COURT FILE AND PARTIES

COURT FILE NO.: CV-08-8428-00CL

DATE: 20140401

SUPERIOR COURT OF JUSTICE - ONTARIO

BETWEEN: Building Failures Inc., Plaintiff

-and-

1168812 Ontario Inc., Rochon Engineering Corporation, Michael Rochon and Vincent Rochon, Defendants

AND BETWEEN:

1168812 Ontario Inc., Michael Rochon and Vincent Rochon, Plaintiffs by Counterclaim

-and-

Building Failures Inc., T. Smith Engineering Inc., Terry Smith, Marko Milicevic and Rocco Mazzone, Defendants to the Counterclaim

AND BETWEEN:

Rochon Engineering Corporation, Plaintiff by Counterclaim

-and-

Building Failures Inc., T. Smith Engineering Inc., Terry Smith, Marko Milicevic and Rocco Mazzone, Defendants to the Counterclaim

BEFORE: Mr. Justice H.J. Wilton-Siegel.

COUNSEL: Angelo G. Sciacca, for the Defendants/Plaintiffs by Counterclaim, 1168812 Ontario Inc., Rochon Engineering Corporation, Michael Rochon and Vincent Rochon

Glenn Stuart, for the Plaintiff/Defendants by Counterclaim, Building Failures Inc., T. Smith Engineering Inc. and Terry Smith

HEARD: March 26, 2014

ENDORSEMENT

[1] On this motion, the defendants 1168812 Ontario Inc. (“Old Rochon”), Rochon Engineering Corporation, Michael Rochon and Vincent Rochon seek an order removing Gosia Bawolska (“Bawolska”) as counsel of record for the plaintiff/defendants by counterclaim Building Failures Inc. (“BFI”), T. Smith Engineering Inc. and Terry Smith (collectively, the “plaintiff”).

[2] In the action, BFI alleges that Old Rochon owes certain fees to it pursuant to a service agreement and supervisory agreement between these parties. As part of its claim, BFI also seeks to set aside a transfer of assets from Old Rochon to Rochon Engineering Corporation (“New Rochon”) for failure to comply with the Bulk Sales Act, R.S.O. 1990, c. B.14.

[3] The plaintiff was previously represented by another lawyer until February 14, 2014 when the plaintiff served a Notice of Change of Lawyers naming Bawolska. Bawolska worked as an associate at the law firm of McCague Borlack between September 2006 and August 2013, prior to joining Rapley & Company. During the period of her employment at McCague Borlack, encountered the defendants in their capacity as experts to clients of McCague Borlack and of parties in litigation in opposition to clients of McCague Borlack.

[4] The applicable test in respect of conflicts of interest was set out by Sopinka J. in MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 S.C.R. 1235 at para. 45:

(1) Did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand?

(2) Is there a risk that it will be used to the prejudice of the client?

[5] The defendants acknowledge that no solicitor-client relationship ever existed between the defendants and Bawolska. The defendants say that Vince Rochon and Bawolska had lunch together on five occasions but their position on this motion is based principally on the last of these occasions. They say that Vincent Rochon imparted confidential information to her at a lunch held on July 27, 2011.

[6] On that occasion, Vincent Rochon had arranged a business development session to which he invited Bawolska and other members of McCague Borlack, which ended with a lunch in a restaurant. Vincent Borlack says that, at that lunch, Bawolska asked about the departure of Terry Smith, a former employee of Old Rochon. Mr. Smith had left the employment of Old Rochon in 2008. He is the shareholder and director of BFI. Vincent Rochon says he discussed the merits of this action, which arose on Mr. Smith’s departure, with Bawolska. He also says he discussed the sale of the business of Old Rochon, the structure of the sale and of his assets. He says this is confidential information that he would not have given to Bawolska if he had known she would subsequently represent the plaintiff.

[7] As this information was not given in the context of a solicitor-client relationship, the onus lies on the defendant to establish that Bawolska received material confidential information. I am not satisfied that he has done so in this case for two reasons.

[8] First, although it is not necessary to give the specific information alleged to be confidential, it is necessary to establish the nature of the alleged confidential information and its relevance to the action.

[9] In this case, Vincent Rochon alleges that he discussed the merits of the action with Bawolska, which she denies. In particular, Vincent Rochon asserts that he discussed the evidence with Bawolska. However, there is no evidence from any of the other persons present at the lunch to corroborate the allegation that there was a discussion about the merits of the defendants’ position in the action. Moreover, the only evidence identified is an alleged claim of Mr. Smith in respect of 6,000 hours in one year, which is manifestly not possible. Any comments of Bawolska regarding the improbability of such evidence can hardly be characterized as legal advice, as the defendants suggest. The remaining information pertaining to the sale of Old Rochon and Vince Rochon’s assets have not been demonstrated to be relevant to the action notwithstanding the relief sought in respect of the Bulk Sales Act.

[10] Second, the evidence does not support the claim of confidentiality in respect of the evidence that Vincent Rochon says he communicated to Bawolska for two reasons. First, it is clear that Vincent Rochon voluntarily provided this information in a public place, without regard for confidentiality, to one or more parties who were prospective sources of business in order to remove any concerns for the continuity of the business. A provider of information in such circumstances could not reasonably expect that a recipient would treat the information as confidential unless he expressly stated that it was being communicated on such basis. There is no suggestion that Vincent Rochon did so. In addition, the defendants have already produced the sale documentation in the action. There is no evidence that Vincent Rochon imparted any information that has not already been revealed in that documentation, with the result that any claim of confidentiality that could have been asserted has already been waived.

[11] The defendants say they would be “uncomfortable” if Bawolska acted for the plaintiff in this action. For the reasons stated above, that is insufficient to satisfy the MacDonald Estate test in the present circumstances. I am not satisfied that denial of the relief sought by the defendants would bring the administration of justice into disrepute in the eyes of an objective third party as the defendants suggest.

[12] The motion is therefore denied. Costs in the agreed amount of $7,000 are payable by the defendants within 30 days.

Wilton-Siegel J.

Date: April 1, 2014