Law360 Canada ( May 6, 2025, 3:34 PM EDT) -- Appeal by appellants against a chambers judge’s decision that most of their disclosed information was not privileged and cross-appeal by respondent to overturn the chambers judge’s finding that the email contained legal advice and to introduce new evidence. The appellants were clients of DeMara Consulting Inc., which was involved in a tax evasion scheme. After refiling their taxes, the appellants received a gross negligence penalty from the Canada Revenue Agency and hired the respondent to represent them in anticipated litigation. The appellants had an outstanding tax debt of approximately $4 million and became indebted to the respondent for legal fees. The appellants assigned themselves into bankruptcy, and the respondent became one of their creditors under the Bankruptcy and Insolvency Act. The respondent disclosed certain financial information to the bankruptcy trustee, which the appellants claimed breached their privilege. The chambers judge ordered questioning to occur and dismissed the appellants’ cross-application to set aside the order. The chambers judge found that the appellants had extensive disclosure obligations under the Bankruptcy and Insolvency Act and that the information disclosed by the respondent was not privileged, except for one email containing legal advice. The chambers judge also refused to allow new evidence regarding the email. The appellants appealed the chambers judge’s findings, while the respondent cross-appealed the findings regarding the email and introduction of new evidence....