Superior Court of Justice - Ontario
CITATION: Furr & Lundgren v Duhamel, 2017 ONSC 5358
COURT FILE NO.: CV-14-62967
DATE: 2017/09/08
RE: Steven Furr and Kathleen Lundgren, Applicants
AND
Michel Duhamel et al., Respondent
BEFORE: Justice M. O’Bonsawin
COUNSEL: Self-Represented Applicants
Catherine P. Coulter, for the Respondent
HEARD: September 8, 2017
ENDORSEMENT
Background
[1] The Moving party, Dentons Canada LLP (Dentons), requests an order removing Scott McLean and Dentons as counsel of record in accordance with Rule 15.04(4) and an order sealing the motion’s supporting affidavit. Both parties consented to the order sealing the affidavit. At the time of the motion, I granted the order sealing the 3 Affidavits on both sides due to issues of solicitor-client privilege.
[2] I have heard the submissions of the parties and reviewed their documents. I find that at this time, the motion is not successful.
[3] By way of history, the Application involves the interpretation of a Co-Tenancy Agreement and in particular, what constitutes shared property. Declaratory relief is also sought in respect of certain decisions taken by the Kings Landing Co-tenancy Committee and by the property owners. On September 11, 2014, Mr. Furr and Ms. Lundgren (Applicants), signed a retainer with Dentons. The retainer was not specifically with Mr. McLean.
[4] In an e-mail dated May 7, 2015, Mr. McLean advised the Applicants that at that time, Dentons’ total receivables and work in progress to date plus disbursements and HST equalled $88,691. The Applicants paid $19,157 at the date of the e-mail. The outstanding balance was $69,534. Mr. McLean sent the Applicants a document as an attachment to his e-mail which included their new “arrangement” and the latter would pay the amount of $54,534 to settle their total fees with Dentons. It must be noted that this document is not signed by the parties.
[5] In an e-mail dated May 12, 2015, the Applicants sent Mr. McLean the amended “arrangement” document which includes two changes: one regarding the balance to be paid by the Applicants and one regarding what would occur in the event that there were relationship issues between them. The Applicants’ e-mail confirms that they and Mr. McLean agreed that the former would pay Dentons a total amount of $60,000 gross (plus disbursements billed on a go forward basis in order for the issues in the Application to a final resolution).
[6] The Applicants secured a second mortgage on their home in order to pay Dentons the balance of the legal fees. Consequently, Dentons received the full $60,000 amount from the Applicants in order to bring their Application to a final resolution.
[7] The hearing of the Application was originally scheduled to commence the week of November 21, 2016. The matter was adjourned because Mr. McLean was unable to argue the case since he was too ill. The hearing was subsequently scheduled to take place for four days starting on June 12, 2017. On the morning of the hearing, Mr. McLean sent the Applicants an e-mail advising that he was going to seek an adjournment due to health reasons. The Applicants raised their concerns with Mr. Elliott, the head of Dentons’ Ottawa Litigation Group. There were a series of e-mails between the Applicants and Mr. Elliott. Despite the Applicants’ concerns, they requested that Dentons help them by continuing to work on their case.
[8] The Applicants attended the Case Conference with Mr. Elliott and the hearing was rescheduled to December 5, 2017 for up to four days. This date is peremptory.
[9] On June 29, 2017, Mr. Elliott advised the Applicants that due to the number of issues that they raised regarding the conduct of their matter, this placed Dentons in a position of a conflict and the Applicants must obtain independent legal advice regarding their concerns. On August 16, 2017, the Applicants received independent legal advice from Norton Rose Fulbright.
[10] On August 2, 2017, Mr. Justice Beaudoin issued a Costs Endorsement awarding the Respondents of the Application their costs thrown away in the amount of $23,500 inclusive of HST and the Intervenors were awarded $2,260.
[11] Dentons also relies on a letter from LawPRO to Mr. McLean dated July 11, 2017 in which it states that due to the “assertions being made against you in their email to Mr. Elliott dated June 28, 2014 places your firm in a conflict of interest in continuing to represent the Claimants…we will wait to see whether the Claimants will be ordered to pay any costs of the adjournment. If they are, your firm will be unable to continue to represent them.”
Position of the Parties
[12] I will turn to the position of the parties. Dentons argues that the Court should grant its request to withdraw from the record because it will not result in delay or prejudice against the Applicants. In addition, Dentons argues that in the alternative, the motion should be granted for ethical reasons. They argue that the Applicants have a serious loss of confidence in their counsel and the allegations of misconduct create a conflict of interest. They also argue that the costs award of August 2, 2017 further places Dentons in a conflict of interest.
[13] The Applicants argue that Dentons is not in a conflict of interest because there is no claim against Dentons to indemnify them against the costs award. This issue is a potential conflict. The Applicants are prepared to defer the resolution of the cost award until after the hearing of their Application thereby preventing an actual conflict from arising. The Applicants also argues that Dentons’ claim of a fundamental breakdown in the solicitor-client relationship is a flag of convenience raised in their motion in the likely event the conflict of interest argument fails. In an e-mail dated July 19, 2017 from the Applicants to Mr. Elliott, they state: [h]owever, it remains as it always has, that we need Dentons to continue to represent us and wish and want representation from Dentons. We have been clients of Dentons in our matter before the Court since 2014; we’re simply attempting to have our proceeding brought to a conclusion with Dentons at the hearing of our Application in December.”
Law and Analysis
[14] Rule 15.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”)outlines that once a lawyer is appointed, only a court can order the removal of counsel.
[15] In Cunningham v. Lilles, (2010 SCC 10, 2010 CarswellYukon 21, para 47), the Supreme Court of Canada states that “[i]f counsel seeks to withdraw far enough in advance of any scheduled proceedings and an adjournment will not be necessary, then the court should allow the withdrawal.”
[16] I have reviewed the caselaw with regards to this matter and this case is significantly different. The majority of caselaw relates to removing counsel of record because of conflicts of interest due to either a lawyer who changes firms or competing interests of different clients of a firm.
[17] Dentons argues that the Applicants will not be substantially prejudiced if they have to retain new counsel because there remains three months before the hearing date. In preparation for the motion, I have reviewed the material for the Application. It is substantial. It will take new counsel a significant amount of time to review and to prepare for the hearing. Dentons did not try to negotiate a without prejudice plan with regards to the amount of $60,000 it has already been paid by the Applicants to bring the Application to a final resolution. This means that the Applicants will have to bear significant costs in relation to retain new counsel.
[18] In addition, Justice Roger previously ordered that all of the owners or co-tenants must be served with the Amended Notice of Application. Consequently, the conflict search pool significantly increases to over 60+ people. This will add difficulty in the Applicants’ trying to retain new counsel and to prepare for the hearing within three months.
[19] It is clear from the facts of this case and the evidence before the Court, the Applicants will be substantially prejudiced if both Mr. McLean and Dentons are removed from the record due to the time constraints and most importantly, the cost associated to retaining new counsel.
[20] With regards to Dentons’ argument of a conflict of interest, the LawPRO letter is not dispositive of the issue. This is a letter of a risk management insurer. The issue of the costs award can be dealt with in a separate matter.
[21] Dentons argues that the Applicants have a serious loss of confidence in their counsel. The evidence demonstrates that the Applicants were frustrated with the provision of Mr. McLean’s services. It is understandable given the situation. However, on more than one occasion, the Applicants continued to ask Dentons to continue to represent them at the hearing. Therefore, Dentons’ argument that there was a loss of confidence fails.
Conclusion
[22] For the reasons noted above, I order as follows:
• Scott McLean and Dentons Canada will not be removed as counsel of record; and
• should Dentons wish to assign a different lawyer than Mr. McLean to the Applicants’ file, that is permissible
[23] I do not grant any costs for this motion.
Justice M. O’Bonsawin
Date: 2017/09/08
CITATION: Furr & Lundgren v Duhamel, 2017 ONSC 5358
COURT FILE NO.: CV-14-62967
DATE: 2017/09/08
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Steven Furr and Kathleen Lundgren, Applicants
AND
Michel Duhamel et al., Respondent
BEFORE: Justice M. O’Bonsawin
COUNSEL: Self-Represented Applicants
Catherine P. Coulter, for the Respondent
HEARD: September 8, 2017
ENDORSEMENT
Justice M. O’Bonsawin
Released: 2017/09/08