Docket: T-229-17
Citation: 2019 FC 532
Ottawa, Ontario, May 1, 2019
PRESENT: The Honourable Mr. Justice Favel
| BETWEEN:
|
| HARRY CHINGEE
|
| Plaintiff
|
| and
|
| THE ATTORNEY GENERAL OF CANADA,
AND
MCLEOD LAKE INDIAN BAND
|
| Defendants
|
ORDER AND REASONS
I.
Overview
[1]
This is a motion on behalf of the Defendant, McLeod Lake Indian Band (the Defendant MLIB), for an order removing the Plaintiff’s former legal counsel, Jack Woodward Q.C. (“Woodward”
), and Plaintiff’s former legal counsel, Mark Underhill (“Underhill”
), as solicitors of record for the Plaintiff, on the basis of an alleged conflict of interest.
[2]
The motion is opposed by the Plaintiff. The Defendant, Attorney General of Canada, takes no position on the motion.
II.
Background
[3]
Woodward began his association with the Plaintiff and MLIB in 1977 when he applied for a grant from the Legal Services Commission while he was a law student at the University of Victoria. Woodward used the funding to purchase a bus with bunks and desks, manual typewriters and a filing cabinet. He travelled to MLIB about three times during the summer of 1977 and met with the Plaintiff and others to help the community in its opposition to a project which ultimately did not proceed.
[4]
Woodward wrote a report about this initiative that resulted in the “Report to the Legal Services Commission on the McLeod Lake Indian Band Legal Assistance Project”
(“Report”
). Copies of the Report were given to MLIB, the Legal Services Commission and the University of Victoria Law School.
[5]
Woodward continued his work for MLIB in the 1980s and there is a band council resolution that references work related to Treaty 8. Woodward did begin working on a title claim for MLIB which was ultimately resolved when MLIB settled their Treaty adhesion with the assistance of another lawyer in the 1990s. Woodward was present at a July 14, 1982 meeting of MLIB and federal government representatives where references to Treaty 8 are contained in a meeting summary.
[6]
Woodward again became involved with MLIB in 1997 concerning an election dispute. Woodward represented the Plaintiff for a period of time until the Plaintiff retained another lawyer. The proceedings before the Federal Court in that matter involved the interpretation of the customary election law of the MLIB.
[7]
The Plaintiff commenced his claim against the Defendants on February 20, 2017. The Statement of Claim of the Plaintiff seeks a declaration that the Plaintiff is a “Headman”
within the meaning of Annuity Provisions of Treaty 8. Woodward was counsel of record until August 29, 2017, which is when Underhill filed a notice of change of solicitor.
III.
The Motion for Disqualification of Woodward
[8]
On January 26, 2018, the Defendant MLIB brought the motion to disqualify Woodward and Underhill from representing the Plaintiff regarding his claim in respect of being a “Headman”
of MLIB. The Defendant MLIB points out that Woodward prepared, served and filed the Statement of Claim, the Plaintiff’s Affidavits of Documents and prepared and commissioned six affidavits related to this action.
[9]
The Defendant MLIB also seeks to strike the Statement of Claim without prejudice to the Plaintiff’s ability to recommence his claim with new counsel and to prevent Woodward or Underhill from having any involvement in the Plaintiff’s claim.
[10]
In support of its motion, the Defendant MLIB filed the affidavits of current Chief Harley Chingee, the Plaintiff’s son, Mr. Solonas and Ms. Duranleau.
[11]
In response to the motion, the Plaintiff filed the affidavits of the Plaintiff, Woodward and Underhill.
IV.
Issue
[12]
The sole issue to be determined in this matter is whether Woodward or Underhill are in a disqualifying conflict of interest and cannot act for the Plaintiff in this proceeding.
V.
Preliminary Matter - Affidavits of Mr. Solonas and Ms. Duranleau
[13]
The Plaintiff submits that the affidavits of Mr. Solonas and Ms. Duranleau should not be admitted for their lack of relevance and reliability. The Plaintiff argues that the affidavit of Ms. Duranleau which contained documents as exhibits adds nothing to the proceedings. The Plaintiff argues that, at best, the documents confirm what is already established: that Woodward was retained as counsel for MLIB in the 1980s which retainer included matters pertaining to adhesion to Treaty 8. The documents do not contain even a passing reference to the Headman issue let alone to confidential information that Woodward may have obtained as a result of his retainer with MLIB.
[14]
The Plaintiff also argues that Mr. Solonas’ affidavit adds nothing to the proceedings and further, the Plaintiff was unable to cross-examine Mr. Solonas. The Plaintiff argues that the cross-examination of Harley Chingee points to controversial aspects of Mr. Solonas’ affidavit including that the Plaintiff agreed he was not a Headman and that it was the understanding of all concerned that anything shared with Woodward would be kept confidential. In short, the prejudice of allowing the affidavit of Mr. Solonas outweighs the prejudice of excluding it. This information in Mr. Solonas’ affidavit is also repetitive of the Harley Chingee affidavit.
[15]
The Defendant MLIB submits that the affidavits of Ms. Duranleau and Mr. Solonas are relevant as they establish that confidential information was imparted to Woodward. The Defendant MLIB submits that the affidavits should be admitted with leave to question Woodward on the documents. Alternatively, if there is no controversy as to the authenticity of the documents and it is conceded that Woodward is stating he does not recall ever meeting
Mr. Solonas, then MLIB is content to abandon its request for leave for further questioning.
VI.
The Applicable Test
[16]
The parties agree that the leading case on the issue is MacDonald Estate v Martin, [1990] 3 S.C.R. 1235 [MacDonald Estate]. It establishes that in determining whether a law firm should be disqualified from acting in a matter where it is in a potential conflict of interest, the following two questions should 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?
VII.
Submissions of the Parties
A.
MLIB
[17]
MLIB submits that the first part of the test may be met in either of two ways: (i) adducing evidence that confidential information was in fact imparted during the solicitor-client relationship; or (ii) demonstrating that a retainer is “sufficiently related”
to the matters in which the lawyer worked for the first client, in which case, a rebuttable presumption arises that the lawyer or firm possesses confidential information which raises a risk of prejudice.
[18]
MLIB submits that the evidence of Harley Chingee establishes that Woodward received the following confidential information relevant to the Headman issue in the action:
(a)
information as to Sekani practices (including leadership and governance practices), customs, and history contained in MLIB’s non-public records as well as that which would have been provided to him as MLIB’s lawyer in private meetings with MLIB members and Elder;
(b)
a confidential report containing legal advice respecting MLIB’s objections relating to the proposed McGregor River Diversion Project, which explores several of the above matters in-depth;
(c)
information as to the meaning of the term “Headman”
in Treaty 8 specifically in relation to MLIB. In that regard and as noted above, Mr. Woodward raised the “Headman”
issue in July 14, 1982 meeting between MLIB and Canada that he attended as MLIB’s lawyer. and
(d)
Sekani governance practices, which are directly related, and inexorably tied to, the “Headman” allegations at issue in this action.
[19]
MLIB submits that it has discharged its burden of adducing evidence that confidential information was imparted on Woodward and that the first part of the test is met on this basis alone.
[20]
MLIB also submits that the first part of the test can also be met by the fact that this action and other matters acted on by Woodward for MLIB throughout the 1970s, 1980s and 1990s are sufficiently related. MLIB refers to a MLIB Band Council Resolution [BCR] dated March 11, 1980, related to retaining Woodward for MLIB “adhering to Treaty 8”
. MLIB relies on Chapters Inc v Davies, Ward & Beck LLP, [2001] OJ No 206 (QL), 102 ACWS (3d) 812, at paragraph 30 [Chapters]:
[…] There may be cases in which a simple description of the two retainers shows them to be so closely connected that the court will infer the possible misuse of confidential information and hence find the retainers to be sufficiently related.
[21]
MLIB also relies on the following passage of Chapters at paragraph 30:
[… ] More commonly, as in this case, an outline of the nature of the confidential information passed to the lawyer pursuant to the first retainer will be needed. In the end, the client must demonstrate that the possibility of relevant confidential information having been acquired is realistic, not just theoretical. For the court to find that the retainers are sufficiently related, it must conclude that in all the circumstances it is reasonably possible that the lawyer acquired confidential information pursuant to the first retainer that could be relevant to the current matter.
[22]
Therefore, MLIB submits that the March 11, 1980 BCR related to adhering to Treaty 8, as well as the July 14, 1982 meeting summary where the issue of the Headman under Treaty 8 was raised shows that the current action is sufficiently related to the previous matters.
[23]
MLIB also submits that Woodward breached his duty of loyalty to MLIB. MLIB argues that the duty is breached where a lawyer switches allegiances in litigation and takes an adversarial position against a former client with respect to a matter that was central to the previous retainer (Consulate Ventures Inc. v Amico Contracting & Engineering (1992) Inc., 2010 ONCA 788). MLIB also relies on the following passage of Brookville Carriers Flatbed GP Inc. v Blackjack Transport Ltd., 2008 NSCA 22, at paragraph 17:
[17] […] lawyers have a duty not to act against a former client in a related matter whether or not confidential information is at risk. A matter is “related” for this purpose if the new retainer involves the lawyer taking an adversarial position against the former client with respect to the legal work which the lawyer performed for the former client or a matter central to the earlier retainer.
[24]
MLIB submits that for the same reasons and evidence referred to above, this matter and Woodward’s previous retainer related to Treaty 8 are unquestionably related. MLIB’s current position is that there is no “Headman”
at MLIB and the Plaintiff’s action seeks a declaration that the Plaintiff is a Headman.
[25]
MLIB also submits that notwithstanding the notice of change of solicitor being filed by Underhill, Woodward continued to be involved in the prosecution of the action which MLIB submits further exemplifies his breach of his duty of loyalty to MLIB. The affidavit of Harley Chingee points to four examples of Woodward’s continued involvement after the notice of change of solicitor was filed:
(a)
On January 7, 2018 the Plaintiff informed Harley Chingee that Woodward would be conducting an interview with the Plaintiff along with an expert to be used in this action;
(b)
Woodward and the expert were present prior to the Plaintiff’s Rule 271 examination on January 16, 2018 and attempted to stay for the examination despite indicating at a case management conference that Woodward would not be attending;
(c)
Woodward attempted to participate in counsel-only discussions on the morning of January 16, 2018; and
(d)
Woodward and the expert accompanied the Plaintiff for lunch mid-way through his cross-examination.
[26]
In addition, MLIB argues that both Woodward and Underhill continue to threaten to sue MLIB’s past and present solicitors for defamation for raising the potential conflict.
[27]
The Defendant MLIB also submits that MLIB had to take measures to prevent Woodward from acting for the Plaintiff against MLIB in the 1997 election dispute. It submits that his representation of MLIB in relation to the potential Treaty 8 adhesion was a main issue in the election proceedings.
[28]
With respect to Underhill, the Defendant MLIB submits that since MLIB’s evidence establishes that Woodward received confidential information from the Plaintiff then the same information must be imputed to Underhill due to his comments made at a January 10, 2018 case management conference that Woodward continued to be involved in the action. MLIB submits that there is a “[…]strong inference that lawyers who work together share confidences.”
(MacDonald Estate at page 1262). An inference to that effect may be drawn in the absence of “clear and convincing evidence, that all reasonable measures have been taken to ensure that no disclosure will occur by the “tainted” lawyer”
(MacDonald Estate at page 1262). The Defendant MLIB submits that there is no evidence of any measures being part in place by Woodward or Underhill to prevent such tainting.
[29]
MLIB submits that there is a risk that the confidential information will be used and therefore the evidence establishes that both parts of the MacDonald Estate test have been met.
B.
The Plaintiff
[30]
The Plaintiff submits that MLIB does not meet the MacDonald Estate test because none of the information it relies on gives rise to the alleged conflict, the information is not confidential or capable of being confidential and that, in any event, the information is irrelevant to the issue in this action.
[31]
The Plaintiff acknowledges that a conflict of interest can arise from mere possibilities, however, there must be an evidentiary basis for finding that a conflict exists which will displace a person’s right to the lawyer of their choice.
[32]
The Plaintiff argues that MLIB is relying on unsubstantiated statements to the effect that Woodward possesses unspecified confidential information concerning Sekani governance practices, customs and history and information as to the meaning of “headmen”
in Treaty 8.
[33]
The Plaintiff argues that MLIB bears the onus of establishing that Woodward came into possession of confidential information from MLIB that he could not have received but for his prior representation of MLIB. “Compelling and cogent evidence”
must be demonstrated to show that the prior retainer by MLIB is sufficiently related to the present case.
[34]
The Plaintiff argues that MLIB has not established that Woodward has any information about the Sekani governance practices, customs and history that is contained in non-public records. The Plaintiff asserts that Harley Chingee’s affidavit simply refers to his understanding that Woodward would have received information on these topics several decades ago.
[35]
The Plaintiff submits that this evidence does not connect these broad topics to the matter at issue in this proceeding: whether the Plaintiff is a Headman pursuant to Treaty 8. He submits that there is no explanation as to how the information provided to Woodward has any bearing on this action.
[36]
The Plaintiff also submits that the Report has been publicly available from the University of Victoria and elsewhere for the last 40 years and that this fact alone is fatal to MLIB’s motion. The Plaintiff submits that the Report was never intended to be confidential because its purpose was to assist MLIB in objecting to a development project. The Plaintiff also points out that the Report also does not contain any substantive information about Sekani governance practices nor could the Report serve as legal advice since Woodward was a student at the time. The Plaintiff also submits that the type of information in the Report cannot be of a confidential nature because it is historical and anthropological information and the fact that Harley Chingee indicated that most adult members of MLIB would also process knowledge about Sekani governance practices.
[37]
With respect to the the July 14, 1982 meeting, the Plaintiff submits that the inquiry by Woodward at the meeting does not establish that he obtained confidential information that is relevant to whether the Plaintiff is a Headman. The Plaintiff argues that this action, which is entirely public, is all about determining whether the Plaintiff is a Headman and this will necessarily require evidence to support or argue against such a finding.
[38]
The Plaintiff argues that the assertions in Harley Chingee’s affidavit, that Woodward possesses disqualifying confidential information about Sekani governance practices, is too vague and inadequate.
[39]
Responding to the issue of the sufficiently related retainers, the Plaintiff submits that MLIB’s reliance on Chapters is misplaced. That case involved a merger where information was obtained from Chapters Inc. and subsequently, the lawyers attempted to use the information in a proceeding involving a takeover of Chapters Inc. That is different from this matter where MLIB relies on minutes or a summary of the July 14, 1982 meeting and the 1980 BCR.
[40]
Concerning the prior retainer from 1980, the Plaintiff argues that MLIB’s assertion that Woodward acquired relevant confidential information is theoretical (Chapters at para 30).
[41]
Regarding the 1997 Federal Court proceeding relating to the MLIB election pursuant to MLIB’s custom election law, the Plaintiff submits that the proceeding is irrelevant because MLIB has not put forward any evidence to establish that Woodward was in a conflict beyond Harley Chingee’s assertion. The Plaintiff also argues that MLIB breached its implied undertaking by including discovery evidence from that proceeding in this motion without first bringing the proper application.
[42]
On the breach of loyalty submission, the Plaintiff asserts that MLIB has failed to establish that Woodward was ever involved in a related proceeding such that it could be said that he has breached his duty of loyalty to MLIB. The fact that the potential adhesion to Treaty 8 arose during his prior representation of MLIB in the 1980s does not establish that he had conduct of a related proceeding for MLIB. As a result, the Plaintiff submitted that measures to prevent transfer of information were not necessary.
VIII.
Analysis
[43]
The Court agrees with the parties that the applicable test is the one set forth in MacDonald Estate, which has been set out above. The legal test is well established but whether the test is satisfied is dependent on the facts. The parties take different positions on the facts. The present matter is complicated by the passage of time and by the death of the Plaintiff.
A.
Did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand?
[44]
The Court needs to first determine whether confidential information was imparted from the Plaintiff to Woodward.
[45]
The Court also needs to determine whether Woodward and Underhill have rebutted the presumption that Woodward, having represented MLIB with the Plaintiff as Chief in the past, received confidential information that could be used against MLIB. As stated in MacDonald Estate at page 1260:
[…]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.
[46]
The Court determines that the affidavits of Ms. Duranleau and Mr. Solonas will be admitted and will be given limited weight. The Court will not grant leave to the Defendant MLIB to question Woodward on the documents contained in the affidavit of Ms. Duranleau. The affidavits of Harley Chingee, the Plaintiff, Woodward and Underhill and the related examinations of these witnesses are more than sufficient to address the merits of the motion.
[47]
Woodward has the burden of establishing that no relevant confidential information was received from Chingee. The Court finds that he has met this burden.
[48]
The Court finds that the first part of the MacDonald Estate test has not been satisfied by the Defendant MLIB. No confidential information sufficiently related to the retainer at issue in this proceeding was exchanged between MLIB and Woodward.
[49]
Respecting the nature of the information Woodward may have received, first, the information itself was public as evidenced by the fact that the Report has been in a library for over 40 years. Second, the information, in its current form, can be utilized by any member or non-member of MLIB. As stated in Chapters, at paragraph 30: “In the end, the client must demonstrate that the possibility of relevant confidential information having been acquired is realistic not just theoretical”
[Emphasis added]. The evidence presented by the Defendant MLIB has not established that the possibility that confidential information was acquired by Woodward is more than theoretical.
[50]
Respecting the nature of the retainers, one needs to go further than the basic words used in the 1980 BCR, the July 14, 1982 meeting summary, the 1997 Federal Court proceeding and review those circumstances in relation to the subject matter of this action. The evidence of the parties is largely similar on the basic nature of these events. However, there is insufficient specific information before the Court to find that whatever information was provided at those times is confidential or sufficiently related to this action. The Plaintiff is seeking a declaration that he is a Headman pursuant to the Treaty annuities of Treaty 8. There are references to a Treaty 8 retainer, a document that summarizes a question related to a “Headman”
issue in 1982 but no evidence that indicates that there is confidential information related to Sekani governance practices, customs or traditions that emanates from those matters. The circumstances related to the 1997 band election dispute are also not sufficiently clear enough to satisfy the Court that this information was confidential or that the matter was sufficiently related to this action: that the Plaintiff is a Headman pursuant to Treaty 8.
B.
Is there a risk that it will be used to the prejudice of the client?
[51]
Had Woodward been in possession of relevant confidential information it would be clear that Woodward would be in a disqualifying conflict of interest and therefore, he could no longer act for the Plaintiff. It therefore flows that since Woodward did not receive confidential information then he was not in a position to relay that information to Underhill.
[52]
Thus, the Court finds that the second part of the MacDonald Estate test must also be answered in the negative.
IX.
Conclusion
[53]
On the record, the Court is not convinced that there was confidential information that was conveyed by the Plaintiff or MLIB to Woodward. The Court is also not convinced that the previous retainers and involvement of Woodward and Woodward’s involvement in this action are sufficiently related. Flowing from this, the Court also finds that no confidential information was passed on from Woodward to Underhill.
[54]
As a result, the Court finds that neither Woodward nor Underhill is in a conflict of interest. Either counsel is able to represent the Plaintiff in the action.
[55]
The motion brought by the Defendant MLIB is dismissed with costs.
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