CITATION: Van Every (Litigation guardian of) v. Findlay, 2025 ONSC 757
DIVISIONAL COURT FILE NO.: 265/24
DATE: 20250319
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Lococo, LeMay and Shore JJ.
BETWEEN:
Jarrod Seth Van Every by his Litigation Guardian, Andrew Stastny
Plaintiff (Respondent)
– and –
D. Robert Findlay and Findlay Personal Injury Lawyers
Defendants (Appellants)
Aron Zaltz, for the Plaintiff (Respondent)
Alan Rachlin, for the Defendants (Appellants)
HEARD: January 31st, 2025
[1] The Respondent was seven years old on May 28th, 2004, when he was hit by a tractor and injured while he was out walking. He originally retained the Appellants to advance a claim for accident benefits under the Statutory Accidents Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (“SABS”). Small amounts of benefits were paid between 2004 and 2006.
[2] In 2014, the Respondent changed law firms. The Preszler Law Firm was retained to assist the Respondent with advancing a claim for SABS and for tort damages from the accident. The SABS claim was settled in 2016. The settlement required court approval, which was granted based on an Affidavit from Jeffrey Preszler, who is a lawyer with the Preszler Law Firm. Court approval was necessary because a capacity assessment was done during the course of the litigation, and the Respondent was found to be incapable of managing his affairs. In that Affidavit, Jeffrey Preszler set out why he believed that it was in the Respondent’s interests to approve the settlement.
[3] The Respondent then sued the Appellants, his former lawyer and his law firm, for damages. David Preszler, another lawyer with the Preszler Law Firm, is counsel on this claim. The claim seeks damages from the Appellants on the basis of professional negligence. Specifically, the claim seeks damages because the Respondent claims that, but for the failure of the Appellants, the Respondent would have received additional monies.
[4] The Appellants brought a motion to have the Respondent’s law firm removed as counsel of record. That motion was dismissed, and the Appellants have appealed with leave to this Court. For the reasons that follow, I have regrettably come to the conclusion that the motions judge’s decision must be set aside as he was misdirected as to the law and that he gave no weight to some of the relevant factors favouring the Appellant’s position and insufficient weight to other of the relevant factors favouring the Appellant’s position. I would therefore remove the Preszler Law Firm as counsel of record for the Respondent.
Background
a) The Parties and the Original Litigation
[5] The Respondent, Jarrod Seth Van Every, was seven years old in May 2004. He was walking across the street on the afternoon of May 28th, 2004, when he was hit by a tractor and severely injured. He spent several weeks in hospital recovering from his injuries.
[6] In June 2004, a litigation guardian was appointed for the Respondent and the Defendants were retained to pursue a claim for SABS on behalf of the Respondent. Approximately $13,000 in SABS were received by the Respondent.
[7] Approximately ten years later, the Respondent changed counsel and retained the Preszler law firm. Several steps were taken in order to advance a claim for SABS. Eventually, a settlement was reached. It resulted in the Respondent receiving more than $1 million in a settlement on the basis that he was catastrophically impaired as a result of, inter alia, an acquired brain injury. In the course of preparing the file, a capacity assessment was performed on the Respondent. It was determined that the Respondent did not have the capacity to manage his property, although he had sufficient understanding to appoint an Attorney for Property.
[8] As the Respondent was a party under disability, his then counsel, Jeffrey Preszler, swore an Affidavit on April 6th, 2016. In that Affidavit, Jeffrey Preszler explained to the Court why he viewed the settlement as being in the Respondent’s best interests. Jeffrey Preszler stated that “the proposed settlement at this time is a windfall to Seth” because of various issues with the Respondent’s claim for SABS, including:
a) In the months leading up to the settlement, the Respondent regularly missed school and did not want to proceed with any of the recommended treatments.
b) The Respondent had no desire to continue with treatment and, in the event that the accident benefits insurer learned of his non-compliance, his benefits would be terminated.
c) The claim for income replacement benefits was a windfall that the Respondent would not have qualified for in any event. A similar statement was made in respect of the housekeeping benefit that formed part of the settlement.
[9] On April 27th, 2016, Maddalena J. signed the judgment approving the settlement. She also, at the request of the Respondent, sealed the settlement agreement and the contents of Mr. Jeffrey Preszler’s Affidavit.
[10] There was also an outstanding tort action in this case, which was settled by Jeffrey Preszler for the sum of $100,000.
b) The Current Litigation and the Motion for Removal
[11] In June 2016, the Respondent brought an action against the Appellants. This claim sought $2 million for professional negligence. The claim alleges, in part, that but for the Appellants’ inaction or actions, the Respondent would have been entitled to have received additional funds not previously paid or included in the settlement. General and special damages are claimed.
[12] There was some discussion as to whether the Statement of Claim had been amended by the Respondent to limit his claim to past losses. The Respondent has expressed an intention to pursue that amendment, and the Appellants have advised that they are not opposed to that settlement. However, it is accepted that, regardless of the amendment, the Statement of Claim will still contain the following allegations:
(eee) their mishandling of the Plaintiff, Van Every’s, claim placed him at a disadvantage visa vie negotiating settlement of his Accident Benefits claim; and
(fff) they created improvident circumstances that adversely affected the quanta of monies ultimately recovered by the Plaintiff, Van Every.
[13] The Appellants defended the action and claimed, inter alia, that the Respondent had entered into an improvident settlement agreement. This assertion is based on the Defendants’ claim that, at the time that the Respondent changed lawyers, he was fully entitled to claim SABS arising from the accident, less what he had received to date. The Appellants also claim that, at the time that the Respondent changed lawyers, he was fully able to claim any losses that he could not recoup in the SABS action from the tortfeasor.
[14] Although the Statement of Claim in this action focuses primarily on the management of the SABS claim, the Statement of Defence engages both settlements as part of the Appellants’ defence. Under the MVA provisions of the Insurance Act, R.S.O. 1990, c. I.8, it is open to the Appellants to argue that the losses that the Respondent could not recover in the SABS claim could be claimed in the tort action. As a result, the allegedly improvident settlement of both claims is at issue.
[15] The claim was originally started with Mr. Jeffrey Preszler as counsel. Before the Statement of Defence was delivered, a notice of change of solicitors was delivered appointing Mr. David E. Preszler as counsel. The Statement of Defence was delivered in April 2018.
[16] In July 2018, an Order was granted unsealing the contents of the Court file (2018 ONSC 4213). The Respondent sought, and was granted, leave to appeal this order to the Divisional Court. The Divisional Court granted the appeal (2019 ONSC 6854) and found that the request for an unsealing of the file was the wrong way for the Appellants to have sought the information. Instead, that Court found that the production processes set out in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 ought to have been used.
[17] Further litigation ensued. A motion addressing three separate issues was then scheduled and heard by the motions judge on July 21st, 2021. The three issues that were addressed were:
a) The Respondent sought an Order striking the portions of the Statement of Defence that alleged an improvident settlement.
b) The Appellants sought to have allegedly privileged portions of the April 2nd, 2016 Affidavit of Jeffrey Preszler disclosed to them.
c) The Appellants sought to have the Preszler Law Firm removed as counsel of record.
[18] The parties agreed that, if the privileged portions of the Affidavit were disclosed, then there would be a need for additional submissions on the removal of counsel portion of the motion.
[19] In September 2021, the motions judge released his reasons (2021 ONSC 6381). He concluded that the portions of the Statement of Defence alleging an improvident settlement should not be struck and that the allegedly privileged portions of the April 2nd, 2016, Affidavit should be disclosed to the Appellants. As a result, the allegations of the improvident settlement remain live issues for trial.
[20] The Appellants sought leave to appeal the motions judge’s decision on the first two issues to the Divisional Court. Leave was denied on December 9th, 2021. The matter then returned to the motions judge and further written submissions were provided on the issue of the removal of counsel.
[21] On November 7th, 2023, the motions judge released reasons dismissing the Appellants’ motion to have the Preszler Law Firm removed as counsel of record. The Appellants sought leave to appeal to this Court, and leave was granted on March 8th, 2024.
The Positions of the Parties
[22] The Appellants argue that the motions judge failed to properly consider the obvious conflict of interest that existed or the effect that conflict would have on the fairness of the proceeding or the overall integrity of the judicial system. In particular, the Appellants point to the vulnerability of the Plaintiff as a person under disability and argues that this was a factor that the motions judge did not consider. More generally, the Appellants argue that the motions judge did not consider all the factors set out in Essa (Township) v. Guergis (1993), 1993 8756 (ON SCDC), 15 O.R. (3d) 573 (Div. Ct.).
[23] The Respondent argues that the motions judge properly considered the guiding legal tests, and particularly the principles set out in Guergis. The Respondent also argues that there was no legal error in the motions judge’s decision that would justify this Court reversing it. The Respondent also points out that the motions judge’s decision is an exercise in discretion and that this Court should not lightly interfere with that exercise.
Standard of Review
[24] The parties were in agreement on the standard of review. The standard of review is described by the Court of Appeal in Ontario v. Chartis Insurance Co. of Canada, 2017 ONCA 59, 62 C.C.L.I. (5th) 173. At para. 57, the Court stated:
[57] The Divisional Court properly identified a disqualification motion as being discretionary in nature. Such a decision is reversible where the court has misdirected itself, has come to a decision that is so clearly wrong that it amounts to an injustice, or where the court gives no or insufficient weight to relevant considerations…. [Citation omitted.]
[25] This Court can only overturn the motions judge’s decision if there is a reviewable error. In my view, there are three related areas where there were errors that justify this Court’s intervention:
a) The motions judge was misdirected on the issue of whether there was a conflict in this case, and the significance of that conflict.
b) The motions judge did not sufficiently consider the fact that the Respondent is a party under disability.
c) When considering the factors under Guergis, the motions judge gave unwarranted weight to the prematurity argument.
[26] In coming to these conclusions, I recognize that the test for removing counsel of record is very high, and that removal motions should only be granted in the rarest of cases: Best v. Cox, 2013 ONCA 695 (Feldman J.A. in Chambers), at para. 8. With that principle in mind, I turn to my analysis of each of these points.
The Scope of the Conflict
[27] At para. 17 of his reasons, the motions judge stated:
[17] David E. Preszler has complied with his professional obligations as noted above. By implication, there is agreement of the plaintiff through his litigation guardian to continue with representation by the [Preszler Law Firm]. In those circumstances, I find it unnecessary to order the removal of the law firm as counsel at this point in the proceedings. If and when the situation changes to make the conflict more acutely a genuine, serious risk to counsel’s duty of loyalty in which representation of the plaintiff would be materially and adversely affected by the law firm’s own interest, the defendants may renew their motion.
[28] In my view, this is an error of law for two reasons. First, there is a potentially significant and irreconcilable conflict between the Preszler Law Firm and the position that the Respondent wishes to take in this litigation. Second, the motions judge did not address the issue of the effect on the administration of justice as a whole and it is not apparent from the record that the motions judge took this consideration into account or gave it sufficient weight.
[29] I start with the conflicts issue. Lawyers should not act as witnesses and advocates in the same case where issues of the lawyer’s credibility are engaged: Mazinani v. Bindoo, 2013 ONSC 4744, at para. 60. Similarly, in cases where a lawyer assumes carriage of a matter from another lawyer, completes the matter and then starts a negligence action against the first lawyer, the Courts routinely disqualify the lawyer that took over the file from acting against the original lawyer: 8657181 Canada Inc. v. Mehdi Au LLP, 2021 ONSC 1295, 155 O.R. (3d) 785, at para. 16; Kota v. Raphael, 2003 CarswellOnt 2863 (Gen. Div.).
[30] At para. 8, I have set out the factual conflicts between Jeffrey Preszler’s evidence and the Plaintiff’s claim in this case. Given those conflicts, Jeffrey Preszler could not be counsel in this matter. However, counsel for the Respondent argues that the motions judge addressed this conflict by noting that there had been a change in counsel from Jeffrey Preszler to David E. Preszler. Both lawyers are members of the same law firm. As a result, counsel argues that any issue in respect of Jeffrey E. Preszler being called as a witness was resolved. I disagree. There are cases in which the Court has been concerned about whether a lawyer in the same firm can act where one of their colleagues is going to be a witness.
[31] For example, in Oliver, Derksen, Arkin v. Fulmyk (1995), 1995 11052 (MB CA), 126 D.L.R. (4th) 123 (Man. C.A.), the Manitoba Court of Appeal stated:
[13] An advocate's credibility may be impeached not only where the advocate doubles as a witness, but also where the advocate has a common interest with a witness in the accuracy of that witness's evidence. This may occur where the witness is a partner or associate of the law firm to which the advocate belongs and the other lawyer's evidence concerns a matter arising from the law firm's practice. The advocate then has an interest in the court accepting the lawyer's evidence as its rejection reflects on all members of the firm.
[14] Similarly, the questioned conduct or judgment which bars a lawyer from acting as an advocate may be not the lawyer's own conduct or judgment, but that of another member of the advocate's law firm. But, here again, the advocate is only barred where the questioned conduct or judgment of the other lawyer occurred in that lawyer's capacity as a member of the firm.
[32] These same principles were adopted in Beacon Hill Service (2000) Ltd. v. Esso Petroleum Canada, 2011 ABQB 138, 512 A.R. 212, at para. 15, aff’d 2012 ABCA 269, 536 A.R. 221. In this case, Mr. Jeffrey Preszler’s credibility will be “on the line”. In presenting the case, Mr. David E. Preszler will have to advance the Respondent’s interests in the face of evidence from another member of his firm that may very well not be helpful to the Plaintiff’s position. That problem alone justifies the removal of the Preszler law firm at this point.
[33] The second error is that the motions judge confined himself to the question of whether the conflicts issue was sufficiently addressed by David E. Preszler’s identification of the potential conflict and the communication of that conflict to the litigation guardian. Counsel for the Appellants argued that the evidence was not sufficient to demonstrate a waiver of the conflict. For the purposes of this analysis, I assume (without deciding) that there was a waiver of the conflict by the litigation guardian.
[34] In my view, the motions judge erred by not considering the effect of the Preszler Law Firm continuing to act on the administration of justice as a whole. As the Supreme Court noted in MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 S.C.R. 1235, the Courts are required to balance the integrity of the justice system and the right of a litigant to their choice of counsel. Even if the Respondent’s litigation guardian waived this conflict, the Court still has a superintending jurisdiction. Given the conflict that exists and the centrality of Mr. Jeffrey Preszler’s evidence to this case, that omission was also an error of law.
The Respondent is a Party Under Disability
[35] This issue is related to the first point in respect of the scope of the conflict. The Respondent is a party under disability. Counsel for the Appellants argues that, as a result, the litigation guardian should not be permitted to waive the Respondent’s right to independent counsel. In support of this position, counsel directs our attention to the reasoning in Aleksa v. Henley, 2017 ONSC 1117. In that case, the Court determined that the guardian’s waiver was insufficient to eliminate the appearance of a conflict. The underlying basis for this approach can be found in the caselaw under r. 7.05 of the Rules of Civil Procedure. That case-law reflects the need to protect parties under a disability from other people, including unscrupulous representatives and family and friends who mistakenly believe that they are acting in the best interests of the person under disability: see, for example, Weidenfield v. Ontario (Education) (2007), 53 C.P.C. (6th) 97 (Ont. S.C.).
[36] On a removal motion such as this, the fact that a party is under a disability is a factor that the Court must turn its mind to in determining whether counsel should be removed. The Court’s parens patriae jurisdiction requires the Court to protect the interests of persons under disability in situations where the Court would not be required to protect the interests of a regular litigant. Decisions in respect of people under a disability must be considered through the lens of their best interest. Parties under disability are different from the usual litigants, where a waiver of counsel may be more persuasive.
[37] The Respondent argues that the motions judge turned his mind to the fact that there was a litigation guardian in this case and, as a result, turned his mind to whether that was a reason to remove counsel from the record. I disagree. At paragraph 27, I have reproduced the motions judge’s key reasoning for his disposition of the conflicts issue. It is clear from that paragraph that the motions judge viewed the fact that independent legal advice had been suggested was, on its own, sufficient grounds for dismissing the removal motion, which was clearly not the case. It is not apparent from the record that the motions judge considered or gave sufficient weight to the special protections given to parties under a disability in removal motions. In these circumstances, the decision must be set aside.
The Factors Under Guergis
[38] The Divisional Court’s decision in Guergis, at p. 583, lists a series of factors that the Court should consider in determining whether to grant a motion to remove counsel from the record.
[39] On this appeal, I am not re-weighing these factors. However, there are two fundamental problems with the way that the motions judge addressed these factors. First, in his reasons, the motions judge relied heavily on a passage from Guergis, at pp. 582-3, that states “I do not accept the argument that when a lawyer is compelled to testify against the ‘other’ side in a lawsuit the lawyer’s firm must always be prevented from acting in the lawsuit.” While I accept that as a statement of law, the problem in this case is that there is a substantial risk that Mr. Jeffrey Preszler is going to end up giving evidence against the Respondent. Certainly, his April 6th, 2016, Affidavit will be used to support the Appellant’s case. That problem engages all the issues that I discussed in the section on the scope of the conflict.
[40] Second, in his decision, the motions judge noted that it was premature to remove the Preszler Law Firm from the record at this point. He stated:
[22] In this case, discoveries have not yet been conducted. It may be that concessions or admissions will be made by the plaintiff, or that for other reasons the defendants will deem it unnecessary to call Jeffrey Preszler as a witness. The issue of counsel as witness would become moot.
[41] In my view, this conclusion was a reversible error for two reasons. First, in argument, counsel for the Respondent was asked whether there were any concessions that could be made that would obviate the need to have Mr. Preszler testify in this matter. Counsel advised that there was the possibility of expert evidence on the standard of care that might very well make it unnecessary for Mr. Jeffrey Preszler to testify. However, even if expert evidence is provided on the standard of care, Mr. Preszler will still have to testify about the decisions he made and the advice he gave.
[42] Second, in concluding that the request for removal was premature, there is no indication that the motions judge considered the case-law that says that, if there is more than a real likelihood that a lawyer will be called as a witness, an early decision on disqualification is preferred because determining the issue later in the proceeding has a greater likelihood of an adverse effect on the party whose lawyer is removed: Karas v. Ontario, 2011 ONSC 5181.
[43] The reasoning that the motions judge relied on from Guergis has been considered in George S. Szeto Investments Ltd. (c.o.b. Ruby King) v. Ott, 2006 9307 (Ont. S.C.). In that decision, Master Beaudoin (as he then was) stated:
[11] This matter has not progressed beyond the pleadings stage. Plaintiffs’ counsel nevertheless maintains that these proceedings commenced as early as January 1999 when the CCRA first initiated an audit of the Plaintiffs. There are those cases that suggest that a motion to remove a solicitor should be made at an early stage of the proceedings so as to allow the Plaintiff to retain new counsel without difficulty and to minimize the financial impact on the Plaintiff. (Khataan v. Kozman (c.o.b. College Medical Group), [1997] O.J. No 3104 at para. 8 (Ont. Ct. Gen. Div.); Ottawa Triple “A” Management Ltd. v. Ottawa (City), [1998] O.J. No. 891 at para. 8 (Ont. Ct. Gen. Div.), Breslin v. Breslin [2003] O.J. No. 5207 (S.C.J.)).
[12] Another line of cases suggest that the application to remove should be deferred to the trial judge who is in the best position to determine if a firm should be disqualified. (Essa (Township) v. Guergis; Membery v. Hill (supra); Zesta Engineering v. Cloutier, [2000] O.J. No. 2893, para. 11 (S.C.J.); International Business Machines Corp. v. Printech Ribbons Inc. (T.D.), 1993 3013 (FC), [1994] 1 F.C. 692, paras. 38-40 (Trial Division)).
[13] In my view, the apparent conflict between these lines of cases is easily resolved by examining when the court can conclude that there is more than real likelihood that the solicitor will be called as witness. If there is some doubt, “merely a potential”, the courts have been more generous in allowing counsel to remain on the record and deferring the matter until after discoveries or leaving the matter to the trial judge. Where the court is satisfied on the record before it that the counsel will be called as a witness, the decisions favour an early determination of the issue.
[44] In my view, the law is clear that the determination to remove counsel is made when there is more than a real likelihood that the lawyer will be called as a witness, regardless of what stage in the litigation process the parties are at. For the reasons set out above, I am of the view that there is more than a real likelihood that Mr. Jeffrey Preszler will be called as a witness in this matter.
Conclusion and Costs
[45] For the foregoing reasons, I would grant the appeal, set aside the decision of the motions judge and order that David E. Preszler be removed as counsel of record for this matter.
[46] Given the appeal’s outcome and taking into account counsel’s costs submissions, costs are awarded to the Appellants as follows:
a) Costs of the leave to appeal motion in the sum of $5,000 all inclusive.
b) Costs of the appeal in the sum of $9,000 all inclusive.
c) The costs award to the Respondent in the motion below of $7,726.40 is set aside and replaced with an award of $6,000 all inclusive to the Appellants.
[47] These amounts are payable by the Respondent within 30 days of today’s date.
LeMay J.
I agree _______________________________
Lococo J.
I agree _______________________________
Shore J.
Released: March 19, 2025
CITATION: Van Every (Litigation guardian of) v. Findlay, 2025 ONSC 757
DIVISIONAL COURT FILE NO.: 265/24
DATE: 20250319
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Lococo, LeMay and Shore JJ.
BETWEEN:
Jarrod Seth Van Every by his Litigation Guardian, Andrew Stastny
Plaintiff
-and-
D. Robert Findlay and Findlay Personal Injury Lawyers
Defendants
REASONS FOR JUDGMENT
LeMay J.
Released: March 19, 2025