SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 12-CV-44581
MOTION HEARD: November 23, 2012
RE: 12-CV-44581
Drash v. Micom Technologies Ltd.
BEFORE: Master Joan Haberman
COUNSEL:
Pagliaroli, T.A. for the moving party
Samfiru, L. for the responding party
REASONS
Master Haberman:
Introduction
1This matter came before me in the context of two motions:
The plaintiff’s motion to amend his Reply; and
The defendant’s motion for a declaration that the plaintiff has waived solicitor-client privilege with respect to legal advice obtained prior to or at the time he entered into the employment contact in issue.
2The plaintiff’s motion was dealt with first, as the outcome of the defendant’s motion in large part depended on how the plaintiff’s motion was resolved.
3Both motions arose in the context of an action for alleged wrongful termination. Drash was employed by the defendant from October 31, 2011 until February 6, 2012 – a period of just over three months. He claims that at the time of his termination, he held a senior management position as VP Marketing, and was earning a base annual salary of $107,500. In addition, he alleges that he was enrolled in a comprehensive benefits plan and that he was entitled to a non-discretionary guaranteed annual bonus.
4Drash’s employment was terminated, according to him, without notice. He claims he was paid the equivalent of one week’s base salary in lieu of notice and that some but not all of his benefits were continued.
5Notwithstanding the short duration of his employment with Mircom, Drash claims he is entitled to a minimum of 6 months’ pay in lieu of notice, as well as his benefits and 3/5 of his $10,000 bonus. It is not clear how he arrives at the numbers with respect to any aspect of his damage claim.
6What is clear is that Drash has a history of being a plaintiff in wrongful termination suits. This is, at least, his 7 th such suit. I will return to this.
7The case appears to turn, in part, on the construction of a clause in Drash’s contract of employment. He expressly pleads that is was an express or implied term of his contract that he could only be terminated upon provision of reasonable notice, or pay in lieu thereof, or for just cause.
8There is, in fact, an express term in the contract that deals with termination. Having relied on it, however, Drash then claims that the clause is invalid as it is ambiguous. Later on, he claims that the clause cannot be enforced as there was no consideration for it. This is a classic case of “sucking and blowing”. Why would a party seek to undermine the validity of a clause he seeks to rely on? As the statement of claim is not consistent within itself, it is not at all clear what it is that Drash means to say in this pleading. Drash does not plead ambiguity of the clause in the alternative to his reliance on it.
9Though he, himself, relies on the express provision in the agreement dealing with termination, Drash goes on to allege that the defendant attempted to rely on this termination clause as the basis for what they paid him. It reads as follows:
...during your initial year of service, Mircom will provide you with the notice of termination of your employment or payment in lieu of notice which complies with the standard required by the various Provincial, State and Federal Employment Standard Act.
10Drash takes the position that the above clause is wholly ambiguous , as it does not identify the various statutes in play. He claims that unless it stipulates the precise statute or combination of statutes that define his entitlement, it has no application. I note, again, that this happens to be Drash’s 7 th suit for wrongful dismissal.
11Drash alleges that if the court finds that the parties’ intention was to stipulate that Ontario Employment Standards Act 2009 applies, that statute provides for a payment of a base minimum rather than setting out a cap on his entitlement. Drash claims that it also does not oust the application of his common law right to reasonable notice.
12Despite the obvious inconsistency in the pleading, Drash, himself, clearly raises the issue of pre-contractual negations in his statement of claim. He asserts that he advised the defendant that the termination clause might be susceptible to attack and that he had actually proposed alternative wording which they rejected.
13This is what he pleads at paragraph 17 of his statement of claim:
Philip (Drash) states that, while negotiating his employment terms, he advised the Defendants that the termination clause may be susceptible to attack by way of a claim for wrongful dismissal. Instead, Philip proposed alternative and less ambiguous termination terms. The Defendants rejected Philip’s proposal.
14Thus, the issue of pre-contractual negotiations regarding the meaning of the termination clause in the contract was initially imported into this action by Drash in his statement of claim. It was Drash who asserted that he took issue with it from the start and that he also tried to negotiate something he felt worked better. He concludes by making it clear that his efforts in that regard failed. Nonetheless, he entered into this contract, though aware that the clause did not necessarily accomplish what he wanted.
15Having identified the shortcomings of the clause as he perceived them, Drash obviously put his mind to two things: 1) what he wanted to see in the way of termination benefits and 2) what Mircom intended the clause to mean.
16Drash goes on to assert in his pleading that as a result of what occurred above, there is nothing in the agreement that limits his common law rights to reasonable notice, which he claims would far exceed the one week’s salary he was paid.
17By way of defence, Mircom relies on the employment agreement, made on October 20, 2011, which was prior to Drash coming on board, and they state that the one week’s notice paid complied with the terms of that agreement as per this termination clause.
18In that Drash raised the issue of pre-contractual negotiations, Mircom responded in kind. They state that Drash approached them in response to an advertised job posting for VP, Marketing on August 26, 2012. At that time, he was unemployed.
19Mircom also states that Drash was told that the advertised position was somewhat experimental as they were in the process of redeveloping their business, so that flexibility, patience and the ability to work cooperatively with other senior management was going to be needed as the company’s marketing strategy evolved.
20After an introductory meeting that took place on September 1, 2011, Mircom asserts that Drash aggressively pursued the position and it was offered to him on September 19, 2011.
21Before the parties could agree on terms, however, Drash asked for an electronic copy of the offer, so that he could send it to his lawyer for review and comment. A copy was provided as requested.
22At paragraph 15 of the statement of defence, Mircom states:
Thereafter, Drash tried vigorously to negotiate the terms of the offer, with the assistance and advice of his lawyer.
23At paragraph 16, Mircom adds:
Indeed, at all material times, Drash was assisted and advised by independent legal counsel.
24It seems these negotiations did not go smoothly and were terminated my Mircom at one stage. This is why: Mircom denies that Drash proposed a less ambiguous termination clause and state that in fact, he actually sought more pay in lieu of notice in the event of termination during the first year of employment. He was repeatedly told that what he suggested was not acceptable. They plead the actual alternative clause that he proposed.
25Drash was told on September 27, 2011 that as the parties were too far apart in their discussions, Mircom was disengaging from the negotiation. Drash, however, came back. On being told that his position regarding a revised termination clause providing for a higher payment in the event of termination first year was a deal-breaker, Drash accepted what was on the table and the agreement was signed on October 20, 2011.
26Mircom states that, in view of these discussions, they relied on Drash’s good faith in signing the agreement, fully cognizant of their position.
27In view of how these negotiations proceeded and the end result, the fact that Drash had legal advice throughout these discussions is critical to Mircom’s defence.
28In terms of remuneration, Mircom states that the agreement made it clear that the bonus was not guaranteed. Rather, it was tied to performance targets and payable “on the assumption of continued employment.”
29Despite all of the references to pre-contractual discussions in both sets of pleadings, the contract contains an “entire agreement” clause. Further, the agreement also contained a provision to the effect that compensation paid on termination as per the termination clause:
...will be in complete satisfaction of all common law and statutory obligations regarding notice of termination and any applicable severance allowance.
30Mircom alleges that not only did Drash have the benefit of independent legal advice throughout these extended negotiations, the agreement they signed actually reflects the fact that he was told to obtain same and that he was given time to do so:
It is also a condition of this offer that you acknowledge that you have been given full opportunity to have independent legal review of this offer and we strongly encourage you to have your lawyer review these terms and conditions.
31Accordingly, Mircom takes the position that to the extent that there is any ambiguity in the clause, which they deny, Drash had the opportunity and took advantage of that opportunity to seek legal advice. Having done so, he then entered into the agreement of his own free will, such that any presumption against Micom as the drafter of an allegedly ambiguous clause was displaced. The fact that Drash, himself, says he pointed out this alleged ambiguity to Mircom, that he tried to negotiate a change to the clause, yet signed on though no changes were made only underscores this point.
32Drash did not challenge the statement of defence. If, in his view, the reference to his having been advised and assisted by counsel was not relevant, he could have moved to strike this from the pleading. Instead, he simply delivered a Reply.
33It is the Reply that led to this motion. In it, Drash effectively denies all aspects of the statement of the defence.
34The two motions before the court turn on a few paragraphs in this pleading and I will focus on them.
35In paragraph 7, Drash states that:
... while he obtained legal advice with respect to the Defendant’s proposed termination clause, he was advised that the clause did not have the legal effect of limiting or revoking Philip’s Common Law rights and entitlement and, instead, the clause was ambiguous and did not allow one to determine what Philip’s termination entitlements would be, in the event that he was let go on a without cause basis. Philip was advised to seek a redrafting of the termination clause which would provide certainty to both parties. While Philip attempted to do just that, the Defendant refused to correct the deficiencies in its termination clause.
36In paragraph 8, Drash goes even further:
Subsequently, both parties negotiated mutually acceptable terms with respect to the other items outlined in the Employment Offer, with Philip’s full belief and understanding that the included termination clause, while ambiguous, did not have the effect of limiting his termination entitlement.
37Stopping there for a moment, what Drash is saying here is as follows:
He knew what he wanted the clause to say;
He knew how far Mircom was prepared to go and that it was not as far as he wished;
Despite that, he relied on legal advice to the effect that he needn’t worry about it, as Mircom was wrong about what their clause would achieve and he could still have things go his way in the event of termination;
He therefore signed this agreement on the basis of legal advice to the effect that the clause would have minimal impact if he was terminated within the first year. He did this, knowing that his view regarding the impact of the clause did not accord with Mircom’s.
38In paragraph 10, Drash claims that he was not required to educate Mircom with respect to the specific shortcoming his counsel identified in the Defendant’s severance clause.
39In paragraph 11, Drash claims that the dialogue between the parties that preceded the signing of the contract was not inconsistent with the fact that he:
... did in fact consult with legal counsel and because of this consultation (rather than in spite of it) wholly relied upon his counsel’s interpretation of the severance clause...
40Drash makes his point very clearly. He alleges that he got legal advice and because of what his lawyer told him about what he perceived to be ambiguities in the clause, he entered the contract, assuming it would not bind him or limit his recovery.
41The lawyer that Drash consulted throughout is the very same counsel who now represents him in this action and who represents him in at least two other wrongful termination actions currently before the court.
PLAINTIFF’S MOTION TO AMEND HIS REPLY
Plaintiff's Motion to Amend His Reply
42Drash now moves to delete various paragraphs or potions thereof from his Reply. Mircom does not oppose his proposal to delete paragraph 3 in its entirely and to amend paragraph 4, so leave is granted to amend the Reply as proposed in so far as those paragraphs.
43The focus of the debate is on paragraphs 7, 10 and 11. In the current version of the Reply, Drash makes it clear that he:
obtained legal advice to the effect that the termination clause was ambiguous and therefore would not limited his entitlement in the event of termination without cause;
that he brought his lawyer’s views to the attention of Mircom, seeking a clearer version of the termination clause but that they refused to change it;
that, relying wholly on his lawyer’s interpretation of that clause, he entered the agreement, knowing that Mircom did not share his views as to whether the clause effectively limited his damages.
44The revised Reply proposes to change the three paragraphs in issue to wholly remove any reference to Drash having received or having acted on the basis of legal advice.
45In paragraph 7, Drash proposes to simply state that that it was never his understanding that the clause had the effect of limiting or removing Philip’s Common Law rights and entitlement but only that the clause was ambiguous. He now seeks to delete all reference as to how he came to this understanding.
46Still in paragraph 7, Drash wants to change the reference to his having attempted redrafting of the clause to his having simply sought one. Mircom has already pleaded in its defence the clause that was provided to them in the course of these negotiations, a clause that was, no doubt, drafted by counsel.
47In paragraph 10, Drash seeks to delete the final words of that paragraph, dealing with the alleged shortcoming in the termination clause, so that the words (that) his counsel identified in the Defendant’s severance clause would be removed from the pleading .
48Finally, in paragraph 11, in the context of referring to the parties’ negotiations, Drash now wants to delete his claim that that he wholly relied on his counsel’s interpretation of the clause.
49Mircom’s position is that this is not a simple motion to amend a pleading pursuant to Rule 26.01 . Rather, it is an attempt to withdraw admissions regarding the receipt of and reliance on legal advice which Drash obtained as to the meaning of the termination clause. They say the fact that Drash relied on his lawyer’s advice to the effect that the clause was ambiguous and therefore could not be enforced against him when he signed the contract constitutes an admission against interest, so that he can only delete these references if he obtains leave of the court. They assert that he has not met or, for the most part, attempted to meet the stringent test that applies in that regard.
Drash’s position and evidence
Drash's Position and Evidence
50Drash approaches the motion as though it were straightforward application of Rule 26.01 which dictates that the relief sought must be granted, as long as what is proposed is tenable at law and consistent with the rules of pleading.
51The motion is supported by a very short affidavit sworn by Drash. After setting out the chronology of events, he says very little about why he seeks these amendments, the thrust of his motivation located at paragraph 7 of the affidavit. He states:
I seek to amend the Reply because certain information contained in the Reply does not accurately reflect the facts. ...Secondly, I did not make any decision in reliance on comments made to me by Mr. Samfiru with respect to my contract of employment with the Defendant. The amended Reply deletes any suggestion to the contrary.
52That is the sum total of the evidence that Drash provides regarding what appears to be a major shift from his original position. In fact, what Drash now says is the polar opposite to what he pleaded. While in his Reply, Drash claims that because of this consultation (rather than in spite of it) [he] wholly relied upon his counsel’s interpretation of the severance clause... he now swears in an affidavit that he did not make any decision in reliance on what Mr. Samfiru told him. Yet, he clearly respects the views of this counsel, with whom we know he consulted before suit was commenced, as Mr. Samfiru is the very man retained to initiate this law suit.
53What is even odder is that, in his factum, Drash provides a very different explanation for his proposed amendments. There, he states that by making these amendments , he does not seek to deny the truth of the statement being struck , but rather, to remove information that is not relevant.
54As Mircom has pleaded the fact that Drash was at all times assisted and advised by legal counsel, and relies on that to question his good faith in signing on with them, I am hard pressed to see how these references in Drash’s own pleading can be irrelevant.
55Further, Drash’s evidence as reflected by his affidavit does precisely what his factum denies – by making these amendments, Drash has sworn that, in fact, he does seek to deny what he had stated previously. Having first claimed that he received and relied on legal advice, he now claims that he didn’t rely on any legal advice and that is why he wants to amend his pleading – to make it factually accurate.
56There is an inconsistency between Drash’s evidence and his factum. Either he seeks to amend his Reply to delete all reference to his reliance on legal advice as that is not accurate, or he seeks to amend as that fact is not relevant. There is a world of difference between this fact being irrelevant and it being inaccurate.
57In view of this obvious inconsistency, the court is left to work out for itself why this amendment was sought and why it was sought at this time. The inconsistency between the evidence and the argument raises considerable doubt as to the accuracy of either version as motivation for this manoeuvre. At the end of the day, however, the court operates on the basis of evidence. The only explanation I can readily accept from Drash for what he is trying to do is what he has sworn to, and even then, I am required to weigh that evidence.
Mircom’s evidence and their position
Mircom's Evidence and Their Position
58Mircom filed a responding affidavit from Mark Falbo, the company president. The purpose of his evidence was to challenge Drash’s sworn statement as to why he seeks to amend the Reply – to the effect that it does not accurately reflect his position, as he now wants to claim that he did not rely on legal advice.
59Falbo takes the court through the e-mail exchange Mircom had with Drash to show that Drash’s evidence is not credible.
60On September 17, 2011, Drash wrote to Falbo with his thoughts about the offer. He clearly had a lot to say. Despite that, it was clear that he was planning to run the offer by his counsel. He states:
I should be able to provide my lawyer’s feedback on Wednesday.
61Drash wrote again on September 19, 20122, to advise that he had reviewed the offer extensively and have now forwarded it to my lawyer for his comments.
62On September 25, 2011, Drash sent Falbo a very detailed 2-page fax, setting out his comments regarding a number of provisions in the offer. Drash comes across as brash and confident in his negotiations. He appears to take issue with several aspects of the offer, and tries to negotiate a better position for himself with respect to several key components of what he was sent.
63Drash then devotes the better part of a page to the issue of “risk” which he subtitles Pay in lieu of Notice and Job Security. In this passage, he includes the following:
First, given that you raised concerns over potential Wallace damages , I’ll share with you my lawyer’s feedback. Apparently, ANY company can be sued for bad faith (Wallace) or tort damages, regardless of whether or not the employment contract used limited notice exclusively to the provisions of the Employment Standards Act.
64Drash then refers to the revised offer he enclosed, and he refers to his rewording of the termination clause that he proposes.
65It is clear from the above that Drash certainly obtained legal advice and that he took his time reviewing all aspects of what was offered. He therefore appears to have known or ought to have precisely what he was getting into. His lawyer told him the clause was ambiguous yet he signed the contract anyway. This suggests that he believed, based on the legal advice he received, that this ambiguity could work to his advantage.
66However, the fact that Drash took and relied on legal advice, and was reckless enough to plead that could nullify that advantage. That, Mircom suggests, is one of the reasons these amendments are now being proposed.
67Mircom suggests other reasons, as well. In that the action has been brought under the Simplified Rules, each party must include a schedule “D” list of witnesses in their respective affidavit of documents. On June 4, 2012, Mircom counsel asked that Drash amend his in several respects. One of the noted deficiencies was the failure to disclose the identity of counsel from whom Drash obtained the legal advice he refers to in his pleadings.
68When no response was received, Mircom counsel wrote again on June 13, 2012. Although he responded that Drash no longer had contact information for one group of possible witnesses identified by Mircom counsel, with respect to the other categories, including the identity of counsel who provided the legal advice, this was Mr. Samfiru’s response on June 19, 2012:
With respect to the other materials their relevance can only be assessed at discovery , at which time proper undertakings will be given and, if necessary, an appropriate motion can be pursued.
69This response makes no sense. Relevance is determined by the pleadings and pleadings were closed. Based on the pleadings, the identity of advising counsel was clearly relevant. Mr. Samfiru has also relied of absence of relevance in his factum as a basis for the desire to amend the Reply now, before discoveries. This is not consistent with his position as to when relevance is established (at discoveries, according to him) in his earlier e-mail. This response suggests that Mr. Samfiru was looking for a way to buy time. It also suggests that he and Drash are prepared to say whatever they have to say to get what they want.
70Mircom counsel wrote the same day, asking for all documents relating to the legal advice. Mr. Samfiru responded by e-mail, now saying it was not a question of relevance after all, notwithstanding what he had stated in a fax he had written only a few hours earlier. His new tact was to state that there were no documents anyway so the relevance debate - which he had raised - was academic. He states:
I can advise formally and on the record that there isn’t any documentation, nothing in writing, including no invoice pertaining to that advice. It was simply a brief phone call.
71Mr. Samfiru later confirmed that he knew this to be the case as he was the lawyer who provided the advice. This led to the June 21, 2012 letter from Mircom counsel:
The fact that you were the lawyer advising Mr. Drash at the time he entered into the agreement raises a new and different issue. Mr. Drash has placed the legal advice he received squarely in issue in this action. As the lawyer who provided that legal advice, you are likely to be a witness at trial. In our view, since you cannot be both a witness and advocate for Mr. Drash, you are disqualified as his solicitor of record in this action. Please advice whether you will agree to withdraw as counsel for Mr. Drash. If you refuse, we will also seek an order removing your firm as solicitor of record on our motion.
72On June 22, 2012, the very next day, Mr. Samfiru wrote to say he would be moving to amend the Reply, such that the information that Mircom has been seeking through the previous week would now be irrelevant. Mr. Samfiru goes on to state that he would not be a witness as he has no information or recollection of any discussions I had with Mr. Drash pertaining to the Mircom contract.
73Mr. Samfiru then added that any such information would be privileged in any event. Despite the pleading in the statement of claim as to the alleged ambiguity of the termination clause, Mr. Samfiru continued to take the position in his correspondence with Mircom counsel that the only relevant information was Mr. Drash’s understanding of the clause, rather than the basis for that belief.
74In the course preparing for this motion, Mircom undertook some research into Drash’s history with the courts in the context of his dealings with previous employers. What they discovered were four previous actions for wrongful dismissal, commenced in 1996 (against Rothman’s), 1998 (against Canada Trust), 2003 (against Marsh Canada) and 2005 (against Altamira) respectively that have been concluded, as well as two active files. The current action is therefore the 7’th law suit for wrongful dismissal. Three of the four former employers are reflected in Drash’s work history on the resume he provided to Mircom.
75The other two “live” actions were started in April and September 2009, respectively. Mr. Samfiru represents Drash in both. Both actions were started under the Simplified Rules and both represent short term positions held by Drash, the first for a little over 7 months, the second for less than 5 months. In fact, his resume suggest that he changed jobs frequently – he was with Marsh from 2003-2003; with RBC from 2003-2004; with Altamira from 2004-2005. Then there is a gap until he joined D & B Canada in 2007. In 2008, he was with 411 Local Research Corporation but by 2009, he had moved on to Revera. He appears to have commenced suit against 5 of these former employers, along with Canada Trust, after his departure from each. Drash also appears to have had a consultancy business since 2005, though this is not clear.
76In all cases, Drash worked in marketing. A review of his resume and his litigation history suggest that either this area of employment is extremely volatile or Drash has difficulty holding a job and he supplements his income by bringing suit. Seven law suits with respect to employment over a period of 12 years is unusual. The fact that the last three were all started within three years by the same counsel is also odd.
77Paragraph 11 of Drash’s pleading in his action against 411 is of interests:
Philip states that the condition of his employment with the defendant did not contain terms which rebut the common law presumption of reasonable notice of termination. In fact, such a term was specifically negotiated out of Philip’s contract of employment. Philip therefore claims that he has considerable termination entitlements under the common law , particularly in light of his senior position with the Defendant.
78In each of the 2009 cases, as well as the current matter before the court, Drash seeks pay in lieu that exceeds the number of months he actually worked at each position.
The law
Are these admissions?
The Law
79As Drash asserts that his proposal to amend his Reply does not constitute withdrawal of an admission, the law as to what does must be reviewed briefly.
80This issue is governed by Rule 51.05, which provides that unlike a straightforward motion to amend, a motion to amend that has the effect of withdrawing an admission requires either consent or leave of the court. Where a Rule provides for leave, the court generally has some degree of discretion.
81The seminal case as to what constitutes an admission is the decision of Saunders J. in Antipas v. Coroneos 1988 10348 (ON SC) , [1988] OJ 137. That case, as many in this area, dealt with an admission of liability in the context of personal injury litigation.
82Much of the cases law involves cases where an admission of liability was made in a pleading at a time when the claim advanced fell within the limits of the applicable insurance policy. A motion to amend a defence to withdraw such an admission often arises when the prayer for relief is amended such that it exceeds the policy limits and puts the insured in a position where he is personally exposed. That is effectively what occurred here.
83The court first made it clear that Rule 51.05, being the more specific, overrides Rule 26.01, such that leave is required.
84In terms of what constitutes an admission, the parties agree that there must be a deliberate and unambiguous concession to the opposing party (see Hughs v. TD Bank [2002] OJ No. 2145 ). In this case, it is important to note that Drash refers directly to the legal advice he received and relied on twice in the current version of his Reply. In paragraph 7, he states that he received legal advice and was advised that the clause did not revoke his common law rights as it was ambiguous. In paragraph 10, Drash states that it was not his obligation to educate Mircom as to the shortcomings that his counsel had identified. In paragraph 11, he notes that it was because of his consultation with legal counsel rather than in spite of it, he wholly relief upon his counsel’s interpretation of the severance clause.
85In other words, when taken together, these two paragraph make it clear that Drash is asserting that because his lawyer told him the clause was ambiguous and therefore unenforceable, he was prepared to and did sign the agreement without further change to this paragraph as he believed it didn’t bind him anyway.
86It is difficult to accept that these three very distinct and carefully worded assertions made in a pleading were not made deliberately. This is not a case of a party making an admission in the course of being cross-examined or being examined for discovery, or even a situation where a party made oblique reference to having received legal advice in an affidavit.
87As D.M. Brown J. stated in Ebrahim v. Continental Precious Minerals Inc. 2012 ONSC 1123 () , [2012] OJ 716:
The present case is not one in which a witness merely averted to the fact of receiving legal advice, leaving one to consider whether a waiver had resulted from that reference because of the nature of the issues advanced by a party. Here the affiant, Mr. Ebrahim, went further and disclosed the contents of the legal advice received.
88The same can be said in the case before this court. Here, it is also clear that the lawyer who drafted the pleading was the very same as the one who gave the advice.
89There can therefore be no doubt that the pleading that legal advice was received and relied on here was deliberate. What that legal advice was has also been deliberately pleaded. These assertions are made over the course of three separate paragraphs and form part of the story Drash wishes to put before the court. These statements are also unambiguous. What Drash says about having received legal advice and the result of having received it is quite clear.
90The current pleading picks up on the theme started in the statement of claim and elaborated on in the statement of defence. Drash not only attacks the validity of the termination clause in his claim but he goes further, asserting that he told Mircom before signing the employment agreement that the clause was susceptible to attack in view of its ambiguity. In their defence, Mircom agrees that Drash challenged the clause but state he did so on the basis of legal advice received. They focus on the fact that he had legal advice throughout and that the entire agreement was freely negotiated. Mircom says Drash’s complaint with the clause was not its alleged ambiguity but that it did not provide enough for him in the event of termination within the first year.
91In his Reply as currently drafted, Drash not only agrees that he obtained legal advice regarding this clause but he goes further and makes it clear what the advice was and that he relied on it. As those facts are currently admitted, Mircom is relieved of having to prove them at trial.
92These admissions have tremendous value to Mircom so are all matters Mircom would want found as facts at the trial. They show that Drash got legal advice before signing on and what that advice was. They also demonstrate that Drash signed the agreement even though he thought the clause was ambiguous because he figured it could not hurt him. He did this knowing Mircom saw things differently but he felt he would have a way around this clause if he had to sue because of what his lawyer told him. This raises the question of his good faith when entering the contract.
93These assertions are therefore concessions to a position taken by a defendant – they confirm that, indeed, Drash relied on legal advice; that the legal advice was to the effect that the clause was ambiguous; and that knowing this, Drash entered into the contract anyway, believing the clause could not work against him (see Yang v. County of Simcoe 2011 ONSC 6405 ). If these assertions are removed, as Drash proposes, Mircom loses valuable concessions.
94On the basis of all of the foregoing, I conclude that what Drash is now trying to do is withdraw admissions with respect to the first line of paragraph 7, paragraph 10 and paragraph 11. I will return to the last line of paragraph 7.
The test for withdrawing admissions
The Test for Withdrawing Admissions
95As a result, Drash can only modify these paragraphs by withdrawing parts and substituting wording if he meets the three-part test set out in Antipas (supra) :
...a party requesting leave to withdraw an admission must pass three tests by establishing (1) that the proposed amendment raises a triable issue; (2) that the admission was inadvertent or resulted from wrong instructions; and (3) that the withdrawal will not result in any prejudice that cannot be compensated for in costs.
96It is trite law that the court can consider evidence with respect to all parts of this test.
97Drash has presented no evidence regarding whether or not what he now proposes to say raises a triable issue. He does not state that the proposed amendment was inadvertent or that it resulted from wrong instructions. All he says in his affidavit is that he did not make any decisions in reliance on comments made to him by his lawyers with respect to his contract of employment and the proposed pleading deletes any suggestion to the contrary. He says something quite different in his factum, now claiming that is not seeking to deny the truth of the statement being struck. This is clearly not accurate. Instead, he now claims he seeks to delineate the information that is relevant from the information that is not.
98In either case, he provides no explanation as to how the information (that is either incorrect if you accept his sworn evidence, or not relevant if you focus on his factum) got into the pleading in the first place.
99Drash also fails to provide any evidence regarding the issue of prejudice.
Analysis and conclusion
Analysis and Conclusion
100In view of the very sparse evidentiary record filed by Drash, an in depth analysis is not required here as Drash did not even try to meet any element of the test. Instead, he restricted his pitch to his assertion that what he was doing did not amount to withdrawing an admission. To the extent that he did file evidence, it conflicted with what he then alleged in his factum, making it very difficult to give much if any weight to this evidence.
101Mircom, on the other hand, established in their evidence, which stands unchallenged and without contradiction, that they were told by Drash that he needed time to run the offer by his lawyer and that he did so. Though Mr. Samfiru does not deny in his e-mails that there are any documents to support this, agrees that he did make some comments to Drash about the agreement over the phone. As both parties admit this occurred, why remove reference to it in the pleading?
102Mircom’s evidence also raises the question of whether both the action and this motion constitute an abuse of process. Drash is apparently a career litigant – this is his 7 th law suit for wrongful dismissal.
103The tactic of moving to amend the Reply also emerged the very day after Mircon’s counsel pointed out Mr. Samfiru’s conflict. Whatever their arrangement, he appears to be Drash’s counsel of choice, who has been working with him on at least 3 of these cases. It appears to this court that Drash and Samfiru sought to make a pre-emptive strike in order to avoid a motion for removal for conflict. The strategy they chose to use to that end was to amend the carefully drafted Rely to delete all reference to the role of counsel in the lead up to the agreement. To that end, Drash swore an affidavit that was then at odds with the factum prepared by his counsel. None of this is explained nor is the about face of Drash’s position. If he is now of the view that what he pleaded is not accurate, in that he is trying to withdraw admissions, it is incumbent on him to explain how this alleged inaccuracy occurred. This he has not even tried to do.
104As for the last line in paragraph 7 of the proposed Reply, although it does not, in my view, constitute the withdrawal of an admission, we know from the evidence filed that it is accurate as it now stands – Drash did provide Mircom with his own draft offer. They declined to make the changes he proposed. Strictly speaking, Drash is therefore free to make the amendment to paragraph 7 in this regard, but why he would want to do so now when there is a decision of the court showing that he went farther than simply seeking a redrafting is difficult to understand. This, of course, will become a matter for costs at the end of the day.
105I therefore dismiss this motion insofar as it concerns the first line of paragraph 7, as well as paragraphs 10 and 211.
MIRCOM’S MOTION REGARDING WAIVER OF SOLICITOR-CLIENT PRIVILEGE
Mircom's Motion Regarding Waiver of Solicitor-Client Privilege
106Mr. Samfiru asked to adjourn this motion in order to get instructions. This was an unusual request in that he ought to have contemplated the possibility that I would hear the plaintiff’s motion first and how it would be dealt with. These are instruction he ought to he had in his back pocket, ready for this possible eventuality.
107Accordingly, the request was dismissed and the motion argued.
108I note that Mr. Samfiru stated in an e-mail to Mircom counsel that he had no paper dealing with or recollection of what he told Drash about the offer, yet this motion was resisted, adding to the costs that Drash was already facing following the plaintiff’s motion. Presumably this is because Drash does have paper and/or a good recollection of what he was advised by counsel.
109Again, the law is well established in this area. We are dealing here with implied rather than express waiver. As the court stated in Bank Leo AG v. Gaming Lottery Corp. [1999] OJ No. 3949 :
When determining whether privilege should be deemed to have been waived, the court must balance the interests of full disclosure against the preservation of solicitor client and litigation privilege. Fairness to a party facing a trial has become a guiding principle in Canadian law. Privilege will be deemed to have been waived where the interests of fairness and consistency so dictate or when a communication between a solicitor and client is legitimately brought into issue in an action. When a party places its state of mind in issue and has received legal advice to help form that state of mind, privilege will be deemed to be waived with respect to such legal advice.
110In this case, Drash put his state of mind in issue in his statement of claim. He pleads not only that the termination clause is ambiguous, but he goes farther and states that he so advised his potential employer that was the case during their pre-contractual negotiations. By making that assertion, Drash made his belief regarding the meaning of the clause in the time frame leading up to the execution of the contract relevant. He put his belief as to the impact of the clause – his state of mind regarding how it could not hurt him – in issue.
111This was a tactical error and opened the door for Mircom to plead reliance on legal advice. Drash then made a second tactical error. Instead of trying to nip this in the bud, he expanded on it, putting his state of mind in issue to an even greater degree in his Reply with his repeated reference to his having received legal advice as to the effect of the clause and its enforceability.
112As in the Ebrahim case (supra) this is an obvious scenario of waiver as it appears in two pleadings – documents carefully crafted by counsel. As in that case, these statements were made with some reflection . They cannot be viewed as inadvertent slips blurted out during stressful examinations.
113I therefore find that Drash has waived his right to claim solicitor client privilege with respect to all circumstances surrounding the legal advice he sought and obtained regarding the termination clause.
COSTS
Costs
114This was the second attendance on the defendant’s motion, in view of Drash having shoved his motion into a time slot that he had to know was not adequate – 15 minutes for an opposed motion when the threshold issue is whether or not what is proposed constitutes a withdrawal of an admission is a motion that will certainly take awhile. As a result, Drash has already been ordered to pay costs of $1500.
115Mircom seeks their costs of $11,262.20 with respect to these motions. This represents their partial indemnity costs. Mr. Samfiru agrees that costs should follow the event and that the number is not unreasonable.
116Costs in that amount shall therefore be paid by Drash within 30 days.
117I remind Drash that this is a law suit regarding termination of employment with Mircom that lasted all of 3 months and 5 days. It has already cost him over $12,000 in legal costs to Mircom. A motion to remove his counsel for conflict now looms. I urge him to approach this case on the basis of proportionality as our Rules require.
Master Joan M. Haberman
Released: December 7, 2012