Court File and Parties
COURT FILE NO.: CV-12-455556 DATE HEARD: September 27, 2016 ENDORSEMENT RELEASED: October 18, 2016
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: LOUIS GORDON SABEAN, HEATHER ANNE TEITLER and SIAN PATRICIA SABEAN by her litigation guardian HEATHER ANNE TEITLER v. BRUCE ROBERT AIKMAN and SEAWAY YARNS LTD.
BEFORE: Master R. Dash
COUNSEL: Kyle Smith, for the plaintiffs John J. Aikins, for the defendant to the counterclaim Sabean
REASONS FOR DECISION
1Can a lawyer represent both the driver and his passenger in an action for damages arising out of a motor vehicle accident when the defendants counterclaim against the driver for contribution to the damages claimed by the passenger or does he have a disqualifying conflict of interest? That is the question before me on the motion by the defendant to the counterclaim, who is represented by separate counsel retained by his insurer, to remove the plaintiffs’ lawyer as lawyer for the passenger.
BACKGROUND
2The plaintiffs Louis Gordon Sabean (“Louis”) and his daughter Sian Patricia Sabean (“Sian”) are both represented by lawyer Jeffrey Strype in this action for damages arising out of a rear-end motor vehicle accident occurring on December 7, 2010. Louis was the driver of a car that had pulled off to the side of the road and Sian was his passenger. When this action commenced Sian was a minor represented by her mother as litigation guardian. She is now an adult. [1] The only defendants are Bruce Aikman and Seaway Yarns, the driver and owner of the truck that rear ended the Sabean vehicle. The defendants counterclaimed against Louis for contribution and indemnity for the damages claimed by Sian. Louis was insured with Portage Insurance Company (“Portage”) who retained lawyer John Aikins to defend the counterclaim on behalf of Louis.
3Mr. Aikins, purportedly on behalf of Louis, has brought this motion to remove Mr. Strype as lawyer for Sian based on Mr. Strype’s alleged conflict of interest as between Louis and Sian. Louis and Sian deny that any conflict exists, but in any event have waived any conflict and consent to Mr. Strype representing both of them. Furthermore, Louis claims he was opposed to Mr. Aikins bringing this motion on his behalf and has brought a cross-motion to remove Mr. Aikins as lawyer of record for Louis based on Mr. Aikins’s alleged conflict of interest between Louis and Portage.
4The plaintiffs were of the view that Mr. Aikins should not argue the motion on behalf of Louis. After I determined to hear both motions concurrently, the plaintiff withdrew its cross-motion as moot.
5The plaintiffs had offered to reduce their claim to the defendants’ policy limits in exchange for an admission of liability but the defendants did not accept that offer. Scheduling of a summary judgment motion by the plaintiffs on liability was adjourned pending determination of this motion.
APPLICABLE LEGAL PRINCIPLES
6In accordance with the Rules of Professional Conduct, “a lawyer shall not act or continue to act for a client where there is a conflict of interest, except as permitted under the rules…” [2] A “conflict of interest” is defined as “the existence of a substantial risk that a lawyer’s loyalty to or representation of a client would be materially and adversely affected by the lawyer’s own interests or the lawyer’s duty to another client…The risk must be more than a mere possibility; there must be a genuine, serious risk to the duty of loyalty or to client representation arising from the retainer.” [3] Substantial risk “means that the risk is significant and plausible, even if it is not certain or even probable that the material adverse risk will occur”. [4]
7A lawyer however may represent a client in a matter when there is a conflict of interest if “there is express or implied consent from all clients and it is reasonable for the lawyer to conclude that he or she is able to represent each client without having a material adverse effect upon the representation of or loyalty to the other client.” [5] Express consent “must be fully informed and voluntary after disclosure”. [6] A client may, by waiver, accept the risk of possible material impairment of representation or loyalty, but the client cannot waive actual material impairment. [7]
8One of the principles to be considered on motions of this nature is the right of a party to be represented by counsel of her choice. Removal of counsel of choice is an extreme remedy and it should be done only in the clearest of cases, particularly given the waste of time and money and the substantial delay which can result from an order removing lawyers. It should not be done where the likelihood of a conflicting interest is contingent, remote or premature. [8]
9Choice of counsel is however not absolute and “the litigant’s right to counsel of his/her choice must yield to the paramount public interest in preserving the integrity of the system, as well as its appearance.” [9] The penultimate question that the court must answer on motions of this nature has been stated as follows:
The issue is whether a fair minded reasonably informed member of the public would conclude that the proper administration of justice required the removal of the solicitor. This is an objective standard and the personal feelings of the litigant are only one element in applying that standard. [10]
10There must be a reasonable perception of actual or likely conflict. [11] Although perception is important, the court should be concerned with the “reality of the matter” and whether there is a risk in fact of “real mischief”. [12]
11In dealing with use of confidential information, the Supreme Court of Canada in MacDonald Estate v. Martin concluded that in the absence of proof of actual misuse of confidential information the appropriate test to apply is as follows:
[T]he 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 [...] must inform the court in answering the question: Is there a disqualifying conflict of interest? In this regard, it must be stressed that this conclusion is predicated on the fact that the client does not consent to but is objecting to the retainer which gives rise to the alleged conflict.
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? [13]
12The Supreme Court of Canada in Wallace v. Canadian Pacific Railway has recently considered the bright line rule when a lawyer purports to act for adverse parties:
The bright line rule holds that a law firm cannot act for a client whose interests are adverse to those of another existing client, unless both clients consent. [14]
The consent must be given “after receiving full disclosure”, preferably (but not necessarily) with independent legal advice and “the lawyer reasonably believes that he or she is able to represent each client without adversely affecting the other.” [15]
13One purpose of the rule is to avoid misuse of confidential information. Another is to ensure that a lawyer is an effective and zealous advocate for and act in the best interests of his client and not his own interests or that of another client. [16] Put another way
Disqualification may be required: (1) to avoid the risk of improper use of confidential information; (2) to avoid the risk of impaired representation; and/or (3) to maintain the repute of the administration of justice. [17]
14The scope of the rule is not unlimited. For example, “the bright line rule applies only where the immediate legal interests of clients are directly adverse.” [18] (emphasis in original) Further, the bright line rule cannot be relied upon by a party who raises it in a manner that is “tactical rather than principled.” [19]
THE ALLEGATIONS OF CONFLICT
15Mr. Aikins raises the following alleged conflicts of interest on the part of Mr. Strype in representing both Sian and Louis as plaintiffs:
(a) Mr. Strype’s client, the plaintiff Sian, has an interest in maximizing her own damages. Mr. Strype’s other client, the plaintiff Louis, by virtue of the fact that he is also a defendant by counterclaim, could be found liable for indemnifying the defendants for all or part of Sian’s damages, and as such has an interest in minimizing Sian’s damages. This is compounded by the fact that Sian’s claim exceeds Louis’s policy limits with Portage. There is as a result a risk of impaired representation.
(b) There is a risk that Louis could pass on confidential information to Mr. Strype about Sian that Louis may have learned in his capacity as defendant by counterclaim, for example from Mr. Aikins.
“SIMILAR” CASES IN THE JURISPRUDENCE
16Neither counsel have provided jurisprudence that is factually on all fours with the situation before me, although it likely arises often where a lawyer agrees to represent both the driver and the passenger after concluding there can be no liability on the part of the driver. I appreciate that the safest course for counsel who wishes to represent the passenger is to send the driver to another lawyer to represent her as plaintiff, so that the passenger will be free to add the driver as a defendant to ensure someone will be found liable and possibly increase total available insurance [20] , but in my view that is neither required nor the norm and in any event is not the situation before me.
17Mr. Aikins suggests that Poirier v. Haduik [21] , a decision of the Alberta Court of Appeal, is the closest decision to the matter before me. As in the matter before me, the plaintiffs were the driver father and his infant son, a passenger, both represented as plaintiff by the same lawyer. The lawyer, unlike the matter before me also named the father as a defendant. The court stated:
It seems to us that there are real, serious and ongoing conflicts of interest. One cannot give a complete list of examples, but the first thing is that it is very much in the interests of the infant plaintiff that the damages assessed be as large as possible. It is very much in the interests of the father that they be assessed at a lower figure. I should explain that liability is by no means a foregone conclusion in this lawsuit. [22]
The court stated that at trial, the plaintiffs’ lawyer would argue that the other driver was solely liable, but having named the father as defendant, it would be in the interest of the son to argue in the alternative that his father was liable. There would also be a conflict if offers were received. [23] The court held that this conflict was not cured by reason of the father’s liability insurer representing him as defendant. [24] The court “partially removed” the lawyer from the record, but that is not explained.
18What distinguishes Poirier v. Haduik from the matter before me is that in Poirier the lawyer, while purporting to act for the father as plaintiff (as well as his son), named the father as a defendant. That is an obvious conflict. A lawyer cannot act for and against the same client, particularly in the same proceeding. In the matter before me, Mr. Strype has not named Louis as a defendant. Sian cannot recover against Louis (although Aikman could claim contribution from Louis). Mr. Strype will be under no obligation to argue (and will have no right to argue) in the alternative or otherwise that Louis is liable.
19In Condoluci v. Martins , the lawyer (Mr. Balena) represented a minor (Jessica) who was struck by a car while crossing the street after school as well as her mother (Cory) and father (Michael) for damages under the Family Law Act , R.S.O. 1990, c. F.3 (“FLA”). The plaintiffs named as defendants the driver and owner of the car and the school board. The defendants counterclaimed against the parents for negligent supervision. The mother was defended as defendant to the counterclaim by her liability insurer. Mr. Balena, unlike in the matter before me, sent the parents as plaintiffs to new counsel. This did not satisfy either the defendants or the insurer for the mother as defendant to the counterclaim and they each moved to remove Mr. Balena as lawyer of record for the minor plaintiff. They claimed that that there was a risk that confidential information from the mother during the time that Mr. Balena represented both mother and child could be used to the detriment of the mother (as defendant to the counterclaim) if Mr. Balena continued to represent the child. [25]
20I responded to that suggestion as follows:
On the issue of Cory's damages I accept the proposition of the moving parties that it is in the interest of Jessica that her damages be assessed as high as possible, but that it is in the interest of Cory as defendant by counterclaim that Jessica's damages be as low as possible since if she is found partly at fault she must contribute to the damages payable by the defendants. In my view however that should not disqualify Mr. Balena. Mr. Balena obtained information about Jessica's injuries from Cory and Michael not because they were plaintiffs but because they were Jessica's parents, in effect witnesses to Jessica's injuries. Jessica was five years old when this accident occurred and her parents are the most logical and informed persons to provide evidence as to her injuries. Ms. Lawson in argument suggests that any time a lawyer sees a family respecting injuries to a minor and information is obtained from the parents about how the accident occurred and the extent of the child's injuries it is already too late. She suggests that the lawyer will have a disqualifying conflict whether or not the parent is made a plaintiff should a counterclaim or third party claim later issue against the parent based on negligent supervision. In my view that proposition is far too restrictive. Even if the lawyer sent the child to new counsel, the new lawyer would seek information from the parents to properly discharge his duties to the child to get the best available information about the child's injuries. In my view no fair-minded reasonably informed member of the public would suggest that there was an appearance of impropriety in a child's lawyer receiving information from her parents and continuing to represent the child, even if the parent should be made a defendant by counterclaim at the suit of the named defendants. [26]
I therefore conclude that there is no disqualifying conflict on the facts herein. There is no appearance of impropriety. Mr. Balena has left the representation of Cory as plaintiff to another solicitor. The solicitor for the only former client who could complain agreed with that arrangement to resolve any potential conflict (although he later changed his mind). The litigation guardian for Jessica has a fundamental right to choose which defendants to sue and he has instructed that Cory not be named as a defendant. Mr. Balena is not representing two sides to a dispute nor is he acting against his former client. Cory is separately represented on the counterclaim by counsel appointed by her insurer. There is no risk that information obtained from Cory when she was Mr. Balena's client will be used to Cory's prejudice. Their positions on liability are identical. Cory is still Jessica's mother and will be a witness as to Jessica's injuries and will continue to be involved in her care. Jessica through her litigation guardian wishes Mr. Balena to continue to represent Jessica. No fair-minded reasonably informed member of the public would conclude on these facts that the proper administration of justice requires the removal of Mr. Balena. [27]
21I found there was no disqualifying conflict and dismissed the motion to remove Mr. Balena.
22Similar to my conclusion in Condoluci , whether Mr. Strype represented Louis as well as Sian or sent Sian to separate counsel, Sian’s lawyer, whether Mr. Strype or new counsel, would “ seek information from the parents to properly discharge his duties to the child to get the best available information about the child's injuries.” Sian’s lawyer would be seeking information from Sian’s parents “not because they were plaintiffs but because they were [Sian]'s parents, in effect witnesses to [Sian]'s injuries.” As in Condoluci , Sian’s mother, as litigation guardian, had the right to direct whom should be named as defendant and she was not required to name Louis as a defendant. As in Condoluci , Sian “is separately represented on the counterclaim by counsel appointed by her insurer. There is no risk that information obtained from [Louis] when [he] was Mr. [Strype]'s client will be used to [Louis]'s prejudice. Their positions on liability are identical. [Louis] is still [Sian]'s [father] and will be a witness as to [Sian]'s injuries and will continue to be involved in her care.”
23As noted, in Condoluci Mr. Balena sent the parents as plaintiff to separate counsel, however that was not determinative of my decision not to disqualify Mr. Balena. I stated:
These reasons should not suggest that the same solicitor can never continue to act for both child and parent as plaintiffs when the parent is named as defendant by counterclaim or as third party…if there is a proper waiver with independent legal advice. These questions are not before me to decide and are best left to a motion where those facts are presented. [28]
That is exactly the matter I must determine today.
24In any event, even if Mr. Strype had, in response to this motion, decided to send Louis to new counsel, that would not have satisfied Mr. Aikins, who made it clear that it is insufficient for Mr. Strype to determine which client he sends to new counsel; he is seeking the removal of Mr. Strype as counsel for Sian.
25In Al Bidery v. Cazzola [29] , a child ran out from between parked cars and was struck by the defendant’s motor vehicle. Plaintiffs’ counsel, Mr. Monforton, represented the child (whose litigation guardian was her aunt) as well as the child’s parents for damages under the FLA . The defendant driver counterclaimed against the parents (and others) for contribution to the child’s injuries. The parents did not have insurance, nor did they retain counsel to represent them as defendants to the counterclaim. Justice Bondy referenced the fact that even through Mr. Monforton did not go on record for the parents in their capacity as defendants to the counterclaim, he “has been taking instructions from, communicating on behalf of, and taking positions on behalf of the mother and father in their capacity as defendants to counterclaim.” [30] The court also noted that “ for almost two years the child's counsel has been receiving information both on behalf of the child and on behalf of the mother and father in their dual capacities as co-plaintiffs and defendants by the counterclaim. There was no evidence before me of any efforts to keep the information received on behalf of any of those parties separate within the law firm.” [31] This included negotiating on behalf of the parents in both capacities [32] , discussing with them strategies related to the defence to counterclaim [33] and providing advice to and speaking on behalf of these parties with respect to their defence to the counterclaim. [34] Justice Bondy found this was a significant difference from the situation in Condoluci , where the parent had separate counsel to defend her on the counterclaim. [35] This very significant fact also clearly distinguishes Al Bidery from the matter before me. Other matters that affected the decision of Justice Bondy and which distinguish Al Bidery from the matter before me is that in Al Bidery , there was no evidence that the parties were advised of a potential or actual conflict or that they consented to waive any conflict [36] . Further in Al Bidery , unlike in the matter before me, the child was still a minor and the position of her litigation guardian was not made known [37] . For these reasons, Justice Bondy found that the child’s interests were “directly adverse to those of her parents in their capacity as defendants by counterclaim” [38] and that it was “overly simplistic and inconsistent with any appreciation of the duty of loyalty” for plaintiffs’ counsel to simply assert that that “there could be no sharing of confidential information because plaintiffs’ counsel was not suing the parents.” [39] Justice Bondy removed Mr. Monforton as lawyer for all three plaintiffs, but as noted, the situation there was markedly different from the matter before me.
26In Caughey v. Gareau [40] a motorcycle was cut off by the defendant’s motor vehicle and both the driver of the motorcycle and his passenger were injured. A lawyer (Mr. Garay) started two actions, one on behalf of the driver and the other on behalf of the passenger (who required a litigation guardian as the accident caused her to have the mental capacity of a 14 year old). The defendant sought to remove Mr. Garay from representing either plaintiff. Master Beaudoin (as he then was) found that the plaintiffs’ combined claims exceeded the defendant’s policy limits, the plaintiffs would not agree to settle their respective claims within the defendant’s policy limits and as such they had a “competing interest in obtaining as much of the available money as possible”, which “could lead to a conflict between them.” [41] Further the defendant served a forensic engineering report concluding that the plaintiff motorcycle driver was partially responsible for the accident. Master Beaudoin found a “real” conflict based on the likelihood of the claims exceeding the defendant’s policy limits and the plaintiffs’ “competing interests in the available funds” as well as the potential claim against the plaintiff driver “supported by forensic evidence.” [42] At one point Mr. Garay transferred the passenger’s tort claim to new counsel, who initially indicated an intention to amend the passenger’s claim to include the motorcycle driver as a defendant, but this did not happen on the advice of Mr. Garay who continued to be involved in the passenger’s tort claim. [43] Further, Mr. Garay continued to represent the passenger in settling her accident benefits claim, after which he went back on record for the passenger in her tort claim and stated that with the accident benefits settlement, the claims of both plaintiffs could now be settled within the defendant’s policy limits and since limits were no longer a problem, his two clients were no longer competing for limited funds. Master Beaudoin stated that “that argument ignores his role in engineering that result [...O]ne could conclude that Mr. Garay settled [the passenger’s] claim in such a manner as to allow him to retain both files; and in doing so, he preferred his own interests to those of his client.” [44]
27Master Beaudoin found that the situation could have been avoided and “Mr. Garay might be able to represent both parties” had there been independent legal advice with respect to the tort action and the accident benefits claim, but as this was not in the case, and in the circumstances before him, Master Beaudoin “regretfully conclude[d] that the apparent conflict of interest is such that the only solution to preserve the integrity of the system of justice is to remove Mr. Garay from the record for both plaintiffs” [45] as he had received confidential information about the passenger’s claim from representing the driver. [46] Caughey of course has significant differences from the matter before me including the very questionable self motivated conduct of counsel in Caughey , the clear evidence of competing claims in excess of policy limits which counsel would not limit (unlike in the matter before me), a party under disability (in the matter before me the passenger was now an adult) and forensic evidence of fault on the part of the plaintiff driver (whereas in the matter before me, possible liability on the part of the driver of the stopped car that was rear-ended in the matter before me was no more than submissions of Mr. Aikins).
28The last case brought to my attention is Barbe-Langevin v. Brasseur [47] . A minor was a passenger on a snowmobile driven by one of the defendants. (The other defendants were the owner of the snowmobile and the occupier of the premises where the accident occurred.) The minor’s mother was initially her litigation guardian (since replaced) and a plaintiff in her own right for claims under the FLA . The defendant counterclaimed against the mother for contribution to the minor’s injuries for failing to provide the minor with a proper helmet (said to be a live issue based on the nature of the injuries sustained) and for negligent supervision. Separate counsel was appointed to represent the mother as defendant to the counterclaim. The defendants sought to remove plaintiffs’ lawyer as lawyer for both plaintiffs. They alleged that the lawyer has been in a conflict between the two plaintiffs since the commencement of the action, that the interests of the mother are not aligned with those of the daughter and having “materially contributed to the child’s injuries”, she is “therefore adverse in interest to her daughter.” [48] There were other specific allegations against the solicitor that are unrelated to the matter before me.
29As in the matter before me, the “potential conflict of interest” in Brasseur was described by Justice McKelvey as a matter between mother and daughter and did not “directly affect the other parties to the lawsuit.” As in the matter before me, the daughter reached the age of majority during the course of the lawsuit and at that time (albeit after independent legal advice) “confirmed that she did not wish to take any action against her mother” and both mother and daughter confirmed that they wished the lawyer acting for both of them as plaintiffs “to continue to represent them”. When asked, the moving party was unable to name any specific prejudice but stated this was not required. Justice McKelvey accepted this as a correct statement of the law, but determined that the absence of specific prejudice was a “significant factor and one which a reasonable person considering the situation would take into account”. [49]
30The moving party then suggested, similar to the matter before me, that plaintiff’s counsel might gain access to information from the mother relating to liability or damage issues such as failure to wear a helmet. In a statement very apropos to the matter before me the court stated:
However, on the record as it stands today neither of the plaintiffs have asserted a position which is contrary to the position of the other. This in my view is a very significant factor to take into account. It means that the two parties who would be potentially affected by any potential conflict have made a conscious and informed decision not to take a position in the action which is adverse to the other, and that any potential conflict has been waived by them. [50]
31Justice McKelvey then considered the wishes of the parties and stated:
Having waived any conflict both parties in question have expressed a desire to be represented by the same firm. As referred to above, the case law recognizes that a litigant should not be deprived of his or her choice of counsel without good cause […A] party's right to the counsel of their choice is an important right which should not be lightly interfered with. I conclude that a reasonable member of the public would expect there to be a compelling reason before removing a counsel who has been acting for the plaintiffs in litigation over a 10-year period. [51]
32Finally, the court noted that counsel should not have accepted instructions from the mother while she was litigation guardian, but that was addressed by appointing a new litigation guardian. (In the matter before me, Louis was never the litigation guardian.) The court then added, in a statement that I adopt: “ The fact that [the daughter] has now reached the age of majority and has the capacity to make decisions on her own behalf is, in my view, a very important factor to consider on this motion.” [52]
33Although critical of counsel ignoring the potential conflict of the mother acting as litigation guardian for some time, the court concluded with respect to removal of counsel based on any potential conflict in acting for both mother and daughter as plaintiffs:
For the above reasons I conclude that a fair-minded, reasonably informed member of the public would conclude in the circumstances of this case that the proper administration of justice does not require the removal of the plaintiff's solicitor […] I believe that a reasonable member of the public would conclude that in the circumstances of this case at the present time the plaintiff's right to counsel should not be interfered with. [53]
Justice McKelvey then dismissed the motion to remove counsel for the plaintiffs.
34In my view, Brasseur has significant similarity to the matter before me.
ANALYSIS
35So I repeat the question I asked myself at the start of these reasons: Can a lawyer represent both the driver and his passenger in an action for damages arising out of a motor vehicle accident when the defendants counterclaim against the driver for contribution to the damages claimed by the passenger or does he have a disqualifying conflict of interest? What I gather from the “similar” cases presented to me is that each is fact specific and all of the circumstances must be considered in determining if there is an inherent conflict with a risk of impaired representation or if there is a substantial risk of improper disclosure of confidential information. The cases are instructive in pointing to certain factors that, if present, will almost always lead to disqualification. For example, a lawyer cannot represent both driver and passenger as plaintiffs if he has also named the driver as a defendant or if he represented or gave advice to the driver as defendant to the counterclaim or if there is a serious and realistic liability issue supported by cogent evidence or if the driver and passenger did not waive any potential conflict and consent to the lawyer representing both of them. None of these disqualifying factors are present in the matter before me; however all of the circumstances must be examined.
36Clearly Sian has the same interest as Louis as plaintiff on the issue of liability. Louis and Sian as plaintiffs elected to sue only Aikman and Seaway, the defendants that rear-ended them. Sian (at that time through her litigation guardian) chose not to name Louis as a defendant. Sian cannot recover damages against Louis even if he is partially (or entirely) at fault. If Louis is 100% at fault, Sian will recover nothing since she has not claimed against Louis. Likewise if he is 100% at fault, Louis will recover nothing. To recover damages, Sian (and Louis) must establish at least 1% liability against Aikman.
37It is the view of Sian and of Louis as plaintiff that Aikman is 100% liable. This is identical to the interest of Louis as defendant to the counterclaim and his insurer, Portage. They too benefit by 100% liability being established against Aikman so that there will be no need to contribute to Sian’s claim. Indeed, earlier in this action, Mr. Aikins wrote to counsel for Aikman questioning how Aikman could counterclaim against Louis given that it was a rear-end collision. The jurisprudence establishes that in the case of a rear-end collision, the following driver will generally always be at fault and once a rear-end collision is established, the evidentiary burden shifts to the following driver to show he was not negligent. [54] This is assisted by Aikman’s evidence at examination for discovery where he admitted that he saw the plaintiff’s vehicle pull onto the shoulder of the road and come to a stop five seconds before he hit it.
38The plaintiffs had sought dates to bring a summary judgment on the basis that there was no liability on the part of Louis, but scheduling was put on hold until after this motion to remove Mr. Strype as Sian’s counsel was determined.
39Should Louis be found partially at fault for the accident such that his insurer would be required to indemnify the defendants for Sian’s damages, the interests of Louis as defendant to the counterclaim could be theoretically conflicted with the interests of Sian as plaintiff on the issue of Sian’s damages. This possibility is slim given the strong case on liability as against Aikman and given the agreement of Mr. Strype that the combined damages of Sian and Louis will not exceed the insurance limits on the defendants’ vehicle. He had in fact formally offered to restrict the combined claims to the defendants’ policy limits (of $2,000,000) if the defendants admitted liability, but the defendants have to date not accepted that offer.
40It is also unclear to me how this conflict would play out in practical terms (other than with respect to passing on confidential information, which I will deal with later in these reasons.) In the real world, Mr. Strype’s job is to maximize the damages of Sian without regard to the damages or liability of Louis and to minimize or eliminate the liability of Louis since Sian did not sue him. Likewise it is Mr. Strype’s job to maximize the damages of Louis without regard to the damages of Sian and to minimize or eliminate any liability of Louis since that would reduce Louis’s damages proportionate to his liability. Given the combined claim within the Aikman policy limit, there are no conflicting claims by Sian and Louis to limited funds. The situation would be no different if there were two separate lawyers, one representing Sian as plaintiff and the other representing Louis as plaintiff in the situation where, as here, Louis has not been named as a defendant.
41Mr. Strype has played no role except as counsel to Sian as plaintiff and Louis as plaintiff. Sian has not named Louis as a defendant. (Sian’s mother as litigation guardian while she was a minor had the right to direct Mr. Strype not to name Louis as a defendant [55] .) Once Louis was named as a defendant to the counterclaim, Mr. Strype did not represent him but sent him to Portage to appoint defence counsel. Mr. Strype does not purport to act for Louis as defendant in any capacity. There is no evidence, such as in Al Bidery , that Mr. Strype ever gave advice to or assisted Louis in his capacity as defendant to the counterclaim.
42In my view the likelihood of conflict on damages is remote and contingent, rather than actual or likely. The risk of conflict is minimal, rather than substantial.
43Even if there were a risk of conflict, Sian and Louis have waived that conflict, as they had a right to do. They have each sworn an affidavit indicating that Strype Barristers has advised them of the possibility of a conflict of interest arising out of their claims for damages surpassing the defendants’ policy limits, have been advised of their right to independent legal advice, have waived “all potential and/or actual conflicts of interest” between them and have given written authority to Mr. Strype to act as their respective solicitor notwithstanding any potential conflict. Mr. Aikins has elected not to cross-examine Sian or Louis on their affidavits. I appreciate that at the time of the accident and at the time that the action was commenced, Sian was a minor, represented by her mother as litigation guardian, but at the time she swore her affidavit confirming her consent she was a 20 year old adult.
44Mr. Aikins raises questions about what discussions may have taken place about potential conflict at the time Mr. Strype was first retained (and Sian was a minor), what exactly was discussed when the issue of potential conflict was first discovered and whether Sian or Louis may have already revealed information to Mr. Strype about themselves or the other that could benefit one but not the other client. My concern however should primarily be with the fact that consent was given at the time that conflict was alleged by Mr. Aikins, rather than at some earlier date when it may or may not have been an issue. In any event, as indicated, Mr. Aikins has chosen not to cross-examine on these issues. I have no reason to believe that the consents of Sian and of Louis are anything other than fully informed consents.
45Is there a risk that Louis could pass on confidential information to Mr. Strype about Sian, if both remain his clients, which would benefit Sian as plaintiff and detrimentally affect Louis’s interest as defendant to the counterclaim? I pressed Mr. Aikins for examples.
46The example proffered was this: what if Mr. Aikins or Portage, perhaps in response to an enquiry from Louis, told Louis that Portage was conducting or was about to conduct surveillance of Sian and Louis in turn warned Mr. Strype? I agree that if that occurred Louis would be passing on information to benefit Sian, but contrary to Louis’s interest as defendant to the counterclaim and more particularly to Portage, to whom Louis owes a duty of co-operation and good faith.
47In my view, that risk is not only speculative, it has no air of reality. I say this for a number of reasons. First, Mr. Aikins takes his instructions from Portage, not from Louis. If he took his instructions from Louis, he would not have brought this motion to remove Mr. Strype since Louis was against bringing such motion. Insurance companies, and their lawyers, are not in the habit of sharing information about litigation strategy, including surveillance, with their insured, particularly as it relates to the damage claim of the plaintiff. Mr. Aikins would have no reason to discuss with Louis what he may know about Sian’s damages. Mr. Aikins is in full control of the information which would be communicated to Louis and he can directly eliminate the very risk he alleges.
48Second, if Mr. Aikins were to have given this information to Louis he would have reminded Louis that pursuant to Louis’s duty to co-operate with Portage, Louis would be bound to keep the information about the surveillance confidential and not share it with Mr. Strype or with Sian, failing which he would run the risk that coverage by Portage would be denied.
49Third, and perhaps most important, Louis is not only a plaintiff and a defendant to the counterclaim, he is Sian’s father. If he wanted to warn Sian about the surveillance (possibly in breach of his duties to Portage), it would not matter whether he was Mr. Strype’s client or whether Sian was Mr. Strype’s client. He would simply tell his daughter. His daughter would then tell her lawyer, whether her lawyer was Mr. Strype or some other lawyer. Removing Mr. Strype as Sian’s lawyer would not fix the problem raised by this speculative risk.
50Mr. Aikins also suggested that Louis may have given Mr. Strype information about how the accident occurred, or how the accident affected Sian, that may have a detrimental effect on Louis as defendant to the counterclaim. This of course is also highly speculative and has no evidentiary foundation. Mr. Aikins has had and continues to have the right to interview Louis as his insured client, and Louis has an obligation to co-operate with his insurer, be forthright and tell the truth; yet Mr. Aikins has not provided to the court any particular example of disclosure of detrimental information. Further, even if Louis was not Mr. Strype’s client, Mr. Strype would have had the right, at the time of retainer, to ask a father about his daughter’s injuries and how the accident happened. Louis’s evidence about the accident, exculpating him from liability, is of common benefit to Sian, to Louis as plaintiff and to Louis as defendant to the counterclaim.
51In any event, examinations for discovery of both Louis and Sian have now been completed and so their evidence is now on the record eliminating or reducing the risk of shared confidential information.
52Mr. Aikins also suggests the following possible scenario: what if Louis discovered some confidential information about Sian that could affect her claim for damages, for example that she was now working, and told Mr. Strype but did not tell Mr. Aikins. In my view this is so speculative that it barely invites comment. There is no evidentiary foundation to support it. I am not told what information Sian and Louis gave at their discovery about Sian’s employment. Assuming there was evidence about her employment, both Sian and Louis are under an obligation under rule 31.09 to correct any answer that is no longer correct. Further, Mr. Aikins is within his rights to ask Louis for updated information about Sian’s condition from time to time and Louis is bound by a duty to co-operate and to be be forthright and truthful.
CONCLUSION
53In my view, given the common interest of Sian, Louis as plaintiff and Louis as defendant to the counterclaim in resisting any liability on the part of Louis, the fact that Sian has not named Louis as a defendant, the likelihood that no liability will be found against Louis for this rear-end collision, the likelihood of the claims being within the defendants’ $2 million policy limits and as such no competing claims for limited funds and no motivation for Mr. Strype to prefer the interest of one client over the other or to “soft pedal” either claim, the fact that Mr. Strype never advised or represented Louis as defendant to the counterclaim and that Louis is independently represented on the counterclaim by counsel appointed by his liability insurer, the likelihood of conflict of interest, risk of impaired representation or risk of real mischief is remote, speculative and minimal, rather than actual, substantial or likely. In my view the “immediate legal interests” of Sian and Louis in the circumstances of this case are not “directly adverse” [56] .
54There is no evidence that Mr. Strype has received evidence from Louis contrary to the interests of Sian or contrary to Louis’s interest as defendant to the counterclaim and the ongoing risk of disclosing confidential information contrary to the interest of Louis as defendant to the counterclaim in the examples suggested by Mr. Aikins is clearly speculative rather than genuine and substantial. In any event whether or not Sian or Louis was a client of Mr. Strype or whether either or both were clients of other lawyers, Louis, as a father and not as a client would be passing on information to Sian or her counsel.
55Finally, and even if there were a risk of conflict, both Sian and Louis have sworn affidavits indicating they have been advised of the potential conflict but have waived any conflict and consent to Mr. Strype continuing to act for both of them. Both affidavits were sworn at a time when Sian was an adult. It is unclear whether there was a waiver at the time of retainer but waiver became important only after the defendants advanced a counterclaim against Louis and then after Mr. Aikins made allegations of conflict.
56Courts are reluctant to remove counsel of choice except in the clearest of cases where there is a genuine and real conflict or a substantial risk of disclosure of confidential information, particularly where there has been a waiver of conflict. [57] This takes on even greater importance where the action is advanced and counsel has represented the clients for a considerable time. Mr. Strype has represented both plaintiffs since November 2011, has completed discovery, obtained substantial medical evidence and expert reports and taken steps to bring a summary judgment motion.
57In my view, a fair minded reasonably informed member of the public would not conclude that the proper administration of justice required the removal of the plaintiffs’ solicitor of choice in the circumstances of this case.
58I would not remove Mr. Strype as lawyer of record for Sian as sought by the insurer and lawyer for and on behalf of the defendant to the counterclaim.
MOTIVE OF MOVING PARTY
59Plaintiff’s counsel also raises the issue of the motivation of counsel for the defendant to the counterclaim, on the instructions of Portage, in bringing the motion. The motivation of the party seeking removal is a factor in the determination of a removal motion since the court will not remove counsel if the moving party has brought the motion for tactical rather than principled reasons. [58] There must be a “genuine” concern with respect to the merits of the alleged conflict. [59]
60The plaintiffs suggest that Portage instructed Mr. Aikins to bring this motion in an attempt to compel the plaintiffs to formally limit their combined claims to the policy limits of the defendant Aikman. Although the plaintiffs had offered to do so if the defendants admitted liability, the defendants refused to accept that offer and the plaintiffs, despite conceding that the claims will be assessed within the defendants’ policy limits, they have not formally reduced their claims to an amount within those limits. There would obviously be a substantial benefit to Portage if the defendants admitted liability since it would no longer need to defend a counterclaim or indemnify Louis. A simple reduction of the plaintiffs’ claims without an admission of liability might reduce their exposure, but not eliminate the possibility of contribution. Portage as insurer and Louis as insured are both clients of Mr. Aikins. Louis did not want Mr. Aikins to bring this motion purportedly on his behalf. I am suspicious as to why Portage would go to all the trouble and expense of instructing its counsel to bring this motion contrary to the wishes of Mr. Aikins’s client (and its insured), other than to force a reduction of the quantum of the claims.
61There are other unanswered questions respecting the rationale for this motion. Why would Mr. Aikins not align himself, at least with respect to liability, with Mr. Strype against their common adversary – the defendants? Surely at trial, both Mr. Strype and Mr. Aikins will be advocating for 100% liability on the part of Mr. Aikman. Although they will be adversarial on the issue of Sian’s damages, it is conceded that the combined claims of the plaintiffs will not exceed Aikman’s policy limits. Why did Mr. Aikins at first question the defendants why they advanced a counterclaim given that it was a rear-end collision but now seems to suggest that liability is not so clear cut? Why would Mr. Aikins bring this motion at a time when the plaintiff was attempting to obtain a date for a summary judgment motion which could have eliminated any exposure on the part of Mr. Aikins’s clients?
62If there would be impaired representation of Sian by Mr. Strype also representing Louis, as suggested by Mr. Aikins, then that impaired representation of Sian included the decision not to name Louis as a defendant, since naming Louis would guarantee recovery whoever was the tortfeasor and increase the recovery pot. If Mr. Strype had named Louis as a defendant on behalf of Sian (and presumably sent Louis as plaintiff to other counsel), how could that possibly benefit either of Mr. Aikins’s clients? Why then would Mr. Aikins write to Mr. Strype and suggest to him that it is in Sian’s interest to find some liability against her father to maximize her recovery? It is in the interest of Mr. Aikins’s clients that Louis not be a defendant. One would have thought such an argument would be advanced by the defendants, not by Mr. Aikins.
63All of these questions give me pause to ask whether Mr. Akins’s concern over Mr. Strype’s alleged conflict is a “genuine” concern of “real mischief”.
64Mr. Aikins submits, correctly, that a lawyer for any party has the right as an officer of the court to bring a disqualification motion to the attention of the court in situations that would cast a shadow upon the integrity of the administration of justice, [60] although where the allegation is that a solicitor is acting against or using confidential information against a client or former client, standing to bring removal motions is usually restricted to the client or former client save in the most exceptional of circumstances. [61] In this case Louis is one of Mr. Strype’s clients and his insurer claims Mr. Strype is conflicted in representing both Louis and Sian as plaintiffs to Louis’s detriment as defendant to the counterclaim. As such, standing is not an issue. Motives of the moving party are more salient when the moving solicitors do not represent parties for whom the solicitor is said to have a conflict of interest. [62] I have however determined that any risk of conflict in the circumstances of this case is speculative and certainly not substantial, but that does not mean it was unreasonable to bring the matter to the court’s attention to make that determination, nor does it necessarily impugn Mr. Aikins’s motives for bringing the motion.
65Given my determination that there is no substantial risk of disqualifying conflict or disclosure of confidential information, and given that both Sian and Louis have waived such conflict and consent to Mr. Strype’s continuing retainer, it is unnecessary for me to come to a conclusion about the motivations of the moving party in order to decide the motion, and in the circumstances, despite my suspicions as to the motivations of Portage, I decline to do so.
66I do however agree with counsel for the plaintiffs that a message should be sent: Where liability is clear and any potential conflicts have been waived, motions to disqualify lawyers from acting for both the driver and passenger on the basis of a conflict of interest due to unwarranted counterclaims by defendants will effectively delay actions, overburden the courts with tactical conflict motions and remove the right of plaintiffs to select their counsel of choice.
67Finally, I note that the plaintiffs had alleged that Mr. Aikins himself was in a conflict of interest and should not be bringing this motion since Mr. Aikins has received conflicting instructions from his two clients, by Portage to bring this motion and by Louis not to bring this motion. This allegation need not be further explored since the plaintiffs withdrew the cross-motion to remove Mr. Aikins once I had decided to hear both motions concurrently.
COSTS
68The plaintiffs, having been successful in resisting the motion to remove their counsel of choice, would prima facie be entitled to their costs of the motion. If the parties are unable to agree upon the costs of the motion, I would be prepared to receive brief costs submissions from the plaintiffs within 10 days of release of these reasons and brief responding submissions by the defendant to the counterclaim within 7 days of receipt of plaintiff’s submissions. Any party seeking costs shall provide a Costs Outline (Form 57B) and redacted dockets.
ORDER
69I hereby order as follows:
The motion by the defendant to the counterclaim Louis Sabean to remove Jeffrey Strype as solicitor of record for the plaintiff Sian Patricia Sabean is dismissed.
Master R. Dash DATE: October 18, 2016
Footnotes
1Heather Anne Teitler (“Heather”) is Sian’s mother and claims damages under the Family Law Act . Heather was also Sian’s litigation guardian until she reached the age of majority. Heather has no involvement in this motion.
2Rule 3.4-1, Rules of Professional Conduct.
3Rule 1.1-1
4Commentary [1] under definition of “conflict of interest” in rule 1.1-1
5Rule 3.4-2
6Rule 3.4-2(a)
7Commentary [0.1] under rule 3.4-2.
8See for example Moffat v. Wetstein , [1996] O.J. No. 1966, 29 O.R. (3d) 371 (O.C.G.D.) at para. 115 ; Condoluci v. Martins , [2004] O.J. No. 4501 (S.C.J. – Master) at para. 25 ; Essa (Township) v. Guergis , [1993] O.J. No. 2581, 15 O.R. (3d) 573 (Div. Ct.) at paras. 43 and 47
9781332 Ontario Inc. v. Mortgage Insurance Co. of Canada (1991), 5 O.R. (3d) 246 (O.C.G.D.) as quoted in Condoluci v. Martins , supra, at para. 26
10Everingham v. Ontario (1992) , 8 O.R. (3d) 121 (Div. Ct.); Condoluci v. Martins , supra at para. 31
11T.S. Publishing Group Inc. v. Shokar , 2013 ONSC 1755 (S.C.J.) at para.108
12Moffat v. Wetstein , supra, at paras. 106-7
13MacDonald Estate v. Martin , [1990] 3 S.C.R. 1235, [1990] S.C.J. No. 41 at paras. 44-45
14Wallace v. Canadian Pacific Railway , 2013 SCC 39 , [2013] 2 S.C.R. 649 at para. 31
15Wallace v. Canadian Pacific Railway , supra at para. 27
16Wallace v. Canadian Pacific Railway , supra at paras. 23 to 26
17Wallace v. Canadian Pacific Railway , supra, at para. 61
18Wallace v. Canadian Pacific Railway , supra, at para. 32 . Also see pars. 33 and 34.
19Wallace v. Pacific Railway , supra, at para. 36
20For example, in a PracticePro publication, “Managing Conflict of Interest Situations”, “motor vehicle accidents e.g. involving a combination of negligent driver, owner and passenger” is listed as an example of multiple interest situations to avoid at all costs. This of course pre-supposes that the driver is identified as negligent.
21Poirier v. Haduik , 1997 ABCA 319 , [1997] A.J. No. 951, 209 A.R. 78, 15 C.P.C. (4th) 394 (Alta. C.A.)
22Poirier v. Haduik , supra, at para. 3
23Poirier v. Haduik , supra at paras. 4 and 5 .
24Poirier v. Haduik , supra at para. 4 .
25Condoluci v. Martins , supra at para. 48
26Condoluci v. Martins , supra at para. 53
27Condoluci v. Martins , supra at para. 56
28Condoluci v. Martins , supra at para. 58
29Al Bidery v. Cazzola , 2016 ONSC 3126 , [2016] O.J. No. 2630 (S.C.J.)
30Al Bidery v. Cazzola , supra, at para. 6
31Al Bidery v. Cazzola , supra, at para. 21
32Al Bidery v. Cazzola , supra, at para. 21
33Al Bidery v. Cazzola , supra, at para. 39
34Al Bidery v. Cazzola , supra, at para. 20
35Al Bidery v. Cazzola , supra, at para. 32
36Al Bidery v. Cazzola , supra, at paras. 26 and 43
37Al Bidery v. Cazzola , supra, at para. 26
38Al Bidery v. Cazzola , supra, at para. 18
39Al Bidery v. Cazzola , supra, at para. 29
40Caughey v. Gareau , [2003] O.J. No. 3817 (S.C.J. – Master)
41Caughey v. Gareau , supra, at paras. 5 and 8
42Caughey v. Gareau , supra, at para. 29
43Caughey v. Gareau , supra, at para. 34
44Caughey v. Gareau , supra, at para. 41
45Caughey v. Gareau , supra, at para. 42
46Caughey v. Gareau , supra, at para. 44
47Barbe-Langevin v. Brasseur , 2013 ONSC 1689 , 2013 O.J. No. 2498 (S.C.J.)
48Barbe-Langevin v. Brasseur , supra, at para. 5
49Barbe-Langevin v. Brasseur , supra, at para. 24 (1)
50Barbe-Langevin v. Brasseur , supra, at para. 24 (1)
51Barbe-Langevin v. Brasseur , supra, at paras. 24 (2) and (3)
52Barbe-Langevin v. Brasseur , supra, at para. 24 (4)
53Barbe-Langevin v. Brasseur , supra, at para. 25
54Martin-Vandenhende v. Mslik , 2012 ONCA 53 at para. 31 ; Iannarella v. Corbett , 2015 ONCA 110 at para. 19 .
55Condoluci v. Martins , supra at para. 56
56As per the Supreme Court of Canada in Wallace v. Canadian Pacific Railway , supra, at para. 32
57See cases cited at footnote 8.
58Wallace v. Pacific Railway , supra, at para. 36
59Moffat v. Weinstein , supa, at para. 131
60Condoluci v. Martins , supra at paras. 38 and 44
61Condoluci v. Martins , supra at paras. 36 and 44
62Condoluci v. Martins , supra at para. 42