Hammoud v Chadi, 2014 ABQB 789

Court of Queen ’ s Bench of Alberta Citation: Hammoud v Chadi, 2014 ABQB 789 Date: 20141222 Docket: 1201 11152 Registry: Calgary Between: Ayyman Hammoud Plaintiff - and - Jamel Hassan Chadi, Chadi & Company and Jamel H. Chadi Professional Corporation Defendant _______________________________________________________ Memorandum of Decision of J.B. Hanebury , Master in Chambers _______________________________________________________ [ 1 ] Mr. Chadi, a lawyer, applies to dismiss a claim by his client, a student-at-law who was denied membership in the Law Society of Alberta. Mr.

Chadi acted as counsel to the student, Mr. Hammoud, in relation to assault charges filed against him. The Law Society asked Mr. Chadi to release his file in relation to the charges against Mr. Hammoud and he did so. Mr. Hammoud’s action is for damages from Mr. Chadi as a result of the release of his file which was subject to solicitor client privilege. The claim is unusual as the solicitor and client privilege affected by the release of a file to the Law Society is usually that of the client of the lawyer being investigated, not that of the lawyer himself as a client. [ 2 ] Mr. Chadi applies for

summary dismissal of the claim and Mr. Hammoud cross-applies for judgment against Mr. Chadi. The applications raise for consideration the

interpretation of s. 112 of the Legal Profession Act , R.S.A. 2000, c. L-8, and the interplay between the principles of solicitor and client privilege and the proper regulation of the profession by the Law Society.

Facts [ 3 ] The relevant facts are not in dispute. Mr. Chadi defended Mr. Hammound in 2002 in relation to a charge of assault under s. 266 of the Criminal Code (the law professor assault). The matter ended with a guilty plea and Mr. Hammoud received a suspended sentence and was placed on probation. [ 4 ] In July, 2010, the Law Society asked Mr. Chadi for a copy of Mr. Hammoud’s file in relation to the law professor assault. Mr. Chadi did not reply to the letter. He then received a letter from a Law Society investigator citing s. 55 of the Legal Profession Act and, again, requesting the file. [ 5 ] Mr.

Chadi refused to provide it while he considered their request. He contacted the Law Society Practice Advisor who advised him of s. 112 of the Act , which provides a statutory waiver of his privilege obligations. Mr. Chadi says that the advisor told him that he was obliged to cooperate with the investigator from the Law Society and he should provide the file. [ 6 ] Mr. Chadi subsequently provided the file to the Law Society and he had no further involvement in the matter. [ 7 ] Mr. Hammoud faced several citations that are described in para. 4 of the Law Society of Alberta Appeal Panel Report, November 18, 2014:

a) Failure to be properly candid with the Law society concerning the particulars of his assault upon a professor while he was at law school b) “Conduct unbecoming” with respect to: • harsh conversations he had with CPLED staff when disappointed with a mark, and • further harsh conversations he had had with a Calgary police officer when found in and searched as a passenger of a motor vehicle which had been transporting marijuana, and • an alleged attempted physical assault upon one of his principals during his Articles of Clerkship.

c) Misleading one of his potential principals about his status as a student suspended from the CPLED program as a result of previously mentioned verbal altercations with the CPLED staff. [ 8 ] The file obtained from Mr Chadi was used in relation to a conduct hearing by the Law Society to consider Mr. Hammoud’s continued membership as a student-at-law. Mr. Hammoud’s membership was ultimately terminated, which is essentially the equivalent of a disbarment. [ 9 ] It appears undisputed that the file obtained from Mr.

Chadi was ultimately only one small part of the case the Law Society of Alberta considered in relation to Mr. Hammoud as there were several citations against him. At some point the Law Society received some of the same evidence found in Mr. Chadi’s file from other sources. [ 10 ] At the Law Society hearing Mr. Hammoud was asked if he wished the privileged information from Mr. Chadi’s file to be dealt with in private, and public access to that information be denied, as was allowed under s. 112 (2) of the Act . He said no. [ 11 ] Mr.

Hammoud appealed the Hearing Committee’s findings of guilt and the sanction imposed to the Benchers. That appeal was recently dismissed by a panel of the Benchers. [ 12 ] After the decision of the Hearing Committee of the Law Society, Mr. Hammoud commenced this action seeking damages for Mr. Chadi’s alleged breach of contract, wrongful communication of confidential and privileged information, and breach of his fiduciary duty. [ 13 ] Mr. Chadi brought this application for

summary dismissal of the claim against him or, in the alternative, for security for costs. Mr. Hammound cross-applied for

summary judgment. The Law Society successfully applied to intervene and filed a brief supporting the application of Mr. Chadi for

summary dismissal. Issues [ 14 ] Mr. Chadi, and the Law Society as intervenor, argue that s. 112 of the Act required Mr. Chadi to release Mr. Hammoud’s file to the Law Society investigator. Furthermore, s. 115, they argue, protects Mr. Chadi from any liability for the release of the file. Finally, they argue that upon applying to the Law Society Mr. Hammoud signed a document that authorized the release of the contents of his file. [ 15 ] Mr. Hammoud argues that s. 112 cannot be seen to sanction the seizure of a lawyer’s own file with his counsel. Such an

interpretation guts the concept of solicitor client privilege and would mean that the Law Society investigator could seize the file relating to the Law Society’s investigation and citations from the counsel for the lawyer being investigated. Furthermore, he says, Mr. Chadi was in a fiduciary relationship with him, and, at the very least, had an obligation to advise him that he was going to release or had released the file. [ 16 ] For the reasons that follow I have come to the conclusion that the release of Mr. Chadi’s file was mandated by s. 112 of the Act with the result that the remaining arguments of Mr.

Chadi justifying the release of the file have not been considered. Analysis [ 17 ] Before considering these issues it is helpful to reiterate the test to be applied to these cross-applications for

summary dismissal and

summary judgment. The most recent description of the test is found in WP v. Alberta , 2014 ABCA 404 , para. 26 , where the Court

said:

Summary judgment is therefore no longer to be denied solely on the basis that the evidence discloses a triable issue. The question iswhether there is in fact any issue of “merit” that genuinely requires a trial, or conversely whether the claim or defence is so compellingthat the likelihood it will succeed is very high such that it should be determined summarily [emphasis in the original]... [18] This follows on the comments found in Windsor v Canadian Pacific Railway Ltd., 2014 ABCA 108, at para. 16: [I]t is appropriate to examine the

summary dismissal application to see whether there is in fact any issue of “merit” that genuinelyrequires a trial. When the resolution of the dispute turns primarily on issues of law,

summary judgment is often appropriate: Tottrup vClearwater (Municipal District No. 99), 2006 ABCA 380 at para.11, 68 Alta LR (4th) 237. Trials are for determining facts, and the factsunderlying this dispute are not seriously in issue. [19] In this case there are no facts in dispute and the issues revolve around the

interpretation of the Legal Profession Act and thereach of certain sections of the Act. Unless the facts and law are so intertwined that a trial is necessary, or insufficient facts have beenprovided,

summary judgment or dismissal appear appropriate. Was the release of the file mandated by s. 55 and 112 of the Act? [20]

Section 55 of the Act states:

(2) An investigator may direct the member concerned or any other member (

b) to produce to the investigator any records or other property in the member’s possession or under the member’s control that are or maybe related in any way to the investigation... [21]

Section 112 then provides:

(1) A member may not in any proceedings under

Part 3 or 4 refuse to give evidence, answer inquiries or produce or make available anyrecords or other property on the ground of solicitor and client privilege if the evidence, inquiry, records or other property is material tothe proceedings.

(2) If a member is required under subsection (1) to give evidence, answer inquiries or produce or make available any records or otherproperty pursuant to subsection (1) and the member may claim solicitor and client privilege in respect of the evidence, answers, recordsor other property, the member or any other person who may claim the solicitor and client privilege may require that (

a) all or part of any proceedings under

Part 3 or 4 in which the evidence, answers, records or other property is dealt with be held inprivate, and (

b) the public be refused access to the records and other property and to any other document containing the evidence or answers. [22] The question of whether sections 55 and 112 required Mr. Chadi to release the file juxtaposes two important principlessanctioned by our Courts. [23] The first principle is solicitor and client privilege. As noted in Stewart McKelvey Stirling Scales v.

Barristers’ Society (NovaScotia), 2005 NSSC 258, solicitor and client privilege has been described as a “fundamental civil and legal right”, a “principle offundamental justice” and “a fundamental tenant (sic) of our legal system”. [24] However, while a fundamental right, it is not an absolute right and can be abrogated by statute: para. 21. See as well:Skogstad v. Law Society (British Columbia), 2007 BCCA 310, para. 6 and cases cited therein; Law Society of Saskatchewan v. E.F.A.Merchant, Q.C., 2008 SKCA 128, para. 43, relying on Descoteaux v. Mierzwinski, [1982] 1 S.C.R. 60.

In Descoteaux the SupremeCourt of Canada discussed the parameters necessary when there is legislation abrogating solicitor and client privilege, at para. 27: When the law gives someone the authority to do something which, in the circumstances of the case, might interfere with thatconfidentiality, the decision to do so and the choice of means of exercising that authority should be determined with a view to notinterfering with it except to the extent absolutely necessary in order to achieve the ends sought by the enabling legislation. [25] The second principle is the importance of the self-regulation of lawyers.

An independent legal profession is important to afree and democratic society: Stewart McKelvey, para. 23. [26] This was highlighted in Finney v. Barreau du Quebec, 2004 SCC 36, para. 1: An independent bar composed of lawyers who are free of influence by public authorities is an important component of the fundamentallegal framework of Canadian society. In Canada, our tradition of allowing the legal profession to regulate itself can largely be attributedto a concern for protecting that independence and to lawyers’ own staunch defence of their autonomy,.

In return, the delegation ofpowers by the State imposes obligations on the governing bodies of the profession, which are then responsible for ensuring thecompetence and honesty of their members in their dealings with the public. [27] For the Law Society to meet these regulatory obligations they must have “sufficiently effective means at their disposal togather all information relevant to determining whether a complaint should be lodged”: Pharmascience Inc. v. Binet, 2006 SCC 48, 2006 S.C.C. 48, paras. 36-37; Rocket v.

Royal College of Dental Surgeons of Ontario, (SCC), [1990] 2S.C.R. 232, p. 249; Finney, para. 40, Stewart McKelvey, para’s 18 and 23; Wise v. Law Society of Upper Canada, 2010 ONSC 1937,para.’s. 21, 22. [28] The Courts have considered the interplay between these two principles on a number of occasions in the context of the

legislation granting law societies regulatory self-governing powers. [ 29 ] In Merchant the Court found that privilege cannot be abrogated simply by inference: para. 46, citing Privacy Commissioner of Canada v. Blood Tribe Department of Health , 2008 SCC 44 , para. 11 . In that case the relevant legislation, unlike the Alberta Act , did not specifically provide for the waiver of privilege. [ 30 ] In the absence of such a provision, the Court held that it must undertake a two-step analysis.

It must first determine whether the Law Society had the authority to demand the production of records subject to solicitor-client privilege and, if it did, whether that authority had been exercised so as to interfere with privilege only to the extent absolutely necessary. [ 31 ] The Court found that the first requirement was met. It held that the wording in the legislation in issue, as it referred to the Law Society’s right to “any of a member’s records or other property”, when used in the context of the professional life of a lawyer, must include privileged material.

See as well: Rocket , para. 41 . [ 32 ] On the question of the “absolutely necessary” principle, the Court found that it was acknowledged that the records requested were required for the purposes of the investigation and therefore, the test was met. [ 33 ] None of the cases provided by counsel considered a situation where the Law Society was granted access to the criminal file of the lawyer being investigated. The situation is unusual. However, in my view, the analysis to be undertaken to determine if the release of the file by Mr.

Chadi was mandated involves a consideration of the provisions of the Act in light of the factors outlined in Merchant . While that case differs from the one before this Court as it involved legislation that did not expressly provide for the waiver of solicitor and client privilege, a similar analysis can be done within a legislative context. [ 34 ] The first question is whether the Law Society had the authority to demand the criminal file of a member it was investigating from that member’s own lawyer. [ 35 ] Sections 55 and 112, on their face, provide authority for the Law Society’s request.

Section 55 makes it clear that the Law Society can demand production of the files of both the member being investigated, and the files of another member . [ 36 ]

Section 112 does not differentiate between the privilege afforded to a client and the privilege afforded to a member who is a client, and it provides a broad ability to seek records. This is not surprising, in light of the aforementioned case law that emphasizes the importance of lawyers’ independence and the need for adequate regulatory tools to enable provincial law societies to properly use their regulatory powers. [ 37 ] As noted in Skogstad v. Law Society , para.16, when considering a waiver of privilege, it is irrelevant who initiated the complaint, a client, a non-client or the Law Society.

In the exercise of its regulatory function the Law Society has an obligation to carefully investigate all complaints, even those it instigates itself. [ 38 ] The fact that the file was in relation to a criminal charge does not alter the Law Society’s ability to request the release of privileged information. The context of the request from the Law Society was regulatory. The more stringent protections provided in a criminal context do not apply: Law Society of Canada v. Feldman , 2013 ONLSHP 168 , para’s. 71-76, and cases cited therein. [ 39 ] In

summary, in light of the plain meaning of the relevant provisions of the Act , and the obligation on the Law Society as a regulatory body to carefully investigate all types of complaints, I have come to the conclusion that the Law Society had the requisite authority to demand the file from Mr. Chadi.

The fact that the file sought was the criminal file of the student-at-law being investigated does not shield it from the ambit of the legislation. [ 40 ] The second question is whether the authority to demand the privileged information was exercised so as to interfere with privilege only to the extent absolutely necessary. [ 41 ] In Merchant , the Court found that the information was material and therefore this test was met. In this case the statute itself provides a limitation of materiality on the waiver of privilege to ensure it is only exercised to the extent necessary. [ 42 ]

Section 112 provides that the privileged records requested must be “material” to the proceedings. Mr. Chadi’s file was certainly material to the first citation Mr. Hammoud faced: a failure to be properly candid with the Law Society concerning the particulars of the law professor assault. Mr. Hammoud did not argue otherwise. He did raise a concern about a mental health report found in the file provided by Mr. Chadi, but that report was not utilized. [ 43 ] The legislation provides a second safeguard to ensure that the abrogation of the privilege is limited.

Section 112(2) of the Act provides that the use of privileged information can be restricted. Mr. Hammoud had the right to require that the information from his file be kept privileged by requesting a private hearing and the denial of public access to records. He did not make that request. The hearing panel offered this safeguard, and he declined. [ 44 ] In my view the legislation provides both the authority and the necessary safeguards to enable the Law Society to require the release of the criminal file of a member from his counsel.

Therefore, I have determined that in the circumstances of this case, the Law Society was entitled to ask Mr. Chadi for Mr. Hammoud’s file and Mr. Chadi was obliged to provide it. There is no need to consider the other arguments raised by Mr. Chadi and the Law Society to justify his release of the records. [ 45 ] Finally, Mr. Hammoud says that even if Mr. Chadi was obliged to release the file, as a fiduciary and the repository of confidential information, Mr. Chadi owed a duty to his client to at least telephone him and advise him of the release of privileged information. Therefore, Mr.

Hammoud says, his claim against Mr. Chadi should remain. [ 46 ] No case law was provided to support this suggestion, and I am unaware of such a concept in relation to a lawyer, or to another service-provide who could be in a fiduciary relationship with someone whose records must be released pursuant to statute. This

argument, without more, is insufficient to convince me that there is merit to Mr. Hammoud’s claim against Mr. Chadi. Conclusion [ 47 ] Mr. Chadi’s application for

summary dismissal is granted. Mr. Hammoud’s application for

summary judgment is denied. Mr. Chadi is entitled to his costs. Finally, the Court appreciated the thoughtful brief on these issues provided by counsel for the Law Society. Heard on the 03 rd day of December, 2014. Dated at the City of Calgary, Alberta this 22 nd day of December, 2014. J.B. Hanebury M.C.C.Q.B.A. Appearances: Catriona M.L. Otto Field LLP for the Defendants Rodney W. MacKenzie MacKenzie & Azim LLP for the Plaintiff Sharon E. Borgland The Law Society of Alberta for the Intervenor