Manning v. Epp, 2007 ONCA 390

CITATION: Manning v. Epp, 2007 ONCA 390

DATE: 20070525

DOCKET: C45797

COURT OF APPEAL FOR ONTARIO

SIMMONS, CRONK and BLAIR JJ.A.

BETWEEN:

MORRIS MANNING, and MORRIS MANNING Q.C. PROFESSIONAL CORPORATION

Appellants

and

HERB EPP, IAN McLEAN, JOHN DOE, JANE DOE, JULIE FINLEY, SIMON FARBROTHER, THE RECORD, BRIAN CALDWELL, PHILIP JALSEVAC, J. FRED KUNTZ, LYNN HADDRALL, DON McCURDY, WATERLOO CHRONICLE, BOB VRBANAC, ROB LEUSCHNER, ANDREA BAILEY, CKCO T.V., CTV INC., CITYMEDIA GROUP, CITYMEDIA GROUP INC., GRAND RIVER VALLEY NEWSPAPERS, FAIRWAY GROUP, TORSTAR CORP., TORSTAR CORPORATION, KEY RADIO LIMITED, TDNG INC., SOUTHERN ONTARIO COMMUNITY NEWSPAPER GROUP ULC

Respondents

Morris Manning, Q.C. and Frederick J. Shush for the appellants

John F. Rook, Q.C. and D. Fraser Hughes for the respondents Herb Epp, Ian McLean, Julie Finley and Simon Farbrother

Paul F. Monahan for the intervenor, the City of Waterloo

Heard and in part Released Orally: May 16, 2007

On appeal from the order of Justice Joan L. Lax of the Superior Court of Justice dated July 17, 2006.

BY THE COURT:

[1] The appellants appeal from the order of Lax J. striking their statement of claim and directing that it be expunged from the record without leave to amend or deliver a further statement of claim. For the following reasons, it is our view that this appeal must be dismissed.

[2] The appellants’ pleading is more than 120 pages in length and incorporates 322 paragraphs. In it, the appellants allege multiple causes of action against one or more of the respondents arising from or related to the termination by the City of Waterloo of the retainer of the appellants as the City’s outside counsel in respect of certain litigation. The appellants also advance defamation claims against some of the respondents.

[3] In support of her decision to strike the appellants’ pleading, the motion judge, in detailed and precise reasons, held that the statement of claim:

(i) contains pages of irrelevant allegations and evidence;

(ii) discloses some information that is privileged and there-fore inadmissible;

(iii) discloses some information that violates a lawyer’s duty of confidence; and

(iv) discloses some information that is irrelevant and there-fore scandalous.

[4] Save with respect to one cause of action as against one respondent, the motion judge found, under rule 21.01(1)(b) of the Rules of Civil Procedure, that the statement of claim discloses no reasonable cause of action. She also held that even if the alleged causes of action or some of them exist, the statement of claim discloses no reasonable cause of action after the offending paragraphs are removed. In effect, therefore, the motion judge found that the numerous causes of action alleged by the appellants, in the manner pleaded, failed to disclose any reasonable cause of action.

[5] We agree. In our opinion, contrary to the rules of pleading established by the Rules of Civil Procedure, this prolix statement of claim is replete with bald and conclusory allegations and evidence. Yet, notwithstanding its length, in many instances it is devoid of those material facts necessary to support the causes of action alleged. In other instances, for the reasons set out by the motion judge, the claims advanced are simply not available as a matter of law on the facts asserted in the pleading. On these grounds alone, we agree with the motion judge that the challenged statement of claim cannot stand.

[6] The motion judge also stated in her reasons, at paras. 44 and 45:

The plaintiffs submit that the allegations that Epp and McLean orchestrated the termination of the retainer to obtain personal benefits was contrary to their public duties and akin to or as serious as fraud. If these allegations are true, Manning was required to follow the procedure in Rule 2.02 of the Rules of Professional Conduct and inform the chief legal officer or council of their alleged dishonest, fraudulent or illegal conduct. If, despite this advice, the alleged mis-conduct continued, Manning was obliged to withdraw from acting in the matter. Instead, he commenced an action that is a deliberate and improper collateral attack on his former client.

Although distinguishable on its facts, I adopt the comments of Nordheimer J. in Aviaco International Leasing Inc. v. Boeing Canada Inc., 2000 22777 (ON SC), [2000] O.J. No. 2420. In that case, documents were inadvertently faxed to an opposing party and then used by that party on a motion resulting in the documents being placed into the public record. In this case, a solicitor, aggrieved by the termination of his retainer and in the face of ongoing litigation by his former client, has placed on the public record to its detriment, a pleading that discloses no reasonable causes of action, pleads privileged communi-cations, discloses confidential information, is devoid of material facts, yet alleges serious improprieties. This is unprofessional and an abuse of the process of this court. I therefore exercise my discretion to expunge the claim in its entirety.

[7] Of the various grounds of appeal advanced in their factum, the appellants’ oral argument before this court was confined essentially to one ground. In respect of the above-quoted comments by the motion judge, they argue that it is incumbent on a party asserting privilege to establish an evidentiary basis for the privilege claim and that, in this case, there was no factual underpinning before the motion judge on which to base a finding of privilege. The appellants say that the quoted observations by the motion judge are the “fulcrum” of her decision and that they are flawed because they are based on an assumption – in the absence of any evidence from the respondents – that information contained in the statement of claim was privileged or confidential.

[8] We reject these submissions for several reasons.

[9] First, the impugned comments by the motion judge reflect her reasoning for directing the expungement of the appellants’ pleading from the public record, in contrast to her reasoning for striking the pleading.

[10] Second, and more importantly, we agree with the motion judge that, on its face, the appellants’ pleading contains information that is at least arguably either privileged or confidential or both. The appellants dispute this, asserting that: (i) by its subject matter, the applicable information is not privileged or confidential; (ii) an established exception to the claim of privilege applies in this case; or (iii) the appellants’ former client waived privilege.

[11] We disagree. The information at issue includes allegations of fact regarding the basis for the termination of the appellants’ retainer, the motivation for that termination, the nature of advice sought from the appellants by representatives of the client (the City of Waterloo), and the content of some communications held between those representatives and the appellants. Relying on Descôteaux v. Mierzwinski, 1982 22 (SCC), [1982] 1 S.C.R. 860, the appellants argue that only advice given by, as opposed to advice sought from, a solicitor is privileged. Descôteaux does not stand for this proposition, which we categorically reject. To the contrary, in Descôteaux, the Supreme Court of Canada stressed at pp. 892 – 93:

[A] lawyer’s client is entitled to have all communications made with a view to obtaining legal advice kept confidential. Whether communications are made to the lawyer himself or to employees and whether they deal with matters of an administrative nature such as financial means or with the actual nature of the legal problem, all information which a person must provide in order to obtain legal advice which is given in confidence for that purpose enjoys the privileges attached to confidentiality. This privilege applies to all communications within the framework of the solicitor-client relationship.

[12] The appellants acknowledge before this court that it was open to the motion judge to strike those paragraphs of their pleading that she regarded as containing privileged or confidential information unless privilege had been lost by client waiver or privilege did not arise due to an applicable legal exception. Even assuming – without deciding – that waiver or an exception to privilege would authorize a solicitor to unilaterally place in the public domain information that is arguably privileged or confidential, as occurred in this case, the appellants’ pleading does not expressly or impliedly allege either waiver or an established legal exception to the privilege claim.

[13] In any event, given the nature of the wrongful conduct alleged by the appellants to have been committed by the respondents, which is in the nature of fraud or intentional tortious impropriety akin to fraud, the appellants were obliged to plead such conduct with particularity in accordance with rule 25.06(8) of the Rules of Civil Procedure. They failed to do so.

[14] As well, there is nothing on this record to support the appellants’ claim that privilege was waived by the City or its authorized representatives.

[15] In the end, we see no error in the motion judge’s decision to exercise her discretion to both strike the statement of claim in its entirety without leave to amend and to direct that it be expunged from the record. Indeed, we regard her decision and her reasoning in support of it as unassailable.

[16] Accordingly, for the reasons given, the appeal is dismissed.

[17] Before concluding these reasons, there is one further matter upon which we wish to comment.

[18] The appellants brought a fresh evidence application in connection with this appeal. The core of the proposed fresh evidence consists of several pieces of correspondence, which indicate that Mr. Manning caused his “concerns” – at least about Herb Epp’s request that he change his legal opinion – to be conveyed to the chief legal officer of the City in compliance with his obligations under Rule 2.02 of the Rules of Professional Conduct.

[19] The practice in this Court with respect to fresh evidence is well-known: the members of the panel read the fresh evidence in advance and frequently, although not always, counsel are permitted to argue the appeal on the basis of the fresh evidence; the Court then rules on the admissibility of the fresh evidence at the time that it disposes of the appeal on the merits. In accordance with this well-established practice in this Court, the panel read the proposed fresh evidence tendered by the appellants in advance of the argument of this appeal.

[20] In this case, the appellants did not address their fresh evidence motion at the outset of the appeal, nor was any reference made to it, or to the proposed fresh evidence, by Mr. Manning during his argument.

[21] At the conclusion of Mr. Manning’s argument, we indicated our view that it was unnecessary to hear submissions from the respondents or the City. At that point, again, Mr. Manning made no reference to the fresh evidence motion or to the proposed evidence.

[22] The panel then dismissed the appeal, for reasons delivered orally as set out above. Only thereafter, when the appeal proceeding had reached the costs submissions stage, did Mr. Manning rise to seek to be heard on the appellants’ fresh evidence motion, informing the panel for the first time that he understood that the motion was to have been dealt with “after the appeal was disposed of”. Despite the unusual nature of this position – the fresh evidence was sought to be introduced to buttress the appellants’ submissions on the appeal – and notwithstanding the unusual nature of Mr. Manning’s request – that he be heard on the fresh evidence motion after his original submissions were complete and a decision had been rendered by the panel – we heard submissions from all counsel with respect to the fresh evidence motion.

[23] Having considered those additional submissions, for the following reasons we are satisfied that the fresh evidence issue is not dispositive of the outcome of this appeal.

[24] First, as we have said, the panel was aware of the nature of the fresh evidence and had read the appellants’ fresh evidence motion materials, including the proposed evidence, in advance of the oral argument of the appeal. Accordingly, the proposed evidence and the fresh evidence motion were taken into account by the panel in determining to dismiss the appeal.

[25] In this regard, it is debatable whether the proposed evidence constitutes fresh evidence at all. While two of the letters had not yet been exchanged at the time of the motion, Mr. Manning nonetheless made the argument before the motion judge that he had reported the respondent Epp’s alleged misconduct to the City’s solicitor. At most, then, the motion judge may have overlooked that submission when she made her reference to the Rules of Professional Conduct in para. 44 of her reasons.

[26] Second, and in any event – even if the evidence is fresh evidence and assuming it meets the test for admissibility set out in R. v. Palmer, 1979 8 (SCC), [1980] 1 S.C.R. 759 – it does not affect our analysis of the merits of the appeal or our view of its proper disposition. Mr. Manning concedes that the fresh evidence does not go to the issue of whether the causes of action alleged should or should not be struck. He seeks to rely on it in conjunction with his attack on paras. 44 and 45 of the motion judge’s reasons, cited above, which he says constitute the heart of her reasons but which, in reality, concern him because of their personal references. It is partly for this reason that we agreed to hear the fresh evidence motion in the unusual circumstances that we have described, in order that the record will clarify that such evidence exists.

[27] However, we do not understand the motion judge’s remarks in para. 44 of her reasons to be anything other than a response to the respondents’ argument before her that there was a procedure available to the appellants if they were concerned about the respondents’ conduct, namely resort to the steps set out in Rule 2.02 of the Rules of Professional Conduct.

[28] Moreover, the context of the motion judge’s comments in paras. 44 and 45 make clear that her impugned statements played no part in her assessment of whether the appellants’ pleading should be struck. As we have said, they were concerned solely with the issue whether the statement of claim, having been struck, should be expunged from the public record. We are satisfied that the central reasoning of the motion judge with respect to expunging the statement of claim is found in her remarks in para. 45, and that any misapprehension by the motion judge about whether Mr. Manning had made his concerns known to the City was not material to that decision.

[29] Accordingly, having again considered the fresh evidence motion and the proposed evidence in the light of the submissions received thereon, we reaffirm that the appeal is dismissed for the reasons already given.

[30] The respondents are entitled to their costs of the appeal, and of the motion by the City for leave to intervene heard by O’Connor A.C.J.O. We fix those costs in the total amount of $40,000.00, inclusive of disbursements and G.S.T.

[31] The intervenor, the City of Waterloo, is also entitled to its costs of the appeal and of the motion to intervene. We fix its costs at $20,000.00, inclusive of disbursements and G.S.T.

RELEASED:

“MAY 25 2007” “Janet Simmons J.A.”

“EAC” “E.A. Cronk J.A.”

“R.A. Blair J.A.”