CITATION: Capital Sports Management Inc. v Trinity Development, 2022 ONSC 4774

DIVISIONAL COURT FILE NO.: 272/22

DATE: 20220829

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: CAPITAL SPORTS MANAGEMENT INC.

AND:

TRINITY DEVELOPMENT GROUP INC., 801 ALBERT STREET INC., TIP ALBERT GP INC., TIP ALBERT LIMITED PARTNERSHIP, TRINITY ALBERT LP, G. BIRD HOLDINGS INC., c.o.b. as GBA Development and Project Management, JOHN RUDDY and GRAHAM BIRD

AND:

GOWLING WLG (CANADA) LLP, Proposed Intervener

BEFORE: Matheson J.

COUNSEL: Anne E. Posno and Amy Sheppard, Lawyers for Gowling WLG (Canada) LLP

Milton A. Davis, Ronald D. Davis, Samantha M. Green and Hailey Abramsky, Lawyers for Trinity Development Group Inc., Trinity Albert LP and John Ruddy

Christopher D. Bredt, Laura M. Wagner and Amitha Carnadin, Lawyers for 801 Albert Street Inc. and TIP Albert Limited Partnership

No one appearing for the other parties

HEARD: In writing.

ENDORSEMENT

[1] Gowling WLG (Canada) LLP (“Gowlings”) seeks leave to intervene in a motion for leave to appeal brought by Capital Sports Management Inc. returnable on September 6, 2022, and seeks leave to intervene in the appeal if leave to appeal is granted.

[2] Capital Sports has sought leave to appeal the decision of Justice Ryan Bell dated May 2, 2022 (which has an Addendum dated June 10, 2022) (the “Decision”), ordering production of certain solicitor-client documents regarding advice given by Gowlings relating to an alleged joint venture between Capital Sports and Trinity Development Group Inc.

[3] Capital Sports supports the motion for leave to intervene and has otherwise not participated in this motion. The other parties who are appearing on this motion oppose it.

[4] I address the request for leave to intervene in the leave motion below. I am not persuaded to address the second request at this time, specifically leave to intervene if leave to appeal is granted. Should leave to appeal be granted, Gowlings may seek to schedule the balance of their motion.

[5] The underlying dispute arises within a civil action about an alleged (failed) joint venture between Capital Sports and Trinity for the development of a large site located in Ottawa, west of Parliament Hill. I will not review the extensive background in this endorsement. Suffice to say that Capital Sports has sued Trinity, alleging that a conflict of interest arose when Trinity began developing an adjacent property on Albert Street. Capital Sports has also sued two Albert Street companies. The action is currently scheduled for a long trial before Justice Ryan Bell commencing in January 2023.

[6] The Decision arises from a motion brought by Trinity against Capital Sports for the production of privileged documents, including communications with Gowlings, on the basis that there was a joint retainer of Gowlings.

[7] Gowlings was given notice of the production motion, participated in early steps, and provided affidavits of its lawyers that were put forward by Capital Sports. Capital Sports took the position that there was an exclusive solicitor-client relationship with Gowlings, and the production request should therefore be denied.

[8] In the Decision, the motion judge determined that there was an implied joint retainer of Gowlings by Capital Sports and Trinity and ordered that Capital Sports produce documents related to Gowlings’ work. Those documents were also ordered produced to the Albert Street defendants on the basis that Trinity was an indirect part owner of those entities. Capital Sports sought leave to appeal. Gowlings was not criticized in the Decision, or the grounds advanced in support of the original motion for leave to appeal.

[9] In an amended notice of motion for leave to appeal served in early July 2022, Capital Sports added grounds that directly impugned Gowlings’ conduct. Gowlings then sought leave to intervene as a party under r. 13.01 of the Rules of Civil Procedure, which provides as follows:

13.01 (1) A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,

(a) an interest in the subject matter of the proceeding;

(b) that the person may be adversely affected by a judgment in the proceeding; or

(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.

(2) On the motion, the court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just.

[10] In brief, Gowlings submits that it has a direct interest in the subject matter of the leave motion, which focuses on the nature and scope of its retainer. Gowlings further submits that it may be adversely affected as a result of the recent grounds challenging its conduct. Gowlings submits that it therefore meets the criteria in both r. 13.01(1)(a) and (b), only one of which is required for leave.

[11] The objecting parties rely on the legal principle that granting intervener status on a motion for leave to appeal should be a rare and extraordinary event: McFarlane v. Ontario (Education), 2019 ONCA 641, at para. 3. Gowlings submits that the cases that apply that principle are distinguishable because in those cases there was an aspect of general or public importance. However, r. 62.02 also includes a requirement that there be an issue of importance or that the court find it desirable to grant leave. Those aspects of the leave test support the application of the above principle and a very limited availability of interventions on a motion for leave to appeal.

[12] Trinity further submits that r. 13.01 does not apply to this motion because it speaks of a “proceeding” (which is defined as an application or action) or “judgment” (which is defined as a decision that finally disposes of an application or action on its merits). Trinity therefore submits that r. 13.01 does not apply to motions for leave to appeal. I disagree. The motion for leave to appeal is a step within an action, which is a proceeding.

[13] The objecting parties raise numerous other reasons for denying leave to intervene. I will address what I see as the main issues.

[14] I recognize that Gowlings did participate in the production motion inasmuch as it was given notice, retained counsel, and had a significant role in providing evidence in response to the motion. Trinity submits that Gowlings could have participated fully, did not do so, and should therefore not be permitted to seek leave to intervene. I do not see that choice as a complete bar to seeking leave now: see, e.g., Richmond Hill (Town) v. Elginbay Corporation, 2015 ONSC 4979, at para. 12. I agree that non-parties should not be able to “lurk in the shadows”: Meridian Credit Union Limited v. Baig, 2016 ONCA 150, at para. 56. I do not see that as the situation here. It appears to me that Gowlings showed restraint, to the benefit of not complicating the litigation, until its conduct was directly challenged.

[15] The objecting parties further point to delay and a strong concern about the potential to disrupt the upcoming trial date. I am satisfied that the timing of this motion has been sufficiently explained and it will not disrupt the hearing of the leave to appeal motion scheduled for September 6, 2022. After that point, the potential impact on the trial date will be a function of whether or not leave to appeal is granted, not the request to intervene on the leave motion.

[16] The objecting parties further submit that Gowlings has nothing to add to the motion materials that have already been put forward by Capital Sports. I agree that at this early stage, an intervener should do more than add their voice to the positions already being advanced by the moving party.

[17] The objecting parties also note that Gowlings has included a reservation of rights in its submissions. Gowlings asserts that it reserves the right to challenge any underlying factual finding of the motion judge if permitted to intervene in the leave motion. This is not necessarily an issue. Even if leave to intervene as a party was granted, it could be subject to the imposition of terms limiting Gowlings’ involvement.

[18] Leave to intervene is discretionary. Even assuming that Gowlings has a sufficient interest under r. 13.01, I have these concerns about granting the requested intervention at the leave to appeal stage. The proposed factum focuses on the issues also put forward by Capital Sports regarding the nature and scope of the retainer. I am not persuaded that Gowlings’ submissions on those same issues justify an intervention at the leave to appeal stage. Further, the added challenges to Gowlings’ conduct come up for the first time in the amended notice of motion for leave to appeal. Those issues would only be adjudicated if leave to appeal is granted. They are therefore more germane if there is an appeal.

[19] In all the circumstances, I am not prepared to exercise my discretion to grant leave to intervene in the motion for leave to appeal. That part of Gowlings’ motion is dismissed. The balance of the motion, seeking leave to intervene in the appeal should leave to appeal be granted, is adjourned.

[20] The objecting parties have claimed costs if successful. I find their costs outlines well in excess of what I would be inclined to award. In the exercise of my discretion, I have taken into account all the submissions in those outlines and all other relevant factors including the motion materials. Gowlings shall pay costs to each of Trinity and Albert Street in the amount of $10,000, all inclusive.

Matheson J.

Date: August 29, 2022