CITATION: A Big Mobile Sign Company v. Janice Marshall et al., 2015 ONSC 894

BARRIE COURT FILE NO.: 13-1438-SR

DATE: 20150211

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

A Big Mobile Sign Company Inc.

Plaintiff

– and –

Janice Marshall a.k.a. Janice Stoner

Curbex Ltd.

Defendants

C. Salazar, for the Plaintiff

Not appearing

Scott R. Fairley, for the Defendant

HEARD: February 5, 2015

REASONS

EDWARDS j.:

OVERVIEW

[1] The City of Barrie has a relatively small civil litigation bar - certainly in comparison to the civil litigation bar in Toronto. Due to a scheduling conflict Mr. Salazar, who appeared December 31, 2013 before Healey J. on a motion seeking injunctive relief, could not appear on January 14, 2014 to deal with the issue of costs and other issues. The plaintiff, therefore, retained Mr. Daniel Dooley to appear as its “agent” on behalf of Mr. Salazar on January 14, 2014. The defendant, Curbex Ltd. (“Curbex”), was represented on both occasions by Mr. Gionet. Mr. Salazar, Mr. Dooley and Mr. Gionet are all well-respected members of the Barrie civil litigation bar.

[2] On May 1, 2014, Mr. Gionet’s law firm merged with Mr. Dooley’s law firm. While a conflicts check was done by the merged law firm, the conflicts check did not reveal that Mr. Dooley had represented the plaintiff before Healey J. on January 14, 2014. For a period of approximately six weeks, Mr. Gionet continued to represent Curbex without any form of “Chinese wall” to protect against the possibility of any communication between Mr. Dooley and Mr. Gionet.

[3] On June 11, 2014, Mr. Salazar contacted Mr. Gionet regarding the perceived conflict of his continued representation of Curbex. Initially, Mr. Gionet advised Mr. Salazar that there was no conflict. Not surprisingly Mr. Salazar took the position, and continues in that position there was a conflict, and this court is now asked to remove Mr. Gionet and his firm as solicitors of record.

THE FACTS

[4] The plaintiff issued its statement of claim on December 23, 2013. A motion seeking injunctive relief was heard by Healey J. on December 31, 2013. At that time the plaintiff was represented by Mr. Salazar and Curbex was represented by Mr. Gionet. Reasons for Decision were released by Healey J. on January 2, 2014, with a return date of January 14, 2014 “for a review of the injunction on further and better material” and the costs of the motion were reserved to the next appearance, i.e. January 14, 2014.

[5] Wendy Bigalke is the President and also a Director of the plaintiff. Ms. Bigalke swore an affidavit, placed in evidence before me, which at paragraph 12 indicates:

From or around January 3, 2014 to January 15, 2014 due to a conflict in plaintiff’s counsels schedule (i.e. Mr. Salazar), Dan Dooley of Dooley Barristers Professional Corporation, as it was known then, was retained to represent the plaintiff on an interim basis.

[6] Ms. Bigalke goes further in her affidavit at paragraph 13 to indicate that during Mr. Dooley’s temporary retainer that, “a significant amount of email and telephone correspondence occurred between the principles of the plaintiff…and Mr. Dooley, Ms. Durant, an associate with his firm and his staff. This correspondence included confidential information”.

[7] The affidavit evidence of Ms. Bigalke is uncontradicted to the extent that she deposes that confidential information was imparted from herself on behalf of the plaintiff to Mr. Dooley and Ms. Durant.

[8] When the matter came back before Healey J. on January 14, 2014, it would appear from the endorsement of Healey J. that because there was no additional evidence filed by the defendants that would warrant any interference with her order of January 2, 2014, the major issue that was addressed by the court was the question of costs. The costs were determined by Healey J. “to be in the cause”. It is noteworthy in the endorsement of Healey J. of January 14 2014 that Mr. Dooley is referred to as “agent for C. Salazar”. Mr. Gionet was shown as agent for Mr. D. Van Sickle who was counsel for the defendant Marshall when the matter was before Healey J. on December 31, 2013.

[9] Between January 14, 2014 and May 1, 2014 (the date of the merger between Mr. Dooley’s firm and Mr. Gionet’s firm), nothing of any material consequence occurred with respect to this litigation.

[10] After January 14, 2014, Mr. Salazar continued to be the solicitor of record for the plaintiff. In point of fact, Mr. Salazar has always been the solicitor of record. Mr. Dooley appeared as “agent” for Mr. Salazar on January 14, 2014.

[11] On April 30, 2014, Mr. Gionet and his partner Scott Fairley left their former firm to join Mr. Dooley’s firm effective May 1, 2014. The transfer took place in two phases. The first phase took place on May 1, 2014, and involved the actual transfer of lawyers and staff to become employees of the newly merged firm Dooley Lucenti with Mr. Fairley and Mr. Gionet becoming partners. Mr. Gionet and Mr. Fairley did not physically move from their then existing location at 151 Ferris Lane, and Mr. Dooley and the other members of his firm remained at their office at 120 Collier Street.

[12] The second phase of the merger took place on July 1 2014, when the two separate offices at Ferris Lane and Collier Street physically moved together into a new building at 10 Checkley Street in Barrie.

[13] On June 11, 2014, Mr. Salazar left a telephone message with Mr. Gionet raising the issue of a potential conflict as a result of Mr. Gionet’s transfer to Dooley Lucenti. This was followed up with a brief and courteous letter of June 11, 2014 from Mr. Salazar to Mr. Gionet, advising Mr. Gionet from Mr. Salazar’s perspective that there existed a serious issue of conflict with Mr. Gionet’s continued representation of Curbex.

[14] The letter of June 11, 2014 was followed up with a more detailed letter of June 12, 2014, responding to a voicemail that would appear to have been left by Mr. Gionet on June 11, 2014. The voicemail message from Mr. Gionet of June 11, 2014 took the position that there was no conflict in Mr. Gionet’s continued representation of Curbex.

[15] Despite Mr. Gionet’s initial position that there was no conflict, Mr. Gionet nonetheless emailed Erin Durant on June 12, 2014 at the Dooley Lucenti law firm instructing Ms. Durant to erect a “conflict wall”. Ms. Durant is an associate lawyer at Dooley Lucenti, who in her affidavit filed on this motion confirms that both Mr. Dooley and herself were retained by the plaintiff to argue the motion before Justice Healey. Ms. Durant further confirms that both Mr. Dooley and herself had communications with Ms. Bigalke, and without revealing the nature of the communications she confirms that both she and Mr. Dooley did receive “certain confidential information regarding issues relevant to the plaintiff’s action.”

[16] On June 23, 2004 2014, Mr. Salazar received correspondence from Mr. Gionet which identified that a conflict may have existed with respect to Mr. Gionet’s continued representation of Curbex, but that adequate steps had been taken to ensure that a conflict wall had been erected to prevent any sharing of confidential information between Mr. Dooley and Mr. Gionet.

[17] Ms. Bigalke, in her affidavit, deposes that she is “entirely uncomfortable with my former counsel in these very proceedings being the counsel of record for Curbex…I consider this a conflict of interest and I am unwilling to consent to the conflict on behalf of the plaintiff”.

[18] As part of the evidence that was filed on this motion the court received affidavits from Mr. Dooley and Ms. Durant, the essence of both affidavits was to the effect that there has been no communication between Mr. Gionet and either Mr. Dooley or Ms. Durant, other than the communication between Ms. Durant and Mr. Gionet with respect to the setting up of a Chinese wall. Both affidavits also confirmed that not only has there been no communication between Mr. Dooley, Ms. Durant and Mr. Gionet, that there has been no breach of any confidential information that would have been imparted by the plaintiff to Mr. Dooley in that relatively brief time period in January of 2014 when Mr. Dooley was assisting the plaintiff in the absence of Mr. Salazar.

[19] The court also received an affidavit from Mr. Gary Cooper who is the President of Curbex. The essence of Mr. Cooper’s affidavit is to the effect that he wishes to continue with his retainer of Mr. Gionet, and that in his view the sole purpose of the motion before this court is nothing more than a “litigation tactic”.

THE LAW

[20] The Supreme Court of Canada in McDonald Estate v. Martin, 1990 CanLII 32 (SCC), [1990] 3 S.C.R. 1235, has made it clear at paragraph 16 that there are essentially three competing values when faced with a motion to have a solicitor removed as counsel of record. These competing values which the court must concern itself with are as follows:

(1) the concern to maintain the high standards of the legal professional and the integrity of the justice system;

(2) the countervailing value that a litigant should not be deprived of his or her choice of counsel without good cause;

(3) the desirability of permitting reasonable mobility in the legal profession.

[21] The test that the court must apply when considering a motion like the one before this court, as enunciated by Sopinka J. at paragraph 47, is as follows:

…the test must be such that the public, represented by the reasonably-informed person, would be satisfied that no use of confidential information would occur. That, in my opinion, is the overriding policy that applies and must inform the court in answering the question: Is there a disqualifying conflict of interest?

[22] In answering the aforementioned questions Sopinka J. at paragraph 48 went on to state:

Typically, these cases require two questions to be answered: (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?

I pause in my analysis and note that in posing the aforementioned two questions, Sopinka J. raises the concern as to whether there is a risk that the confidential information attributable to a solicitor client relationship “will be used” to the prejudice of a client as opposed to phrasing the question, is there a risk that the confidential information “ has been used” to the prejudice of the client.

[23] On the facts of this case, there is no dispute that Mr. Dooley and Ms. Durant did receive confidential information from the plaintiff. An essential question that now has to be answered is whether there is a risk that that information “will be used” to the prejudice of the plaintiff.

[24] As part of the court’s analysis in Martin, Sopinka J. rejects the suggestion that a reasonable member of the public will necessarily conclude that confidences are going to be disclosed in every case despite institutional efforts to prevent it. It is clear then, that it is not every case where a potential conflict of interest arises that the court will come to the conclusion that a reasonable person would conclude that confidences will be breached. That said, however, Sopinka J. goes on in his reasons to state:

There is, however, a strong inference that lawyers who work together share confidences. In answering this question, the court should therefore draw the inference, unless satisfied on the basis of clear and convincing evidence, that all reasonable measures have been taken to ensure that no disclosure will occur by the “tainted” lawyer to the member or members of the firm who are engaged against the former client. Such reasonable measures would include institutional mechanisms such as Chinese walls and cones of silence.

[25] The evidence in this case, like many cases where an issue of a potential conflict has been raised, involves affidavits from the involved lawyers. As previously mentioned, Mr. Dooley and Ms. Durant have both confirmed that there has been no communication of any confidential information between themselves and Mr. Gionet. Both of these affidavits also provide an undertaking that no such communication will occur in the future. These types of affidavits were addressed in Martin by Sopinka J. at paragraph 52 as follows:

A fortiori undertakings and conclusory statements in affidavits, without more, are not acceptable. These can be expected in every case of this kind that comes before the court. It is no more than the lawyer saying, “Trust me.” This puts the court in the invidious position of deciding which lawyers are to be trusted and which are not. Furthermore, even if the courts found this acceptable, the public is not likely to be satisfied without some additional guarantees that confidential information will under no circumstances be used. In this regard I am in agreement with the statement of Posner Circ. J. in Analytica, supra, to which I have referred above, that affidavits of lawyers difficult to verify objectively will fail to assure the public.

[26] The test that has been laid down by the Supreme Court of Canada in Martin is one which has been described by many judges as a difficult one to meet. As Morawetz J. indicated in 1964 Bay Inc., Re 2008 O.J. No. 4149 at paragraph 38:

In order to meet the test, something more is required than evidence to the effect that no use was made of the confidential information. It is not sufficient to state: “Trust me”, even though the basis of a “protective screen” or “ethical wall” is one of trust. The Martin test requires that a reasonably informed person would be satisfied that no use of confidential information would occur.

Morawetz J. went on to state at paragraph 67, “Overcoming the presumption of sharing of information is a very difficult and heavy burden to discharge”.

[27] The timing of when the Chinese wall was put in place by Ms. Durant on behalf of the newly constituted Dooley Lucenti firm is, in my view, critical to the outcome of this case given the jurisprudence which I am bound to follow. While the evidence confirms that a conflicts check was done by the newly merged firm of Dooley Lucenti as of May 1, 2014, that conflicts check for whatever reason did not reveal Mr. Dooley’s limited engagement representing the plaintiff in mid-January 2014. It may very well be that the conflicts check did not reveal the potential conflict, given that Mr. Dooley on all accounts likely had billed out the file and sent it to cold storage. A conflicts check, however, is not only designed to reveal situations where a law firm is presently representing a party, but also those situations where a law firm has represented a party in the past.

[28] There is no dispute that the Chinese wall was not put in place until approximately six weeks after the actual conflict occurred. The conflict occurred once Mr. Gionet joined the Dooley Lucenti firm as of May 1, 2014. It is clear to me from a review of the jurisprudence that the Chinese wall has to be put in place prior to that point in time when the conflict would have occurred. In that regard, the Court of Appeal in Skye Properties Ltd. v. Wu, 2003 CanLII 75374 (ON SCDC), [2003] O.J. No. 3481 at paragraph 31 states:

There is abundant authority for the proposition that, absent sufficient explanation, the screening mechanism must be in place when the conflict first arises…Nevertheless, those ethical walls should be in place at the time the possibility of conflicting sharing of confidential information first arises.

[29] The Court of Appeal in Skye goes on to adopt the comments of Winkler J. in Ford Motor Co. of Canada v. Osler, Hoskin & Harcourt, 1996 CanLII 8070 (ON SC), [1996] 131 DLR (4th) 419, where Winkler J. at paragraph 441 to 442 commented on the timing of the Chinese wall as follows:

…For if the screen is not in place for a material period of time, in the instant case a substantial one, there is no “clear and convincing” evidence within the meaning of Martin v. Gray, with the result that the inference must be drawn that relevant confidential information was conveyed. To adopt the words of Huband J.A. in York Investments: “The appropriate measure cannot be put in place after the event and still satisfy the public concern that no breach of confidentiality will take place”.

[30] The evidence in this case is relatively straightforward and uncomplicated. The conflicts check that Dooley Lucenti had in place did not, regrettably, pick up the fact that Mr. Dooley had represented the plaintiff, albeit as agent for Mr. Salazar, for a relatively brief period of time. Mr. Gionet joined Dooley Lucenti on May 1, 2014, and for a period of approximately six weeks there were no measures put in place that could satisfy the public concern that no breach of confidentiality could take place. The erection of the Chinese wall did not take place for six weeks.

[31] Mr. Cooper, the President of Curbex, deposes in his affidavit that he is of the opinion that the only reason why the plaintiff has brought the motion to remove Mr. Gionet as counsel of record is because of “litigation tactics”. The affidavit of Wendy Bigalke, the President of the plaintiff, amongst other things deposes she is “entirely uncomfortable” with my former counsel in these very proceedings being the counsel of record for Curbex. Ms. Bigalke’s affidavit was not cross-examined on and this court can only take her evidence at her word. As such, I cannot find that the sole purpose for which this motion was brought was to obtain a tactical advantage over the defendant Curbex. If I had been satisfied that the sole purpose for which this motion had been brought was to obtain a tactical advantage, as the Court of Appeal commented in Skye Properties at paragraph 70, this court would have been vigilant in weeding out such a disqualification motion which was brought solely for the purposes of gaining a tactical advantage by one side over the other.

CONCLUSION

[32] The facts of this case highlight the risks that counsel take when they appear as agent for another lawyer of record, or take on a limited retainer to assist a fellow barrister who finds himself/herself double-booked. I have no doubt that Mr. Dooley provided his assistance to Mr. Salazar in January 2014 to help Mr. Salazar at a point in time when Mr. Salazar was not otherwise able to attend before Healey J. on January 14, 2014. It is not an uncommon occurrence, especially within a smaller collegial bar like that in Simcoe County, that a lawyer will act as agent for another lawyer. Those agency appearances may or may not involve the imparting of confidential client information. On the facts of this case, Mr. Dooley and Ms. Durant both candidly admitted that they did receive confidential information from the plaintiff during the relatively brief period of time that they were involved with this matter in January 2014.

[33] The test that I am required to apply is one that has no loopholes. It is a test that carries a heavy onus on the party resisting removal of their counsel. The reasonably informed person would not, in my view, be satisfied that no use of confidential information would occur in that six week time frame from when the conflicts check at the Dooley Lucenti law firm had failed to undercover the possible conflict.

[34] While the evidence from Mr. Dooley and Ms. Durant is uncontradicted concerning any disclosure to Mr. Gionet of confidential information imparted by the plaintiff to Mr. Dooley, such affidavit evidence - adopting the words of Sopinka J. in Martin at paragraph 52, cannot assure the public because they cannot be verified objectively. While I have concluded on the evidence and the case law which binds me that Mr. Gionet must be removed as the solicitor of record for Curbex, I must emphasize that this decision should not reflect negatively on the conduct of Mr. Dooley, Ms. Durant or Mr. Gionet. My decision, simply put, is a recognition that the responding party in this case could not overcome the presumption of the sharing of information, which as many judges have commented is a very difficult and heavy burden to discharge. Acting as an agent for another lawyer usually involves the lawyer who was acting as the agent doing a favour for the other lawyer. Regrettably, on the facts of this case the favour that Mr. Dooley was doing is one that has now resulted in the undoing of the relationship between Mr. Gionet and his client.

[35] An order shall be issued removing Mr. Gionet as the solicitor of record for Curbex Ltd. The motion which seeks to amend the statement of claim is adjourned sine die, to be brought back on four days notice once Curbex has appointed new counsel.

[36] As to the question of costs, costs would normally follow the event. Mr. Salazar may wish to seek instructions from his client with respect to pursing costs against Curbex, given the unique aspects of this case involving what occurred on January 14, 2014 where Mr. Dooley was appearing on behalf of Mr. Salazar as agent and not counsel of record. If the issue of costs cannot be resolved between the parties I will receive submissions, limited to two pages in length, to be received no later than February 28, 2015.

Justice M.L. Edwards

Released: February 11, 2015