Court File and Parties
COURT FILE NO.: CV-14-20687 DATE: 20160511 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Sora Al Bidery, a minor by her litigation Guardian, Wafa Karem, Amir Al Bidery and Amal Karim Plaintiffs and Responding Parties – and – Brandon Cazzola and Paulo Conchacha Defendants and Moving Parties
COUNSEL: Laura M Pearce, for the Plaintiffs and Responding Parties Philip S. Chandler and Mary-Joe Renaud, for the Defendants and Moving Parties
– and –
Brandon Cazzola and Paulo Conchacha Plaintiffs by Counterclaim – and – Amir Al Bidery, Amal Karim, Nada Nader, John Doe and Jane Doe Defendants to Counterclaim
COUNSEL: Philip S. Chandler and Mary-Joe Renaud, for the Plaintiffs by Counterclaim and Moving Parties The Defendants to Counterclaim and Responding Parties Amir Al Bidery, Amal Karim were unrepresented; Bruce R. Mitchell is counsel for the Defendant to Counterclaim Nada Nader but did not appear
BEFORE: BONDY J.
A. BACKGROUND
[1] This was a motion to have plaintiffs’ counsel removed as counsel of record based upon conflict of interests.
[2] On May 12, 2012, the plaintiff Sora Al Bidery ("Sora") was attending a birthday party at 25 Alderton St. in the town of Leamington, Ontario. That is the home of the defendant by counterclaim, Nada Nader. Unfortunately, Sora ran out from behind a parked car and was struck by an automobile driven by the defendant Brandon Cazzola ("Brandon"), and owned by the defendant Paulo Conchacha ("Paulo"). Sora was 11 years of age at the time.
[3] On April 16, 2014, a statement of claim was issued alleging that Sora sustained serious and permanent personal injuries as a result of being struck by that automobile.
[4] Wafa Karem ("Wafa") is named as her litigation guardian. Wafa is Sora's aunt. The plaintiffs, Amir Al Bidery ("Amir" or the "father") and Amal Karim ("Amal" or the "mother"), are respectively Sora's father and mother. They are each making a Family Law Act, R.S.O. 1990, c. F.3 ("FLA") claim.
[5] All three plaintiffs are represented by the Greg Monforton and Partners Law Firm ("Monforton").
[6] On August 28, 2014, the defendants Brandon and Paulo issued a statement of defense and counterclaim. In the counterclaim, they have added the plaintiffs Amir and Amal, as well as Nada Nader, John Doe and Jane Doe as defendants by counterclaim. Plaintiffs’ counsel denies a formal retainer as between Monforton and the mother and father in their capacities as defendants by counterclaim. However plaintiffs’ counsel has been taking instructions from, communicating on behalf of, and taking positions on behalf of the mother and father in their capacity as defendants to counterclaim. This issue is more fully considered below.
[7] Defendants’ counsel asserts that by acting as counsel for the plaintiff Sora, and at the same time acting for her father and mother who are defendants by counterclaim, that Monforton has an inherent conflict of interest. Counsel for the defendant by counterclaim, Nada Nader, did not take a position in this motion.
[8] For the reasons that follow, I agree with the proposition put forth by the defendants, and accordingly, find it appropriate to grant the motion.
B. ANALYSIS
1) The Defendants’ motive
[9] There was some suggestion at paragraph 21 of the plaintiffs’ factum that the motion is without merit and that defendants’ counsel may have an improper motive in bringing this motion. There was no meaningful evidence to support that proposition. For the reasons below, I find the defendants’ motion to have been reasonable in these circumstances. Accordingly, I find no improper motive on the part of defendants’ counsel.
2) Overview of the law
[10] There are three sources of jurisdiction for the removal of the lawyer from the record when a conflict is found: see "Motions to Remove Counsel for Conflict of Interest", M.A. Code J., (Paper delivered at the Superior Court of Justice (Ontario) Spring Education Seminar, May 21, 2011), [unpublished], at p. 1.
[11] The first is rule 3.4-1 of the Law Society Rules which provide that "a lawyer shall not act or continue to act for a client where there is a conflict of interest": see Ontario, The Law Society of Upper Canada, Rules of Professional Conduct, r. 3.4-1, Adopted by Convocation on June 22, 2000, effective November 1, 2000, Amendments based on the Federation of Law Societies Model Code of Professional Conduct adopted by Convocation October 24, 2013, effective October 1, 2014.
[12] The second is the Court's common law inherent jurisdiction which derives from the fact that lawyers are officers of the court. A lawyer’s conduct in legal proceedings may affect the administration of justice, and so is subject to this supervisory jurisdiction: see MacDonald Estate v. Martin, 1990 SCC 32, [1990] 3 S.C.R. 1235, 48 C.P.C. (2d) 113, [1990] S.C.J. No. 41, at para. 18. [MacDonald Estate]
[13] The third is related to the right of everyone "to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice": see s. 7 of the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, Schedule B to the Canada Act 1982 (UK), 1982, c. 11. The Supreme Court has recently found the common law principles related to a lawyer's conflicts of interest are constitutionally enshrined in section 7: see Canada (Attorney General) v. Federation of Law Societies of Canada, 2015 SCC 7, [2015] 1 S.C.R. 401, [2015] S.C.J. No. 7, at para. 1.
[14] It is primarily the second source, and to a lesser extent the third, which were applicable in this case. That said, the Rules of Professional Conduct offer some insight into the expectations of the Law Society, and potentially the public as well in these situations.
[15] Conflicts of interests may require disqualification: (1) to avoid the risk of improper use of confidential information, sometimes called a duty of confidentiality; (2) to avoid the risk of impaired representation, sometimes called a duty of loyalty; and/or (3) to maintain the repute of the administration of justice: see Canadian National Railway Co. v. McKercher LLP, 2013 SCC 39, [2013] 2 S.C.R. 649, [2013] S.C.J. No. 39, at para. 61. [McKercher]
[16] In this case, it is the duty of loyalty and the duty of confidentiality which are of the primary areas of concern.
3) The Duty of Loyalty
[17] For the reasons that follow, I find that the motion ought to be granted on the basis of the solicitors’ duty of loyalty.
[18] For the reasons that follow, I also find that Sora's interests are directly adverse to those of her parents in their capacity as defendants by counterclaim.
[19] A "bright line" is provided by the general rule "that a lawyer may not represent one client whose interests are directly adverse to the immediate interests of another current client -- even if the two mandates are unrelated -- unless both clients consent after receiving full disclosure (and preferably independent legal advice), and the lawyer reasonably believes that he or she is able to represent each client without adversely affecting the other.": see R. v. Neil, 2002 SCC 70, [2002] 3 S.C.R. 631, [2002] S.C.J. No. 72, at para. 29. [Neil] This bright line rule amounts to a clear prohibition: see McKercher, at para. 26. The rule is designed to ensure that "a divided loyalty does not cause the lawyer to soft-pedal his or her representation of a client out of concern for another client: see McKercher, at para 43; and Neil, at para. 19.
[20] In the case before me, plaintiffs’ counsel has from the outset purported to act on behalf of the child in her claim, and also the mother and father in their FLA claims. The mother and father have expressed an interest in defending the counterclaim yet have not retained separate counsel. Their interest in defending the counterclaim has been conveyed to defendants’ counsel through the child's counsel. I reiterate that the counterclaim has been outstanding since August of 2014. Although the child's counsel denies they have been retained by the mother and father, they have provided advice to and spoken on behalf of all of each of those parties regarding their defense to counterclaim since August of 2014.
[21] Plaintiffs’ counsel purported to negotiate on behalf of the mother and father. They expressed a willingness to seek instructions regarding various proposals to resolve the apparent conflict between the child and her parents in this litigation. In other words, for almost two years the child's counsel has been receiving information both on behalf of the child and on behalf of the mother and father in their dual capacities as co-plaintiffs and defendants by the counterclaim. There was no evidence before me of any efforts to keep the information received on behalf of any of those parties separate within the law firm.
[22] There were a number of proposals put forth with respect to the defense to counterclaim. They include the following.
[23] The first is that, as said above, a statement of defense to counterclaim has yet to be filed to the counterclaim issued August 2014. On October 29, 2014, plaintiffs’ counsel wrote to defendants’ counsel and requested they refrain from noting the mother and father in default. Although that request from plaintiffs’ counsel suggests the mother and father will defend the counterclaim, alternate counsel was not retained by them between October 29, 2014 and today. All negotiations have taken place through Monforton.
[24] The second is that, in that same correspondence, plaintiffs’ counsel asserts that the mother and father do not own their home nor did they carry tenants insurance at the time of the accident. Plaintiffs’ counsel suggested that the counterclaim be dismissed in exchange for an agreement that the plaintiffs’ claims be limited to the damages attributable to the fault of the defendants Brandon Cazzola and Paulo Conchacha, and defendants by counterclaim, Nada Nader, John Doe and Jane Doe. Defense counsel pointed out that if that were done, Sora would be denied not only recovery from her parents, but also recovery from tortfeasors jointly and severally liable for any negligence found on the part of her parents: see s. 1, Negligence Act, R.S.O. 1990, c. N.1. Plaintiffs’ counsel ultimately resiled from that suggestion. I find plaintiffs’ counsel's suggestion on behalf of the parents clearly contrary to Sora's interests. I find this to be a clear example of the "soft-pedaling" referred to in McKercher.
[25] The third is that in November of 2015 there was a suggestion that the mother and father abandon their FLA claims and dismiss their action. That would leave plaintiffs’ counsel only acting for Sora. The mother and father decided to pursue their FLA claim as is their right. As a result nothing has changed.
[26] In addition to my concern with those proposals, I also have concern with the lack of evidence from Wafa in her capacity as Sora's litigation Guardian, as well as the lack of evidence from either Amir or Amal. There is nothing to suggest that they had been made aware of these conflicts, much less having expressed an informed consent to the continuation of plaintiffs’ counsel in these circumstances. Even if those discussions took place, I question whether the parties could have any appreciation of the potential conflict since plaintiffs’ counsel does not seem to recognize the conflict of interest: see Booth v. Huxter (1994), 1994 ONSC 10535, 16 O.R. (3d) 528 (Div. Ct.), [1994] O.J. No. 52, at para. 40; R. v. Silvini (1991), 1991 ONCA 2703, 5 O.R. (3d) 545, 68 C.C.C. (3d) 251 (C.A.), at p. 553; and Hoffman v. Leeke (1990), 903 F.2d 280 (4th Cir. U.S. Ct. of App.), at p. 288.
[27] I offer the following examples in support of that proposition.
[28] At the opening of her argument, plaintiffs’ counsel characterized the interests of Sora and her parents as "identical". I disagree with that proposition for the reasons above and below.
[29] After opening, plaintiffs’ counsel also suggested that “there could be no sharing of confidential information because plaintiffs’ counsel was not suing the parents.” I find that suggestion overly simplistic and inconsistent with any appreciation of the duty of loyalty.
[30] In her closing, plaintiffs’ counsel also asserted that "Sora will never seek recovery as against her parents". Plaintiffs’ counsel also stated in closing that she would be surprised if Sora’s claim exceeded the defendants’ policy limits, but that if it did she would then find it appropriate to advise Sora’s parents to seek alternate counsel. It seems to me that Sora is entitled to legal advice regarding those propositions from a lawyer serving only her interests. I find that need is immediate.
[31] Finally, plaintiffs’ counsel placed significant weight upon the decision of Master Dash in Condoluci (Litigation guardian of) v. Martins (2004), 2004 ONSC 35132, 72 O.R. (3d) 428, [2004] O.J. No. 4501. That case shares some similarities with this in that a child was struck by a car after having run out from between parked cars. It is also similar in that the parents were plaintiffs for a FLA claim and also defendants by counterclaim based upon an allegation of negligent supervision. The two cases are, however, fundamentally different as to the core issues related to the potential for breach of the duties of confidentiality and loyalty owed by a lawyer to her/his client.
[32] In the case before Master Dash, the mother and father retained counsel separate from the child's counsel to pursue their respective FLA claims. The mother also retained counsel separate from the child's counsel in her capacity as defendant to the counterclaim. The father did not defend the counterclaims against him. I reiterate that in the case before me, notwithstanding the lack of a formal retainer, plaintiffs’ counsel have received information on behalf of the parents in their capacities as plaintiffs and defendants to counterclaim. Plaintiffs’ counsel has advised Amir and Amal and has taken positions on their behalf in those capacities for almost 2 years.
4) The Duty of Confidentiality
[33] In the event that I am wrong as to my conclusions regarding breach of the duty of loyalty, I would grant the motion based on breach of the duty of confidentiality in any event.
[34] I begin with the observation that rule 3.4-2 of the Rules of Professional Conduct, provides that a lawyer shall not represent a client in a matter when there is a conflict of interest unless there is express or implied consent from all clients. Further, it must be reasonable for the lawyer to conclude that he or she is able to represent each client without having a material adverse effect upon the representation of or loyalty to the other client. An express consent must be fully informed and voluntary after disclosure.
[35] There was no evidence before me of such an express consent.
[36] There may be implied consent where, for example, the matters are unrelated. Another example is when the lawyer has no relevant confidential information from one client that might reasonably affect the representation of the other client. In this case, the matters are clearly related and plaintiffs’ counsel is privy to confidential information of both the child and her parents. To be clear, I am not bound by the Rules of Professional Conduct, but they do offer some insight into the standard of conduct expected as between lawyers and their clients.
[37] In conflict of interest cases there are two questions to be answered:
(1) Did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand? (2) Is there a risk that it will be used to the prejudice of the client?
(see: MacDonald Estate, at para. 45; Paylove v. Paylove, 2001 ONSC 28169, [2001] O.T.C. 917, [2001] O.J. No. 5009, at para. 18; and Peritus Inc. v. Elder, 2011 ONSC 1953, [2011] O.J. No. 1789.
[38] At the first question, the onus is upon the moving party to show that there exists a relationship which is sufficiently related to the retainer from which it is sought to remove the solicitor: see MacDonald Estate, at para 46).
[39] I reiterate that for two years, plaintiffs’ counsel has been the voice of the mother and father in their capacities as defendant to counterclaim. I reiterate that I am aware that plaintiffs’ counsel denies a formal retainer. Notwithstanding, the very clear trail of correspondence leaves no doubt that strategies related to the defense to counterclaim were discussed by Monforton with the mother and father, and that they received advice from Monforton in that regard. Accordingly, I find that the defendants have met the onus upon them at the first question.
[40] Once that is established by the moving party, there is a presumption that the lawyer should be disqualified unless the lawyer can rebut that presumption: see R. v. Chartis Insurance Co. of Canada, 2014 ONSC 6792, 123 O.R. (3d) 593, at para. 13. Rebutting that presumption will be a difficult burden for the lawyer to discharge because the court’s degree of satisfaction must be such that it would withstand the scrutiny of a reasonably informed member of the public that no such information passed. However, the burden must also be discharged without revealing the specifics of the privileged communication: see MacDonald Estate, at para. 46.
[41] I reiterate that the primary argument put forth by Monforton was the lack of a formal retainer. For the reasons above, I find that explanation either in isolation or in the context of the entire fact situation insufficient to displace the presumption of disqualification.
[42] To that I would add that in this case I would have expected evidence as to the efforts taken by Monforton to keep separate within the firm the information received and disseminated on behalf of Sora from that of her parents. No such evidence was proffered.
[43] Finally, as said above, there was no meaningful evidence to suggest that the nature and extent of this potential conflict was brought to the attention of any of the plaintiffs, or that they consented.
C. ORDER
[44] For all the reasons above, order to go removing Greg Monforton and Partners as the solicitors for all three of the plaintiffs.
D. COSTS
[45] Counsel are encouraged to resolve the issue of costs and submit a draft order to myself for approval. The draft order is to include counsels’ recommendations as to both responsibility for, and quantum of, costs. In the event that the parties are unable to agree on those issues within seven (7) days, then costs submissions shall be in writing on the following basis:
Counsel for defendants/moving parties shall serve costs submissions and a "Cost Outline" as provided for in Rule 57.01(6) of the Rules of Civil Procedure (using Form 57(b)) upon plaintiffs’ counsel within fourteen (14) days. Such written argument shall be no more than three (3) pages in length. In the event the foregoing is not complied with within that time period, the defendants shall be deemed to have waived their right to do so.
Plaintiffs’ counsel shall have a further ten (10) days to provide a response to counsel for the defendants. Such response is to be no more than three (3) pages in length. In the event the foregoing is not complied with within that time period, the plaintiffs shall be deemed to have waived their right to do so.
Counsel for the defendants shall have five (5) further days to provide a reply to counsel for the plaintiffs. Such reply is to be no more than one (1) page in length. In the event the same is not complied with within that time period, the defendants shall be deemed to have waived her right to do so.
Once all of those steps have been completed, council for the defendants shall provide all the submissions to the court through Trial Co-ordination.
The costs submission shall be double-spaced and use a "Times New Roman" font no smaller than 12 pitch. All references to the length of submissions exclude Bills of Costs, Dockets, and Costs Outlines and any Offers to Settle.
“original signed and released by Justice Bondy”
Christopher M. Bondy Justice
Released: May 11, 2016
COURT FILE NO.: CV-14-20687 Sora Al Bidery, a minor by her litigation Guardian, Wafa Karem, Amir Al Bidery and Amal Karim Plaintiffs and Responding Parties – and – Brandon Cazzola and Paulo Conchacha Defendants and Moving Parties – and – Brandon Cazzola and Paulo Conchacha Plaintiffs by Counterclaim – and – Amir Al Bidery, Amal Karim, Nada Nader, John Doe and Jane Doe Defendants to Counterclaim
RULING Christopher J. Bondy Justice
Released: May 11, 2016