COURT FILE NO.: CV-13-484688
DATE: 2019 12 03
SUPERIOR COURT OF JUSTICE - ONTARIO
IN THE MATTER OF the Construction Lien Act, RSO 1990, c. C.30, as amended
RE: YUANDA CANADA ENTERPRISES LTD., Plaintiff
- and -
WALSH CONSTRUCTION/BONDFIELD PARTNERSHIP, WALSH CONSTRUCTION COMPANY CANADA, BONDFIELD CONSTRUCTION COMPANY LIMITED and WOMEN’S COLLEGE HOSPITAL, Defendants
BEFORE: Master Todd Robinson
COUNSEL: D. Glaholt and L. Wang for Schindler Elevator Corporation
F. Bogach for Walsh Construction/Bondfield Partnership, Walsh Construction Company Canada and Bondfield Construction Company Limited
HEARD: September 23, 2019
REASONS FOR DECISION
[1] Schindler Elevator Corporation (“Schindler”) moves for an order authorizing a US attorney, Larry M. Prosen, to conduct Schindler’s examination and cross-examination of US-based delay experts intended to be called at the pending trial in this reference by each of Schindler and Walsh Construction/Bondfield Partnership, Walsh Construction Company Canada and Bondfield Construction Company Limited (collectively, “WBP”). WBP opposes the motion.
[2] Schindler does not dispute that the Law Society Act, RSO 1990, c. L.8 provides an express prohibition against non-licensees practicing law or providing legal services in Ontario. Schindler argues that the court nevertheless retains jurisdiction to control its own trial process within the four corners of the courtroom and, accordingly, has discretion to authorize the limited examinations sought, particularly in the context of a reference pursuant to the Construction Act, RSO 1990, c. C.30. The balance of trial examinations and submissions will be done by Schindler’s lawyers of record.
[3] WBP disagrees with Schindler’s position. WBP argues that the Law Society Act expressly prohibits Mr. Prosen from conducting any examination or cross-examination at trial and, further, that case law supports there is no basis for the court to grant any exemption. WBP submits that the court lacks discretion to permit Mr. Prosen to conduct examinations at trial.
[4] Simply put, the issue on this motion is as follows: Does a master conducting a reference pursuant to the Construction Act and the Rules of Civil Procedure, RRO 1990, Reg 194 have any discretion to permit a US attorney who is not called to the bar in Ontario or any other Canadian province to conduct limited examinations at trial? For the reasons that follow, I have determined that the court no longer has any discretion to authorize a non-licensee to conduct any extent of examinations at trial on behalf of a party.
Reference History
[5] Schindler’s motion is brought within a consolidated reference that currently continues before me under the lead reference file in CV-13-484688. Five proceedings currently remain subsumed in the consolidated reference. Schindler is a party in two of those proceedings: its own lien action in CV-15-540309 and an extant third party claim by WBP against Schindler in CV-15-536536-A1 (the main action having been previously resolved).
[6] The lead reference file in CV-13-484688 was referred to a master for determination by a judgment of reference made pursuant to the now-former Construction Lien Act (the provisions of which remain applicable to these proceedings by operation of Section 87.3 of the current Construction Act, hence references in the balance of this decision are to provisions of the now-former Construction Lien Act). Schindler’s lien action in CV-15-540309 was subsumed into the reference in CV-13-484688 by operation of the provisions of the Construction Lien Act.
[7] Not all of the actions proceeding to trial in this consolidated reference have been referred pursuant to the Construction Lien Act. Two bond claims and the outstanding third party claim against Schindler have also been referred to be tried together with the lien actions. Orders directing a reference pursuant to Rule 54 of the Rules of Civil Procedure were made in CV-15-526601, CV-15-543298, and CV-15-536536-A1.
[8] All of the related references are now being conducted as a single, consolidated reference proceeding.
Relevant Statutory Framework
[9] Prohibition under the Law Society Act against a non-licensee practising law or providing legal services is set out in section 26.1, which provides as follows:
26.1 (1) Subject to subsection (5), no person, other than a licensee whose licence is not suspended, shall practise law in Ontario or provide legal services in Ontario.
(5) A person who is not a licensee may practise law or provide legal services in Ontario if and to the extent permitted by the by-laws.
[10] A “licensee” is defined in section 1(1) of the Law Society Act as a person licensed to practise law in Ontario as a barrister and solicitor, or a person licensed to provide legal services in Ontario. By-Law 4 of the Law Society of Ontario, enacted under section 62 of the Law Society Act, addresses practice by a non-licensee at sections 41-45, but those provisions only address practice in Ontario by licensees of certain other Canadian provinces, not foreign lawyers.
[11] Subsections 1(5)-(7) of the Law Society Act are also relevant to this motion. They provide as follows:
Provision of legal services
(5) For the purposes of this Act, a person provides legal services if the person engages in conduct that involves the application of legal principles and legal judgment with regard to the circumstances or objectives of a person.
Same
(6) Without limiting the generality of subsection (5), a person provides legal services if the person does any of the following:
Gives a person advice with respect to the legal interests, rights or responsibilities of the person or of another person.
Represents a person in a proceeding before an adjudicative body.
Representation in a proceeding
(7) Without limiting the generality of paragraph 3 of subsection (6), doing any of the following shall be considered to be representing a person in a proceeding:
Determining what documents to serve or file in relation to the proceeding, determining on or with whom to serve or file a document, or determining when, where or how to serve or file a document.
Conducting an examination for discovery.
Engaging in any other conduct necessary to the conduct of the proceeding.
[12] Procedurally, references in construction actions are typically obtained in one of two ways: in the case of lien actions, a reference pursuant to section 58 of the Construction Lien Act (which is still the same provision in the current Construction Act, although now with an additional provision permitting references to the Small Claims Court) and, in the case of non-lien actions, a reference pursuant to Rule 54 of the Rules of Civil Procedure.
[13] In the context of a reference to a master pursuant to the Construction Lien Act, a reference master is afforded broad discretion in conduct of the reference. Section 58(4) provides as follows:
58 (4) A master or case management master to whom a reference has been directed has all the jurisdiction, powers and authority of the court to try and completely dispose of the action and all matters and questions arising in connection with the action, including the giving of leave to amend any pleading and the giving of directions to a receiver or trustee appointed by the court.
[14] Rule 55 governs the discretion of a referee under the Rules of Civil Procedure. It has a similar provision, at Rule 55.01(1), as follows:
55.01 (1) A referee shall, subject to any directions contained in the order directing the reference, devise and adopt the simplest, least expensive and most expeditious manner of conducting the reference and may,
(a) give such directions as are necessary; and
(b) dispense with any procedure ordinarily taken that the referee considers to be unnecessary, or adopt a procedure different from that ordinarily taken.
Analysis
[15] Evidence of Mr. Prosen’s experience as a construction lawyer and prior involvement in both the project at issue in this litigation and other projects for Schindler is not disputed. Mr. Prosen’s affidavit confirms he is a partner with the US firm of Kilpatrick Townsend & Stockton LLP, and has been practicing construction law for the past 22 years. Mr. Prosen describes his construction practise as being “concentrated in complex construction law matters, including litigation and arbitration of large and technically complex construction disputes, and government contracts construction disputes.” He has a long list of distinctions supporting his expertise as a construction attorney. Mr. Prosen’s evidence is that he has been admitted to practise law in numerous US states and federal courts, but is not called to the bar in any Canadian province. Mr. Prosen does appear to have been involved in the subject project and related litigation on behalf of Schindler for some time, and has further acted for and advised Schindler on other large construction projects in the past.
[16] I do not doubt that Mr. Prosen is a knowledgeable, competent and capable construction lawyer. I turn now to whether or not I have discretion to permit him to conduct any examination at trial on behalf of Schindler.
[17] Interlocutory steps not provided for in the Construction Lien Act require leave of the court pursuant to section 67(2). Prior to her retirement, by order dated October 1, 2018 in Trial Directions #6 in this reference, Master Albert granted leave for Schindler to bring this motion. Argument of the motion accordingly proceeded without the need for the parties arguing the leave requirement.
[18] Schindler concedes that the Law Society Act prohibits a person other than a licensee whose licence is not suspended from practicing law in Ontario and, further, that neither the Law Society Act nor the by-laws provide any statutory exemption for foreign lawyers. This was an appropriate concession. The statutory framework outlined above provides a clear prohibition against Mr. Prosen practising law or providing legal services in Ontario. Had Schindler argued otherwise it may have undermined the credibility of its overall argument. Originally, Schindler’s motion sought leave to have Mr. Prosen act as co-counsel or, in the alternative, at least sit at the counsel table and assist Schindler’s Canadian counsel. That relief was narrowed substantially to the relief actually sought at the hearing, namely authorization for Mr. Prosen to conduct examinations at trial, limited to the two US-based delay experts. The narrowed relief was relayed to WBP’s counsel at least prior to facta being exchanged.
[19] On the plain language of the relevant provisions of the Law Society Act and the by-laws, a US attorney who is not called to the bar in any Canadian jurisdiction is prohibited from providing legal services in Ontario. I agree with WBP’s submission that the proposed examinations constitute a provision of legal services that is captured by the Law Society Act. Examinations and cross-examinations of witnesses at trial are “conduct necessary to the conduct of the proceeding” within the meaning of subsection 1(7) 3. of the Law Society Act. Preparation for cross-examination of WBP’s delay expert is further likely to engage subsection 1(7) 1., i.e., determining what documents are to be relied upon during cross-examination, which must be filed with the court at trial. In performing either of these functions, subsection 1(6) provides that Mr. Prosen will be representing Schindler in this proceeding, which in turn is a provision of legal services pursuant to subsection 1(5).
[20] I accordingly find that conducting even limited examinations or cross-examinations of witnesses at trial on behalf of a party constitutes providing legal services under the Law Society Act, for which a licence is required.
[21] That does not end the matter. Schindler’s position is that a reference master has the same discretion to control the trial process as a Superior Court judge and, accordingly, may authorize other forms of examination at trial that will assist the trier of fact, such as permitting experts to examine one another. Schindler points to the Law Society of Ontario’s publication, “Rights of Appearance for Law Students”, which acknowledges that Ontario courts have jurisdiction over their own processes despite any by-laws governing rights of appearance. Schindler further points to the decision in Elder v. Rizzardo Bros Holdings Inc., 2016 ONSC 7235, in which Justice Boswell, at para. 27, held as follows:
[27] The court has an obligation to ensure that trials are conducted in a fair and efficient manner for all parties and, more generally, in the broader interests of the community. It has an inherent jurisdiction to control the trial process. Part of that jurisdiction includes the discretion to put limits on cross-examination: See R. v Clancey, [1992] O.J. No. 3968.
[22] Schindler submits that section 58(4) of the Construction Lien Act and Rule 55 provide sufficient discretion to permit Mr. Prosen to conduct limited examinations. For example, Rule 55.01(1)(b) (extracted further above) affords a reference master with discretion to dispense with any procedure ordinarily taken and Rule 55.02(15) permits a reference master to direct that any party be examined. Schindler argues that permitting a US attorney to examine US-based delay experts will be of assistance to the court in disposition of this matter. Mr. Prosen’s affidavit supports that he is an experienced construction attorney and that he has historical knowledge of the subject dispute, including attendance at the prior mediation. In his affidavit, at para. 16, Mr. Prosen swears that he has reviewed the Law Society Act, the Rules of Civil Procedure, the Law Society of Ontario’s Rules of Professional Conduct, and the Evidence Act, RSO 1990, c. E.23, and will abide by them if granted a waiver of the applicable provisions of the Law Society Act.
[23] I accept as a correct statement of law that there is general discretion available to both a judge and master conducting a trial to control the trial process. However, the crux of the motion before me is more nuanced. This motion does not require a determination on whether or not a reference master has jurisdiction or discretion to control the trial process. It requires a determination on whether or not the court has any discretion to allow a person to conduct examinations at trial where that person is prohibited from providing legal services by the Law Society Act. Schindler argues “yes, in the very particular and limited circumstances of the conduct of a trial” and WBP argues a blanket “no”.
[24] Schindler primarily relies on three cases in support of its argument that there is limited judicial discretion to permit an exemption to the prohibition under the Law Society Act. I deal with them each in turn below. Schindler also relies on a number of US cases where foreign lawyers were permitted to appear in US courts, but I have not found those cases to be persuasive.
[25] In Essar Steel Algoma Inc., Re, 2016 ONSC 595 (SCJ – Comm. List), Justice Newbould commented, at para. 65, on the more commonplace occurrence of US attorneys appearing in Ontario courts, and vice versa, in cross-border litigation. However, I do not view this comment as a statement of current law. Rather, in my view, it is an observation that representation in cross-border litigation is an issue that has arisen and been successfully navigated in prior cases. I am aware of cases before the Superior Court in which US attorneys have been permitted to appear at hearings or trial. However, the facts and specific orders in such cases are not before me. Notably, the role taken by US attorneys at trial in such cases is not before me. This is also not a case of cross-border litigation.
[26] In O’Toole v. Scott, [1965] 2 All ER 240 (PC), the Privy Council held that it is part of a court’s inherent jurisdiction to allow non-lawyers to appear before the court where the interests of justice require it. However, that decision post-dates the abolition in 1949 of civil appeals to the Judicial Committee of the Privy Council. It is an appeal from the Supreme Court of New South Wales. It is not itself binding, although has been endorsed by the decision in Stone v. Stone, 2000 CanLII 20767 (ON SC), 2000 CarswellOnt 486 (SCJ), which is the strongest case law support for Schindler’s position. In that case, which was decided in the context of a family law action governed by the Family Law Rules, the applicant sought leave of the court to be represented by a paralegal. Although leave was ultimately denied, Justice Steinberg affirmed that it is part of the court’s inherent jurisdiction to allow non-lawyers to appear before it, citing O’Toole. Justice Steinberg concluded, at para. 9, as follows:
One can conclude that there exists in the courts of Ontario a very limited judicial discretion to permit non-lawyers to represent parties in civil matters before them. The exercise of that discretion, in any case, would constitute an exemption to the prohibition under [the former] s. 50(1) of the Law Society Act.
[27] Former section 50(1) of the Law Society Act, as referenced in Stone, is the prior version of the current section 26.1(1). It provides a similar restriction. However, the language is different than the current provision. Former section 50(1) of the Law Society Act as it stood at the time of the decision in Stone is as follows (emphasis added):
Prohibition as to practice, etc.
- (1) Except where otherwise provided by law,
(a) no person, other than a member whose rights and privileges are not suspended, shall act as a barrister or solicitor or hold themself out as or represent themself to be a barrister or solicitor or practise as a barrister or solicitor; and
(b) no temporary member shall act as a barrister or solicitor or practise as a barrister or solicitor except to the extent permitted by subsection 28.1 (3).
[28] Unlike the current section 26.1(1), the former section 50(1) provided an express exemption of “except where otherwise provided at law”. Section 26.1(1) provides no such exemption. The current prohibition is subject only to subsection 26.1(5), which incorporates the by-laws of the Law Society of Ontario.
[29] There are at least two more recent decisions than O’Toole and Stone reaching variant determinations. In Gagnon v. Pritchard (2002), 2002 CanLII 49419 (ON SC), 58 OR (3d) 557 (SCJ), Justice Stinson addressed the extent to which the court has discretion to permit a non-lawyer to represent a party in a proceeding. While Justice Stinson did find that the court has discretion to permit participation by non-lawyer agents in Superior Court proceedings, albeit a limited discretion confined to narrow circumstances, in each case reviewed by Justice Stinson the court relied on the exception language in former section 50(1) of the Law Society Act, namely “except where otherwise provided by law.”
[30] Robert M. Simon Construction Limited v. Waterloo (Municipality), 2007 CanLII 18741 (ON SCJ) is a decision that post-dates the amendments to the Law Society Act that were implemented by the Access to Justice Act, 2006, SO 2006, c. 21, Sched C. Those amendments introduced section 26.1 and the current statutory framework. At para. 27, in denying leave to permit a non-lawyer agent to represent a corporation, Master Graham confirmed that the amended provision does not alter the principle from case law that “the Superior Court of Justice has no jurisdiction to allow a non-lawyer to represent another party in a proceeding in the Superior Court”.
[31] In my view, the exception language in the former section 50(1) of the Law Society Act may well have preserved the inherent jurisdiction of the court to permit non-licensees to appear. However, the current section 26.1 does not. The amended language in section 26.1 expressly removes the general exception language found in former section 50(1).
[32] Inherent jurisdiction of the court may only be removed by clear and precise statutory language: see, for example, R. v. Rose, 1998 CanLII 768 (SCC), [1998] 3 SCR 262 at para. 133, as cited in Bondy-Rafael v. Potrebic, 2015 ONSC 3655 (Div Ct) at para. 47. In my view, the language used in the relevant provisions of the current Law Society Act is both clear and precise regarding the only permitted exceptions to the general prohibition against non-licensees practicing law or providing legal services in Ontario. The language used is sufficiently clear and precise to remove any inherent jurisdiction to authorize a non-licensee to act for a party in Superior Court proceedings. Both O’Toole and Stone are decisions made prior to the 2006 amendments to the Law Society Act. Those decisions are inconsistent with the statutory restrictions imposed by the current Law Society Act. In my view, the court has no residual discretion to authorize any person to provide legal services other than as provided in the Law Society Act.
[33] Although in the context of former section 50(1) of the Law Society Act, I find Justice Stinson’s comments in Gagnon, at para. 44, to aptly summarize the rationale behind my view that there is no discretion to permit a non-licensee who does not fall under the exemptions provided in the current Law Society Act to provide legal services. Justice Stinson held as follows: “In the absence of an express statutory authorization, […] [i]t would be both wrong and risky to interpret the court's inherent jurisdiction to control its own procedures so as to, in effect, permit the court to issue licences to practise law in its discretion.”
[34] Does the context of a reference under the Construction Lien Act (now the Construction Act) make any difference?
[35] Schindler argues that the provisions of the Construction Lien Act and the provisions of the Law Society Act must, as a matter of statutory interpretation, be read in a manner allowing harmony between the two statutes. Schindler’s submits that the court should consider the outcome if the reference had not been to a construction lien master, but was instead to a non-judicial person such as a lawyer like Mr. Prosen. Section 58(1)(b) of the Construction Lien Act permits a reference to “a person agreed on by the parties”. As I understand Schindler’s argument, the suggestion is that a non-judicial referee is not the court and may accordingly have discretion to permit a US attorney to participate in or conduct a trial in the reference. That discretion should be consistent with the discretion of a reference master. I see little merit in engaging in the proposed hypothetical. The circumstance of this case is a reference to a master. It will be for another case to determine if representation of a party in a reference proceeding before a non-judicial person (including at any trial in such a reference) engages the prohibition in section 26.1 of the Law Society Act.
[36] In the circumstances of this reference, I see no conflict between the Construction Lien Act and the Law Society Act. In my view, when conducting a reference pursuant to the Construction Lien Act, a reference master does not acquire greater discretion or authority than the court would otherwise have. The language of section 58(4) of the Construction Lien Act, which governs the powers of a master to whom a reference has been directed, is instructive in that regard. In my view, since a reference master has “all the jurisdiction, powers and authority of the court” to determine the issues, and the court lacks discretion to authorize a non-licensee to conduct examinations at trial, a reference master under the Construction Lien Act also lacks discretion to permit a non-licensee to conduct examinations at trial. In my view, for similar reasons, a reference master appointed under Rule 54 of the Rules of Civil Procedure would similarly lack that discretion.
[37] I accordingly find that I have no discretion to permit Mr. Prosen to conduct examinations at trial. Schindler’s motion is accordingly dismissed.
[38] If I am wrong in all of the foregoing, then in my view the only reasonable circumstance in which any exemption to the prohibition in the Law Society Act should be granted is where such an exemption is necessary and in the interests of justice. No evidence has been tendered on how Mr. Prosen’s examination of the US-based experts will make the trial more effective or serve the interests of justice. Schindler argues that Mr. Prosen has been involved in this matter since the outset, so there are efficiencies in having him participate in trial. In my view, the evidence before the court does not support that assertion. The closest evidence is Mr. Prosen’s statement at para. 15 of his affidavit, as follows:
- Schindler has requested that I be a part of the team of lawyers to represent it in the [subject dispute] before this Court, not only because of my overall expertise on large and complex construction disputes, but also my in-depth knowledge of the [subject dispute]. I acquired this knowledge through my representation of Schindler in similar disputes in the past and my attendance at the Mediation and involvement throughout the duration of the [subject dispute].
[39] This is not evidence of tangible trial efficiencies to be gained from Mr. Prosen’s involvement. In my view, the above evidence and Schindler’s arguments speak more to cost efficiencies for Schindler than broader trial efficiencies.
[40] The delay experts at trial may well be US-based professionals, but the subject project is in Toronto and Ontario law will apply in disposition of the litigation. Schindler has already engaged a well-respected, experienced and capable Toronto construction litigation firm to represent it in these proceedings. I am not satisfied that Mr. Prosen’s affidavit provides sufficient evidence for why or how a US attorney is somehow better situated to examine US-based delay experts regarding delay analysis on an Ontario project in an Ontario proceeding. Accordingly, if I am wrong in my analysis that the court has no remaining discretion to permit limited exemptions to the prohibition in the Law Society Act against non-licensees providing legal services, then in my view it is neither necessary nor in the interests of justice to grant Mr. Prosen an exemption to conduct Schindler’s examinations of delay experts at trial.
[41] I wish to thank counsel for their helpful materials and for their concise and pointed submissions on the issues before the court on this motion.
Disposition
[42] For the foregoing reasons, Schindler’s motion is dismissed.
Costs
[43] Given the proximity to trial, I do not wish to unnecessarily distract either Schindler or WBP from focusing on trial preparation. If the parties cannot agree on costs of this motion, then costs submissions may be made at the conclusion of trial. If the parties prefer to address the issue of costs prior to trial, then a case teleconference may be arranged with my Assistant Trial Coordinator to make brief oral submissions as to costs, not to exceed 10 minutes per side, with costs outlines and any case law relied upon filed at least five (5) days prior to such case teleconference.
MASTER TODD ROBINSON
DATE: December 3, 2019