Date: 20070309
Docket:
T-956-06
Citation: 2007
FC 276
Ottawa, Ontario, the 9th day
of March 2007
Present:
The Honourable Mr. Justice Blais
BETWEEN:
GENEX COMMUNICATIONS INC.
Applicant
and
JEAN-FRANÇOIS FILLION
Respondent
REASONS FOR JUDGMENT AND
JUDGMENT
[1]
This is an
application for judicial review of an interlocutory decision rendered and
forwarded to the applicant on June 5, 2006, by an adjudicator appointed under
section 242 of the Canada Labour Code, R.S.C. 1985, c. L-2 (the
Code), allowing an objection to disqualify made by the respondent concerning
René Dion, a lawyer representing the employer, Genex Communications Inc. (the
applicant).
RELEVANT FACTS
[2]
On May 5,
2005, Jean-François Fillion (the respondent) filed an unjust dismissal
complaint under sections 240 et seq. of the Code. Pursuant to section
242 of the Code, lawyer Jean Gauvin (the adjudicator) was appointed as
adjudicator to hear the respondent’s complaint.
[3]
René Dion
is vice-president of the applicant’s legal affairs department and has also
acted as counsel ad litem for the applicant and respondent in a series
of civil suits, including a suit instituted by Sophie Chiasson. For the
purposes of the unjust dismissal complaint, he had been appointed as a
representative of the employer to attend the hearing of the complaint before
the adjudicator. In this file, the firm of Desjardins Ducharme LLP was retained
to act as the applicant’s legal representative.
[4]
On May 15,
2006, at the pre-hearing conference before the adjudicator, counsel for the
respondent announced that he intended to officially object to the presence of
Mr. Dion as representative of the applicant and as an assistant to counsel
ad litem. This objection was subsequently reiterated by counsel for the
respondent in a letter dated May 17, 2006. It was worded as follows:
[translation]
Accordingly, we ask the tribunal to rule
that Mr. Dion is disqualified from acting as representative of the employer at
the hearing and must not give any assistance to counsel ad litem in this
case, namely, to André Johnson or any other member of his firm, and that
Mr. Dion must not prejudice Mr. Fillion’s rights by, among other
things, disclosing information contrary to the solicitor–client privilege
between Jean-François Fillion and René Dion.
[5]
In a
letter dated May 26, 2006, Mr. Dion contacted counsel for the respondent to
reassure him that there was no conflict of interest or other impediment that
would warrant his being disqualified from the adjudication process. In another
letter dated May 26, 2006, this one addressed to the adjudicator, counsel
for the applicant responded to the arguments made by counsel for the respondent
concerning Mr. Dion’s disqualification from representing the employer
during the adjudication process.
[6]
At the
hearing before the adjudicator on June 5, 2006, the parties reiterated their
submissions on Mr. Dion’s disqualification. Following pleadings by counsel, the
adjudicator rendered his decision orally, allowing the objection to Mr. Dion’s
appearing as the employer’s representative and acting as resource person for
the applicant’s counsel ad litem.
[7]
At the
June 6, 2006 hearing before the adjudicator, the applicant advised the
adjudicator and the respondent that it intended to file an application for the
judicial review of the adjudicator's decision on the disqualification of Mr.
Dion, dated June 5, 2006.
[8]
On June
20, 2006, the Court stayed the execution of the adjudicator’s decision and
suspended the continuation of the hearing before the adjudicator until the
Court disposed of the application for judicial review.
ISSUES
[9]
The Court
must determine the following issues in this application for judicial review:
(1) Did the
adjudicator exceed his jurisdiction in declaring that Mr. Dion was disqualified
from representing the employer and from acting as resource person for counsel ad
litem during the adjudication?
(2) Did the
adjudicator err in applying a principle of law or in assessing the evidence?
STANDARD OF REVIEW
[10]
It is
necessary to apply a pragmatic and functional analysis to determine the
standard of review applicable to the review of a decision of an adjudicator
appointed under the Code. The four criteria to be considered are the following:
(1) the nature of the appeal
or review mechanism;
(2) the relative expertise of
the tribunal;
(3) the purpose of the
legislation; and
(4) the nature of the
question.
[11]
The first
factor, namely, the nature of the appeal or review mechanism, suggests that the
Court must show a certain degree of deference for an adjudicator’s decision in
the absence of a right of appeal and in the presence of a privative clause
under section 243 of the Code, which states:
|
243. (1) Every order of an adjudicator appointed
under subsection 242(1) is final and shall not be questioned or reviewed in
any court.
|
243. (1) Les ordonnances de l’arbitre désigné en
vertu du paragraphe 242(1) sont définitives et non susceptibles de recours
judiciaires.
|
|
(2) No order shall be made, process entered or proceeding taken in
any court, whether by way of injunction, certiorari, prohibition, quo
warranto or otherwise, to question, review, prohibit or restrain an
adjudicator in any proceedings of the adjudicator under section 242.
|
(2) Il n’est admis aucun recours ou décision
judiciaire — notamment par voie d’injonction, de certiorari, de
prohibition ou de quo warranto — visant à contester, réviser, empêcher
ou limiter l’action d’un arbitre exercée dans le cadre de l’article 242.
|
[12]
The
Federal Court of Appeal ruled on the area of expertise of an adjudicator
appointed under the Code in Canada Post Corporation v. Pollard, [1994] 1
F.C. 652, [1993] F.C.J. No. 1038 (QL). Décary J.A. wrote the following at
paragraph 25:
25 Furthermore, the area of expertise of
the adjudicator is a rather limited one. He is “any person that the Minister
considers appropriate as an adjudicator” (subsection 242(1)), he is appointed
on an ad hoc basis and he is to consider complaints made by a limited class of
employees (subsections 240(1) and 242(3.1)) with respect to one single issue,
namely, unjust dismissal (paragraph 242(3)(a)). His expertise is far less
extensive than that of the members of the Canada Labour Relations Board and
that of an arbitrator appointed pursuant to Part I of the Code. The Supreme
Court, in Bradco, at page 337, and in Mossop, at page 585,
was not very much impressed, albeit at a different stage of the review process,
with the status of ad hoc bodies which have as restricted powers and expertise
as the adjudicator has under the Code. To paraphrase the words of counsel
approved by Beetz J. in Bibeault, at pages 1094-1095, it can be
seen at the outset that the legislator did not see fit to give the adjudicator
a general, exclusive jurisdiction over implementation of and compliance with
all the provisions of the Code. He chose instead the approach of conferring a
general power to the Canada Labour Relations Board and several specific powers
over specific and defined matters to other decision-makers and even then he did
not give the same powers to all.
[13]
However,
within this area of expertise, that is, “to receive and assess evidence, but
also to apply his/her expertise in the solution of the labour relations dispute
to be adjudicated upon”, the Federal Court of Appeal recognized the
adjudicator’s expertise (Atomic
Energy of Canada Ltd. v. Sheikholeslami (C.A.), [1998] 3
F.C. 349, [1998] F.C.J. No. 250 (QL)).
[14]
With
regard to the purpose of the legislation, the Code may be described as being
polycentric because of the multiple objectives stated in its preamble. However,
the purpose of Part III is much more limited and therefore does not
require a high degree of deference. As stated by the Federal Court of Appeal in
Dynamex Canada Inc. v. Mamona,
[2003] F.C.J. No. 907 (QL), 2003 FCA 248, at paragraph 35:
In summary, the object of Part III of the Canada Labour Code is
to protect individual workers and create certainty in the labour market by
providing minimum labour standards and mechanisms for the efficient resolution
of disputes arising from its provisions.
[15]
Finally,
the degree of judicial deference will be strongly influenced by the nature of
the question. First of all, a question concerning the jurisdiction of an
adjudicator will be assessed according to the standard of correctness. As was
stated by the Federal Court of Appeal in Beothuk Data Systems Ltd., Division Seawatch v. Dean (C.A.),
[1998] 1 F.C. 433, [1997] F.C.J. No.1117, at paragraph 27:
. . . The law is now settled that,
notwithstanding the curial deference owed to tribunals protected by a privative
clause, an interpretation by a tribunal of a statutory provision which confers
jurisdiction upon it, or which limits the scope of its jurisdiction, is to be
reviewed on a correctness standard.
[16]
However,
once it has been determined that an adjudicator acted within his or her
jurisdiction, a decision rendered under section 242 will generally be subject
to review on the standard of patent unreasonableness (Mihalicz v. Royal Bank of Canada, [1998]
F.C. J. No. 1857 (QL), (1998) 160 F.T.R.1, McKeown v. Royal Bank of Canada (F.C.T.D.), [2001]
3 F.C. 139, [2001] F.C.J. No. 231 (QL)).
[17]
This being
said, in Dynamex Canada, supra, the Federal Court of Appeal also
ruled on the nature of the question by distinguishing a “question of law of a kind that is normally considered by the courts” which does not require “the
special expertise of a referee”. Such an question is
subject to the standard of correctness, while a question of mixed general law
and fact will be subject to the standard of reasonableness simpliciter.
ANALYSIS
(1)
Did the adjudicator exceed his jurisdiction in declaring that Mr. Dion was
disqualified from representing the employer and from acting as resource person
for counsel ad litem during the adjudication?
[18]
In his
decision, the adjudicator stated that he had jurisdiction to deal with the
matter of the disqualification of Mr. Dion pursuant to his powers concerning
procedure, the holding of a hearing and the presentation of evidence, which are
provided for under section 242 of the Code.
[19]
The
applicant contested this interpretation, arguing that the adjudicator, who was
appointed under the Code, derives all his powers from this statute and
therefore does not have any inherent or residual jurisdiction. Contrary to the
adjudicator, the applicant submits that nothing in the relevant sections of the
Code supports the conclusion that the adjudicator had jurisdiction to determine
that Mr. Dion was disqualified from acting as representative of the
applicant.
[20]
The respondent
agrees with the adjudicator’s interpretation and submits that he had
jurisdiction to rule on the objection pursuant to the powers granted to him
under section 242 of the Code.
[21]
First of
all, it is necessary to examine the scope of the jurisdiction of an adjudicator
under section 242, which reads as follows:
|
242. (1) The Minister may, on receipt of a report
pursuant to subsection 241(3), appoint any person that the Minister considers
appropriate as an adjudicator to hear and adjudicate on the complaint in
respect of which the report was made, and refer the complaint to the
adjudicator along with any statement provided pursuant to subsection 241(1).
|
242. (1) Sur réception du rapport visé au
paragraphe 241(3), le ministre peut désigner en qualité d’arbitre la personne
qu’il juge qualifiée pour entendre et trancher l’affaire et lui transmettre
la plainte ainsi que l’éventuelle déclaration de l’employeur sur les motifs
du congédiement.
|
|
(2) An adjudicator to whom a complaint has
been referred under subsection (1)
|
(2) Pour l’examen du cas dont il est saisi,
l’arbitre :
|
|
(a)
shall consider the complaint within such time as the Governor in Council may
by regulation prescribe;
|
a)
dispose du délai fixé par règlement du gouverneur en conseil;
|
|
(b)
shall determine the procedure to be followed, but shall give full opportunity
to the parties to the complaint to present evidence and make submissions to
the adjudicator and shall consider the information relating to the complaint;
and
|
b) fixe
lui-même sa procédure, sous réserve de la double obligation de donner à
chaque partie toute possibilité de lui présenter des éléments de preuve et
des observations, d’une part, et de tenir compte de l’information contenue
dans le dossier, d’autre part;
|
|
(c)
has, in relation to any complaint before the adjudicator, the powers
conferred on the Canada Industrial Relations Board, in relation to any
proceeding before the Board, under paragraphs 16(a), (b) and (c).
. . .
|
c) est
investi des pouvoirs conférés au Conseil canadien des relations industrielles
par les alinéas 16a), b) et c).
[…]
|
[22]
It is
clear upon reading paragraph 242(2)(b) that an adjudicator is
master of his or her proceedings. This authority is in compliance with the rule
stated by the Federal Court of Appeal in Fishing Vessel Owners’ Assn. of
British Columbia v. Canada (Attorney General), 1 C.P.C. (2d) 312 (F.C.A.),
at page 319:
Every tribunal has the fundamental power
to control its own procedure in order to ensure that justice is done. This,
however, is subject to any limitations or provisions imposed on it by the law
generally, by statute or by the rules of Court.
[23]
Therefore,
the power to control its procedure should logically include the adjudicator’s
power to ensure procedural fairness during a hearing. I agree with the
adjudicator R.C. Dumoulin, who wrote the following in his preliminary
decision in Iny-Somberg v. Laurentian Bank of Canada, [1999] C.L.A.D.
No. 526, at paragraph 14: “The principles of audi alteram partem
and procedural fairness should be safeguarded by the adjudicator during the
pre-hearing process as well as in the conducting of the hearing itself.” This
duty to enforce procedural fairness must include among other things the duty of
ensuring an impartial hearing. In Smith Mechanical Inc. v. Thomson,
[1985] C.S. 782, [1985] Q.J. No. 124 (QL), the Honourable Mr. Justice Charles
D. Gonthier of the Quebec Superior Court, as he then was, wrote the following:
[translation]
¶ 12 An
impartial hearing implies not only impartiality on the part of the tribunal,
but also independence and disinterestedness on the part of the lawyers who are
tasked with asserting the rights of their clients. This also implies that a
litigant must have to his or her counsel in confidence, which can only be
ensured through the protection of confidential information secrecy and total
loyalty.
[24]
It is
nevertheless useful to note that the disqualification objection made in this
case was quite unusual, as it did not concern counsel for either one of the
parties, as Mr. Dion was not acting as a lawyer but rather as an employee
that the employer, a legal person, had appointed to represent it at the
hearing. However, Mr. Dion had acted as counsel for the respondent and for
the applicant before the Quebec Superior Court under a joint mandate. This
distinction is important for the purposes of the analysis of the adjudicator’s
jurisdiction in this case.
[25]
However, I
am of the opinion that, by choosing to retain the services of external counsel
while assigning Mr. Dion as its representative, the applicant makes it
necessary to examine in more detail the hearing process before the adjudicator
and to ensure that procedural fairness as well as the respective rights of the
parties are respected. Consideration of this additional factor makes me even
more inclined to give a liberal interpretation to the adjudicator’s
jurisdiction in accordance with procedural fairness.
[26]
I also
intend to examine the applicant’s submission, which relies on a decision of
Mr. Justice Andrew W. MacKay J. in CRTC v. Canada, [1991] 1 F.C.
141, [1990] F.C.J. No. 819 (QL), to the effect that the right of a legal person
to assign a person to represent it and to define the role to be played by that
person for the purposes of litigation to be heard by a tribunal belongs
exclusively to that legal person. The decision of MacKay J. dealt with an
application to quash an order of the Human Rights Tribunal excluding a CRTC
representative from the hearing until it was his turn to testify. McKay J.
concluded as follows at paragraph 26 of this decision:
Where a party is a corporate or statutory
body it can only be represented at the hearing and can only instruct counsel by
a natural person who for all intents and purposes at the inquiry is deemed to
represent the corporate or statutory body. If that body is not free to select
its representative as it sees fit, then the person who stands in at the hearing
and whose presence is primarily to instruct counsel may not have the full
confidence of those responsible for the corporate or statutory body. That surely
is the basis on which a body selects its representative and is the key to
accepting the representative named as the person with the responsibility
assigned by the corporation, or in this case CRTC, to instruct counsel on its
behalf. In my view, under subsection 50(1) of the Act, a statutory body,
here CRTC, is entitled to representation and to instruct counsel at the hearing
of the Tribunal by the person designated by that statutory body, CRTC, and its
opportunity to participate in the hearing as assured by subsection 50(1)
may not be limited by excluding that designated representative even though he
or she may be a potential witness.
[27]
Although
at first sight this decision of MacKay J. may seem to be applicable to the
present situation, I share the respondent’s opinion to the effect that this
judgment must be distinguished on the facts. In that case, the tribunal had
decided to exclude the employer’s chosen representative from the hearing room
because he would be called to testify. As MacKay J. stated at paragraph 28
of his decision, the employee’s right could have been protected in such a
situation by the tribunal’s subsequent weighing of the probative value of the
testimony of the employer’s representative.
[28]
In fact,
such situations often arise before tribunals. It is not unusual for a
representative of one of the parties to be called on to testify at some point
during the hearing, without being excluded from the hearing room for that.
[29]
It seems
clear to me that the respondent does not question the employer’s right to
choose its representative at the time of the hearing before the adjudicator.
However, he is right in submitting that this right must be balanced against
other rules of natural justice and regulations of public order, such as rules
of ethics applicable to lawyers regarding confidentiality and conflicts of
interest.
[30]
In
addition, in the present case, mitigation of the infringement of the
respondent’s rights is not as simple as in CRTC v. Canada, supra,
because, as was stated by the Supreme Court of Canada in MacDonald Estate v.
Martin, [1990] 3 S.C.R. 1235 (MacDonald Estate), the use of
confidential information by a lawyer is usually impossible to prove or to
rebut.
[31]
Therefore,
I am of the opinion that the adjudicator had jurisdiction to allow the
disqualification objection made against Mr. Dion because of his obligation to
safeguard procedural fairness and thus ensure that the respondent had an
impartial hearing.
(2)
Did the adjudicator err in applying a principle of law or in assessing the
evidence?
[32]
In the
alternative, the applicant submits that, even if the adjudicator had
jurisdiction in this matter, he erred in applying the MacDonald Estate
judgment to the present situation and rendered a decision in the absence of any
evidence, based on an erroneous finding of fact that he made in a perverse or
capricious manner or without regard for the material before him.
[33]
The
respondent counters that the adjudicator’s decision reflected the evidence on
the record and took into consideration the letters exchanged, the submissions
and admissions by counsel for both parties and the documents on the record. The
adjudicator did indeed recognize that there was a distinction between the
situation in MacDonald Estate and the present one but clearly
explained his reasons in favour of applying this judgment. MacDonald Estate
is a leading case which has been applied in various situations where
disqualification was sought (see, inter alia, Métro Inc. v.
Regroupement des marchands actionnaires, J.E. 2002-2046 (C.A.)).
[34]
The motion
presented to the adjudicator by the respondent required that the adjudicator
consider several factors, namely: (1) the respondent’s right to an impartial
hearing and to the continued loyalty and professional secrecy which every
lawyer must uphold, (2) the employer’s right to be represented by an employee
of its choice at the hearing, and (3) the protection of the integrity of the
judicial process, such that justice is not only done but seen to be done.
[35]
To do so,
the adjudicator applied the test developed by the Supreme Court of Canada in MacDonald
Estate to determine in which circumstances a lawyer may be disqualified
from acting for a client. He therefore examined various factors as mentioned by
Sopinka J.:
[13] ¶ In resolving this
issue, the Court is concerned with at least three competing values. There
is first of all the concern to maintain the high standards of the legal
profession and the integrity of our system of justice. Furthermore, there
is the countervailing value that a litigant should not be deprived of his or
her choice of counsel without good cause. Finally, there is the
desirability of permitting reasonable mobility in the legal profession . . . .
[36]
Although
these values considered by the Supreme Court, just like the factual situation
giving rise to that decision, are not identical to the situation in the present
case, there is sufficient similarity to apply the test developed in MacDonald
Estate. First of all, the right to be represented by a lawyer of one’s
choice may be equated with an employer’s right to be represented by an employee
of its choice. As far as Mr. Dion is concerned, although he did not act as
counsel for the applicant at the hearing before the adjudicator, he
nevertheless was subject to the Code of Ethics of Advocates, R.S.Q., c.
B-1, r.1, which provides the following, among other things:
|
3.06.01.
An advocate shall not use, for his benefit, for the benefit of the
partnership or joint-stock company within which he engages in his
professional activities or for the benefit of a person other than the client,
confidential information obtained while he engages in his professional
activities.
|
3.06.01. L’avocat ne peut
utiliser à son profit, au profit de la société au sein de laquelle il exerce
ses activités professionnelles ou au profit d’une personne autre que le
client, les renseignements confidentiels qu’il obtient dans l’exercice de ses
activités professionnelles.
|
|
3.06.02.
An advocate shall not agree to perform professional services if doing so
entails or may entail the communication or use of confidential information or
documents obtained from another client without the latter’s consent, unless
required by law.
|
3.06.02. L’avocat ne peut
accepter de fournir des services professionnels si cela comporte ou peut
comporter la communication ou l’utilisation de renseignements ou documents
confidentiels obtenus d’un autre client sans le consentement de ce dernier,
sauf si la loi l’ordonne.
|
[37]
In
addition to the duty of confidentiality, every lawyer also has a broader duty
of loyalty as specified by the Canadian Bar Association in its Code of
Professional Conduct (Revised Edition, 2006) at Chapter 5:
|
The lawyer shall not
advise or represent both sides of a dispute and, except after adequate
disclosure to and with the consent of the clients or prospective clients
concerned, shall not act or continue to act in a matter when there is or is
likely to be a conflicting interest.
|
L’avocat ne doit pas
conseiller ou représenter des parties ayant des intérêts opposés, à moins
d’avoir dûment averti ses clients éventuels ou actuels et d’avoir obtenu leur
consentement. Il ne doit ni agir, ni continuer d’agir dans une affaire
présentant ou susceptible de présenter un conflit d’intérêts.
|
Moreover, the Commentary on this rule states the following:
|
1. A
conflicting interest is one that would be likely to affect adversely the
lawyer’s judgment on behalf of, advice to, or loyalty to a client or
prospective client.
|
1. Il y a
conflit d’intérêts lorsque les intérêts en présence sont tels que le jugement
et la loyauté de l’avocat envers son client ou envers un client éventuel ou
en son nom peuvent en être défavorablement affectés.
|
|
. . .
|
[…]
|
|
12. A lawyer
who has acted for a client in a matter should not thereafter, in the same or
any related matter, act against the client (or against a person who was
involved in or associated with the client in that matter) or take a position
where the lawyer might be tempted or appear to be tempted to breach the Rule
relating to confidential information. It is not, however, improper for the
lawyer to act against a former client in a fresh and independent matter
wholly unrelated to any work the lawyer has previously done for that person.
|
12. L’avocat
qui a agi pour un client ne doit ni agir ultérieurement contre lui (ou contre
des personnes qui s’étaient engagées ou associées avec le client) dans la
même affaire ou dans une affaire connexe, ni se placer dans une position
telle qu’il pourrait être tenté, ou être perçu comme tenté, de violer le
secret professionnel. Cependant, il est parfaitement licite pour un avocat
d’agir contre un ancien client, dans une affaire totalement nouvelle n’ayant
aucun lien avec les services qu’il aurait pu rendre antérieurement à cette
personne.
|
This duty of loyalty is also recognized in the Code of
Ethics of Advocates, which provides the following:
|
3.00.01.
An advocate owes the client a duty of skill as well as obligations of
loyalty, integrity, independence, impartiality, diligence and prudence.
|
3.00.01.
L’avocat a, envers le client, un devoir de compétence ainsi que des
obligations de loyauté, d’intégrité, d’indépendance, de désintéressement, de
diligence et de prudence.
|
[38]
The
professional obligation of confidentiality, like the duty of loyalty, protects
the current client as well as the previous client and is in relation to the
lawyer personally, regardless of the capacity in which he or she subsequently
acts.
[39]
Having
confirmed the applicability of MacDonald Estate, it is now necessary to
consider the test developed by the Supreme Court of Canada in this judgment.
Sopinka J. wrote the following at paragraphs 44 to 51:
¶44. What then should
be the correct approach? Is the "probability of mischief"
standard sufficiently high to satisfy the public requirement that there be an
appearance of justice? In my opinion, it is not. This is borne out
by the judicial statements to which I have referred and to the desire of the
legal profession for strict rules of professional conduct as its adoption of
the Canadian Code of Professional Conduct demonstrates. The probability
of mischief test is very much the same as the standard of proof in a civil
case. We act on probabilities. This is the basis of Rakusen. I am,
however, driven to the conclusion that the public, and indeed lawyers and
judges, have found that standard wanting. In dealing with the question of
the use of confidential information we are dealing with a matter that is
usually not susceptible of proof. As pointed out by Fletcher Moulton L.J.
in
Rakusen, "that is a thing which you cannot prove" (p.
841). I would add "or disprove". If it were otherwise,
then no doubt the public would be satisfied upon proof that no prejudice would
be occasioned. Since, however, it is not susceptible of proof, the test
must be such that the public represented by the reasonably informed person
would be satisfied that no use of confidential information would occur.
That, in my opinion, is the overriding policy that applies and must inform the
court in answering the question: Is there a disqualifying conflict of
interest? In this regard, it must be stressed that this conclusion is
predicated on the fact that the client does not consent to but is objecting to
the retainer which gives rise to the alleged conflict.
¶45. Typically, these
cases require two questions to be answered: (1) Did the lawyer receive
confidential information attributable to a solicitor and client relationship
relevant to the matter at hand? (2) Is there a risk that it will be
used to the prejudice of the client?
46. ¶ In answering the
first question, the court is confronted with a dilemma. In order to
explore the matter in depth may require the very confidential information for
which protection is sought to be revealed. This would have the effect of
defeating the whole purpose of the application. American courts have
solved this dilemma by means of the "substantial relationship"
test. Once a "substantial relationship" is shown, there is an
irrebuttable presumption that confidential information was imparted to the
lawyer. In my opinion, this test is too rigid. There may be cases
in which it is established beyond any reasonable doubt that no confidential
information relevant to the current matter was disclosed. One example is
where the applicant client admits on cross-examination that this is the
case. This would not avail in the face of an irrebuttable
presumption. In my opinion, once it is shown by the client that there
existed a previous relationship which is sufficiently related to the retainer
from which it is sought to remove the solicitor, the court should infer that
confidential information was imparted unless the solicitor satisfies the court
that no information was imparted which could be relevant. This will be a difficult
burden to discharge. Not only must the court's degree of satisfaction be
such that it would withstand the scrutiny of the reasonably informed member of
the public that no such information passed, but the burden must be discharged
without revealing the specifics of the privileged communication.
Nonetheless, I am of the opinion that the door should not be shut completely on
a solicitor who wishes to discharge this heavy burden.
¶47. The second
question is whether the confidential information will be misused. A
lawyer who has relevant confidential information cannot act against his client
or former client. In such a case the disqualification is automatic.
No assurances or undertakings not to use the information will avail. The
lawyer cannot compartmentalize his or her mind so as to screen out what has
been gleaned from the client and what was acquired elsewhere.
Furthermore, there would be a danger that the lawyer would avoid use of
information acquired legitimately because it might be perceived to have come
from the client. This would prevent the lawyer from adequately
representing the new client. Moreover, the former client would feel at a
disadvantage. Questions put in cross-examination about personal matters,
for example, would create the uneasy feeling that they had their genesis in the
previous relationship.
. . .
¶ 50
A
fortiori undertakings and conclusory statements in affidavits without more
are not acceptable. These can be expected in every case of this kind that
comes before the court. It is no more than the lawyer saying "trust
me". This puts the court in the invidious position of deciding which
lawyers are to be trusted and which are not. Furthermore, even if the
courts found this acceptable, the public is not likely to be satisfied without
some additional guarantees that confidential information will under no
circumstances be used. In this regard I am in agreement with the
statement of Posner J. in Analytica, supra, to which I have referred above, that affidavits of lawyers
difficult to verify objectively will fail to assure the public.
¶51. These standards
will, in my opinion, strike the appropriate balance among the three interests
to which I have referred. In giving precedence to the preservation of the
confidentiality of information imparted to a solicitor, the confidence of the
public in the integrity of the profession and in the administration of justice
will be maintained and strengthened. On the other hand, reflecting the
interest of a member of the public in retaining counsel of her choice and the
interest of the profession in permitting lawyers to move from one firm to
another, the standards are sufficiently flexible to permit a solicitor to act
against a former client provided that a reasonable member of the public who is
in possession of the facts would conclude that no unauthorized disclosure of
confidential information had occurred or would occur.
[40]
In
applying the test developed by the Supreme Court of Canada, there is no doubt
in my mind that there is a “substantial relationship” between the case before
the adjudicator and the recent litigation in which Mr. Dion had acted as
counsel for the respondent. As noted by the adjudicator, Mr. Dion [translation] “acted as counsel
for the complainant and his employer in a case in which both were co-defendants
and which it is plausible to think the employer will cite against the
complainant in this case”.
Having shown this substantial relationship, the adjudicator had to infer that
confidential information had been disclosed, subject to evidence to the
contrary. In fact, such evidence had to be sufficiently probative to convince
the adjudicator that [translation] “a reasonably informed member of the public would be
persuaded that no information of this nature was disclosed”, failing which the
adjudicator would have to conclude that such confidential information could be
misused and that Mr. Dion therefore could not now act against his former
client.
[41]
The
applicant states that no confidential information was disclosed, because
Mr. Dion had acted under a joint mandate. As a general rule, when a lawyer
acts for two parties, the information disclosed by one party will not be
considered to be protected by privilege in respect of the other party (Chersinoff
v. AllState Insurance Co. (1969), 3 D.L.R. (3d) 560 (B.C.C.A.), R. v.
Dunbar (1982), 138 D.L.R. (3d) 221 (Ont. C.A.)). However, it is possible
that in practice, such an explanation would not be sufficient to persuade the
Court that a reasonably informed person would be satisfied that no confidential
information had been passed on (Zaworski v. Carrier Lumber Ltd., 2003
BCSC 565, [2003] B.C.J. No. 829 (QL)).
[42]
In his
decision, the adjudicator acknowledged that information obtained for the
purposes of a joint defence is not generally considered to be confidential.
However, he did not believe that such an explanation could satisfy reasonably
informed members of the public that no confidential information would be
disclosed in the course of the hearing and that the respondent had no
reason to entertain apprehensions in this regard.
[43]
In these
circumstances, the conclusion reached by the arbitrator is, in my view,
reasonable and should therefore not be set aside.
[44]
Finally,
the applicant submits that the adjudicator erred in ruling that the respondent
was not barred from making his objection, even though he had accepted
unreservedly that Mr. Dion, in the ordinary course of his employment, had acted
for the applicant and its counsel ad litem since the month of
April 2005.
[45]
The respondent,
however, submits that the adjudicator was correct in not considering the time
elapsed to be a bar against the objection, because no time had elapsed between
the moment Mr. Dion’s role before the adjudicator became known and the
respondent’s objection.
[46]
I agree
with the respondent on this point. The respondent’s failure to object to the
presence of Mr. Dion during the negotiation process does not prevent the
respondent from objecting to such a situation when the issue is brought before
an adjudicator, at which time the matter has become litigious (Peel
Financial Holdings Ltd. v. Western Delta Lands Partnership, 2001 BCSC 1560,
[2001] B.C.J. No. 2828 (QL)).
[47]
In Celanese
Canada Inc. v. Murray Demolition Corp., [2006] 2 S.C.R. 189, the Supreme
Court of Canada examined the factors to be considered in deciding whether or
not a motion to disqualify should be allowed. One of the factors used by the
Court is the stage of the proceedings, as discussed at paragraph 64 of this
judgment:
. . . At advanced
stages of complex litigation, an order removing counsel can be “extreme” and
may have a “devastating” effect on the party whose counsel is removed (Michel
v. Lafrentz (1992), 12 C.P.C. (3d) 119 (Alta. C.A.), at para. 4).
That is not the case here. No doubt substantial costs have been incurred
by all parties, but BLG advised Cassels Brock by letter dated July 15, 2003,
i.e. within less than a month after commencement of the litigation, and a few
days after learning of the privilege controversy, that “[t]his is a most
serious matter and we intend to bring it to the attention of the Court at the
earliest opportunity.” The removal motion was launched July 24,
2003. There was therefore ample early notice that removal was being
sought.
[48]
In the
present case, the respondent argues, with good reason, that because the
objection had been made at the beginning of the case before the adjudicator,
the adjudicator was warranted in concluding that the lack of an objection by
the respondent during settlement negotiations was not to be interpreted as a
waiver of his right to object to Mr. Dion’s presence during the adjudication
process.
[49]
For all
these reasons, the application for judicial review will be dismissed.
ORDER
1.
The
application for judicial review is dismissed;
2.
With
costs.
“Pierre Blais”
Certified
true translation
Michael
Palles