COURT FILE NO.: 01-CV-212338 DIV. COURT NO.: 424/07 DATE: 20071025
SUPERIOR COURT OF JUSTICE - ONTARIO DIVISIONAL COURT
RE: ADRIANA MIELE, a mentally incapable person by her Litigation Guardian, ANNA MIELE, MARCO MIELE, a minor by his Litigation Guardian, ANNA MIELE, ENZO MIELE and the said ANNA MIELE, personally Plaintiffs
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HUMBER RIVER REGIONAL HOSPITAL, S. GREENSPAN, M. MADEL, W. TUROSIENSKI, P. SKOWRON, K. WEREZAK, A. COVELLO, W. RODRIGUEZ, D. WHITING, J. VENTURA, J. GOW, J. BURNETT, J. DOE 1, J. DOE 2, L. HEW, J. DOE 4 THROUGH 18 Defendants
COURT FILE NO.: 425/07
AND B E T W E E N:
ANDRAE STEWART, JERROME STEWART AND ATRISHA-LEE STEWART, minors by their Litigation Guardian, JUDITH DAVIS, DESMOND STEWART and the said JUDITH DAVIS, personally Plaintiffs
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HUMBER RIVER REGIONAL HOSPITAL, A. BELL, M. NADEL, W. TUROSIENSKI, L. LARABIE, S. GORDNER, A. WADDEN, M. RIMMA, J. PIPITONE, L. CAMPBELL, S. BURTON, J. DOE 1 THROUGH 13 Defendants
BEFORE: Mr. Justice Carnwath
COUNSEL: Gavin MacKenzie, for the Plaintiffs Deborah Berlach, for the Defendants, Humber River Regional Hospital, A. Covello, W. Rodrigues (incorrectly named as W. Rodriguez), and J. Gow
HEARD: October 18, 2007
E N D O R S E M E N T
CARNWATH J.:
INTRODUCTION
[1] Adriana Miele and Andrae Stewart allege they suffered permanent brain damage at the time of their births at the Humber River Regional Hospital on January 2 and August 12, 1983, respectively. They have each commenced separate actions against the Hospital and the doctors and nurses involved, claiming significant damages.
[2] The same counsel act for the Hospital and the defendant nurses in both the Miele action and the Stewart action. On January 23, 2007, the defendants in the Stewart action were served with the expert report of Ms. Anne Holden. Ms. Holden is a nurse and former employee of the Hospital who, during the time of her employment, was involved in the defence of both actions on behalf of the Hospital, including being examined for discovery, on behalf of the Hospital in the Miele action.
[3] The defendants in both actions moved before Pattillo J., seeking an order removing counsel for the plaintiffs in both actions on the ground that, as a result of the latter’s involvement with Ms. Holden, they had come into possession of confidential information which was subject to solicitor-client privilege belonging to the Hospital and the nurses, a circumstance which is prejudicial to those defendants. Pattillo J. granted the order.
[4] The plaintiffs move before me seeking leave to appeal the order. Leave will be granted on one narrow point.
BACKGROUND
[5] The Statement of Claim in each action was issued on June 11, 2001. The allegations of negligence against the defendants in each of the Statements of Claim are identical. Mr. Eilik Elmaliah and his firm, Sommers & Roth, are counsel for the plaintiffs in both actions.
[6] In response to the actions, the Hospital organized a management team comprising three persons, one of whom was Ms. Holden, the manager of Women’s and Children’s Health Program. Ms. Holden’s duties of employment included managerial responsibility for the Birthing Unit at the Hospital.
[7] In preparation for the examinations-for-discovery in both actions, counsel for the Hospital and the nurses met with Hospital representatives for the purpose of preparing the defence and preparing for discovery. Ms. Holden was involved in meetings over the period from February 4, 2003 to March 20, 2003, meeting with counsel for the Hospital on four separate occasions and discussing the files of both actions in great detail.
[8] Ms. Holden was examined for discovery in the Miele action on February 12, 2003. In preparation for her discovery, she met with counsel at the Hospital and the nurses immediately before the discovery to discuss discovery strategy and the issues relating to the Miele action.
[9] Ms. Holden was to be examined for discovery in the Stewart action on March 26, 2003. She met with counsel for the Hospital and the nurses on March 20, 2003, at which time litigation strategy was discussed.
[10] On the eve of her discovery in the Stewart action, Ms. Holden requested an adjournment due to the outbreak of SARS at the Hospital. Subsequent correspondence was exchanged concerning the re-scheduling of Ms. Holden’s examination but, in the end, Mr. Elmaliah elected not to examine a representative of the Hospital in the Stewart action. Indisputably, Mr. Elmaliah was aware that Ms. Holden would be produced as the Hospital’s representative for discovery in the Stewart action.
[11] An issue arose in both actions as to whether the Hospital had maintained and preserved records relating to the medical care and applicable policies and procedures relevant to the claims. In March of 2004, the plaintiffs in both actions were successful in amending their respective Statements of Claim to plead that the Hospital had engaged in spoliation of evidence.
[12] On October 18, 2004, Ms. Holden left the employ of the Hospital.
[13] In December of 2006, Mr. Elmaliah wrote to counsel for the Hospital requesting the answers to the undertakings given during Ms. Holden’s examination-for-discovery in the Miele action. Counsel for the Hospital spoke with Ms. Holden by telephone and obtained her assistance in providing the answers. During that conversation, counsel and Ms. Holden discussed the conduct of the defence in both actions and issues in respect of strategy in both actions. At no time did Ms. Holden tell counsel for the Hospital that she had provided Mr. Elmaliah with an expert report in the Stewart action.
[14] In her report, Ms. Holden states that she is of the opinion that the defendant nurses in the Stewart action did not meet the standard of care required at the time of the birth of Andrae Stewart in 1983. In particular, she states the nurses did not properly monitor or document the fetal heart rate and uterine activity before Andrae’s birth. Ms. Holden also comments on the inadequacy of the Hospital’s forms in use at the time and its failure to maintain certain medical records.
[15] On February 13, 2007, counsel for the Hospital and the nurses wrote to counsel for the plaintiffs raising the conflict of interest created by the production of Ms. Holden’s report in the Stewart action. Counsel requested that the plaintiffs’ counsel remove themselves as solicitors of record in both actions. Counsel for the plaintiffs responded the same day stating that the Miele action and the Stewart action were not related and had nothing to do with each other. He took the position there was no property in an expert witness and further stated that counsel for the plaintiffs “never had any conversations with Ms. Holden regarding Stewart” and had no intention of discussing any information with her concerning either action. He ended with the statement that he would not remove the firm as solicitors of record.
[16] This response of the plaintiffs’ counsel led to the motion before Pattillo J. on June 8, 2007, resulting in his order:
(a) Removing Mr. Elmaliah and Sommers & Roth as solicitors of record in both the Miele Action and the Stewart Action;
(b) Requiring Mr. Elmaliah and Sommers & Roth to destroy all copies of Ms. Holden’s Report dated December 11, 2006 and any notes, memoranda or documents referring to any information received from Ms. Holden regarding either of the two actions;
(c) Requiring Mr. Elmaliah and Sommers & Roth to retrieve all copies of Ms. Holden’s Report sent to third parties to be retrieved by them and destroyed.
[17] Pattillo J.’s order, in turn, resulted in this leave application brought by the plaintiffs seeking leave to appeal Pattillo J.’s order to the Divisional Court.
PATTILLO J.’S DECISION
[18] Pattillo J. began his consideration of the motion with a discussion of the two leading cases in the area of disqualifying conflicts of interest arising from possession of confidential information, pursuant to solicitor-client privilege, that is, MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 S.C.R. 1235 and Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, [2006] 2 S.C.R. 189. From his review of these cases, Pattillo J. extracted the principle that regardless of whether the disclosure of privileged information is inadvertent, the onus remains on the party who received the confidential information to rebut a presumption of prejudice.
[19] Pattillo J. ended his analysis by citing Binnie J., speaking on behalf of the Supreme Court in Celanese, as reported at p. 220:
Firstly, in an Anton Piller situation, as in MacDonald Estate, to ‘require the very confidential information for which protection is sought to be revealed…would have the effect of defeating the whole purpose of the application’ (p. 1260). Placing the onus on Celanese accords with the usual practice that the party best equipped to discharge a burden is generally required to do so. Celanese’s lawyers know what they looked at. Canadian Bearings’ lawyers do not The latter should not have to reveal the universe of potential confidences to the former who, at this point, refuse (or have rendered themselves unable) to identify precisely what they have seen.
Secondly, putting the onus on the party in receipt of the confidential information rather than on the party being searched, increases the incentive on its part to take care to ensure that privileged information is not reviewed in the first place.
Thirdly, it seems to me procedurally unfair not only to subject the defendant to the intrusion of a surprise search under an exceptional order in the course of which its solicitor-client confidences are disclosed to its opponent, but then to throw on it the onus of clearing up the problem created by the plaintiff’s carelessness. The principal source of the present difficulty lies in the post-search conduct of Celanese’s solicitors. Having created the problem, the searching party should bear the burden of resolving it.
[20] Pattillo J. then identified three issues that he had to consider on the motion to remove the plaintiffs’ solicitors:
(a) Whether Ms. Holden was in possession of confidential information attributable to a solicitor-client relationship;
(b) Whether the confidential information was relevant to the Stewart action; and
(c) Whether there was a risk that the confidential information would be misused to the prejudice of the Hospital and the defendant nurses.
[21] Pattillo J. found Ms. Holden was in possession of confidential information attributable to a solicitor-client relationship. He found that from the commencement of both the Miele action and the Stewart action, Ms. Holden was involved, through her position as a senior employee of the Hospital, in the defence of both actions. She was part of the management team advising and consulting with counsel for the Hospital and the defendant nurses. She attended meetings with counsel and was involved in discussions concerning the strategy of the Hospital’s and the nurses’ defence. She was prepared by counsel and produced, on behalf of the Hospital, for discovery in the Miele action. It was intended that she also be produced on behalf of the Hospital to be discovered in the Stewart action. Ms. Holden was also involved in discussions with counsel for the Hospital in respect of the defence of the Stewart action.
[22] Based on these findings, Pattillo J. concluded that the information communicated to Ms. Holden by counsel for the Hospital and the nurses in respect of both the Miele and Stewart actions was confidential information attributable to a solicitor-client relationship. Whether she was a “directing” mind or not, Ms. Holden assisted in the defence of both actions and was clearly involved in discussions with counsel for the Hospital concerning both actions. He concluded by finding that the information conveyed in those discussions was confidential and was protected by solicitor-client privilege. I have no good reason to doubt the correctness of his decision on this point.
[23] Pattillo J. found that the confidential information was “relevant to the matter at hand”, that is, to the Stewart action. He called to his mind what Sopinka J. said, in the MacDonald Estate, above, at p. 1260, but notwithstanding that Ms. Holden had received confidential information, she might satisfy the Court “that no information was imparted which could be relevant”.
[24] The plaintiffs submitted to Pattillo J. that because Ms. Holden’s report was produced only in the Stewart action and since she had no involvement in her discussions concerning the action, according to her, she had no confidential information with respect to it and was not restricted from being an expert in that action. Pattillo J. rejected that submission and found Ms. Holden was clearly involved in confidential discussions with counsel for the Hospital and defendant nurses in relation to both the Miele action and the Stewart action. He found, further, he was directly involved in discussions concerning the defence of the Stewart action. She was the chosen representative to be discovered on behalf of the Hospital in the Stewart action and attended a meeting with counsel in respect of preparation of the defendant nurses for their discovery in the Stewart action.
[25] Pattillo J. found, further, that beyond the identical pleadings in the two actions, it was clear that there were issues in each action in respect of the Hospital’s liability that were common to both actions – issues of supervision, applicable protocols and procedures, record-keeping policies and destruction or loss of records. He noted that, as a result of the proximity of the events giving rise to the two claims, the Hospital approached its defence of both actions as one. Pattillo J. therefore concluded that the confidential information in Ms. Holden’s possession attributable to the solicitor-client privilege was relevant to the matter at hand – the Miele action and the Stewart action. I find no good reason to doubt the correctness of his decision on this point.
[26] Pattillo J. then turned to consider whether there was a risk that the confidential information would be misused to the prejudice of the Hospital and the defendant nurses. He first considered whether counsel for the plaintiffs were in receipt of confidential information. The plaintiffs had submitted that the onus was on the Hospital and nurses to provide cogent evidence that the confidential information was indeed supplied by Ms. Holden to counsel for the plaintiffs. Pattillo J. rejected that submission finding that despite the absence of direct evidence, the Court can, depending on the circumstances, draw an inference that the solicitors for the plaintiffs were in receipt of confidential information. He noted that the inference was not final and could be rebutted, but that this view of the matter put the onus on the party best able to deal with the issue – counsel for the plaintiffs who had the dealings with Ms. Holden.
[27] After referring to a number of cases involving lawyers and third parties with confidential information and given the relationship of counsel/expert witness, Pattillo J. concluded that that relationship would involve a discussion between the parties of the facts and issues in the Stewart action. He found that it gave rise to the possibility of the sharing of confidential information directly or indirectly. He concluded by finding it appropriate to infer that Mr. Elmaliah and Sommers & Roth were, as a result of the retainer of Ms. Holden, in receipt of the confidential information in her possession arising from the solicitor-client relationship.
[28] He supported his conclusion by noting that it was Mr. Elmaliah who approached Ms. Holden, knowing that she had been involved on behalf of the Hospital in the defence of both actions. He found no explanation of why he did so or why Ms. Holden’s expertise was required, particularly where Mr. Elmaliah had retained other experts in both actions to provide opinions on the same issue – the standard of nursing care.
[29] He concluded by finding it appropriate to draw the inference of imputed knowledge since it could be rebutted by counsel for the plaintiffs, the persons best suited to deal with the issue.
[30] Mr. Elmaliah had filed an affidavit deposing that neither he nor his firm had received any privileged or confidential information from Ms. Holden which emanated from her employment at the Hospital. Ms. Holden, in her affidavit, confirmed Mr. Elmaliah’s evidence saying she had no conversations with counsel for the plaintiffs in respect of either action and, specifically, with respect to the issues in the Stewart action either before or after she sent her report of December 11, 2006. It did not ring true to Pattillo J. that a counsel who retained an important expert in an important case would have no discussions whatsoever with that expert about the requirements of the retainer, the opinion required and what the expert’s views were prior to finalizing it on paper or after receiving it.
[31] Pattillo J. found the evidence of both Mr. Elmaliah and Ms. Holden as nothing more than conclusory statements that no confidential information had been shared. He cited Sopinka J., in MacDonald Estate, above, at p. 1262:
Undertakings and conclusory statements in affidavits without more are not acceptable.
[32] Pattillo J. concluded this analysis by finding that the evidence provided by counsel for the plaintiffs to rebut the inference that they received confidential information relative to the Miele and Stewart action was neither “clear” nor “convincing”. He found the plaintiffs had failed to rebut the inference. I find no good reason to doubt the correctness of his decision on this point.
[33] Pattillo J. then turned to consider whether the confidential information he found to have been received by counsel for the plaintiffs would be misused to the prejudice of the Hospital and the defendant nurses. Relying on MacDonald and Celanese, above, he found that since the plaintiffs had received confidential information attributable to a solicitor-client relationship relevant to the matter at hand, a presumption of prejudice arose. He noted that the presumption of prejudice could be rebutted and to do so, counsel for the plaintiffs had to establish that they had taken sufficient steps to ensure that prejudice emanating from possession of the confidential information would not occur.
[34] He noted that notwithstanding that counsel for the plaintiffs were aware that Ms. Holden had previously been involved with both actions, no steps were taken to ensure that no communication of confidential information could or would take place. Further, once counsel for the Hospital and the nurses became aware of Ms. Holden’s retainer and raised it with counsel for the plaintiffs, counsel denied that there was any confidential information in respect of the Stewart action and simply denied that any discussions concerning confidential information took place. Pattillo J. concluded that it could not be said that the public, represented by the reasonably informed person, on the basis of all the evidence before him, would be satisfied that no use would be made by counsel for the plaintiffs of the Hospital’s and nurses’ confidential information to their prejudice. I find no good reason to doubt the correctness of his decision on this point.
THE APPROPRIATE REMEDY
[35] In considering the appropriate remedy, Pattillo J. identified the necessity of balancing the interests of the public and the integrity of the profession by upholding solicitor-client privilege, on the one hand, with the important right of the public to retain the counsel of choice. Citing Binnie J., in Celanese, above, at p. 223, Pattillo J. noted that court must consider whether a “less drastic remedy would be effective”.
[36] Pattillo J. considered the six factors listed by Binnie J., in Celanese, above, at p. 225, that should be considered by the court in determining whether counsel should be removed from an action.
[37] He first considered how the confidential information came into the possession of counsel for the plaintiffs. He noted that the contact with Ms. Holden was initiated by counsel for the plaintiffs with knowledge that Ms. Holden had been involved in the defence of both the Miele action and the Stewart action. No explanation was provided as to why Ms. Holden was required as an expert. The plaintiffs submitted there was nothing improper in approaching Ms. Holden, who was retained solely as an expert. Pattillo J. rejected this submission. He found that Ms. Holden’s position as both a former employee with privileged information and as an expert was unique. Her involvement distinguished those cases relied upon by the plaintiffs where experts were permitted to testify notwithstanding they had received confidential information from the opposite party in their role as an expert.
[38] Second, Pattillo J. considered what the plaintiffs did to deal with the issue when put on notice by counsel for the Hospital and the nurses. He found that no steps were proposed or taken by counsel for the plaintiffs to address the issue. Nothing was done, he found, to address the issue of how to deal with the future risk of prejudice arising from the confidential information already disclosed. Nothing was put forward by counsel for the plaintiffs about how to resolve the issue from the time the issue was first raised by the defendants to the time when the motion was argued.
[39] Third, Pattillo J. turned his mind to the contents of the solicitor-client communications, the extent of counsel for the plaintiffs’ exposure to it and the degree to which the defendants were prejudiced, a combination of the third and fourth factors listed by Binnie J. Briefly put, Pattillo J. found the essence of the communications with Ms. Holden related to the defence of both actions. If utilized by counsel for the plaintiffs, this would clearly be prejudicial to the defendants. Having found that the plaintiffs’ evidence in rebutting the inference was neither clear nor sufficient, he concluded the counsel for the plaintiffs and, regrettably, the plaintiffs themselves would have to bear the consequences.
[40] Fourth, Pattillo J. considered the stage of the litigation which he found to be reasonably well-advanced. Both actions had been set down for trial, pre-trials were to be heard in September of 2007 and the trial of the Miele action was set for January, 2008. The trial of the Stewart action was set for September, 2008. Pattillo J. found there was adequate time to enable the plaintiffs in each action to retain new counsel. The actions were not, he found, at the “extreme” stage where switching counsel would have a “devastating” effect on the plaintiffs. He noted there would be some issues for counsel for the plaintiffs in respect of costs incurred to date, but found those to be the result of actions of their own making. He noted that the defendants acted expeditiously once they became aware of the retainer of Ms. Holden. This view of the stage of the action was as of July 13, 2007, when his reasons were issued.
[41] Fifth, Pattillo J. considered the potential effectiveness of a firewall or other precautionary steps, the final consideration to be given as established by Binnie J. in Celanese, above. He found that this final factor had no application, given the nature of the confidential information involved and the fact that counsel for the plaintiffs initiated contact with Ms. Holden without taking any steps whatsoever to protect against disclosure of confidential information. Once such a situation occurred, it was his view that other precautionary steps, after the fact, would not be sufficient to overcome the risk of prejudice to enable counsel for the plaintiffs to continue. With respect, I think there is good reason to doubt Pattillo J.’s conclusion on this point.
[42] It must be remembered that counsel for the plaintiffs, however erroneously, were of the view that no overtures to the other side were necessary concerning the confidential information that Ms. Holden might have. In my respectful view, it is not enough to say that the plaintiffs’ solicitors are the authors of their own misfortune. It must be remembered that the plaintiffs themselves are not the authors of their own misfortune and that a balancing must take place between the level playing field and the right to counsel of choice.
[43] In my view, consideration of other precautionary steps, after the fact, should be explored before the drastic step of removing counsel as solicitors of record. Counsel should have an opportunity, even at this late date, to make proposals for other precautionary steps that might allay the concerns of the defendants. I, of course, am unable to suggest or imagine what those other precautionary steps might be at this stage. I merely say the continued representation of the plaintiffs should not be decided at this point because the plaintiffs’ counsel misapprehended their legal position. I propose to give leave on this narrow point and this narrow point alone.
[44] In considering the application of R. 62.02(4)(a) and (b), it will be apparent from these reasons that I find no good reason to doubt the correctness of Pattillo J.’s conclusion other than that discussed in the three preceding paragraphs. His analysis of the facts and his application of the principles in MacDonald and Celanese, above, are thorough and compelling.
[45] I find no conflicting decisions that bear on the matter. Those cases referred to by counsel for the plaintiffs have different fact situations than the one before me.
[46] The question of whether plaintiffs should have an opportunity to propose other precautionary methods where the failure to have done so can be attributed to a misapprehension of their legal position is one of public importance that should be considered by a panel of the Divisional Court.
[47] I cannot leave this matter without pointing out to the plaintiffs that they now know their legal position with respect to their having acquired confidential information by their own activity. Armed with that knowledge it is open to the plaintiffs, until the panel deals with the question noted below, to take whatever steps they consider appropriate in the meantime.
[48] Leave is granted to the plaintiffs to appeal to the Divisional Court on this one issue:
Before being removed from the record, are these plaintiffs precluded from an opportunity to propose “other precautionary steps”, after the fact, having obtained privileged information from defendants by the plaintiffs’ own actions?
[49] I find the answer to the question to be one of public importance in that it would assist the profession and would advance the law.
[50] I emphasize that this is the only question that I find requires scrutiny by a Divisional Court panel.
[51] Counsel are agreed that if leave were granted, the costs of the motion before me should be reserved to the panel and I so order.
CARNWATH J.
DATE: 20071025