Court File and Parties

Court File No.: CV-14-51597 Date: 20170601 Superior Court of Justice - Ontario

Re: York Region Condominium Corporation No. 890, Plaintiff – AND – Douglas A. Hendler, Aylesworth LLP, and Dickinson Wright LLP, Defendants

Before: E.M. Morgan J.

Counsel: Bruce Jaeger, for the Plaintiff Eric Kay, for the Defendant

Heard: June 1, 2017

Endorsement

[1] The Plaintiff manages a commercial condominium building. The Defendant, Douglas A. Hendler (“Hendler”), was its lawyer. For the period in which Hendler represented the Plaintiff, he was partner of, inter alia, the Defendant, Aylesworth LLP (“Aylesworth”) and later a member of the Defendant, Dickinson Wright LLP (“Dickinson”). He is still a partner in both firms, although Aylesworth is now a non-practicing firm.

[2] The action is framed in negligence. It was issued by the Plaintiff on the heels of a solicitor-client assessment commenced by Dickinson. Essentially, the Plaintiff’s claim for faulty advice given to it by Hendler is a set-off claim as against the fees billed to it by Dickinson.

[3] The Defendants are represented here by the Dickinson firm as solicitors of record. The Plaintiff moves to remove Dickinson from the record on the grounds of conflict of interest. It is the Plaintiff’s position that Dickinson cannot perform an objective counsel role in this matter since one of its partners’ conduct is in issue. A summary judgment motion is pending, and Hendler has sworn an affidavit in that motion. Hendler’s credibility is likely to be an issue when the matter is finally heard on its merits.

[4] Counsel for the Plaintiff takes the position that litigation counsel must be more independent of its client than any member of the Dickinson firm could possibly be. He cites Stevens v. Salt, [1995] OJ No 813, at para 8, for the proposition that, “The rule prohibiting a member of a firm from acting as counsel in a case where another member of the firm is a crucial witness is intended to protect the independence of counsel and to prevent any appearance that this independence might be compromised.” He stresses that, “The court cannot simply stand by and allow counsel to act in a matter where he/she has an obvious conflict of interest with the client…” Soulard v. Soulard, [2016] OJ No 3465.

[5] Plaintiff’s counsel submits that it is litigation counsel’s function to give sometimes unpopular advice to the client, and to let the client know the real strength or weakness of its case. He goes on to observe that it is doubtful that Dickinson lawyers can give Dickinson the kind of hard-nosed advice he has in mind.

[6] On the other side of the coin, counsel for the Defendants points out that, “…all applications to remove solicitors from the record are not brought with the purest of motives. The expense and delay involved in retaining new counsel may work to the substantial benefit of an opposing party in some cases”: Town of Essa v. Guergis (1993), 15 OR (3d) 573, at para 46. He contends that the timing of the present motion – coming just as the summary judgment motion heats up – suggests that it is brought for tactical reasons rather than out of genuine concern for a conflict. He goes on to state, as did the court in Saint John Shipbuilding Ltd. v. Bow Valley Husky (Bermuda) Ltd., 2002 NBCA 41, [2002] NBJ No 205, that, “Courts are rightly allergic to disqualification motions driven purely by tactical considerations.”

[7] Defendants’ counsel argues that the Plaintiff has been engaged in a series of tactical moves like this one. Hendel and Dickinson brought an assessment proceeding to collect the fees that they billed to the Plaintiff, and on the eve of the assessment hearing the Plaintiff issued the within claim for negligence. Then, the Defendants brought a summary judgment motion to dismiss the negligence claim, and when it is on the verge of being scheduled for a hearing the Plaintiff brought this motion to remove their lawyers.

[8] Some of the factors that are used to measure the strength of a motion to remove the opposing side’s solicitors of record include:

a. the stage of the proceedings; b. the likelihood that the witness will be called; c. the good faith (or otherwise) of the party making the application; d. the significance of the evidence to be led; e. The impact of removing counsel on the party’s right to be represented by counsel of choice…

See Rice v. Smith, 2013 ONSC 1200, [2013] OJ No 784, at para 20.

[9] The matter may be at an early, pre-discovery stage of proceedings, but a substantial amount of work has already gone into preparation of the summary judgment motion. It would be rather expensive and cumbersome for the Defendants to have to bring new counsel on board at this stage (although it is, of course, feasible for them to do so). Hendel will likely be a witness, and a significant one at that. However, as indicated above, it is unclear whether the motion has been brought out of a good faith concern to remove a conflict, or whether it is a tactical measure to delay and inconvenience the Defendants.

[10] I note that Law Pro has not appointed counsel for the Defendants. Counsel for the Defendants explains that this is because it perceives the dispute as essentially one over fees. Counsel for the Plaintiff adds that since the Plaintiff’s remedy is essentially to set off the amount that it owes the Defendants against the damages it claims, the legal insurer has expressed little interest in defending the claim.

[11] To the extent that this negligence suit comes in response to, and is similar to, the Defendants’ assessment proceeding, I note that a law firm can certainly represent itself at an assessment hearing: Vardalas v. 1455358 Ontario Ltd., [2014] ACWS (3d) 525, at para 21. Indeed, it does not appear that the Plaintiffs took any objection to their doing so in this very matter.

[12] I also note that the Defendant law firms could certainly be self-represented, just like any other litigating party. In that case, their current counsel could appear on their behalf; he would simply have to put on street clothes rather than his barrister’s gown.

[13] This matter is close enough to a dispute over fees that the conflict, such as it is, does not raise a serious concern. Not only do law firms regularly represent themselves in collecting fees – whether in an assessment procedure or in a regular court action – but the member of the firm most closely associated with the particular client will typically testify. This does not raise the kind of conflict that jeopardizes the fairness of the proceeding for the former client. While it is certainly true that, “The public has an overriding interest in ensuring that justice is not only done but is seen to be done,” Soulard, at para 46, there is nothing particularly unjust about Dickinson defending its own economic interest. It is difficult to see how this would prejudice the Plaintiff in any way.

[14] Accordingly, the Plaintiff’s motion to remove the Defendants’ solicitors of record is dismissed.

[15] The Defendants have submitted a Costs Outline seeking a total of $8,400 on a partial indemnity scale. This is in roughly the same range as the $7,800 in partial indemnity costs sought by the Plaintiff in its Costs Outline. The Defendants’ request can therefore be characterized as an “amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed”: Rule 57.01(1)(0.b) of the Rules of Civil Procedure.

[16] In his case conference endorsement of April 10, 2017, Archibald J. indicated that in the event the Plaintiff is unsuccessful in the present motion, the Defendants are to be awarded an extra $2,000 for costs thrown away in preparation for the aborted hearing of the summary judgment motion. Accordingly, the Plaintiff shall pay the Defendants $8,400, inclusive of fees, disbursements, and HST, plus another $2,000 in costs thrown away, for a total costs payment to the Defendants of $10,400.

Morgan J. Date: June 1, 2017