2021 QCCA 210, 2021 QCCA 210

La Schiazza c. Syndicat RN 1 2021 QCCA 210 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-028805-208 ( 500-17-101324-179 ) MINUTES OF HEARING DATE: February 5, 2021 CORAM: THE HONOURABLE FRANÇOIS DOYON, J.A. MARK SCHRAGER, J.A. CHRISTINE BAUDOUIN, J.A. APPLICANTS COUNSEL Giovanni La schiazza 6169970 canada inc. investissement mattawa s.e.n.c. Mtre pierre françois mcnicolls ( LJT Avocats ) By videoconference RESPONDENTS COUNSEL syndicat rn 1 michel dagenais Mtre CLÉMENT LUCAS Mtre PIERRE G.

CHAMPAGNE ( De Grandpré Joli-Coeur) By videoconference IMPLEADED PARTIES COUNSEL daniel demers gilles lachapelle serge greffard daniel barbosa Mtre carole samuel (Clyde & Cie Canada) Absent PETER TRIASSI JOE VALENTINO Absent and unrepresented On appeal from a judgment rendered on December 10, 2019 by the Honourable Marie-Anne Paquette of the Superior Court , District of Montréal .

NATURE OF THE APPEAL: Application of Appellants to have the attorneys of Respondents disqualified (Articles 49 and 193 C.C.P. ) Application for Permission to Present Indispensable New Evidence. (Article 380 C.C.P. ) Clerk at the hearing : Lesly Ramos Courtroom: Pierre-Basile-Mignault HEARING 9:32 Commencement of the hearing.

Identification of counsel. 9:33 Submissions by Mtre McNicolls. 9:47 Question by the Court and response by Mtre McNicolls. 9:51 Mtre McNicolls resumes his submissions. 9:57 Question by the Court and response by Mtre McNicolls. 9:58 Mtre McNicolls resumes his submissions. 10:03 Submissions by Mtre Lucas. 10:26 Reply by Mtre McNicolls. 10:28 Recess of the hearing. 10:36 Resumption of the hearing. 10:37 BY THE COURT : Judgment – see page 4. 10:38 Conclusion of the hearing.

Lesly Ramos, Clerk at the hearing JUDGMENT [ 1 ] This is an appeal of the judgment rendered on December 10, 2019 by the Superior Court, District of Montreal (the Honourable Marie-Anne Paquette), which dismissed Appellants’ application seeking to disqualify the law firm of De Grandpré Joli-Coeur L.L.P. (DGJC) from representing Respondents. As well, the judgment declared the application to be abusive and condemned Appellants to pay Respondent Syndicat RN 1 $25,147.16 being the legal fees incurred in defending the application. [ 2 ] We are also seized with Respondents’ motion to produce indispensable new evidence.

The motion seeks to introduce a deed of sale and corporate searches demonstrating that the land upon which the second building of the condominium complex in question was to be constructed has now been sold by Appellant La Schiazza’s companies. As such, the justification for the latter’s participation in the syndicate of co-owners is obviated which is what underpinned, in large measure, the allegations of conflict of interest. As such, the evidence is not only new but useful to uphold the judge’s finding that the law firm is not in conflict of interest.

Thus, the motion should be granted. [ 3 ] Respondents are respectively a syndicate of co-owners of the first phase or apartment tower of the Condominium Rosa Nova and one of its members. [ 4 ] Appellant La Schiazza is the real estate developer behind the project and through the two corporate Appellants controlled by him, holds 51% of Syndicat RN, the co-owners’ syndicate for the entire project (i.e. the existing apartment building (Syndicat RN 1) and the second one to be built alongside it (Syndicat RN 2), the land for which has now been sold). [ 5 ] In first instance, Respondents sought injunctive relief regarding the administration of the condominium as well as reimbursement of overpayment of expenses by Syndicat RN 1 to Syndicat RN.

In addition to representing Syndicat RN 1, DGJC also acts

for Syndicat RN in other litigation arising from alleged problems connected with the construction of the building. [ 6 ] Appellant La Schiazza’s involvement is multi-facetted. He is the developer/contractor and as such has claims against him or his companies regarding the construction of the project. He also has claims against sub-trades. Most significantly, as the developer, he sits provisionally on the board of the co-owners’ syndicates.

That being said Syndicat RN was, but is no longer, a party to the instant legal proceedings. [ 7 ] The judge concluded that DGJC had not contravened its duty of loyalty to Syndicat RN and that the motion to disqualify was but a tactic to intimidate and to delay the progress of the legal proceedings.

As such, she not only dismissed the motion but declared it abusive and awarded compensation of Syndicat RN 1’s legal fees of $25,147.16. [ 8 ] The application to disqualify was filed sixteen months after the initiation of the proceedings and after failed settlement negotiations of the litany of litigation involving the parties.

This delay reinforces the judge’s conclusions. [1] Appellants’ explanation of the discovery of new facts is not convincing since the application to disqualify raises prior existing issues. [ 9 ] Moreover, even if the interests of Syndicat RN were not common with those of Syndicat RN 1(for example in litigation against the municipality), any conflict would be covered by the confirmation of DGJC’s mandates by the former’s board of directors one of whom was Mr. La Schiazza.

The board did not vote by majority to dismiss DGJC. [ 10 ] There was no proof that DGJC represents members of the board in their personal capacity against Respondent Syndicat RN 1. As such, “the bright line rule” was not infringed contrary to Appellants’ assertion. [2] There is no hard and fast rule that shareholders or directors should have independent counsel. [3] [ 11 ] The judge commits no error of law in enunciating the principles regarding conflicts of interest and balancing those principles against the rights of citizens to choose lawyers to represent them.

The application of those principles to the factual circumstances of the case leading to the dismissal of the application for disqualification is equally free of any errors which would justify this Court to intervene.

She exercised her discretion in a reasonable and judicious manner leaving no room for appellate intervention. [4] Given her conclusions on the merits of the application and its strategic nature, the judge was well within the realm of a reasonable exercise of discretion to declare the proceedings abusive and order reimbursement of legal fees. [ 12 ] On the other hand, Respondents’ conclusion that the appeal be declared abusive, will not be granted given that leave to appeal was granted by a judge of the Court and there is nothing to indicate that Appellants acted abusively since leave was granted.

FOR ALL THE FOREGOING REASONS, THE COURT: [ 13 ] GRANTS the motion entitled « requête pour permission de présenter un preuve nouvelle indispensable », without legal costs; [ 14 ] GRANTS permission to file the new evidence annexed thereto being a deed of sale of December 17, 2020 and extracts of the Registre des Entreprises of January 22, 2021; [ 15 ] DISMISSES the appeal with legal costs; [ 16 ] DISMISSES the application to declare the appeal abusive without legal costs. FRANÇOIS DOYON, J.A. MARK SCHRAGER, J.A. CHRISTINE BAUDOUIN, J.A.