Fridays with Rogers Partners
At our weekly meeting, Itai Gibli discussed the recent decision in Horvat v. Alam, 2024 ONSC 51. This decision concerned a disqualification motion, and the Superior Court analyzed whether a lawyer has a conflict of interest by acting as counsel of record in a litigation to which they (1) are a material witness and (2) have a direct interest.
Facts
The Personal Injury Action
In May 2017, the plaintiff, Mr. Horvat, was struck by a forklift driven by his co-worker on his work premises. Mr. Horvat retained Mr. Alam of Alam Law Firm for representation in a personal injury action he subsequently commenced.
Mr. Alam gave evidence that he cautioned Mr. Horvat against bringing the claim, as it was unlikely to succeed due to regulations in the Workplace Safety and Insurance Act, but he was instructed to proceed nonetheless.
The defendants in that action were Mr. Horvat’s employer, CJR Wholesale Grocers Ltd. aka Rabba Fine Foods (“Rabba”), and RML 5876 Coopers Limited (“Coopers”), the owner of the property where the injury occurred. Rabba and Coopers retained Mr. Laframboise to defend Mr. Horvat’s action.
Mr. Laframboise indicated he intended to bring a motion to dismiss the action against the defendants. Mr. Laframboise and Mr. Alam exchanged numerous emails.
The action began unraveling. On August 31, 2020, Mr. Horvat terminated his retainer with Mr. Alam. Soon after, the plaintiff delivered a Notice of Intent to Act in Person.
Mr. Horvat began negotiating directly with Mr. Laframboise regarding the costs he was potentially exposed to pay from commencing the lawsuit. Mr. Laframboise recommended Mr. Horvat liquidate some his equity in his home to pay these costs.
Mr. Horvat discontinued his personal injury action in June 2021. He re-mortgaged his home to pay the costs. A month later, he commenced the present action against his former lawyer, Mr. Alam and Alam Law Firm, alleging negligent representation.
The Negligent Representation Action
Mr. Horvat retained Mr. Laframboise as counsel of record for this action. His statement of claim specifically referred to communications between Mr. Alam and Mr. Laframboise from the personal injury action. One allegation against Mr. Alam was that Mr. Horvat had to re-mortgage his home to pay his costs. The claim stated Mr. Laframboise wrote to Mr. Alam numerous times advising the plaintiff liquidate some of his home equity, which Mr. Alam ignored.
The defendants sought an order disqualifying Mr. Laframboise due to a conflict of interest. They submitted that Mr. Laframboise was a material witness to the action, as he was directly involved in the events that led to the litigation, a witness to conversations which were the basis for the claim, and all the alleged damages occurred when Mr. Laframboise was counsel for the defendants in the personal injury action. As such, his role as advocate could not be reconciled with his role as witness.
The defendants stated they would call Mr. Laframboise as a witness. But even if Mr. Laframboise would not give evidence, as counsel of record, he would be asking questions in cross-examination about events in which he participated.
The defendants also argued that Mr. Laframboise had a direct interest in the outcome of the case, as his client was indebted to him from the personal injury action.
Mr. Laframboise argued he played a minimal role in the personal injury action. He highlighted the litigant’s right to choice of counsel, submitted the plaintiff would be prejudiced by changing lawyers, and argued the motion was a litigation tactic. Thus, he should not be disqualified.
Issue
Is Mr. Laframboise in a conflict of interest representing by plaintiff?
Law
Disqualification motions are not brought pursuant to any statute or rule, but the Court’s inherent jurisdiction to determine to whom it will give audience.[1]
The common law test for determining if a lawyer should be removed from the record is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires it.[2] This determination is very fact specific and based on an examination of all the factors in the case and the specific reason for the motion. The Court’s task is to uphold and preserve the integrity of the justice system while ensuring that litigants are not deprived of their counsel of choice without good cause.
Courts have consistently indicated it is undesirable for a lawyer to be a witness in a case in which they are counsel of record. While litigants certainly have a right to choice of counsel, this right is not absolute and can be overcome by the need to maintain the administration of justice.
The Court explains that when counsel appears as a witness on a contentious matter, it creates two problems. First, there is a possible conflict of interest between the counsel and client – but this may be waived by the client. Second, the dual role creates a conflict between counsel’s obligations owed to the Court of objectivity and detachment, and obligations to his client to present evidence in as favourable a light as possible.
The client cannot waive this conflict, because it exists between counsel and the court. Courts need to rely on plaintiff counsel for a high degree of objectivity. Thus, a distinction must be drawn between the role of counsel, as an independent officer of the court, and the role of a witness, whose objectivity and credibility are subject to challenge. Dual roles compromise the integrity of the legal system.[3]
Despite the existence of a conflict, in order to remove counsel from record, there must be a possibility of real mischief. The test is whether a fair-minded and reasonably informed member of the public would conclude that disqualification is necessary for the proper administration of justice.[4]
Further, vitiating factors should be considered when determining disqualification. For example, a court should consider the stage of proceedings, the likelihood the witness will be called, the good faith of the party making the application, the significance of the evidence to be led, the impact of removing counsel on a party’s right to be represented by counsel of choice, whether the trial is by judge or jury, the likelihood the evidence will be tainted, and the connection between the parties in the litigation.
Ruling
The Court granted the disqualification order.
The Court believed that a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice required Mr. Laframboise’s removal.
Mr. Laframboise would likely be both counsel and witness to the same action. His communications with Mr. Alam in the personal injury action were a key part the negligent representation action. There was a strong likelihood Mr. Laframboise would be required to give evidence at trial. This created a risk that his evidence would be tainted, or perceived as such.
The Court also held that Mr. Laframboise was in a conflict of interest because the damages his plaintiff alleged in this negligent representation action took place as a result of his insistence on obtaining costs from the plaintiff in favour of his previous clients in the personal injury action.
Further, examinations for discovery were not yet completed. The early stage of proceedings favoured disqualification.
[1] Urquhart v Allen Estate, 1999 O.J. No. 4816 (S.C) at para 11.
[2] Karas v Ontario, 2011 ONSC 5181, at para 26.
[3] Urquhart v Allen Estate, 1999 O.J. No. 4816 (S.C) at paras 27-28.
[4] Best v Cox, 2013 ONCA 695, at para 8.