COURT FILE NO.: FS-09-0001
DATE: 2020 04 21
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
YASMINE MAHMOUD HANI SHALABY
Applicant
– and –
HESHAM MAHMOUD NAFEI
Respondent
A. Crossley, for the Applicant
R. Shulman, for the Respondent
HEARD: December 6, 2019
REASONS FOR DECISION
L. Shaw J.
OVERVIEW
[1] The applicant, Yasmine Mahmoud Hani Shalaby, moves to have the respondent’s lawyer, Mr. Ron Shulman, and any lawyer at his law firm removed as counsel of record for the respondent, Hesham Mahmoud Nafei. The applicant alleges that Mr. Shulman and his law firm can no longer represent the respondent as it is anticipated that he will be a witness at trial. At trial, the applicant is seeking to set aside a separation agreement on the basis of duress.
[2] For the reasons outlined below, the applicant’s motion is dismissed.
BACKGROUND
[3] The parties married on April 1, 2005 in Egypt. They have two children, one who is approximately fourteen and one who is nine. They moved to Canada in March 2016 as permanent residents, stayed for the March Break, and then returned to the United Arab Emirates so the children could finish the school year. In July 2016, the family moved back to Canada. The respondent remained in Canada for two months and then returned to live and work in the United Arab Emirates where he operates a medical clinic.
[4] Although there is some dispute regarding the actual date of separation, the parties separated in either May or June 2018. On June 22, 2018, they were divorced in accordance with Islamic law.
[5] The parties entered into a separation agreement that the respondent signed on August 14, 2018 and the applicant signed on August 17, 2018 (“the agreement”). The respondent was represented by Mr. Shulman during the negotiations for the agreement and the applicant was represented by Ms. Sharan Sodhi. The applicant asserts that Mr. Shulman did more than provide the respondent with independent legal advice, but was involved in negotiating the terms of the agreement.
[6] According to the agreement, the parties have joint custody of the children. There were specific provisions agreed to regarding access to the children including extended time with the respondent in Egypt during the summer months, winter break and March Break. The agreement also provided that the respondent would pay child support of $4,500 per month per child, plus 100% of their tuition fees. It was also agreed that he would pay spousal support of $40,000 per annum which would end if the applicant began to work, died or remarried. There were also terms dealing with the home in which the applicant and children resided.
[7] In December 2018, the applicant retained new counsel and commenced this application to set aside the separation agreement. On January 8, 2019, she also brought a motion without notice after her children returned from an access visit with the respondent in Egypt. I will not go into the details of this motion, but there were various allegations that the respondent was claiming that the children had not been delivered to him by the applicant’s father in Egypt. The applicant’s father maintained that the children were with their father. On January 8, 2019, an order was made by Fowler Byrne J. that the applicant would have sole temporary custody of the children. There were also orders made regarding the home, child support and spousal support.
[8] On February 21, 2019, the parties attended a case conference and entered into an order on consent. On March 7, 2019, they were back before Fowler Byrne J. On June 5, 2019, Fowler Byrne J. released reasons varying some of the terms of her order made on January 8, 2019. According to the June 8, 2019 order, the applicant was given interim custody of the children and the respondent was given access to the children to be exercised in the Greater Toronto Area.
[9] On May 24, 2019, the parties appeared again before Fowler Byrne J. as the respondent was seeking summer access to the children in either Egypt, the United Arab Emirates, or in Niagara Falls, USA. In Fowler Byrne J.’s reasons released August 1, 2019, the respondent was granted access, but it had to be exercised in the Greater Toronto Area.
[10] On October 31, 2019, the parties attended a settlement conference. At the settlement conference, counsel for the applicant first raised the issue about Mr. Shulman and his firm being in a conflict, given Mr. Shulman’s involvement in the negotiating and drafting of the agreement. At all prior court attendances, it was another lawyer from Mr., Shulman’s firm that attended, and the issue of a conflict was never raised. Mr. Shulman first attended in person at the October 2019 settlement conference.
[11] The respondent maintains that although other lawyers were attending in court, the file was always under the direction and control of Mr. Shulman who has been his lawyer throughout.
ISSUE
[12] The sole issue to be determined on this motion is whether Mr. Shulman and his firm ought to be removed as lawyers of record for the respondent.
POSITION OF THE PARTIES
[13] The applicant’s position is that she will be calling Mr. Shulman at trial to give evidence about his involvement in drafting the agreement. This includes evidence with respect to when he was retained, the scope of his retainer, whether he sent Ms. Sodhi an initial draft agreement, and whether he was involved beyond simply providing independent legal advice. For that reason, she intends to call him as a witness which she asserts places him in a conflict of interest with his client.
[14] The applicant’s position is that she was under duress when she signed the agreement as she was threatened by the respondent that she would live a life of poverty if she did not sign. She also alleges that the respondent failed to provide her with financial disclosure. She submits that the respondent told her to have her lawyer pressure his lawyer on terms of the agreement. According to the applicant, as she is seeking to set aside the agreement based on duress and lack of financial disclosure, it is important for the court to determine who put the pressure on whom to sign the agreement. The extent of Mr. Shulman’s involvement in negotiating the terms of the separation agreement will therefore be important evidence for the court to hear in order to determine if the agreement should be set aside.
[15] Furthermore, according to the applicant, it was the respondent who initially retained a lawyer and dictated the terms of the agreement. It is also the applicant’s position that the litigation is at an early stage as there has been no questioning. Further, she submits that given the respondent’s financial position, he can afford to hire another lawyer.
[16] The applicant also intends to call her former lawyer, Ms. Sodhi, who provided a letter dated November 8, 2019 addressed to “whom it may concern”. In that letter, Ms. Sodhi stated that she confirmed that Mr. Shulman was involved in drafting the agreement and that he had sent her office a draft agreement for review and comment on August 7, 2018.
[17] The respondent is maintaining the position that at all times, it was the applicant who initiated the negotiating and drafting of the agreement and that it was her lawyer who drafted the agreement. His position is the applicant dictated the terms of the agreement and that it was discussed between their lawyers for approximately one month before it was signed. The respondent’s position is that he has always been represented by Mr. Shulman. He submits that it is only in the rarest of cases where a court shall grant an order removing a party’s lawyer of choice.
[18] Furthermore, the respondent’s evidence is that he has not waived solicitor -client privilege. Accordingly, Mr. Shulman could not give evidence at trial as that would be in violation of solicitor-client privilege.
LEGAL PRINCIPLES AND ANALYSIS
[19] The applicant’s motion to remove Mr. Shulman as the respondent’s counsel is based on her submission that there are issues in the case that will require him to give evidence.
[20] The courts consider a variety of factors when a party claims that they intend to call opposing counsel as a witness at trial. The argument is that a conflict of interest occurs when such a witness is called, as the witness is being called to assist the party against whom he is acting. In this case, Mr. Shulman has an interest in seeing the respondent succeed. If he is called as a witness for the applicant, he must testify honestly, even if that will assist the applicant. This would put him in a conflict of interest.
[21] Courts should be very reluctant to interfere with a party’s choice of counsel. Removal motions should only be granted in the rarest of cases: Best v. Cox, 2013 ONCA 695, at para. 8.
[22] As outlined in Essa (Township) v. Guergis, 1993 CanLII 8756 (ON SCDC), 15 O.R. (3d) 573 (Div. Ct.), some of the factors the court should consider on a motion to remove a lawyer of record are as follows:
The stage of the proceeding;
The likelihood that the witness will be called;
The good faith (or otherwise) of the party making the application;
The significance of the evidence to be led;
The impact of removing counsel on any parties’ right to be represented by counsel of choice;
Whether a trial is by judge or jury;
The likelihood of a real conflict arising or that the evidence will be “tainted”;
Who will call the witness; and
The connection or relationship between counsel, the prospective witness and the parties involved in the litigation.
[23] I will now review each of those factors.
1. The Stage of the Proceeding
[24] It the applicant’s position that the litigation is at an early stage as there has been no questioning.
[25] I do not agree with the applicant’s position that this motion is being heard early in the proceedings. In fact, the applicant first raised the issue at a settlement conference in October 2019. Under the Family Law Rules, O. Reg. 114/99, a settlement conference is the step of the proceeding before a trial is scheduled whereby the focus is on attempting to resolve, settle or narrow the issues. If a matter is at the settlement conference stage, it is not early in the litigation. In fact, it is close to setting a date for trial. The applicant submits that there has been no questioning, but if there was to have been questioning, one would have assumed it would have already occurred prior to the settlement conference stage. If questioning was required, a settlement conference would not have been scheduled.
[26] I also note that when she commenced this litigation, the applicant was aware that Mr. Shulman’s firm was still representing the respondent. She was also aware that Mr. Daniel Simard was a lawyer at Mr. Shulman’s firm as he had attended at a case conference and two motions prior to the settlement conference. As a result, if the applicant perceived a conflict, this motion should have been raised much earlier than at the settlement conference.
[27] Therefore, I find that this factor is more favourable to the respondent.
2. The Likelihood That The Witness Will Be Called
[28] The applicant stated that she intends to call Mr. Shulman as a witness at trial. The applicant’s undertaking to call Mr. Shulman as a witness does not automatically entitle her to a removal order. However, this is not a case where the evidence is that she might call Mr. Shulman, but that she intends to do so.
[29] At this stage, I find that this factor favours the applicant.
3. The Good Faith (Or Otherwise) of the Party Making the Application
[30] The respondent’s view is that the applicant’s intention to call Mr. Shulman as a witness is strategic as if he has to retain a new lawyer, it will take him some time to do so as he does not live in Canada. He further submits that delaying the proceeding is to the applicant’s advantage as that creates a longer status quo with the children living with her with his access being limited. Conversely, the applicant asserts that delay favours the respondent as he allegedly has significant assets in the United Arab Emirates that he will be able to dissipate.
[31] I make no finding that the applicant is bringing this motion for any strategic or tactical reasons. Further, while there are arguments that delay favours each party, I do find these arguments to be persuasive. I am not prepared to find that delay favours the applicant and that delaying the proceedings is her motivation behind this motion.
[32] However, I am concerned that the issue of Mr. Shulman’s possible involvement as a witness was not raised at the first reasonable opportunity. If the applicant thought that Mr. Shulman should be a witness at trial, she should have raised that when the application was commenced and when she saw that Mr. Shulman’s law firm continued to represent the respondent. I therefore have some residual concerns about this motion being brought in good faith. However, I am not prepared to find that this motion has been brought in bad faith.
[33] Therefore, I find that this is a neutral factor in the analysis.
4. The Significance of the Evidence to Be Led
[34] The applicant is seeking to set aside the agreement based on duress and lack of financial disclosure. The applicant seeks to call Mr. Shulman to give evidence on how the agreement was drafted. Her position is that Mr. Shulman’s evidence is relevant as it relates to her claim of duress. She asserts that Mr. Shulman’s evidence is necessary in relation to the extent of his and the respondent’s involvement in negotiating and drafting the terms of the agreement and who was pressuring whom to sign the agreement. The applicant asserts that Mr. Shulman’s evidence would support her position that she was not the party who initiated the negotiation and drafting of the agreement, but rather that Mr. Shulman and the respondent were fully involved and that it was the respondent who was dictating the terms of the agreement and pressuring the applicant to sign.
[35] I did not hear any submissions with respect to Mr. Shulman being called as a witness to address the issue of lack of financial disclosure.
[36] First, with respect to duress, there is no evidence that Mr. Shulman himself had any direct contact with the applicant. Any duress would be as a result of the respondent’s conduct and behaviour towards the applicant and the extent to which he exerted control over her.
[37] Second, in my view, calling Mr. Shulman as a witness is problematic as any evidence he could provide would be governed by solicitor-client privilege. For example, any discussions he had with the respondent or any instructions the respondent received or did not receive are all be governed by solicitor-client privilege. This privilege has not been waived. As Mr. Shulman has been the respondent’s solicitor throughout this action, much of the information he has about the respondent’s case is privileged. At best, Mr. Shulman could give evidence with respect to the date he was retained and whether he prepared the first draft of the agreement.
[38] In Notay v. Bahra, 2017 ONSC 1755, LeMay J. held at para. 24:
A court will only permit a party’s solicitor to be called in the rarest of circumstances and only where there is a basis for calling them as a witness that is independent of the fact that they may have helpful evidence. Indeed, even in circumstance where the lawyer may have the best evidence, the courts may not require him or her to be removed from the record or called as a witness (See Leopold v. Leopold [1999] O.J. No. 2181 (Ont. C.A.).
[39] In my view, there is other evidence the applicant can rely upon to support her position. For example, attached to her affidavit was a text message from the respondent dated July 2, 2018, in which he seems to dictate the terms of the agreement. There are also other text messages from the respondent to the applicant dated July 27, 2018 and August 9, 2018 that deal with the terms of the agreement. She also attached emails exchanged between her lawyer and Mr. Shulman’s office between July 16 and August 13, 2018. Further, a law clerk form Mr. Shulman’s office sent an email on July 16, 2018 indicating that Mr. Shulman represented the respondent with respect to his family law matter and requesting a Word version of the draft agreement. Other emails exchanged involved questions asking about the status of the agreement. There was also an email dated August 7, 2018 from the applicant’s counsel to Mr. Shulman’s office regarding the agreement and a further email on August 8, 2018 asking for a copy of the agreement.
[40] The applicant also intends to call her former lawyer, Ms. Sodhi, who represented her during the negotiations. Ms. Sodhi will be able to give evidence with respect to who prepared the initial agreement and the scope and involvement of the respondent and Mr. Shulman.
[41] For these reasons, I fail to see why Mr. Shulman would be necessary to call as a witness when there are other sources from which this evidence can be obtained. I do not consider Mr. Shulman’s evidence to be significant as it relates to the issue of setting aside the agreement based on duress or lack of financial disclosure. Furthermore, the evidence with respect to who drafted the agreement and when and how the negotiations were conducted will presumably be put before the court by the applicant’s former lawyer, the email exchanges between the lawyer’s offices, and the text messages from the respondent.
[42] Therefore, I find that this factor favours the respondent.
5. The Impact of Removing Counsel on the Parties’ Right to Be Represented By Counsel of Choice
[43] The applicant asserts that the respondent has significant financial means to retain new counsel. The respondent’s position is that as he resides out of the country, it will be more difficult for him to retain a new lawyer. In addition, Mr. Shulman has been his lawyer since before this application was commenced. If he is to retain a new lawyer, that lawyer will have to review an extensive file in a relatively short period of time which will result in additional expense.
[44] I agree with the respondent that it will not be easy to retain new counsel as he does not reside in Canada. I also agree that if and when he does retain new counsel, it will be of no simple task for the lawyer to become up to speed on the respondent’s file and on the progress of this proceeding. Further, I consider a party’s right to be represented by counsel of their own choosing to be of significant importance.
[45] Therefore, I find that this factor favours the respondent.
6. Whether Trial is By Judge or Jury
[46] The action will be tried by a judge alone. Therefore, I find that this factor is neutral with respect to the outcome of this motion.
7. The Likelihood of a Real Conflict Arising or That The Evidence Will Be Tainted
[47] For the reasons outlined above, in my view, there is a conflict of interest concern as the applicant intends to call Mr. Shulman as a witness against the respondent, the party for whom he is acting.
[48] With respect to the evidence being tainted, I am not prepared to find that Mr. Shulman has acted or will act with the intention of supressing or modifying relevant evidence or will not be truthful with the court if called as a witness. However, because Mr. Shulman has acted for the respondent since before this application was even commenced, and continues to act for him, there is a concern that the evidence to be provided by Mr. Shulman may be influenced or tainted by his favourable relationship with the respondent. I accept that Mr. Shulman will know things that are helpful to the respondent’s case. However, much of this information will be protected by solicitor-client privilege which will limit the evidence that Mr. Shulman can speak to. Therefore, the concern regarding tainting of the evidence can largely be attenuated.
[49] I find that this factor is neutral in the analysis.
8. Who Will Call the Witness
[50] It is also important to consider who will call the witness. If, for example, there is a probability that counsel will be in a position to cross-examine a favourable witness, a trial judge may rule to prevent that unfair advantage from arising.
[51] As discussed, the applicant intends to call Mr. Shulman as a witness. This would raise the concern that the respondent’s new counsel, who would presumably conduct the cross-examination of Mr. Shulman, could obtain an unfair advantage by cross-examining a favourable witness.
[52] I therefore find that this factor favours the respondent.
9. The Connection or Relationship Between Counsel, The Prospective Witness and The Parties Involved in the Litigation
[53] As reviewed above, the applicant intends to call the respondent’s lawyer, Mr. Shulman, as a witness at trial. Mr. Shulman has acted for the respondent since before the application was commenced, and continues to act for him in this family law proceeding. The fact that Mr. Shulman’s solicitor-client relationship with the respondent and their actions in negotiating and drafting the agreement in question could affect the outcome of this proceeding favours the removal of Mr. Shulman as counsel.
[54] I therefore find that this factor favours the applicant.
CONCLUSION
[55] Based on a review of the factors outlined in Essa, I find that the circumstances favour the respondent’s position. Further, a motion to remove a party’s counsel of choice from the record should only be granted in the rarest of cases. I find that this is not one of those cases.
[56] Accordingly, the applicant’s motion to remove Mr. Shulman and his law firm as the respondent’s lawyers of record is dismissed.
[57] As the successful party, the respondent is entitled to costs. If the parties cannot agree on costs, the respondent shall file his Bill of Costs, costs submissions limited to one page, and any relevant offers to settle by September 1, 2020. The applicant shall file her response by October 1, 2020. These dates have been selected given the current uncertainty with the court’s operations as a result of COVID-19. I expect flexibility from counsel if the dates need to be extended. The submissions can be emailed to my administrative assistance who will provide her email to counsel.
L. Shaw J.
Date: April 21, 2020
COURT FILE NO.: FS-09-0001
DATE: 2020 04 21
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
YASMINE MAHMOUD HANI SHALABY
Applicant
– and –
HESHAM MAHMOUD NAFEI
Respondent
REASONS FOR DECISION
L. Shaw J.
Released: April 21, 2020