Court File and Parties

COURT FILE NO.: CV-11-430602 DATE: 20190521 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Maria Konstan et al., Plaintiffs - and - Samuel Jacob Berkovits et al., Defendants

BEFORE: F.L. Myers J.

COUNSEL: David Shiller, for Ruby Shiller Enenajor DiGiuseppe, lawyers for the Defendants Samuel Jacob Berkovits and Sheba Berkovits, in person

HEARD: May 17, 2019

Endorsement

[1] Brian Shiller, the lawyer for the Berkovits parties in this and six related actions, moves for an order removing him as the lawyer of record under Rule 15.04 of the Rules of Civil Procedure, RRO 1990, Reg 194 as amended. The six other actions bear Toronto Court File Nos.: CV-11-436825, CV-12-447394, CV-13-476452, CV-13-476936, CV-13-474051, and CV-13-483531. This endorsement applies all of the actions.

[2] Mr. and Mrs. Berkovits oppose their lawyer’s request and ask the court to require Mr. Shiller to remain as their lawyer of record.

[3] After having acted from the Berkovits family members in these proceedings for the better part of a decade, Mr. Shiller testifies that he has made a change in his career path. He has made a contractual arrangement with another long-standing client under which Mr. Shiller will devote himself principally to handling the other client’s legal affairs. He has agreed to focus his practice on one client although he will still be able to handle a limited number of smaller matters for others. He testifies that he will no longer be able to devote the time and attention required by Mr. and Mrs. Berkovits in these cases.

[4] I have been case managing this litigation for several years. Trial is at least a year off. The adverse parties assert that they need more examinations for discovery. That issue has yet to be resolved. Trial is in no way imminent.

[5] Mr. and Mrs. Berkovits argue that Mr. Shiller has been intimately involved in their issues for many years. He is not just their lawyer, but, as a result of their joint experiences, they have become close friends. As the sheer number of cases that are outstanding discloses, after the first case was commenced in 2011, new issues arose as time moved forward. Mr. Shiller was personally present or engaged as many of the facts and issues emerged in real time. Mr. and Mrs. Berkovits argue that there is no way to replace Mr. Shiller’s intimate knowledge of their cases.

[6] Moreover, Mr. Shiller agreed to certain financial terms that the clients found advantageous. Mr. Berkovits has provided evidence indicating that it will be difficult for him to replicate these financial terms.

[7] Mr. Berkovits understands that lawyers can leave the practice or become judges for example. There is no guarantee that one’s lawyer will not have to change over time. But, he argues, Mr. Shiller is staying in private practice. He is making a voluntary, economic decision to put his own self-interest as a full-time practicing civil litigation lawyer ahead of the interests of his clients. He is withdrawing his services in order to make more money from a different client. Mr. Berkovits argues that this is not just or appropriate. It is a breach of fiduciary duty if not a breach of legal ethics, he submits.

[8] Counsel for Mr. Shiller did not have any case law or deliver a factum to assist with the applicable principles when a motion under Rule 15.04 is contested. He argued that the court cannot force a lawyer to stay on the record except in extreme circumstances. His argument reduces to an argument that as long as the client is not being “left in the lurch” counsel is free to change his practice as he sees fit.

The Law

[9] In Todd Family Holdings Inc. v Gardiner, 2015 ONSC 6590, McIsaac J. considered the applicable principles on a motion to remove counsel from the record as follows:

[11] I agree with counsel for the Todd Group that the principles governing the exercise of my discretion transcend the simple canons of contractual interpretation. That discretion is informed by the applicable Rules of Professional Conduct propounded by the Law Society of Upper Canada and, more importantly, governed by recent pronouncements by the Supreme Court of Canada. A lawyer is not permitted to withdraw if serious prejudice would result to the client: see rule 3.7-3 of the Rules of Professional Conduct.

[12] In R. v. Cunningham, 2010 SCC 10 the Supreme Court of Canada listed at para. 50 a number of factors that should influence the exercise of the discretion, at least, in the context of criminal proceedings. Despite a comment by the Saskatchewan Court of Appeal that the observations by the Supreme Court of Canada in that case may not apply in the civil context, see Tri-Link Consultants Inc. v. Saskatchewan Financial Services Commission, 2012 SKCA 41 at para. 15, I am of the view that the weight of Canadian authority suggests that they do apply: see Williams v. Halifax (City), 2011 NSSC 84 at para. 11; Sandhu v. Household Realty Corp., 2013 BCSC 192 at para. 17; Seaway Consultants Inc. v. J.D. Irving Ltd., 2013 NBQB 234. See as well Children’s Aid Society of Halton (Region) v. K. (D.), 2012 ONCJ 502, [2012] O.J. No. 3644 (Ont. C.J.) at para. 8 in the context of child protection proceedings. In my view, the pertinent factors in this case are the following:

• it is not feasible for Lance Todd to properly advocate the issues in this complex commercial litigation on his own;
• it is doubtful he could retain alternative representation at this late date and at the mid-trial juncture;
• he has already paid in full approximately $425,000 to the law firm that initiated this litigation;
• he was found by Lack J. to have been, in effect, abandoned by his second lawyer on the eve of a previous trial date;
• Robins accepted security on Lance Todd’s two properties in the amount of $250,000 during the course of the first stage of the trial; and
• Robins has failed to satisfy me that there is no or insufficient equity in this security to see their outstanding accounts paid.

[13] Given this combination of circumstances, I am satisfied that need for the retention of present counsel significantly outweighs the interest of Robins in withdrawing from this course on the basis of non-payment of legal fees. [Emphasis added.]

[10] Mr. and Mrs. Berkowitz relied upon the following pertinent provisions of the Law Society of Ontario’s Rules of Professional Conduct:

Withdrawal from Representation

3.7-1 A lawyer shall not withdraw from representation of a client except for good cause and on reasonable notice to the client.

Commentary

[1] Although the client has the right to terminate the lawyer-client relationship at will, the lawyer does not enjoy the same freedom of action. Having undertaken the representation of a client, the lawyer should complete the task as ably as possible unless there is justifiable cause for terminating the relationship.

[2] An essential element of reasonable notice is notification to the client, unless the client cannot be located after reasonable efforts. No hard and fast rules can be laid down about what will constitute reasonable notice before withdrawal and how quickly a lawyer may cease acting after notification will depend on all relevant circumstances. Where the matter is covered by statutory provisions or rules of court, these will govern. In other situations, the governing principle is that the lawyer should protect the client's interests to the best of the lawyer's ability and should not desert the client at a critical stage of a matter or at a time when withdrawal would put the client in a position of disadvantage or peril.

[3] Every effort should be made to ensure that withdrawal occurs at an appropriate time in the proceedings in keeping with the lawyer's obligations. The court, opposing parties and others directly affected should also be notified of the withdrawal. [Emphasis added]

[11] Under the Rules of Ethics, lawyers require “good cause” or “justifiable cause” to terminate a relationship. The cause must also consider and balance the amount of notice available to ensure that the clients are not left with too little time to find alternate counsel. As noted by McIsaac J. the question may resolve to an assessment of whether counsel’s withdrawal seriously prejudices the clients.

[12] In confidential, unredacted material provided to me at the hearing under Rule 15.04(1.3), Mr. Shiller adduced additional evidence to support another basis for the order that he seeks. The clients also submitted an unredacted affidavit containing Mr. Berkovits’s version of the facts. Without disclosing privileged or confidential material, it is enough for me hold that the evidence does not convince me on the balance of probabilities that the fact on which Mr. Shiller relies can be found or that the inference that he asks me to draw ought to be drawn. As I find the factual assertion is not proved, I do not need to consider this point further.

Analysis

[13] In deciding whether to allow a lawyer to be removed from the record under Rule 15.04, the court is not acting as the Law Society. While the Rules of Ethics may guide or inform the discussion of relevant issues, whether Mr. Shiller is violating the Rules of Ethics is a question for the Law Society itself. The court, by contrast, is concerned with the seven pieces of litigation before it in particular and the administration of justice more generally. I agree with McIsaac J. that I am also not strictly bound by the terms of the parties’ contractual arrangements. In fact, neither party put a written contract before me. Counsel for Mr. Shiller expressly agreed that whether I grant or refuse the relief sought today has no bearing or effect on any claim for breach of contract or for compensation that the clients may choose to bring. While I briefly considered making it a condition of the order that Mr. Shiller be responsible to pay new counsel’s fees for getting up to speed on the file, it seems to me that I cannot assess his contractual or other legal liability to do so on this motion. Moreover, it would be a mistake to turn routine motions under Rule 15.04 into a form of assessment of breach of contract or breach of fiduciary duty. I am satisfied that whatever rights the clients may have to seek compensation as a result of Mr. Shiller’s acts, if any, are fully preserved to be dealt with in other proceedings that the clients may be advised to bring.

[14] I agree with Mr. Shiller’s counsel who argues that the court’s principal concern on a motion by counsel to get off the record under Rule 15.04 ought to be directed to ensuring that the clients are able to obtain new counsel without being prejudiced beyond the loss of historical knowledge that is necessarily incidental to a change of counsel. The trial is a long time off. Moreover, as the case management judge I am in a position to oversee the remaining steps toward trial preparation. I am able to ensure that all of the parties’ positions are taken into account.

[15] I cannot accept that there is no other capable counsel willing to take on these cases at a fair price. I can take judicial notice of the fact that there are approximately 50,000 lawyers licensed by the Law Society of Ontario. It is a competitive and price-sensitive marketplace. Mr. Shiller may be one of few with his precise qualities. But I do not accept (and there is no industry evidence to support an assertion that) there are not many other lawyers available in Toronto and environs with similar professional experience who may offer similar pricing terms.

[16] I am satisfied that Mr. Shiller’s change in his practice modality presents a proper basis to remove him from the record. There is ample time for the clients to obtain counsel to ensure that they are properly represented in this litigation. It is unfortunate for them that their lawyer is changing his practice. But there are many others who can replace Mr. Shiller – some more expensive and some less expensive; some more experienced and some less experienced. Mr. and Mrs. Berkovits will draw the balance of cost and experience that suits them. There are always cost-benefit balances to be drawn in conducting civil litigation. In the circumstances of these pieces of litigation, I do not find that Mr. Shiller’s removal from the record will cause serious prejudice to the clients or that the prejudice to the clients greatly outweighs the interests of Mr. Shiller in withdrawing. Nor do I view his removal as an affront to the administration of justice.

Outcome

[17] The motion is therefore granted. Counsel for Mr. Shiller may send me draft orders in each of the actions containing the particulars required by Rules 15.04(4). As Mr. Shiller is technically on the record for Mr. Hosseini in error and reasonable efforts to find Mr. Hosseini have failed, Mr. Shiller or his counsel may arrange to see me in chambers to deal with appropriate orders to remove Mr. Shiller from the record for Mr. Hosseini.

[18] I have kept the unredacted affidavits filed by the parties on the motion to assist me during the period in which my decision was reserved. Although Rule 15.04(1.3) does not expressly mention affidavits submitted by the clients, where a client chooses to deliver an affidavit in response to a lawyer’s affidavit under Rules 15.04(1.2) and (1.3), in my view, where the client’s affidavit contains privileged or confidential material, it should be returned to him or her like the lawyer’s unredacted affidavit. I will therefore send the unredacted affidavits to counsel for Mr. Shiller who has undertaken to return the affidavit delivered by Mr. Berkovits to him.

[19] No costs are sought and none are ordered.

F.L. Myers Date: May 21, 2019