Date: 19981015
Docket: T-1064-97
Between:
GROUPE TREMCA INC.
and
JAGNA LIMITED
Plaintiffs
- and -
TECHNO-BLOC INC.
Defendant
REASONS FOR ORDER AND ORDER
BLAIS J.
[1] This is an appeal from the decision rendered on July 3, 1998 by Mr. Richard Morneau, a prothonotary of the Federal Court, dismissing the defendant"s motion that plaintiffs" counsel be declared in a conflict of interest in this action and accordingly be declared disqualified from continuing to act on behalf of the plaintiffs.
[2] The action was brought by the plaintiffs for infringement of Canadian patent number 1,182,295.
[3] The prothonotary"s description of the facts and the issue in dispute is a very adequate reflection of the situation.
[4] It may be worth noting that counsel on both sides agree that the Robic firm, patent and trade mark agents, and the solicitors" firm of Léger Robic Richard are but one for the purposes herein.
[5] It is likewise conceded that there were three meetings between Mr. Ciccarello, the defendant"s vice-president, and Mr. Antoine Gauvin, a patent agent for Robic.
[6] Counsel for the parties dissected at length the decision in MacDonald Estate v. Martin,1 in which Sopinka J. laid down the general principles to be followed in matters involving conflict of interest for the solicitors involved in a case.
[7] The point in dispute is whether confidential information was exchanged during these meetings and whether Mr. Gauvin, and consequently the solicitors in Léger Robic Richard, were subsequently in a conflict of interest when they agreed to represent the plaintiffs in this matter.
[8] Counsel for the defendant Techno-Bloc Inc. submits that confidential information was conveyed at the time of these meetings and that accordingly the solicitor for Léger Robic Richard should be declared disqualified from representing their clients in this matter.
[9] Counsel for the plaintiffs contends that no confidential information was conveyed during these discussions and that accordingly counsel were fully competent to represent the plaintiffs several years later in this matter, since no confidential information had been conveyed and they were not in a conflict of interest.
[10] The plaintiffs" counsel argue that Mr. Ciccarello"s testimony indicates clearly that no confidential information had been conveyed and furthermore that the defendant had waived citing any conflict of interest during previous legal proceedings for infringement of patent 295, when the defendant had been sued for infringement.
[11] The defendant was well aware at the time of these proceedings that the legal firm Léger Robic Richard, which it had consulted several years earlier, was now representing the interests of the plaintiffs and the defendant had waived the possibility of citing the conflict of interest in favour of filing a defence in an action that was ultimately abandoned several years later.
[12] The issues in dispute were identified by defendant"s counsel as follows: Did the prothonotary Mr. Richard Morneau err in law in applying the principles set out in MacDonald Estate v. Martin2 ("Martin") to this situation? And did the prothonotary Mr. Richard Morneau err in fact and in law in deciding that the information contained in the documents received by Robic were in the public domain and that consequently Léger Robic Richard had discharged its burden of proof by applying the principles laid down in Martin ?
[13] Before going further, what about this much talked-about Martin decision and what are the parameters that were traced by Sopinka J. for a court faced with determining whether or not a solicitor is in a conflict of interest situation?
[14] First, and I quote from page 1235:
...the Court is concerned with three competing values: (1) the concern to maintain the high standards of the legal profession and the integrity of our system of justice; (2) the countervailing value that a litigant should not be deprived of his or her choice of counsel without good cause; and (3) the desirability of permitting reasonable mobility in the legal profession.... The use of confidential information is a matter usually not susceptible of proof, and the test must therefore be such that the public represented by the reasonably informed person would be satisfied that no use of confidential information would occur. Two questions must 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?... Rather, 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. The degree of satisfaction must withstand the scrutiny of the reasonably informed member of the public. This will be a difficult burden to discharge.
In answering the second question, whether the confidential information will be misused, a lawyer who has relevant confidential information is automatically disqualified from acting against a client or former client.
[15] Although the facts in Martin are not readily comparable to the facts in this case, the Supreme Court judges clearly intended that this decision would set out the relevant principles, and this Court assumes that the general principles laid down in Martin should, in so far as possible, apply in the case at bar.
[16] At page 1244 of the decision, Sopinka J. explains the professional responsibility of the lawyer:
Nothing is more important to the preservation of this relationship than the confidentiality of information passing between a solicitor and his or her client. The legal profession has distinguished itself from other professions by the sanctity with which these communications are treated. The law, too, perhaps unduly, has protected solicitor and client exchanges while denying the same protection to others. This tradition assumes particular importance when a client bares his or her soul in civil or criminal litigation. Clients do this in the justifiable belief that nothing they say will be used against them and to the advantage of the adversary. Loss of this confidence would deliver a serious blow to the integrity of the profession and to the public"s confidence in the administration of justice.
[17] After commenting on the Code of Professional Code of the Canadian Bar Association, Sopinka J. reports Commentary 8 [sic] following this Code, which reads as follows:
11. A lawyer who has acted for a client in a matter should not thereafter act against him (or against persons who were involved in or associated with him in that matter) in the same or any related matter, or place himself in a position where he 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 he has previously done for that person.
[18] Later, Sopinka J. resorts to two fundamental criteria in assessing conflicts of interest:
The law in Canada and in other jurisdictions has adopted one of two basic approaches in determining whether a disqualifying conflict of interest exists: (1) the probability of real mischief, or (2) the possibility of real mischief. The term "mischief" refers to the misuse of confidential information by a lawyer against a former client. The first approach requires proof that the lawyer was actually possessed of confidential information and that there is a probability of its disclosure to the detriment of the client. The second is based on the precept that justice must not only be done but must manifestly be seen to be done. If, therefore, it reasonably appears that disclosure might occur, this test for determining the presence of a disqualifying conflict of interest is satisfied.
[19] And further on, at page 1260, Sopinka J. explains:
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.
[20] Sopinka J. agrees that this may be a difficult burden for the solicitor but says it is nonetheless necessary to allow the solicitor to discharge the burden.
[21] In this case, the previous relationship and its relationship with the retainer have been proven and are sufficient.
[22] The point on which the parties do not agree is whether the solicitor has rebutted the presumption and managed to demonstrate that no relevant information was disclosed.
[23] In my humble opinion, I think the whole issue, as it was debated both before the prothonotary and before me, lies in this point. Let us begin, first, by considering what the information is that was conveyed between Mr. Ciccarello and Mr. Gauvin. Plaintiffs" counsel makes much of the fact that Mr. Ciccarello himself stated, on his examination, that all of the information exchanged during the meeting with Mr. Gauvin was in the public domain. At paragraphs 23 and 24 of his decision the prothonotary notes, quite correctly, the information that was passed in the other direction, namely Mr. Gauvin"s opinion as to the scope of the invention covered by patent 295 and whether or not the OMNI block was covered by that patent, and Mr. Gauvin"s opinion on the draft licence that had been presented by Mr. Risi to Mr. Ciccarello.
[24] Defendant"s counsel right noted that the elements on which Mr. Ciccarello was questioned during his examination did not cover all of the exhibits that make up the Gauvin file, which was filed under the name "[Translation ] Robic file" and kept in a confidential folder for the purposes of the file.
[25] It is also hard to assess the discussions between the two parties, Mr. Ciccarello and Mr. Gauvin, in their totality, since these discussions continued over three meetings that lasted several hours in total.
[26] Did the content of these discussions cover confidential information, which might have been used against the defendant and cause him some mischief?
[27] In light of the evidence before me, I must begin by dismissing the contentions by the plaintiff"s counsel that there was a waiver of raising the issue of conflict of interest and that the defendant agreed that Léger Robic Richard could act as counsel for the plaintiffs.
[28] Plaintiff"s counsel relies in particular on the fact that the defendant thought about this at one point and ultimately decided to file a defence " in the previous case, which ended in an abandonment.
[29] It is important to note that in the present case, the action was commenced in May 1997 and the motion to seek the withdrawal of the solicitor was filed in February 1998. As I stated earlier to counsel during the hearing, the time taken to request the withdrawal of counsel, which was done in February 1998, for an action filed in May 1997, is not exorbitant in the circumstances, in my opinion.
[30] However, I am of the view that the waiver of raising the conflict of interest or the consent relied on by the plaintiff who had been a party in the previous case cannot apply in the present case, since it is apparent from the record that this is a different action which must be assessed on its own merits. No doubt it would be interesting to assess whether or not Léger Robic Richard was or was not in a conflict of interest in the previous case, which ended in an abandonment, but this issue was not put to the court, the court was therefore unable to address it, and the matter ended in an abandonment.
[31] As to the substance of the dispute " whether or not Léger Robic Richard was in a conflict of interest " defendant"s counsel was well advised to raise at the beginning of his authorities the Canadian Bar Association"s Code of Professional Conduct, which was referred to in the decision by Sopinka J. in the Martin case.
[32] Chapter V, entitled "Impartiality and Conflict of Interest", commences with a fundamental rule:
The lawyer must not advise or represent both sides of a dispute and, save after adequate disclosure to and with the consent of the client or prospective client concerned, he should not act or continue to act in a matter when there is or there is likely to be a conflicting interest.3
[33] This principle is of such importance that in my opinion it ought to inform any effort by a court required to assess whether either of the counsel of record is likely to be in a conflict of interest situation.
[34] In Les Inventions Morin Inc. v. Les Équipements Claude Éléments Inc.,4 Dubé J. states, at p. 551:
In light of these tests, I find that the concern for preserving the integrity of our judicial system in this case prevails over the right of the defendants not to be deprived of Mr. Girouard"s services. Since he has himself admitted having acted for the plaintiffs in respect of the same patent, he must therefore not place himself in a position where he might be tempted to violate professional privilege.
[35] Referring to the case at bar, it is obvious to me that the work performed by Mr. Gauvin and Mr. Gauvin"s meetings with Mr. Ciccarello, the defendant"s vice-president, created a solicitor-client relationship in which not only was confidential or non-confidential information exchanged between them but there was an exchange of opinions and views between the two men.
[36] A sequence of three meetings between a client and his solicitor can create an atmosphere of trust and discussion that constitutes a framework for confidential communications between the solicitor and his client. It is not possible for either the client or the solicitor to inventory every aspect of these discussions, but it is clear to me that as a result of these meetings Mr. Gauvin was in a better position to know the objectives and strategic considerations contemplated by Mr. Ciccarello in relation to the disputed patent.
[37] I assume, in this regard, that the relationship established between Mr. Ciccarello and the patent agent, Mr. Gauvin, was equivalent to the relationship between Mr. Ciccarello and the legal firm Léger Robic Richard, given the close relationship between Gauvin, the patent officer in the Robic office, and Léger Robic Richard, the legal firm, which is acknowledged by both parties.
[38] Plaintiffs" counsel has failed to persuade me that having given Mr. Ciccarello an opinion, both orally and in writing, on the scope of patent 295 and subsequently bringing an action on behalf of the other party alleging infringement of that very patent is not, on its face, a conflict of interest. Although the reason for the infringement action has been altered over the years between the two actions, it still involves the same patent for which the patent agent Gauvin gave an opinion in one sense to Mr. Ciccarello while the legal firm with which he is closely related is bringing an action in support of an opinion appreciably different in relation to the same patent and against the same individual.
[39] I think it is worth quoting the comments of Gonthier J. in Donald D. Thompson v. Smith Mechanical Inc. et al.,5 at p. 785 of his judgment:
[Translation]
However, solicitor-client privilege is not the only reason to prohibit conflict of interest even independently of any issue as to simultaneity of retainers. To allow a solicitor to advise and act on behalf of clients with opposing interests, albeit successively, in the same case without their agreement, would undermine the confidence that a litigant must have in relation to his counsel, and would be incompatible with the loyalty that a solicitor owes to his client. These are two conditions that are closely interrelated and essential to the accomplishment by the solicitor of his role as a counsellor of his client and as his client"s representative in Court. Such a practice is especially inadmissible given the necessity in this respect not only to ensure the independence and impartiality of the solicitor but also to make this apparent. This is the price of ensuring not only that justice is done but that it is seen to be done, in accordance with the well-known maxim on which the integrity of the legal system (of which solicitors are an essential element) is based. Such a practice may also be in conflict with the right of the parties to a full and equal hearing, as prescribed by section 23 of the Charter.
These conclusions are consistent with the interpretation of conflict of interest by the profession itself, as expressed in the Code of Professional Conduct of the Canadian Bar Association, in which a very similar general provision is found in article 3.05.04, in chapter V.
[40] It is also worth considering the comment by Strayer J.A. in Almecon Industries Ltd. v. Nutron Manufacturing Ltd.,6 at p. 328:
General denials are not enough to satisfy the court that no such information could have been imparted, nor is their analysis seeking to demonstrate the information was already known. A "reasonably informed person" would assume a variety of incidental information and opinions, significantly nuanced, would have been transmitted between two firms engaged in the defence of two defendants in similar litigation brought by the same plaintiff involving the validity of the same patent.
Later in the judgment, Strayer J.A. likewise refers to the Code of Professional Conduct of the Canadian Bar Association.
[41] In Bristol-Myers Squibb Canada Inc. v. Merck Frosst Canada Inc.,7 Dyson J. of the Ontario Court, General Division, disqualified a legal firm, stating at p. 525:
Nevertheless, it seems abundantly clear to me there was "a substantial relationship" between Fraser & Beatty and Merck Frosst and the activity complained of by Bristol-Myers (the dissemination of misleading information) was obviously related to many of the retainers Fraser & Beatty has for Merck Frosst, and particularly with respect to "an opinion with respect to the competition law implications of a proposed marketing and production strategy".
Accordingly, I am of the view that Fraser & Beatty are in conflict acting against its former client Merck Frosst and that if would be patently unfair for them to act in a position against their former client in these circumstances and therefore they are disqualified from doing so.
[42] In another decision, Domaine Ti-Bo Inc. et al. v. La corporation municipale de la ville de Repentigny,8 Clément Trudel J. of the Superior Court of Quebec stated, at p. 6:
[Translation]
Whereas this case and the one in which the two solicitors from the firm Dunton Rainville were consulted are closely related and are obviously connected;
Whereas in light of all the facts of the case, including the testimony of the solicitors in question, the court is not convinced that a reasonably informed person would be persuaded that the solicitors had not been apprised of confidential information that might be used to the detriment of their former clients;
Whereas if Dunton Rainville continues to be the solicitor of record, there is a risk either that they will breach solicitor-client privilege by taking advantage of information obtained when their new adversaries (the plaintiffs) were their clients or that they will not be independent of their adversaries of today who were their clients of yesterday;
And in view of the public interest criterion, which must tend to convince the public, that is, a reasonably informed person, that there is no appearance or apprehension of conflict of interest or any possibility of potential disclosure of confidential information;
[43] In light of these considerations and a number of others that need not be cited here, Trudel J. held that the solicitors in question should be disqualified.
[44] In relation to the connection between a patent officer and a legal firm closely associated with it, it is interesting to read the comments by Gibson J. of the Federal Court in Decap et al. v. Midland Manufacturing Ltd.,9 and I quote:
The solicitors of record for the Applicants were, until the time of the order of the associate senior prothonotary, Fillmore & Riley of Winnipeg. It was acknowledged before me, for the purposes of this application, that Fillmore & Riley is closely associated with Ade & Company, patent and trade mark agents, also of Winnipeg....
In excerpts from letters from Mr. Battison to the Respondent that are quoted earlier in these reasons, Mr. Battison expressed the view that Ade & Company would not be able to involve itself in any litigation relating to the "Bottom Dump" trailer patent by reason of its former relationship both to the Applicants and the Respondent. While this view was later withdrawn on the basis of legal advice, I am satisfied that it represented the view of a "reasonably informed member of the public" that is at the heart of these issues. The view of a member of the public who has taken legal advice on the subject is not the standard that should prevail....
I conclude that the relationship between a patent agent and a solicitor in closely associated firms and in relation to patent litigation is much more akin to the relationship between two solicitors in the same firm than it is to the relationship between a solicitor and a secretary employed by his or her firm.
[45] In Bert Fabian v. 293098 Canada Inc. and Roger Bernard,10 Roland Tremblay J. of the Quebec Superior Court quoted Cory J. in Martin:
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. Reasonable mobility may well be important to lawyers. 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.
[46] In regard to the parameters that would allow a Federal Court judge to review a discretionary order of a prothonotary of this Court, it is necessary to refer to R. v. Aqua-Gem Investments Ltd.,11 per MacGuigan J.A. on behalf of the Federal Court of Appeal (Décary and Robertson JJ.A.), and I quote at page 454:
I am in agreement with counsel for the appellant that the proper standard of review of discretionary orders of prothonotaries in this Court should be the same as that which was laid down in Stoicevski for masters in Ontario. I am of the opinion that such orders ought to be disturbed on appeal only where it has been made to appear that
| (a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or |
| (b) in making them, the prothonotary improperly exercised his discretion on a question vital to the final issue of the case. |
In each of these classes of cases, the Motions Judge will not be bound by the opinion of the prothonotary; but will hear the matter de novo and exercise his or her own discretion.
[47] I conclude, therefore, that the decision reached by the prothonotary in the case at bar was clearly wrong, in the sense that the exercise of his discretion was based upon a misapprehension of the facts; indeed, from a review of the evidence presented to me and the documents filed on the record, it is clear to me that the discussions between Mr. Ciccarello, the defendant"s vice-president, and Mr. Antoine Gauvin, a Robic patent agent, in the course of their three meetings did involve the exchange of documents and in particular oral discussions between the two of them, fully subject to privilege, that confidential information was exchanged on both sides between these two individuals and that accordingly Mr. Antoine Gauvin, a Robic patent agent, and consequently the Léger Robic Richard law firm were subsequently in a conflict of interest when they agreed to represent the plaintiffs in this case.
[48] Accordingly, it is appropriate, in my opinion, that the matter be heard de novo and that I exercise my own discretion as to the assessment of this motion.
[49] As to the cases submitted by counsel for the plaintiffs, I have carefully reviewed Morissette-Paré v. Gestion des rebuts D.M.P. Inc.,12 a judgment by LeBel, Chamberland and Forget JJ.A. Although the Court of Appeal judges rejected disqualification in that case, their decision was based on an assessment that there was no risk that confidential information had been conveyed and the belief that the application in that matter was "[translation ] rather a tactical gesture designed to deprive a party of the solicitor of its choice, without actual need, in light of a purely hypothetical fear of conflict of interest". Obviously, these considerations cannot apply in the case now under appeal.
[50] As to Salatellis v. Hellenic Community of Montreal,13 I have carefully reviewed the judgment of Vallerand, Baudouin and Rousseau-Houle JJ.A. of the Quebec Court of Appeal, and again, I refer to the first paragraph on page 5:
[Translation]
WHEREAS, in the particular circumstances of this case, it has been categorically established that no confidential information was obtained in the 1985 proceeding that might have some connection with or direct relation to this litigation; ...
WHEREAS the sole fact that a legal firm represented the adverse party in previous litigation with no direct connection to the present litigation cannot in fact, by itself, without further justification, serve to deny the right of any litigant to choose his own representative; [emphasis added]
[51] Again, I have some difficulty in applying the reasons in that case to the case at bar.
[52] Furthermore, in Asian Video Movies Wholesaler, Inc. v. Mathardoo et al.,14 Denault J. found that the prothonotary in that case had initially disqualified the solicitors and, in doing so, had failed to take into account the evidence, which was fairly clear, that there had been no conveyance of confidential information. Again, I am unable to conclude from the evidence presented to me that there was no confidential information that passed between the two respective parties.
[53] As to the decision of the Quebec Superior Court in Association des radiologistes du Québec v. Rochon,15 Diane Marcelin J. found that there had been no exchange of privileged information and, again, I was unable to find any reason to apply the findings and facts to the case at bar.
[54] The plaintiffs" counsel drew my attention to page 169 of Castro Holdings, Ltd. (Dans l"affaire de la faillite de)16 concerning the consent given by a party to his solicitor to act for the other party. I conclude, from my reading of the decision of Gendreau J., that, for the reasons referred to earlier, this reasoning is inapplicable in the present case.
[55] The same considerations apply to the following cases that were cited: Clément Marchand Service Gaz Naturel Ltée v. Roger Lachapelle Pontiac Buick,17 Association professionnelle des sténographes officiels du Québec v. Québec (Procureur général)18 and Crystal Heights Co-operative Inc. v. Barban Builders Inc.,19 in which the party had clearly consented to the solicitor acting on behalf of the opposing party.
[56] I have no reason, moreover, to think that counsel for the defendants can be accused of unethical conduct in invoking a conflict of interest by counsel in this proceeding.
[57] For all of these reasons, I am unable to conclude that the plaintiffs" counsel has rebutted the presumption of confidentiality of the information conveyed and I conclude that there is indeed a conflict of interest.
[58] I will therefore allow the motion by the defendant. I declare that the firm of Léger Robic Richard is disqualified from representing the plaintiffs Groupe Tremca Inc. and Jagna Limited in this proceeding, with costs in the cause.
| Pierre Blais |
| J. |
OTTAWA, ONTARIO
October 15, 1998
Certified true translation
Bernard Olivier
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| FILE NO. T-1064-97 |
| STYLE: GROUPE TREMCA INC. ET AL. v. TECHNO-BLOC INC. |
| PLACE OF HEARING: MONTRÉAL, QUEBEC |
| DATE OF HEARING: SEPTEMBER 10, 1998 |
REASONS FOR ORDER OF BLAIS J.
| DATED: NOVEMBER 15, 1998 |
APPEARANCES:
FRANÇOIS GRENIER FOR THE PLAINTIFFS
and
BOB SOTIRIADIS
JEAN CARRIÈRE FOR THE DEFENDANT
SOLICITORS OF RECORD:
LÉGER ROBIC RICHARD FOR THE PLAINTIFFS
MONTRÉAL, QUEBEC
MENDELSOHN FOR THE DEFENDANT
ROSENTZVEIG SCHACTER
MONTRÉAL, QUEBEC
__________________1 [1990] 3 S.C.R. 1235.
2 Supra.
3 Code of Professional Conduct of the Canadian Bar Association, p. 21.
4 (1993), 46 C.P.R. (3d) 547.
5 [1985] S.C. 782.
6 (1994), 55 C.P.R. (3d) 327.
7 (1966), 66 C.P.R. (3d) 521.
8 705-05-002236-977 (S.C.).
9 (1994), 55 C.P.R. (3d) 421.
10 R.E.J.B. 98-5568 (S.C.).
11 [1993] 2 F.C. 425.
12 J.E. 97-516 (Que. C.A.).
13 J.E. 92-70 (Que. C.A.).
14 (1991), 36 C.P.R. (3d) 29 (F.C.).
15 J.E. 96-1417 (Que. S.C.).
16 [1995] R.J.Q. 1665 (Que. C.A.).
17 J.E. 95-865 (Que. C.A.).
18 J.E. 96-1985 (Que. S.C.).
19 (1987), 19 C.P.C. (2d) 212 (Ont. Dist. Ct.).