Court File and Parties

COURT FILE NO.: FS-21-00021517-0000 DATE: 20240806 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LECKER, Rennie, Applicant AND: LECKER, Bram A., Respondent AND: MNP LLP (added party to motion)

BEFORE: Justice M. Sharma

COUNSEL: Barry Nussbaum / Julia Passeri, for the Applicant Nancy Iadeluca, for the Respondent Emily Stock, for the added party to motion

HEARD: August 6, 2024

Endorsement

1. This is the Applicant’s motion seeking the following orders: a. That Mr. Paul Mandel provide expert testimony at trial on the Respondent’s income valuation and business valuation on behalf of the Applicant in accordance with his report from RSM Canada Consulting LP, dated October 31, 2023, or in the alternative, that he be permitted to provide such testimony. b. Costs.
2. The Applicant had sought an order for pre- and post-judgment interest, but her counsel advised that this relief was included in error.
3. The Respondent seeks a dismissal of the Applicant’s motion, plus costs.

Relevant Facts

4. The Respondent operates three corporations related to his law practice: a. Leckerslaw Professional Corporation (“LPC”) which is a law firm where the Respondent is the principal. The Respondent owns all of LPC’s preferred shares and 60% of its common shares; b. Bram A. Lecker Professional Corporation (“BALPC”) which is a personal services corporation which the Respondent bills LPC for services he provides to LPC. BALPC pays salaries and wages to lawyers and other employees of LPC. The Respondent owns 100% of BALPC’s preferred shares and non of it its common shares; c. Leckerslaw Holdings (2016) Ltd. (“LH”) is a holding company which held real estate, namely the office out of which the Respondent’s law practice operates.
5. The Applicant retained Mr. Paul Mandel, a CBV in January 2022 to prepare an income and business report of the Respondent. He was employed with RSM Canada LLP (“RSM”).
6. Mr. Mandel completed his expert reports, dated October 31, 2023. Mr. Mathew Krofchick of Krofchick Valuations, the Respondent’s CBV expert, completed his reports in April 2022.
7. Pursuant to an Order made by Kraft J. made on September 13, 2023, both experts were ordered to prepare a document that explains the different valuations of the Respondent’s business, what numbers are agreed upon, and what numbers remain in dispute. In compliance, the experts prepared a joint email on December 18, 2023.
8. In or around June 2024, after completing his expert reports, Mr. Mandel left RSM and moved to a new company, MNP LLP (“MNP”) as a partner. As part of his transition, he discovered that the Respondent has been a client of MNP since 2014. In addition, the Respondent states that MNP has provided litigation support services to the Respondent in connection with this family proceeding.
9. Mr. Mandel was of the view that a conflict of interest arose. On July 2, 2024, he advised the parties of this conflict. On July 4, 2024, he later confirmed that he cannot give evidence in this proceeding with respect to any expert reports he has rendered to date, and MNP and Mr. Mandel cannot deliver any further or updated expert reports.
10. A trial was originally scheduled for June 2024, but on April 22, 2024, it was adjourned to January 2025.
11. On June 19, 2024, this purported conflict was raised at a TMC before Diamond J. who ordered MNP to set out its position on (a) whether Mr. Mandel can give evidence in relation to reports he has already prepared, and (b) whether he can prepare any further or updated expert reports. Diamond J. also ordered this motion to proceed.
12. On July 4, Ms. Sarah Hill, counsel for MNP, advised MNP’s view is that there is a conflict which prevents Mr. Mandel from testifying, even if the Respondent consented. She later referred to para 16 of the Guidance to Rule 201 of the CPA Ontario Code of Professional Conduct.
13. Similarly on July 4, 2024, Mr. Mandel advised the parties that, after having spoken with MNP’s legal and independence team, he is in a conflict position and “he is precluded from acting in this matter.” He further explains that he is “unable to testify due to our professional obligations and the unresolvable conflict issues.”
14. On this motion, the Applicant is not seeking to have Mr. Mandel or MNP provide any further or updated expert reports.

Parties’ Positions

15. The Applicant’s evidence is that she spent over $175,000 on this expert report, and after consulting with RSM, was advised RSM cannot provide a new expert on the file without preparing a new report. The Applicant states that she cannot afford this cost. She says that Mr. Mandel is an expert witness, and unlike an advocate where conflict of interest rules might preclude his continued involvement in this case, there is no ownership in witnesses, including expert witnesses. Mr. Mandel would merely be giving evidence on reports he already prepared before any conflict arose. Furthermore, upon joining MNP, Mr. Mandel has not been privy to any information with respect to the Respondent’s files at MNP, other than what was disclosed to him while he was working a RSM when preparing expert reports for the Applicant.
16. The Respondent argues that there is a conflict which goes directly to the issue of Mr. Mandel’s independence. He argues that Mr. Mandel must have been aware that MNP provided services to the Respondent because Mr. Mandel obtained various records and documents prepared by MNP in the course of preparing his expert reports for the Applicant. He suggests Mr. Mandel may have fallen short on his duty of care to the Applicant if he failed to provide meaningful notice of his anticipated move to MNP. Finally, he argues Mr. Mandel’s ability and/or perception to be impartial and independent is a serious issue for all parties and may impact the admissibility of his evidence.
17. Neither MNP nor Mr. Mandel filed a factum or any evidence. MNP’s position was provided orally by its counsel, Ms. Stock, and in some correspondence in evidence. In summary, because MNP concluded it would be breach of Mr. Mandel and MNP’s professional obligations for Mr. Mandel to testify, and that this conflict could not be managed or waived by MNP, MNP would benefit from a court order clarifying whether Mr. Mandel must testify.

Analysis

18. For the reasons that follow, and after considering the parties’ factums and cases cited therein, I make the following orders: a. Mr. Paul Mandel shall provide expert testimony at trial on the Respondent’s income valuation and business valuation on behalf of the Applicant in accordance with his report from RSM Canada Consulting LP, dated October 31, 2023, notwithstanding that such testimony may conflict with MNP’s or Mr. Mandel’s professional obligations under the CPA Ontario Code of Professional Conduct and the Guidance issued by the CPA. b. The scope of Mr. Mandel’s expert testimony shall be limited to the opinions expressed by Mr. Mandel in his expert reports, dated October 31, 2023, and any information he relied upon in forming his opinion.
19. Expert witnesses are firmly part of Ontario’s justice system and have been so for several decades. Expert witnesses provide invaluable assistance for parties and the Court. Based on their unique expertise, they can assist in uncovering and analyzing relevant facts related to matters in dispute. They can advise parties on appropriate factual inquiries to make of the opposing party which can inform the expert’s opinion. Those opinions can assist parties in reaching settlement. An expert’s evidence can provide tremendous help to the trier of fact in understanding the facts and in making factual findings.
20. It can be fairly stated that with the proliferation of expert evidence, an industry of experts in various fields now exists. For example, in family law, the use of chartered business valuators, is now commonplace. They are very helpful in resolving family disputes, particularly ones involving litigants with business income or corporate assets.
21. With this proliferation of experts, there was a common complaint that too many experts were “no more than ‘hired guns’ who tailor their reports and evidence to suit the client’s needs.” [^1] In fact, this was a principal objective behind amendments to the Rules of Civil Procedure and the Family Law Rules, that introduced new duties on experts, and required expert witnesses to attest to those duties, namely to provide opinion evidence that is fair, objective and non-partisan: see r. 20.1(2) and (3), Family Law Rules.
22. The duty to provide objective and non-partisan opinions is one trait that distinguishes experts from lawyers, who advocate for one party’s interests and who are clearly partisan. The solicitor/client relationship, which is fiercely protected, is also manifestly different than the relationship between a party and a retained expert. As such, the ruling in MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235, relied upon by the Respondent, is not dispositive.
23. In MacDonald Estate, a junior lawyer worked at a law firm for the appellant. He switched to a new law firm that acted for the respondent. The Supreme Court held that the respondent’s law firm was disqualified from acting for the respondent. It set a test to determine when a law firm is disqualified to act by reason of conflict of interest.
24. In McDonald Estate, the Court was concerned with three competing values that are unique to the practice of law, and not applicable or of negligible relevance to whether an expert witness should be disqualified to be a witness: the concern to maintain high standards of the legal profession and the integrity of our justice system; that a litigant should not be deprived of their choice of counsel without good cause, and; desirability of permitting reasonable mobility in the legal profession.
25. I accept that expert witnesses are sometimes engaged in litigation planning and can provide strategic advice to parties. In such a case, does the analysis of whether a conflict of interest exists for an expert witness elevate to that used for a lawyer?
26. The respondent relies on a BC case which suggests that the McDonald Estate reasoning may equally apply where an expert witness participates in litigation planning and strategy: Spectratek Industries Inc. et al v. Dyke & Howard et al, 2006 BCSC 1053, at para 17, citing L.R. v. British Columbia, [2002] B.C.J. No. 565, 2002 BCSC 405 at para 25.
27. However, Spectratek is distinguishable. At para. 36, there was evidence of information being disclosed to one side’s proposed expert from the accounting firm that had a prior engagement with the other party.
28. In this case, there is no evidence of Mr. Mandel having received information from MNP’s files with respect to the Respondent. In fact, in evidence is a letter from Ms. Stock, counsel for MNP, dated July 24, 2024 which states, “It is noted that MNP identified this potential conflict early, and ethical screens were immediately put in place.” As such, I am not persuaded that Mr. Mandel has or will obtain information from MNP relating to their assistance to the Respondent prior to Mr. Mandel giving testimony.
29. L.R. (and Rumley v. British Columbia, 2002 BCSC 405, [2002] B.C.J. No. 565 (S.C.)) stand for the proposition that the role of an expert who does not participate in litigation planning or strategy does not lend itself to the type of analysis applied in McDonald Estate.
30. In this case, there is no evidence of Mr. Mandel providing litigation planning or strategy advice to the applicant, such that the analysis of his conflict should be akin to that of a lawyer. It is alleged that a representative of RSM attended the questioning of the respondent. However, even if this occurred, it does not persuade me there is a conflict. An expert’s attendance at questioning is not exceptional. Experts often attend questioning of an opposing party to uncover facts which will inform their opinions. In addition, parties, without expert assistance, may not know what questions to put to opposing parties. None of this detracts from an expert’s duty to provide fair, independent and non-partisan opinion evidence to the court. Attendance at questioning merely informs the scope of facts on which an expert’s opinion is based.
31. I asked the parties at the outset of the motion to define succinctly what was the concerning conflict. For MNP, they were concerned that Mr. Mandel’s testimony, by virtue of his new role at MNP, would offend his and MNP’s professional responsibilities. For the respondent, he was concerned that because Mr. Mandel was now a partner at MNP, who the respondent had previously engaged in this litigation (although not as an expert witness), Mr. Mandel could not be an independent witness for the applicant.
32. I am not satisfied there is a conflict concern.
33. There is no evidence of MNP having disclosed to Mr. Mandel any privileged information about the Respondent, such that the Respondent is prejudiced because of the acquisition of such information.
34. I accept there is historical information from MNP that Mr. Mandel received in forming his opinion, but this was disclosed to him when he was at RSM when he formed his opinion. I expect it was disclosed consistent with the Respondent’s duty of financial disclosure.
35. To the extent there is a risk of Mr. Mandel acquiring information after joining MNP which may inform his testimony, the ethical screens preclude or at least minimize that risk. Further, Mr. Mandel’s scope of review documents which informed his October 2023 reports will be fully set out in his reports. Should he purport to rely on subsequent information that he obtained from MNP after switching firms, which information may be privileged, he will be subject to cross-examination, and the trial judge can make necessary evidentiary rulings as required (e.g. not admitting any privileged information received and relied upon by Mr. Mandel).
36. MNP is not retained as the Respondent’s expert. This is not a case of the same business valuation firm providing expert evidence to opposing parties. Even if it were, authority cited by the Applicant suggests that this would not necessarily be problematic: Irving Paper Limited v. Atofina Chemicals Inc., 2008 ONSC 15903 at paras. 40 – 41, citing Harmony Shipping Co. S.A. v. Saudi Europe Line, [179] 3 All E.R. 177 (CA).
37. It is the function of an expert witness is to give evidence of facts as known to them and their opinion on those facts. Their role is as a witness. There is no property in a witness, and “there is no property in an expert witness as to the facts he has observed and his own independent opinion on them”, subject to the expert not being compelled to answer any questions which may infringe the rule of litigation privilege: Bortnikov v. Rakitova, 2015 ONSC 1163 at paras. 22 to 23, citing Harmony Shipping Co. S.A.
38. Mr. Mandel is already a witness. He has already prepared expert reports with a Form 20.1 attestation regarding his duties as an expert. He has met with the opposing expert to summarize areas where they agree and disagree and why. I see no reason why he cannot give evidence on the report he has already prepared and on why and how his opinion differs from that of the respondent’s expert, based on the information available to him when he worked for RSM and prior to his move to MNP.
39. It would appear his evidence meets threshold admissibility. While I make no findings that bind the trial judge, Mr. Mandel’s evidence is relevant, is likely necessary in assisting the trial judge understand the respondent’s business and income valuations, and there is evidence Mr. Mandel was willing and able to fulfil his duty to the court because he has already completed a Form 20.1. In it, he acknowledged his duty to provide fair, objective and non-partisan opinion evidence, and that this duty “prevails over any obligation which [he] may owe to any party by whom or on whose behalf [he is] engaged.” As such, it appears that he has met the first stage, threshold test for the admission of expert evidence: R. v. Mohan, 1994 SCC 80; White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23 at para 23. The trial judge, however, may disagree, or may find in the second stage of the expert witness analysis to reject Mr. Mandel’s evidence or give it little weight.
40. Is Mr. Mandel no longer willing and able to provide fair, objective and non-partisan opinion evidence for the applicant because he now works for MNP which previously assisted the Respondent?
41. Mr. Mandel, in a July 4, 2024 email indicated he is not able testify because of the advice he has received with respect to his professional responsibilities. Nowhere does he state he is no longer willing or able to fulfill his duties to the court to provide fair, objective and non-partisan evidence. While Mr. Mandel’s testimony may (a) pose challenges with his professional regulator; (b) place MNP in an uncomfortable position with respect to its professional relationship with the respondent; and (c) require ethical screens being maintained at MNP, the fact that Mr. Mandel is now working with MNP does not lead to the conclusion he is unable or unwilling to honour his previously attested duties to the court.
42. To conclude Mr. Mandel can no longer give evidence would suggest there is property in an expert witness, and that the “hired gun” approach to expert witnesses remains live Ontario. Both propositions have been rejected either in jurisprudence and in the Family Law Rules.
43. I have considered the Guidance to rule 201 Conflicts of Interest of the CPA Ontario Code of Professional Conduct. The relevant aspects states that the expectation is that a member or firm will respect the obligation to such parties to not act against them. However, it states this expectation may be modified in certain circumstances if it is clear the information received from the affected party is not relevant to the matter in dispute. Here, MNP has already disclosed information to Mr. Mandel, relevant to the matter in dispute, about the respondent when Mr. Mandel was at RSM. Mr. Mandel will be testifying only to that information which he previously received from MNP while he was at RSM and in preparation of his expert report. While I make no order that binds the professional regulator, it seems a conflict arises only with a mechanical application of the CPA’s Code and Guidelines and without a nuanced application to the facts before this Court. The interests of justice strongly favour Mr. Mandel testifying with respect to his previously prepared report.
44. The primary objective under the Family Law Rules supports Mr. Mandel giving evidence at trial on his report. To rule otherwise would necessitate the applicant incurring significant additional expense prior to trial, and it would likely delay the trial. The interests of fairness include consideration of cost and delay. The scale weighs in favour of Mr. Mandel testifying and additional costs and delay being avoided.
45. I place no weight on allegations or previous judicial findings with respect to Mr. Mandel’s credibility. This is an issue for the trial judge.
46. Finally, MNP’s counsel sought directions and clarifications be given in any Order I make today. Namely, that Mr. Mandel not be compelled to undertake further work (although the applicant is not seeking an updated report from Mr. Mandel), that sets out the scope of Mr. Mandel’s retainer when he testifies, and that arrangements be in place for Mr. Mandel to access his file from RSM without it being given to MNP. I make no orders around these issues since no motion was before me or are not an issue on this motion. I expect parties to sensibly work out these details.
47. I have made orders, however, that Mr. Mandel testify notwithstanding that it may conflict with his professional obligations, and that he shall only testify to information obtained and relied upon in his October 31, 2023 report, along with any opinions in that report. These issues were squarely before me today.

Costs

48. The Applicant submitted a Bill of Costs identifying roughly $6,400 in full indemnity costs. The Applicant was successful and is presumptively entitled to costs. The Applicant was the innocent bystander. She should be entitled to costs.
49. MNP took almost a neutral position on this motion. They did not file material or drive-up costs. Nonetheless, it would appear that some costs of this motion should be borne by MNP in the circumstances. I am satisfied that what instigated this motion was Mr. Mandel’s view that he was unable to testify because of his professional responsibilities, which view was based on advice from MNP’s legal and independence advisors. It was MNP’s position, as set out in the letter of Ms. Stock, dated July 24, 2024, that a court order would be necessary regardless of whether the Respondent consented to the relief sought. There is benefit to MNP and Mr. Mandel in getting a court order, as it may insulate MNP and Mr. Mandel from regulatory issues.
50. In a sense, it mattered not what position the Respondent took because MNP clearly required a court order. As such, there may have been merit in the Respondent not taking a position on this motion. However, on July 9, 2024, Respondent’s counsel wrote to Applicant’s counsel advising that he would not consent to the Applicant’s relief. In his material, the Respondent clearly opposed the Applicant’s motion.
51. Having considered these factors and those under rule 24 of the Family Law Rules, I grant the Applicant costs of this motion fixed in the amount of $4,500, with $2,000 payable by MNP and $2,500 payable by the Respondent, both payable within 30 days.

Justice M. Sharma Date: August 6, 2024

Footnotes

[^1]: The Hon. Coulter A. Osborne, Report of the Civil Justice Reform Project: Findings and Recommendations (November 2007)