Legal Blog

Tactics

At times, some parties are more interested in raising procedural hurdles than in having a matter tried on its merits. It would seem that the case of York Condo No. 890 v. Hendler 2017 ONSC 3420 is an example of that proposition.

Dispute

A lawyer acted for a condominium. He was a partner in a law firm and, under its name, rendered an account for his services to the condo. The condo did not pay the account and the law firm moved to assess it. So far, this is a garden variety fees dispute.

Instead of just dealing with the assessment, the condo went on the offensive. On the eve of the assessment, it commenced an action against the partner and the law firm claiming that they were negligent in dealing with the condo’s affairs. (i.e. they gave faulty advice).

The law firm defended itself and the partner. The defendants moved by way of summary judgment to dismiss the action. The partner submitted an affidavit in support of that motion. Did the condo want to deal with that motion on the merits? No.

Really?

Just before the summary judgment motion was to be scheduled, the condo brought a motion to remove the law firm as lawyers of record, claiming that the law firm had a conflict of interest. The condo argued that the law firm could not perform an objective counsel role because the conduct of one of its partners was in issue.

The condo also argued that litigation counsel had to be more independent – to be able to give tough and unpopular advice to its client (i.e. itself) – and could not possibly do so while acting for itself and a partner in the firm.

Retribution

The motions judge noted the following:

• A substantial amount of work had already gone into preparation of the summary judgment motion.
• Although the partner was a witness, it was unclear whether the motion was brought out of a good faith concern to eliminate a conflict or whether it was a tactical measure to delay and inconvenience the defendants (the judge was being nice).
• Since the condo’s remedy was essentially to set off the amount that it owed the defendants against the damages it claimed, LawPro expressed little interest in defending the claim, viewing the condo’s action as essentially one over fees.
• A law firm can represent itself on a fees assessment.
• The law firm could represent itself, just like any other party to litigation. In that case, its current counsel could appear on its behalf, wearing street clothes rather than a barrister’s gown.

The judge concluded that:

“This matter is close enough to a dispute over fees that the conflict, such as it is, does not raise a serious concern. Not only do law firms regularly represent themselves in collecting fees — whether in an assessment procedure or in a regular court action — but the member of the firm most closely associated with the particular client will typically testify. This does not raise the kind of conflict that jeopardizes the fairness of the proceeding for the former client. While it is certainly true that, “The public has an overriding interest in ensuring that justice is not only done but is seen to be done,” … there is nothing particularly unjust about (the law firm) defending its own economic interest. It is difficult to see how this would prejudice the Plaintiff in any way.”

The judge dismissed the motion and awarded the defendants $8,400.00 in partial indemnity costs plus the $2,000.00 that the case conference judge awarded if the condo were unsuccessful in the motion. Sometimes, hardball tactics can backfire.

Image courtesy of mconnors.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.