Court File and Parties

COURT FILE NO.: CV-16-59395 DATE: 2018/08/30 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

THOMAS S. TIFFIN and F. MARC HOLTERMAN Self-represented Plaintiffs

• and -

TEPLITSKY COLSON LLP and THE ESTATE OF MARTIN TEPLITSKY Ms. A. Lev-Farrell for the law firm Berkow Youd Lev-Farrell Das, LLP (“BYLD”), on behalf of the Defendant, Defendants

HEARD: August 28, 2018 A.J. Goodman J.

Endorsement

[1] This motion is brought by the plaintiffs, Thomas Tiffin and F. Marc Holterman for the removal of counsel, R. Leigh Youd and his law firm, Berkow Youd Lev-Farrell Das, LLP (“BYLD”) as solicitors of record for the defendant law firm and the late Martin Teplitsky.

[2] For the following reasons, the plaintiffs’ motion to remove Mr. Youd and his firm as counsel of record is dismissed.

Background

[3] The substantive case is framed as a lawyers’ professional negligence action. The claim was issued in 2016. Pleadings have closed but no examinations for discovery have commenced.

[4] The Lawyer’s Professional Indemnity Corporation (“LawPro”) appointed Mr. Youd, of BYLD to act as counsel for the defendant, Teplitsky Colson LLP (the “Firm”). Martin Teplitsky, now deceased, was a principal lawyer at the Firm. Martin Teplitsky’s estate is also a defendant in this action.

[5] The plaintiffs are self-represented litigants, and former clients of the Firm.

Summary of the Facts

[6] The plaintiffs were acquitted at trial for allegations of tax evasion and other charges. The Firm acted for the plaintiffs in an action they commenced in 2009 against the Attorney General of Canada and certain other government officials (the “2009 Action”). In this action, the plaintiffs alleged that they had been wrongly prosecuted for tax evasion and related offences.

[7] After bringing the 2009 Action, the plaintiffs substantially amended their claim, seeking general damages for malicious prosecution; invasion of privacy; and violation of their Charter rights. The defendants in the 2009 Action moved to strike the amended claim. In advance of that date, the plaintiffs allege that they first met with Martin Teplitsky on June 2, 2011, and thereafter retained the Firm to take over the 2009 Action.

[8] While paragraph 11 of the Notice of Motion alleges that Martin was to have “sole carriage and control of the matter”, it is clear from the plaintiffs’ productions that from their retention of the Firm in 2011, and over the course of the next three years, Martin Teplitsky’s son, Bradley Teplitsky, also a lawyer at the Firm, had some involvement or carriage of the 2009 Action. Bradley Teplitsky left the employ of the Firm sometime in early 2015, and is not a party to this action.

[9] The within action was issued four months after Martin Teplitsky’s death, but was not served until nearly a year following his death. The plaintiffs seek damages of $18,594,365.48.

[10] The plaintiffs allege that the Firm was negligent during its carriage of the 2009 Action. In particular, the plaintiffs allege that in December of 2011, Martin Teplitsky negotiated a “secret” settlement of the 2009 Action whereby, following the completion of to be scheduled examinations for discovery, the defendants would pay to the plaintiffs the sum of $9,000,000 plus costs (the “Settlement”).

[11] In reliance on the secret Settlement, the plaintiffs allegedly agreed to release certain of their claims; and agreed to a new streamlined version of their claim contained in a Fresh as Amended Statement of Claim in the 2009 Action, drafted by the Firm. The plaintiffs further allege that the Firm unilaterally terminated the retainer in November 2014 without having finalized the Settlement. The plaintiffs proceeded to trial in the 2009 Action in November 2015 without counsel, and discontinued their claims during trial.

[12] Mr. Youd and BYLD were retained to defend this action. As the action was commenced following Martin Teplitsky’s death, Mr. Youd never had the opportunity to ask the witness about the alleged Settlement. Both Bradley Teplitsky and lead counsel for the defendants in the 2009 Action deny that an offer akin to the alleged Settlement was ever discussed or made.

The October 25, 2017 Letter

[13] Soon after receipt of the Statement of Claim in this matter, Mr. Youd attempted to collect the documents in the possession of the Firm. The Firm provided Mr. Youd with such documents as they had in their possession, and advised him that most of the file had either been returned to the plaintiffs at the termination of the retainer in 2014, or had been delivered to Bradley Teplitsky sometime in December of 2015.

[14] Mr. Youd asked Bradley Teplitsky if he had any remnants of the 2009 Action file. He initially advised that he could find no such documentation, however, on or about September 9, 2017, Bradley Teplitsky contacted Mr. Youd to advise him that he had discovered an extensive amount of file documentation which formerly belonged to the Firm. He provided these documents to BYLD on or about September 19, 2017.

[15] On October 25, 2017, Mr. Youd wrote to the plaintiffs to request an extension of time to deliver the Firm’s defence. Mr. Youd wrote, in part, as follows: “We have received from Brad Teplitsky an extensive amount of file documentation which formerly belonged to the firm. I was hopeful of having it organized and read in time to deliver our defence by the end of this week”.

[16] The following day, Mr. Holterman wrote to Mr. Youd and advised him that, based on the October 25 Letter, the plaintiffs had concluded that Bradley Teplitsky’s possession of the documents was tantamount to theft. Mr. Holterman requested that the Firm report the matter to the police, and that the plaintiffs would be willing to cooperate with any police investigation that ensues.

[17] On February 6, 2018, Mr. Holterman again wrote to Mr. Youd to demand that the Firm report the “conversion or theft” of the documents to both the police and the Law Society. On February 9, 2018, Mr. Youd wrote to Mr. Holterman to advise him that neither he, nor the Firm, would be notifying the police as demanded.

The March 9, 2018 Letter

[18] On March 3, 2018, Mr. Holterman sent Mr. Youd an extensive letter reiterating his position that the documents had been stolen. In addition, Mr. Holterman now took the positions that the October 25 Letter constituted a waiver of privilege by Mr. Youd; and that in relying on the documents to prepare the Firm’s defence, Mr. Youd had variously “tainted the integrity of the documentary record”. Further Mr. Youd had “broken the chain of custody” and “rendered [the documents] useless to the Firm”. Mr. Holterman advised that the plaintiffs intended to bring a motion to strike the defence.

[19] On March 7, 2018, Mr. Holterman again wrote to Mr. Youd, advising of his intention to bring a motion to strike, and enclosing a draft Notice of Motion seeking, among other grounds of relief, an Order permitting the plaintiffs to enter into evidence records of disciplinary proceedings against Bradley Teplitsky before the Tennessee Supreme Court's Board of Professional Responsibility.

[20] On March 9, 2018, Mr. Youd responded to the plaintiffs. The relevant segments include:

Insofar as your claim against the firm, I had understood that the principle thrust of your claim was that somehow the firm had cost you an alleged secret $9,000,000 settlement. As a result, I continue to fail to see how the issues which you raise in your draft Notice of Motion address the merits of any such claim. In the circumstances, I respectfully suggest that you direct your energies to prosecuting the merits of the claim. As it stands, the points you raise with respect to admissibility of documentation at trial might simply be dealt with by the trial judge.

Additionally, we remind you that we act for the firm. You have to date failed or refused to obtain an order to continue your claim against the Estate of Martin Teplitsky (which is a bankrupt). In any event, we do not act for Brad Teplitsky.

[21] The plaintiffs did not proceed with the motion and the Firm served its affidavit of documents on March 21, 2018. The next day, Mr. Holterman wrote to Mr. Youd, advising him of the plaintiffs’ position that an “undisclosed number” of the documents listed in the affidavit of documents “were and remain stolen property”, and that the plaintiffs will not accept it. Mr. Holterman further advised that as they are self-represented litigants, effective immediately, all service must be made under the Rules.

[22] On April 2, 2018, Mr. Holterman wrote a letter to Mr. Youd, which claimed that the March 9 Letter constituted “legal advice” which was accepted and relied upon by the plaintiffs. As such, Mr. Youd became counsel for the plaintiffs. It was also suggested that Mr. Youd could not continue to act for both plaintiffs and the Firm without their explicit written consent. No consent would be provided. Mr. Holterman went on to advise of his position that Mr. Youd had become a material witness to the proceedings with respect to the alleged theft of the documents.

Positions of the Parties

[23] The plaintiffs seek to remove Mr. Youd and BYLD as counsel for the Firm. The plaintiffs add that they are acting in good faith and are protecting the integrity of the administration of justice in bringing this motion.

[24] The plaintiffs concede that Mr. Youd’s professionalism is not being challenged. Rather, the plaintiffs submit that BYLD have through their acts, omissions and breaches of duty become adverse in interest to the defendants and LawPro.

[25] The plaintiffs submit that despite the unresolved conflicts of interest, Mr. Youd has breached privilege and refused to recuse himself. His refusal benefits his firm at the expense of the defendants’ interests and the overall administration of justice.

[26] The plaintiffs also says that Mr. Youd will be a material witness with substantive evidence to provide at trial in regards to how the documents were obtained by him, the nature of these documents, and more importantly, to address allegations of false, misleading or fraudulent documents being provided and relied upon by the Firm in defence of the within action.

[27] Ms. Lev-Farrell on behalf of BYFD submits that the plaintiffs’ argument rests or relies on two letters written to them by Youd in the course of this litigation. The plaintiffs’ argue that these letters claim a breach of litigation privilege and render Mr. Youd and BYLD adverse in interest to their client. The documents reveal criminal activity and render Mr. Youd a compellable witness with respect to this important issue. Moreover, Mr. Youd is purported to have provided the plaintiffs’ with legal advice, thereby rendering the plaintiffs as his “phantom clients”, and placing themselves in a conflict of interest.

[28] Ms. Lev-Farrell submits that there is no merit whatsoever to the relief sought in this motion and it ought to be summarily dismissed with costs.

Discussion

[29] The law is clear that a litigant’s counsel of choice may not be removed lightly. The decision to disqualify is a discretionary one, to be made only in the clearest of cases: MacRae v. Santa, 2002 ONSC 18620, [2002] O.J. No. 4231 at paras. 29-32, Karas et al. v. Her Majesty the Queen et al., 2011 ONSC 5181, [2011] CarswellOnt 8946 at para. 26.

[30] The overarching test to be applied on a motion to remove a lawyer from the record is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires it. This determination is fact-specific and based on an examination of all of the factors in the case and the specific reason why the motion is being brought. The task of the court is to uphold and preserve the integrity of the justice system while ensuring that litigants are not deprived of their counsel of choice without good cause.

[31] A court should be reluctant to make what may result in orders preventing solicitors from continuing to act. This is in view of the expense of litigation and the enormous waste of time and money and the substantial delay which can result from an order removing solicitors. The jurisprudence provides that courts should do so only in clear cases.

[32] The motivation of the party seeking removal is a factor in the determination of such a motion. A court will not remove counsel if the moving party has brought the motion for tactical rather than principled reasons. There must be a “genuine” concern with respect to the merits of the alleged conflict: Sabean v. Aikman, 2016 ONSC 6130 at para. 59.

Did Mr. Youd violate privilege?

[33] The plaintiffs submit that Mr. Youd waived privilege in one sentence of a paragraph of the October 25 Letter: “[W]e have received from Brad Teplitsky an extensive amount of file documentation which formerly belonged to the firm”.

[34] It is unclear why the plaintiffs consider this a waiver of privilege. Bradley Teplitsky was not Mr. Youd’s client. Accordingly, any communications or documents transmitted between them would be incapable of attracting solicitor-client privilege. Furthermore, any privilege as between the plaintiffs and the Firm was waived the moment the plaintiffs served the Firm with the Statement of Claim: Reklitis v. Whitehall Estates Ltd., [1993] O.J. No. 788, 17 C.P.C. (3d) 193.

[35] In my view, the October 25 Letter similarly did not waive litigation privilege. To engage litigation privilege, the communication at issue must have been made when litigation was commenced or contemplated, where the dominant purpose for the communication was for use in, or advice concerning, the litigation. In addition, once implicated, litigation privilege is extinguished when the litigation, or the contemplation of it, comes to an end: Ontario (Liquor Control Board) v. Lifford Wine Agencies, 2005 ONCA 25179, [2005] O.J. No. 3042, 76 O.R. (3d) 401 (ONCA), at para. 74.

[36] The documents were already in existence prior to the commencement of this litigation, and were prepared for use in the 2009 Action. Accordingly, they are incapable of attracting litigation privilege in the context of this litigation. That being the case, the mere fact that they were provided to Mr. Youd by Bradley was also incapable of attracting litigation privilege.

[37] In any event, privilege must be claimed to be waived. No privilege was ever claimed over the communications or documents in question.

[38] More to the point, in compliance with Rule 30.02 of the Rules of Civil Procedure, the impugned documents were provided to Mr. Youd from representatives of the Firm with the expectation that they would be included in the Firm’s Affidavit of Documents.

[39] In my view, the relevant communications were not capable of attracting either litigation or solicitor-client privilege; no such privilege was ever claimed by the Firm over the communications in question; and no such privilege was ever waived by Mr. Youd. I am not persuaded with the plaintiffs’ argument that Mr. Youd’s alleged violation of litigation privilege “exposed LawPro to vicarious liability to the defendants for any new actions arising out of their improvident disclosures”. In any event, there was no privilege to breach in the production of documents in this case.

Is Mr. Youd a material witness in this action?

[40] The plaintiffs also submit that, as the author of the October 25, 2017 letter, Mr. Youd became a material witness. From this correspondence, the plaintiffs have drawn a series of conclusions including that the Firm had “lost control” and “ownership” of the plaintiffs’ file; that the Firm had thereby been negligent, or breached their fiduciary duty; that the “chain of custody for documents received from Brad was broken”; that “extra-ordinary caution was required to see that none of the Firm’s other documents were conflated with Brad’s to taint all the defendant’s documents”; and that “conflation of all documents tainted all of the defendant’s documentation, putting the Defendant’s defence in peril.”

[41] The plaintiffs allege that Mr. Youd’s testimony is required with respect to “his unique firsthand knowledge of events relating to collection and provenance of documentary evidence explicitly relied upon in preparation of the Statement of Defence”.

[42] While there is no rule of law prohibiting counsel from appearing as a witness, the courts have consistently indicated that such is extremely undesirable: Karas, at para. 27. When considering the removal of a lawyer from the record on the basis that the lawyer will also be a witness, the court adopted a flexible approach. The court proposed a series of factors to be considered on such motion. A party’s good faith in bringing this type of motion is one of those relevant factors.

[43] The plaintiffs argue that the documents were “stolen” and “tainted”, and that Mr. Youd’s testimony is required on this point. The plaintiffs do not disclose that the individual who allegedly stole and “tainted” the documents was the plaintiffs’ own counsel during the relevant timeframe. The plaintiffs appear to have obfuscated this fact. I reject the assertion that Martin Teplitsky was to have sole carriage of the case. Bradley Teplitsky was a lawyer at the Firm until 2015. For the duration of the plaintiffs’ retainer, I accept that he had carriage of the file. Indeed, the overwhelming majority of the email communications between the plaintiffs and the Firm were directed to, and answered by Bradley Teplitsky.

[44] Further, the plaintiffs’ allegations are directly contradicted by their own Statement of Claim, which pleads that Bradley Teplitsky was, at all material times, “a servant, agent, or employ of [the Firm and Martin]”; and that “the choice of whether to use their servants, agents and employees in working on the Plaintiffs’ behalf” lay with the Firm alone.

[45] Given that both Bradley Teplitsky and his now-deceased father were the plaintiffs’ lawyers during the entirety of their retention of the Firm, Bradley Teplitsky’s subsequent discovery and provision of the Documents is neither unusual nor improper. There is no reasonable basis on which to conclude that the documents were “stolen”. In any event, there is no evidence before me that they have followed up with this complaint to the authorities.

[46] The plaintiffs profess great concern that Bradley Teplitsky’s possession of the documents somehow “tainted” them, potentially undermining the “integrity of the court’s processes”. In support of this contention, I agree with the defendant that the plaintiffs offer only innuendo and speculation. These documents have been included in the Firm’s Affidavit of Documents, and are available for the plaintiffs’ review. It remains open for the plaintiffs to review the documents for specific instances of “taint”, and to identify same at trial or during examinations for discovery.

[47] I observe that the plaintiffs’ claim makes no mention of its allegations respecting the documents, or of Mr. Youd’s conduct with respect to these documents. Notwithstanding the alleged importance of these allegations, the plaintiffs have made no move to amend their Claim to include them. Accordingly, it is unlikely that these allegations will be in issue at trial.

[48] Even in the event an issue arises at trial, it is unclear why the plaintiffs would call Mr. Youd. The totality of Mr. Youd’s evidence on the point is that BYLD received boxes of file materials from Bradley Teplitsky on or about September 19, 2017.

[49] I am not persuaded in the least that Mr. Youd will have material evidence to provide in this action and necessarily will be required to be called as a witness. As mentioned, Mr. Youd was merely fulfilling his function to provide documents as required by the Rules. No lawyer, similarly situated would act any differently.

[50] Mr. Youd has no personal knowledge of these documents and is merely, (without sounding pejorative), a messenger. He would have no substantive evidence to provide as to the nature, source or substance of any of the Firm’s documents. Mr. Youd could not speak to the alleged fraudulent or false nature of some of the documents. Of course, the plaintiffs would be free to examine a representative of the Firm to obtain his or her evidence as to how the documents came to be in the possession of Bradley Teplitsky. Alternatively, they are free to issue a summons to Bradley Teplitsky to explain the impugned documents.

[51] As mentioned, the evidence referred to by the plaintiffs is not referenced in the pleadings, and has no bearing on the merits of the claim. Mr. Youd has nothing more to convey on the point than what was contained in his letter. Furthermore, according to the evidence before me, the plaintiffs’ allegations regarding the alleged “theft” and “tainting” of the documents are entirely without foundation.

Is Mr. Youd conflicted?

[52] It is true that the plaintiffs did not proceed with their motion. They claim that Mr. Youd’s March 9 Letter constituted legal advice, which they relied upon. They further submit that, as a result, Mr. Youd became their counsel; is therefore conflicted; and must be removed.

[53] The Rules of Professional Conduct provide that “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: Rule 3.4-1.”

[54] 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: Rule 1.1-1.”

[55] There is no allegation that Mr. Youd has any loyalty to the plaintiffs, nor any interest in acting for their benefit. Accordingly, for a conflict to arise, Mr. Youd must owe some duty to the plaintiffs as clients. Indeed, the plaintiffs argue that as a result of their reliance on Mr. Youd’s “legal advice”, a “phantom client” relationship arose as between them. I cannot accept that argument.

[56] Whether a solicitor-client relationship exists in any particular set of circumstances is a question of fact. A court may look to a number of factors to ascertain whether a solicitor/client relationship has arisen. However, the key question is whether a reasonable person in the position of a party with knowledge of all the facts would reasonably form the belief that the lawyer was acting for a particular party.

[57] In my opinion, the plaintiffs overstate the matter and misapprehend both the applicable law, and Mr. Youd’s March 9 letter. At its highest, Mr. Youd’s letter suggested that the plaintiffs’ threatened motion to strike was ill-advised; and that the plaintiffs ought to direct their energies toward prosecuting the merits of the claim. There is nothing improper with those statements.

[58] While the plaintiffs’ make bald assertions that they relied on the information in the letter as legal advice, I find that no reasonable person would conclude that Mr. Youd was ever acting for the plaintiffs or providing legal advice. Indeed, Mr. Youd made this abundantly clear in the March 9 Letter, explicitly stating that “we remind you that we act for the firm”.

[59] Most importantly, it seems apparent to me that the plaintiffs were under no illusion that Mr. Youd was acting for them. On March 22, 2018, less than two weeks after the plaintiffs allege that they became Mr. Youd’s clients, Mr. Holterman wrote to Mr. Youd, refusing to accept production of the Firm’s Affidavit of Documents with the claim that the plaintiffs were both self-represented litigants.

[60] Where a plaintiff continues to refer to themselves as a “self-represented litigant”, and to insist that counsel for the defendant serve them personally in strict compliance with the Rules, no reasonable person can conclude that a solicitor-client relationship has arisen as between them.

[61] Finally, the plaintiffs argue that Mr. Youd and BYLD are in conflict with their own client. This is a determination which the Firm is more than capable of making, and I agree with Ms. Lev-Farrell that there is no basis for this Court to substitute its own judgment in this regard. I accept that Mr. Youd is the counsel of choice of both the Firm and LawPro. His removal would significantly impact their right to be represented by counsel of choice.

Conclusion

[62] I need not resolve whether the plaintiffs’ motion to remove Mr. Youd as counsel for the defendants was brought for tactical reasons, in bad faith or whether it was out of the plaintiffs’ genuine concern for the administration of justice. What is clear to me is that in this motion, the plaintiffs tend to rely on speculation, innuendo, and misapprehensions of the facts and law in relation to the relief being sought.

[63] In my opinion, there is no basis in law to remove Mr. Youd as counsel of record for the Firm. At all material times, Mr. Youd was acting professionally and in full compliance with the Rules of Civil Procedure and his obligations to the Law Society under the Rules of Professional Conduct.

[64] The plaintiffs have fallen well short of their onus to satisfy me that removal of Mr. Youd as counsel for the defendants is warranted in this case. The motion is dismissed.

Costs

[65] At the conclusion of the hearing, I received submissions as to costs. While the plaintiffs argue that no costs ought to be awarded, or in the alternative, costs should be deferred to the trial judge, the defendants were entirely successful in this motion.

[66] I have determined that there was no merit to the plaintiffs’ motion and there is no reason why an award of costs should not follow the event. In my view, BYLD’s outline of costs with the quantum of fees and the hours expended in relation to this matter are reasonable.

[67] In the exercise of my discretion under Rule 57.01 of the Rules of Civil Procedure, the plaintiffs shall pay costs to the defendants fixed in the amount of $7,834.00, (all inclusive), payable within 30 days.

[68] The parties are encouraged to move the matter forward by exchanging or accepting service of their respective affidavit of documents, and more importantly, scheduling examinations for discovery in order to move the action along to trial.

A.J. Goodman J. Date: August 30, 2018