Capital Sports Management Inc. v Trinity Development, 2022 ONSC 5459

CITATION: Capital Sports Management Inc. v Trinity Development, 2022 ONSC 5459

DIVISIONAL COURT FILE NO.: 272/22

DATE: 2022-09-28

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, Teagan Markin 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 as a party in an appeal brought by Capital Sports Management Inc. challenging the decision of Justice Ryan Bell dated May 2, 2022 (which has an Addendum dated June 10, 2022) (the “Decision”).

[2] The Decision ordered 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] By decision of this court dated September 7, 2022,[^1] leave to appeal was granted on one issue, as follows:

Having found an implied joint retainer among Capital Sports Management Inc., Trinity Development Group Inc. and Gowling WLG LLP, did the motion judge err in ordering the production of documents after May 2016?

[4] The appeal is scheduled to be heard on October 26, 2022. The appeal has been expedited because the action is scheduled to go to a long trial in January 2023.

[5] 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.

[6] Gowlings also sought leave to intervene in the leave to appeal motion, which was denied.[^2] The request for leave to intervene in the appeal itself was deferred until now.

[7] The background to the action and the involvement of Gowlings is summarized in the prior endorsement at paras. 5-8, as follows:

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. 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 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.

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.

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. …

[8] In the notice of appeal, Capital Sports has included grounds that directly impugn Gowlings’ conduct, alleging that Gowlings gave erroneous advice with respect to its ability to represent Capital Sports exclusively and acted in a conflict of interest.

[9] Gowlings seeks leave to intervene as a party under r. 13.01 of the Rules of Civil Procedure. Gowlings submits that it has a direct interest in the subject matter of the appeal, which focuses on its relationship with Capital Sports and Trinity after May 2016, and directly impugns its conduct and advice. Gowlings further submits that it may be adversely affected as a result of the recent grounds challenging its conduct and advice. 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.

[10] There is no issue of delay. Gowlings has agreed to file its appeal factum on the same schedule as Capital Sports, share time with Capital Sports at the hearing of the appeal, and not duplicate arguments.

[11] Trinity submits that Gowlings’ proposed intervention duplicates or adds nothing to Capital Sports’ position on the appeal and that Capital Sports will not be permitted to raise new issues on appeal. Trinity further submits that Gowlings has no public or legal interest in the actual subject matter of the appeal, which Trinity describes as the “date range” of the document production ordered by Justice Ryan Bell. Trinity further submits that Gowlings seeks to challenge findings of fact that are not relevant to the question upon which leave was granted and that Gowlings’ real interest is its potential professional liability.

[12] The Albert Street respondents plainly assert that Gowlings purported to act in contravention of its fiduciary duties of loyalty and candour to Trinity after May 2016, the date in the leave order. Yet they also submit that at least some of the allegations against Gowlings in the notice of appeal are irrelevant and the appeal will be sufficiently addressed by Capital Sports. These respondents also continue to rely on Gowlings’ limited role in the motion before Justice Ryan Bell, submitting that the time to seek leave to be added as a party was then, not now. For the reasons set out in my prior endorsement I do not agree that Gowlings needed to intervene before Justice Ryan Bell.

[13] The Albert Street respondents also submit, in the alternative, that any grant of leave to appeal shall be as a friend of the court only, not as a party. These respondents submit that Gowlings would otherwise have appeal rights. However, in this case, it would mean a right to seek leave to appeal without an automatic stay pending appeal. The motion before me is for leave to intervene as a party, and I have addressed it as such.

[14] Having considered all the submissions, I am satisfied that Gowlings has an interest in the subject matter of the proceeding. I do not agree with Trinity’s characterization of the appeal as concerning a “date range” only. It is centered on an implied joint retainer, alleged or actual conflicts of interest, and the consequences with respect to solicitor-client privilege. The date in the order granting leave is in or around the time that Capital Sports advised Trinity that Gowlings was acting for it only and Trinity raised a conflict of interest.

[15] The participants to this motion disagree about whether Gowlings needs to show that its proposed contribution to the appeal will be useful to the court. I need not decide that point because I find that focused submissions by Gowlings likely will be useful, given that the appeal may address significant issues about solicitor-client privilege after the breakdown of a relationship where there is an implied joint retainer.

[16] As for the relevance of the allegations against Gowlings in the notice of appeal, and the ability to argue about those grounds, and the facts, on appeal, those are matters that can be raised in the submissions to the panel hearing the appeal.

[17] However, I agree that Gowlings’ role should be limited in the circumstances of this case, given the expedited appeal and upcoming trial date. Gowlings has already proposed a page/time limit on its written and oral submissions and will attempt not to duplicate submissions. The Albert Street respondents have raised other possible limits (in the alternative), such as limiting the submissions to specific issues. It seems to me that the latter approach will mainly lead to more disputes between the parties about the scope of this order, as have already begun with respect to the leave to appeal order, rather than a focus on the appeal. A short page limit will deliver the required focus without unproductive debate.

[18] I therefore grant Gowlings leave to intervene as a party with these terms:

(1) it may deliver a factum of up to 15 pages in length;

(2) it may not seek to supplement the evidentiary record; and,

(3) it may have up to 15 minutes of oral argument (from the time allocated to the appellant) subject to any order of the panel hearing the appeal.

[19] Gowlings does not request costs of this part of its motion in its supplementary factum and has not uploaded a costs outline. There shall be no order as to costs.

Matheson J.

Date: September 28, 2022

[^1]: 2022 ONSC 4901 [^2]: 2022 ONSC 4774