Court File and Parties

COURT FILE NO.: CV-20-642688 RELEASED: 2023/07/13 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Reuben Moses and Laura Harkin v. Metro Hardware and Maintenance Inc., 2188661 Ontario Inc., Rosy Moses and The Estate of Abraham Moses

And by counterclaim: Metro Hardware and Maintenance Inc., 2188661 Ontario Inc., Rosy Moses and The Estate of Abraham Moses v. Reuben Moses, Laura Harkin and 2720584 Ontario Inc. o/a Castle Glass & Locks

BEFORE: Associate Justice Graham HEARD: April 25, 2023

COUNSEL: Gregory Sidlofsky for the plaintiffs (moving parties) Catherine Francis for the defendants Metro Hardware and 218 Ontario Ranjan Das for the defendants Rosy Moses and The Estate of Abraham Moses

Reasons for Decision

(Plaintiffs’ motion to remove the solicitors of record for the defendants Metro Hardware and Maintenance Inc. and 2188661 Ontario Inc.)

[1] This action is a dispute among family members over the ownership and control of the hardware business operated by the defendant Metro Hardware and Maintenance Inc. (“Metro Hardware”). The dispute also concerns the ownership of the defendant 2188661 Ontario Inc. (“218 Ontario”) which owns the property on Martin Ross Avenue in North York, Ontario at which Metro Hardware operates.

[2] Metro Hardware was incorporated on December 23, 2008. Aby Moses and his wife Rosy Moses were Metro Hardware’s sole directors and Aby Moses was its controlling shareholder until his death on July 12, 2019. Aby Moses and Rosy Moses also jointly held all 100 shares in 218 Ontario. Rosy Moses and The Estate of Abraham Moses are also named as defendants and are represented by different counsel than counsel for the two defendant corporations. In their statement of defence, Rosy Moses pleads that she is the sole executor and trustee of the Estate of Aby Moses.

[3] The plaintiffs Reuben Moses and Laura Harkin are a married couple who are respectively the son and daughter-in-law of Rosy Moses and the late Aby Moses. Based on his contribution to the growth of Metro Hardware’s business, and assurances allegedly made to him by his father Aby Moses, Reuben Moses claims from Metro Hardware a 100% interest in the business and assets of Metro Hardware and claims from 218 Ontario a 50% interest in the Martin Ross Avenue property. Reuben Moses and Laura Harkin, who were both employees of Metro Hardware, also claim damages for constructive dismissal.

[4] The defendants Metro Hardware and 218 Ontario assert a counterclaim against the plaintiffs and 2720584 Ontario Inc. o/a Castle Glass & Locks (“272 Ontario”) on the basis that on October 8, 2019, Reuben Moses and Laura Harkin incorporated 272 Ontario for the purpose of competing with Metro Hardware, and after resigning from Metro Hardware, they hired 10 Metro Hardware employees to work in their new business.

[5] The plaintiffs issued their statement of claim on June 18, 2020 and immediately obtained an ex parte order for a Certificate of Pending Litigation (“CPL”) on the Martin Ross Avenue property. On November 2, 2020, Myers J. discharged the CPL, partly based on material non-disclosure by the plaintiffs, and ordered the plaintiffs to pay costs of $69,000.00. The plaintiffs’ motion to the Divisional Court for leave to appeal Myers J.’s decision was dismissed on February 12, 2021.

[6] On April 23, 2021, the plaintiffs amended their statement of claim to increase the quantum of damages claimed and to add a claim for oppression. On May 14, 2021, the defendants Metro Hardware and 218 Ontario (“the defendant corporations”) retained their current counsel, Catherine Francis of Minden Gross LLP, to defend the action. As reflected in the list of counsel who appeared on this motion, the defendants Rosy Moses and The Estate of Abraham [Aby] Moses are represented separately by Ranjan Das of the firm Berkow Youd Lev-Farrell Das LLP (“BYLD”).

[7] Both sets of defendants have delivered fresh as amended statements of defence and the defendant corporations’ pleading includes their counterclaim. Affidavits of documents have been exchanged and examinations for discovery of all parties and a mediation have been held. Both sets of parties have scheduled refusals motions to proceed on August 9, 2023.

[8] Pursuant to a will that he executed on April 15, 2019, Aby Moses left all of his estate to his wife Rosy Moses, so Rosy Moses inherited all of his shares in Metro Hardware and became its president and sole director. This was the same disposition of Aby Moses’ assets contemplated by his previous will executed in 1996. Aby Moses’s shares in 218 Ontario vested in Rosy Moses by right of survivorship.

[9] On August 21, 2020, Reuben Moses issued a Notice of Application against respondents Rosy Moses, the Estate of Aby Moses, and his sister Rachel Moses to challenge Aby Moses’s 2019 will. The respondents, represented by Ms. Francis of Minden Gross LLP, brought a motion to dismiss or strike the Estate Application on the basis that Reuben Moses had no standing to challenge the will. Both Reuben Moses and Rachel Moses filed affidavits on this motion.

[10] Reuben Moses alleged in his affidavit that the respondents’ counsel Minden Gross was in conflict of interest because Rachel Moses is a partner at Minden Gross, but he did not pursue that allegation. On January 25, 2021, Cavanagh J. dismissed the Estate Application with costs against Reuben Moses. The Court of Appeal upheld this dismissal on September 28, 2021.

The motion

[11] As stated, Rachel Moses, the daughter of Rosy and Aby Moses and the sister of Reuben Moses, and who is not a party to this action, is a partner in the Minden Gross law firm which has represented the defendants Metro Hardware and 218 Ontario since May, 2021.

[12] The plaintiffs now move for an order removing Minden Gross LLP as counsel for the Metro Hardware and 218 Ontario. They submit that Rachel Moses’s knowledge of the matters in dispute between her parents and brother, and the pre-litigation involvement of Minden Gross on behalf of Metro Hardware and 218 Ontario, means that Rachel Moses and other lawyers and staff from Minden Gross will be necessary witnesses at trial, thus disqualifying that firm from continuing to act in this action.

The pleadings

[13] Resolving the issue of whether Minden Gross should be disqualified from acting for the defendants Metro Hardware and 218 Ontario requires a review of the plaintiffs’ and responding defendants’ pleadings to ascertain the material issues in the action. I have highlighted specific references in the pleadings to the involvement of Rachel Moses.

[14] The key allegations in the statement of claim are:

• Para. 1: The plaintiff Reuben Moses claims as against 218 Ontario a Certificate of Pending Litigation (“CPL”) against and a 50% interest in the Martin Ross Avenue property or damages of $4 Million, and as against all other defendants damages of $7 Million for breach of contract and oppression and a declaration that he has a 100% interest in the business and assets of Metro Hardware as of July 12, 2019 (the date of Aby Moses’s death).
• Para 1: Reuben Moses and Laura Harkin claim damages as against Metro Hardware totalling $900,000.00 and $650,000.00 respectively for constructive dismissal, breach of the Employment Standards Act, and punitive damages.
• Paras 10-11: Reuben Moses pleads that he worked in the family business Metro Hardware part time from the age of 14 and full time upon graduating from high school in 1991. He received salary increases on an irregular basis but his father Aby Moses promised that upon his death, the entire business would belong to him. After 2009 when the building on Martin Ross Avenue was acquired (by 218 Ontario), Aby Moses also promised that 50% of that building would be given to Reuben.
• Paras 12-15: From 1996 Reuben managed all of the day to day service affairs of Metro. By 2018, owing to Aby Moses’s advancing age, Reuben had taken over all aspects of managing the business. Reuben alleges that he “was consistently underpaid for his work at Metro” but continued his employment based on Aby Moses’s promises that he would be given the entire business and 50% of the Martin Ross building. In reliance on these promises, he did not pursue other business opportunities and focussed on growing Metro’s business. From 2008 to 2020, Reuben grew the Metro business from sales of $2 Million to $7.6 Million.
• Para. 18: Shortly before the death of Aby Moses (on July 12, 2019) Rosy Moses “insisted on becoming more involved in Metro for the first time.” After Aby Moses’s death, Reuben became obligated to consult with Rosy to obtain instructions with respect to the management of Metro. Rosy would not take calls from Reuben and when she did speak to him, she could not make any decisions about the business operations, and she failed to take steps to transfer the business to Reuben. Reuben alleges that he was constructively dismissed by Metro as of February 13, 2020.
• Paras. 24, 27-28: Laura Harkin (Reuben Moses’s wife) began working at Metro Hardware in 2001. In January 2007, Aby Moses “decided to bring in Jake Benbihy, Reuben’s brother in law” (i.e. the husband of Rachel Moses, a partner at Minden Gross). In September or October 2008, Aby Moses decided to incorporate Metro and discussions took place that Reuben Moses and Rachel Moses would have an equal class of shares in Metro. It was also proposed that Jake Benbihy would be an officer of Metro. Jake Benbihy’s salary had been increased to substantially more than Laura Harkin’s which caused friction within the family.
• Paras. 34-35: On October 11, 2019, Rosy Moses attended at Metro’s premises to collect payment of a cash advance, became verbally abusive to both Reuben Moses and Laura Harkin, and struck Laura Harkin. Laura Harkin alleges that she was constructively dismissed by Metro as of January 3, 2020.
• Paras. 42-44: On June 6, 2018, on instructions from his parents Aby Moses and Rosy Moses, Reuben Moses terminated the employment of Jake Benbihy through Metro’s lawyer, for cause. A family rift ensued.
• Paras. 45-47: Aby Moses died on July 12, 2019. Leading up to his death, both Rosy Moses and Rachel Moses “put tremendous pressure on Aby to stop him from transferring Metro and his 50% interest in the property on Martin Ross to Reuben. . . . [B]oth Rosy and Rachel exercised undue influence to stop Aby from leaving Metro and his 50% interest in the property on Martin Ross to Reuben in Aby’s will, which was signed by Aby without Reuben’s knowledge very shortly before Aby’s death while he was completely dependent on Rosy for his care.”
• Paras. 49-50: Reuben Moses learned after this litigation commenced that Aby Moses had restructured Metro and made Reuben a shareholder. Without knowing this, Reuben entered into ultimately unsuccessful negotiations to transfer Metro and the Martin Ross building to him. “A further complication introduced into the transfer discussions for the business was a requirement of having Rachel Moses, who was estranged from Reuben agree to any transfer.”
• Para. 53-54: Reuben Moses relied on Aby Moses’s promise to transfer 50% of the Martin Ross property to him to his detriment. As a result of Reuben’s efforts, Aby, Rosy and Rachel all benefited from the success of Metro.
• Para. 58: Based on an alleged breach by Aby Moses and Rosy Moses of their fiduciary duty to Reuben Moses, the plaintiffs plead that the defendants hold the value of the Metro business and 50% of the Martin Ross property as a constructive trust for the benefit of Reuben.
• Paras. 60-61: The plaintiffs also claim a constructive trust remedy based on the alleged unjust enrichment of Aby Moses and Rosy Moses.
• Paras. 62-65: Reuben Moses alleges oppressive conduct by Rosy Moses in failing to inform him of his ownership interest in Metro Hardware, call shareholders meetings, provide annual financial statements or permit Reuben to operate the business as owner, and by disregarding “Reuben’s reasonable expectations that he would continue managing Metro and that he would succeed as 100% owner of the business.”
• Para. 66: “Further, after Reuben’s departure, Rosy, at the urging of Rachel, left Jake (Benbihy) in charge of the operations of Metro despite knowledge of his history of improperly removing cash from the business and refusing to declare cash revenue.”

[15] The key allegations in the fresh as amended statement of defence and counterclaim of Metro Hardware and 218 Ontario are:

• Paras. 8,17,23: Before Aby Moses’s death, all four members of the Moses family (Aby, Rosy, Reuben and Rachel) were shareholders in Metro Hardware; Reuben had 60 common shares and Rachel had 40 common shares. Aby Moses and Rosy Moses were the directors of Metro Hardware and controlled it through their ownership of all the voting shares.
• Para. 24: These defendants admit that Reuben worked diligently at Metro Hardware but deny that he was underpaid for his work or that he continued his employment on the basis of Aby Moses’s promises that he would eventually be given the entire business.
• Paras. 34-35: Reuben Moses is not a shareholder in 218 Ontario and Aby Moses never him promised shares in 218 Ontario.
• Paras. 39-43: On or about June 6, 2018, Reuben Moses, purporting to act on behalf of Metro Hardware, fired Jake Benbihy alleging cause, while Aby Moses, Rosy Moses and Rachel Moses were flying to England. He never provided any evidence to support his allegation that Jake Benbihy was stealing from Metro. This action “severed the relationship between Reuben and Rachel and irrevocably damaged the family relationship.”
• Paras. 12,14,48,49: In 1996, Aby Moses executed a will whereby he left all of his assets to Rosy Moses. On April 15, 2019, Aby Moses executed a new will in which he bequeathed all his assets to Rosy Moses, consistent with his intentions that he would provide for her as long as she was alive.
• Paras. 8,9,11: After the death of Aby Moses on July 12, 2019, Rosy Moses, as the sole beneficiary of Aby Moses’s estate, inherited his shares in Metro Hardware and became its president and sole director. She also became the sole shareholder of 218 Ontario.
• Paras. 58-59: Reuben Moses tendered his resignation from Metro Hardware by email to Rosy Moses on January 31, 2020 and re-submitted his resignation on February 13, 2020.
• Paras. 60-62: Reuben Moses and Laura Harkin incorporated the defendant by counterclaim 2720584 Ontario Inc. (“272 Ontario”) on October 8, 2019, several months before they resigned from Metro Hardware. On February 14, 2020, the day after he re-submitted his resignation, Reuben Moses sent an email to Metro’s customers stating that he had started a new company called Castle Locks and Glass (operated by 272 Ontario), which would offer the same services as provided by Metro Hardware, except paint supply. Reuben Moses and Laura Harkin took 10 Metro Hardware employees to their new business.
• Paras. 86-94: In response to the claim of Reuben Moses for relief with respect to the Martin Ross Avenue property, the defendants plead the history of the plaintiff’s efforts to obtain a CPL against that property as set out above.
• Paras. 96-103: Metro Hardware asserts a counterclaim against both plaintiffs and 272 Ontario arising from the breach by Reuben Moses and Laura Harkin of their fiduciary duties in opening a competing business and soliciting Metro Hardware’s customers and employees.

[16] The fresh as amended statement of defence of Rosy Moses and The Estate of Abraham Moses makes the following references to Rachel Moses:

• Para. 5: Rachel Moses was one of the shareholders of Metro Hardware until the death of Aby Moses.
• Para. 14: Following its incorporation in 2008, Rachel Moses held 40 common shares of Metro Hardware.
• Para. 19: Rachel’s husband Jake Benbihy was an officer of Metro Hardware until Reuben Moses fired him on or about June 6, 2018.
• Paras. 38-40: Rachel Moses, along with Rosy Moses and Aby Moses’s estate, brought a motion to dismiss the Estate Application commenced by Reuben Moses, which resulted in Cavanagh J.’s dismissal of that Application based on Reuben Moses’s lack of standing. (As stated above, the Court of Appeal upheld the dismissal of the Application.)

[17] The plaintiffs’ fresh as amended reply and defence to the counterclaim of Metro Hardware and 218 Ontario makes the following references to Rachel Moses:

• Paras. 5-6: Reuben Moses denies knowledge that he was issued 60 common shares in Metro Hardware until Metro Hardware made that allegation in this action. The “60/40 shareholding split” (i.e. the allocation of 60 shares to Reuben Moses and 40 shares to Rachel Moses) was proposed to Reuben Moses in 2007 and he declined the proposal. He later became aware that “Aby, Rosy or Rachel, or agents on their behalf, purported to proceed with the proposal nonetheless.”
• Paras. 18, 20 and 21: The instructions to Reuben Moses to fire Jake Benbihy (Rachel Moses’s husband) “came from Rosy and Aby”, but he was asked to delay the termination until after Rosy and Rachel returned from holidays. Reuben Moses “discussed Jake’s handling and taking of cash with both Aby and Rosy on multiple occasions” and “Jake’s conduct was well known to Metro employees.” Reuben Moses further states “that the damage to family relationships occurred because Rosy would not admit the truth of Jake’s conduct to Rachel.”
• Paras. 28-29: In May or early June, 2019, Reuben Moses was directed by his father Aby Moses to his uncle David Elias to act as a go-between to purchase a 50% interest in the Martin Ross Avenue property from Rosy Moses. David Elias was then directed by Rosy Moses “to deal with Rachel”. Reuben Moses “could not contemplate owning the building in partnership with his sister Rachel given the acrimonious relationship between them.”

Evidence on the motion

[18] The evidence in Reuben Moses’s affidavit affirmed November 30, 2022 is:

• Paras. 2-8: Reuben Moses summarizes his action as being a proprietary estoppel claim to the ownership of Metro Hardware and half of the shares of 218 Ontario, and a claim by himself and his wife Laura Harkin for damages for constructive dismissal from Metro. He pleads that at the time of his death, Aby Moses was the sole owner of Metro Hardware and a 50% owner of 218 Ontario. Reuben Moses worked full time at Metro Hardware between 1991 and 2020, and was instrumental in developing the business, in reliance on Aby Moses’s repeated promises that, on his death, he would inherit the ownership of Metro and Aby’s shares in 218 Ontario.
• Paras. 9-11: When Aby Moses died, he left Reuben “absolutely nothing at all”. Rosy Moses inherited Aby Moses’s shares of 218 and full ownership of Metro, and interfered with his management of the business making it unbearable for Reuben and his wife to continue at Metro. Rosy Moses together with Rachel Moses exerted tremendous pressure on Aby Moses to get what they wanted from him. “I am certain that because of Rosy and Rachel’s animosity toward me and my spouse, they pressured Aby not to give me what he had promised.” [This last statement expresses an opinion that is not proper evidence.]
• Paras. 12-14: “Although Rachel is not named as a defendant in the litigation, she will be a key witness at trial. . . . Rachel will be a key witness concerning her interactions with Aby and Rosy concerning Metro, her husband’s involvement in Metro, the reasons for the estrangement between Rosy, herself, myself and my wife, and the corporate reorganization of Metro and 218 and her law firm’s work on those matters.”
• Para. 13: “It is pleaded that Rachel received hundreds of thousands of dollars in assets from Aby prior to his death based on the promises and expectation that I would inherit the business. This led to Rachel being equalized with other assets as part of my father’s estate planning. So Rachel received these other assets, but I would up getting nothing, and I stand to inherit nothing from my mother given our very poor relationship.” [Emphasis added; there is no such pleading - see para. 162 of Rachel Moses’s affidavit below]
• Para. 15: Catherine Francis, current counsel for the defendants Metro Hardware and 218 Ontario, served a notice of change of lawyer on May 19, 2021. [Those defendants were previously represented by other counsel, who had acted on the motion to discharge the CPL that the plaintiffs obtained ex parte immediately after the commencement of the action.]
• Paras. 16-18: Rachel Moses has worked at Minden Gross since 2002 and is a partner in that firm. Reuben Moses deposes on information and belief that his counsel Mr. Sidlofsky informed Ms. Francis of his view that Minden Gross was in a potential conflict of interest shortly after Minden Gross became counsel of record. Minden Gross is also closely connected to Metro Hardware and 218 Ontario and did work on Aby Moses’s estate planning and the restructuring of Metro Hardware that is in issue in the litigation.
• Paras. 19-22: On January 21, 2008, Aby and Rosy Moses and Aby’s brother met with Aaron Grubner of Minden Gross to discuss succession planning for Aby Moses and Metro Hardware. In July, 2009, Mr. Grubner prepared a draft shareholder agreement for Metro Hardware. Mr. Gruber also “purportedly” executed an estate freeze for Aby Moses impacting Metro Hardware’s ownership, and “likely” incorporated 218 Ontario and prepared the lease agreement between 218 Ontario and Metro Hardware.
• Paras. 23-24: The position of Reuben Moses in the litigation is that he is not a shareholder of Metro Hardware and he had no knowledge that he or Rachel Moses were shareholders. Nonetheless, Rachel Moses’s position is that she holds 40% of the common shares in Metro Hardware based on documents prepared by Minden Gross.
• Paras. 25-28: Reuben Moses disputes the position of the defendants that he and Rachel Moses are shareholders of Metro Hardware. If he was made a shareholder without his knowledge and Rachel Moses was made a shareholder contrary to his expectations, he understands that this would potentially give rise to a claim against Minden Gross. Similarly, if Aby, Rosy and Rachel Moses wanted to make Rachel and Reuben Moses shareholders and this was not done, possible claims against Minden Gross could also arise.
• Para. 30: Reuben Moses expresses the belief that Minden Gross has an interest in maintaining Rosy Moses’s control of Metro Hardware and 218 Ontario as Rosy Moses continues to retain Minden Gross owning to Rachel Moses’s position at that firm.
• Para. 31: If Rosy Moses continues to maintain her ownership of Metro Hardware and 218 Ontario, Rachel Moses will likely inherit all of these assets as the expected sole beneficiary of Rosy Moses’s estate. Rachel Moses therefore has a significant interest in the outcome of the litigation.
• Paras. 32 and 33: Rachel Moses provided instructions to Minden Gross regarding Metro Hardware’s lease from 218 Ontario. “Personally I believe that Rachel is making all of the decisions for my mother in this proceeding and in the continuing business of Metro, as my mother has never had any involvement in running Metro or making business decisions in the past.” [The statement that Rachel Moses is making Rosy Moses’s decisions in the litigation is a statement of opinion and not evidence.] The defendants have also refused to answer questions regarding instructions from Rachel Moses to Minden Gross involving the defendant corporations based on privilege.
• Para. 34: Reuben Moses asserts that it will be necessary to call various lawyers and potentially clerks from Minden Gross as witnesses at trial.

[19] The evidence in Rachel Moses’s affidavit sworn January 12, 2023 is:

• Paras. 1-12: Rachel Moses confirms her relationship to the plaintiffs and defendants in the action and that she is a partner at Minden Gross LLP. She also confirms the incorporation of Metro Hardware on December 23, 2008 by Minden Gross, and the share structure of the company, including 60 common shares owned by Reuben Moses and 40 common shares owned by herself. She attaches as exhibits documents confirming Metro Hardware’s shareholdings, including their tax filings from 2010-2018 which reflect the 60%-40% distribution of common shares between Reuben Moses and herself.
• Paras. 13 and 14: Rachel Moses asserts that “the share structure [of Metro Hardware] is clear and I believe he [Reuben Moses] was always aware of the share structure since the beginning.” [Rachel Moses’s belief is opinion and not evidence.] She acknowledges that a draft shareholders agreement was circulated in 2009 with respect to which she was represented by the Aird & Berlis firm, “but in the end no agreement was concluded.”
• Paras. 16 and 17: She confirms that Minden Gross acted on the incorporation of 218 Ontario, the owner of the Martin Ross Avenue property, on October 27, 2008. Her parents jointly held the 100 common shares of 281 Ontario.
• Paras. 18-22: On June 6, 2018, Reuben Moses fired Rachel Moses’s husband Jake Benbihy, alleging cause based on him stealing from Metro. “This permanently severed the relationship between me and Reuben.” Later in June, 2018, Reuben hired Aird & Berlis to negotiate with Rachel over their shareholdings. Rachel agreed to waive the conflict arising from the fact that the same firm had acted for her with respect to the draft shareholders agreement in 2009.
• Paras. 23-30: Rachel and her parents attended a meeting with Reuben at the Aird & Berlis offices in early July 2018 to discuss a potential transaction to transition Metro’s business to Reuben. The transaction would require a valuation of Metro Hardware’s assets and would have to take into consideration Rachel’s 40 common shares and Aby’s and Rosy’s future needs. Rachel did not attend any further meetings with Aird & Berlis. A subsequent meeting was held on August 7, 2018 that Rachel was not invited to attend. No transaction was finalized at that time or at any time. At his examination for discovery, Reuben acknowledged that after meeting with Aird & Berlis in 2018 he decided that he did not want to acquire Metro’s shares.
• Paras. 39-47: Rachel refers to the execution by Aby Moses of new wills on April 15, 2019. Minden Gross had no involvement in preparing those wills and Rachel was unaware of their contents until after Aby’s death on July 12, 2019. Rachel’s mother was the sole executor and beneficiary of the will. Rosy Moses inherited Aby Moses’s shares in Metro Hardware. Reuben Moses acknowledged at his examination for discovery that he did not know that his parents had done revised wills. He also acknowledged that the shares of 218 Ontario vested in Rosy Moses by right of survivorship.
• Paras. 48-52: Commencing in or about October 2019, further negotiations took place between Reuben Moses and Rosy Moses for the potential sale of the assets of Metro Hardware and of the Martin Ross Avenue property to Reuben. They were both represented by counsel other than Minden Gross. Reuben admitted at his examination for discovery that he assumed that he did not need to deal with Rachel because he was not asking for the shares in Metro Hardware. Neither Rachel nor anyone else at Minden Gross was involved in these negotiations and Rachel only found out about them after Reuben resigned from Metro Hardware on January 31, 2020.
• Paras. 53-67: Rachel Moses recounts the plaintiffs’ resignations from Metro Hardware, Reuben Moses’s email of February 14, 2020 to Metro’s customers informing them of the opening of Castle Glass & Locks, and the hiring by the plaintiffs of 10 Metro Hardware employees.
• Paras. 68-78: Rachel Moses refers to Metro Hardware being represented by the Fasken law firm after the plaintiffs’ departure, including correspondence from the Fasken lawyer to the plaintiffs’ then counsel and Laura Harkin’s response. She then refers to the commencement of this action on June 18, 2020, and describes the substance of the action, the obtaining by the plaintiffs of a CPL on an ex parte motion, and the service of the statement of claim, motion record and ex parte CPL order on Rosy Moses one and a half days before the anniversary of Aby Moses’s death according to the Hebrew calendar.
• Paras. 79-84: The defendants retained counsel [not Minden Gross] to bring a motion to discharge the CPL, and Rachel Moses filed an affidavit in support of that motion.
• Paras 79-130: Rachel Moses recounts the steps taken in the defendants’ motion to discharge the CPL, including excerpts from Myers J.’s decision in their favour, and the plaintiffs’ unsuccessful motion for leave to appeal to the Divisional Court. She also refers to Reuben Moses’s commencement of the Estate Application in which she was represented by Ms. Francis of Minden Gross LLP, Reuben Moses’s affidavit alleging a conflict of interest on the part of Minden Gross, the dismissal of that Application by Cavanagh J. on January 25, 2021 with a subsequent costs award, and the dismissal of Reuben Moses’s appeal by the Court of Appeal on September 28, 2021. Reuben Moses did not object to Ms. Francis arguing the motion to dismiss the Estate Application as lead counsel, and Cavanagh J. did not raise any issues or concerns about Minden Gross being in a conflict of interest even though the issue was addressed in the factums.
• Paras. 131-133: Rachel Moses refers to the plaintiffs’ amendments to the statement of claim on April 23, 2021, including allegations of undue influence against her and Rosy Moses, although she was not added as a defendant.
• Paras. 134-136: Rachel Moses deposes that Reuben Moses caused a rift in their family by demanding his “inheritance” while their parents were still alive, threatening to leave Metro and destroy the business if he was not given what he wanted, and fabricating allegations that Jake Benbihy was stealing from Metro and firing him while Rachel and their parents were on a trip to England. Rachel Moses also describes the plaintiff’s “disruptive and cruel conduct” toward Rosy Moses, including steps taken in this action and in the Estate Application, with the related legal costs.
• Para. 137: “In the circumstances, it was (and is) extremely important that the interests of the defendants be represented by a lawyer who is fully familiar with the background and family dynamics and who will provide the best possible legal advice and representation and prevent Reuben and Laura from stripping my mother of her assets and destroying her mental, physical and financial health.”
• Paras. 138-141: Ms. Francis served a notice of change of lawyers for Metro Hardware and 218 Ontario on May 14, 2021. Rosy Moses retained Mr. Das’s firm to act for herself and Abraham Moses’s estate. P. 138: “Ms. Francis is fully familiar with the background. She is very detail-oriented and has expertise and experience in complex family disputes with the ability to address all the issues required in this lawsuit spanning decades. My mother and I are strongly of the view that Ms. Francis is the best person to defend Reuben’s and Laura’s allegations and to pursue the counterclaim on behalf of Metro.” P. 139: “For this reason, after Reuben abandoned his conflict of interest allegations, Minden Gross LLP commenced acting for Metro and 218 in the Civil Action.”
• Paras. 142-143: In response to the statement in paragraph 17 of the affidavit of Reuben Moses “it is absolutely not true that Mr. Sidlofsky informed Ms. Francis of his view that Minden Gross was in a potential conflict of interest shortly after Minden Gross went on the record. . . . Reuben had only raised allegations of conflict of interest in his affidavit and factum filed in the Estate Application, and then abandoned those allegations at or before the hearing. Mr. Sidlofsky did not raise the issue of the alleged conflict of interest at all when Ms. Francis notified him that Minden Gross LLP would be acting for Metro and 218 in the Civil Action and did not respond at all either to the May 13, 2021 email or to the notice of change of lawyers. He certainly never suggested that he was waiting until after discoveries until the issues and material disputes were confirmed.”
• Paras. 144-145: “In fact, far from complaining that Minden Gross LLP was in a conflict and shouldn’t be acting, Mr. Sidlofsky took the position that Minden Gross LLP should be acting for all the defendants.” P. 145: “In an email sent to Mr. Das [counsel for Rosy Moses and the Estate] on June 9, 2021, Mr. Sidlofsky wrote: I expect that Catherine [Ms. Francis] will cover most of the issues just as she did with the hearing of the last motion” and “Further, I repeat that there is no need for the defendants to be separately represented in this litigation. It is increasing costs and already causing delays.” [Emphasis added]
• Paras. 146-147: Rachel Moses reviews the substantial steps that have been taken in the litigation subsequent to when Minden Gross LLP first became counsel of record for Metro Hardware and 218 Ontario including delivery of their amended pleading, review of documents and preparation of their affidavit of documents, preparation for and attendance at examinations for discovery of both plaintiffs and Rosy Moses, answering undertakings and refusals, and preparation for and attendance at mediation on October 3, 2022. It was only after the mediation and before the case conference to schedule a motion for outstanding undertakings and refusals that Mr. Sidlofsky advised that he expected to receive instructions to bring this removal motion.
• Paras. 148-153: Rachel Moses refers to the alleged conflicts raised by Mr. Sidlofsky and states that those allegations “were known to Reuben all along and already raised and abandoned by him in the Estate Litigation.” Reuben Moses had alleged in the Estate Litigation that Rachel Moses, Aaron Grubner (a retired partner of Minden Gross LLP) and other members of the Minden Gross firm will be necessary witnesses at trial. Rachel Moses has no reason to believe that she, Mr. Grubner (whose legal work for the Minden Gross clients was done in 2008/2009) or other lawyers at Minden Gross will be necessary witnesses. Regardless, if the trial judge ruled that Ms. Francis could not lead the witnesses’ evidence, then Mr. Das could do so.
• Para. 154-161: These paragraphs relate to Reuben Moses’s knowledge of the share structure of Metro Hardware, which is addressed in previous paragraphs in the affidavit. As Aird and Berlis were involved in the 2018 negotiations for the possible acquisition by Reuben Moses of Metro Hardware’s shares, their files will be relevant to the share structure issue.
• Para. 162-163: Rachel Moses refers to paragraph 13 of Reuben Moses’s affidavit, quoted in full above, in which Reuben deposes that “It is pleaded that Rachel received hundreds of thousands of dollars in assets from Aby prior to his death based on the promises and expectation that I would inherit the business.” Rachel deposes that there is no such pleading. [A review of the amended statement of claim confirms that there is no such pleading.]
• Para. 164: In response to the assertion by Reuben Moses in para. 12 of his affidavit that Rachel Moses “will be a key witness at trial”, Rachel deposes: “At present, I have no intention of testifying in the Civil Action and Reuben has not indicated an intention to call me as a witness.” [emphasis added]
• Paras. 165-182: These paragraphs consist primarily of Rachel Moses’s comments on the viability of the plaintiffs’ claims and whether they have sustained any damages, which may go to the merits of the action, but which do not assist the court in determining whether Minden Gross LLP should be permitted to continue to act in the matter.
• Paras. 183-184: Rachel Moses challenges the assertion by Reuben Moses that the involvement of Minden Gross in the corporate restructuring of Metro Hardware potentially raises claims against Minden Gross, because Metro Hardware was incorporated over 14 years ago and Minden Gross LLP did not act for Reuben Moses.
• Paras. 185-190: These paragraphs consist primarily of more statements of opinion regarding the merits of the plaintiffs’ claims and the lack of relevance of any evidence of current and former members of the Minden Gross firm.
• Para. 191: With respect to Ms. Francis, the Minden Gross lawyer with carriage of the matter on behalf of Metro Hardware and 218 Ontario, Rachel Moses deposes: “Ms. Francis had no involvement whatsoever in any of the events and there is no allegation or possibility that she will be a witness at trial. As I stated above, if for some reason it becomes necessary for someone from Minden Gross LLP to testify at trial, and if for some reason the trial judge finds that it would be a conflict for Ms. Francis to call the witness, then Mr. Das could do so as “second chair.”

The issue

[20] The main issue on the motion is whether the Minden Gross firm should be removed as counsel for the defendants Metro Hardware and 218 Ontario on the basis that Rachel Moses, a partner in that firm, or other members or former members of the same firm, may be witnesses at trial. A further issue raised by the plaintiffs is whether Minden Gross should be removed based on inappropriately partisan conduct by counsel Ms. Francis in the conduct of examinations for discovery.

Case law

[21] The question of when a lawyer or law firm should be precluded from acting in a matter in which a lawyer from the firm may be a witness in the action was addressed in Essa (Township) v. Guergis; Membery v. Hill, [1993] O.J. No. 2581 (Div. Ct.). O’Brien J., writing for a unanimous panel, considered three main issues:

• Whether there is a general prohibition in Ontario against partners or associates of counsel with carriage of litigation being witnesses in the proceeding;
• The appropriateness of orders that would interfere with a party’s choice of lawyer;
• The factors to be considered in determining whether a lawyer should be disqualified from acting for an opposing party.

[22] The first issue addressed by the court in Essa Township was very similar to a central issue in the motion currently before the court: “Should there be a judicial policy prohibiting trial counsel from appearing on an application where a member, or associate, of the same firm is, or is likely to be, a trial witness?” (Essa Township was not written with numbered paragraphs, so the quoted passages that follow are not numbered.)

[23] In addressing this issue, the court considered the different guidelines in the Canadian Bar Association (“CBA”) Code of Professional Conduct and the Rules of Professional Conduct of the Law Society of Upper Canada (“LSUC”, now the Law Society of Ontario). The CBA commentary with respect to “The Lawyer as Witness” states:

“5. The lawyer who appears as an advocate should not submit the lawyer’s own affidavit to or testify before a tribunal save as permitted by local rule or practice, or as to purely formal or uncontroverted matters. This also applied to the lawyer’s partners and associates; generally speaking, they should not testify in such proceedings except as to merely formal matters.”

[24] The LSUC commentary with respect to “The Lawyer as Witness” states:

16(a) The lawyer who appears as advocate should not submit the lawyer’s own affidavit to the tribunal. (b) The lawyer who appears as advocate should not testify before the tribunal save as may be permitted by the Rules of Civil Procedure or as to purely formal or uncontroverted matters. . . .

[25] So, the CBA Code prohibited a lawyer’s reliance on evidence from members of his firm, even by affidavit, and the LSUC rules were silent on the issue. In reconciling the inconsistency, O’Brien J. stated:

“In Ontario, lawyers are not required to abide by the CBA Code but are required to abide by the LSUC rules. They are at risk of being reprimanded, suspended or disbarred (depending on the nature of the infraction) if they breach those rules.

I accept the submissions of LSUC counsel [the LSUC had intervenor status at the hearing] that courts should be reluctant to adopt the CBA Code in preference to the LSUC rules in such circumstances.”

[26] There is therefore no strict rule in Ontario that prevents the partner or associate of a party’s lawyer from being a witness in the proceeding.

[27] On the issue of the appropriateness of orders removing opposing counsel, O’Brien J. stated:

“I believe courts should be reluctant to make what may be premature orders preventing solicitors from continuing to act. In view of the expense of litigation and the enormous waste of time and money and the substantial delay which can result from an order removing solicitors, courts should do so only in clear cases. I adopt the approach taken on this point in Carlson v. Loraas Disposal Services Ltd. (1988).

As discussed in the Carlson decision, an application to remove counsel can be made to the trial judge when it is certain there is a problem. In this case Mr. Green [the lawyer whose firm the opposing party sought to remove] may, or may not be, subpoenaed to testify. Concessions or admissions may be made which will obviate the need to call him as a witness. The evidence he could give may be readily obtainable from other witnesses. As issues are developed, or resolved during trial, his evidence may not be required at all. A trial judge will be in a much better position to determine if his firm should be disqualified.

I do not accept the argument that when a lawyer is compelled to testify against the “other” side in a lawsuit the lawyer’s firm must always be prevented from acting in the lawsuit. There are a variety of scenarios which might develop at, or during, trial. The possible conflict as discussed in [Kitzerman v. Kitzerman (1993), 37 A.C.W.S.(3d) 1282] should not automatically result in a law firm’s removal. In the course of litigation an honest witness is often compelled to give evidence which will assist a party that witness feels is “opposite”. I do not agree that such a possible conflict requires removal in all cases. There may be some where it does. I am not persuaded that decision should be made at this pre-trial stage of the proceedings in this case.

It should also be born in mind that all applications to remove solictors from the record are not brought with the purest of motives. The expense and delay involved in retaining new counsel may work to the substantial benefit of an opposing party in some cases.

Courts should also carefully consider the right of a client to be represented by counsel of choice.” [emphasis added throughout]

[28] O’Brien J. also set out factors to be considered in determining whether a lawyer should be disqualified from acting for an opposing party on the basis that they may be a witness in the proceeding:

“[I]n these applications a court should approach the matter by following a flexible approach and consider each case on its own merits. A variety of factors should be considered. These will include [numbers added for ease of reference]:

(i) The stage of the proceedings; (ii) The likelihood that the witness will be called; (iii) The good faith (or otherwise) of the party making the application [i.e. the motion for removal]: (iv) The significance of the evidence to be led; (v) The impact of removing counsel on the party’s right to be represented by counsel of choice; (vi) Whether the trial is by judge or jury; (vii) The likelihood of a real conflict arising or that the evidence will be “tainted”; (viii) Who will call the witness if, for example, there is a probability counsel will be in a position to cross-examine a favourable witness, a trial judge may rule to prevent that unfair advantage arising; (ix) The connection or relationship between counsel, the prospective witness and the parties involved in the litigation.”

[29] These factors have been cited with approval in numerous subsequent decisions, such as Mazinani v. Bindoo, 2013 ONSC 4744 (at para. 61) and 8657181 Canada Inc. v. Mehdi Au LLP, 2021 ONSC 1295 (at para. 9).

[30] Most of the case law on the issue of when an opposing lawyer should be removed from the record addresses circumstances in which the lawyer with carriage of the matter may herself be required to testify as a witness in the proceeding. As stated, the issue on this motion is whether the Minden Gross firm should be disqualified from acting because Rachel Moses, another partner at the firm, or other members of the firm, may be witnesses. There is no suggestion that Ms. Francis would be required to testify.

[31] In Mazinani v. Bindoo, in addition to citing the list of factors from Essa Township, supra to be considered in determining whether counsel for an opposing party should be removed from the record, Master Glustein (as he then was) set out additional principles to be considered on such motions (at para. 60 – I have included only the passages that are applicable to the issues on this motion):

60 I adopt the following principles as the applicable law on a motion to remove a lawyer of record who may be a witness at trial:

(i) The court has inherent jurisdiction to remove a lawyer from the record who has a conflict of interest. The inherent jurisdiction "stems from the fact that lawyers are officers of the court and their conduct in legal proceedings which may affect the administration of justice is subject to this supervisory jurisdiction" (MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235 ("MacDonald Estate"), at para. 18);

(ii) The inherent jurisdiction extends to removing a lawyer who may be a witness in a case in which the lawyer acts as counsel (Ontario Realty Corp v. P. Gabriele & Sons Limited et al, [2006] O.J. No. 4497 ("Ontario Realty"), at para. 16);

(iii) The court on a motion to remove a lawyer of record who may be a witness at trial must consider "(a) the maintenance of high standards of the legal profession and the integrity of our system of justice and (b) the right of a litigant to its choice of counsel, which he or she should not be deprived of without good cause" (Ontario Realty, at para. 17, citing MacDonald Estate, at para. 13);

(iv) The test to be applied on a motion to remove a lawyer from the record who may be a witness is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires the removal of the lawyer. This determination is objective, fact-specific and based on an examination of all factors in the case (Karas v. Ontario, 2011 ONSC 5181 (S.C.J. - Mast.) ("Karas") at para. 26; Ontario Realty, at para. 20); . . .

(x) Courts should be reluctant to make what may be premature orders preventing lawyers from continuing to act. If the evidence does not necessarily have to come from the lawyer and may be obtained through admissions or documentary productions, a removal order will be premature (Essa (Township) v. Guergis; Membery v. Hill, [1993] O.J. No. 2581 (Div. Ct.) ("Essa"), at para. 43; Lesniowski v. H.B. Group Insurance Management Ltd., [2002] O.J. No. 3194 (S.C.J. - Mast.) ("Lesniowski"), at para. 15);

(xi) If there is some doubt or "merely a potential" that a lawyer will be called as a witness at trial, the courts should be more generous in allowing the lawyer to remain on the record and deferring the matter until after discoveries or leaving the matter to the trial judge (George S. Szeto Investments Ltd. et al v. Ott, [2006] O.J. No. 1174 ("George S. Szeto"), at para. 13);

(xii) "In view of the expense of litigation and the enormous waste of time and money and the substantial delay which can result from an order removing solicitors, courts should only do so in clear cases" (Essa, at para. 43);

(xiii) "[A] court should be slow to interfere with the litigant's right to choose his or her counsel. ... When a litigant is deprived of the services of a lawyer whom she has chosen, there will be some hardship imposed on her. The imposition of such hardship can only be justified if it is done to prevent the imposition of a more serious injustice. It follows that the removal of counsel should be only to relieve the risk of real mischief and not a mere perception of mischief" (Urquhart v. Urquhart, at para. 19);

(xiv) Certainty that a lawyer will be called as a witness is not required. Rather, the court must consider the likelihood of the lawyer being called as a witness (Ontario Realty, at para. 33);

(xv) "It is not sufficient for a moving party to suggest opposing counsel is a potential witness or allege only that he or she might provide material evidence. Rather, it must be established that there is a real basis to believe counsel can likely, or probably, provide material evidence" (Graham v. Ontario, [2006] O.J. No. 763 (S.C.J.) ("Graham"), at para. 35; Ontario Realty, at paras. 34-35);

(xvi) "While courts have acknowledged that the freedom to choose counsel is an important interest to protect, it is not an absolute right. The right to be represented by counsel of choice can be outweighed when the administration of justice would be detrimentally affected" (Karas, at para. 45; George S. Szeto, at para. 21; Urquhart, at paras. 21 and 28); and

(xvii) The court should approach a motion to remove a lawyer of record who may be a witness at trial by following a flexible approach and consider each case on its own merits (Essa, at para. 48). [Emphasis added]

[32] Counsel for the plaintiffs refers to Rice v. Smith, 2013 ONSC 1200, para. 19:

19 The particular conflict of interest prohibition dealing with “lawyer as witness” is intended to prevent the inevitable conflict of interest a lawyer otherwise would have between the duty owed to his or her client, and duties of independence otherwise owed to others, especially the Court. In particular, lawyers are independent officers of the court, and a trial judge must be able to rely upon counsel for a high degree of objectivity and detachment. That fundamental relationship is compromised, and the administration of justice and integrity of the system accordingly are undermined, where the objectivity and credibility of counsel necessarily are subjected to challenge in the course of determining the substantive merits of an underlying dispute.

Submissions of the plaintiffs (moving parties)

[33] Plaintiffs’ counsel submits that there are two reasons that Minden Gross should be removed as counsel for the defendants Metro Hardware and 218 Ontario. First, the lengthy involvement of Minden Gross in the affairs of the two defendant corporation, the ownership of which is in dispute in the action, means that Minden Gross lawyers, and particularly Rachel Moses, will inevitably be witnesses at trial. Second, Minden Gross lawyer Ms. Francis has displayed an unacceptably partisan approach to the conduct of the litigation, thus warranting the firm’s disqualification.

[34] The plaintiffs rely on the fact that Minden Gross incorporated 218 Ontario and Metro Hardware on October 27, 2008 and December 23, 2008 respectively, partners at Minden Gross LLP played an essential role in the estate advice related to the assets of Metro Hardware, Aaron Grubner, a now retired partner, structured the estate freeze and the share structure of Metro, and Minden Gross kept the books of both of the defendant companies. Minden Gross continues to act as corporate lawyers for Metro Hardware and 218 Ontario. Further, on her own admission, Rachel Moses is a shareholder of Metro Hardware.

[35] The plaintiffs submit that the involvement of lawyers and staff from Minden Gross in the affairs of Metro Hardware and 218 Ontario means that they will be required to testify as witnesses at trial, thus disqualifying that firm from acting for the defendant companies. The fact that Rachel Moses has sworn a 192 paragraph affidavit in response to the motion, as well as other affidavits in the action and in the Estate Application, reflects a degree of involvement such that she will not be able to avoid testifying at trial.

[36] With respect to the conduct of Ms. Francis on behalf of the defendants, plaintiffs’ counsel relies on Rice v. Smith, supra, in which the court stated that “lawyers are independent officers of the court, and a trial judge must be able to rely upon counsel for a high degree of objectivity and detachment.” Plaintiffs’ counsel refers to the fact that on the cross-examination of Reuben Moses on his affidavit sworn for this motion, Ms. Francis asked questions about his religious beliefs and whether he was litigating to cause his family pain. Plaintiff’s counsel submits that these types of questions reflect improperly partisan behaviour on the part of Ms. Francis which warrants the removal of her firm as counsel.

[37] Counsel also refers to over 150 interjections by Ms. Francis during the examination of Rosy Moses, who he submits is not her client. He submits that her conduct in this regard warrants her disqualification as counsel. The court must be able to rely on counsel for a high degree of objectivity and detachment. It is therefore not appropriate for Minden Gross to take this case to trial and they should be removed.

Submissions of the defendants Metro Hardware and 2188661 Ontario

[38] The defendants’ counsel refers to the Law Society of Ontario Rules of Professional Conduct. Rule 3.4 prevents a lawyer from acting for a client where there is a conflict of interest. However, this rule is not engaged because Minden Gross has never acted for the plaintiffs and Reuben Moses was never a director of either corporation.

[39] Counsel also refers to Rule 5.2 – “The Lawyer as Witness”:

5.2-1 A lawyer who appears as advocate shall not testify or submit their own affidavit evidence before the tribunal unless

(a) permitted to do so by law, the tribunal, the rules of court or the rules of procedure of the tribunal, or (b) the matter is purely formal or uncontroverted.

[40] Counsel submits that there is no prohibition in this rule against a lawyer’s partner or associate giving evidence in the proceeding in which the lawyer is acting. The likelihood of lawyers or staff from a law firm representing a party is not in itself disqualifying and would only be disqualifying if there is evidence of a conflict of interest. This is consistent with the finding of the court in Essa Township, supra, that there is no strict rule in Ontario that prevents the partner or associate of a party’s lawyer from being a witness in the proceeding.

[41] In response to the submission of plaintiffs’ counsel that “a trial judge must be able to rely upon counsel for a high degree of objectivity and detachment”, defendants’ counsel relies on Rule 5.1–1[3] of the LSO Rules of Professional Conduct:

[3] The lawyer’s function as advocate is openly and necessarily partisan.

So, a lawyer unquestionably has an obligation of candour to the court but can hardly be subject to criticism for assuming a partisan role in advocating their client’s position.

[42] In her affidavit, Ms. Moses goes through the various transactions and negotiations leading to this litigation during which various other law firms were retained for both sets of parties. Ms. Moses’s evidence is that she was not aware of the negotiations whereby Reuben was attempting to acquire Metro so she would have no evidence to give with respect to any such negotiations. The action is for damages for proprietary estoppel and constructive dismissal and neither of these causes of action impugn the conduct of anyone at Minden Gross. Rachel Moses would not have been involved in any relevant decisions.

[43] Defendants’ counsel filed the responding affidavit of Rachel Moses because the motion is based on the assertion that Rachel Moses would be a witness at trial. Counsel observes that there was no cross-examination on this affidavit. Further, Ms. Moses says that she does not intend to testify at trial and Reuben Moses has not said that he intends to call her as a witness. In addition, any evidence that anyone from Minden Gross might give is not material to the issues in the lawsuit.

[44] Defendants’ counsel acknowledges that Ms. Moses has sworn other affidavits in relation to the issues involving the plaintiffs, including an affidavit on the motion to discharge the CPL on the Martin Ross Avenue property. She also swore two affidavits in the Estate proceeding brought by Reuben Moses; there was no cross-examination on either of these affidavits.

[45] If the possible conflict were raised earlier, it would have been dealt with. Plaintiffs’ counsel has no written record of having raised the conflict at an earlier stage of the action. Further, Reuben Moses raised a conflict in the Estate action, which he subsequently abandoned.

[46] Defendants’ counsel relies on MacDonald Estate v. Martin, cited at paragraph 60 (iii) of Mazinani v. Bindoo, supra to argue that a party should not be deprived of his or her choice of counsel without good cause. To deprive the defendants of their choice of counsel on the basis that an opposing party might call someone from Minden Gross to testify on an issue lacking in materiality would be very unfair to them.

[47] Further, the proceedings have been very costly as reflected by the fact that the professional fees in the Castle Glass financial statements are in excess of $500,000.00. Counsel submits that this motion is tactical, similar to the Estate matter in which Reuben Moses alleged a conflict of interest and then abandoned the position.

Submission of counsel for Rosy Moses and Aby Moses’s Estate

[48] Mr. Das, counsel for Rosy Moses and the Aby Moses Estate refers to the statement of claim in which the allegations by Reuben Moses, that his father did not give him his promised share of the Metro business, and of constructive dismissal, are such that there is no nexus between those allegations and any involvement of Minden Gross. Further, Rosy Moses is now 78 years old and an order removing Minden Gross as the lawyers for the defendant corporations will impact her significantly. Mr. Das does not intend to call anyone from Minden Gross to give evidence.

Reply submissions of plaintiffs’ counsel

[49] With respect to the submission that the defendants are not going to call Minden Gross witnesses, the judge at the pre-trial conference will have to decide whether anyone from Minden Gross should be required to testify and if so, who has to call those witnesses. This may put Ms. Francis in the position of cross-examining her own partners, associates or employees. (I would comment that this argument is highly speculative given Ms. Moses’s evidence that she does not intend to testify and the absence of evidence from Reuben Moses that he intends to call her as a witness.)

[50] With respect to the defendants’ submission that the plaintiffs have delayed in bringing this motion, plaintiffs’ counsel submits that counsel must time their motion carefully because they need evidence as to the likelihood of a lawyer being a witness, but if they wait, then they must face the argument that they are too late.

[51] With respect to the service of the statement of claim, CPL motion record and CPL order coinciding with the anniversary of Aby Moses’s death, the order was served at that time because the Rules pertaining to CPL orders require that it be served forthwith.

Analysis and decision

[52] In determining whether Minden Gross LLP should be removed as the lawyers of record for the defendant corporations, I will consider the factors in Essa Township v. Guergis, supra, as follows:

(i) The stage of the proceedings: This motion is brought following the completion of a CPL motion, a motion to discharge the CPL, an unsuccessful motion for leave to appeal the discharge order, pleadings and amended pleadings, documentary discovery, oral discovery and mediation. Accordingly, the motion is brought sufficiently late in the litigation that significant prejudice would result to the defendant corporations if their counsel were removed, which militates against a removal order.

(ii) The likelihood that the witness will be called: It is acknowledged that the issue is whether it is likely that a lawyer will be called as a witness, not whether it is a certainty. The plaintiffs’ main concern is that Rachel Moses, a partner of Catherine Francis at Minden Gross, will be required to give evidence. The problem from the plaintiffs’ standpoint is that Rachel Moses has sworn in her responding affidavit that “I have no intention of testifying in the Civil Action, and Reuben has not indicated an intention to call me as a witness.” So, the current state of affairs is that Rachel Moses will not be a witness at trial which favours a dismissal of this removal motion.

(iii) The good faith (or otherwise) of the party making the application (i.e. the motion for removal): As indicated above, the motion was brought at a point where the only remaining steps before setting the action down for trial are motions to compel answers to questions refused at examinations for discovery, which may result in some further oral examination.

There has been unwarranted delay on the part of the plaintiffs in bringing this motion. Plaintiffs’ counsel submits that he elected not to bring the motion until after examinations for discovery when “the issues and material disputes were confirmed.” However, the plaintiffs provide no particulars of any such “issues and material disputes” confirmed at examinations for discovery that would have shed any additional light on whether Rachel Moses or any other Minden Gross lawyers or staff might be required to testify at trial.

Further, following the delivery by Ms. Francis of her notice of change of lawyers on behalf of Minden Gross on May 14, 2021, in an email sent to Mr. Das [counsel for Rosy Moses and the Estate] on June 9, 2021, plaintiffs’ counsel Mr. Sidlofsky objected to the defendants being separately represented in this litigation based on increased costs and delays. So, Mr. Sidlofsky clearly addressed his mind to the issue of the defendants’ representation shortly after Ms. Francis and Minden Gross were retained but made no objection to their retainer based on the possibility of Rachel Moses or any other Minden Gross personnel possibly being witnesses at trial. I cannot say what was in plaintiffs’ counsel’s mind when he initiated this motion 17 months later in December, 2022. However, there is at least an appearance of the motion being brought for strategic reasons, rather than to address a legitimate concern relating to the proper administration of justice, which raises a question as to the plaintiffs’ good faith. This factor favours a dismissal of the removal motion.

(iv) The significance of the evidence to be led: As indicated, based on the analysis under item (ii) above, there is no evidence to be led from Rachel Moses. However, I will consider what evidence might theoretically be led based on the pleadings. Reviewing the highlighted references to Rachel Moses in the statement of claim, most of them refer to her in passing, in relation to her husband Jake Benbihy being brought in to work at Metro Hardware, discussions that Reuben Moses and Rachel Moses would have an equal class of shares in Metro, Rachel Moses having to agree to any transfer of Metro Hardware to Reuben Moses, Rachel having benefited from the success of Metro along with Aby and Rosy, and Rosy Moses leaving Jake Benbihy in charge of Metro “at the urging of Rachel.” However, none of these allegations relate directly to the substance of Reuben Moses’s claim that his father Aby Moses failed to comply with his promise to transfer the Metro Hardware business to him along with 50 of the shares in 218 Ontario.

The only significant allegations in the statement of claim that relate to the causes of action are those in paragraphs 46 and 47 that Rosy Moses and Rachel Moses “put tremendous pressure on Aby” and “exercised undue influence” to stop him from transferring or bequeathing Metro Hardware and his 50% interest in the Martin Ross Avenue property to Reuben. However, it should be noted that Rachel Moses is not a defendant so there is no relief sought against her based on these allegations, and to reiterate, she has elected not to testify.

Plaintiffs’ counsel submits that the fact that Rachel Moses has sworn a 192 paragraph affidavit in response to the motion reflects the volume of evidence that she has to give in the matter. However, much of the affidavit, which is summarized in detail in these Reasons, is a detailed history of the litigation between the parties and consists largely of matters of record. Ms. Moses also gives evidence regarding the relationship between herself and her husband Jake Benbihy, and the plaintiffs, but she is apparently content to assume any risk of her decision not to give that evidence at trial.

The possible evidence of other members of the Minden Gross firm relates to the incorporation and corporate structure of the defendant corporations, which is peripheral to the central issue of the failure of Aby Moses to transfer the business of Metro Hardware and 50% of 218 Ontario to Reuben Moses. However, as indicated at item (xiii) below, if evidence from a member of Minden Gross were determined to be more contentious, that witness could be examined in chief by Mr. Das.

Based on Rachel Moses not being a witness at trial, this factor is at best neutral.

(v) The impact of removing counsel on the party’s right to be represented by counsel of choice:

As stated in Essa Township, supra, “Courts should also carefully consider the right of a client to be represented by counsel of choice.” Also as stated in Essa Township, and cited with approval in Mazinani v. Bindoo, supra (at para. 60 (x)), “Courts should be reluctant to make what may be premature orders preventing solicitors from continuing to act.”

What plaintiffs’ counsel seeks on this motion is exactly what the court in Essa Township was cautioning against: a premature order depriving a party of their choice of counsel. The Minden Gross firm should not be disqualified from acting in this case where Ms. Francis has been involved in this complex litigation through the Estate Application and appeal, delivery of the defendant corporations’ amended pleading, documentary discovery, oral discovery and mediation. It would impose an unwarranted burden on the defendant corporations to require them to retain other counsel who would be forced to absorb the entire file, resulting in a very significant duplication of effort and correspondingly great expense. This factor favours dismissal of the removal motion.

(vi) Whether the trial is by judge or jury: The fact that the trial would be by judge alone would weigh in favour of not disqualifying the Minden Gross firm because a judge would not be influenced or confused by a Minden Gross lawyer or paralegal being examined in chief by Mr. Das, counsel for Rosy Moses and The Estate of Abraham Moses, if that became necessary.

(vii) The likelihood of a real conflict arising or that the evidence will be tainted: First, as stated, the current state of affairs is that neither Rachel Moses or anyone else from Minden Gross will be giving evidence. However, if it becomes necessary for a Minden Gross lawyer or paralegal to testify, either the trial judge will allow Ms. Francis to call them, which is not prohibited under the LSO Rules of Professional Conduct, or the witness may be called by Mr. Das. In any event, the evidence of any Minden Gross witness will not be tainted by the identity of the lawyer who conducts their examination in chief.

(viii) Who will call the witness: As is clear from the LSO Rules of Professional Conduct, there is no prohibition on a partner or an associate of counsel with carriage of an action being a witness at trial so even if one were to accept that Rachel Moses or another member of Minden Gross would be giving evidence, that would not preclude Ms. Francis leading their evidence in chief. However, if the trial judge did identify a conflict of interest in Ms. Francis calling a member of her firm as a witness, it is agreed between counsel for the two sets of defendants that Mr. Das would do so. This would not require Minden Gross to be removed as counsel.

(ix) The connection or relationship between counsel, the prospective witness and the parties involved in the litigation: Rachel Moses and any other Minden Gross lawyers or paralegals who might testify would be colleagues of Ms. Francis. Either the trial judge would allow Ms. Moses to lead their evidence in chief or Mr. Das would do so. This would not require Minden Gross to be removed as counsel.

[53] None of the Essa Township factors leads to the conclusion that Minden Gross should be removed as the defendant corporations’ lawyers of record.

[54] Plaintiffs’ counsel also argued that Minden Gross should be removed as counsel for the defendant corporations owing to Ms. Francis’s improperly partisan questioning of the plaintiff Reuben Moses and her objections to questions put to Rosy Moses “who is not her client”. The propriety of Ms. Francis’s questions and objections will be the subject of a separate motion, at which the court will determine whether counsel’s conduct was improper. I also note that Rosy Moses was examined in her personal capacity and as the representative of the estate of Aby Moses, but also as the representative of Ms. Francis’s clients Metro Hardware of which she is the controlling shareholder and 218 Ontario of which she is the sole shareholder. It therefore appears that Ms. Francis was within her rights to object to questions put to Rosy Moses. This can be addressed at the refusals motion but it is not sufficient reason to remove counsel of record.

[55] For these reasons, I conclude that there is no reason to remove Minden Gross LLP as lawyers of record for Metro Hardware and 218 Ontario. The motion is therefore dismissed.

Costs

[56] The defendant corporations were successful on the motion and should recover their costs. The defendants’ costs outline sets out partial indemnity costs of $41,796.90; the plaintiffs calculated their partial indemnity costs to be $21,424.50.

[57] Defendants’ counsel submits that the plaintiffs’ total claims exceed $12 million, so the stakes in the litigation are very high for her clients. Plaintiffs’ counsel submits that the defendants’ costs are grossly excessive for the limited scope of the motion and are beyond the reasonable expectations of the parties. Both counsel were content to rely on their costs outlines and their submissions at the hearing.

[58] I accept that partial indemnity costs of $41,796.90 are significantly more than what any party might reasonably expect to pay for a half day motion. Using the plaintiffs’ own figure of $21,424.50 as a yardstick, I assess the responding defendants’ recoverable costs at $23,500.00, which is approximately 10% more than the plaintiffs’ figure and therefore still within their reasonable expectations. The plaintiffs shall pay these costs within 90 days to allow for the possibility of set-off in the event that the plaintiffs achieve some success on the refusals motions.

ASSOCIATE JUSTICE GRAHAM Date: July 13, 2023