COURT FILE AND PARTIES
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: AMIR GIRGIS-BOKTOR, Plaintiff
AND:
RONALD REDDY, GREG CHEW, NEXUS HEALTH MANAGEMENT LTD. and PGR HEALTH AND WELLNESS LTD., Defendants
AND RE: RONALD REDDY, GREG CHEW, NEXUS HEALTH MANAGEMENT LTD. and PGR HEAL TH AND WELLNESS LTD., Plaintiffs by Counterclaim
AND:
AMIR GIRGIS-BOKTOR and MANAHREE INC., Defendants to the Counterclaim
BEFORE: Stinson J.
COUNSEL:
Derrick M. Fulton, for the Plaintiff
Ronald Reddy, appearing in person and on behalf of Nexus Health Management Ltd. and PGR Health and Wellness Ltd.
Greg Chew, appearing in person
HEARD at Toronto: June 24, 2014
ENDORSEMENT
1This endorsement concerns a motion brought by the defendants for an order to disqualify and remove plaintiff’s counsel of record, Minden Gross LLP. In view of the nature of the allegations upon which the motion is based, outside counsel in the person of Mr. Fulton represented the interests of the plaintiff and Minden Gross in responding to the motion. The defendants, who are self-represented, argued the motion on their own behalf.
2The genesis of this lawsuit is a dispute arising from an unsuccessful business venture in which the plaintiff invested $250,000 with or through the defendants. In his statement of claim, the plaintiff seeks the return of that amount on the ground that the transaction did not proceed. He asserts that the defendants improperly, fraudulently and dishonestly withheld the $250,000 payment.
3The defendants have served a statement of defence and counterclaim. They assert that the plaintiff is responsible for the transaction not proceeding and that the $250,000 was a non-repayable deposit. They further deny any personal liability. In their counterclaim, they seek damages of $2,269,950, asserting breach by the plaintiff and his corporation of their contractual obligations.
4Although the statement of claim was issued in April 2012 and the statement of defence and counterclaim was served in June 2012, little progress has been made in the action since the exchange of pleadings. At one stage, the plaintiff announced his intention to bring a motion for summary judgment. The result was several appearances in Motions Scheduling Court dealing with dates for the motion, the timetable for exchange of materials and related issues. The plaintiff’s materials in support of the motion for summary judgment were served in February 2013, just outside the date specified in the timetable. Disputes arose as to the timing of receipt of those materials. Further attendances in Motions Scheduling Court ensued. At one such attendance, before Frank J. on May 7, 2013, the defendants publicly accused Matthew Maurer, a Minden Gross lawyer representing the plaintiff, of serious professional misconduct; the result was a profane exchange in the hallway outside the courtroom.
5Ultimately, the plaintiff decided he would not proceed with his motion for summary judgment. Meanwhile, the defendants served this motion seeking to remove Minden Gross as plaintiff’s lawyers of record. Additional attendances in Motions Scheduling Court followed, relating to disputes regarding, among other things, the timing of exchange of materials, the ability of the defendants to cross-examine on an affidavit filed in support of a motion they had served and withdrawn, and various other disagreements. The September 2013 date for the plaintiff’s summary judgment motion came and went. The defendant’s motion to remove plaintiff’s lawyers of record remained outstanding.
6Subsequently, Low J., who was then the presiding judge on the Civil List in Toronto, concluded that this case require case management. I was designated as the case management judge in November 2013. Since then I have conducted a series of case conferences (both in person and by telephone conference) directed at advancing the matter and dealing with the various outstanding issues. In light of the stance of the defendants that plaintiff’s counsel should be removed, resolution of that issue was the top priority. After several false starts due to delays in the preparation and exchange of materials, disputes regarding cross-examinations, etc., the defendants’ motion came on for argument before me on June 24, 2014.
7A significant quantity of material was filed by the defendants in support of the motion. Both personal defendants swore supporting affidavits. A substantial responding record was filed on behalf of the plaintiff, comprised mainly of an affidavit sworn by Mr. Maurer, the lawyer at Minden Gross with most active involvement in the matter. Cross-examinations were conducted on the affidavits. As well, the defendants conducted a rule 39.03 examination of a more senior lawyer at Minden Gross, Arnie Herschorn.
8Much of the material contained in the motion records of the defendants and in the responding motion record of the plaintiff dealt with the procedural history of the matter, preceding my appointment as case management judge. In my view, most of that material is irrelevant for purposes of the issue I am called upon to decide on this motion, namely, whether grounds have been put before the court that warrant an order removing Minden Gross as lawyers of record for the plaintiff. What that material does record is an unfortunate lack of cooperation among the parties with respect to advancing the matter on a timely basis. Each side complains that the other side has been uncooperative, but in my view, while each side may share some blame, there is nothing in any of that conduct that would warrant the remedy now sought.
9In addition, the defendants assert that the lawyers for the plaintiff, in particular Mr. Maurer, have displayed a lack of civility in dealing with them. They rely on this as a ground for removing Minden Gross as lawyers of record. I am not in a position to adjudicate, one way or another, the validity of the defendants’ complaints regarding alleged incivility, subject to one exception. The one exception concerns a profane utterance by Mr. Maurer in the hallway outside the Motions Scheduling Court courtroom. That occurrence came immediately on the heels of the defendants’ accusation in open court before Frank J. that Mr. Maurer was guilty of serious professional misconduct.
10In light of the defendants’ apparent intention to pursue a complaint of professional misconduct against Mr. Maurer I have little to say about that incident, save that the use of profanity by Mr. Maurer was plainly inappropriate. Taken by itself and indeed viewed in the context of the overall history of the matter, however, I do not see this conduct as sufficiently egregious as to warrant the exceptional remedy of a removal of the plaintiff’s lawyers of record.
11The true substance of the defendants’ motion concerns a series of communications between the defendant Greg Chew and Mr. Maurer, in March 2013. These communications largely consisted of an exchange of email messages (initiated by Mr. Chew) on March 19, 2013, a telephone discussion on March 26, 2013, and a follow-up exchange of email messages on April 3, 2013. All those communications were put in evidence before me as well as a memorandum to file prepared by Mr. Maurer on March 26, 2013 recounting the conversation he had that day with Mr. Chew.
12Because it is important to place the defendants’ argument in context, I will briefly summarize the contents of these various communications. I begin by noting that they were initiated by Mr. Chew, without invitation by Mr. Maurer, in the wake of service of the plaintiff’s material in support of his motion for summary judgment. The key contents of these emails are summarized below.
March 19, 2013, at 11:44 AM – email from Mr. Chew to Mr. Maurer
13This message is expressly entitled “sent without prejudice”. Among other contents, it includes a settlement proposal, by which Mr. Chew proposes to pay a total of $10,000: $5,000 upon agreement, and a further $5,000 in monthly installments over a 10 month period. Mr. Chew denies any control over the defendant corporations. He sets out detailed information regarding his personal circumstances, including the fact that he lives at home with his parents, and that he is insolvent with secured creditors with whom he is attempting to work, failing which he will be forced into bankruptcy. He states “in the event that this continues and I am unable to hire, at a minimum, legal aid council [sic] you will receive a call from a trustee in short order.” He concludes “I would suggest very strongly that you consider this offer as soon as possible as I may not be in a position to make this to you again.”
March 21, 2013 at 4:12 PM – email from Mr. Chew to Mr. Maurer
14This is a further without prejudice email, sent by Mr. Chew as a follow up because he had not received a response to his previous message by that date. Mr. Chew signs this email “Greg”.
March 21, 2013 at 4:14 PM – email from Mr. Maurer to Mr. Chew
15Mr. Maurer advises that he has forwarded Mr. Chew’s offer to his client and that has not had an opportunity to discuss it with him. This email from Mr. Maurer is addressed to “Mr. Chew”.
March 21, 2013 at 4:23 PM – email from Mr. Chew to Mr. Maurer
16In a further without prejudice email, Mr. Chew states “I have no issue signing/swearing and providing further detail of my financial situation. I truly have nothing to hide and am sincere in saying that I may be unable to make that offer again.” Mr. Chew signs this email “Greg”. It is worth noting that, without any request or urging by Mr. Maurer, Mr. Chew has, by this point, revealed considerable private information regarding his circumstances, and has volunteered to provide more, under oath if necessary.
March 22, 2013 at 12:17 PM – email from Mr. Maurer to Mr. Chew
17This e-mail states as follows:
I spoke with Amir [the plaintiff – Mr. Maurer’s client] this morning.
We would be prepared to entertain the idea of accepting a payment from you that would be far less than what you would be liable for at trial, in exchange for a release, on the basis that you say you have no money.
However, before we get into the specifics of what might be acceptable and the specific terms and conditions of any settlement, we first need to know how you might be able to assist Amir’s case against your co-defendants. Once we have this information we can determine whether or not settlement is a realistic possibility.
This email from Mr. Maurer to Mr. Chew is addressed to “Greg”, the name by which Mr. Chew had signed his previous email messages.
March 25, 2013 at 9:48 AM – email from Mr. Chew to Mr. Maurer
18This email is marked “without prejudice” and states as follows:
… I made a generous offer considering the position I am in. It was not meant as a starting point to negotiate anything further and time is of the essence. Regarding assisting Amir I am not sure how to respond to that. I am not sure that I can help in any way other than remain truthful. I have not been involved with Nexus or Reddy now for quite some time.
This message is signed “Greg”.
March 25, 2013 at 4:49 PM – email from Mr. Maurer to Mr. Chew
19This email states as follows:
Greg,
If you would like to call me sometime this week we can discuss what I meant by assisting Amir’s case. If so, please let me know a date and time that works for you.
March 25, 2013 at 5:06 PM– email from Mr. Chew to Mr. Maurer
20The email, labelled without prejudice, states as follows:
Matt please confirm that I can legally have a phone conversation or meeting with you where everything said is said without prejudice and cannot be recorded or used as material in the suit. In layman’s terms it would all be off the record.
Greg
March 25, 2013 also at 5:06 PM – email from Mr. Maurer to Mr. Chew
21Mr. Maurer confirms “everything we discuss will be off the record, will not be recorded or used as material in the lawsuit.”
March 25, 2014 at 5:33 PM – email from Mr. Chew to Mr. Maurer
22In this email Mr. Chew asks Mr. Maurer to provide him two dates and times and says that he will attend at Mr. Maurer’s office in Toronto. This message is again entitled “Without Prejudice”.
March 25, 2013 at 5:38 PM – email message from Mr. Maurer to Mr. Chew
23Mr. Maurer responds to Mr. Chew’s last message in a further without prejudice email as follows:
Greg, perhaps we can have a brief chat on the phone first. I don’t want to waste either of our time with the meeting unless it is necessary. Especially since you are coming from out of town.
In order for us to recommend a settlement to Amir, part of that settlement would have to entail your agreement to provide an affidavit and/or give evidence at trial (should to be at trial). To that end, we need to know if you are prepared to do that and, perhaps more importantly, what evidence you are prepared to give. If this is something you are willing to consider I thought we could use the phone call to have a brief chat about your comments (evidence) on this case.
Again, the call would not be recorded (I am not permitted by law in any event to record phone calls without consent) and would be completely off the record. In the event that we do not ultimately reach a settlement, the contents of our discussion and any meetings we may have cannot be used in court at a later date.
Mr. Chew responded 10 minutes later, advising that he was available at 11 a.m. the next day for a phone call.
24Following the foregoing exchange of messages, on March 26, 2013, Mr. Maurer and Mr. Chew had a telephone conversation. According to Mr. Maurer, he made some notes during the course of the call and he prepared a memorandum to file that same day recounting the contents of the discussion. The notes were not kept or preserved, but the memorandum formed part of the evidence filed by Mr. Maurer. Having reviewed it, I conclude that it largely reflects information relating to the underlying dispute and Mr. Chew’s involvement with the matters in question. It is the very type of memorandum that one would expect would be prepared in the circumstances, so that the interviewing lawyer could consult it to refresh his or her recollection of the information provided. Moreover, it largely contains information that would be forthcoming on an examination for discovery. In short, by my assessment, it does not contain any confidential information.
25The memorandum concludes with the following paragraph:
Greg said that it was possible that Amir wouldn’t actually want Greg to give evidence on the stand because Greg is not prepared to lie and the facts as Amir has set out so far in the materials are not entirely accurate. Greg said that Amir needs to be more forthcoming with his lawyers in order for us to have the full story. Greg indicated that he is currently fighting with CRA over other issues and that he might declare bankruptcy. He also indicated that he may not even defend our motion and that his offer of $10,000 is simply to try to put this behind him and close the books so to speak and focus on more pressing matters. Greg indicated that if desired, he is prepared to provide evidence of his financial circumstances to show that he truly does not have any money.”
26Before me Mr. Reddy (not Mr. Chew) submitted that, in the face of Mr. Maurer’s assurance that he would not record the conversation, Mr. Maurer’s keeping of notes and preparation of a memorandum somehow violated the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5. He was unable to cite any authority in support of that submission. I do not accept that this statute has any bearing on the issues I am called upon to decide.
27As I read the exchange of emails, Mr. Chew sought and received the assurance of Mr. Maurer that their conversation would be without prejudice and off the record. He sought specific assurance that the conversation or meeting “cannot be recorded or used as material in the suit”. In the context of that inquiry, Mr. Maurer assured Mr. Chew that their discussion would not be recorded, which I take to mean would not be the subject of audio recording. I do not interpret any comments made by Mr. Maurer to indicate that he would neither take notes nor prepare a memorandum to file. Indeed, the purpose of the conversation, as Mr. Chew plainly knew, was to enable Mr. Maurer to obtain information from Mr. Chew that would enable Mr. Maurer to give advice to his client, the plaintiff, regarding the propriety of the proposed settlement. I therefore reject any suggestion by the defendants that there was any impropriety in Mr. Maurer making notes or preparing the memorandum to file that he did.
28After the telephone conversation on March 26, Mr. Maurer sought instructions from his client, the plaintiff.
April 3, 2013 at 6:12 PM – email from Mr. Maurer to Mr. Chew
29This email states as follows:
Greg,
I have discussed your offer with Amir. Unless you are prepared to increase the amount you are willing to offer, by a substantial amount, he is not inclined to accept your offer.
April 3, 2013 at 6:59 PM – email from Mr. Chew to Mr. Maurer
30This email states as follows:
Without prejudice
That is unfortunate. I will not have the ability to increase any offer so we will let the cards fall where they may.
Greg
31I note that in his email message to Mr. Maurer on April 3, 2013, Mr. Chew raised no complaints regarding Mr. Maurer’s conduct in their conversation or otherwise. Further, there was no suggestion that, as a result of their prior exchanges and the telephone conversation, Mr. Maurer had somehow provided legal advice to or entered into a lawyer-client relationship with Mr. Chew. In particular, there was no suggestion or complaint that, during the telephone conversation on March 26, 2013, Mr. Maurer had attempted to persuade Mr. Chew to be untruthful, to change his evidence, or otherwise to act in an improper fashion.
32On May 7, 2013, the parties again attended in Motions Scheduling Court, this time before Frank J. During their attendance on that occasion, for the very first time, Mr. Reddy (not Mr. Chew) publicly and in open court alleged that Mr. Maurer had counseled Mr. Chew to lie under oath during their telephone conversation of March 26, 2013. Mr. Reddy also announced that the defendants would be scheduling a motion to remove Minden Gross as lawyers of record for the plaintiff. It was following those statements in open court that, in a hallway conversation with Mr. Reddy, Mr. Maurer used a profanity: “don’t f****** start [with me]!”
33One week later, on May 14, 2013, the defendants wrote a letter complaining of Mr. Maurer’s “attempt to coach Mr. Chew’s testimony and negotiate offer to settle with an effort to obtain adverse evidence from Mr. Chew …”. The letter went on to state that “these acts of Mr. Maurer that obstruct and pervert the course of justice are criminal in nature, against the rules of professional conduct and unbecoming a lawyer. The letter went on to demand (on behalf of all defendants apart from Chew) that Minden Gross and/or Mr. Herschorn and/or Mr. Maurer “direct funds to the order of $850,000 for exposing the defendants to the possibility of unsuccessful result in this case and to exposing us to the risk of liability of this amount had Mr. Chew given such testimony.” The letter also demanded that Minden Gross and/or Mr. Maurer “compensate Mr. Reddy and Mr. Chew with $5,000 each … for Mr. Maurer’s abusive conduct in the Motions Scheduling Court on May 7, 2013.”
34The foregoing letter was sent not only to Mr. Maurer, but also to Mr. Herschorn, and the entire Executive Committee of Minden Gross. This motion followed.
35Before addressing the substance of the defendants’ submission regarding the creation of a lawyer-client relationship between Mr. Maurer and Mr. Chew and the allegation that confidential information was somehow imparted during their conversation on March 26, 2013, I wish to address the allegation that Mr. Maurer somehow acted improperly during the course of this conversation by asking Mr. Chew, in effect, to lie. I reject that suggestion absolutely. The best evidence concerning what transpired in the conversation between Mr. Chew and Mr. Maurer is found in Mr. Maurer’s memorandum to file. It reflects a summary of what Mr. Chew told him concerning Mr. Chew’s involvement in the transaction in dispute, as well as Mr. Chew’s reasons for believing that the plaintiff was responsible for the demise of the parties’ business relationship. This memorandum was prepared immediately following the conversation, for the purposes I have described previously. It certainly reflects no efforts by Mr. Maurer to obtain anything but the unvarnished truth from Mr. Chew.
36In his affidavit, Mr. Chew paraphrased certain aspects of the conversation and the questions posed by Mr. Maurer. I note that Mr. Chew’s affidavit was not sworn until June 25, 2013, some three months after the conversation in question. It is by no means a contemporaneous recollection, unlike the memorandum prepared on March 26, 2013 by Mr. Maurer. I have previously noted that in early April, Mr. Chew made no complaint about Mr. Maurer’s conduct or style of questioning. I therefore consider Mr. Chew’s recollection of the details of the conversation of doubtful reliability.
37According to Mr. Maurer’s version of this conversation, he disputes that he suggested alternative answers to Mr. Chew or tried to have him “slant” his evidence. I observe that it makes little sense that Mr. Maurer would act in the fashion alleged, putting his personal and professional reputation at risk for no good reason. It is illogical that he would conduct himself in such a fashion, in the context of a lawsuit such as this, with no compelling reason to do so. The defendants have offered no logical explanation for why Mr. Maurer would conduct himself as the defendants allege he did. Viewed in this light, together with his contemporaneous memo to file (which was prepared well before any controversy arose regarding the contents of the telephone conversation), Mr. Maurer’s evidence makes sense and I prefer and accept it.
38To the extent Mr. Chew’s affidavit contains paraphrases of certain portions of the telephone conversation of March 26, I find nothing improper or unethical about Mr. Maurer’s approach. Not surprisingly, given the settlement proposal made by Mr. Chew and Mr. Maurer`s need to give proper advice to his client, the plaintiff, Mr. Maurer needed to test what he was being told by Mr. Chew. Since Mr. Chew had made the approach to Mr. Maurer and Mr. Maurer had made it plain that he needed to know Mr. Chew’s version of events for purposes of assessing what recommendation to make, I see nothing whatsoever offensive about his conduct. I therefore reject this allegation of impropriety absolutely.
39Returning to the main thrust of the defendants’ complaint, they assert that through the exchange of emails described above and the telephone conversation on March 26, 2013, a lawyer-client relationship or something akin to it developed between Mr. Maurer and Mr. Chew, during which confidential information was imparted, with the result that Mr. Maurer and Minden Gross are now tainted by a disqualifying conflict of interest. For the reasons that follow, I reject that argument.
40To begin with, Mr. Chew knew from the outset that Mr. Maurer was acting for the plaintiff. This was not a situation in which the relationship between Mr. Maurer and the plaintiff was somehow not disclosed or disavowed. Nor was this a case where Mr. Maurer transferred to Minden Gross from a firm that had previously acted for Mr. Chew. Instead, the March 2013 exchanges came about as a result of Mr. Chew’s approach to Mr. Maurer in the latter’s capacity as lawyer for the plaintiff.
41The defendants argue that, during the email exchanges, by using the plural pronoun “we”, Mr. Maurer somehow signaled to Mr. Chew that he, Maurer, was now acting on behalf of Mr. Chew in negotiating the proposed settlement with the plaintiff. In my view, read in context, the emails contain no such message. Moreover, to a reasonably informed person, it would have been apparent that Mr. Maurer could not be acting as lawyer for Mr. Chew, since he was already acting as lawyer for Mr. Chew’s adversary, the plaintiff. The characterization of the emails advanced by the defendants is both illogical and, with respect, unsupportable, on a fair reading of the messages in the context of the overall exchange of emails between Mr. Chew and Mr. Maurer.
42I note as well that, from the outset of the exchange, Mr. Chew chose to caption his communications with Mr. Maurer with the words “without prejudice”. This reflects some degree of legal sophistication on the part of Mr. Chew, which is further reflected in his subsequent request for Mr. Maurer’s assurance that the parties’ communication would be “without prejudice and cannot be recorded or used as material in the suit. In layman’s terms it would all be off the record.” The use of these terms in emails authored by him counters the suggestion that Mr. Chew was somehow naïvely induced into believing that he was getting legal advice from Mr. Maurer. As an experienced business person, Mr. Chew’s assertion of naïvety rings hollow.
43The defendants further argue that, in outlining to Mr. Chew potential terms of settlement, Mr. Maurer somehow crossed the line into providing legal advice to Mr. Chew. Again, I reject this submission. At most, in response to a settlement proposal that was made by Mr. Chew, Mr. Maurer was, quite understandably, informing Mr. Chew regarding the terms that would need to be incorporated into a settlement, in the event his client (the plaintiff) was prepared to agree to terms with Mr. Chew. I therefore do not accept the defendants’ characterization that by informing Mr. Chew about the terms that would likely be required by the plaintiff, legal advice was provided by Mr. Maurer. He was merely explaining his client’s position.
44For these reasons I reject the suggestion that, somehow, a lawyer-client relationship or something akin to it came into being as a result of the communications between Mr. Maurer and Mr. Chew in March 2013. In my view, no fully informed, reasonable person would conclude that it had.
45The other point that must be addressed is the assertion by the defendants that, during the conversation on March 26, 2013, Mr. Chew conveyed confidential information to Mr. Maurer. I note that in his affidavit, Mr. Chew did not describe in detail this supposedly-confidential information. When cross-examined about what privileged information Mr. Chew provided to Mr. Maurer, he declined to answer stating “I would be happy to share it with a judge.” No further confidential affidavit was provided to the court. Mr. Chew’s answers with respect to questions about whether he provided privileged or confidential documents to Mr. Maurer were similarly evasive. His evidence on this point was both vague and unpersuasive.
46On his cross-examination, Mr. Reddy confirmed that he had discussions with Mr. Chew regarding the legal advice that Mr. Chew had received from Mr. Maurer. Had there indeed been a lawyer-client relationship between Mr. Chew and Mr. Maurer, the disclosure of that advice by Mr. Chew to Mr. Reddy would have amounted to a waiver of privilege. Nevertheless, Mr. Reddy refused to disclose what legal advice had been described to him by Mr. Chew on the ground that it was privileged. Once again, I find Mr. Reddy’s responses to these questions evasive. His evidence is similarly vague and unpersuasive on this topic.
47For his part, Mr. Maurer denied that he received any confidential information from Mr. Chew. As previously noted, the best record of what was discussed in the conversation of March 26, 2013 is Mr. Maurer’s memorandum to file of that date. As I have observed, that memorandum contained nothing (save the reference to the settlement proposal) that would not have been forthcoming during an examination for discovery. It would be illogical for Mr. Maurer to omit material or significant information when preparing a memorandum about Mr. Chew`s version of the underlying events. The memorandum was dictated immediately following the conversation, at a time well in advance of any suggestion that Mr. Maurer had somehow acted improperly in obtaining so-called confidential information from Mr. Chew. This negates any suggestion that the memo contains only selected portions of what was discussed.
48I therefore reject the submission of the defendants that any privileged or confidential information was provided by Mr. Chew to Mr. Maurer in their telephone discussion on March 26, 2013. To the contrary, I prefer and accept the evidence of Mr. Maurer that no such information was confided.
49Before leaving the matter I should also address the assertion by the defendants that, by engaging in the discussion with Mr. Chew that he did, Mr. Maurer somehow violated the rule of professional conduct that prohibits communication directly with an adverse party who is represented by counsel. Throughout the proceedings, Mr. Chew has been self-represented. At no time has he had a lawyer of record. At one point during the telephone discussion with Mr. Maurer on March 26, 2013, Mr. Chew alluded to the fact that, at some point in the litigation, he had sought advice from a friend who is a lawyer. The defendants assert that, upon hearing that information, Mr. Maurer should have immediately stopped the discussion and informed Mr. Chew that he, Maurer, would need to speak to that unnamed lawyer before proceeding further.
50On the facts of this case and in the context of the telephone discussion between Mr. Maurer and Mr. Chew, I reject that argument. Once again, the contact between Mr. Maurer and Mr. Chew was initiated by Mr. Chew. It was he who proposed a settlement. In advance of their discussion, Mr. Maurer made it clear to Mr. Chew that, as a precondition for proceeding with settlement negotiations, Mr. Chew would need to be forthcoming about what his evidence would be regarding the underlying dispute. Mr. Chew – who, as I have noted, is not unsophisticated – was willing to proceed with a discussion on this basis. In the circumstances, I do not accept that a mere reference in passing to the fact that, at some stage, Mr. Chew had sought legal advice regarding the litigation, somehow imposed upon Mr. Maurer an obligation to contact that lawyer (who was plainly not retained) before continuing the conversation. Mr. Chew was a knowing and willing participant in the discussion, which flowed from a communication initiated by him. On these facts there is no basis upon which to conclude that, in continuing the conversation, Mr. Maurer acted unprofessionally or improperly exploited an unrepresented litigant.
51That a litigant should not be deprived of his or her choice of counsel without good cause is a value recognized by courts in determining whether a lawyer should be disqualified: see MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 S.C.R. 1235 at 1243; Davies, Ward & Beck v. Baker & McKenzie (1998), 1998 5083 (ON CA), 40 O.R. (3d) 257 (C.A.) 261; Maftoun v. Banitaba, 2012 ONCA 786 [In Chambers], at paras. 4 and 6. This interest is one aspect of protecting the integrity of the legal system, and “if a litigant could achieve an undeserved tactical advantage over the opposing party by bringing a disqualification motion or seeking other ‘ethical’ relief using ‘the integrity of the administration of justice’ merely as a flag of convenience, fairness of the process would be undermined”: R v. Neil, 2002 SCC 70, [2002] 3 S.C.R. 631, at para. 14, per Binnie J.
52In the present case, for the reasons indicated, I reject the argument that a lawyer-client relationship existed between Mr. Maurer and Mr. Chew. I further reject the argument that the relationship akin to a lawyer-client relationship came into being. Throughout, Mr. Maurer acted and was known by Mr. Chew to be acting as the plaintiff’s lawyer; at no point did Mr. Maurer undertake to advise, counsel or represent the interests of Mr. Chew.
53Moreover, on the facts found by me, Mr. Chew provided no confidential information to Mr. Maurer. As such, there is no basis for any concern or complaint that confidential information provided by Mr. Chew to Mr. Maurer will be used to Mr. Chew’s prejudice.
54For the foregoing reasons, the motion of the defendants to remove Minden Gross, Mr. Herschorn and Mr. Maurer as lawyers for the plaintiff is dismissed.
55In relation to costs, at the close of argument on June 24, Mr. Fulton provided a costs outline on behalf of the plaintiff. He submitted that, given the serious allegations made by the defendants, which he suggested were unsupported, this was a suitable case for an order for substantial indemnity costs.
56The defendants requested and were provided with an opportunity to prepare a written submission as to costs. They did so on July 2, 2014. For his part, Mr. Fulton provided a reply on July 10, 2014.
57In view of the fact that the defendants’ motion has been dismissed, it follows that as unsuccessful parties they should pay costs to the successful parties. I see no proper reason for departing from that standard approach.
58The defendants made very serious allegations of professional misconduct, and indeed criminality, as against Mr. Maurer. They publicly accused Mr. Maurer of professional misconduct and went on to advance those allegations aggressively, including by way of correspondence sent by them to the entire Executive Committee of Minden Gross, Mr. Maurer`s employer. I have found those allegations to be unwarranted and unsupportable. Allegations that impugn the professional integrity of an adverse party and which are found to be unproven warrant a punitive award of costs.
59This motion was, in my view, wholly unnecessary and an unjustifiable attack on the professional integrity of plaintiff’s counsel. One is left with the impression that it was a strategic ploy, designed to delay the proceeding – which it has, for more than a year. Such conduct is to be strongly discouraged.
60I therefore conclude that costs should be awarded on a substantial indemnity scale.
61With respect to quantum, the motion was hard fought. The defendants chose to attack the conduct of Mr. Maurer and Minden Gross throughout, and they filed extensive motion materials. The result was the need for those parties to respond in kind. Although I found most of that information to be irrelevant, Mr. Maurer and Minden Gross could not be certain in advance that this would be the case. Moreover, in light of the nature of the motion, Minden Gross was required to retain outside counsel to advance the matter. All of these elements contributed to a significant expenditure on the part of the plaintiff for a motion that, as I have found, was wholly unwarranted. In my view, it does not lie in the defendants’ mouth to complain about the costs of the ongoing involvement of the Minden Gross lawyers who, of necessity, continued to be involved, on behalf of the plaintiff, in responding to the defendants’ allegations.
62In light of the allegations and arguments they advanced, it should come as no surprise to the defendants that the motion was defended vigorously. For the same reason, it should further come as no surprise that significant costs were incurred in so doing. It follows that it must have been within their reasonable expectation that a significant costs award against them was likely in the event the motion was not successful. Put another way, it is both fair and reasonable that the defendants should indemnify the plaintiff for the expense of defending the motion.
63With respect to other Rule 57 factors, I note that the plaintiff was completely successful. The issues were important – and were described as such in defendants’ costs submission – since the defendants sought to displace plaintiff`s counsel of choice. I also consider that certain of the conduct of the defendants tended to lengthen the proceedings – for example, their refusal to answer some questions put on cross-examination; as well, their failure to meet some of the timetable deadlines in relation to this motion, resulted in its rescheduling, etc. In light of the amount of time spent and the experience of the various lawyers involved, the principle of indemnity also applies. For their part, as non-lawyers who were unrepresented parties, the defendants sought a costs award in their favour in the order of nearly $29,000. In view of all the foregoing, I do not consider the amount sought by the plaintiff, while significant, to be disproportionate.
64The costs outline submitted by the plaintiff sought slightly more than $49,000, exclusive of counsel fee for argument of the motion. Adding a modest amount for counsel fee, as well as preparation, I fix the costs payable by the defendants to the plaintiff in relation to this motion on a substantial indemnity basis, at the all inclusive sum of $50,000. That sum shall be payable within 30 days.
Stinson J.
Date: July 23, 2014