Court of Appeal for Ontario

Date: 2017-04-10

Docket: M47607(C63021)

Strathy C.J.O. (In Chambers)

Parties

Between

SMTCL Canada Inc. Plaintiff (Responding party)

and

Master Tech Inc. Defendant (Responding party)

and

Wajeb Assaf Non-party (Moving party)

Counsel

Jeffrey Michael Van Bakel, for the moving party

Carlin McGoogan, for the responding party SMTCL Canada Inc.

Fariborz M. Tavana, for the responding party Master Tech Inc.

Heard: March 29, 2017

Endorsement

[1] The defendant has appealed an order granting summary judgment against it, declaring that it has forfeited a deposit of US$41,000 plus costs of $25,343.55.

[2] Its sole ground of appeal is that its documentary record on the summary judgment motion was incomplete, allegedly due to the negligence of its former solicitor.

[3] It seeks to adduce "fresh evidence" on the appeal, in support of its claim of solicitor's negligence. It claims it intends to sue its former solicitor.

[4] On this motion, the solicitor seeks leave to intervene on both the appeal and the motion as an added party pursuant to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rr. 13.01 and 13.03. He wishes to ensure that a full record is before the court and asks the court to declare that the appellant has waived solicitor and client privilege. The respondent on the appeal consents to the motion.

[5] The solicitor claims that he meets the requirements of r. 13.01(1) because he has an interest in the subject matter of the proceeding, could be adversely affected by the outcome of the appeal, and shares common issues of fact and law with the parties. He says that he meets the requirement of r. 13.01(2) because there would be no prejudice to the appellant in granting the intervention and the respondent consents. He says that permitting intervention would maximize efficiency and avoid a multiplicity of proceedings.

[6] The proposed intervener relies upon Butty v. Butty (2009), 98 O.R. (3d) 713 (C.A.) which, he says, demonstrates that the courts readily grant leave to intervene where the conduct of a party's former lawyer is impugned in the proceeding. He also relies on Froates v. Spears, [1999] O.J. No. 77 and Lindsay v. Verge Insurance Brokers Ltd., 2016 ONSC 4005 in support of the proposition that privilege has been waived and once waived, a party cannot pick and choose to waive privilege over some documents but not others. He also relies on Bank Leu AG v. Gaming Lottery Corp. (1999), 43 C.P.C. (4th) 73 (Ont. S.C.), at para. 11, for the proposition that "where the client puts in issue its state of mind or knowledge with respect to matters on which it alleges breach of duty owed to it by its solicitors, it will be deemed to have waived privilege as to all communications and advice received by it relating to such matters."

[7] The appellant is a corporation, but its principal, Mr. Tavana, has been given leave to represent it. He opposes the solicitor's proposed intervention. He has made it clear that he intends to sue the former solicitor if the appeal is not successful.

[8] The granting of leave to intervene is discretionary. The court is required to determine whether it would be just to grant leave and whether the intervention would unduly delay or prejudice the determination of the parties' rights.

[9] I have considered whether to refuse leave to intervene and simply let the chips fall where they may. On the one hand, if the appellant persists in making selective disclosure, his motion to adduce "fresh evidence" may be doomed. Moreover, the court may find that he is bound by the actions of his lawyer and that any relief in that regard must take place in another forum. I fail to see how any determination against the appellant could be found to be binding against the solicitor if he is not a party to the proceeding. By seeking to intervene in this proceeding, the solicitor essentially invites this court to make a determination that he was not negligent. That goes well beyond the usual basis on which intervention is granted.

[10] On the other hand, I am concerned that without the intervention, this court will be asked to consider the appellant's motion, and the appeal, on an incomplete record. It may be more efficient for the court, and the parties, to have the issue addressed on a full record. That may, or may not, resolve the potential claim against the lawyer. I am satisfied that there will be no prejudice to the respondent, which supports the intervention for obvious reasons. While the appellant may face the additional burden of an adverse former solicitor, the search for the truth should be an over-arching concern. Ultimately, it is my view that the interests of justice favour a complete evidentiary record on the motion and the appeal.

[11] The appellant's sole ground of appeal is essentially an ineffective assistance of counsel claim in a civil context. This claim is unusual in civil cases and rarely available: W. (D.) v. White (2004), 189 O.A.C. 256 (C.A.), leave to appeal to S.C.C. refused, [2004] S.C.C.A. No. 486 and 8150184 Canada Corp. v. Rotisseries Mom's Express Ltd., 2016 ONCA 115. Justice Laskin recognized the possibility that the appeal may be frivolous in making a security of costs order on January 31, 2017. That being said, there is authority permitting the former counsel to make written and oral submissions in response to such allegations: W. (D.) v. White. In my view, the same result is appropriate here.

[12] For these reasons, an order will go granting the solicitor leave to intervene in the fresh evidence motion and the appeal. I declare that the appellant has waived solicitor and client privilege with respect to the content of the solicitor's file and solicitor and client communications pertaining to the matters in dispute. The solicitor may file an affidavit in response to the motion within 15 days of release of this endorsement. The appellant will be at liberty to cross-examine the solicitor on his affidavit on appointment served within 30 days of delivery of the affidavit. The solicitor shall not otherwise augment the record on the appeal. The solicitor shall be entitled to deliver a factum not to exceed 15 pages in length. The solicitor shall be entitled to seek costs and shall be liable for costs, in the discretion of the panel hearing the appeal.

[13] There shall be no order as to costs of this motion.

"G.R. Strathy C.J.O."