When Parallel Lawsuits Expose Privileged Legal Advice
Buyers who feel wronged in a real estate transaction may often have multiple professionals to blame. It may be their realtor, who failed to flag a deficiency, or their lawyer who missed a critical term in the Agreement of Purchase and Sale.
In such transactions, buyers may choose to start separate lawsuits against each professional, assuming they can strategically control the flow of information in each lawsuit, and specifically, the flow of information protected by solicitor-client privilege.
That assumption was shut down by the court in Di Iorio v. MacNamara et al.,[i] where the Plaintiff sued his realtor (the “Realtor Action”) and his lawyer (the “Lawyer Action”), among other parties, in separate lawsuits, both for negligence.
In this article, the real estate litigation lawyers at Walker Law break down the court’s decision and what it means for buyers and professionals navigating real estate litigation.
What is Solicitor-Client Privilege
Solicitor-client privilege (“Privilege”) protects confidential communications between clients and their lawyers that are made for the purpose of obtaining legal advice. It is one of the most fundamental protections of the Canadian legal system.[ii]
However, this Privilege is not absolute. Clients may waive Privilege explicitly but Courts may also determine that a client has waved their Privilege implicitly.
The Implied Waiver of Privilege
An implied waiver of Privilege arises where two conditions are met, as set out in the seminal case of S. & K. Processors Ltd. v. Campbell Ave. Herring Producers Ltd.,[iii] which has been adopted by the Ontario Court of Appeal:[iv]
- Intention: The person who possesses the Privilege must have voluntarily shown some intention to waive the Privilege, at least in part; and
- Fairness and Consistency: Fairness and consistency must require that the scope of the waiver extend beyond the initial disclosure.You cannot cherry-pick favourable parts of privileged material. If someone chooses to disclose part of a privileged communication (for example, relying on legal advice to support their position), then fairness may require that they disclose more of that communication or related communications so that the court and the opposing party are not misled.
What Happened in Di Iorio v. MacNamara?
In the Di Iorio case, the buyer purchased a luxury condo unit that included a swimming pool for his exclusive use. After problems arose with the pool, the buyer sued his realtor, claiming they were negligent for failing to recommend terms in the Agreement of Purchase and Sale related to the condition of the swimming pool. He claimed that but for his realtor’s negligence, he would have either not entered into the transaction or offered a lesser amount. The buyer also sued the lawyer that represented him on the transaction, on the same basis.
Given the connection between these two lawsuits, the parties consented to having both lawsuits heard simultaneously at trial, or one after another, and for the trial judge if possible, to apportion liability between both defendants, should there be any liability to assign.
In his examination for discovery (an early stage in every lawsuit where the parties can question each other on their evidence) in the Realtor Action, the buyer refused to answer questions about the communications he had with his lawyer in the transaction, claiming that these communications were protected by Solicitor-Client Privilege.
The realtor brought a motion (request to the Court) to force the buyer to answer those questions, arguing that the buyer had waived his privilege. The motion judge agreed with the realtor and ordered the buyer to answer those questions. The buyer appealed the outcome of the motion, which brought this matter before the Superior Court.
The Court’s Findings
The Court dismissed the buyer’s appeal, finding no error in the motion judge’s reasoning, which applied the implied waiver analysis outlined above.
Firstly, on the Intention element, the Court found that the buyer had voluntarily put his lawyer’s advice in issue in the Lawyer Action. The buyer intended to rely on the advice he received from his lawyer to explain why he entered into the transaction. The buyer himself chose to waive privilege to advance his claim against the lawyer.
Secondly, on the Fairness and Consistency element, the Court agreed with the motion judge that the buyer had taken inconsistent positions across the two lawsuits. In each lawsuit, the central issue was the buyer’s state of mind and specifically around the point that, but for the advice he received, he would not have entered into the transaction.
Allowing the buyer to hide shield the advice he received from the Realtor Action, while relying on the same advice in the Lawyer Action, which were to be decided simultaneously or one after the other, would create a risk of inconsistent outcomes and place the trial judge in a difficult, if not impossible, position of deciding the same central issue based on different factual records.
Accordingly, the Court upheld the motion judge’s decision that the buyer must answer the questions he was asked about the advice he received from his lawyer in the transaction.
Lessons for Real Estate Buyers
The Di Iorio case is a cautionary tale for buyers considering suing multiple professionals involved in a real estate transaction. Separating the lawsuits does not automatically preserve Privilege if the allegations mirror each other and the lawsuits become intertwined.
Lessons for Real Estate Professionals
The flip side of the Di Iorio decision is that professionals who are on the defence in real estate litigation should be alert about the possibility of relying on the legal advice given to the buyer, for the purpose of their defence. Evidence on the legal advice given to the buyer may reveal how much the buyer actually relied on the realtor or the lawyer. This is critical because it directly affects how the Court apportions liability between the professionals.
How the Real Estate Lawyers at Walker Law Can Help
The Di Iorio decision is a reminder that litigation strategy in real estate disputes involves more than pleading the appropriate cause(s) of action. How lawsuits are structured, sequenced, and connected can have consequences that extend beyond the walls of each individual lawsuit.
The real estate litigation lawyers at Walker Law advise buyers, sellers, and professionals on parallel proceedings, privilege issues, and related real estate litigation matters in Ontario. Contact Walker Law today if you are navigating a real estate dispute involving multiple parties or multiple lawsuits.
Tags: Civil Litigation Law, Negligence Liability and Regulation, Residential Real Estate Disputes
[i] Di Iorio v MacNamara et al, 2026 ONSC 560 [Di Iorio].
[ii] Lavallee, Rackel & Heintz v. Canada (Attorney General); White, Ottenheimer & Baker v. Canada (Attorney General); R. v. Fink, 2002 SCC 61 at para 49.
[iii] S. & K. Processors Ltd. v. Campbell Ave. Herring Producers Ltd., 1983 CanLII 407 (BC SC) at para 6.
[iv] R. v. Youvarajah, 2011 ONCA 654 at para 147.