In a major ruling regarding the boundaries of legal confidentiality, the Court of Appeal for Ontario has dismissed an appeal by a group of state-backed Saudi corporations seeking access to the confidential law firm trust records of a former top Saudi intelligence official and his son1. The unanimous three-judge appellate panel held that law firm accounting ledgers are protected by a strong presumption of solicitor-client privilege, and that the plaintiffs failed to meet the legal threshold required to pierce that confidentiality under the crime-fraud exception.
The underlying multi-billion-dollar civil fraud lawsuit was launched in 2021 in the Ontario Superior Court of Justice by Sakab Saudi Holding Company alongside several other private corporate entities. The plaintiff companies, which were originally established and funded to carry out state counterterrorism operations for the Kingdom of Saudi Arabia, claim they were the victims of a massive international fraud orchestrated between 2008 and 2017. They allege that Saad Khalid Al Jabri, a former senior Saudi government official, abused his executive authority to divert billions of dollars into personal accounts and corporate entities under the control of himself and his family members, including his son, Mohammed Saad Al Jabri.
The Al Jabri family has vigorously denied all allegations of fraud. They maintain that the corporations were established at the direction of former Saudi Minister of the Interior and Crown Prince Mohammed bin Nayef as part of legitimate, state-approved counterterrorism efforts. According to the respondents, the funds in question were deployed for valid security operations, and the subsequent lawsuits represent politically motivated targeting following domestic power shifts within the Saudi Arabian government. The core action has not yet gone to trial, with proceedings heavily complicated by international assertions of state secrecy.
Shortly after initiating the civil proceedings in January 2021, the plaintiff corporations secured an ex parte Mareva injunction against Saad Al Jabri, effectively freezing his worldwide assets and requiring him to submit sworn asset disclosures. A corresponding Norwich order was also issued, compelling various Canadian and international financial institutions to produce banking records. Several months later, in August 2021, the Ontario Superior Court granted a similar Mareva freezing order against his son, Mohammed Al Jabri, after concluding there was a strong initial case that a purported 2017 transfer of assets between father and son was invalid. Under the freezing orders, the defendants were barred from disposing of their assets without court approval, though provisions existed permitting applications to access funds for ordinary living and legal expenses.
A fierce evidentiary dispute arose in August 2023 when the plaintiff companies brought a motion seeking the production of global trust ledgers from every law firm that had represented Saad or Mohammed Al Jabri from June 2017 onward. The plaintiffs demanded detailed ledgers identifying the dates, amounts, senders, recipient institutions, and account numbers for all transactions handled by any of their legal counsel, asserting that the records were needed to trace the movement of funds both prior to and after the freezing orders were imposed. Simultaneously, the plaintiffs sought unredacted copies of foreign bank statements where references to transactions involving legal counsel had been blacked out by the defense.
Both the Superior Court motion judge and later the Ontario Divisional Court largely rejected the plaintiffs’ sweeping document requests. The lower courts determined that law firm accounting records and trust ledgers enjoy a presumptive shield of solicitor-client privilege that was not rebutted by the plaintiffs. While the Divisional Court found that the presumption did not automatically apply to the defendants’ personal bank statements, it sent that specific issue back to the motion judge to determine whether the redacted bank entries qualified independently for privilege. The plaintiffs then appealed the trust ledger rulings to the Court of Appeal for Ontario, while seeking to introduce fresh evidence on appeal.
Writing on behalf of the appellate panel, Justice Benjamin Zarnett affirmed the dismissal of the appeal, confirming that a law firm’s administrative and accounting records, including trust ledgers, are presumptively privileged under Canadian law. The court rejected the plaintiffs’ argument that this presumption should only apply when law enforcement or government regulators seize documents without prior notice. Justice Zarnett explained that the presumption applies equally in contested civil litigation to prevent clients from being forced to reveal confidential information simply to prove a claim of privilege.
The appellate court held that the plaintiffs failed to meet the established legal test to rebut this presumption. Under Ontario precedent, overcoming the presumption requires evidence establishing either that there is no reasonable possibility disclosure would directly or indirectly reveal confidential client-lawyer communications, or that the records are unconnected to the merits of the case and would not cause prejudice. Because the requested trust ledgers could expose legal strategies, the timing of legal consultations, or the identities of third parties funding the defense, the court ruled that the presumption remained intact. Furthermore, the court dismissed assertions that the law firms acted merely as financial conduits for non-legal transactions, noting that the plaintiffs offered bare allegations without evidentiary support.
A significant portion of the decision addressed the exact scope of the crime-fraud exception to solicitor-client privilege. The lower courts had held that the exception is strictly confined to criminal prosecutions and could never apply in a civil fraud lawsuit or a claim involving the breach of a court order. Justice Zarnett clarified that the applicability of the exception depends on the purpose of the communication rather than the formal category of the court proceeding. The court confirmed that communications aimed at facilitating future fraud, within the broad criminal definition of dishonesty and deprivation, or communications designed to orchestrate an intentional violation of a court order, cannot be protected by solicitor-client privilege in any civil or criminal proceeding.
However, the Court of Appeal found that the plaintiffs fell far short of meeting the rigorous evidentiary preconditions necessary to invoke the crime-fraud exception. To pierce privilege, a moving party must establish a prima facie case with clear and specific evidence showing that communications took place to knowingly facilitate future unlawful conduct. The court observed that the plaintiffs conceded they were not alleging any wrongdoing against the law firms themselves, yet failed to point to any specific transactions, law firms, or communications demonstrating that the respondents duped their lawyers into furthering a fraud or breaching court orders. The court noted that the plaintiffs had previously brought a civil contempt motion in 2024 alleging improper use of frozen funds to pay legal fees, which had been fully dismissed for lack of proof.
The Court of Appeal also denied the plaintiffs’ motion to introduce fresh evidence, which included foreign court filings from the United States, recent affidavits, and correspondence from 2021. The panel concluded that much of the material could have been gathered earlier with due diligence, while the remaining documents failed to provide evidence capable of establishing that trust ledgers across numerous law firms were utilized to circumvent the freezing orders.
Finally, the appellate court upheld the Divisional Court’s decision to remit the issue of the redacted bank statement entries back to the motion judge. The court noted that while bank statements held by an individual do not enjoy an automatic presumption of privilege, the specific dollar amounts and details of payments made to legal counsel may still be protected if their disclosure would reveal confidential aspects of the legal retainer and professional advice. The court affirmed that the burden remains on the defense to prove their privilege claim over those specific redactions.
The Court of Appeal dismissed the appeal in its entirety, with Justices Bradley Miller and Lois Madsen concurring with Justice Zarnett. In accordance with an agreement between the parties, the appellant corporations were ordered to pay $50,000 in costs for the main appeal, along with an additional $12,000 for the fresh evidence motions.
