COURT FILE NO.: CV-16-547996

DATE: 2021-09-07

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: EMMERSON DENNEY, Plaintiff

• and -

K. BRUCE CHAMBERS and FLAHERTY MCCARTHY LLP, Defendants

BEFORE: Associate Justice Todd Robinson

COUNSEL: E. Khoshbin, lawyer for the plaintiff

PARTIES: E. Denney, in person

HEARD: September 2, 2021 (by videoconference)

REASONS FOR DECISION

[1] Howie, Sacks & Henry LLP seek an order removing them as lawyers of record for the plaintiff, Emmerson Denney, and a charging order for legal fees and disbursements incurred to date. Mr. Denney opposes both. A pre-trial is scheduled for January 12, 2022 and a 19-day trial is currently scheduled to commence on February 14, 2022.

[2] Mr. Denney has sued his former lawyers for negligence in allowing his tort claim from a 2006 motor vehicle accident to be administratively dismissed, failing to inform him that it had been dismissed, and failing to take any steps to reinstate it. Mr. Denney claims damages of $1,000,000 against his former lawyers. They deny any liability.

[3] The prior litigation was commenced in 2008. Mr. Denney sued both the driver and the owner of a vehicle that had struck him from behind when he was driving on Highway 401. He sought damages for both physical injuries and financial losses. There is little evidence before me on the prior action. The affidavit filed on this motion sets out that the action was administratively dismissed by registrar’s order dated March 28, 2012. There is no evidence on what, if any, steps were taken between that dismissal and this action being commenced in March 2016.

[4] On this motion, the core disputes are whether there is sufficient cause to end the retainer with Mr. Denney and potential prejudice from a removal order, particularly if the pending trial cannot be adjourned. Mr. Denney has expressed concern about the impact of his lawyers being removed just over five months before the scheduled trial, when they have represented him for the entirety of this action since its inception in 2016, and being potentially unable to find competent counsel to take over the litigation and be ready for trial in February 2022. Mr. Khoshbin is confident that an adjournment will be granted to permit Mr. Denney and new counsel an opportunity to properly prepare.

[5] I am satisfied that there has been a sufficiently significant loss of confidence between lawyer and client to constitute an irreparable breakdown in the solicitor-client relationship. Although adjournment of the trial may ultimately be requested, and I do not know if it will be granted, I am granting the removal order. However, I am not granting the requested charging order. On the record before me, Howie, Sacks & Henry LLP has not satisfied the legal requirements to obtain it.

Analysis

Removal relief

[6] Argument proceeded in camera, since submissions on solicitor-client privileged matters were required, including about the redacted portions of the motion record filed by Howie, Sacks & Henry LLP. The unredacted version of that record was provided to me at the hearing in accordance with Rule 15.04(1.3) of the Rules of Civil Procedure, RRO 1990, Reg 194.

[7] I have previously summarized principles to be assessed in determining a removal motion opposed by a client in Baradaran v. Alexanian, 2020 ONSC 4759, at paras. 5-6. Not all are applicable here, but they are as follows:

(a) The principles governing exercise of the court’s discretion to allow or refuse withdrawal “transcend the simple canons of contractual interpretation”.

(b) In deciding whether to allow a lawyer to be removed from the record under Rule 15.04 of the Rules of Civil Procedure, the court’s discretion is informed by the Rules of Professional Conduct. However, the court is not acting as the Law Society of Ontario (the “LSO”). Whether the Rules of Professional Conduct were violated or are being violated is a question for the LSO itself.

(c) The Rules of Professional Conduct require that a lawyer have “good cause” or “justifiable cause” to terminate a relationship, which 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: see Rule 3.7-1 of the Rules of Professional Conduct and the related commentary.

(d) Withdrawal may be sought for an ethical reason, meaning that an issue has arisen in the solicitor-client relationship where it is now impossible for counsel to continue to act for the client. This includes circumstances such as instructions to act in violation of the lawyer’s professional obligations or a client’s refusal to accept the lawyer’s advice on an important trial issue. Generally, the court will grant removal in such circumstances since counsel may be required to withdraw in order to comply with their professional obligations. It would be inappropriate for the court to require counsel to continue to act when to do so would put them in violation of professional responsibilities.

(e) Withdrawal may also be sought for non-payment of legal fees or another non-ethical reason. In these circumstances, the court may exercise its discretion to refuse counsel’s request having regard to the following non-exhaustive list of factors:

(i) whether it is feasible for the client to represent herself or himself in the litigation, having regard to considerations such as the particular circumstances of the client and the complexity of the proceeding;

(ii) other means of the client obtaining representation;

(iii) conduct of counsel, such as whether counsel gave reasonable notice to the client to allow the her/him to seek other means of representation, or if counsel sought leave of the court to withdraw at the earliest possible time;

(iv) impact on the client from delay in the proceedings;

(v) impact on the other parties in the proceeding and, if applicable, witnesses and jurors, including consideration of the expected length and complexity of the proceeding; and

(vi) the history of the proceeding, including whether the client has changed lawyers repeatedly.

(f) One of the court’s principal concerns on a removal motion is ensuring that the client is able to obtain new counsel without being prejudiced beyond the loss of historical knowledge that is necessarily incidental to a change of counsel. Prejudice to a client from a withdrawal is thereby always a significant factor to be considered. Serious prejudice militates strongly against permitting withdrawal, consistent with Rule 3.7-3 of the Rules of Professional Conduct, which expressly provides that a lawyer is not permitted to withdraw if serious prejudice would result to the client.

(g) The court is also concerned with ensuring that granting a removal order does not cause serious harm to the administration of justice.

(h) The court is not strictly bound by the terms of the parties’ contractual arrangements. Granting or refusing a removal motion has no bearing or effect on a claim for breach of contract or for compensation that the client or the lawyer may choose to bring.

[8] Since submissions involved solicitor-client privileged matters, I am limited in the extent of detail I may provide about my assessment of the evidence and arguments. I have considered a number of the above factors, but address only the two primary disputes in these reasons.

[9] The first primary dispute is whether Howie, Sacks & Henry LLP has “good cause” or “justifiable cause” to terminate the retainer. Howie, Sacks & Henry LLP argue that there has been an irreconcilable breakdown in the relationship. Mr. Denney’s position is essentially that matters between them are more minor in nature and readily resolved, so there is no need or basis to terminate the retainer.

[10] The redacted portions of Howie, Sacks & Henry LLP’s supporting affidavit about the solicitor-client relationship are less detailed than I would like on a removal motion. I cannot review the evidence and arguments in these reasons, but have considered them in detail. I am satisfied that the evidence before me does support a breakdown in the solicitor-client relationship. However, it is still appropriate that I consider the prejudice suffered by Mr. Denney before granting the removal order.

[11] The second primary dispute on prejudice to Mr. Denney was a focal point of argument from both sides, particularly since trial is scheduled to commence in just over five months. Prejudice to the client is always a significant factor in deciding a removal motion and is also one of the court’s principal concerns. Prejudice is one of my primary concerns on this motion given apparent complexities in this proceeding and proximity to trial.

[12] In my view, since I have already found a breakdown, prejudice must be considered in the particular context of that breakdown having regard to the potential unfairness to both parties from requiring them to continue together. Substantial prejudice to Mr. Denney or serious harm to the administration of justice from granting the removal order would militate against removal. I do not find either here.

[13] Complexity of this proceeding was not clear from the materials filed, but became clear during the course of oral argument. As a solicitor negligence action arising from administrative dismissal of a prior tort action, Mr. Denney must not only establish liability of the defendant lawyers for negligence in their conduct of the prior litigation, but must also prove that he has suffered damages. Doing so reasonably requires proving the damages claim in the underlying tort litigation. Those damages include fairly common claims for physical injuries and ongoing pain and suffering from the motor vehicle accident. They also appear to involve a claim for income loss and diminution of earning capacity connected to a lost opportunity of a US-based movie deal. That claim appears sufficiently complex to require expert evidence. Unsurprisingly, evidence and even expert reports relied on by Mr. Denney for his damages claim date back to the prior litigation.

[14] There will naturally be some prejudice to Mr. Denney from a removal order. This litigation has been ongoing since 2016. Howie, Sacks & Henry LLP has represented Mr. Denney since its inception. They have been counsel through pleadings, documentary production, examinations for discovery, medical expert assessments, and mediation. They have over five years of historical knowledge, which will not be available to new counsel.

[15] Putting aside for a moment Mr. Denney’s position that a removal order is not warranted at all, Mr. Denney argues that adjournment of the trial will be necessary if I grant the removal order. He has expressed concern that, unless trial is adjourned, he will be prejudiced by having insufficient time to find new competent counsel and get them up to speed before the trial commences in February 2022. Conversely, Mr. Khoshbin is confident that Mr. Denney will be able to secure an adjournment if it is required.

[16] As an associate judge, I have no jurisdiction to postpone or adjourn a trial, which is in the exclusive jurisdiction of a judge. It is also not appropriate for me to make an order that will clearly impact the fixed trial dates. Mr. Khoshbin’s confidence that an adjournment will be granted may be borne out, but the decision to adjourn the trial is ultimately in the discretion of the judge hearing the adjournment request.

[17] Nevertheless, in my view, the contingent possibilities that an adjournment may be required and might not be granted are insufficient to support a finding that there will be significant prejudice to Mr. Denney or serious harm to the administration of justice if a removal order is granted. There is nothing before me supporting that Mr. Denney will reasonably be unable to find new competent counsel if a removal order is granted, or that such counsel will be unable to properly prepare for trial by February 2022. If needed, it will be open to new counsel (or Mr. Denney, if he elects to act in person) to seek an adjournment. Although it will be for a judge to decide, the complexities of portions of this case (as it seems to me), including the need for expert evidence, would seem to support an adjournment request.

[18] Prejudice is not the only factor on a removal motion. I must weigh all relevant factors. In my view, the breakdown in the solicitor-client relationship is sufficiently material to support removal. I acknowledge that there will be some prejudice to Mr. Denney from a removal order, but not to such a degree or with such certain significance that it should outweigh the other factors that I have considered. In my view, the removal order should be granted.

[19] Mr. Denney requests that, if I grant the removal order, I should also make an order requiring Howie, Sacks & Henry LLP to immediately turn over the litigation file to him and that Howie, Sacks & Henry LLP not deal with any new lawyer. Mr. Denney is primarily concerned about having prompt access given the pending trial and reducing delays in any transition.

[20] I see no need for such an order. Turnover and transition of client files are specifically addressed in the Rules of Professional Conduct, notably Rule 3.7-9 and the commentary. There is nothing before me to suggest that Howie, Sacks & Henry LLP will not comply with their legal and professional obligations regarding maintaining solicitor-client privilege unless waived by Mr. Denney, turnover of Mr. Denney’s file and necessary information, and, if Mr. Denney retains new counsel, transition to those lawyers.

Charging order relief

[21] Where a lawyer has been employed to prosecute or defend a proceeding in the Superior Court of Justice, the lawyer may seek a charge on property recovered or preserved in that proceeding through the lawyer’s instrumentality for fees, costs, charges and disbursements incurred in that proceeding: Solicitors Act, RSO 1990, c. S.15, s. 34(1).

[22] No case law was submitted by Howie, Sacks & Henry LLP in support of a charging order. A charging order is a discretionary remedy. To obtain one, the onus is on the lawyer seeking it to demonstrate three criteria: (i) the fund or property must be in existence at the time the charging order is granted; (ii) the property must have been “recovered or preserved” through the instrumentality of the lawyer; and (iii) there must be some evidence that the client cannot or will not pay the lawyer’s fees: Weenen v. Biadi, 2018 ONCA 288 at paras. 14-15.

[23] In my view, Howie, Sacks & Henry LLP has not established key pre-requisite criteria to obtain a charging order. I have two primary concerns.

[24] First, the unredacted record does not include the retainer agreement with Mr. Denney nor does it outline the specific terms of the retainer. The relationship between a lawyer and client is firstly contractual. I am being asked to approve a charging order based solely on hours having been spent and disbursement costs having been incurred, but without any evidence on the specific retainer terms for payment of fees. Without that, I cannot determine the extent to which Howie, Sacks & Henry LLP is entitled to a charge, if any, or the appropriate quantum of any charge.

[25] Second, it is not enough that Howie, Sacks & Henry LLP represented Mr. Denney throughout the course of this action. They must demonstrate instrumentality in their representation to any ultimate success. The unredacted record provides no evidence of anything done by Howie, Sacks & Henry LLP in the course of their retainer that, in my view, could be held to be “instrumental” to Mr. Denney’s potential success. I do not accept the argument that commencing the action was itself sufficiently instrumental. Similarly, if conducting standard litigation steps that are typical of any civil litigation retainer, such as documentary production, examinations for discovery, and mediation, was itself sufficient to satisfy the requirement for “instrumentality” in s. 34 of the Solicitors Act, the threshold for a charging order would be too low. A request for a charging order must be supported by specific evidence that the lawyer’s work played a substantial and integral part in success of the litigation. That has not been provided here.

[26] I am accordingly exercising my discretion not to grant a charging order. Whether Howie, Sacks & Henry LLP is entitled to payment of any fees or disbursements from Mr. Denney, and in what amounts, is a matter to be agreed between them or assessed.

Disposition

[27] I accordingly order that Michael Henry and Howie, Sacks & Henry LLP be removed as lawyers of record for Mr. Denney in accordance with Rule 15.04 upon compliance with Rule 15.05(b), but I am extending the time for Mr. Denney to obtain new counsel or serve a notice of intention to act in person to 60 days, as sought by Howie, Sacks & Henry LLP in their notice of motion and draft order. I dismiss the motion for a charging order.

[28] Costs were not discussed at the hearing. However, in my view, costs would not be appropriate in all the circumstances. I accordingly order that there be no costs.

[29] I have signed an amended version of draft order submitted, as amended electronically prior to signing.

ASSOCIATE JUSTICE TODD ROBINSON

DATE: September 7, 2021