Court File and Parties
NEWMARKET COURT FILE NO.: FC-15-49424-00 DATE: 2018-06-07
SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT
RE: Carol Junger, Applicant AND: Richard Portugese, Respondent
BEFORE: The Honourable Mr. Justice D.A. Jarvis
COUNSEL: M. Polisuk, Agent for S. Lawrence Liquornik, Counsel for the Applicant L. Mongillo, Agent for D. Todd Morganstein, Counsel for the Respondent
HEARD: May 24, 2018
Ruling on Motion
JARVIS J.
[1] The respondent (the “husband”) moves for an Order to remove counsel for the applicant (the “wife”) from the record. The motion is granted. These are the reasons.
Evidence
[2] The husband and wife are engaged in family law proceedings that the wife started in October 2015. The parties have resolved all of their parenting and support issues but not the equalization of their net family properties, in particular the value of the wife's interest in a family business or businesses. Counsel for the husband (TM) was retained after the Application was started. Counsel for the wife (LL) was retained after the parties’ support issues were settled.
[3] The parties’ counsel are long-time colleagues. The unchallenged evidence is that they met studying for the Bar admission exams and during the following 25 years often represented opposing sides in family law cases and collaborated, formally and informally, on cases. They provided, again formally and informally, legal opinions to the other, acted as the other’s agent from time to time and socialized with their respective partners. Each holds the other in high personal and professional regard.
[4] Before the parties separated, the husband attended a meeting with his wife and her father during which the father explained how the family businesses were structured. This discussion also involved corporate cash flow and distribution of funds. Valuation of the wife's business interests is critical to determining her net family property. TM alleges that before the wife changed counsel he and LL discussed on at least three occasions how best to strategize, or roadmap, the father's case based on the disclosure being made by the wife. TM provides no date, time, place or mode of communication for these discussions but says that LL “gave me advice on a strategy, discussed particulars of and was provided with privileged evidence which relates directly”[^1] to the father’s case. Clarifying, TM added that “there is no document which Mr. Portugese would rely on in court, it is information and the strategic use of that information which was discussed and developed…”[^2]
[5] After the discussions alleged by TM but before LL served a notice of the wife’s change in representation confirming his retainer, LL wrote to TM responding to the husband’s financial disclosure requests made months earlier to his predecessor. The letter contained details about the wife’s business interests. Shortly afterwards TM wrote to LL to alert him that the husband objected to his representing the wife, asking him to withdraw.
You and I discussed the core financial issues in the case, including: the possible interwoven business interests enjoyed by Ms Carol Junger, and how I might or might not wish to use certain evidence that Mr Portugese thinks he may have to shed more light on Ms Junger’s wealth…
I have specific recollection of our discussions…
Mr. Portugese is clear and unequivocal: under the circumstances, he objects to your representing Ms Carol Junger as her family law lawyer on the basis that you and I discussed the facts of the case, the discussion centered around the remaining issue and specifically Ms Junger’s (non) disclosure on her financial statement and minimizing her interest in the family business(es).[^3]
[6] LL disputed any conflict of interest. He said that he had no independent recollection of ever having discussed the case with TM before his retainer but he accepted TM’s recollection that he had been consulted “about this tactical issue concerning evidence which may impact on financial issues relating to”[^4] the wife. He also stated that he had no idea about what “documents or evidence” TM had imparted to him. There was no suggestion in the evidence that the names of the spousal parties, the names of the family business or businesses or the specific nature of the evidence in possession of the husband was discussed. LL claimed that the husband’s disclosure was deficient and requested an affidavit of documents from him. It is clear from LL’s correspondence that he viewed the financial disclosure already made, to be made, and its’ timing as “inconsequential” to any real or perceived conflict of interest.[^5]
[7] The wife filed an affidavit that alleged that her husband’s motion was purposed to obstruct the more timely resolution of the outstanding equalization issue and pressure her into an unfavourable settlement. She said that shortly before TM raised the conflict issue, her husband told her that, among other things, he would keep her “in court forever.”[^6] She alleged that TM did not disclose to LL the names of the parties involved in the discussions between counsel or the nature of the compelling evidence in her husband’s possession. The wife was not present for these discussions.
[8] Determining whether LL should be removed as the wife's counsel involves the delicate interplay between a party’s right to counsel and respect for the integrity of the administration of justice.
Law
[9] Only in the rarest of cases should a court grant a solicitor’s removal Order.[^7] In Kaiser[^8] (Re), Cronk J.A. stated:
As the motion judge properly noted, “A litigant should not be deprived of counsel of its choice without good cause…” For this reason, Canadian courts exercise the highest level of restraint before interfering with a party’s choice of counsel. Where such discretionary, equitable relief is invoked, there must be a possibility of real mischief should a removal order be refused. The test is whether a fair-minded and reasonably informed member of the public would conclude that counsel’s removal is necessary for the proper administration of justice… [Citations omitted.]
[10] As noted by Kiteley J. in Zaldin v. Zaldin[^9]:
[13] There does not need to be a finding of impropriety in order for the solicitor to be removed, rather it is the appearance of impropriety that is the test. This is particularly true when the litigation involves a family dispute.[^10]
[11] The leading solicitor’s removal case is MacDonald Estate v. Martin.[^11] As stated by Sopinka J., the test for determining whether there is a disqualifying conflict of interest is whether “the public, represented by the reasonably-informed person would be satisfied that no use of confidential information would ever occur.”[^12] Two questions require answer:
Did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand?
Is there a risk that it will be used to the prejudice of the client?[^13]
[12] In Dalgleish v Dalgleish[^14], a wife was in the process of discharging her counsel of record and, in the process of interviewing for new counsel, she spoke to the secretary of a lawyer who was later retained by her husband. The wife never spoke to the lawyer. She objected to that retainer. She maintained that, as a result of her telephone conversations with his secretary, the lawyer had information about the wife’s case and was aware of the strategy of her case. The lawyer said that he had received no information from the wife that would prejudice her. The lawyer’s secretary had taken notes of her discussions with the wife. In disqualifying the lawyer from acting for the husband, Nelson J. referred to the MacDonald Estate case and observed that,
[28] As in the MacDonald Estate case, the alleged confidential information here was given to a person other than litigation counsel. In that case it was an articled student who later became a lawyer. In this case it is Mr. Schmidt’s secretary, an employee of the law firm later retained by the applicant. The test is not the type of relationship between the litigator and the person who has received confidential information; it is whether or not the information or communication received is likely to be disclosed.[^15] (Emphasis added)
[13] In Guthrie v. Guthrie[^16], the wife sought to disqualify a lawyer from a law firm that had been retained by her husband and which had previously acted for other members of her family in their family law litigation. Seppi J. held that while the Family Law Act mandates full financial disclosure,
[7]… there is no requirement to disclose the client’s instructions about strategic use of financial information. The client is entitled to expect that information communicated in the course of his retainer remain confidential and not be perceived at risk of being used in adversarial proceedings against the client’s or his family’s interest. In those circumstances of a genuine concern there is no basis on which to question the applicant’s motives in bringing this motion.
[8] The applicant is not required to particularize the nature of the confidential strategy which she believes may be used against her in order to establish that confidential information relevant to her case was received by the firm…[^17] (Emphasis added)
[14] In Marinangeli v. Marinangeli[^18] Ferrier J. held that:
Confidential information, in the present context, is not limited to financial details or information concerning such details.[^19]
[15] Such information can involve “strength and weaknesses in the processes of settlement discussions, negotiation tactics and litigation strategies.”[^20]
[16] It is not uncommon that, like LL in this case, counsel whose removal is sought will claim that they have no recollection of, or any knowledge about, the confidential information which is alleged to have been imparted. In Macdonald Estate Sopinka J. observed,
[52] 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… the affidavits of lawyers difficult to verify objectively will fail to assure the public.[^21]
[17] The onus of satisfying the court that relevant confidential information, which includes strategic use of that information, has been imparted to counsel acting for an opposing party rests with the claimant, in this case the husband. When that onus is met, the onus then shifts to opposing counsel to satisfy the court that no relevant information was received. In this case, the husband has satisfied me that TM and LL discussed the husband’s strategic use of information relevant to this case which arose from the husband’s relationship with his counsel. It does not matter that the information was not particularized to the parties.
[18] In MacDonald Estate Sopinka J. observed that counsel answering the second question involving risk and opposing client prejudice had a difficult burden to discharge.[^22] In my view, LL has not met that burden. I accept TM’s evidence about the number of times that he claimed that he and LL discussed the husband’s strategy. Even though LL claimed that he had no independent recollection of those discussions, he did not suggest that TM was incorrect. It does not matter that the subsequent disclosure of the wife’s business interests “might” in some way cure the alleged conflict.
[19] This is not a case of delay vitiating a conflict of interest objection or, in my view, tactical removal of counsel of record as alleged by the wife. Nor is this a case of an isolated contact between legal colleagues during which there was a general discussion about evidentiary or strategic challenges in a family law dispute. There were three such discussions in this case. Even though a solicitor’s removal request should be approached cautiously and not granted “without good cause” I cannot say that a reasonably-informed member of the public would be satisfied that no use of confidential information (in this case strategy) would ever occur.
[20] As already noted, the husband’s motion is granted. If counsel are unable to settle costs, the husband shall deliver his written submissions by June 22, 2018 and the wife shall deliver her submissions by July 6, 2018. Reply (if any) shall be filed by July 13, 2018. Submissions shall be limited to four double-spaced pages: in the case of Reply, two pages. All submissions shall be filed in the Continuing Record. Offers to Settle, Bills of Costs and any Authorities upon which a party may wish to rely shall also be filed by the above deadlines. Counsel are to advise the judicial secretary at Nurit.suzana@ontario.ca once the submissions have been filed in the Continuing Record.
Justice D.A. Jarvis
Date: June 7, 2018
[^1]: Para. 32 of TM affidavit sworn December 22, 2017 [^2]: Para. 19 of TM affidavit sworn February 27, 2018 [^3]: Supra #1, Exhibit “D” [^4]: Exhibit “I” to LL affidavit sworn February 21, 2018 [^5]: Supra # 2, Exhibit “I” (letter dated January 23, 2017) [^6]: Para. 4 of the wife’s affidavit sworn February 21, 2018 [^7]: Best v. Cox et al, 2013 ONCA 695, para. 8 [^8]: 2011 ONCA 713, 205 O.A.C. 275, para. 21 [^9]: 2014 ONSC 6504 [^10]: Ibid, para. 13 [^11]: 1990 CanLII 32 (SCC), [1990] 3 S.C.R. 1235, [1990] S.C.J. No. 41, 121 N.R. 1, 48 C.P.C. (2d) 113, 77 D.L.R. (4th) 249 [^12]: Ibid, para. 47 [^13]: Ibid, para. 48 [^14]: 2001 CarswellOnt 2016, [2001] O.J. No. 2187, [2001] O.T.C. 426, 105 A.C.W.S. (3d) 1157 [^15]: Ibid, para. 28 [^16]: 2006 CarswellOnt 5513, [2006] O.J. No. 3644, 151 A.C.W.S. 769 [^17]: Ibid, paras 7 and 8 [^18]: 2004, CarswellOnt 3015, [2004] O.J. No. 3082, [2004] O.T.C. 647, 132 A.C.W.S. (3d) 798, 4 C.P.C. 383 [^19]: Ibid, para. 16 [^20]: Ibid, para. 18 [^21]: Supra # 10, para. 52 [^22]: Supra #10, para. 49