IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20160219

Docket: 13-4176

Registry:
Victoria

Between:

Kenneth Alfred
Desmond Hanlan

Plaintiff

And:

John Doe, Robyn
Wilson and

Insurance
Corporation of British Columbia

Defendants

Before:
The Honourable Mr. Justice MacKenzie

Oral Reasons for Judgment

[1]            
THE COURT: This is an application by Ms. Wilson, one of the
three defendants in this litigation, for an order enjoining the plaintiff’s
present lawyer, Mr. Legh, from continuing to act on the ground that he is
in a conflict of interest.

[2]            
The application is filed on behalf of Ms. Wilson through her present
counsel, who is retained by Ms. Wilson’s insurer, ICBC. ICBC is also a
defendant and, through counsel, supports the application that Mr. Legh be
enjoined from continuing to act for the plaintiff Mr. Hanlan.

[3]            
The subject matter of the litigation is a two car motor vehicle accident
that occurred on December 12th, 2012. One of the vehicles was operated by Ms.
Wilson. The passenger in her vehicle was Mr. Hanlan, the plaintiff, her
common-law spouse. I am advised that this matter has been set for trial to
commence January the 9th, 2017.

[4]            
The background facts are not in dispute, as far as this application is
concerned. Ms. Wilson’s van was hit by a truck operated by an unidentified
driver, according to the position advanced by the plaintiff. This vehicle left
the scene and the driver has not been located.

[5]            
Both Ms. Wilson and Mr. Hanlan allege they suffered injuries as a result
of the accident. In this regard, Mr. Hanlan deposes that he has not been able
to work overseas in the oil industry since the date of the accident. I believe
it was the oil industry he is employed in. Be that as it may, his claim against
Ms. Wilson and the other defendants could very well be substantial, if he is
indeed successful.

[6]            
In December 2012 both Mr. Hanlan and Ms. Wilson retained Mr. Legh as
legal counsel to represent them both with respect to a claim for injuries as a
result of the accident. According to Mr. Hanlan, both he and Ms. Wilson met
four times with Mr. Legh to discuss the accident. In addition, they attended at
the scene of the accident with Mr. Legh in order to "walk through the
scene," as outlined in the application by counsel for Ms. Wilson. Approximately
a year later Mr. Legh was still acting for both Mr. Hanlan and Ms. Wilson.

[7]            
On November the 19th, 2013, they both again met Mr. Legh at his office,
at which time he explained that Mr. Hanlan should file an action naming the
unidentified driver and Ms. Wilson as defendants, as they could not identify
the unknown driver, and Ms. Wilson was the operator of the vehicle in which Mr.
Hanlan was the passenger. As a result, Mr. Legh advised Ms. Wilson that she
would have to find another lawyer. On that point Mr. Legh has deposed in his
affidavit on this application that Ms. Wilson agreed that he could continue to
represent her spouse, Mr. Hanlan, and she would not oppose Mr. Legh acting
against her.

[8]            
A couple of weeks later, in early December, Mr. Legh filed a notice of
civil claim on behalf of Mr. Hanlan naming Ms. Wilson and John Doe as the
drivers liable for Mr. Hanlan’s injuries allegedly sustained in the accident,
along with ICBC as the third defendant.

[9]            
In due course, Mr. Finn was retained as defence counsel by the insurer
for Ms. Wilson, and in June of 2014 filed a response to the civil claim denying
liability for the accident, as well as any alleged injuries, etcetera, etcetera.

[10]        
Later in 2014 Ms. Wilson filed her own notice of civil claim, again with
respect to injury she says she sustained in the same accident, naming John Doe
and ICBC as defendants. Again, counsel was retained by ICBC to defend Ms.
Wilson’s claim.

[11]        
In July of 2014 an examination for discovery of Mr. Hanlan was conducted
by Mr. Finn. During that discovery Mr. Hanlan confirmed that he and Ms. Wilson
had met with Mr. Legh on the four occasions I have mentioned, as well as
attending the scene.

[12]        
As a result of this information Mr. Finn wrote Mr. Legh stating that it
appeared Mr. Legh was in a conflict of interest by representing Mr. Hanlan
against Ms. Wilson. Mr. Finn advised Mr. Legh that he objected to Mr. Legh
conducting an examination for discovery of Ms. Wilson. Apparently Mr. Legh
responded in December stating that he had spoken to Mr. Hanlan, and Mr. Hanlan
was content to have Mr. Legh continue to act for him. As far as Mr. Legh was
concerned, there was no conflict. Hence the present application.

[13]        
The legal framework that arises on this application is established by
the Supreme Court of Canada in MacDonald Estate, the leading authority
on the disqualification of counsel based on prior client representation. In
addition, apart from any professional code of conduct, the Supreme Court has
inherent jurisdiction to make the order that is sought, and the purpose of this
power is to avoid the possibility of mischief occurring if counsel in question
was permitted to continue to act: see Wilson v. Brown.

[14]        
In the present case there are two competing interests at stake. One, the
confidence of the public in the integrity of the legal profession and the
administration of justice, having regard to the question of confidentiality
between solicitor and client; and secondly, the ability of a litigant to retain
counsel of his or her choosing.

[15]        
In MacDonald, both Justice Sopinka for the six member majority,
and Justice Cory for three others, concurring in the result, but disagreeing
somewhat on the appropriate test to be applied for disqualification of counsel,
emphasized the fundamental importance of the maintenance of the public’s
confidence in the integrity of our system of justice.

[16]        
In this regard, I pause here to simply state that applications such as
this are difficult for any court, given the very significant competing
interests at stake in such litigation.

[17]        
In MacDonald Estate the court found that the test to be applied
in determining whether there is a conflict of interest is whether a reasonably
informed person would be satisfied that no use of confidential information
would occur. The court also determined that the issues to be addressed on an
application for disqualification include:

(1)        Did the lawyer receive
confidential information attributable to a solicitor and client relationship
relevant to the matter at hand? [and] (2) Is there a risk … it will be used to
the prejudice of the client?

At paragraph 46 Justice Sopinka
concluded that:

…once it is shown … that there
existed a previous relationship which is sufficiently related to the retainer
from which it is sought to remove the … [lawyer], the court should infer that
confidential information was imparted unless the … [lawyer] satisfies the court
no information was imparted which could be relevant.

Justice Sopinka then
unequivocally stated this would be a "difficult burden to discharge",
and further described it as a "heavy burden". Justice Sopinka further
stated that:

… the court’s degree of
satisfaction [must] be such that it would withstand the scrutiny of the
reasonably informed member of the public that no such [confidential and
relevant] information passed …

[18]        
In the present case there is no question that the matters are sufficiently
related as the subject matter is the same motor vehicle accident where Mr.
Legh’s former client is now a defendant.

[19]        
In the present case counsel on behalf of Mr. Legh submits that Mr. Legh
has discharged the heavy burden that no relevant information was imparted. In
this regard counsel submits that Mr. Legh did not receive any confidential
information from his former client, Ms. Wilson, now the defendant in the same
action, which prompted her to retain Mr. Legh to act for her in the first place.

[20]        
The basis for this submission is contained in Mr. Legh’s affidavit when
he deposes that whatever Ms. Wilson told Mr. Legh, that Mr. Hanlan was present
and that throughout the retainer he did not have any meetings with Ms. Wilson
without Mr. Hanlan being in attendance.

[21]        
As a result, Mr. Legh submits that the court cannot infer that he
received confidential information from Ms. Wilson, because Mr. Hanlan and Ms.
Wilson had previously discussed the accident, given their relationship, and
they were together when Ms. Wilson discussed the matter with Mr. Legh.

[22]        
A similar submission to establish no confidential information was
forthcoming was, however, considered by Justice Loo in Abdul v. Nisha. In
that case counsel was opposing an application to be removed from acting for a
plaintiff because of a conflict of interest arriving from his prior
representation of the defendant.

[23]        
Counsel advanced the same argument there as here. That is, the lawyer
was not in possession of confidential information because both the defendant
and the plaintiff had consulted counsel together and therefore there was no
information obtained that could be considered confidential.

[24]        
This argument failed in Abdul and I am satisfied it must fail in
the present case. As Justice Loo found in Abdul, even where both clients
were together when consulting counsel "that fact does not overcome the
conflict of interest that was created" when counsel sued his former client.

[25]        
I pause here to note, as well, that I appreciate that unlike counsel in Abdul,
Mr. Legh is still not acting for Ms. Wilson in her separate claim as a
plaintiff against John Doe and ICBC.

[26]        
Moreover the facts in the present case are similar to those in Dobosz
v. Doe, another case involving a claim against an unidentified driver. At
paragraph 10 of that decision Justice Joyce agreed that if a solicitor has interviewed
both the driver and the passenger in an accident, then he or she has obtained
confidential information from both of them.

[27]        
In my view, the fact that both the defendant and the plaintiff were
interviewed together on several occasions by Mr. Legh does not mean counsel did
not obtain confidential information from Ms. Wilson about the accident.

[28]        
I am also not persuaded that the plaintiff’s assertion that Ms. Wilson
told Mr. Legh when she was advised he would be commencing an action
against her alleging her negligence was the cause of the accident, or at least
contributed to the accident, that she would not oppose Mr. Legh acting against
her, resolves this issue in favour of the plaintiff.

[29]        
Given the totality of the circumstances present here, I am not satisfied
counsel has discharged the heavy burden of establishing that no information was
imparted, which could be relevant, now that Mr. Legh is clearly in an
adversarial position against Ms. Wilson with respect to the same subject matter
that he was retained on.

[30]        
I also agree with the applicant that Ms. Wilson’s alleged consent must
give way to the public interest in the administration of justice, as there is
no doubt that here there is a legitimate concern about the appearance of
impropriety arising from a conflict where counsel was once acting for a client
but is now pursuing a claim against her arising out of the same incident.

[31]        
I am of the view that is especially significant where, as here, as I
have mentioned, Mr. Legh has filed a claim alleging Ms. Wilson contributed or
caused the accident. This clearly raises the distinct possibility that Mr. Legh
will be placed in the position of having to cross-examine his former client on
the same matter in which he once represented her.

[32]        
In this regard, when he was still in the Nova Scotia Court of Appeal,
Mr. Justice Cromwell put the issue simply when he observed that the
principle is whether a lawyer was, in effect, changing sides by taking an
adversarial position against a former client with respect to a matter that was
central to the prior retainer.

[33]        
Again, while I readily appreciate that in the present case Mr. Legh
discontinued acting for Ms. Wilson in her claim for damages before filing a
claim naming her as a defendant as a result of the same accident, I am
satisfied that by obtaining information about the circumstances of the motor
vehicle accident and her claim, Mr. Legh did receive confidential information
from Ms. Wilson. The fact that Mr. Hanlan was present when these confidential
discussions took place does not alter the fact Ms. Wilson imparted confidential
information to Mr. Legh, who now acts against her. It is the confidential trust
relationship established between Mr. Legh and Ms. Wilson which is the
fundamental principle which must be protected.

[34]        
In this regard, what Ms. Wilson is being protected against is having her
former lawyer act against her. On this particular point it is helpful to note
what Justice Dubin said many years ago in R. v. Speid, (1983) 8 C.C.C.
(3d) 18:

It was fundamental to … [the
client’s] rights that her solicitor respect her confidences and that he exhibit
loyalty to her. A client has every right to be confident that the solicitor
retained will not subsequently take an adversarial position against the client
with respect to the same subject-matter that he was retained on. That fiduciary
duty … is not terminated when the services rendered have been completed.

[35]        
In my view, a reasonably informed member of the public, aware of all the
circumstances in this case, would not be satisfied that no confidential
information was imparted which could be relevant.

[36]        
As a result, I am unable to conclude Mr. Legh has discharged that heavy
burden placed upon him pursuant to the principles outlined in MacDonald
Estate.

[37]        
Finally, I turn to the issue of counsel of choice and the desirability
for litigants to be able to retain counsel of their choice, as long as counsel
is in a position to act professionally and in the absence of any conflict of
interest.

[38]        
On this point Mr. Hanlan, the plaintiff, deposes that if Mr. Legh were
unable to act for him, this would cause Mr. Hanlan a great deal of hardship,
and that it "will be very difficult, if not impossible, to find a new lawyer
due to the complexity of the case."

[39]        
While I am confident that since December 2012 Mr. Legh and Mr. Hanlan
have established a rapport, and that Mr. Legh is well versed in the circumstances
of the case, and even though the question of pre-existing injuries does
complicate any personal injury action somewhat, I am unable to agree it will be
unduly difficult for Mr. Hanlan to obtain new counsel, given the trial date is
approximately 11 months away.

[40]        
On this point, it is instructive to note the following comments of Mr.
Justice Cory in MacDonald Estate, when referring to the relevant factors
at play when determining whether a litigant should be deprived of their chosen
counsel. He said at paragraph 58:

Of these factors, the most
important and compelling is the preservation of the integrity of our system of
justice. The necessity of selecting new counsel will certainly be inconvenient,
unsettling and worrisome to clients … However, the integrity of the judicial
system is of such fundamental importance to our country and, indeed, to all
free and democratic societies that it must be the predominant consideration in
any balancing of these three factors.

[41]        
In conclusion, as I have found that Mr. Legh has not discharged the
heavy burden of satisfying the court that no relevant confidential information
was imported, coupled with the fact that the retainers are clearly sufficiently
related to the same subject matter, Mr. Legh is in a conflict of interest that
precludes him from acting further for Mr. Hanlan.

[42]        
In these circumstances, as the court found in MacDonald Estate
and our Court of Appeal in Rosin v. McPhail, disqualification is
automatic. As a result, the application is allowed and I direct that Mr. Legh,
and his firm, be removed as counsel of record for the plaintiff Mr. Hanlan.

[43]        
As a result of this determination, as discussed at the outset of the
application, the application by the plaintiff to examine Ms. Wilson with
respect to the issue of the passing of confidential information is academic
and, for the record, is dismissed.

[44]        
Subject to any further submissions, as Justice Bracken found in Brueckner,
I am satisfied it is appropriate to order costs will be in the cause.

                  “B.D.
MacKenzie, J.”                    

The
Honourable Mr. Justice B.D. MacKenzie