COURT FILE NO.: CV-09-8102-00 CL

DATE: 20121224

ONTARIO

SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST

B E T W E E N:

CORRADO DI ROSA and DI ROSA FAMILY TRUST

Plaintiffs

• and -

EDISOFT INC., and ATHANASIOS POLYZOS, also known as THANOS POLYZOS

Defendants

Guillermo Schible, for the Plaintiffs

Peter W.G. Carey, for the Defendants

BEFORE: Justice Newbould

DATE HEARD: December 19, 2012

E N D O R S E M E N T

[1] The defendants move for an order removing Hodder Barristers as solicitors of record for the plaintiffs Corrado Di Rosa and his family trust. It is not alleged that Mr. Hodder acted at any time for the defendants. Rather it is alleged that Mr. Hodder acted for a plaintiff in related litigation against Mr. Di Rosa and that the circumstances were such that Mr. Hodder will be required to give evidence at the trial of this action and that his acting in this action would undermine the public confidence in the administration of justice. Mr. Hodder denies that he has any relevant evidence or that there is any basis for him to be removed as solicitor for the plaintiffs.

Background

[2] The defendant Edisoft Inc. (“Edisoft”) is a software company founded in 1995 by Thanos Polyzos, Ted Szabo, Bruce Kemp, and Mr. Di Rosa. Originally, Mr. Polyzos and Mr. Szabo each held 35 percent of Edisoft’s shares, and Mr. Di Rosa and Mr. Kemp each held 15 percent.

[3] As a result of a dispute between Mr. Kemp, an accountant by profession in charge of Edisoft’s bookkeeping, and the other shareholders who alleged improper activity on the part of Mr. Kemp, Mr. Kemp was bought out as a shareholder for $450,000, which was secured by a promissory note to be paid by Edisoft out of 50% of its net cash flow pursuant to an agreed upon formula. As a result, Mr. Polyzos and Mr. Szabo each held 41.18% of the shares of Edisoft and Mr. Di Rosa held 17.64%.

[4] Mr. Kemp initially stayed on with Edisoft after he sold his shares and took on a new role as Vice President of Sales. Mr. Di Rosa took on the role of President. On April 22, 2005 Mr. Kemp was terminated by Edisoft.

[5] Mr. Kemp subsequently commenced litigation against Edisoft and Messrs. Szabo, Polyzos, and Di Rosa, claiming that he was owed $450,000 for his shares in Edisoft and also alleging wrongful dismissal. The firm of Polten and Hodder, now Hodder Barristers, were Kemp’s lawyers in the Kemp litigation. That action settled in 2010 contingent on payments being made over time, and the last payment was made December 1, 2012. Thus the action by Mr. Kemp will now be dismissed.

[6] In this action, Mr. Di Rosa claims to have been oppressed by the defendants in relation to his interest in Edisoft and claims various heads of relief under section 248 of the OBCA, including orders reinstating him as president of Edisoft, removing Mr. Polyzos as a director, compensation for amounts allegedly owed to him and a declaration that he is entitled to lifetime employment as long as he is a shareholder of Edisoft.

[7] In their defence, the defendants plead a number of improper activities on the part of Mr. Di Rosa, including an allegation that he conspired with Mr. Kemp to acquire Edisoft at below market value and provided confidential and privileged information to Mr. Kemp to bolster Mr. Kemp’s case against Edisoft. As a result, Mr. Di Rosa was terminated by Edisoft. The defendants assert that from evidence obtained in this case, including evidence obtained during discoveries earlier this year, they can establish that in the Kemp litigation, Mr. Di Rosa and Mr. Kemp abused the process of the court by having Mr. Di Rosa act as a straw defendant to bolster Mr. Kemp’s claim against Edisoft. The relevance of this, they assert, is that Mr. Hodder acted for Mr. Kemp in the Kemp litigation and will inextricably be required to give evidence in this action. Mr. Carey says that the defendants will call Mr. Hodder. The defendants plead that Mr. Di Rosa breached his fiduciary duties to Edisoft and deny any oppressive conduct towards him.

[8] Mr. Carey has referred to a number of pieces of evidence to support the defendant’s claim of improper collusion between Mr. Kemp and Mr. Di Rosa in the Kemp litigation. The plaintiffs assert there is no evidence to sustain the allegation. This of course will be an issue at the trial. It seems to me that it is only if I conclude that at this stage there is no evidence to support the allegation that I can make any finding regarding it. Otherwise I am in no position to conclude, as asserted by the plaintiffs, that there is nothing in the allegation of abuse of process and thus no valid reason for the defendants to assert that Mr. Hodder has relevant information.

[9] In my view I clearly cannot conclude that there is no evidence to support the allegation of collusion between Mr. Kemp and Mr. Di Rosa in the Kemp litigation. I will refer to only a few pieces of evidence, and in doing so I make no any finding with respect to the evidence. This evidence includes the following:

(a) Mr. Szabo died in March, 2007. Later that year Mr. Di Rosa attempted to buy his estate’s shares for $1, which would have given him control of Edisoft.

(b) Mr. Di Rosa and Mr. Kemp met on numerous occasions. What was discussed is contested.

(c) Mr. Di Rosa and the other defendants in the Kemp litigation were represented by Cassels Brock. Mr. Di Rosa sent emails to Cassels Brock requesting secret meetings for the purposes of advancing a private settlement between him and Mr. Kemp. Cassels Brock on multiple occasions informed Mr. Di Rosa that they could not keep secrets between defendants whom they jointly represented. In March, 2008 Mr. Di Rosa dismissed Cassels Brock as his solicitors in the Kemp litigation.

(d) Mr. Kemp was provided with Edisoft documents by Mr. Di Rosa regarding the Kemp litigation. There is a difference as to what the scope of the documentation was and whether it contained privileged information.

(e) Commencing in September, 2008, Mr. Di Rosa began to secretly work with a competitor of Edisoft’s, Comport Communication International Inc., to gain a controlling interest in Edisoft. Edisoft e-mails between Mr. Di Rosa and Mr. Ralph of Comport of October, 2008 refer to methods of having the discussions camouflaged.

(f) Mr. Kemp was aware of the discussions between Mr. Di Rosa and Mr. Ralph and had discussions himself with Mr. Ralph. The extent of those discussions are contested.

(g) In September 2008, Mr. Di Rosa retained new counsel, Kevin J. Scullion of Ross, Scullion Barristers.

(h) On February 20, 2009 Mr. Di Rosa sent a memo to Mr. Ralph indicating a plan for Mr. Di Rosa to purchase on behalf of Mr. Ralph the shares of Edisoft owned by Mr. Szabo’s estate without the knowledge of Mr. Polyzos, the CEO of Edisoft. This would have been contrary to the shareholders’s agreeement of Edisoft which prevented any sale of shares without notice to all shareholders. On March 14, 2009 Mr. Ralph sent a memo to Mr. Di Rosa outling details of the plan and referring to a plan to ask for police assistance in getting access to the Edisoft property.

(i) On March 16, 2009, Mr. Di Rosa sent an e-mail to Mr. Ralph indicating a plan to commence the present action to assist in obtaining the shares from Mr. Szabo’s widow. The e-mail stated:

“Dave [Mr. Ralph]: Just spoke with my lawyer [Mr. Scullion]. He very much likes the idea you have proposed, i.e. I launch my lawsuit while you go after the widow's shares. He is very interested in speaking with your lawyer about the situation and the strategy going forward. ….

(j) Mr. Ralph replied as follows:

…I will talk to Nico Paul [solicitor of Mr. Szabo’s widow] directly in ht next days or so and make sure he and FRO [Mr. Szabo’swidow] are on the same page as we are. At that time, discuss the proxy, the purchase and the company requirements on all parties. By all parties, I mean Comport, Mr. Paul and Fro, as I want you to be independent in this matter and keep your pressure on Thanos [Mr. Polyzos].

I will begin to draft everything tonight.

You go stun him [Mr. Polyzos] with your attack.

(k) On March 26, 2009 this action was started by Mr. Scullion on behalf of Mr. Di Rosa way of an application. It was later converted into a statement of claim.

(l) In the Kemp litigation the claim against Mr. Di Rosa was narrow. Mr. Di Rosa’s original defence drafted by Cassels Brock had provided a complete defence to Mr. Kemp’s claim against Mr. Di Rosa focusing exclusively on defending Mr. Di Rosa, and it did not comment on Mr. Kemp’s allegations against Edisoft or the other defendants.

(m) On August 14, 2009 Mr. Scullion amended Mr. Di Rosa’s defence in the Kemp litigation. Mr. Di Rosa’s amendment admitted many of Mr. Kemp’s allegations against Edisoft and sought to support Mr. Kemp’s claims for payment on the promissory note and for wrongful dismissal. Mr. Carey asserts that by the amendment, Mr. Di Rosa was “throwing Edisoft under the bus”.

[10] Both the Kemp litigation and this action were mediated by Justice Gans in June, 2012. The Kemp litigation was settled. This action was not. Mr. Kemp then dropped his claim against Mr. Di Rosa, as the settlement involved a series of payments by Edisoft over an extended period of time. The Minutes of Settlement required that the Kemp litigation to be maintained against the remaining defendants until such time as the scheduled payments were completed, which occurred on December 1, 2012.

[11] Approximately two years after the settlement of the Kemp litigation, Mr. Di Rosa served a Notice of Change of Solicitors on April 13, 2012, by which he dismissed Mr. Scullion and retained Mr. Kemp’s former lawyers, Hodder Barristers, to represent him.

[12] Discoveries had been already been scheduled to commence on April 18, 2012. During the course of discoveries, Mr. Schible, counsel for Mr. Di Rosa, stated he had only received the plaintiff’s documents a few days before and had not had a full opportunity to review them.

[13] On cross-examination, Mr. Di Rosa stated that his reason for changing solicitors was that Mr. Scullion would not accept a contingency fee arrangement and that Mr. Hodder would. In his affidavit, Mr. Hodder stated that he was acting on a contingency fee basis. What the terms of the retainer are is not before the court as Mr. Di Rosa refused to disclose the nature of the retainer agreement on the asserted ground of privilege. This refusal was improper as any privilege was waived by Mr. Di Rosa’s evidence that he had a contingent fee arrangement with Mr. Hodder’s firm. Mr. Di Rosa did say that he approached no other lawyer other than Mr. Hodder to determine if they would work on a contingency.

Discussion

[14] The defendants move to remove Mr. Hodder’s firm primarily on two grounds:

(1) If Hodder Barristers are allowed to represent Mr. Di Rosa, whom they ostensibly acted against in a closely related action, the bona fides of which is an issue in this action, the administration of justice will be brought into disrepute.

(2) Mr. Hodder will be called as a witness at trial and lawyers may not act as both witness and counsel in the same matter.

[15] Mr. Di Rosa takes the position that the motion to remove Mr. Hodder’s firm is tactical and is brought to cause delay and wasted expenditures. He says he would be prejudiced by not being able to take advantage of the contingent fee arrangement with Mr. Hodder’s firm.

(a) Legal principles

[16] A litigant should not be deprived of counsel of its choice without good cause. See McDonald Estate v. Martin, 1990 CanLII 32 (SCC), [1990] 3 S.C.R. 1235. In Re Kaiser (2011), 2011 ONSC 4877, 84 C.B.R. (5th) 29; leave to appeal refused (2011), 84 C.B.R. (5th) 269 (Ont. C.A.), Cronk J.A. stated:

21. As the motion judge properly noted, "A litigant should not be deprived of counsel of its choice without good cause. See McDonald Estate v. Martin, 1990 CanLII 32 (SCC), [1990] 3 S.C.R. 1235." For this reason, Canadian courts exercise the highest level of restraint before interfering with a party's choice of counsel. Where such discretionary, equitable relief is invoked, there must be a possibility of real mischief should a removal order be refused. The test is whether a fair-minded and reasonably informed member of the public would conclude that counsel's removal is necessary for the proper administration of justice: see for example, McDonald; Zawadzki v. Matthews Group Ltd. (1998), 18 C.P.C. (4th) 373 (Ont. Gen. Div.); Colville-Reeves v. Canadian Home Publishers Inc. (2002), 111 A.C.W.S. (3d) 1202 (S.C.); Lautec Properties Inc. v. Barzel Windsor (1984) Inc. (2002), 26 C.P.C. (5th) 131 (S.C.).

[17] There is no doubt that on a motion to remove a solicitor, care must be taken to ensure that the motion is not brought for tactical purposes. In Lautec Properties Inc. v. Barzel Windsor (1984) Inc. (2002), 26C.P.C. (5th) 131 Epstein J. (as she then was) stated the following:

44. Other courts have expressed alarm about the growing trend of removal litigation. They have expressed a need for caution. There is strong support for the warnings summarized by Keenan J. in Sharpe Electronics of Canada Ltd. v. Battery Plus Inc., [2000] O.J. No. 2642. It is incumbent upon me to consider whether there is genuinely an issue of conflict or other misconduct or is the issue simply being raised as a strategic tool where it may well advantage the moving parties by delaying matters or for other positioning purposes. The possibility of attempting to gain an unfair advantage through delay or by forcing a party to retain counsel other than counsel of first choice is one of the elements that a court must look at critically in assessing the competing interests to be balanced.

(b) Is the motion tactical?

[18] I do not see this motion by the defendants as being tactical and raised only for strategic purposes.

[19] One of the grounds for the relief requested is that Mr. Carey states that he will be calling Mr. Hodder as a witness. Mr. Di Rosa dismissed Cassels Brock as his solicitors in the Kemp litigation in February, 2008. He was unrepresented until September, 2008 when he retained Mr. Scallion to act for him. Mr. Hodder in his affidavit acknowledged that during the period from March 3, 2008 to September 4, 2008, he had conversations with Mr. Di Rosa, and while he states that no agreement was arrived at with respect to the action against Mr. Di Rosa, he did not disclose what was said during the conversations. While Mr. Hodder was cross-examined on his affidavit, he was not asked to say what the conversations with Mr. Di Rosa were. It is contended that if Mr. Carey were serious about calling Mr. Hodder at the trial, he would have canvassed on cross-examination what Mr. Hodder and Mr. Di Rosa discussed.

[20] The problem with this argument is that it is a decision for counsel what to explore in cross-examination prior to trial. Sometimes counsel prefer not to telegraph too much prior to trial what a cross-examination at trial will explore. Sometimes counsel take the opposite tack and go into everything in a cross-examination prior to trial. I cannot conclude from a lack of cross-examination of Mr. Hodder that there is no intent to call him as a witness or that on that ground the motion is brought only for tactical purposes.

[21] It is also contended that if Mr. Hodder is relevant to the issues of collusion between Mr. Kemp and Mr. Di Rosa, Mr. Scullion would also be and the failure to bring a motion to remove Mr. Scullion while he acted for Mr. Di Rosa in this action for more than two years is another indication that the motion was brought for tactical purposes. Mr. Carey stated that he had not yet made up his mind about calling Mr. Scullion. He stated that it only became clear during the discoveries in April of this year of the extent of the communications between Mr. Kemp and Mr. Di Rosa, and it was during the discoveries that he came to realize the need to call Mr. Hodder as a witness. I have not been pointed to any evidence to suggest that Mr. Carey’s statements should not be accepted.

(c) Administration of justice

[22] The defendants contend that if Mr. Hodder acts for Mr. Di Rosa, the administration of justice will be brought into disrepute. This argument does not rest on Mr. Hodder being a witness. Reliance is placed on:

(i) In McDonald Estate v. Martin, supra, it was stated that the courts’ jurisdiction “stems from the fact that lawyers are officers of the court and their conduct in legal proceedings which may affect the administration of justice is subject to this supervisory jurisdiction.”

(ii) In Goldberg v. Goldberg, 1982 CanLII 3235 (ON CA), [1982] OJ No 1412 (Div Ct) cited in McDonald Estate v. Martin, it was stated:

Of more importance, however, is the fact that the principles involved herein are designed not only to protect the interests of the individual clients but they also protect the public confidence in the administration of justice. [...] Furthermore, when the public interest is involved, the appearance of impropriety overrides any private interest claimed by waiver.

(iii) In Everingham v. Ontario (1992), 1992 CanLII 7681 (ON SC), 8 OR (3d) 121 (Div Ct), it was stated:

It is within the inherent jurisdiction of a superior court to deny the right of audience to counsel when the interests of justice so require by reason of conflict or otherwise. …

The issue is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice required the removal of the solicitor. …

The public interest in the administration of justice requires an unqualified perception of its fairness in the eyes of the general public. ... The goal is not just to protect the interests of the individual litigant but even more importantly to protect public confidence in the administration of justice … The sine qua non of the justice system is that there be an unqualified perception of its fairness in the eyes of the public.

[23] This is not a case in which Mr. Hodder has ever acted for Mr. Di Rosa. He acted against him in the Mr. Kemp litigation. In that sense, the case is not like McDonald Estate v. Martin or Goldberg v. Goldberg. But it is claimed that because Mr. Kemp and Mr. Di Rosa colluded in having Mr. Di Rosa act as a straw man defendant, which is relevant as a defence in this action, there will be problems if Mr. Hodder acts for Mr. Di Rosa and a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires the removal of Mr. Hodder.

[24] It is asserted that at trial, the presiding judge will be required to make findings of fact as to whether Mr. Di Rosa and Mr. Kemp abused the process of this court by having Mr. Di Rosa act as a straw defendant in the Kemp litigation to bolster Mr. Kemp’s claim against Edisoft. The presence of Mr. Hodder acting at trial for Mr. Di Rosa, an individual he was purportedly acting against in the closely intertwined Kemp Litigation, will inevitably cause a real appearance of impropriety that would undermine the public confidence in the administration of justice.

[25] It is further claimed that a basis for the appearance of impropriety will be the perceived alignment of the personal interests of Mr. Hodder’s firm and its client. There is no allegation of impropriety against Mr. Hodder himself, but it is claimed that in addressing at trial the issue of whether Mr. Kemp and Mr. Di Rosa agreed to abuse the process of this court through litigation in which Mr. Hodder acted as counsel, it is inevitable that there will be the perception that Mr. Hodder’s own reputation will be at stake. There is thus a very real danger that the cause of the client and the cause of counsel will appear to be too close and there will be a public perception that that counsel might overlook one of his or her duties in order to justify himself.

[26] Reliance is placed on the following statements in Stevens v Salt (1995), 1995 CanLII 7173 (ON SC), 22 OR (3d) 675;

One of the most important qualities counsel brings to litigation is the quality of calm, dispassionate, analysis and action. Can the appearance of this be present when counsel's own firm is inextricably bound up in the litigation?

Is there not a danger that the cause of the client and the cause of counsel will appear to be too close?

Even further, is there not a danger that counsel might overlook one of his or her duties in order to justify his or her partner/ associate/employer in the eyes of the client, in the eyes of the court or the eyes of the public? …

[27] I do not see the case of Stevens v Salt as helpful. It involved a lawyer acting in litigation over a real estate transaction in which another lawyer in his firm was the solicitor on the transaction and would be a crucial witness. The statements in that case are understandable but should not be taken out of context.

[28] Mr. Carey contends that there could be a problem if at the trial Mr. Kemp gives evidence different from Mr. Di Rosa. In such a case, Mr. Hodder would need to either cross-examine his former client Mr. Kemp, or attempt to cross-examine his current client Mr. Di Rosa, neither of which would be proper. While I understand the concern, it is speculative at this stage that any such different evidence will be given, and it would not be right to deprive a party of the lawyer of his or her choice on the basis of speculation.

[29] I do not think it can be said that the fact that Mr. Hodder is acting for Mr. Di Rosa in this action would give a fair minded person a concern with the administration of justice. There is no jury and a trial judge will be well aware of the dynamics involved. I would not on this ground disqualify Mr. Hodder from acting for Mr. Di Rosa.

[30] There is one caveat that needs be mentioned. When questions were put to Mr. Kemp regarding the preparation of his affidavit, Mr. Schible refused to allow Mr. Kemp to answer. This was improper. Mr. Hodder’s firm is not acting for Mr. Kemp in this action, and there is no solicitor-client relationship between Mr. Hodder’s firm and Mr. Kemp. Preparation of affidavits and possible changes to drafts of an affidavit are quite properly the subject of cross-examination of a witness who is not the client of the solicitor who may have prepared the affidavit, and no objection should have been made to the questions. This has given me concern of the closeness of Mr. Kemp to Mr. Hodder’s firm, his former solicitors.

(d) Counsel being a witness

[31] A witness should not be a lawyer for a party in the case. See Imperial Oil v Grabarchuk (1974), 1974 CanLII 869 (ON CA), 3 OR (2d) 783 (CA). In Urquhart v Allen Estate [1999] OJ No 4816 (SCJ), Gillese J. (as she then was) explained the rationale behind the rule:

When counsel appears as a witness on a contentious matter, it causes two problems. First, it may result in a conflict of interest between counsel and his client. That conflict may be waived by the client, as indeed, was done in this case. The second problem relates to the administration of justice. The dual roles serve to create a conflict between counsel's obligations of objectivity and detachment, which are owed to the court, and his obligations to his client to present evidence in as favourable a light as possible. This is a conflict that cannot be waived by the client as the conflict is between counsel and the court/justice system.

Counsel are independent officers of the court. The trial judge must be able to rely upon plaintiffs' counsel for a high degree of objectivity. The overriding value, in these circumstances, is concern for the proper administration of justice. A distinction must be drawn between the role of counsel as an independent officer of the court and the role of a witness whose objectivity and credibility are subject to challenge. The dual roles that Mr. Gilby intends to fulfill compromises the integrity of the system.

[32] In Essa (Township) v Guergis (1993), 1993 CanLII 8756 (ON SCDC), 15 OR (3d) 573 (Div Ct), O:Brien J. stated that a court should take a flexible approach in looking at the issue and he listed factors that a court should take:

a. The stage of the proceedings;

b. The likelihood that the witness will be called;

c. The good faith (or otherwise) of the party making the application;

d. The impact of removal of counsel on the party=s right to be represented by counsel of choice;

e. Whether the trial is by judge or jury;

f. The likelihood of a real conflict arising or that the evidence will be tainted;

g. Who will call the witness if, for example, there is a probability that counsel will be in a position to cross-examine a favourable witness, a trial judge may rule to prevent the unfair advantage arising; and

h. The connection or relationship between counsel, the prospective witness and the parties involved in the litigation.

[33] In George S Szeto Investments Ltd (cob Ruby King) v Ott 2006 CanLII 9307 (ON SC), [2006] O.J. No. 1174 (SCJ), Master Beaudoin (as he then was) reviewed two lines of cases, one of which suggested that it was preferable to defer the decision to remove counsel to the trial judge and the other which suggested 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. He then stated:

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.

[34] Can it be said that there is a real likelihood that Mr. Hodder will be called as a witness at the trial? Mr. Carey has said that he intends to call Mr. Hodder. Mr. Hodder asserts that he has no evidence that could be relevant. While I do not doubt the sincerity of Mr. Carey’s statement, in light of Mr. Hodder’s position that he has no evidence to offer, I must consider the evidence on the record to determine if Mr. Carey’s stated intention to call Mr. Hodder bears an air of reality to the point that it is likely that Mr. Hodder will be called or likely that he will have relevant evidence.

[35] The evidence before me is that Mr. Hodder discussed the Kemp litigation with Mr. Di Rosa during a period that Mr. Di Rosa was not represented by counsel, and during which period there is evidence of collusion between Mr. Kemp and Mr. Di Rosa. Mr. Hodder has not disclosed what was said in his discussions with Mr. Di Rosa. He has stated that no agreement was arrived at with respect to the action against Mr. Di Rosa and that Mr. Di Rosa did not provide him with privileged information. He “categorically” denied that there was any secret arrangement between Mr. Kemp and Mr. Di Rosa pursuant to which Mr. Di Rosa was a “straw defendant”. While he of course could not know if Mr. Kemp and Mr. Di Rosa had some arrangement or agreement not told to him, his denial of such an arrangement can perhaps be taken as some evidence that he was not aware of it. Mr. Hodder also stated that he received no pertinent information from Mr. Di Rosa and was cautious about speaking to Mr. Di Rosa. He suggested to Mr. Di Rosa that he get a lawyer with whom he could speak and wrote to a solicitor to whom Mr. Di Rosa pointed him asking if Mr. Di Rosa might contribute to a possible settlement. He stated that he has no knowledge, information or belief relevant to the matters in issue in this action.

[36] Mr. Di Rosa should not lightly be required to retain another lawyer. He has a contingent fee arrangement with Mr. Hodder, although it cannot be said that no other lawyer would act on the same basis as Mr. Di Rosa has not approached anyone else. Mr. Carey points out that Mr. Hodder’s firm has not done a great deal of work on this case, as it was retained shortly before the discoveries in April of this year and on the fourth day of discoveries Mr. Carey told Mr. Schible of his intent to move to have Mr. Hodder removed as counsel. No trial date has been set and there is plenty of time for Mr. Di Rosa to retain someone else.

[37] Mr. Carey is also concerned that if Mr. Hodder continues to act and it becomes apparent at the trial that he should not continue, there may be a mistrial and there will be a real likelihood that the costs thrown away, if ordered to be paid to the defendants, will not be collectible. Mr. Di Rosa acknowledges that he requires a contingent fee arrangement in order to pursue his case. Thus Mr. Carey contends that it is better now that Mr. Hodder be removed before further costs are incurred.

[38] This is not a case in which it is clear that Mr. Hodder would not have relevant evidence. He spoke to Mr. Di Rosa at relevant times and he has not disclosed what was discussed. While he has said that certain things were not discussed, I cannot at this stage conclude that his statements would be accepted at trial. Other evidence he may give, including on cross-examination if it is permitted, may reveal otherwise.

[39] In all the circumstances, in light of Mr. Carey’ statement that he will call Mr. Hodder as a witness, I think it preferable that Mr. Hodder and his firm be removed as solicitors for the plaintiffs. If it turns out at trial that Mr. Hodder is not called as a witness, or that it becomes obvious that he should not have been called, there may be cost consequences. This of course will be a matter for the trial judge.

[40] Each side has requested costs of the motion, and the normal rule is that costs go to the winner. However, in the circumstances I leave costs of the motion to the trial judge.

Newbould J.

DATE: December 24, 2012