Court File and Parties

COURT FILE NO.: CV-16-205

DATE: 20231107

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: JARROD SETH VAN EVERY by his Litigation Guardian, ANDREW STASNY Plaintiff

AND:

D. ROBERT FINDLAY and FINDLAY PERSONAL INJURY LAWYERS, Defendants

BEFORE: The Honourable Justice Robert B. Reid

COUNSEL: A. Zaltz, Counsel, for the Plaintiff

A. Rachlin, Counsel, for the Defendants

HEARD: July 21, 2021

supplementary decision on motions

[1] The parties sought orders in three separate but related motions:

a. The plaintiff asked that a portion of the statement of defence alleging improvident settlement be struck.

b. The defendants asked that the court order production of an unredacted affidavit filed by the plaintiff.

c. The defendants asked for an order that counsel for the plaintiff be removed from the record.

[2] By decision dated September 27, 2021 (2021 ONSC 6381), I determined that the improvident settlement defence should not be struck and required that the plaintiff provide to the defendants an unredacted copy of the affidavit of Jeffrey Preszler sworn April 6, 2016.

[3] As agreed at the hearing, counsel were provided an opportunity to file supplementary submissions on the requested removal of counsel once the decision on disclosure of the affidavit was known, since the material over which privilege had been claimed might be relevant to that issue.

[4] Submissions were filed in a timely way following resolution of the application for leave to appeal the initial decision to the Divisional Court.

Background:

[5] The detailed background facts were set out in my September 27, 2021 decision.

[6] As to the remaining issue, the key facts are as follows:

a. The defendants were retained in June 2004 to represent the plaintiff in his claim under Statutory Accident Benefits Schedule (“SABS”).

b. The plaintiff received SABS payments totaling $12,981 for care, medical, and rehabilitation benefits between 2004 and 2006.

c. In 2014, the plaintiff changed counsel and retained the Preszler Law Firm LLP (the “PLF”) to act on his behalf.

d. Jeffrey Preszler, as counsel for the plaintiff, swore an affidavit on April 6, 2016, in support of a motion for judicial approval of the settlement of the plaintiff’s SABS claim.

e. The affidavit included Mr. Preszler’s opinion as to why the proposed settlement was reasonable.

f. The judicial approval of the settlement was granted and is not in dispute.

g. This action for professional negligence against the defendants as former counsel for the plaintiff alleges, in part, that but for their action or inaction, the plaintiff would have been entitled to have received additional funds not previously paid or included in the settlement. The plaintiff claims general and special damages, interest and costs on the basis that the defendants failed to properly and professionally represent his best interest and did not take steps to secure appropriate funding for treatment and attendant care, based on the plaintiff’s psychological and physical impairments.

h. A defence raised by the defendants in addition to the denial of professional negligence is that the settlement was improvident, thus calling into question Mr. Preszler’s opinion recommending the settlement to the court. The defendants assert that at the time the plaintiff changed lawyers, he was fully entitled to claim SABS arising from the accident, less what he had received to that date, plus his tort losses.

i. According to the supplementary submissions of the plaintiff, the statement of claim was amended on October 12, 2021 (after the motion hearing date) to limit his claim for damages in this action to lost entitlement for past attendant care and past medical and rehabilitation benefits. As a result, no claim is maintained for lost future benefits.

The Issue to be decided:

[7] The sole issue remaining for decision (other than costs of the motions) is whether the PLF, including Jeffrey Preszler and David E. Preszler should be removed as counsel of record for the plaintiff.

Analysis:

[8] Jeffrey Preszler is the deponent of the April 6, 2016 affidavit. David E. Preszler had no involvement with the SABS claim. He deposes that he became counsel of record after filing a Notice of Change of Lawyer dated March 13, 2018. Both lawyers are members of the PLF.

[9] As set out by the Ontario Court of Appeal in Best v. Cox, 2013 ONCA 695 at para. 8, a court will only in the rarest of cases grant a removal motion. This is consistent with the earlier statement by Cronk J.A. in Kaiser (Re), 2011 ONCA 713 at 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 public would conclude that counsel’s removal is necessary for the proper administration of justice … [Citations omitted.]

[10] In this case, there are two bases on which removal is sought: conflict of interest and the potential for counsel to be a witness at trial.

Conflict of Interest:

[11] The defendants submit that if it is determined that there was an improvident settlement reached during the PLF’s retainer, then rather than the defendant being professionally negligent, negligence could be ascribed to the PLF. As such, continued representation of the plaintiff by his current law firm could put counsel into a conflict of interest: responding to the defence would mean defending its own conduct The potential for liability on the law firm could potentially impact the representation provided by counsel to the plaintiff.

[12] The Supreme Court of Canada in R. v. Neil, 2002 SCC 70, [2002] 3 SCR 631 at paras. 17 and 19 has directed that a lawyer's duty of loyalty to current clients includes avoidance of conflicts of interest, a duty of commitment to the client’s cause, and a duty of candour. Those principles entail ensuring that divided loyalty does not impair a lawyer's relationship with a client. The question is whether there is a substantial risk that the lawyer's representation of the client would be materially and adversely affected by the lawyer's own interests.

[13] The Rules of Professional Conduct of the Law Society of Ontario provide as follows:

1.1-1 “conflict of interest” means the existence of a substantial risk that a lawyer’s loyalty to or representation of a client would be materially and adversely affected by the lawyer’s own interest or the lawyer’s duties to another client, a former client, or a third person. The risk must be more than a mere possibility; there must be a genuine, serious risk to the duty of loyalty or to client representation arising from the retainer;

3.4-1 A lawyer shall not act or continue to act for a client where there is a conflict of interest, except as permitted under the rules in this Section.

3.4-2 A lawyer shall not represent a client in a matter when there is a conflict of interest unless there is consent, which must be fully informed and voluntary after disclosure, from all affected clients and the lawyer reasonably believes that he or she is able to represent each client without having a material adverse effect upon the representation of or loyalty to the other client.

[14] While the Rules of Professional Conduct are not binding on the court, the Supreme Court of Canada in MacDonald Estate v. Martin, 1990 CanLII 32 (SCC), [1990] 3 SCR 1235 characterized the professional standard set by lawyers in a code of conduct to be a persuasive statement of public policy.

[15] In the affidavit of David E. Preszler sworn July 5, 2021 at para. 3, he deposes that he has fulfilled his duty to disclose the allegations of conflict of interest and the defendants’ improvident settlement defence to the plaintiff’s litigation guardian, and has referred him for independent legal advice in that regard.

[16] The court has supervisory jurisdiction to order the removal of a lawyer stemming from the fact that lawyers are officers of the court and their conduct in legal proceedings may affect the administration of justice.

[17] David E. Preszler has complied with his professional obligations as noted above. By implication, there is agreement of the plaintiff through his litigation guardian to continue with representation by the PLF. In those circumstances, I find it unnecessary to order the removal of the law firm as counsel at this point in the proceedings. If and when the situation changes to make the conflict more acutely a genuine, serious risk to counsel’s duty of loyalty in which representation of the plaintiff would be materially and adversely affected by the law firm’s own interest, the defendants may renew their motion.

Counsel as Potential Witness:

[18] To defend the improvident settlement allegation, it is submitted by the defendants that Jeffrey Preszler, as deponent of the affidavit in which he opined that the settlement was reasonable, would be a necessary witness for them at trial. The plaintiff asserts that the relevant evidence could be secured from some other source, such as an expert, but that is not a decision for the plaintiff to make. The defendants should be able to put forward their defence as they deem fit, and with such witnesses as are required.

[19] Since Jeffrey Preszler is no longer counsel of record, there is no need to remove him from that role. David E. Preszler, as current counsel of record, had no involvement in resolution of the SABS claim. As such, the mischief of a lawyer acting in the dual role of witness and current counsel is not present in these circumstances.

[20] That leaves the question of whether the PLF should be removed from the file, given the potential for Jeffrey Preszler to be called as a witness.

[21] As the Divisional Court in Essa (Township) v. Guergis, 1993 CanLII 8756 (ON SCDC) observed:

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. …. 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.

[22] In this case, discoveries have not yet been conducted. It may be that concessions or admissions will be made by the plaintiff, or that for other reasons the defendants will deem it unnecessary to call Jeffrey Preszler as a witness. The issue of counsel as witness would become moot.

[23] Balancing the desirable policy of permitting a litigant to retain counsel of choice against the avoidance of an adverse effect on the administration of justice by having a party’s own lawyer testify “against” him or her is an exercise that can occur at various stages of a lawsuit. As the Divisional Court said in Berge v. College of Audiologists and Speech Language Pathologists of Ontario, 2019 ONSC 3351, at para. 16, the essential question is whether continuing with counsel of choice impedes the fairness of the proceeding or the ability of counsel to discharge his or her role as an officer of the court.

[24] In this case, while that balance may tip toward removal of the law firm at some point, it is premature to make that decision now. This is not the “clearest of cases” contemplated by courts when choosing to remove counsel.

[25] For the foregoing reasons, the motion to remove the PLF, including Jeffrey Preszler and David E. Preszler as counsel of record for the plaintiff is dismissed, without prejudice to the right of the defendants to renew their motion, if necessary, at a later stage of the proceedings.

Costs:

[26] The parties are encouraged to resolve the issue of costs amongst themselves. If they are unable to do so, they may submit Bills of Costs and make written submissions, consisting of not more than three pages in length according to the following timetable:

a. The defendants are to serve their Bill of Costs and submissions by November 21, 2023;

b. The plaintiff is to serve his Bill of Costs and submissions by December 5, 2023;

c. The defendants are to serve their reply submissions, if any, by December 12, 2023.

[27] All submissions are to be filed with the court with a copy to St.Catharines.SCJJA@ontario.ca and uploaded to CaseLines by December 15, 2023.

[28] If no submissions are received by the court by December 15, 2023, or any agreed extension, the matter of costs will be deemed to have been settled.

Reid J.

Date: November 7, 2023