COURT FILE NO.: 05-005/12

DATE: 20120711

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Vito Lisi, Applicant

AND

Stella Lisi, Respondent

BEFORE: Madam Justice Darla A. Wilson

COUNSEL: Eugene Zalucky, Counsel for the Applicant

Charles B. Wagner, Counsel for the Respondent

HEARD: July 9, 2012

ENDORSEMENT

[1] The Respondent brings this motion for an order removing Mitchell, Bardyn & Zalucky LLP [“MBZ”] as solicitors of record for the Applicant. In support of the motion, the affidavit of the Respondent sworn May 24, 2012 is relied upon. MBZ opposes the motion and relies on the affidavit of Stefan Bojeczko sworn July 3, 2012.

Background

[2] The Notice of Application in this matter was issued January 20, 2012 requesting the Respondent provide an accounting of her dealings with a property located at 207 Edenbridge Drive in Toronto while she was acting under Power of Attorney commencing in 1995.

[3] The parties are brother and sister and are the children of the late Marta Lisi [“the deceased”] who died January 25, 2010. The parties were co-executors under the will of the deceased dated February 1995. The will stipulated that the residue of the estate of their mother was to be split between the children.

[4] The Respondent takes the position that there were no assets of the deceased’s estate and that the house was transferred into her name in 2001 and does not form part of the estate. A Power of Attorney was executed in favour of the Respondent by the deceased in 1995.

[5] It is not disputed that in August of 2005, the Respondent arranged for a mortgage in the sum of $222,758.00 to be registered against the property.

[6] The Applicant takes the position that the transfer of the home to the Respondent was not valid and the house forms part of the estate and is subject to the provisions of her will.

[7] The Applicant retained MBZ in 2010. Correspondence was sent to the Respondent in March 2011. She retained solicitor Mostyn in June 2011 and changed counsel to Tibollo and Associates in October 2011. Both of these counsel had discussions with Mr. Bojeczko concerning the file. Subsequent to the issuance of the within application, there were negotiations between MBZ and Tibollo and Associates which resulted in the consent Order which gave directions issued by Justice Belobaba on March 29, 2012. The Belobaba order set out various time lines for the action and made orders concerning productions. Specifically, paragraph 17 of this order required the Respondent to deliver any and all documentation pertaining to the transfer of the house and to provide particulars of other assets of the deceased.

[8] In May of 2012, the Respondent changed solicitors and retained her present counsel. Mr. Wagner wrote to counsel for the Applicant on May 18, 2012 advising that MBZ had previously acted for the Respondent on a mortgage on the property and that Mr. Bojeczko was in a conflict of interest and could no longer act. Mr. Wagner asked whether MBZ would be getting off the record or alternatively, requested dates for a motion for removal of the firm as solicitor of record for the Applicant.

[9] After receiving that letter, Mr. Bojeczko wrote to Mr. Wagner confirming no information had been leaked or accessed as a result of the prior retainer.

Positions of the Parties

Respondent

[10] Mr. Wagner submits that his client has never agreed to waive the conflict of interest and she is concerned that confidential financial information she provided to MZB for the mortgage in 2005 will be divulged during this litigation. He submitted that allowing MZB to continue on acting for the Applicant in these circumstances brings the administration of justice into disrepute. Even if there is no evidence that any of the information provided by the Respondent to her counsel in 2005 has been accessed or will be in the future, it is sufficient that it might be. Mr. Wagner submitted that the cases are clear that because it is often impossible to prove that there has been a breach of the confidentiality of the information given by a client to their lawyer, it is sufficient to prove that there is a risk that this might occur.

Applicant

[11] Mr. Zalucky points out that for fourteen months, neither the Respondent nor her counsel raised the issue of conflict of interest with the MZB firm. Further, the affidavit of Mr. Bojeczko makes it clear that there has been no sharing of information from the prior retainer and that the necessary steps have been taken to ensure it will not occur in the future. Finally, it is submitted that the issues in the within application are discrete from any information that MZB might have acquired from the Respondent about the mortgage.

Analysis

[12] It is trite law to state that confidential information that is imparted by a client to a solicitor must be guarded with the utmost care. The relationship between a lawyer and his or her client must be such that the client has no worries about disseminaton of information that is communicated to counsel. One of the leading cases on the law of confidential information between a solicitor and client is MacDonald Estate v. Martin[^1]. In that case Justice Sopinka stated:

Is the “probability of mischief” standard sufficiently high to satisfy the public requirement that there be an appearance of justice? In my opinion, it is not…I am, however, driven to the conclusion that the public, and indeed lawyers and judges have found that standard wanting. In dealing with the question of the use of confidential information we are dealing with a matter that is usually not susceptible of proof. As pointed out by Fletcher Moulton L.J. in Rakusen, “that is a thing which you cannot prove”, I would add “or disprove”. If it were otherwise, then no doubt the public would be satisfied upon proof that no prejudice would be occasioned. Since, however, it is not susceptible of proof, the test must be such that the public represented by the reasonably informed person would be satisfied that no use of confidential information would occur. That, in my opinion, is the overriding policy that applies and must inform the court in answering the question: Is there a disqualifying conflict of interest?

[13] Courts in dealing with motions to remove solicitors from the record due to prior dealings with a party must balance the need for a litigant to be able to have confidence that what is conveyed to his or her counsel will remain confident with the concern that a litigant ought not to be deprived of counsel without good cause. As part of the analysis, necessarily the Court must be concerned with the integrity for the justice system.

[14] In the case at hand, the affidavit of Stella Lisi affirmed May 24, 2012 is four paragraphs in length and simply says that MBZ acted for her on a mortgage and now represents the Applicant. It fails to specify when the prior retainer was, who the solicitor was or any specifics about the retainer. It goes on to state that she is concerned since MBZ “knows my personal financial matters” and she worries that her brother will use that against her to apply pressure in the current litigation. No particulars are provided about the nature of the financial information that was imparted to MBZ in 2005 or how that information could be used against her in the lawsuit. In my view, instead of providing details about information given to the lawyer who handled the mortgage back in 2005, the affidavit is remarkable for the information it fails to provide. The affidavit, in my opinion, consists of a few bald statements with no facts to support them.

[15] The affidavit of Mr. Bojeczko deposes that he has never had access to Ms. Lisi’s files and he has no information about the Respondent as a result of her prior retainer of the firm. In fact, the predecessor to Mr. Bojeczko on the file learned about the mortgage by doing a search, not through any other means.

[16] In MacDonald, supra, Sopinka J. sets out a two part test to determine whether a disqualifying conflict of interest exists: did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand? And is there a risk that it will be used to the prejudice of the client?

[17] While I am aware that the burden to be discharged once the prior relationship has been established is a heavy one, I have no difficulty in concluding the answer to the first question as set out in MacDonald, supra, must be answered in the negative. The record before me makes it clear that no information has been imparted. Furthermore, but also there is nothing to indicate any of the information that might have been provided by the Respondent to MZB when she was securing the mortgage would be relevant to the estate issues in this Application.

[18] The delay of the Respondent in advising the solicitor for the Applicant of her objection to his continued representation of the Applicant is of concern to me. While Ms. Lisi deposes “I have always objected to MBZ’s role”, there is no evidence to support this statement, nor is any explanation provided for the failure of her prior two counsel to raise this issue early on in these proceedings. The position of Vito Lisi about the house was clearly articulated to the Respondent and her counselquite some time ago and has not changed. There is nothing in the record before me to suggest that prior to Mr. Wagner’s letter of May 18, 2012, the Respondent had informed the Applicant and his counsel of her opposition to the MBZ firm acting for Vito Lisi due to their prior retainer for Stella Lisi. If the Respondent were “concerned” about this issue, one would have expected her to have voiced it early on.

[19] Perhaps her failure to do so could be explained by lack of knowledge of the law if she continued to act on her own behalf. However, Ms. Lisi retained two lawyers after being notified of her brother’s opposition to her continued ownership of the home of their mother. Neither solicitor raised the issue of conflict of interest of the law firm until quite recently when Mr. Wagner was retained.

[20] It is significant that the order of Justice Belobaba in March 2012 which provided timelines for the steps in this lawsuit and made production orders was obtained on a consent basis while the Resp had legal representation. Why would the Respondent agree to the terms of that order, negotiating with the solicitor from MBZ who was acting for the Applicant, when she took the position that it was improper for the firm to act for Vito Lisi given that the firm had acted for her on a mortgage on the property a number of years ago? If she had any concern about confidential information she passed on to the lawyer who handled the mortgage being used in this lawsuit, that certainly would have been the time to raise the issue with counsel and she did not. Her affidavit makes absolutely no reference to the 14 month period of time when the negotiations were ongoing between her counsel and MBZ and provides no explanation for her failure to raise the issue of conflict during this time frame.

[21] There is no indication in Ms. Lisi’s affidavit as to the nature of information about her financial affairs that was communicated to the lawyer at MBZ handling the mortgage so it is impossible to speculate on how it could be used “against” her in the current litigation. The fact that she placed a mortgage in the sum of $222,758.00 on her mother’s home in 2005 is a matter of public record. The application that is currently before the court disputes the Respondent’s position that the house is hers and does not form part of the estate.

[22] I agree with the submission of counsel for the Applicant that the issues in the application have nothing to do with the retainer of MBZ in 2005 to put the mortgage on the house, apart from the fact that it is the same house and one of the central issues to be determined is whether it is owned by the Respondent or forms part of the estate. In the absence of any details, it is difficult to conceive of how information that the Respondent may have communicated to MBZ in 2005 about her “financial situation” would be of any particular importance to the issues in the estate litigation. Mr. Wagner, in his submissions, argued that his client would be asked about how she spent the money that was obtained from the mortgage. It would be surprising if information of this type would be contained in a file from a solicitor doing a mortgage, but even if it were, it would not be relevant to the issues arising in the estate litigation. The essence of the within application arises from the will of the deceased, how the Respondent became the sole owner of the house and whether it properly forms part of the deceased’s estate.

[23] Finally, in determining whether the apparent conflict of interest is one that justifies removal of a counsel as solicitor of record, the court must weigh the interests of the parties. In this case, there is no explanation offered in the affidavit of the Respondent for the delay in raising the issue of the appropriateness of MBZ acting for the Applicant. On the other hand, there is evidence that the Applicant is a man of limited means and MBZ has acted for him for approximately eighteen months, and invested more than 60 hours of time. If MBZ were removed as counsel for the Applicant, it would place Mr. Lisi in the unenviable position of having to secure new counsel who would have to become acquainted with the file and be in a position to adhere to the timelines set out in the order of Belobaba J. In my view, on the facts of this case, that is unfair to the Applicant. There is nothing in permitting MBZ to continue on as counsel of record for the Applicant that brings the integrity of our justice system into disrepute.

Conclusion

[24] The Respondent’s motion to remove the law firm of MBZ as counsel of record for the Applicant is dismissed. In accordance with the agreement of counsel, costs of the motion are reserved to the trial judge.

D.A. Wilson J.

Date: 20120711

[^1]: MacDonald Estate v. Martin (1990), 1990 32 (SCC), 77 D.L.R.(4th) 249(S.C.C.)