A standoff in Toronto between the Bank of Nova Scotia (Scotiabank) and the Royal Canadian Mounted Police (RCMP) over the disclosure of documents - including letters of credit (L/Cs) - is raising questions over the extent of privacy laws.

The bank itself is not under investigation, but it has been caught up in a probe into the Royal Group Technologies Ltd, a plastics company embroiled in several lawsuits and accounting investigations.

Documents refused

The standoff emerged after the bank refused to turn over 125 documents wanted by the RCMP investigators.

The documents specified in the search warrant include L/Cs, money orders, client profiles, financial statements, correspondence and other documents regarding mortgages and other loans, loan risk analyses and documents relating to other financial institutions.

Privilege claim

Scotiabank says the files are privileged under solicitor-client confidentiality and that such documents are specifically excluded from the list of paperwork that it must disclose to the investigators.

"Nothing in this order shall be so construed as to require the production of any data or documents which are subject to solicitor-client privilege," the 5 October 2004 order to the bank says.

Court decision

The RCMP has argued that all documents, including those that are privileged, should be handed over to them for investigation.

The files could be sealed while the two sides ask a court to decide whether the documents should be turned over to the investigators.

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