COURT FILE NO.: CV-12-452652
DATE: 20130725
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Mazinani v. Bindoo
BEFORE: Master Glustein
COUNSEL: Barry Weintraub as agent for the plaintiff
Stephanie Turnham for the defendant
HEARD: July 11, 2013
REASONS FOR DECISION
Nature of the motion
[1] The defendant Ronnie Michael Louis Bindoo (“Bindoo”) brings a motion to remove Elena Mazinani (“Elena”) as lawyer of record for her brother[^1], the plaintiff Amir Mazinani (“Amir”).
[2] For the reasons I discuss below, I find that this is a clear case in which there is a real likelihood that Elena will be a witness at trial on contentious issues involving her credibility which are critical to the action. The litigation is not complex and was commenced in May 2012 so it is not longstanding. The action has proceeded through examinations for discovery, so the significance and likelihood of Elena’s testimony is apparent. The motion is brought in good faith and the conflict issue was raised at the earliest opportunity within weeks of receipt of the statement of claim.
[3] Further, while a removal order would prevent Amir from retaining Elena, Mr. Weintraub, Amir’s counsel for the motion (appearing as agent for the plaintiff), properly acknowledged that there is no evidence of any financial impediment to prevent Amir from retaining another lawyer. In fact, Amir’s affidavit evidence that he would be forced to act for himself if Elena was removed as his lawyer was not supported by any financial information and Amir refused to provide such information on cross-examination. Also, Mr. Weintraub conducted the examinations for discovery in this matter and Elena advised that he was retained as co-counsel by May 27, 2012, three weeks after the statement of claim was issued. Consequently, Mr. Weintraub properly acknowledged that if Amir acts for himself as a result of a removal order it would be his “choice” and Amir would not be forced to do so as a result of a removal order.
[4] Consequently, I grant the motion to remove Elena as Amir’s lawyer of record.
Facts
(a) The allegations in the pleadings
[5] Amir sues Bindoo for damages in negligence and breach of fiduciary duty arising out of documents Bindoo prepared for Amir and Mr. Manouchehr Ahmadi-Jorny (“Jorny”) in relation to Amir’s purchase of a 50% interest from Jorny in a Subway franchise restaurant.
(i) The statement of claim
[6] The statement of claim was issued on or about May 2, 2012.
- Allegations relevant to the background to the action
[7] Amir alleges that Jorny as franchisee entered into a franchise agreement with Subway Franchise Systems of Canada Ltd. on December 26, 2001 to establish and operate a Subway restaurant franchise (the “Franchise Agreement”).
[8] Amir alleges that in July 2007, he reached an oral agreement with Jorny to purchase 50% of Jorny’s interest in Jorny’s corporation, 1698020 Ontario Inc. (the “Corporation”) which was incorporated by Jorny on May 8, 2006 to enter into a sub-lease with the landlord (the “Sub-Lease”) and to operate a Subway franchise restaurant at 396 Spadina Road in Toronto (the “Spadina Store”).
[9] Amir alleges that the agreement was that Amir would pay Jorny $140,000 for the 50% interest in the Spadina Store, and that the profits of the Spadina Store or other financial resources to be contributed by Amir and Jorny as partners would be used to acquire other Subway franchise stores. Amir alleges that the agreement was for “a partnership arrangement to manage and acquire multiple Subway Sandwich Franchise Stores” (which Amir defines as the “Partnership”)[^2].
[10] Amir alleges that Bindoo was aware of this agreement and that Jorny was a “long-standing client of Bindoo” since Bindoo had previously advised Jorny with respect to Jorny’s “many years of experience” in Subway franchise investment.
[11] Amir alleges that Jorny introduced Amir to Bindoo, who agreed to provide legal advice and representation to Amir, Jorny, the Partnership, the Corporation and “various other corporate entities involved in the business of the Partnership”.
[12] Amir alleges that Bindoo provided legal advice to Amir and Jorny pursuant to the above retainer, and in particular prepared the following documents for execution by Jorny, Amir and the Corporation: (i) a share purchase agreement dated September 13, 2007 by which Amir purchased 50% of the issued shares of the Corporation for $140,000 (the “Share Purchase Agreement”) and (ii) a shareholder agreement dated September 13, 2007 (the “Shareholder Agreement”) which included “Buy/Sell Provisions which stated that if any disagreement should arise among the shareholders relating to the corporation any shareholder may, by written notice given to the other shareholder, offer to purchase or offer to sell the shares of the other shareholder”.
[13] Amir alleges that he relied on “Bindoo’s advice and the skill which Bindoo held himself out as possessing” and paid the purchase price of $140,000 to Jorny for 50% of the shares of the Corporation, “believing that he was purchasing a fifty percent (50%) interest in the Partnership as agreed”.
[14] Amir claims that the Share Purchase Agreement and the Shareholder Agreement did not protect his interests. In particular, Amir alleges that in March 2011, Jorny (i) evicted Amir from the franchise, (ii) caused the Corporation to fail to pay rent to the landlord and (iii) entered into a new sublease with the landlord through a different corporation which Jorny owned. Amir alleges that he “was left with no recorded, recognized and protected interest in the Partnership or the Spadina Store”.
[15] Amir alleges that Jorny’s conduct was part of a “dishonest design by Jorny with the knowing assistance and participation of Bindoo in this dishonest design” through which (i) “Jorny has taken away from [Amir] his interest” and (ii) Amir’s “rights under the Share Purchase Agreement and Shareholder Agreement are without value, because the Corporation has no substantial value”.
- Allegations relevant to the claim against Bindoo
[16] Amir alleges that “Bindoo in accepting this retainer placed himself in a conflict of interest” and as such was negligent and breached his fiduciary duties. Amir alleges that Bindoo:
(i) “failed to advise [Amir] of [Bindoo’s] previous relationship with Jorny and the duty of loyalty [Bindoo] owed to Jorny”,
(ii) “breached his fiduciary duties to [Amir] and favoured the interests of his client Jorny to the detriment of his client [Amir]”,
(iii) “did not advise [Amir] that [Bindoo] had a conflict of interest, and did not advise [Amir] to obtain independent legal advice”, and
(iv) “did not review with [Amir] in detail or at all the provisions of the Shareholder Agreement and the Share Purchase Agreement, nor did he give [Amir] time to review them in detail. Rather, he simply placed them in front of [Amir] for execution and advised [Amir] to sign the agreements”.
[17] Amir alleges that Bindoo was obliged to put into place “appropriate agreements and other arrangements necessary for the Partnership”, and in particular, that Bindoo:
(i) “failed to prepare a partnership agreement to detail and protect the interests of [Amir] in the Partnership”,
(ii) “failed to ensure that [Amir’s] interest in the Franchise Agreement was appropriately recorded and recognized and failed to advise [Amir] that his interest in the Franchise Agreement was not appropriately recorded and recognized”,
(iii) “failed to ensure that [Amir’s] interest in the Spadina Store was appropriately recorded, recognized and protected, and failed to advise [Amir] that his interest in the Spadina Store was not appropriately recorded, recognized and protected”,
(iv) “failed to ensure that the Corporation was a party to the Franchise Agreement, and failed to advise Amir that the Corporation was not a party to the Franchise Agreement”,
(v) “failed to devise a way to protect the interests of the Corporation in the Franchise Agreement, the Sub-Lease and the Spadina Store, and failed to advise [Amir] that he had failed to do so”,
(vi) “failed to advise that the Share Purchase Agreement contravened the Franchise Agreement and the Sub-Lease and were specifically prohibited therein”, and
(vii) “failed to ensure that [Amir’s] interest in the Sub-Lease was appropriately recorded, recognized and protected, and failed to advise [Amir] that his interest in the Sub-Lease was not appropriately recorded, recognized and protected”.
[18] Consequently, the nature of the claim is that Bindoo acted as Amir’s lawyer for all parts of the transaction, but (i) failed to advise Amir of his conflict of interest, (ii) did not advise Amir to obtain independent legal advice, (iii) failed to review the documents with Amir and (iv) failed to prepare the necessary documents or provide advice to protect Amir’s interests in the alleged Partnership.
(ii) The statement of defence
[19] In his statement of defence, Bindoo pleads that he was only asked by Amir and Jorny to effect a transfer of the shares in the minute books of the Corporation and to prepare a share purchase agreement and shareholder agreement in accordance with the oral agreement between Amir and Jorny that Amir would purchase 50% of the shares in the Corporation for $140,000. Bindoo alleges:
(i) “[Bindoo] had no knowledge of the terms of any business arrangement reached between [Amir] and Jorny. However, [Bindoo] was advised that those parties had oral discussions and reached a binding agreement whereby [Amir] agreed to pay $140,000 to Jorny and in return, Jorny agreed to sell 50% of the issued shares of the Corporation (the ‘Oral Agreement’)”;
(ii) “[Amir] and Jorny asked Bindoo to effect a transfer of the shares in the minute books of the Corporation and to prepare a Share Purchase Agreement and Shareholder Agreement in accordance with the Oral Agreement for ultimate review by each of Jorny and/or [Amir] and/or their independent legal advisors”; and
(iii) “In accordance with those instructions, [Bindoo] prepared a Share Purchase Agreement and a Shareholder Agreement which reflected the terms of the Oral Agreement”.
[20] Bindoo pleads that he “did not provide advice with respect to the prudence of the Oral Agreement nor was any such advice sought from him in any event”.
[21] With respect to the cause of action against him in negligence and breach of fiduciary duty, Bindoo pleads that:
(i) “[Bindoo] was not asked to provide advice or act for one party as against the other”;
(ii) his retainer was limited to the preparation of the Share Purchase Agreement, Shareholder Agreement, and the minute book transfer; and
(iii) “Each of Jorny and [Amir] waived retaining independent legal advice”.
[22] Bindoo further pleads that:
(i) “[Amir] had independent counsel in the form of Elena Mazinani, to review and explain the terms of the aforementioned draft agreements”; and
(ii) “It was only after receipt of [Elena’s] advice that [Amir] signed the agreements”.
[23] While it may be established at trial that Elena was not a lawyer at the date of the agreements, the essence of the allegations in the defence set out at paragraphs 21 and 22 above is that Amir waived independent legal advice and Elena reviewed and explained the terms of the draft agreements to Amir.
[24] Consequently, the central issue in the case is whether Bindoo was retained to protect Amir’s interests or instead was acting for the limited purpose which Bindoo alleges. Based on the pleadings, that issue will be determined primarily on whether Bindoo disclosed the conflict of interest, advised the parties to obtain independent legal advice, and fulfilled his alleged limited role by reviewing, with Amir and Elena, the Share Purchase Agreement and Shareholder Agreement he prepared.
(iii) The reply
[25] In reply, Amir denies that he waived independent legal advice. Amir pleads that:
(i) “[Bindoo] acted for [Amir]. [Bindoo] did not advise [Amir] to get independent legal advice”; and
(ii) “[Amir] at no time waived independent legal advice”.
[26] Amir further pleads in the reply that he did not obtain independent legal advice from Elena “as she was not a lawyer”.[^3] Amir pleads that “Bindoo and its insurer were aware of this fact and made the allegation in bad faith in an attempt to seek to remove [Elena] as counsel of record”.[^4]
(b) Evidence about the September 13, 2007 meeting and Elena’s participation at the Meeting
[27] The evidence is uncontested that on September 13, 2007, Bindoo met at his office with at least Amir, Jorny, Jorny’s wife, and Amir’s mother to review and execute the applicable documents. It is also uncontested that this was the first and only meeting between Bindoo and Amir with respect to the transaction (the “Meeting”).
[28] As I discuss above, a key element of the defence is that Elena attended at the Meeting and that when Bindoo advised Amir to retain independent counsel, Amir waived independent legal advice and instead had Elena review and explain the terms of the draft agreements. I review below the evidence about the Meeting and Elena’s participation at the Meeting.
(i) Evidence from the Bindoo Affidavit
[29] In his affidavit sworn October 9, 2012 in support of the motion (the “Bindoo Affidavit”) , Bindoo swears that Elena attended at the Meeting.
[30] Bindoo sets out the following evidence about Elena’s participation (paras. 9-12 and 14-16 of the Bindoo Affidavit):
(i) “I called a meeting for September 13, 2007 with [Amir] and Jorny (the “Meeting”)[^5]. This was my first face-to-face meeting with [Amir]. Also present were the following individuals: Elena Mazinani (“Ms. Mazinani”)[^6], who is [Amir]’s sister and present counsel in this matter; [Amir]’s mother; and Jorny’s wife”;
(ii) “During the Meeting, I reiterated my advice that [Amir] should retain separate counsel. [Amir] reiterated that he did not want to retain another lawyer. [Elena] advised me that she was in the process of becoming a lawyer in Ontario and would assist [Amir] in reviewing the documents”;
(iii) “[Amir] and [Elena] asked many questions about the shareholders agreement, with [Elena] asking most of the questions. [Elena] was especially concerned about the Buy/Sell Clause in the shareholders agreement and asked several questions about this clause. After reviewing the shareholders agreement and other draft documents, [Amir] asked [Elena] if it was okay to sign the documents, and she affirmed that it was okay to sign. I also recall explaining to [Amir] during the meeting that simply because he was buying shares in the Corporation, it did not mean that he was becoming a franchisee”;
(iv) “The documents were reviewed, paragraph by paragraph, prior to execution during the course of the Meeting which lasted 1 ½ to 2 hours”;
(v) “… I properly advised [Amir] with respect to a potential conflict of interest and obtained [Amir’s] consent to act, and further I reviewed the documents at issue with [Amir] in detail”;
(vi) “…the Meeting was the only time I met with [Amir] face-to-face, and the documents were reviewed and executed at the Meeting”; and
(vii) “[Amir]’s current counsel, [Elena], was present at, and participated in, the Meeting”.
[31] Bindoo also filed as an exhibit to his affidavit a letter from Elena to Bindoo’s counsel dated July 23, 2012 (the “July 23, 2012 Letter”) in which Elena stated that she was present at the Meeting (para. 30 of the Bindoo Affidavit):
“What are the bases for your objection to my presence as counsel at trial? I was present at the meeting between [Amir] and [Bindoo] but did not review any documentation nor participated in the meeting”.
[32] Bindoo also filed the responding letter from his counsel dated July 25, 2012 in which Bindoo’s counsel discussed the conflict issues arising from Elena’s “admission” in the July 23, 2012 Letter that she was present at the Meeting. Bindoo’s counsel stated in his letter (para. 31 of the Bindoo Affidavit):
“By your own admission, you were present at the meeting where the documents were executed. You maintain that you did not review any documentation and did not participate in the meeting. We understand that our client’s evidence will be to the contrary”.
(ii) Evidence from the Amir Affidavit
[33] Elena filed no evidence on the motion.
[34] In response to the Bindoo Affidavit, Amir filed an affidavit sworn November 4, 2012 (the “Amir Affidavit”). Amir states (at paras. 7-13 and 15 of the Amir Affidavit):
(i) Elena did not attend the Meeting. She “remained in in the reception area”. Only Amir and his mother, and Jorny and his wife, attended the Meeting with Bindoo at his office;
(ii) There were only four chairs in Bindoo’s office for clients and guests which were occupied by Amir and his mother, and Jorny and his wife;
(iii) Bindoo said nothing during the Meeting about who he was representing. “There was no discussion at all about the topic”;
(iv) The Meeting “lasted for 10 to 15 minutes, at most. After general pleasantries, [Bindoo] asked me to execute some documents, which I did. The content of the documents were never explained to me”;
(v) “Bindoo did not advise me that he had previously acted for Jorny. There was no discussion of the topic. I was not advised that there was a conflict of interest or right to independent legal advice. I did not really even think about either one and they were never waived”;
(vi) Elena “came with my mother and me to Bindoo’s office” [^7] but “did not participate in the [Meeting]. Mr. Bindoo’s Affidavit is completely false. … [Elena] accompanied [Amir and his mother] to the meeting at Bindoo’s office for moral support. She remained in the waiting area, on the second floor, and did not participate in the meeting which took place in Bindoo’s office on the third floor”; and
(vii) “Elena was not present in the meeting in which I executed the documents prepared by Bindoo nor did she review or explain the documents to me. Elena did not give me any advice about the deal, legal or otherwise in September 2007”. Elena “was not involved in the transaction and has no interest in my investment” .
(iii) Evidence from the Bindoo Reply Affidavit
[35] Bindoo swore a reply affidavit dated November 8, 2012 (the “Bindoo Reply Affidavit”), in which he stated (paras. 2-3 of the Bindoo Reply Affidavit):
(i) “[I]t is not true that [Elena] remained in the reception area during the meeting. [Elena] came into my office at the same time as the other individuals” and “I regularly have three chairs in my office and two in the hallway outside my office. I brought in the other two chairs for all five individuals to sit”; and
(ii) “[M]y office is located in a three storey townhouse. However, my office and my reception area are both located on the second floor (my address being Suite 200). I do not have, and have never had, any offices on the third floor”.
(iv) Evidence from the Jorny transcript
[36] Jorny was examined under Rule 39.03 on November 19, 2012 as a witness with evidence relevant to the motion. Jorny provided the following evidence:
(i) Elena attended the Meeting, along with Jorny, Jorny’s wife, Amir’s mother, Amir, and Bindoo (question 26 of transcript);
(ii) Jorny can remember “vividly” that Elena “mentioned that … she is Mr. Mazinani’s brother (sic) and then they had a good chat about [Bindoo’s] background” (questions 34-35 of transcript);
(iii) Elena was at the Meeting in Bindoo’s office for the full duration and at no time did she wait in the waiting or reception area (question 38 of transcript);
(iv) Elena participated in the Meeting and asked questions to Bindoo, especially about the buy and sell arrangement which was “her area that she was asking lots of questions” (questions 45-46 of transcript);
(v) The Meeting lasted between an hour and a half and two hours (questions 47-48 of transcript); and
(vi) Bindoo advised Amir at the Meeting that “This is a conflict of interest” (questions 123-25 of transcript); and
(vii) “Elena was there to go through the details of the documentation” (questions 123-25 of transcript).
(c) Evidence about the parties’ intention to call Elena as a witness
[37] Bindoo’s evidence is that he intends to call Elena as a witness at trial. Bindoo states (paras. 15-18 of the Bindoo Affidavit):
(i) “Given that the Meeting was the only time that I met with [Amir] face-to-face, and the documents were reviewed and executed at the Meeting, the events that transpired at the Meeting will be essential to the determination of [Amir’s] allegations”;
(ii) “[Amir’s] current counsel, [Elena], was present at, and participated in, the Meeting and is therefore a witness to a critical and contentious event. It will therefore be important to have [Elena’s] evidence on this point”;
(iii) “[Elena’s] evidence will be critical for a summary judgment motion[^8] and/or trial”;
(iv) “If [Amir] does not call [Elena] as a witness at the trial of this matter, or put forward her evidence on his summary judgment motion, I intend to instruct my counsel to call or examine her as a witness, as the case may be”.
[38] Amir led no evidence as to his intention to call Elena as a witness, nor challenged Bindoo’s evidence that Bindoo would instruct his counsel to call Elena as a witness if Amir chose not to do so.
(d) Evidence about Bindoo’s counsel raising the conflict issue
[39] The evidence is uncontested that Bindoo’s counsel raised the conflict issue immediately. The statement of claim was issued on or about May 2, 2012. Two weeks later (on May 17, 2012), Bindoo’s counsel delivered a notice of intent to defend and raised the conflict issue in a letter in which he advised (para. 21 of the Bindoo Affidavit):
“ the delivery [of the notice of intent to defend] is without prejudice to our rights to assert that you should not be acting as counsel on this matter given that you are likely to be a witness at trial”.
[40] On May 27, 2012, Elena, acting as counsel for Amir, advised Bindoo’s counsel by letter that Mr. Weintraub would act as “co-counsel” in light of the conflict issue raised by Bindoo’s counsel. Elena wrote (para. 22 of the Bindoo Affidavit):
“Also, to address the issue that I may not be able to act as counsel on this matter as I may be a witness, my client and I have consulted, Barry Weintraub of Reuter Scargall Bennett LLP. Thus, Barry Weintraub will be acting as co-counsel on this matter and we will seek the legal costs”.
[41] Bindoo’s counsel reiterated his position that Elena “ought to be voluntarily removing yourself as counsel of record as you will be a witness in this matter” when delivering a demand for particulars on June 1, 2012 (para. 23 of the Bindoo Affidavit). Elena responded by letter dated June 7, 2012 that she did not accept that there was any “issue at the moment which would require the writer to give evidence as a witness” and that “[i]f and when this changes the matter can be dealt with appropriately” (para. 24 of the Bindoo Affidavit).
[42] By letter dated July 18, 2012, Bindoo’s counsel again reiterated his position by stating, in response to Elena’s suggestion that Amir would seek summary judgment, that “we have noted that we would object to your presence as counsel at trial because you are going to be a witness at trial (having been in attendance at a meeting with the Plaintiff and Defendant when reviewing the subject documentation)” (para. 29 of the Bindoo Affidavit).
[43] In response to this July 18, 2012 letter, Elena stated in the July 23, 2012 Letter which I set out at paragraph 31 above that “I was present at the meeting between the Plaintiff and the Defendant but did not review any documentation nor participated in the meeting” (para. 30 of the Bindoo Affidavit).
[44] In his July 25, 2012 letter in response to the July 23, 2012 Letter (which I set out at paragraph 32 above), Bindoo’s counsel referred to Elena’s “admission” that she was “present at the meeting where the documents were executed” and that Bindoo’s “evidence will be to the contrary”.
[45] The issue of the conflict was again raised before the motion scheduling court, as Elena wanted to schedule a summary judgment motion. Bindoo’s counsel sought an adjournment to obtain instructions to bring the removal motion which Bindoo believed had to be determined before a summary judgment motion. Elena opposed the adjournment. On August 3, 2012, Justice Brown agreed with Bindoo’s counsel and adjourned the motion scheduling court date to August 10, 2012 so that Bindoo’s counsel could obtain instructions on the removal motion (paras. 32-35 of the Bindoo Affidavit).
[46] By letter dated August 5, 2012, shortly prior to the adjourned motion scheduling court hearing on August 10, 2012, Elena advised Bindoo’s counsel that Amir was willing to proceed to trial without summary judgment provided that the trial would be scheduled for early February 2013 (para. 37 of the Bindoo Affidavit).
[47] By letter dated August 7, 2012, Bindoo’s counsel advised Elena that he had instructions to bring the removal motion. Two days later, Bindoo’s counsel requested available dates from Elena for the removal motion (paras. 38 and 41 of the Bindoo Affidavit).
[48] At the return of the hearing before the motion scheduling court on August 10, 2012, Elena again raised the summary judgment motion scheduling issue, but Justice Penny agreed with Bindoo’s counsel and held that the removal motion ought to be decided prior to any summary judgment motion (para. 47 of the Bindoo Affidavit).
[49] Later on August 10, 2012, Bindoo’s counsel wrote to Elena requesting dates for the removal motion (para. 48 of the Bindoo Affidavit). By letter dated August 15, 2012, Bindoo’s counsel advised Elena that Bindoo’s counsel had booked November 27, 2012 for the removal motion.
[50] The removal motion was returnable on November 27, 2012 and then adjourned to July 11, 2013 at a telephone case conference on February 6, 2013.
(e) Evidence as to the impact on Amir if Elena is removed as his lawyer
[51] Amir’s evidence is that (para. 17 of the Amir Affidavit):
“Due to the complexity and longevity of the case hiring a new lawyer will be very expensive and impractical. Thus, I will be forced to represent myself if Elena is removed as counsel. I have lost money and 5 years of my life. I would like to have my day in Court with counsel of my choice who knows the case and the services I am able to afford”.
[52] However, on his cross-examination on his affidavit, Amir acknowledged that “Ì have the means to be represented for a reasonable delivery of justice, but I do not have the means to pursue a bad faith abuse of justice” (question 78 of transcript).
[53] Further, Amir refused Bindoo’s request in his notice of examination to bring financial records with him and refused questions from Bindoo’s counsel in cross-examination to “produce any financial records to [Bindoo`s counsel] that might show [Amir’s] current financial situation” (question 110 of transcript).
[54] Finally, the evidence from Elena’s May 27, 2012 letter discussed at paragraph 40 above is that within weeks of issuing the claim, Elena consulted Mr. Weintraub, who “will be acting as co-counsel on this matter and we will seek the legal costs” in order “to address the issue that I may not be able to act as counsel on this matter as I may be a witness”. Mr. Weintraub conducted the examinations for discovery and is counsel for Amir (as agent for the plaintiff) on this removal motion.
[55] Consequently, Mr. Weintraub fairly acknowledged at the hearing that the evidence did not support Amir’s assertion that Amir would “be forced to represent [himself] if Elena is removed as counsel”. Mr. Weintraub fairly acknowledged that the evidence was that Amir would “choose” to represent himself rather than retain counsel.
(f) Evidence on the Jorny Action and small claims court action
[56] By statement of claim dated October 14, 2010, Amir brought a separate action CV-10-412272 against Jorny arising from their dealings in 2010 with respect to the Spadina Store (the “Jorny Action”) (para. 40 of the Bindoo Affidavit).
[57] By letter dated June 21, 2012, Elena advised Bindoo’s counsel that Amir would not pursue the Jorny Action (para. 26 of the Bindoo Affidavit):
“The costs of pursuing this claim are prohibitive for my client. Thus, my client will not pursue the claim but is willing to assign that right over to your client.”
[58] By letter dated August 23, 2012, Elena confirmed that Amir would discontinue the Jorny Action. She stated (para. 51 of the Bindoo Affidavit):
“Further to my letter, dated June 21, 2012, the costs of pursuing court file # CV-10-412272 are prohibitive for my client. Thus, my client is unable to pursue the claim but is willing to assign that right over to your client”.
[59] By claim dated June 13, 2012, Amir also brought a small claims court action against Jorny for the return of a deposit cheque of $5,250 related to their dealings in 2010 with respect to the Spadina Store (para. 40 of the Bindoo Affidavit). There is no evidence before the court as to the status of that action.
Analysis
(a) The applicable law on a motion to remove a lawyer of record who may be a witness at trial
[60] I adopt the following principles as the applicable law on a motion to remove a lawyer of record who may be a witness at trial:
(i) The court has inherent jurisdiction to remove a lawyer from the record who has a conflict of interest. The inherent 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” (MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 S.C.R. 1235 (“MacDonald Estate”), at para. 18);
(ii) The inherent jurisdiction extends to removing a lawyer who may be a witness in a case in which the lawyer acts as counsel (Ontario Realty Corp v. P. Gabriele & Sons Limited et al, 2006 37844 (Ont. S.C.J.) (“Ontario Realty”), at para. 16);
(iii) The court on a motion to remove a lawyer of record who may be a witness at trial must consider “(a) the maintenance of high standards of the legal profession and the integrity of our system of justice and (b) the right of a litigant to its choice of counsel, which he or she should not be deprived of without good cause” (Ontario Realty, at para. 17, citing MacDonald Estate, at para. 13);
(iv) The test to be applied on a motion to remove a lawyer from the record who may be a witness is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires the removal of the lawyer. This determination is objective, fact-specific and based on an examination of all factors in the case (Karas v. Ontario, 2011 ONSC 5181 (S.C.J. - Mast.) (“Karas”) at para. 26; Ontario Realty, at para. 20);
(v) The court’s concern of a lawyer appearing as a witness is that (i) there may be a conflict of interest between the lawyer and client and (ii) the administration of justice can be impaired by a conflict between the lawyer’s obligations of objectivity and detachment which are owed to the court and the lawyer’s obligation to his or her client to present evidence in as favourable a light as possible. In Urquhart v. Allen Estate, [1999] O.J. No. 4816 (S.C.J.) (“Urquhart”), Gillese J. (as she then was) held (Urquhart, at paras. 27-28):
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.
(See also Karas, at para. 27);
(vi) The integrity of a lawyer`s role as an advocate is also undermined if the lawyer was a witness to a critical meeting. In Young-Tangjerd v. Official Board of Cavalry United Church, 2006 17946 (Ont. S.C.J.) (“Young-Tangjerd”), Hockin J. held (Young-Tangjerd, at paras. 6-7):
The material fact on the motion and the fact which raised the possibility that the solicitor might be called as a witness at trial is this. The solicitor was present at a meeting at which the plaintiff was present with members of the defendant church. He was there as a member of the church not as solicitor. The plaintiff alleges that she was dismissed from her employment constructively during the course of the meeting or because of the meeting. The reasons of the motion judge posit that in this circumstance, the solicitor's disqualification is not automatic and that it could be left to another judge by motion (presumably on the eve of trial) to quash his subpoena or to the trial judge to determine whether he could act as trial counsel if he was to be called as a witness.
In my view, the issue is not the lawyer's position as a witness but his position as advocate. I doubt whether any party or a witness may be cross-examined by a lawyer who could cross-examine not on the basis of his brief but on the basis of his participation in the event or transaction cross-examined on. Any question, leading or not, once posed by the lawyer is unfair to the witness and carries with it the appearance of an unsworn offer of the advocate's version of the facts. In addition, questions put in cross-examination by the lawyer witness would create the uneasy feeling in the mind of the plaintiff in this case that the measure of his credibility could be based not on the basis of the evidence but the unsworn declaration of a judicial participant in the proceeding, the defendant's lawyer. It goes without saying that the lawyer cannot compartmentalize his or her mind to exclude actual knowledge of the event. As well, the court should ensure no conflict in the lawyer's duty as advocate and as an officer of the court. For example, what is the lawyer to do if his memory of the event differs from the evidence in-chief he hears from his witnesses. [Italics in original.]
(vii) Rule 4.02(2) of the Rules of Professional Conduct of the Law Society of Upper Canada provides that “Subject to any contrary provisions of the law or the discretion of the tribunal before which a lawyer is appearing, a lawyer who appears as advocate shall not testify before the tribunal unless permitted to do so by the rules of court or the rules of procedure of the tribunal, or unless the matter is purely formal or uncontroverted”;
(viii) The commentary to Rule 4.02(2) sets out the concern that a lawyer who puts personal beliefs into issue acts contrary to the lawyer’s role as an objective advocate and puts the lawyer’s credibility at issue. The commentary provides:
“A lawyer should not express personal opinions or beliefs or assert as a fact anything that is properly subject to legal proof, cross-examination or challenge. The lawyer should not in effect appear as an unsworn witness or put the lawyer’s own credibility in issue. The lawyer who is a necessary witness should testify and entrust the conduct of the case to another lawyer”.
(ix) Rules of Professional Conduct are not binding on a court, but are persuasive as an important statement of public policy (MacDonald Estate, at paras. 16 and 18; Karas, at para. 29);
(x) Courts should be reluctant to make what may be premature orders preventing lawyers from continuing to act. If the evidence does not necessarily have to come from the lawyer and may be obtained through admissions or documentary productions, a removal order will be premature (Essa (Township) v. Guergis; Membery v. Hill, [2003] O.J. No. 2581 (Div. Ct.) (“Essa”), at para. 43; Lesniowski v. H.B. Group Insurance Management Ltd., [2002] O.J. No. 3194 (S.C.J. - Mast.) (“Lesniowski”), at para. 15);
(xi) If there is some doubt or “merely a potential” that a lawyer will be called as a witness at trial, the courts should be more generous in allowing the lawyer to remain on the record and deferring the matter until after discoveries or leaving the matter to the trial judge (George S. Szeto Investments Ltd. et al v. Ott, 2006 9307 (Ont. S.C.J. - Mast.) (“George S. Szeto”), at para. 13);
(xii) “In view of the expense of litigation and the enormous waste of time and money and the substantial delay which can result from an order removing solicitors, courts should only do so in clear cases” (Essa, at para. 43);
(xiii) “[A] court should be slow to interfere with the litigant’s right to choose his or her counsel. … When a litigant is deprived of the services of a lawyer whom she has chosen, there will be some hardship imposed on her. The imposition of such hardship can only be justified if it is done to prevent the imposition of a more serious injustice. It follows that the removal of counsel should be only to relieve the risk of real mischief and not a mere perception of mischief” (Urquhart, at para. 19);
(xiv) Certainty that a lawyer will be called as a witness is not required. Rather, the court must consider the likelihood of the lawyer being called as a witness (Ontario Realty, at para. 33);
(xv) “It is not sufficient for a moving party to suggest opposing counsel is a potential witness or allege only that he or she might provide material evidence. Rather, it must be established that there is a real basis to believe counsel can likely, or probably, provide material evidence” (Graham v. Ontario, [2006] O.J. No. 763 (S.C.J.) (“Graham”), at para. 35; Ontario Realty, at paras. 34-35);
(xvi) “While courts have acknowledged that the freedom to choose counsel is an important interest to protect, it is not an absolute right. The right to be represented by counsel of choice can be outweighed when the administration of justice would be detrimentally affected” (Karas, at para. 45; George S. Szeto, at para. 21; Urquhart, at paras. 21 and 28); and
(xvii) The court should approach a motion to remove a lawyer of record who may be a witness at trial by following a flexible approach and consider each case on its own merits (Essa, at para. 48).
(b) The factors to consider under Essa
[61] Given the above law, the Divisional Court in Essa set out “a variety of factors” to be considered on a motion to remove a lawyer of record who may be a witness at trial. Those factors are (Essa, at para. 48) (quoted verbatim):
(i) the stage of the proceedings,
(ii) the likelihood that the witness will be called,
(iii) the good faith (or otherwise) of the party making the application,
(iv) the significance of the evidence to be led,
(v) the impact of removing counsel on the party’s right to be represented by counsel of choice,
(vi) whether trial is by judge or jury,
(vii) who will call the witness if, for example, there is a probability counsel will be in a position to cross-examine a favourable witness, a trial judge may rule to prevent that unfair advantage arising, and
(viii) the connection or relationship between counsel, the prospective witness and the parties involved in the litigation.
(c) Application of the law to the evidence
[62] I apply the relevant legal principles to the evidence considering the factors set out in Essa.
(i) The stage of the proceedings
[63] The action has now proceeded through examinations for discovery. This factor reduces the concern of uncertainty about further production or discovery evidence which might affect the likelihood of Elena giving evidence at trial.
[64] In particular, there is now a record of the evidence to be led at trial with respect to the Meeting. In effect, there are three different versions about Elena’s attendance and participation at the Meeting.
[65] The evidence can be summarized as follows:
(i) Amir states in his affidavit (and counsel advise that his evidence was consistent on discovery) that Elena did not attend the Meeting and that it was very brief (10 to 15 minutes). Amir’s evidence is that Bindoo raised no issue about conflict of interest or independent legal advice and simply put the documents before Amir for his signature;
(ii) Contrary to Amir’s evidence, Elena states in the July 23, 2012 Letter that she was present at the Meeting, although she states that she did not participate or review documents. Elena filed no evidence on the motion;
(iii) Bindoo states in his affidavit (and counsel advise that his evidence was consistent on discovery) that Elena attended the Meeting at all times and as such Elena was there while conflict of interest and independent legal advice issues were raised. Bindoo’s evidence is that Amir waived independent legal advice at the Meeting and that Elena said that she would assist Amir to review the documents. Bindoo’s evidence is that Elena fully participated and asked questions about the buy/sell provisions. Bindoo’s evidence is that the documents were reviewed at length at the Meeting that lasted one and a half to two hours, that Elena was the principal individual conducting the review, and that Amir did not sign the documents until Elena told him he could do so; and
(iv) Jorny has been examined under Rule 39.03, and his evidence is consistent with Bindoo, i.e. Elena attended the Meeting at all times and as such Elena was there while conflict of interest and independent legal advice issues were raised. Jorny’s evidence is that (i) Amir waived independent legal advice and (ii) Elena was at the Meeting to review the documents. Jorny’s evidence is that Elena fully participated and asked questions about the buy/sell provisions. Jorny’s evidence is also consistent with Bindoo’s evidence that the Meeting that lasted one and a half to two hours.
[66] The present case is unlike the situation in Lesniowski relied upon by Amir. In Lesniowski, the court raised concerns that the evidence of the lawyer could come from other sources since “it could for example come from admissions by Ms. Chung at her examination for discovery confirming Mr. Smith’s version of that conversation” or “evidence might also come from the defendant insurer’s documentary productions which may indicate for example that such a ‘standard form letter’ was sent routinely to other insureds in single vehicle accidents” (Lesniowski, at para. 15).
[67] In the present case, the key evidence as to Elena’s role at the Meeting has been set out by the parties to the action and by Jorny as the vendor who attended the Meeting. The stage of the proceeding is much more advanced and the evidence much more certain than in Lesniowski.
[68] Consequently, the critical evidence is known at this stage of the proceedings and this factor strongly favours removal of Elena as Amir’s lawyer of record.
(ii) The likelihood Elena will be called as a witness
[69] I accept the legal proposition as stated by Mr. Weintraub that the mere statement by a party that it intends to call the lawyer as a witness at trial is not sufficient. The court must review the evidence to determine the likelihood of that possibility.
[70] At the hearing, Mr. Weintraub submitted that removal of a lawyer as a witness ought to take place only when the “likelihood” of the lawyer being called as a witness is a “near certainty” or “almost necessary”, relying on the commentary to Rule 4.02 that a “lawyer who is a necessary witness should testify and entrust the conduct of the case to another lawyer”.
[71] However, Rule 4.02(2) precludes a lawyer from acting as counsel from testifying before the tribunal “unless permitted to do so by the rules of court or the rules of procedure of the tribunal, or unless the matter is purely formal or uncontroverted”. It does not require the lawyer to be a “necessary” witness in order for the Rule to apply.
[72] The commentary ought not to be read as changing the general rule (which would not be a reasonable interpretation of commentary), but only adding guidance that if a lawyer is a necessary witness, the proper choice for the lawyer to make is to testify in the action and not act as counsel.
[73] Further, the applicable law is clear that the court must consider the “likelihood” of a lawyer being called as a witness, not whether the lawyer’s evidence is “necessary”.
[74] Requiring the court to determine if a lawyer’s evidence would be “almost necessary” or a “near certainty” at trial would impose an unreasonable onus on a moving party as it would be difficult for any counsel to conclude as to who are “necessary” witnesses until evidence is led at trial. Consequently, it is more appropriate for the court to consider the “likelihood” of the lawyer being called as a witness, with the strength of the likelihood being a factor to consider under the Essa test.
[75] The Divisional Court in Essa requires the court to consider the “likelihood” of the lawyer testifying and the significance of the evidence, not the “necessity”. A lawyer who is likely to give evidence as a witness on a material contentious issue raises the same concerns as set out by the guidelines in Essa (see also Graham, at para. 35), regardless of whether a finding of “necessity” is made.
[76] Consequently, I do not consider whether it is “near certain” or “almost necessary” that Elena will be called as a witness. I rely on Essa and the other authorities discussed at subparagraphs 60 (xiv) and (xv) above (Graham and Ontario Realty), and consider the likelihood that Elena will be called as a witness.
[77] On the evidence in this case, there is a strong likelihood that Elena will be called as a witness. The positions of the parties at trial depend to a large extent on Elena’s alleged conduct at the Meeting, and as such depend on the credibility of the witnesses at the Meeting. If Bindoo’s evidence is accepted, (i) Bindoo explained the conflict of interest and independent legal advice issues to both Amir and Elena; (ii) Amir advised Bindoo that Amir did not want separate counsel; (iii) Elena advised Bindoo that she was assisting Amir at the Meeting; (iv) Bindoo explained the documents at length (for one and a half to two hours) to both Amir and Elena; (v) Elena asked many questions about the documents including the buy/sell provisions; and (vi) Elena was the individual who advised Amir that he could sign the documents.
[78] Not only will Bindoo provide this evidence, but Jorny’s evidence will be to a similar effect.
[79] Amir’s evidence of the Meeting is diametrically opposed to that of Bindoo and Jorny. Amir gave sworn evidence in his affidavit and discovery that Elena did not attend at the Meeting but instead Elena waited alone in the reception area while all of the other participants including Jorny’s wife and Amir’s mother attended at Bindoo’s office.
[80] On the other hand, Elena states in the July 23, 2012 Letter that she was present at the Meeting. Elena also did not object to Bindoo’s counsel’s July 25, 2012 letter which (i) referred to Elena’s “admission” that she was present at the Meeting, and (ii) then set out the conflict issues arising from her attendance.
[81] Mr. Weintraub submits that it is not likely Amir will call Elena to provide evidence, as her position that she did not participate in the Meeting or review documents is set out in the July 23, 2012 Letter. I agree with Mr. Weintraub that calling Elena would not appear to assist Amir since Amir has now on two occasions given sworn evidence that Elena did not attend the Meeting, and Elena’s position in the July 23, 2012 Letter is that she did attend the Meeting (although Elena states in that letter that she did not participate in the Meeting or review documents).
[82] If Amir called Elena and her evidence was that she attended the Meeting, this could result in a finding at trial that Amir should not be believed on his evidence that Elena did not attend the Meeting, which could have a significant effect on Amir’s credibility on the evidence as to whether the seminal conflict issues were raised at the Meeting. Further, if Elena’s evidence is consistent with her statement in the July 23, 2012 Letter that she attended but did not participate in the Meeting, such evidence could not help establish what took place at the Meeting.
[83] For the above reasons, I accept that it is not likely that Amir would call Elena as a witness, even though Amir led no evidence as to his intentions to call Elena as a witness.
[84] However, I agree with Bindoo that it is very likely that he will call Elena as a witness. Bindoo’s assertion that he intends to instruct counsel to call Elena as a witness (while not sufficient on its own) is supported by the evidence of this case.
[85] Bindoo has the July 23, 2012 Letter from Elena advising Bindoo’s counsel that she attended the Meeting. Her attendance at the Meeting would directly refute her brother’s assertion that she did not attend, which could have a significant effect on Amir’s credibility on all issues before the court at trial. There is little risk in Bindoo calling Elena to obtain trial evidence from Elena as to whether she attended the Meeting.
[86] If Elena denies attendance, she will be faced with the July 23, 2012 Letter (and her failure to object to Bindoo’s counsel’s July 25, 2012 response) as the basis for cross-examination, and the court will be required to assess her credibility, which raises the conflict issues discussed in Rule 4.02 and in Urquhart and Young-Tangjerd discussed at subparagraphs 60 (v) – (vii) above.
[87] If Elena provides evidence that she attended the Meeting, Amir’s credibility is in jeopardy.
[88] Even if Elena admits to attendance at the Meeting but denies participation in the Meeting or reviewing the documents (as she states in the July 23, 2012 Letter), there is little risk to Bindoo, who already will have his evidence and Jorny’s evidence to the contrary. Amir cannot provide evidence as to Elena’s participation except to say that she did not attend regardless of whether Amir is believed on the issue of Elena’s attendance.
[89] Consequently, Elena’s evidence as to whether she attended the Meeting can damage Amir (if Elena says she attended) or raise credibility issues against Elena based on the July 23, 2012 Letter (which is one of the legal bases to remove a lawyer of record). There appears to be little risk in Bindoo calling Elena as a witness and significant potential benefit in order to refute Amir’s credibility.
[90] For the above reasons, on the facts of this case I find that it is highly likely Bindoo will call Elena as a witness, and this factor strongly favours removal of Elena as Amir’s lawyer of record.
(iii) The good faith (or otherwise) of the party making the application
[91] On the evidence I discuss above, Bindoo established his good faith in making the application.
[92] Bindoo’s counsel raised the issue of conflict as soon as possible on May 17, 2012, two weeks after the statement of claim was issued, upon delivery of the notice of intent to defend. Even if Elena was not a lawyer at the time of the Meeting in September 2007[^9], Bindoo’s counsel stated as soon as receiving the claim that there was a conflict because Elena was acting as lawyer for Bindoo in the present action when she would be a witness.
[93] Bindoo’s counsel repeated the concern about the conflict in four separate letters between May 27 and July 28, 2012. The conflict issue was raised again before Justice Brown at the motion scheduling court in August 2012 and Justice Brown granted Bindoo’s request for an adjournment (which Elena opposed) to obtain instructions on the removal motion. Bindoo’s counsel confirmed instructions by letter dated August 7, 2012 and requested Elena’s available dates for the removal motion two days later by letter dated August 9, 2012, prior to the return before motion scheduling court.
[94] Justice Penny at the August 10, 2012 return date for the motion scheduling court agreed with Bindoo and ordered that the removal motion be heard before any summary judgment motion. Later the same day after the motion scheduling court appearance on August 10, 2012, Bindoo’s counsel wrote and requested dates for the removal motion. The motion was booked within 5 days (on August 15, 2012) for the available date of November 27, 2012.
[95] Examinations for discovery then took place prior to the July 11, 2013 return date of this motion so as not to delay the action, with Mr. Weintraub acting as counsel on the discoveries and Elena not attending at the discoveries.
[96] There is no evidence to support the bald assertion in Amir’s factum that “The Defendant is bringing the within motion in bad faith as LawPro has unlimited resources and knows that if Elena Mazinani is removed as solicitor of record the Plaintiff will be unrepresented which will result in prejudice and delay.[^10] LawPro has refused to pay for the additional costs the plaintiff would incur if required to change counsel”.
[97] Further, in any event, there is no case law to support a requirement that a moving party pay for new counsel if successful. To the contrary, the impact of removal which is considered below can take this factor of additional costs into account. On the evidence in this case, such a financial means argument cannot be supported as I discuss at paragraphs 105 to 112 below.
[98] On the evidence before the court, there could not be a better example of an immediate, reasoned position taken by Bindoo which was maintained throughout with a motion booked within three months after delivering a notice of intent to defend which raised the issue. The good faith of the moving party is evident.
(iv) The significance of the evidence to be led
[99] Elena is not just one of several witnesses to the Meeting. She is a critical witness on the issue of whether Bindoo fulfilled his obligations as counsel which form the basis of Amir’s claim in negligence and breach of fiduciary duty.
[100] Elena’s evidence as to her attendance and role at the Meeting goes to the root of the allegations against Bindoo in the action, i.e. that Bindoo failed to disclose a conflict of interest, failed to advise Amir to obtain independent legal advice, and simply put the documents to Amir for signature in a 10-15 minute meeting.
[101] Bindoo’s defence to the claim is premised to a significant part on Elena’s involvement. Bindoo led evidence on this motion and alleged in his defence that he raised the issues of conflict of interest and independent legal advice, but that Amir waived any conflict issue and Elena was at the Meeting to assist Amir in reviewing the documents. Bindoo further led evidence that Amir signed the documents after Elena advised that he could do so and after a lengthy review of the documents by Amir and Elena which took one and a half to two hours.
[102] Elena’s evidence relates to her role as a participant at the Meeting, on all issues pertinent to the claim concerning disclosure of conflict of interest, review of documents, and her role in providing assistance to Amir. She is a key participant in the only Meeting on which the claim is based, not just a witness.
[103] As set out above, the key issues for trial will be whether (i) Bindoo explained the conflict of interest to both Amir and Elena; (ii) Amir advised Bindoo that Amir did not want separate counsel; (iii) Elena advised Bindoo that she was assisting Amir at the Meeting; (iv) Bindoo explained the documents at length (for one and a half to two hours) to both Amir and Elena; (v) Elena asked many questions about the documents including the buy/sell provisions; and (vi) Elena was the individual who advised Amir that he could sign the documents. On all those issues, Elena’s evidence will be pivotal.
[104] Consequently, this factor strongly favours removal of Elena as lawyer of record for Amir.
(v) The impact of removing counsel on the party’s right to be represented by counsel of choice
[105] The evidence does not support Amir’s bald assertion that he would be forced to act for himself if Elena was removed as his lawyer. To the contrary, the evidence supports the acknowledgement by Mr. Weintraub that Amir may choose to represent himself if Elena is removed as lawyer of record, but would not be forced to do so.
[106] Amir’s own evidence that he had the means to represent himself in a “reasonable” action (see paragraph 52 above) further supports that he would not be forced to act without counsel. On the evidence I review at paragraphs 92 to 96 above, and my additional analysis at paragraph 107 below, Bindoo did not act unreasonably and did not bring any unnecessary proceedings to incur additional costs.
[107] To the contrary, Bindoo chose not to bring a motion for particulars despite serving a demand for particulars, instead filing a statement of defence promptly after service of the claim. Bindoo brought no motion in this action except this removal motion which was brought promptly. It was Amir who required attendance at motion scheduling court to schedule a summary judgment motion which he did not bring. Further, on both occasions before the motion scheduling court, the court agreed with Bindoo that (i) an adjournment was appropriate to obtain instructions on the removal motion (Justice Brown at the August 3, 2012 attendance) and (ii) the removal motion had to be heard before the summary judgment motion (Justice Penny at the August 10, 2012 attendance).
[108] Mr. Weintraub further submits that even if a party has the means to represent itself upon removal of a lawyer, the court can still consider the complexity and longevity of the action to assess the impact of removing a lawyer of record. I agree. However, these factors do not assist Amir.
[109] The action is not complex. The issues arise from the purchase of a 50% interest in a franchise, and the factual issues essentially arise out of the Meeting which was the only time the parties met in person. There are no complex legal issues raised by the pleadings, and none were put before the court in argument.
[110] The present action has not been ongoing for a lengthy period of time. To the contrary, the statement of claim was issued in May 2012 and discoveries are now complete.
[111] Even though Elena acted for Amir in the Jorny Action, that action has not been pursued and Elena advised Bindoo’s counsel that Amir will discontinue that action. There is no evidence as to the status of the small claims court action for the $5,250 claim.
[112] Consequently, on the evidence in this case, the impact on Amir of removing Elena as Amir’s lawyer is minimal.
(vi) Whether trial is by judge or jury
[113] Amir has not delivered a jury notice in accordance with Rule 47.01 and the action will proceed by judge. This factor is not relevant on the evidence in this case.
(vii) Who will call the witness
[114] As I discuss above, it is highly likely that Bindoo will call Elena as a witness. This would raise the concern discussed by the court in Essa that Amir’s counsel for the cross-examination (who could not be Elena) could obtain an “unfair advantage” by cross-examining a favourable witness.
[115] Further, as in Urquhart, “there is the very distinct possibility that the defence” would call plaintiff’s counsel as a witness which “would place counsel for the plaintiff in the invidious position of having to cross-examine the counsel who is making the plaintiff’s primary case” (Urquhart, at para. 22).
[116] Consequently, this factor favours removal of Elena as lawyer of record for Amir, although it is not as pivotal a factor as the others discussed above, and is not necessary to my decision.
(viii) The connection or relationship between counsel, the prospective witness and the parties involved in the litigation
[117] While Elena is Amir’s sister, such a family relationship does not on its own create the concern of an intimate personal relationship that affects counsel’s ability to conduct the litigation with the necessary degree of emotional detachment (as the test is set out in Karas, at para. 54).
[118] However, as a lawyer who placed her integrity at issue by advising Bindoo’s counsel in the July 23, 2012 Letter that she attended the Meeting, such a connection places Elena in a conflict with the evidence now provided by her client Amir. As Master McAfee held in Karas, “[a]n informed and reasonable member of the public might be left with the impression that any particular decision taken by … counsel for the plaintiffs could have been motivated by his interest in the outcome, bringing the administration of justice into disrepute” (Karas, at para. 58).
[119] The court should not be put into a situation “to worry about, or wonder whether there are extraneous considerations that could impair the lawyer’s ability to act appropriately” (Shenna Ka Wei Kim v. Marc Andre Hermanstyne, 2011 ONCJ 101 at para. 18).
[120] Consequently, this factor favours removal of Elena as lawyer of record for Amir, although even if this factor was not at issue[^11], the overall balance of factors still favours the same relief.
(d) Conclusion
[121] On the basis of the evidence in this case, an order removing Elena as lawyer for Amir is appropriate. Elena is a key witness to the seminal event at issue in the action, i.e. who attended and what transpired at the Meeting. It is highly likely that Bindoo will call Elena as a witness. The evidence is that while Amir may choose to act as self-represented if Elena is removed as lawyer of record, he can retain a lawyer and Mr. Weintraub has conducted the examinations for discovery. The action is not at a stage imminent to trial, and examinations for discovery are complete so the scope of the relevant documentary and oral evidence from the critical parties is known. Finally, the motion is brought in good faith with the conflict issue having been raised from the outset of the action in May 2012. These are the key factors from Essa on which I rely to make the order removing Elena as Amir’s lawyer of record.
Order and costs
[122] For the reasons I discuss above, I grant the motion. Bindoo was successful and is entitled to his costs of the motion. The issue before the court was important to both parties. Given the motion records filed, the cross-examinations of Amir and Bindoo and the Rule 39.03 examination of Jorny, the detailed factums and briefs of authorities filed, and the long motion appearance before the court, I fix costs at $10,000 inclusive of taxes and disbursements, payable by Amir to Bindoo within 30 days of this order.
[123] I also order additional costs in the amount of $1,000 inclusive of taxes and disbursements payable by Amir to Bindoo within 30 days of this order, for the success of Bindoo at both motion scheduling courts. Justice Penny reserved the costs of attendance before motion scheduling court to the court hearing either the summary judgment or removal motion, and Bindoo was successful as I discuss at paragraphs 45, 48, 93, 94, and 107 above.
[124] As I noted at the hearing, I thank counsel for their thorough written and oral submissions which were of great assistance to the court. Further, I commend counsel for the civility and professionalism with which they addressed each other and the court.
Master Benjamin Glustein
DATE: July 25, 2013
[^1]: As I discuss at paragraph 117 below, my decision does not rely on a sibling relationship as a basis for removal of Elena as lawyer of record.
[^2]: I use the defined term “Partnership” in these reasons as the alleged partnership relationship set out in Amir’s claim. I make no finding that there was a partnership arrangement.
[^3]: I note that Amir did not expressly plead in his reply that Elena did not attend the Meeting (defined at paragraph 27 below) with Amir or that Elena did not review documents or provide advice, but only pleaded that she was not a lawyer at the time. However, given that Amir pleaded in his reply a general denial to the specific allegations in the statement of defence including those involving Elena’s review of documents, I do not take the pleading to admit that Elena attended the Meeting, reviewed documents, or provided advice. In any event, Amir and Bindoo address the critical issue of Elena’a attendance at the Meeting directly in the affidavit evidence discussed below.
[^4]: However, as I discuss below, the motion to remove Elena as Amir’s lawyer does not depend on whether Elena was a lawyer at the time of the September 13, 2007 meeting but rather on the basis that Elena, as the alleged individual who attended the Meeting, reviewed the documents and upon whose advice Amir signed the documents, cannot act as Amir’s present lawyer and a witness.
[^5]: Emphasis in original text.
[^6]: See footnote 5.
[^7]: This statement might appear contradictory to Amir’s earlier affidavit evidence which distinguishes between the office and the reception area, although later in this same paragraph in his affidavit, he reiterates that Elena remained in the waiting area and did not participate in the Meeting which took place in Bindoo’s office. Further, Amir later states in his affidavit that Elena was not present at the Meeting (in which Amir executed the documents) and as such Elena did not explain or review the documents to Amir. For the purposes of this motion, I take Amir’s position to be as set out at three occasions in his affidavit that Elena waited in the reception area and did not attend the Meeting.
[^8]: At the date Bindoo swore his affidavit, the issue of whether Amir would bring a motion for summary judgment remained unresolved.
[^9]: (As I discuss at paragraphs 22 and 26 above, Bindoo’s pleads at in his statement of defence that Amir had “independent counsel in the form of Elena” but Amir pleads in his reply that Elena was not a lawyer at that date.)
[^10]: Also see my analysis at paragraphs 105 to 112 below of the impact on Amir if Elena is removed as lawyer, on which the evidence also does not support this assertion by Amir.
[^11]: (or even favoured Amir since the brother-sister relationship does not raise the nature of an intimate personal relationship addressed in the case law)