’s willingness to fashion a practical remedy based on commercial factors where there is a viable business but the principals are no longer able to work together.

​Takeaways

Section 324 of the BCA can be an attractive option for resolving shareholder disputes in closely held companies because: 
‍ ‍
1. such proceedings are not subject to the Limitation Act so relief may be available even where a claim for the oppression remedy is statue barred; 

2. the court has discretion to fashion a practical commercial remedy as an alternative to liquidation; and 

3. the court is not required to make findings of wrongdoing before granting relief under s. 324, which can simplify the process. 

Please contact us if you have questions or would like advice regarding a shareholder dispute. 

Please also see one of our previous Legal Insights for a discussion on court ordered shotgun sales in closely held companies

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AMLC Legal Insights are intended for informational purposes only and do not constitute legal advice or opinion.

AMLC is a Proud Standing Ovation Sponsor of The 2026 Lawyer Show

This year’s production is of 9 to 5: The Musical and tickets are available to purchase at https://touchstonetheatre.com/2026-lawyer-show.

The Lawyer Show is an annual fundraising event for Touchstone Theatre, a registered charitable organisation and non-profit society. Every year, an ensemble of talented lawyers take centre stage for four days to raise funds to support the production of works from Canadian theatre artists, and ancillary programs for emerging under-represented playwrights.

AMLC Legal Insights - Certificates of Pending Litigation - to file or not to file

By Bryan Hicks & Noah Faust-Robinson

The recent decision by Supreme Court of British Columbia (the “Court”) in Boston Development Corp. v Takhar, 2026 BCSC 784 (“Boston Development”) is the most recent example of the Court ordering that a certificate of pending litigation (“CPL”) be cancelled because the plaintiff failed to properly claim an interest to land, which is a requirement for filing a CPL under the British Columbia Land Title Act (the “LTA”). 

This case highlights the importance for plaintiffs to properly consider and frame their claim when they intend to tie-up lands by registering a CPL. The decision also provides a useful example of how a CPL may be attacked at an early stage.

Background​

The CPL at issue in Boston Development was filed by Gurdip Takhar as part of an action he and his company commenced against Dave Sidhu, the director of Boston Development Corp. (“BDC”), and others, regarding an alleged business venture to pursue development projects in Surrey and Kelowna (the “CPL Action”). The CPL was registered against lands owned by BDC in Kelowna (the “Kelowna Lands”).  BDC was not named as a defendant in the CPL Action. 

 Mr. Takhar’s primary allegation is that he never received his share of the profits derived from a development project in Surrey, and that Mr. Sidhu used those funds to acquire and improve the Kelowna Lands.  At the hearing to cancel the CPL, Mr. Takhar clarified that he was relying on a claim of substantive constructive trust over the Kelowna Lands as the basis for the CPL. 

 BDC argued that Mr. Takhar’s Notice of Civil Claim is deficient, does not properly set out a claim to an interest in the Kelowna Lands, and the CPL should therefore be canceled.  BDC also argued that, in the alternative, even if the Court found that Mr. Takhar’s pleading met the threshold requirements under the LTA, the CPL should nevertheless be canceled on the basis of hardship and inconvenience upon providing replacement security. 

 The Court agreed with BDC and found that Mr. Takhar had failed to properly claim an interest to the Kelowna Lands and therefore he did not meet the requirements under s. 215 of the LTA for filing a CPL.  The Court decided it was unnecessary to consider BDC’s alternative argument on hardship and inconvenience given the deficient pleading.  In particular, the Court found the Notice of Civil Claim was deficient because it: 

a) did not address legal or beneficial ownership of the Kelowna Lands – Mr. Takhar did not plead that BDC held title in trust for him, or that any of the named defendants had any legal or beneficial interest in the property; 

b) did not contain a pleading that any of Mr. Takhar’s funds were used in the purchase or improvement of the Kelowna Lands; 

c) did not contain any allegation of wrongdoing on the part of BDC, and therefore relief could not be granted against BDC; and 

d) title to the Kelowna Lands could not change as an outcome of the CPL Action since BDC was not named as a defendant. 

​Takeaways

CPLs are an effective and efficient way for plaintiffs to gain leverage since the practical effect of a CPL is to tie-up land and prevent the owner from dealing with the property while the CPL is in place.  CPLs are especially attractive for plaintiffs since they are available at the outset of litigation without the plaintiff having to first prove its claim. 

The ease with which a CPL may be initially obtained creates the opportunity for abuse through the improper registration to stifle an imminent transaction in the hopes of gaining short term tactical advantage.  The risk for such abuse is mitigated by the strict statutory requirements for filing a CPL and the Court’s ability to order that a CPL be immediately canceled where it was improperly filed. 

It is well established that CPLs are an extraordinary pre-trial mechanism to preserve a valid claim to an interest in land.  Courts have held that CPLs should not be used as a method of pre-trial enforcement of a financial claim.  Above all else, a CPL is only available where there is a viable claim to an interest in land, and not merely a claim that relates to land.  Where no such claim is pleaded, the CPL is said to be a “nullity” and should be cancelled. 

The Boston Construction decision is a good illustration of why parties should seek legal advice on the extent to which their claim may support the registration of a CPL, and if so, ensure the originating pleading properly sets out a claim to an interest in land so the CPL will survive scrutiny.  Conversely, property owners facing a CPL should consider whether there is a basis to have the CPL canceled at an early stage of the litigation. 


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AMLC Legal Insights are intended for informational purposes only and do not constitute legal advice or opinion.

Kaitlyn Meyer receives Emerging Talent Litigator of the Year Award

AMLC is proud to announce that Kaitlyn Meyer is the recipient of Benchmark Litigation’s Emerging Talent Litigator of the Year Award.

Benchmark Litigation recognizes the most distinguished litigators and firms across Canada. Congratulations to Kaitlyn and all the Benchmark winners and nominees!

Learn more here: Benchmark Canada 2026 Award Winners and Photos | Benchmark Litigation

Congratulations to Janiene Chand for being elected President of BCLMA

We’re proud to announce that Janiene Chand, Director of Operations and Talent at AMLC, has been elected President of the British Columbia Legal Management Association for the 2026–2027 term.

Janiene’s leadership and commitment to excellence continue to make a strong impact both within our firm and across the broader legal community. We look forward to seeing all she will accomplish in this role.

Congratulations, Janiene!