CITATION: Stewart v.
|
DATE: 20090430 |
DOCKET: C49572 C49573 |
COURT OF APPEAL FOR ONTARIO |
O’Connor A.C.J.O., Goudge and Epstein JJ.A. |
BETWEEN: |
Andrae Stewart, Jerrome Stewart and Atrisha-Lee Stewart, minors by their Litigation Guardian Judith Davis, Desmond Stewart and the said Judith Davis, personally |
Plaintiffs (Appellants) |
and |
Humber River Regional Hospital, A. Bell, M. Nadel, W. Turosienski, L. Larabie, S. Gordner, A. Wadden, M. Rimma, J. Pipitone, L. Campbell, S. Burton, J. Doe 1 Through 3 |
Defendants (Respondents) |
AND BETWEEN: |
Adriana Miele, a mentally incapable person by her Litigation Guardian Anna Miele, Marco Miele, a minor by his Litigation Guardian Anna Miele, Enzo Miele and the said Anna Miele, personally |
Plaintiffs (Appellants) |
and |
Humber River Regional Hospital, S. Greenspan, M. Nadel, W. Turosienski, P. Skowron, K. Werezak, A. Covello, W. Rodriguez, D. Whiting, J. Ventura, J. Gow, J. Burnett, J. Doe 1, J. Doe 2, L. Hew, J. Dow 4 Through 18 |
Defendants (Respondents) |
Gavin MacKenzie and Leila Wright, for the appellants |
Deborah Berlach, for the respondents |
Heard: January 19, 2009 |
On appeal from the order of the
|
Goudge J.A.: |
[1] When an expert who has received solicitor-client confidences from one party to a lawsuit is subsequently retained to give an opinion by counsel for the opposing party, should that counsel be prevented from continuing to act? That is the issue in these appeals.
[2] Pattillo
J., with whom the
[3] In
these actions, Adriana Miele and Andrae Stewart each claim that they suffered
serious permanent brain damage at the time of their births. Both were born
at the
[4] The statements of claim in both actions were issued on the same day, June 11, 2001. The allegations of negligence pleaded against the Hospital and the defendant nurses are identical in both cases. In March 2004, both actions were amended on the same day to include a pleading against the Hospital of spoliation of evidence. Mr. Hilik Elmaliah and his firm, Sommers & Roth, have acted for the plaintiffs in both actions from the beginning.
[5] The
actions have moved ahead in parallel. Case conferences were held at the
same time with the Case Management Master. Both were spoken to at the same
time in
[6] To respond to these actions, the Hospital put together a management team. It included Ms. Ann Holden, who, as manager of the Women’s and Children’s Health Program, was responsible for nursing in the labour and delivery unit of the Hospital. She had been with the Hospital since November 2002. The same firm of solicitors acts for the Hospital and the defendant nurses in both actions.
[7] In preparation for examination for discovery in these actions, counsel for the Hospital and the nurses attended at the Hospital to meet with the Hospital representatives, including Ms. Holden. From February 4, 2003 to March 20, 2003, Ms. Holden met with counsel on four separate occasions and discussed the files in both actions in detail.
[8] The meetings included not just preparation for discovery, but discussions of strategies to conduct the defence in both actions.
[9] Ms. Holden was to be the representative of the Hospital examined for discovery in both actions, something Mr. Elmaliah was aware of. On February 12, 2003, he examined Ms. Holden for discovery in the Miele action. Immediately prior to that, she met with counsel for the Hospital to discuss the issues in the Miele action and the strategy for her discovery.
[10] Ms. Holden’s examination for discovery in the Stewart action was scheduled for March 27, 2003, but was cancelled due to the outbreak of SARS at the Hospital. Subsequently, Mr. Elmaliah elected not to examine a representative of the Hospital in that action on the basis that he had already obtained the necessary evidence from the Hospital in both actions from Ms. Holden’s examination in the Miele action.
[11] On October 18, 2004, Ms. Holden left the employ of the Hospital.
[12] On August 8, 2006, Mr. Elmaliah wrote to Ms. Holden, enclosing a number of the Hospital records and transcripts of the examinations for discovery of individual defendants in the Stewart action. His letter also described the background facts in the case. The letter did not explicitly seek her opinion or otherwise outline the nature of the retainer being proposed, but simply requested that Ms. Holden contact Mr. Elmaliah at her earliest possible convenience to discuss the matter further.
[13] On December 11, 2006, Ms. Holden, who has provided expert reports in a number of cases to a number of law firms, including Sommers & Roth, wrote to Mr. Elmaliah with her opinion on the standard of nursing care given to Andrae Stewart by the Hospital and the defendant nurses. Her opinion was that in this case the nurses did not properly monitor or document the fetal heart rate and uterine activity prior to birth. She commented adversely on the inadequacy of the forms used by the Hospital at that time, and its failure to maintain certain records. She concluded that the nursing care was substandard, and led to Andrae’s present condition.
[14] On December 21, 2006, Ms. Holden was contacted by counsel for the Hospital. She assisted counsel in providing answers to the undertakings given during her examination for discovery in the Miele action, and again discussed with counsel the strategy for the conduct of the defence in both actions. She said nothing about having provided Mr. Elmaliah with an expert report in the Stewart action.
[15] On January 23, 2007, Mr. Elmaliah served counsel for the Hospital with Ms. Holden’s expert report in the Stewart action.
[16] On February 13, 2007, counsel for the Hospital wrote to Mr. Elmaliah, saying that his retaining of Ms. Holden as an expert had given his firm unauthorized access to information subject to solicitor-client privilege and therefore his firm must remove itself as solicitor of record in both actions. Mr. Elmaliah responded by letter the same day. He took the position that the two actions were not related and had nothing to do with each other. He noted that Ms. Holden was retained in the Stewart action but not in the Miele action, that no representative of the Hospital was discovered in the Stewart action, that there is no property in an expert witness, that he had had no conversations with Ms. Holden regarding the Stewart action, and that he had no intention of discussing with Ms. Holden any privileged information regarding either action. He concluded by making it clear that his firm would not remove itself as counsel.
[17] The result of this standoff was the motion brought before Pattillo J. by counsel for the Hospital seeking an order removing Mr. Elmaliah and his firm as counsel for the plaintiffs in both actions.
[18] Pattillo J. first determined that Ms. Holden was in possession of confidential information attributable to a solicitor-client relationship and that this information was relevant to both actions. He then addressed the question of whether counsel for the appellants had received this confidential information. He applied the reasoning in MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235, to conclude that the relationship between counsel and an expert witness meant that it was appropriate to infer receipt by counsel of confidential information, and that the appellants had not rebutted that inference. He went on to apply a presumption that this created a risk that the confidential information would be misused to the prejudice of the Hospital and defendant nurses. He concluded that the appellants had not rebutted that inference. Finally, he found that in light of the factors described in Celanese Canada Inc. v. Murray Demolition Corp., [2006] 2 S.C.R. 189, removal was the appropriate remedy.
[19] The
appellants moved before Carnwath J. for leave to appeal to the
[20] In
the Divisional Court, the appellants advised for the first time that they
were prepared to undertake that they would not call Ms. Holden in either
action, would refrain from communicating with her about either action,
would destroy all copies of her report of December 11, 2006, and would
consent to the appointment of independent counsel to review their files
to verify that they had been purged of any information from Ms. Holden.
However, the appellants also conceded that if they were limited to the
one issue on which leave was granted, the appeal could not succeed. In
light of that concession, the
[21] The
appellants then sought leave to appeal to this court. We were advised that
the respondents took the position that if leave were granted it should
be confined to the single issue on which leave had been granted to the
[22] The central issue is whether counsel for the appellants were properly found to be in possession of relevant solicitor-client information to which they have no claim of right such that they must be removed as the appellants’ solicitor of record. The approach to this issue must be guided by the principles enunciated by the Supreme Court of Canada in MacDonald Estate and Celanese.
[23] The starting point is that the courts have an inherent supervisory jurisdiction that extends to the removal of solicitors from the record where their conduct of legal proceedings would adversely affect the administration of justice (MacDonald Estate, at p. 1245).
[24] Where solicitor-client information comes into the possession of the opposing party this creates a serious risk to the integrity of the administration of justice. The court in Celanese put it this way at paragraph 34:
Whether through advertence or
inadvertence the problem is that solicitor-client information has wound
up in the wrong hands. Even granting that solicitor-client privilege is
an umbrella that covers confidences of differing centrality and importance,
such possession by the opposing party affects the integrity of the administration
of justice. Parties should be free to litigate their disputes without fear
that their opponent has obtained an unfair insight into secrets disclosed
in confidence to their legal advisors. The defendant’s witnesses ought
not to have to worry in the course of being cross-examined that the cross-examiner’s
questions are prompted by information that had earlier been passed in confidence
to the defendant’s solicitors. Such a possibility destroys the level playing
field and creates a serious risk to the integrity of the administration
of justice. To prevent such a danger from arising, the courts must act ‘swiftly
and decisively’ as the
[25] In short, if the public loses faith that communications between lawyer and client will be kept confidential and will not be used to the advantage of the adversary, this loss of faith would deliver a serious blow to the integrity of the legal profession and to the public’s confidence in the justice system.
[26] In my view, in this case the jurisprudence requires that four questions be answered:
1. Have the respondents shown that Ms. Holden received confidential information attributable to the solicitor-client relationship between the respondents and their counsel, and is this information relevant to these two actions?
2. Has counsel for the appellants received the confidential information?
3. Is there a risk that the confidential information will be used to the prejudice of the respondents?
4. Is removal from the record the appropriate remedy?
[27] The first question is easily answered in the affirmative. Counsel for the appellants in this court, who was retained only following the decision of Pattillo J., did not contest the point. Ms. Holden was privy on a number of occasions to solicitor-client communications in both actions. She was to be the Hospital’s representative discovered in both actions. She was prepared for discovery and was in fact examined in one of them. The claims in each action are pleaded in identical terms and the actions have proceeded in tandem from their inception. There can be no doubt that Ms. Holden has received confidential information in these very actions that is attributable to the solicitor-client relationship between the respondents and their counsel.
[28] The second question is more difficult. In determining whether counsel for the appellants was in receipt of the confidential information protected by the solicitor-client privilege held by the respondents, Pattillo J. applied the approach set out in MacDonald Estate. In my view he was correct to do so.
[29] MacDonald Estate concerned a lawyer who acted as junior counsel for a defendant in an action, in the course of which she became privy to many confidential communications between counsel and that defendant. She subsequently changed firms and joined the law firm representing the plaintiff in the action.
[30] The Supreme Court of Canada set out two questions to be answered in such a case:
1. Whether the lawyer had received confidential information attributable to a solicitor-client relationship relevant to the matter at hand; and
2. Whether a risk exists that it would be used to the prejudice of the client holding the privilege.
[31] The court made clear that the overriding policy requirement is that the public, represented by the reasonably informed person, should be satisfied that no use of confidential information would occur (p. 1259-60).
[32] In determining whether the transferring lawyer has received confidential information, Sopinka J., speaking for the court, said this at p. 1260-61:
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.
[33] The appellants assert that this approach should not be extended to an expert witness who has received privileged information from one party relevant to the matter and is then retained by opposing counsel, because an expert is not a fact witness, but merely provides an opinion based on facts supplied to the expert.
[34] Despite Mr. MacKenzie’s able argument, I disagree. In my view, it is appropriate to apply the MacDonald Estate approach to assess whether, when an expert has received solicitor-client information from one party and then is retained by opposing counsel, opposing counsel has acquired that information. The court should infer that confidential information was imparted unless opposing counsel satisfies the court that no such information passed. The court must ask itself whether the reasonably informed member of the public would be so satisfied. This will be a heavy burden for opposing counsel to discharge.
[35] There are a number of reasons why this approach, first enunciated in MacDonald Estate, is appropriately applied in this context.
[36] First, like the transferring lawyer, the expert in these circumstances serves as a vehicle for the potential transmission of confidential information to the opposing firm of solicitors. The expert comes to the opposing firm with confidential information relevant to the matter at hand. In this case, there were two such matters, one the very one in which the expert was retained by opposing counsel, and the other a closely related case with identically pleaded issues.
[37] Second, the relationship between expert and counsel prima facie entails the sharing of information about the facts and issues in the case. The expert cannot be expected to screen out of those communications the confidential information the expert has previously received that is of relevance to the case. This is particularly so since experts need have no training in identifying what of previously received information is legally privileged. In MacDonald Estate, at p. 1261, the court concluded that the transferring lawyer cannot compartmentalize his or her mind to screen out the solicitor-client information. No more should be expected of the expert in similar circumstances.
[38] Third, since the question is what, if any, confidential information was acquired by the opposing firm, placing the onus on it to rebut the presumption is simply to put that onus on the party best positioned to speak to a part of the question, namely what information was in fact acquired, whether confidential or not. In my view, it would not be appropriate to place on the party holding the solicitor-client privilege the burden of showing that confidential information has wound up in the wrong hands, because this could require that party to reveal the very information for which protection is sought.
[39] Finally, the requirement that the opposing law firm show that it did not acquire any confidential information to which it has no claim of right reflects the burden of persuasion found in the overriding policy requirement that the public, represented by the reasonably informed person, should be satisfied that no use of confidential information would occur.
[40] Thus, unless counsel for the appellants can demonstrate that not only the court but also the reasonably informed member of the public would be satisfied that no confidential information was imparted by Ms. Holden, the court should infer that confidential information relevant to both actions passed.
[41] In my opinion, in the circumstances of this case that heavy burden cannot be discharged.
[42] Mr. Elmaliah filed an affidavit in each action in which he said simply that he had had no discussions or communications with Ms. Holden with respect to the Miele action and none with respect to the Stewart action apart from his letter to her of August 8, 2006 and her written response of December 11, 2006. He also said that neither he nor his firm received any privileged or confidential information from Ms. Holden which emanated from her employment with the hospital, although I am uncertain about how he would know what portion of the information that was received was the product of solicitor-client communications between Ms. Holden and counsel for the respondents.
[43] Ms. Holden also filed an affidavit in each action in which she said that she had had no oral or written discussions with Mr. Elmaliah or any member of his firm with regard to the Miele action, and no conversations with them with respect to the Stewart action either before or after she sent her opinion letter to them. She also said that in preparing that letter she relied only on the material sent to her by Mr. Elmaliah.
[44] On the other side of the ledger, there are a number of considerations. Ms. Holden acknowledged in cross-examination on her affidavits that her usual practice when requested to provide an opinion was to contact counsel after reviewing the records. She indicated that she likely would have called Mr. Elmaliah before delivering her report to say that she had reviewed the records and to discuss her draft report with him.
[45] Indeed, Mr. Elmaliah’s original letter invited communication. It was entirely silent on the precise task asked of her, thereby almost necessitating some contact. And it explicitly requested Ms. Holden to contact him to discuss the matter further.
[46] One communication that Mr. Elmaliah undeniably received from Ms. Holden is her written opinion of December 11, 2006. We cannot know for certain the extent to which it may reflect the confidential information that she had previously received. Her assertion that she relied only on the written material for Mr. Elmaliah requires the dubious assumption that she was able to compartmentalize her mind.
[47] In addition, the close linkage between the two cases makes it likely that any communications that did take place between Mr. Elmaliah and Ms. Holden would have had relevance to both actions.
[48] Finally, it must be noted that although Mr. Elmaliah was aware of Ms. Holden’s role in both actions, he has offered no explanation for then seeking to retain her as an expert. Nor did he take any steps to ensure that neither he nor his firm would acquire any information from her that arose from her close involvement with the parties that he was suing and for which privilege might be claimed. A suspicion that some informational advantage was anticipated is hardly surprising and simply adds to the appellants’ challenge of satisfying the court and the reasonably informed public that no confidential information was acquired.
[49] Putting these various considerations together, I conclude, as did Pattillo J., that the appellants have not rebutted the inference that they received confidential information from Ms. Holden that is attributable to solicitor-client communications between the respondents and their counsel that is relevant to both actions. I do not think that the reasonably informed member of the public would be satisfied that no confidential information was imparted.
[50] The appellants ask rhetorically what more they could have done to rebut the presumption. As one example in response, one might say that the result would have been different if preventative steps had been taken to ensure no acquisition from Ms. Holden of information derived from her role with the respondents. However, that did not happen here.
[51] The third question is whether, given that the appellants must be presumed to have received confidential information protected by solicitor-client privilege and to which they have no claim of right, there is a risk that this information will be used to the prejudice of the respondents who hold that privilege.
[52] In MacDonald Estate, the court concluded that an inference of prejudice should be drawn unless the court is satisfied to the contrary on the basis of clear and convincing evidence. Celanese makes clear that this approach is not to be confined to the circumstances of the transferring lawyer, but that once lawyers for the opposing party acquire information protected by solicitor-client privilege held by another party, the opposing party has the onus of rebutting the presumption of prejudice. At para. 46 of Celanese, Binnie J. said this:
The relevant elements of the MacDonald Estate analysis do not depend on a pre-existing solicitor-client relationship. The gravamen of the problem here is the possession by opposing solicitors of relevant and confidential information attributable to a solicitor-client relationship to which they have no claim of right whatsoever.
[53] In
this case, the appellants can point to nothing that would discharge the
burden.
No steps were taken beforehand that might have walled off those in the
appellants’ firm conducting the action from the disqualifying information.
Nor do the appellants suggest that the confidential information received
is of negligible significance. The terms proposed by the appellants, in the
[54] In my view, the conclusion is inevitable. Counsel for the appellants must be taken to have acquired solicitor-client information to which they had no right. Neither the court nor the reasonably informed member of the public can be satisfied that this information will not be used to the prejudice of the respondents.
[55] Having determined that Ms. Holden was in receipt of solicitor-client information, that it fell into the wrong hands, and that there is a real risk of prejudice to the respondents as a result, it is necessary to address the fourth question, namely whether removing counsel for the appellants from the record is the appropriate remedy.
[56] Both MacDonald Estate and Celanese recognize that in cases like these the courts need to be concerned about the integrity of the administration of justice and the importance to it of solicitor-client privilege, but also with the right of litigants to select counsel of their choice. Celanese makes it clear that if the integrity of the justice system can be protected with a remedy short of removal, that lesser remedy should be employed. The court describes a series of factors that may be appropriate to consider in making that assessment. In my view, a number of them are relevant to this case.
[57] The first consideration is how the confidential information got into the wrong hands and whether precautions could have been taken by anyone to avoid it. Here there is no doubt that counsel for the appellants caused the problem by retaining Ms. Holden, and could have taken precautions to minimize the risks – for example, by seeking judicial supervision of communications with Ms. Holden or at least setting explicit ground rules for themselves. Those who cause the problem yet take no precautions must bear the responsibility.
[58] Another
consideration is what counsel for the appellants did upon learning of the
problem. The short answer is that until the
[59] A third consideration concerns the degree of prejudice that may arise from the confidential information. Given the nature of the solicitor-client communications to which Ms. Holden was privy, I agree with Pattillo J. that in the hands of counsel for the appellants it would cause significant prejudice to the respondents. The appellants have not shown that the confidential information acquired by them represents little risk of prejudice to the respondents.
[60] Finally, the litigation was at an early stage when it was before Pattillo J. The appeal process has since then brought the litigation much closer to the initially fixed trial dates. However, that should not dramatically change the impact of this consideration given that it was undertaken by the appellants.
[61] In light of these considerations, I conclude that there is no remedy short of removal that can alleviate the adverse impact on the integrity of the administration of justice created by the present circumstances. Permitting counsel for the appellants to remain as solicitors of record would leave that adverse impact undiminished. Hence the right of the appellants to the counsel of their choice must yield.
[62] For all these reasons the appeal must be dismissed. Costs to the respondents fixed at $20,000.00 including disbursements and GST.
RELEASED: April 30, 2009 “DO”
“S.T. Goudge J.A.”
“I agree Dennis O’Connor A.C.J.O.”
“I agree G.J. Epstein J.A.”