Anthony J. O’Brien

The plaintiffs appealed a master's order removing their solicitors of record due to a conflict of interest.

The defendants argued that a U.S. counsel listed on the plaintiffs' law firm's letterhead had previously represented one of the defendants, creating a conflict.

The Divisional Court allowed the appeal, finding that the U.S. counsel was not a member of the firm, but merely had a referral arrangement.

Therefore, there was no solicitor-client relationship between the firm and the defendant, no presumption of shared confidences, and no disqualifying conflict of interest.

The appellant appealed a receiving order finding he had committed an act of bankruptcy by failing to meet his liabilities.

The respondent cross-appealed the trial judge's costs order, which denied the respondent costs and ordered it to pay the appellant's costs for part of the trial.

The Court of Appeal dismissed the appeal, finding ample evidence supported the trial judge's conclusion that the appellant was unable to meet his obligations.

The Court allowed the cross-appeal on costs, holding that the trial judge unreasonably exercised his discretion by ignoring the appellant's evasive conduct and the respondent's presumptive entitlement to costs under the Bankruptcy and Insolvency Act.

The respondent was awarded 90% of its costs on a full indemnity basis.