Straw v. ThyssenKrupp, 2020 ONSC 5253
CITATION: Straw v. ThyssenKrupp , 2020 ONSC 5253
COURT FILE NO.: CV-13-493107-000
DATE: 2020/09/04
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jacqueline Straw
Plaintiff/Moving Party
– and –
ThyssenKrupp Northern Elevator Corporation, 8174709 Canada Inc o/a Consilium Investments L.P. and Consilium Management L.P.
Defendants/Responding Parties
Todd J. McCarthy and R. Tally Vanounou for the Plaintiff/Moving Party
Sean Dewart and Adrienne Lei Agents for Rapley & Company, Lawyers for the Defendants/Responding Parties
HEARD: August 13, 2020
REASONS FOR DECISION
Vella j.
[1] This is a motion by Ms. Straw’s lawyers to remove Ms. Rapley and her law firm, Rapley & Company, as lawyers of record for the three Defendants on the basis that Ms. Rapley has an actual or perceived conflict of interest in acting for the Defendants.
[2] The central issue in this motion is when is it appropriate for the court to disqualify a lawyer from representing clients, thereby denying those clients their lawyer of choice, at the request of an adverse party who is not, and was never, a client of the challenged lawyer?
[3] For the reasons that follow, I dismiss the motion to remove Ms. Rapley and her law firm as lawyers of record in this action.
Jurisdiction
[4] This motion was brought under Rule 15 of the Rules of Civil Procedure. However, that Rule does not directly address this factual scenario in which a lawyer for an adverse party who is neither a current nor former client of the challenged law firm is seeking an order removing the adverse party’ law firm.
[5] However, I rely on my inherent jurisdiction to control the court’s process, provide oversight over the conduct of counsel, and safeguard the integrity of the administration of justice to hear this motion. This supervisory oversight was affirmed by the Supreme Court of Canada in MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 SCR 1235.
Standing to Bring this Motion
[6] As stated, Ms. Straw is not, and was never, a client of Ms. Rapley or her law firm. However, a lawyer has standing, and indeed the duty, as an officer of the court to ask the court to remove of lawyer of record when it is necessary to ensure the integrity of the justice system. This type of standing has been repeatedly recognized in the jurisprudence, including Caughet v. Gareau, [2003] O.J. No. 3817 and T.S. Publishing Group v Shokar, [2013] O.J. No. 1506.
[7] Mr. McCarthy advised that he is bringing this motion as an officer of the court to protect the integrity of the pending trial of this action and the administration of justice. He is supported in this motion by Ms. Straw. Accordingly, he has standing to bring this motion.
Uncontested Facts
[8] Affidavits were filed in support of the motion by Ms. Straw and by a lawyer with Ms. Straw’s law firm, Frank Benedetto.
[9] An affidavit was filed in response to the motion by Ms. Rapley, the lawyer for the three Defendants.
[10] No cross examinations were conducted.
[11] A chronology of the relevant events for purposes of this motion, based on the undisputed facts supported by the affidavit evidence filed, follows.
[12] On April 24, 2013, Ms. Straw was involved in an accident in an elevator (“Elevator 9”) at her workplace.
[13] The building in question was owned by the defendant, 8174709 Canada Inc., operating as Consilium Investments L.P. (“Consilium Investments”) and managed by the co-defendant, Consilium Management L.P. (collectively, “Consilium Defendants”).
[14] Elevator 9 was the subject of a repair and maintenance contract between Consilium Investments and the co-defendant, ThyseenKrupp Northern Elevator Corporation (“T.K.”).
[15] The Consilium Defendants advised T.K. of the incident but did not relay to T.K. that Ms. Straw had reported that the elevator doors closed on her arms which were “sore but fine” or that she reported a concern for the safety of others arising from the ongoing operation of Elevator 9. This is important because had that information been relayed to T.K. in a timely manner, T.K. would have shut down the elevator and made a report under the Technical Standards Safety Act, 2000, Ontario Regulation 209/01 (“T.S.S.A.”).
[16] A second incident occurred on June 28, 2013 in Elevator 9, once again involving Ms. Straw in which she reported to have suffered a personal injury. This time, when the Consilium Defendants reported the incident to T.K., it included Ms. Straw’s report of the injury. T.K. shut Elevator 9 down, and made a report under the T.S.S.A.
[17] Notably, subsequent to the first incident, a labour strike by the International Union of Elevator Constructors started on midnight April 30, 2013 and was still ongoing as at the time of the second incident.
[18] Ms. Straw alleges that the two elevator incidents culminated in her alleged present and complete disability.
[19] This action was started by Statement of Claim issued in November 2013.
[20] At the examination for discovery of T.K. held on April 28, 2016, Mr. Mount testified that had T.K. been informed of Ms. Straw’s report of an injury and concern for the safety of others with respect to the first incident, T.K. would have shut down Elevator 9 and made a report under the T.S.S.A. At the time of the examination for discovery, T.K. was represented by Ms. Rapley, but the Consilium Defendants were represented by another law firm (Moodie Mair LLP). Furthermore, at this point in the litigation, T.K. and the Consilium Defendants had crossclaims against each other.
[21] T.K.’s service contract with Consilium Investments required T.K. to add Consilium Investments as an “Additional Insured” under its insurance policy which was issued by Chartris Canada (“Chartris”).
[22] In February 2018, the Consilium Defendants, still represented by Moodie Mair LLP, issued a Notice of Application against T.K. and Chartris for declaratory relief seeking a declaration that Chartris be required to defend Ms. Straw’s claim and to indemnify them in the event they, or either of them, are found liable. The Application was settled in August 2018 on the basis that T.K. and Chartris would pay for the defence of the Consilium Defendants and fully indemnify them in respect of any damages that may be awarded against them with respect to Ms. Straw’s claim.
[23] Ms. Straw’s lawyer, Mr. McCarthy, was advised of the Application in May 2018, and then of the settlement in August 2018. Mr. McCarthy was provided with a copy of the Chartris insurance policy in December 2018 evidencing coverage having been extended to the Consilium Defendants.
[24] The Consilium Defendants, still represented by Moodie Mair LLP, agreed to be jointly represented with T.K. by Ms. Rapley after the settlement of the Application.
[25] Upon being informed of Ms. Rapley’s expanded role as sole counsel for all three Defendants in August 2018, Mr. McCarthy advised Ms. Rapley that she was now in a conflict of interest and that new alternate defence counsel must be appointed. However, according to the unchallenged affidavit of Ms. Rapley, Mr. McCarthy told Ms. Rapley in the course of a telephone conversation on October 3, 2018 that he was “not serious” about pursuing this issue of a potential conflict of interest, and that Ms. Straw was not going to require the Defendants to retain separate legal representation.
[26] Ms. Rapley filed an Amended Statement of Defence for all the Defendants, withdrawing the crossclaims, on October 31, 2019. There is no suggestion in the evidence that Ms. Rapley did not have instructions to do so.
[27] The next time Mr. McCarthy raised the potential conflict of interest issue was in the context of a pre-trial conference held in May 2020.
[28] In the intervening period between Ms. Rapley’s advice that she had become sole counsel to all three Defendants and the pre-trial conference, the following occurred:
(a) A mediation had been scheduled to resume, but the Defendants cancelled this event on February 12, 2019;
(b) A motion for summary judgment was brought by the Defendants before Justice Kimmel in January 2020. In response to the motion, T.K.’s representative was cross-examined by counsel for the Plaintiff. Mr. Mount effectively repeated his testimony from the examination for discovery that had T.K. been advised by the Consilium Defendants of the injury reported by Ms. Straw and her reported concern for the safety of others after the first incident, T.K. would have shut down Elevator 9 and reported the incident under the T.S.S.A. Justice Kimmel dismissed the motion.
(c) The Defendants brought a collective application before the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”) for a determination as to whether the Workplace Safety and Insurance Act, 1997 barred Ms. Straw from proceeding with her civil action against any or all the Defendants. The WSIAT released its decision rejecting the application on March 18, 2020, thereby paving the way for Ms. Straw to proceed with her civil action against all three Defendants.
Test for Removal of Lawyers of Record Brought by Counsel as an Officer of the Court
[29] It bears emphasizing that this motion does not involve the situation where an allegation is made by a client or former client of the challenged lawyer alleging that the lawyer is acting in a manner that is disloyal to the current or former client or has confidential information that may be prejudicial to the current or former client.
[30] Rather, this motion is brought by the Ms. Straw’s lawyer as an officer of the court on the basis that there is an actual or perceived conflict of interest alleged against Ms. Rapley in her ongoing representation of the three Defendants because T.K. may have a defence that is adverse in interest to the Consilium Defendants regarding their failure to report all the details of the Ms. Straw’s initial report. Mr. McCarthy submits that these circumstances prevent Ms. Rapley from acting as a “zealous” advocate for all three Defendants, as that phrase has been used in cases such as R. v. Neil, 2002 SCC 70, [2002] 3 S.C.R. 631, as she must “soft peddle” a potential defence arguably available to T.K. so as not to compromise her defence of the Consilium Defendants.
[28] The burden of proof is on the moving party to establish that a lawyer is acting in an actual or perceived conflict of interest such that her ongoing representation will bring the administration of justice into disrepute. This burden of proof is described as high and the lawyer of record should only be removed in clear cases: Essa (Township) v. Guergis; Membery v. Hill, 1993 8756 (ON SCDC).
[29] The analysis is driven by the factual matrix presented in each case: T.S. Publishing Group Inc. Shokar, 2013 ONSC 1755, para. 94(vii).
[30] This motion centers around two fundamental rights within the justice system; namely, the duty of undivided loyalty owed by a lawyer to her clients, and the right of clients to retain the lawyer of their own choice (MacDonald Estate v. Martin, supra). These are two pillars of our justice system.
[31] The Court of Appeal, in Best v Cox, 2013 ONCA 695, reiterated the principle that a court will only remove lawyer of record “in the rarest of cases” in circumstances such as those in the present motion. Justice Feldman cited with approval the following statement of the test from Kaiser (Re), 2011 ONCA 713, para. 21:
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 pubic would conclude that counsel’s removal is necessary for the proper administration of justice…
[32] Furthermore, where the court finds that a motion to remove a lawyer is brought for tactical purposes, it should be dismissed. I will return to this concept later in these reasons.
Analysis
[33] In the context of the undisputed facts, I am satisfied that a fair-minded and reasonably informed member of the public would not conclude that the integrity of the pending trial requires that Ms. Rapley and her firm be removed as lawyers of record for the reasons that follow.
(a) The Consilium Defendants were represented by other lawyers (Moodie Mair LLP) from the outset of the litigation against them to the time of the settlement of the insurance coverage issue and the decision was made that Ms. Rapley would represent all three Defendants. The Consilium Defendants therefore had their own counsel to advise them at the time the decision was made to retain Ms. Rapley.
(b) The Consilium Defendants were represented by Moodie Mair LLP at the time T.K.’s representative testified at discovery that it would have shut down Elevator 9 and reported under the T.S.S.A. after the first incident had Consilium told T.K. of Ms. Straw’s report of injuries and of her concern for the safety of others. Therefore, the Consilium Defendants and T.K. were alive to the potential defence of T.K. against them, prior to making the decision to jointly retain Ms. Rapley.
(c) There is no suggestion in the evidence that when Ms. Rapley withdrew the crossclaims and presented a unified defence, she failed to secure the informed instructions of the three Defendants.
(d) There is no prejudice to Ms. Straw if Ms. Rapley continues as the Defendants’ lawyer because Ms. Straw will be paid from the proceeds of the insurance and by T.K. if the court finds any or all of the Defendants liable and awards damages.
(e) Mr. McCarthy submitted that if Ms. Straw is successful at trial, one of the unsuccessful Defendants might move for a mistrial on the basis that Ms. Rapley “soft peddled” a defence due to the alleged conflict of interest. A mistrial, if granted, would then cause Ms. Straw undue delay and further legal costs. However, there is no basis in the evidentiary record before me to conclude that any of the Defendants would move for a mistrial on the basis of an alleged conflict of interest if liability is ultimately found. It is contrary to common sense to conclude that any of the Defendants would do so, given that each Defendant will have the benefit of indemnification under the Chartris policy and each Defendant was aware of T.K.’s position regarding the first incident by virtue of the examination for discovery and cross examination of T.K.’s representative. It is apparent in the evidentiary record before me that the Defendants have chosen to present a unified defence, including the withdrawal of the crossclaims. This is a matter of strategy which is open to the Defendants to pursue. Accordingly, this concern is hypothetical and not a possibility of “real mischief” required to justify the requested order: Chapman et al v 3M Canada Inc. et al (1995), 25 O.R. (3d) 658, 1995 7128 (ON SC).
[34] Mr. McCarthy, in his submissions, urged the Court to follow this Court’s decision in Bulloch-MacIntosh v. Browne, 2015 ONSC 1622, as persuasive in supporting a finding that Ms. Rapley be removed. However, Bulloch-MacIntosh is distinguishable on the facts. In that medical malpractice case, the law firm initially represented both doctors as defendants in the lawsuit. However, during the litigation, one of the doctors, Dr. Browne, became self-represented after his law firm obtained an order removing it as lawyers of record for him. The law firm continued to represent the remaining doctor, Dr Emery. The lawyers explicitly agreed with its former client, Dr. Browne, that they would not act adverse to his interests in defending Dr Emery. However, when Dr. Browne adopted the Plaintiff’s pleading of negligence as against Dr. Emery in his crossclaim, this placed the lawyers in an untenable situation as Dr. Browne was now adverse in interest to Dr. Emery. Firestone J. concluded that when these lawyers seek to cross examine other witnesses to defend the negligence allegations, it would be impossible to determine at trial at what point the cross examination of experts and other witnesses might become adverse in interest to Dr. Browne. Justice Firestone found this to give rise to a possibility of real mischief. The law firm was therefore removed as lawyers of record in the action to ensure a fair trial and protect the administration of justice.
[35] That case is entirely different from the case at bar. Ms. Straw was never a client of Ms. Rapley’s and there is no evidence to suggest that Ms. Rapley’s unified defence strategy, including the withdrawal of the crossclaims, is not in accordance with the informed instructions of the Defendants.
[36] Rather more persuasive to the present factual situation is the decision of Justice Leitch in Chapman et al v 3M Canada Inc. et al, supra. That case, like the case at bar, arose from a motion by the plaintiff’s lawyer, as an officer of the court, seeking an order removing the defendants’ lawyers on the alleged basis that to allow them to remain would “cast a shadow upon the integrity of the administration of justice”. The facts in that case were that the plaintiff, a former employee of 3M Canada, brought an action against 3M Canada and 24 individual defendants who were all former employees of 3M Canada and/or fellow union members of the plaintiff. 3M Canada retained a law firm and agreed that its lawyers would represent (at 3M Canada’s expense) all the individual defendants provided that this law firm could share all confidential information received from the individual defendants with 3M Canada. Furthermore, 3M Canada did not agree to indemnify the individual defendants for any damage awards that might be assessed against them. The Plaintiff complained that in the event any of the individual defendants crossclaimed against 3M Canada, a conflict of interest would arise based on the misuse of confidential information. However, in dismissing the motion, Justice Leitch held:
In my view the plaintiff’s position on this motion is based on hypotheticals and assumes that two or more of the responding defendants are involved in the alleged conduct and assumes that one or more of those responding defendants may decide to implicate the other to minimize their responsibility. At the present time this scenario is hypothetical and is contrary to the facts alleged by the responding defendants.
The Removal Motion as a Tactical Strategy
[37] I have also considered the motivation of the moving party in light of the timing of this motion, which is in close proximity to the trial. I am guided by Justice Binnie’s observation as to why this particular type of motion to remove counsel on ethical grounds, brought by a lawyer as an officer of the court, should be scrutinized:
If a litigant could achieve an undeserved tactical advantage over the opposing party by bringing a disqualification motion or seeking other “ethical” relief using “the integrity of the administration of justice” merely as a flag of convenience, fairness of the process would be undermined. (R. v. Neil, supra, at para. 14)
[38] Mr. McCarthy was clear in his submissions that he did not question the integrity of Ms. Rapley. Furthermore, the evidence reflects the fact that Ms. Rapley is recognized as having considerable experience in the field of elevator liability litigation, and often acts as litigation counsel in these particular types of cases, including on behalf of T.K. While the Defendants abandoned the defence of waiver at the oral argument of this motion, delay was argued in the context of assessing the moving party’s motivation in bringing this motion.
[39] This motion was brought nearly 2 years after Mr. McCarthy first raised the issue of a conflict with Ms. Rapley. I am not persuaded that the intervening events (including the application before the WSIAT, the failed mediation, and the failed motion for summary judgment) are reasonable grounds for the delay. Rather, the fact that Ms. Straw and her lawyers were content to have Ms. Rapley act throughout these steps in the litigation and before the WSIAT suggests that this motion may have more to do with disrupting the defence at this late stage of the litigation. I note that this matter was originally scheduled to proceed to trial in June 2020 but was delayed due to the COVID-19 pandemic.
[40] Therefore, I find that this motion was brought to gain a tactical advantage by removing a lawyer who is well known in the industry prior to trial, well after the issue of Ms. Rapley’s potential conflict of interest was first raised by the Plaintiff’s lawyer. This is a further ground for dismissing the motion (see: Condoluci v. Martins, 2004 35132 (ON SC); Milicevic v. T. Smith Engineering, 2016 ONSC 2166; Moffat v Wetstein, 1996 8009 (ON SC)).
[41] In conclusion, the moving party has not satisfied me that this is one of the rare cases in which it is necessary for the administration of justice that Ms. Rapley and her firm be removed as lawyers of record by reason of an actual or perceived conflict of interest or that there is a possibility of real mischief should they be permitted to continue. Furthermore, I find that this motion was brought to gain a tactical advantage. Accordingly, the motion is dismissed.
Costs
[42] The Parties are to attempt to settle the issue of costs and advise me. If the Parties are unable to settle the issue of costs, then they are to exchange, and deliver to me, their respective Cost Outlines, together with written submissions not exceeding 3 pages in length, by September 11, 2020.
The Honourable Justice S. Vella
Released: September 4, 2020
COURT FILE NO.: CV-13-493107-000
DATE: 2020/09/04
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jacqueline Straw
Plaintiff/Moving Party
– and –
ThyssenKrupp Northern Elevator Corporation, 8174709 Canada Inc o/a Consilium Investments L.P. and Consilium Management L.P.
Defendants/Responding Parties
REASONS FOR JUDGMENT
Vella J.
Released: September 4, 2020