DATE: 20040212

DOCKET: C40081

COURT OF APPEAL FOR ONTARIO

RE: MARY SERNIAK (Applicant/Respondent) –and– MURRAY TEITEL, NEWMAN, WEINSTOCK and GREEN AND SPIEGEL (Respondents/Appellants)

BEFORE: McMURTRY C.J.O., CATZMAN and ABELLA JJ.A.

COUNSEL: Murray Teitel

for the appellants

Richard B. Swan

for the respondent

HEARD: February 9, 2004

RELEASED ORALLY: February 9, 2004

On appeal from the judgment of Justice Janet M. Wilson of the Superior Court of Justice dated April 30, 2003.

E N D O R S E M E N T

[1] In our view, the motions judge erred in concluding that Ms. Serniak did not acquiesce in Mr. Teitel’s alleged conflict of interest and breach of fiduciary duty and in concluding that it is not possible by conduct to waive rights with respect to such a conflict and such a breach.

[2] This is not a case of “mere delay”. Even assuming that there was such a conflict or breach, Ms. Serniak’s active participation for a period of 4½ years through 19 days of assessment hearing reasonably leads to the conclusion that she acquiesced in Mr. Teitel’s conduct. It was not open to her at the end of that period to raise the issue for the first time: Louie v. Lastman (2002), 61 O.R. (3d) 459 at paras. 16‑18. Throughout the enforcement and assessment proceedings, she has from time to time had the benefit of legal counsel. She has offered no explanation for her delay in raising the issue of conflict of interest or breach of fiduciary duty in the assessment proceedings, a delay which has caused demonstrable prejudice to the integrity of the assessment process in general and to Mr. Teitel in particular.

[3] Although it is not necessary for us to deal with the remaining grounds of appeal, we do not wish to be taken as agreeing with the motions judge that a conflict of interest creates an absolute bar to the payment of a solicitor’s fees. In our view, such a determination must necessarily depend, in any particular case, on the nature of the conflict and the circumstances before the court.

[4] The appeal is allowed. The order of Wilson J. is set aside. The assessment is to proceed without consideration of the allegations of conflict of interest and breach of fiduciary duty. In all of the circumstances, we are of the opinion that there should be no order for costs either before Wilson J. or in this court.

Signed: “R.R. McMurtry C.J.O.”

“M.A. Catzman J.A.”

“R.S. Abella J.A.”