Court File and Parties
Court File No.: FS4-07/C-26-07/C-248-07/ES-623-07/C772-07/08-004-09/08-005-09/ES-1040-11/ES-1041-11 and ES-827-16 Date: 2017/06/13 Ontario Superior Court of Justice at Kitchener
In the Michael Val O’Donovan Family Trust #1 In the Michael Val O’Donovan Family Trust #2 In the Sheila O’Donovan Family Trust
Superior Court of Justice – Ontario
Brian O’Donovan, Patrick O’Donovan, Michael O’Donovan and Tyler O’Donovan Applicants
- and -
Sheila O’Donovan (in her personal capacity and her capacity as Trustee of The Sheila O’Donovan Family Trust), Edward Kalkstein (in his personal capacity and in his former capacity as Trustee of the Sheila O’Donovan Family Trust), Steven O’Donovan aka Stephan O’Donovan, Christopher Anthony O’Donovan, The Estate of Michael Val O’Donovan, And Ministry of the Attorney General Office of the Children’s Lawyer, Respondents
Counsel: Arieh Bloom, Justin Nasseri & Sean Grayson - Solicitors for the Applicants H. Scott Fairley & Elena Mamay, - Solicitors for Sheila O’Donovan (in her personal capacity and her capacity as Trustee of the Sheila O’Donovan Family Trust) Mark Muir Rodenburg, - Solicitor for the Children’s Lawyer on behalf of all the minor beneficiaries, the unborn and the un-ascertained beneficiaries (watching brief) Edward Kalkstein (not represented at hearing) The Estate of Michael Val O’Donovan, Unrepresented
Before: The Honourable Mr. Justice J.W. Sloan Heard: June 12, 2017
Endorsement
Motion to Remove Solicitors and Add Defendant
[1] Unfortunately Paul Amey who had been the lawyer for Mrs. O’Donovan passed away unexpectedly in January 2017.
[2] As a result, Mrs. O’Donovan retained Mr. Douglas Elliott of the Cambridge LLP law firm to take over as her lawyer in all of the above files.
[3] One of Mr. Elliott’s partners is Adam Cappelli. Mr. Cappelli was, from June 2016 until June 1, 2017, a trustee along with Mrs. O’Donovan of either or both family trusts known as SOFT and SOFT 2016.
[4] Notwithstanding that Mr. Cappelli resigned from his position as trustee, the applicants, in addition to requesting that Cambridge LLP be removed as solicitors of record, request that Mr. Cappelli be added as a party respondent for the purpose of passing his accounts for the duration of the time that he was a co-trustee.
Removal of Cambridge LLP
[5] The applicants submit that Cambridge should be removed as solicitors of record because:
- Cappelli is virtually certain to be a witness in these proceedings and a law firm should not act in a proceeding where one of its lawyers is a witness,
- Cappelli’s resignation as trustee does not absolve the conflict issues since he has preferred his firm’s and his personal interests over the interests of the beneficiaries of the trusts,
- Mr. Elliott was formerly a partner in a law firm that represented several of the applicants whose interests are adverse to Mrs. O’Donovan.
[6] I will deal with the third item first. Other than by innuendo, because he was a partner in the firm of Roy Elliott O’Connor from 2011 to mid-2013, the evidence before me is that Mr. Elliott knew nothing about the O’Donovan’s nor that anybody in the firm was acting on any of the O’Donovan’s behalf.
Mr. Cappelli as a Witness
[7] There are conflicting submissions about how likely it is that Mr. Cappelli may be called as a witness.
[8] The applicant submits that because of Cappelli’s one-year stint as a trustee, he must furnish certain information to the beneficiaries and pass his accounts. This is true, but it does not mean that Mr. Cappelli is obligated to or should pass his accounts within the confines of this 10-year-old multi-faceted series of court actions.
[9] In fact, at this time, the court has no idea how complicated or uncomplicated Mr. Cappelli’s accounts may be, however, it is likely certain from the court’s perspective so far, that it would be much cheaper and less time-consuming to pass Cappelli’s accounts for one year, independently of the actions set out on the first page of this endorsement.
[10] Is it likely that Mr. Cappelli will be a meaningful witness, aside from his passing of accounts because he may have had some involvement when the assets of SOFT were rolled into SOFT 2016?
[11] Here again the parties have different opinions.
[12] While the applicants think that Cappelli may have played more than a minor role in the decision to form and fund SOFT 2016, it is the Cambridge Law firm’s position that Mrs. O’Donovan’s former lawyer Mr. Amey, his law partner Mr. Clement and accountants from KPMG who formulated and constructed the documentation to create and fund SOFT 2016, which if true, tends to suggest that Cappelli was needed only because the trust needed two trustees to conduct business.
[13] The applicants submit, that while there is no mandatory rule that a lawyer should not act as counsel in a matter where a lawyer from his/her firm is likely to be a witness, the court has discretion to remove the firm.
[14] The applicants argue that the test is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires the removal of the lawyer. They go on to argue, that the integrity of the justice system must be balanced against the right of a litigant to her/his choice of lawyer.
[15] Both parties referred the Court to the nine factor test enunciated by the Divisional Court in Corporation of the Township of Essa et al. v. Guergis which are as follows:
i. The stage of the proceedings. This litigation has been going on for approximately 10 years, however, if it goes to a trial it will likely be another few years before it is finished, not counting any possible appeals. Given the age of Mrs. O’Donovan and the medical problems being experienced by Kalkstein, this action should proceed as quickly as possible. There is currently a lengthy motion brought by some of the respondents to stay the action(s) which are scheduled to continue for another 4 days in August 2017. ii. The likelihood the witness will be called. Although it may be likely that Cappelli will be called as a witness, at this stage it is unknown whether or not his evidence will be of much assistance. With respect to the totality of the issues and the timelines involved Cappelli’s knowledge of the issues in this case appear to be minor, with the possible exception of what role if any he played in the creation and funding of SOFT 2016. iii. The good faith (or otherwise) of the party making the application. This appears to be a neutral factor. iv. The significance of the evidence to be led. See ii above. v. The impact of removing counsel on the party’s right to be represented by counsel of choice. Mrs. O’Donovan wants Mr. Elliott to represent her interests. It was her former lawyer Mr. Amey who introduced her to the Cambridge Law firm when Mr. Cappelli came on board as a co-trustee. vi. Whether the trial is by judge or jury. This trial will be heard by judge alone. vii. The likelihood of a real conflict arising. Although the applicants have raised some theoretical issues, I am not persuaded that there is a “real conflict” if Mr. Elliott continues to represent Mrs. O’Donovan. viii. Who will call the witness, if for example, there is a possibility counsel will be in a position to cross-examine a favourable witness. The trial judge may rule to prevent that unfair advantage arising. At the suggestion of the court, Mr. Fairley confirmed, that at any subsequent trial Mr. Cappelli would be called as a witness by Mrs. O’Donovan’s trial counsel who would examine him in chief, so that all parties having an adverse interest would be able to cross-examine him. ix. The connection or relationship between counsel, the perspective witness and the parties involved in the litigation. This is not a case of a lawyer acting both as advocate and witness and there is also no issue of relevant confidential information or of acting against a former client.
Adding Cappelli as the Respondent
[16] The applicants knew of Mr. Cappelli’s involvement as a co-trustee as early as September 2016.
[17] Notwithstanding this, they did not seek to amend their application and proceeded to argue the currently adjourned motion for four days in November 2016.
[18] They now seek to add Cappelli halfway through a complicated motion, the argument of which will hopefully be finished in August 2017.
[19] I therefore would not allow the applicants to add Mr. Cappelli as the respondent at this time.
Summary
[20] The motion to have the law firm Cambridge LLP removed as solicitors of record for Sheila O’Donovan is dismissed.
[21] In any subsequent court case, Sheila O’Donovan’s trial counsel, shall at the request of any party having an adverse interest to Mrs. O’Donovan, call Mr. Cappelli as a witness and examine him in chief, so that all parties having an adverse interest may cross-examine him.
[22] The motion to add Mr. Cappelli as a party respondent is dismissed without prejudice at some date following the August motion, to seek to have him added, keeping in mind my previous comments in this endorsement.
[23] Mrs. O’Donovan is entitled to her costs.
[24] If the parties are unable to agree on costs, Mr. Fairley shall forward his brief submissions on costs to me by June 19, 2017. Mr. Bloom on behalf of the applicants shall forward their brief response to me by June 23, 2017. Mr. Fairley shall then forward his reply, if any, to me by June 28, 2017. Cost submissions may be sent to my attention by email, care of Kitchener.Superior.Court@ontario.ca
J. W. Sloan J. Released: June 13, 2017