ONTARIO
SUPERIOR COURT OF JUSTICE
Court File No.: 48569/06
Date: 2013-09-12
B E T W E E N:
1162740 ONTARIO LIMITED, JOSEPH PINGUE, and SABATINO PINGUE Jr.
M. K. Douglas, for the Plaintiffs
Plaintiffs
- and -
VENANZIO PINGUE, 2077626 ONTARIO INC. and 912618 ONTARIO LIMITED
Orie H. Niedzviecki, Agent for Pedwell and Pedwell, Solicitors for the Defendants
Defendants
HEARD: August 13, 2012 at St. Catharines
PARAYESKI, J.
REASONS FOR JUDGMENT
[1] The defendants move for an order removing the Douglas, Stewart & Associates LLP law firm as solicitors of record for the plaintiffs. The basis of the motion is an alleged conflict of interest which has the potential to disqualify the firm from continuing to act.
[2] The alleged conflict flows from the fact that one R. David House, who has acted for the defendants, or some of them, in the past now shares office space with the Douglas et al. law firm, and is advertised as being “of counsel” to it.
[3] Mr. House acted in respect of three actions on behalf of the defendants, or some of them, as follows:
he acted for Venanzio Pingue and 912618 Ontario Limited in a Small Claims Court action which settled in April of 2012;
he acted on a limited retainer basis as counsel or consultant to Mr. Pedwell, who acts for all of the defendants, in the present action; and
he acted for the defendant 912618 Ontario Limited in an action against Young’s Insurance having to do with the fire loss claim. That retainer was terminated by Venanzio Pingue, a principal of 912618 Ontario Limited, on May 3rd, 2013.
[4] On January 8th, 2013 Mr. House began physically sharing space with the Douglas et al. law firm. He and its two partners had purchased the property together as tenants in common in the previous year.
[5] The interested entities, including Mr. House, have engaged in the less-than-helpful practice of exchanging tit-for-tat affidavits, which makes winnowing out the facts difficult. It seems, however, that Mr. House and the Douglas et al. law firm now share a reception area with separate reception desks and staff. Each practice has its own telephone, internet, computer, bookkeeping, and storage systems. The offices can be locked, but are not always locked. Filing cabinets are not shared, although they do not appear to be locked.
[6] While precise details of the retainer of Mr. House as counsel or consultant to Mr. Pedwell in the present action are mired in the conflicting affidavits, it appears that Mr. House did, in the course of his duties, become privy to some limited information which can be accurately described as being privileged. That said, Mr. House has deposed that he rendered his final account in this matter on May 31st, 2012, and that he closed his file at that time. Its physical contents were said to have been destroyed then as well.
[7] Venanzio Pingue deposes that Mr. House told him that he could no longer act relative to the present action when they met at the new, shared premises on August 23rd, 2013. Obviously, this conflicts with Mr. House’s description of him having closed his file in the previous May. In any event, there is no evidence that Mr. House has done any work on the present matter since May of 2012. Mr. House did continue to act with regard to the two other actions as described above.
[8] Venanzio Pingue is uncomfortable with the physical closeness and inevitable personal interaction between the solicitors, including Mr. House, who share the new premises. All of the solicitors categorically deny that they have engaged in any inappropriate of sharing of privileged or confidential information.
[9] Additionally, and more specifically, Venanzio Pingue deposes that he terminated Mr. House’s retainer relative to the action described above against Young’s Insurance because Mr. House told him he would not bring a motion against the said Young’s Insurance because it was being represented by a solicitor with Douglas et al. It is argued that this is demonstrative of Mr. House having a greater dedication or loyalty to Douglas et al. than to Mr. Pingue and his corporation.
[10] The ultimate test, as articulated in the MacDonald Estate v. Martin decision of the Supreme Court of Canada, reported at [1990] S.C.R. 1235, is whether a “reasonably informed person would be satisfied that no use of confidential information would occur.” Thus, the issue is to be decided neither upon the subjective perceptions of the party seeking removal nor upon simple denials by counsel.
[11] The defendants have attempted to make much of the fact that Mr. House has sworn affidavits in response to their motion. While I am critical of the back and forth nature of all parties’ affidavits, I am not prepared to read anything sinister into Mr. House’s participation. In my view, he has the right to respond to an attack, be it oblique or direct, upon his professional character in relation to using confidential information.
[12] I do not accept as reasonable the inference the moving parties draw from Mr. House’s declining to bring a motion against a client represented by Douglas et al. The evidence before me does not provide sufficient context to come to the conclusion argued.
[13] I am convinced that a reasonably informed person knowing of the space sharing arrangement and other facts described above would be satisfied that the sharing of confidential information would not occur. The test uses the word “would” not “could”. Obviously, the result might be different if Mr. House had joined the Douglas et al. firm as an associate or partner and/or if he purported to act for the plaintiffs. Also, one must recall that he is not the target of this motion. Rather the target is the Douglas et al. firm. The relationship between the entities sharing space is what is really at issue, in my view.
[14] The defendants’ motion is denied.
[15] If the parties cannot agree upon costs of the motion, they may make brief written submissions to me in that regard. Each set of such submissions, if any, shall not be more than three typewritten pages in length, not including costs outlines. The plaintiffs shall serve and forward to me their submissions on costs on or before September 30th, 2013. The defendants will have a further 15 days to reply. Cost submissions should be forwarded to my attention at the John Sopinka Court House at Hamilton.
Parayeski, J.
Released: September 12, 2013
COURT FILE NO.: 48569/06
DATE: 2013-09-12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
1162740 ONTARIO LIMITED, JOSEPH PINGUE, and SABATINO PINGUE Jr.
Plaintiffs
- and –
VENANZIO PINGUE, 2077626 ONTARIO INC. and 912618 ONTARIO LIMITED
Defendants
REASONS FOR JUDGMENT
PARAYESKI, J.
MDP:mw
Released: September 12, 2013