r v. New Brunswick et al., 2019 NBCA 50

E.J. MOCKLER and E.J. MOCKLER, PROFESSIONAL CORP. APPELLANTS E.J. MOCKLER et E.J. MOCKLER, PROFESSIONAL CORP. APPELANTS - and - - et - THE PROVINCE OF NEW BRUNSWICK, THE NEW BRUNSWICK UNION OF PUBLIC AND PRIVATE EMPLOYEES, THE NEW BRUNSWICK NURSES UNION, LOCAL 37 OF THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, MARILYN QUINN, SUSIE PROULX-DAIGLE, ROSS GALBRAITH, LEONARD LEE-WHITE, ERNEST L. MacKINNON, MARK GAUDET, THE NEW BRUNSWICK INVESTMENT MANAGEMENT CORPORATION and GUY LEVESQUE RESPONDENTS LA PROVINCE DU NOUVEAU - BRUNSWICK, LE SYNDICAT DES EMPLOYÉ(E)S DES SECTEURS PUBLIC ET PRIVÉ DU NOUVEAU - BRUNSWICK, LE SYNDICAT DES INFIRMIÈRES ET INFIRMIERS DU NOUVEAU - BRUNSWICK, LA

SECTION LOCALE 37 DE LA FRATERNITÉ INTERNATIONALE DES OUVRIERS EN ÉLECTRICITÉ, MARILYN QUINN, SUSIE PROULX - DAIGLE, ROSS GALBRAITH, LEONARD LEE - WHITE, ERNEST L. MacKINNON, MARK GAUDET, LA SOCIÉTÉ DE GESTION DES PLACEMENTS DU NOUVEAU - BRUNSWICK et GUY LEVESQUE INTIMÉS Mockler v. New Brunswick et al., 2019 NBCA 50 Mockler c.

Nouveau-Brunswick et autres, 2019 NBCA 50 CORAM: The Honourable Justice Drapeau The Honourable Justice Larlee The Honourable Justice French CORAM : l’honorable juge Drapeau l’honorable juge Larlee l’honorable juge French Appeal from a decision of the Court of Queen’s Bench: September 28, 2017 Appel d’une décision de la Cour du Banc de la Reine : le 28 septembre 2017 History of Case: Historique de la cause : COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 112-17-CA

Decision under appeal: 2017 NBQB 180 Décision frappée d’appel : 2017 NBBR 180 Preliminary or incidental proceedings: Court of Appeal: 2019 NBCA 10 Procédures préliminaires ou accessoires : Cour d’appel : 2019 NBCA 10 Appeal heard: June 17, 2019 Appel entendu : le 17 juin 2019 Judgment rendered: June 17, 2019 Jugement rendu : le 17 juin 2019 Counsel at hearing: For the appellants: G. Scott Ellsworth, Q.C. For the respondents, the Province of New Brunswick and the New Brunswick Investment Management Corporation: Stephen J. Hutchison, Q.C., and Josie H.

Marks For the respondents, the New Brunswick Union of Public and Private Employees and New Brunswick Nurses Union and Local 37 of the International Brotherhood of Electrical Workers: David M. Brown, Q.C. For the respondents, Marilyn Quinn, Susie Proulx- Daigle, Ross Galbraith, Leonard Lee-White, Ernest L. MacKinnon and Mark Gaudet: Ronald A. Pink, Q.C. and Bettina Quistgaard For the respondent, Guy Levesque: Sabrina A.D. Winters Avocats à l’audience : Pour les appelants : G. Scott Ellsworth, c.r.

Pour les intimés la Province du Nouveau-Brunswick et la Société de gestion des placements du Nouveau- Brunswick : Stephen J. Hutchison, c.r., et Josie H. Marks Pour les intimés le Syndicat des employé(e)s des secteurs public et privé du Nouveau-Brunswick, le Syndicat des infirmières et infirmiers du Nouveau- Brunswick et la

section locale 37 de la Fraternité internationale des ouvriers en électricité : David M. Brown, c.r. Pour les intimés Marilyn Quinn, Susie Proulx- Daigle, Ross Galbraith, Leonard Lee-White, Ernest L. MacKinnon et Mark Gaudet : Ronald A. Pink, c.r. et Bettina Quistgaard Pour l’intimé Guy Levesque : Sabrina A.D. Winters THE COURT The appeal is dismissed. Reasons will follow. LA COUR L’appel est rejeté. Les motifs suivront. The following is the judgment delivered by

THE COURT [ 1 ] The appeal is dismissed. Reasons will follow. Version française de la décision rendue par LA COUR [1] L’appel est rejeté. Les motifs suivront. COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 112-17-CA E.J. MOCKLER and E.J. MOCKLER, PROFESSIONAL CORP. APPELLANTS E.J. MOCKLER et E.J. MOCKLER, PROFESSIONAL CORP. APPELANTS - and - - et -

THE PROVINCE OF NEW BRUNSWICK, THE NEW BRUNSWICK UNION OF PUBLIC AND PRIVATE EMPLOYEES, THE NEW BRUNSWICK NURSES UNION, LOCAL 37 OF THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, MARILYN QUINN, SUSIE PROULX-DAIGLE, ROSS GALBRAITH, LEONARD LEE-WHITE, ERNEST L. MacKINNON, MARK GAUDET, THE NEW BRUNSWICK INVESTMENT MANAGEMENT CORPORATION and GUY LÉVESQUE RESPONDENTS LA PROVINCE DU NOUVEAU - BRUNSWICK, LE SYNDICAT DES EMPLOYÉ(E)S DES SECTEURS PUBLIC ET PRIVÉ DU NOUVEAU - BRUNSWICK, LE SYNDICAT DES INFIRMIÈRES ET INFIRMIERS DU NOUVEAU - BRUNSWICK, LA

SECTION LOCALE 37 DE LA FRATERNITÉ INTERNATIONALE DES OUVRIERS EN ÉLECTRICITÉ, MARILYN QUINN, SUSIE PROULX - DAIGLE, ROSS GALBRAITH, LEONARD LEE - WHITE, ERNEST L. MacKINNON, MARK GAUDET, LA SOCIÉTÉ DE GESTION DES PLACEMENTS DU NOUVEAU - BRUNSWICK et GUY LÉVESQUE INTIMÉS Mockler v. New Brunswick et al. , 2019 NBCA 50 Mockler c.

Nouveau-Brunswick et autres , 2019 NBCA 50 CORAM: The Honourable Justice Drapeau The Honourable Justice Larlee The Honourable Justice French CORAM : l’honorable juge Drapeau l’honorable juge Larlee l’honorable juge French Appeal from a decision of the Court of Queen’s Bench: September 28, 2017 Appel d’une décision de la Cour du Banc de la Reine : le 28 septembre 2017 History of Case: Historique de la cause : Decision under appeal: 2017 NBQB 180 Décision frappée d’appel : 2017 NBBR 180 Preliminary or incidental proceedings: Court of Appeal: 2019 NBCA 10 Procédures préliminaires ou accessoires : Cour d’appel : 2019 NBCA 10 Appeal heard and judgment rendered: June 17, 2019 Appel entendu et jugement rendu : le 17 juin 2019 Reasons delivered: August 15, 2019 Motifs déposés : le 15 août 2019

Counsel at hearing: For the appellants: G. Scott Ellsworth, Q.C. For the respondents, the Province of New Brunswickand the New Brunswick Investment ManagementCorporation: Stephen J. Hutchison, Q.C., and Josie H. Marks For the respondents, the New Brunswick Union ofPublic and Private Employees and New BrunswickNurses Union and Local 37 of the InternationalBrotherhood of Electrical Workers: David M. Brown, Q.C. For the respondents, Marilyn Quinn, Susie Proulx-Daigle, Ross Galbraith, Leonard Lee-White, ErnestL. MacKinnon and Mark Gaudet: Ronald A.

Pink, Q.C. and Bettina Quistgaard For the respondent, Guy Lévesque: Sabrina A.D. Winters Avocats à l’audience : Pour les appelants : G. Scott Ellsworth, c.r. Pour les intimées la Province du Nouveau-Brunswicket la Société de gestion des placements du Nouveau-Brunswick : Stephen J. Hutchison, c.r., et Josie H. Marks Pour les intimés le Syndicat des employé(e)s dessecteurs public et privé du Nouveau-Brunswick, leSyndicat des infirmières et infirmiers duNouveau-Brunswick et la

section locale 37 de laFraternité internationale des ouvriers en électricité : David M. Brown, c.r. Pour les intimés Marilyn Quinn, Susie Proulx-Daigle, Ross Galbraith, Leonard Lee-White, ErnestL. MacKinnon et Mark Gaudet : Ronald A. Pink, c.r. et Bettina Quistgaard Pour l’intimé Guy Lévesque : Sabrina A.D. Winters THE COURT On June 17, 2019, the Court dismissed the appealagainst an order removing the appellants as solicitorsof record on the basis of a disqualifying conflict ofinterest, with reasons to follow. Those reasons are setout in the accompanying text.

In our view, none ofthe conditions precedent to principled interventionhas been established. LA COUR Le 17 juin 2019, la Cour a rejeté l’appel interjetécontre une ordonnance en radiation des appelants entant qu’avocats commis au dossier en raison d’unconflit d’intérêts entraînant leur inhabilité à agir, enprécisant que les motifs suivraient. Ces motifs sontexposés dans le texte qui suit. À notre avis, aucunecondition préalable à une intervention de principe n’aété établie. The following is the judgment delivered by THE COURT I. Introduction [1] Nearly 30 years after its release, MacDonald Estate v.

Martin, (SCC), [1990]3 S.C.R 1235, [1990] S.C.J. No. 41 (QL) continues to inform the determination of motions for the removal of a solicitor from ongoing

litigation on the basis of a conflict of interest. In MacDonald Estate , the issue arose in the context of a lawsuit in which a solicitor for one party transferred to the law firm acting for an adverse party. Sopinka J., writing for the majority, fashioned a two-prong test for the removal of the latter firm:

(1) Did it receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand? and

(2) Is there a risk this information will be used to the prejudice of the client? The answer to those pivotal questions is shaped by rebuttable presumptions: confidential information has been or will be disclosed by the transferring solicitor and has been or will be used to the prejudice of the objecting client.

Those presumptions will not be rebutted by objectively unverifiable undertakings and conclusory statements in affidavits sworn by the solicitor whose removal is sought ( MacDonald Estate , para. 50 ). [ 2 ] The test and guidelines articulated by the majority in MacDonald Estate stand to be applied to motions for removal of the respondent solicitor where he or she is in possession, without legal entitlement, of confidential information arising from a solicitor-client relationship.

It matters not one iota that the source of the confidential information did not make its acquisition while acting as solicitor for the proprietor; it is sufficient if the confidential information is attributable, as here, to a solicitor- client relationship.

In the result, and as correctly determined by the motion judge, the relevant elements of the MacDonald Estate analysis governed the determination of the motion by the defendants, the New Brunswick Investment Management Corporation and the Province of New Brunswick, for removal of the appellants as solicitors of record for the plaintiff in the underlying action. In the text that follows, we refer to the appellants collectively as “Mr.

Mockler” in virtually all instances. [ 3 ] In the Amended Statement of Claim, the plaintiff, Guy Lévesque, a retired civil servant, seeks unspecified damages and manifold declaratory and mandatory orders against the Corporation for its role in the execution of the Province’s legislatively imposed conversion from the public service pension plan in effect prior to 2014 to a shared risk plan. Richard Speight Q.C. was, at the critical time, a director of the Corporation.

As such, he was privy to confidential corporate information, including legal advice provided to the Corporation by its solicitors with respect to issues at the heart of the litigation, and he had undertaken not to disclose any information of that nature to outsiders. Significantly, Mr. Speight was simultaneously a director of the Corporation and an active member of Mr. Mockler’s legal team in preparing, framing and prosecuting, for several months, the action on Mr.

Lévesque’s behalf. [ 4 ] After receiving comprehensive briefs, hearing the parties over the course of several days on the facts, the law and their interaction, and conducting the MacDonald Estate analysis, a judge of the Court of Queen’s Bench found Mr. Mockler had a disqualifying conflict of interest, and allowed the motion for removal ( see 2017 NBQB 180 ) . Mr. Mockler appeals, seeking reversal and ancillary relief. [ 5 ] Following a fulsome debate, we dismissed the appeal from the bench, with reasons to follow.

In a nutshell, our view is quite simply that the controlling standard of review forecloses intervention. Where the correct legal principles are identified and applied, a removal order can only be set aside if it is the result of a palpable and overriding error in the assessment of the evidence or if the exercise of discretion at the root of the order is unreasonable in the sense that nothing in the record can justify it. As will more fully appear, none of those conditions precedent to principled intervention has been established. II. The Context [ 6 ] Mr.

Lévesque retired from the Provincial civil service in 1998. At that time, and until December 31, 2013, the pension benefits to which he was entitled were set out in the Public Service Superannuation Plan (“the Plan” or “the pre-2014 Plan”), which was created and governed by the Public Service Superannuation Act , R.S.N.B. 1973, c. P-26 .

The overall responsibility for the Plan was entrusted to its “governor”, the Chairman of the Board of Management, while the Act ’s administration was assigned to the Minister of Finance. [ 7 ] Pension payments, including a guaranteed annual cost of living adjustment, were drawn from a “pension trust fund” established by s. 27 of the Act . All prescribed employer and employee contributions were paid into that fund and s. 27(3) appointed the Corporation as its trustee. Section 14(1) (

a) of the New Brunswick Investment Management Corporation Act , S.N.B. 1994, c. N-6.01 added, perhaps unnecessarily, the Corporation was to “act as the trustee for” the pension trust fund. [ 8 ] Section 27(8) of the Public Service Superannuation Act specified that, should the pension trust fund be insufficient to make the payments due under the Act , the Minister of Finance was required, upon the request of the Board of Management, to pay out of the Consolidated Fund and into the pension trust fund an amount sufficient to cover the deficiency. This seemingly conditional obligation apparently fuels Mr.

Lévesque’s understanding that the sufficiency of the pre-2014 pension trust fund was guaranteed by the Province.

[ 9 ]

An Act Respecting Public Service Pensions , S.N.B. 2013, c. 44 , converted the Plan to a shared risk plan in accordance with

Part 2 of the Pension Benefits Act , S.N.B. 1987, c. P-5.1 , effective January 1, 2014. Broadly speaking, under a shared risk pension plan, both the employer and the plan membership share the risk as benefits may be impacted by the fund’s performance and the plan’s ongoing capacity to pay. In addition to mandating conversion to a shared risk plan,

An Act Respecting Public Service Pensions eliminated the annual cost of living adjustment guarantee. [ 10 ]

Section 100.4(1) of the Pension Benefits Act lists the criteria that must be met by any shared risk plan: 100.4(1) A shared risk plan shall meet the following criteria: (

a) the employer and the members make contributions to the pension plan in the amount set in accordance with the plan and the funding policy; (

b) subject to the prior consent of the Superintendent, a funding policy for the pension plan is established at inception and reviewed at least annually by the administrator in accordance with the regulations; (

c) subject to the prior consent of the Superintendent, an investment policy for the pension plan is established at inception and reviewed at least annually by the administrator in accordance with the regulations; (

d) subject to the prior consent of the Superintendent, risk management goals and procedures for the pension plan are established at inception and reviewed at least annually by the administrator in accordance with the regulations; (

e) escalated adjustments may only be granted in respect of past periods and if the funding policy so permits; (

f) contributions shall not be reduced or suspended except in accordance with the Income Tax Act (Canada) and the funding policy; 100.4(1) Le régime à risques partagés satisfait aux critères suivants :

a) le montant des cotisations que versent au régime de pension l’employeur et les participants est fixé conformément au régime et à la politique de financement;

b) sous réserve du consentement préalable du surintendant, la politique de financement du régime de pension est établie au moment de l’instauration du régime et l’administrateur la révise au moins une fois l’an conformément aux règlements;

c) sous réserve du consentement préalable du surintendant, la politique de placement du régime de pension est établie au moment de l’instauration du régime et l’administrateur la révise au moins une fois l’an conformément aux règlements;

d) sous réserve du consentement préalable du surintendant, les procédures et les objectifs de gestion des risques du régime de pension sont établis à l’instauration du régime et l’administrateur les révise au moins une fois l’an conformément aux règlements;

e) des rajustements actualisés ne peuvent être accordés qu’à l’égard de périodes antérieures et que si la politique de financement le permet;

f) la suspension ou la réduction des cotisations n’est permise qu’en conformité avec la Loi de l’impôt sur le revenu (Canada) et la politique de financement;

g) l’objet et les caractéristiques du régime de pension sont communiqués aux participants conformément aux règlements;

(

g) disclosure of the purpose and characteristics of the pension plan is made to its members in accordance with the regulations; (

h) a dispute resolution process is established at inception in the shared risk plan to resolve a deadlock among the trustees on a board of trustees with respect to any resolution or motion before them; and (

i) the base benefits and ancillary benefits satisfy any other criteria prescribed by regulation.

h) le mécanisme de règlement des différends est établi, au moment de l’instauration du régime, dans le régime à risques partagés pour mettre fin à une impasse au sein du conseil de fiduciaires relativement à une résolution ou à une motion dont les fiduciaires sont saisis;

i) les prestations de base et les prestations accessoires satisfont à tout autre critère réglementaire. [ 11 ] In accordance with s. 100.5, the administrator of a shared risk plan may be a board of trustees. The sole obligation and fiduciary duty of the board “is to carry out the purposes of the shared risk plan”. In discharging its mandate, the board is required to manage financial risk in compliance with the funding policy, the investment policy and the risk management procedures established pursuant to s. 100.4(1). [ 12 ] Importantly, for the purposes of the underlying litigation:

(1) An Act Respecting Public Service Pensions repealed the entirety of the Public Service Superannuation Act as well as s. 14(1) (

a) of the New Brunswick Investment Management Corporation Act , effective January 1, 2014; and (2) pursuant to s. 100.52(4) of the Pension Benefits Act , the administrator of the Plan was required to transfer the ownership of its assets, including the pension trust fund of approximately six billion dollars, to the shared risk plan.

As a result, the pre-2014 Plan and the Corporation’s statutory trusteeship of the Plan’s pension trust fund ceased to exist on January 1, 2014, and the ownership of that fund was transferred to the shared risk plan to be administered by a board of trustees composed of the respondents, Marilyn Quinn, Susie Proulx-Daigle, Ross Galbraith, Leonard Lee-White, Ernest L. MacKinnon and Mark Gaudet (“the Trustees ”). [ 13 ] A number of documents were prepared in furtherance of the legislatively imposed conversion to a shared risk plan including, in addition to the documents contemplated by

Part 2 of the Pension Benefits Act , the following: (1) an Agreement to Transfer Trust Assets and Indemnity under which the Corporation was directed to transfer the pension trust fund established by the Public Service Superannuation Act to the Trustees as administrators of the shared risk plan, and the Province agreed to indemnify the Corporation, its officers, directors, employees, advisors and agents against any and all transfer-related liability, loss, damage, cost or expense whatsoever; (2) an Agreement and Declaration of Trust for the shared risk fund executed by the Trustees as administrators of the shared risk plan; (3) an Investment Management Agreement by which the Trustees appointed the Corporation as investment manager for the shared risk fund; and (4) a Memorandum of Understanding regarding the conversion signed by the Province and the respondent Unions, dated November 20, 2013. [ 14 ] In August 2015, Mr.

Speight and others retained Mr. Mockler’s services to prosecute an action challenging the validity of the conversion of the pre-2014 Plan to a shared risk plan. Eventually, Mr. Lévesque agreed to stand as the sole plaintiff. He did so despite being financially unscathed by the plan conversion. Indeed, in virtue of the conversion legislation, any pre-2014 earned, accrued or vested benefit pursuant to the Public Service Superannuation Act becomes a base benefit under the shared risk plan and, since the conversion, Mr.

Lévesque has received the annual cost of living adjustments that were guaranteed under the pre- 2014 Plan. [ 15 ] On December 30, 2015, Mr. Lévesque commenced the underlying action against the Province, the Corporation, and the respondent Unions and Trustees alleging, inter alia : (1) the conversion-related actions and steps taken or announced by the Province were “illegal, void or of no force or effect”. This was so, it is alleged, because those actions and steps constitute “a breach of the contractual rights existing between [Mr.

Lévesque] and the Defendants, or some one or more of them, and they breach the reliances placed on them by [Mr. Lévesque] to secure his pension and the benefits to which he is entitled”; (2) the Defendants “without colour of right made, or alternatively failed to prevent, payments out of the [pre-2014 pension trust fund] which were contrary to the [ The Public Service Superannuation Act ]”; (3) the Defendants “did, without colour of right, purport to, and in fact did, utilize the [pre-2014 pension trust fund] for purposes contrary to those for which it was created and without regard for the rights of [Mr.

Lévesque] thereto or, alternatively, failed to prevent such improper use of the [pre-2014 pension trust fund]”; and (4) by subscribing to the terms of the conversion documents, the Defendants “agreed to cause harm” to Mr. Lévesque without “colour of right or authority”.

[ 16 ] Those harm-causing agreements are particularized as follows in the Amended Statement of Claim: (

a) agreeing that the [pre-2014 pension trust fund] might be utilized by the Trustees for payment of benefits of a new shared risk pension plan; (

b) agreeing [Mr. Lévesque] would have no further contractual entitlement under the terms of the [pre-2014 pension trust fund]; (

c) agreeing [Mr. Lévesque] would be a member of the new shared risk plan, the terms of which were agreed to by them, and that he would be bound by those terms and conditions; (

d) agreeing to create a trust for the benefit of the Defendants utilizing the [pre-2014 pension trust fund] without regard for [Mr. Lévesque]’s beneficial entitlement thereto; (

e) agreeing that the benefits payable out of the [post-2013 pension trust fund under the shared risk plan] and contributions to that fund might be as determined by them; (

f) agreeing that a new trustee for the [pre-2014 pension trust fund] might be appointed; (

g) agreeing that the terms of the [pre-2014 pension trust plan] and the [pension trust fund itself] might be altered without regard for [Mr. Lévesque]’s rights and entitlement thereto or thereunder; and (

h) agreeing that the employment contract liability of the Province to [Mr. Lévesque], which was in return for good and valuable consideration provided by [Mr. Lévesque] would not be honoured. [para. 62] [ 17 ] In paragraph 66 of the Amended Statement of Claim, Mr. Lévesque seeks the following relief:

a) an Order appointing [him] as the representative of the pensioners and the survivors, beneficiaries and Estates of the retirees;

b) a Declaration that the [ Public Service Superannuation ] Act was based on and contained the terms and conditions of a contract of employment entered into by each retiree at the commencement of employment with the Public Service, and said contract is in full force and effect, notwithstanding the illegal attempt to establish a Shared Risk Plan as at January 1, 2014;

c) a Declaration that the Defendants, and each of them, have breached the trust under which the [pre-2014 pension trust fund] was held and that the said Defendants, and each of them, repay all trust monies found to have been misappropriated or misapplied contrary to and in breach of the terms of the [pre-2014 pension trust fund], as set out herein and for equitable compensation in the amount determined by the Court, plus interest at 6% per annum, compounded from January 1, 2014, until paid;

d) an order directed to each of the Defendants to provide an accounting detailing any and all payments or transfer of assets from the [pre-2014 pension trust fund] made on and after the [Memorandum of Understanding] was executed: (

i) by them, (ii) at their direction, or (iii) for their benefit;

e) an order directed to each of the Defendants to cease and desist from any and all use of the [pension trust fund] save for the purposes of making the payments prescribed under the terms of the trust as set out in

section 27 of the [ Public Service Superannuation Act ];

f) an order severally directing the Defendants to repay to the [pension trust fund] all amounts detailed by them pursuant to the order under Paragraph 66(

d) which are other than payments described in Paragraph 32 hereof;

g) an order directed to the Province directing it to pay sufficient amounts into the [pension trust fund] to meet its pension liability under the [ Public Service Superannuation Act ] as determined by its actuaries upon the wind up of the [Plan] in 2014;

h) an order directing the disbursement of the [pension trust fund], upon the payment by the Province of the amounts described in Paragraph 66(g), to members of the Public Service in accordance with their individual entitlement under the [ Public Service Superannuation Act ];

i) alternatively, with respect to Paragraphs 66(

g) and (h), an order directing the Province to (

i) pay, on a going concern basis, the pension benefits to which the Plaintiff is entitled under the [pre-2014 public service pension plan], (ii) continue to administer [that plan] in accordance with its terms, (iii) preserve the [pension trust fund] in accordance with the terms of the trust, (iv) ensure that the [pension trust fund] has sufficient funds at all times to make the payments described in subsection 27(8) of the [ Public Service Superannuation Act ], and (

v) such other order as the court deems just in the circumstances;

j) an order directing a determination of the Defendants’ right to use the [pension trust fund] and the validity of the appointment of the Trustees therefor;

k) damages as are just in the circumstances;

l) an Order that the Defendant Trustees establish a fund of $2,000,000.00 from the funds now held in trust and use the same for payment of such legal fees and costs as are incurred by [Mr. Lévesque] in this litigation. And such fees and costs shall be paid as rendered, but shall be subject to taxation in accordance with the provisions of the Law Society Act, S.N.B. 1996, c. 89 , and Regulations. [ 18 ] As can be discerned, in seeking to turn back the clock to the pre-2014 Plan, Mr. Lévesque does not challenge the constitutionality of the conversion-prescribing legislation or any related documents.

That being so, one might be forgiven for wondering how the relief claimed in paragraph 66 of the Amended Statement of Claim could be granted without violating the constitutional separation of powers between the judiciary and the Legislature. [ 19 ] Be that as it may, the lawsuit is described in the Appellants’ Submission as a challenge to the legality of the transfer of the pension trust fund from the Corporation to the Trustees as administrators of the shared risk plan: “Mr.

Lévesque claims this transfer was done without any authority by the [Corporation], and without the consent of the beneficiary members of the [pre-2014 Plan] who, like Mr. Lévesque, were retirees with vested pension entitlements” (para. 13). As the motion judge noted, in a January 23, 2017 letter, Mr. Mockler indicates the action “is to remedy public mischief, e.g. confiscation of trust funds”. [ 20 ] In the Amended Statement of Claim, Mr.

Lévesque seeks a representation order that would allow him to pursue the action on behalf of the “approximately 13,200 retired employees whose pension benefits have been, or may be, adversely impacted” by the conversion to a shared risk plan. To this date, Mr. Lévesque has not applied for, let alone secured the sought- after representation order. [ 21 ] The 66-paragraph Statement of Claim and Amended Statement of Claim were signed by Mr. Mockler. However, those documents were drafted by Mr. Speight, albeit under Mr.

Mockler’s supervision. [ 22 ] In its Statement of Defence, the Corporation denies all liability and relies, for the validity of its conversion-related actions and decisions, on the sovereign authority of the Legislature. It also pleads immunity from suit under specific legislative provisions applicable to the conversion and the Proceedings Against the Crown Act , R.S.N.B. 1973, c. P-18 . [ 23 ] The pleadings are not closed; there are indications Mr. Lévesque might file a Reply in which he may, inter alia , contest the constitutional validity of the conversion-prescribing legislation and all ancillary documents.

[24] Neither documentary nor oral discovery has taken place. In fact, affidavits of documents havenot been exchanged. [25] A motion for

summary judgment dismissing the action is outstanding. On October 25, 2016,Mr. Mockler signed the 124-page Brief filed on Mr. Lévesque’s behalf in opposition to the motion. However, the Brief was drafted byMr. Speight. [26] Also outstanding is a motion by Mr. Lévesque for an order compelling the Trustees under theshared risk plan to set aside $2,000,000 to cover his anticipated legal fees (see paragraph 66(

l) of the Amended Statement of Claimreproduced hereinabove). The January 6, 2017 affidavit sworn and filed by Mr. Lévesque in support of that motion prompted theCorporation to make inquiries to ascertain whether Mr. Speight might have been assisting Mr. Mockler in the underlying action while hesat on its board of directors (“the Board”). [27] In the affidavit in question, Mr. Lévesque adverts to the contribution of an unnamed pensioner(“a senior lawyer”) to the prosecution of his action: Mr. Mockler advised me […] he has engaged the help of one of the pensioners who is a senior lawyer and highly experienced.

Heestimates his time in the file to be probably upwards of 500 hours, but for which no charge is included in this account. This pensionerengaged to assist in briefing Mr. Mockler and in the preparation of the Statement of Claim […], preparation of the Notices RequiringAffidavits of Documents and a Demand for Particulars, and reviewing and responding to Briefs filed by all the Defendants. A Briefoutlining in very great detail the entire history of this matter and pin-pointing the many legal and factual issues involved consisting ofsome 124 pages was prepared and filed by this Plaintiff.

Countless hours in discussing strategy, tactics and issues with Mr. Mockler havebeen expended as advised by Mr. Mockler, which I verily believe. [motion decision, para. 56] [Emphasis added.] [28] Mr. Lévesque also requested “fair payment to cover the fees and disbursements and any taxesincurred by the undisclosed pensioner”. [29] By letter dated January 13, 2017, counsel for the Province and the Corporation asked Mr.Mockler for the name of that “undisclosed pensioner”. [30] In an e-mail dated January 16, 2017, Mr.

Mockler responded the still unidentified “solicitor” didnot intend to make a claim for fees, disbursements and taxes incurred by him. [31] By letter dated January 19, 2017, counsel for the Province and the Corporation asked Mr.Mockler to confirm Mr. Speight was the “undisclosed individual”. Mr. Mockler did so by e-mail bearing the same date. [32] In a letter dated January 23, 2017, counsel for the Province and the Corporation described forMr. Mockler’s benefit the basis upon which his clients considered he and Mr. Speight were burdened by a disqualifying conflict ofinterest: Mr.

Speight's active assistance to the Plaintiff while serving as a director of the [Corporation] constitutes a serious breach of his fiduciaryduty of loyalty. It also creates a legal presumption that you have been the recipient of an unauthorized disclosure of confidential andprivileged information belonging to the [Corporation], so as to disqualify you from representing the Plaintiff in this proceeding.

Wespecifically draw your attention to the law relating to disqualifying conflicts of interest, including the decision of our Court of Appeal inrelation to confidential information held by corporate directors in Canadian Broadcasting Corp. v. New Brunswick Broadcasting Co., (NB CA), [2000] N.B.J. No. 450 (NBCA). Your pre-bill confirms a level of involvement of Mr. Speight that is sufficiently serious to require your removal as solicitor of record. IfMr.

Speight is also the “undisclosed pensioner” whom your client estimates has spent upwards of 500 hours on this file, we areconcerned that this conduct can only be characterized as egregious.

In the circumstances, we have no choice but to file a motion seeking removal of you and your firm as solicitor of record for the Plaintiff and to enjoin Mr. Speight from assisting the Plaintiff in this litigation. As this motion must be brought without delay, it is our intention to file same by tomorrow afternoon (January 24, 2017). Prior to doing so, we wished to bring the above conflict to your attention. Should you and Mr. Speight wish to voluntarily withdraw from this file, we are prepared to discuss the possibility of resolving this delicate matter by agreement or consent order.

Should you wish to discuss same, we urge you to contact the undersigned at your earliest convenience and prior to 11:00 a.m. tomorrow, January 24, 2017. [ 33 ] By responding letter also dated January 23, 2017, Mr. Mockler advised he was not aware Mr. Speight had been a director of the Corporation from November 2002 until October 1, 2016. In his view, withdrawal was unnecessary since no confidential information had been disclosed by Mr. Speight and, more fundamentally, there was no confidential information since “all information with which this litigation is concerned is highly public”.

We would point out, parenthetically, that the latter observation fails to take account of the confidential legal advice provided to the Board by its solicitors. [ 34 ] On January 25, 2017, the Corporation and the Province applied, by motion, for orders: 1. […]; 2. that Eugene J. Mockler, Q.C. (“Mr. Mockler”) and E. J. Mockler Professional Corporation (“the Mockler Firm”) be removed as solicitors of record for the Plaintiff; 3. enjoining the Plaintiff or any representative on his behalf from, directly or indirectly, communicating with or receiving further advice or information from Mr.

Mockler, the Mockler Firm or Richard Speight, Q.C. (“Mr. Speight”) with respect to this proceeding or any other proceeding arising out of or related to the facts pleaded in the Amended Notice of Action with Statement of Claim Attached; 4. restraining Mr. Speight from disclosing to the Plaintiff or to any other person any confidential or privileged information he obtained as a director of the [Corporation]; 5. that the Plaintiff shall immediately remit its entire file to the Court or, in the alternative, to an independent third party solicitor appointed by the Court, for review and removal of: (

a) all confidential or privileged documents belonging to the [Corporation] and all documents which record or communicate confidential or privileged information relating to the [Corporation], which documents or information shall be returned to counsel for the [Corporation] forthwith, without retention of any copies, whether paper or electronic; (

b) all documentation provided or prepared by Mr. Speight, which documentation shall be destroyed […]. [ 35 ] The motion was supported by four affidavits sworn by John Sinclair, at all pertinent times the President and Chief Executive Officer of the Corporation. Those affidavits establish the following:

a) Mr. Speight was first appointed to the Board on September 19, 2002. He was a director until October 1, 2016, occupying the seat statutorily reserved for “a member of the public service superannuation plan in respect of which the Corporation acts as trustee of the pension fund referred to in

section 27 of the Public Service Superannuation Act . ” Effective October 1, 2016, the Board ceased to exist and all appointments to the Board, including Mr. Speight’s, were terminated by An Act to Implement Strategic Program Review Initiatives , S.N.B. 2016, c. 28 ;

b) From August 2015, when he retained Mr. Mockler, until October 1, 2016, Mr. Speight was both on the Board and an active contributing member of the Mockler legal team representing Mr. Lévesque in his action against the Corporation;

c) For each of the three full years of his last re-appointment to the Board in 2013, Mr. Speight was duty bound to abide by the Corporation’s Code of Ethics and Business Conduct. As the motion judge noted, the following provisions are pertinent: 4. CONFIDENTIAL INFORMATION Employees and directors may have access to confidential information relating to the affairs of the [Corporation] and its investments or potential investments.

The disclosure of such confidential information even to close friends or family members, or the use of such confidential information for personal gain, could be highly detrimental to the interests of the [Corporation] and parties whose confidential information has been entrusted to the [Corporation]. 4.1 Confidentiality Individuals must recognize that all non-public information is to be held in strict confidence. No one shall divulge any confidential information unless authorized by the President or required by law, to do so.

Individuals who leave the [Corporation], or retire from the [Corporation], continue to be bound by this requirement. 5 . CONFLICT OF INTEREST 5.1 Conflict of Interest All individuals must avoid conflict of interest situations. A conflict of interest may appear when an individual is put in a position of judging between the interest of the [Corporation] and his/her personal interests or those of another party in which they may have an interest. When conflicts are present, individuals must act in the interest of the [Corporation].

Furthermore, individuals who are acting as a fiduciary should hold their fiduciary duty above their personal interests. Furthermore, all employees and directors are subject to the [Corporation’s] Conflict of Interest Guidelines contained in the By-Laws. 5.2 Disclosure and Elimination of Conflict Any employee or director who believes that he/she has or may have an actual or potential conflict of interest must report it to the person to whom they directly report. In the case of directors, they must report the matter to the Chair.

All efforts must be taken to remove the conflicted individual from situations where decisions, opinions or actions are required in regards to the conflict issue. (

d) Additionally, the Code recognized explicitly that confidentiality was an important aspect of the duty of loyalty, which it defined as “the duty to place the interests of the Corporation first, and not to use one’s position to further private interests”. In his last Declaration of compliance, Mr. Speight certified he had read and understood the Code of Ethics and Business Conduct Policy, and he agreed to abide by its dictates; (

e) Mr. Speight had online website access to confidential Board materials from December 12, 2011, until the end of his tenure as a director. As well, he had the use of a Director Material iPad from 2012 until its return following his last Board meeting on September 26, 2016. This was a personalized, secure and password-protected device that included confidential Board and committee meeting minutes, memoranda and other confidential documents circulated in November and December 2013 in relation to issues that are central to the underlying action; (

f) While on the Board, Mr. Speight was privy to confidential and privileged legal advice in relation to the proposed legislative conversion to a shared risk pension plan, the Agreement to Transfer Trust Assets and Indemnity and the transfer of the pre-2014 pension

trust fund to the shared risk plan. In that regard, the following paragraphs of the affidavit sworn by Mr. Sinclair in January 2017 bear reproduction: In or about December 2013, after Bill 11 –

An Act Respecting Public Service Pension was tabled in the New Brunswick legislature but before its enactment, members of the Board engaged in several private and confidential discussions regarding the impact of the proposed legislative changes and sought the advice of legal counsel. As a member of the Board, Mr. Speight engaged in discussions in my presence and received copies of legal advice from our legal counsel. The Defendant [Corporation] executed an Agreement to Transfer Trust Assets and Indemnity dated January 1, 2014 (“the Agreement”).

Prior to entering the Agreement, the Board received legal advice in relation to same. Mr. Speight engaged in those discussions in my presence and participated in the Board decision for the Defendant [Corporation] to enter the Agreement. On January 1, 2014, the Defendant [Corporation] transferred assets previously held in a fund established pursuant to the (now repealed) Public Service Superannuation Act to a fund established pursuant to the new shared risk plan under the Pension Benefits Act . Mr.

Speight engaged in confidential and privileged discussions of the Board, including with its solicitor, in my presence in relation to this transfer of assets. The Plaintiff commenced this action on December 30, 2015 and filed an amended claim on January 20, 2016.

The legislative reform relating to pensions, the Agreement and the transfer of assets by the Defendant [Corporation] are referenced repeatedly in the pleadings underlying this action, as well as in the Motion materials filed by the Plaintiff’s legal team and in the 124- page Brief referenced at paragraph 2 of the [Plaintiff’s] Affidavit sworn on January 6, 2017. Based upon paragraphs 25-26 and Exhibit 4 [Mr. Mockler’s pre-bill] of the [Plaintiff’s] Affidavit, I believe that Mr. Speight has been an active member of the Plaintiff’s legal team in relation to these and other aspects of this proceeding.

The Defendant [Corporation] was served with this action on January 12, 2016. The Board scheduled a meeting for January 15, 2016 to obtain legal advice with respect to same. Prior to that meeting, Mr. Speight was identified as having a potential conflict of interest as the action was purportedly brought to benefit all retired members of the public service superannuation plan, which would include Mr. Speight. Consequently, he was asked to recuse himself. Mr. Speight initially refused to recuse himself from the discussions of the Board relating to this action.

As a result, the matter was not discussed at the January 15, 2016 meeting. Following further discussion between myself, Michael Walton, the Chair of the Defendant [Corporation] and Mr. Speight, Mr. Speight agreed to recuse himself. From January 17, 2016 until the end of his term as a director on October 1, 2016, Mr. Speight recused himself from Board discussions regarding this action. However, at no time did Mr. Speight inform the Defendant [Corporation] that he had been and would continue to assist counsel for the Plaintiff in these legal proceedings against the Defendant [Corporation]. At no time did Mr.

Speight request permission from the Defendant [Corporation] to waive confidentiality or privilege or to waive compliance with Mr. Speight’s obligations as a Director of the Board so as to permit him to assist counsel for the Plaintiff in these proceedings against the Defendant [Corporation]. The Defendant [Corporation] has not waived and does not intend to waive confidentiality or privilege regarding communications with the Board, including any communications referenced above; (

g) As a director and Chair of the Corporation’s Governance Committee, Mr. Speight received and discussed confidential and privileged legal advice in relation to the Corporation’s status as a Crown Corporation for the purposes of the Proceedings Against the Crown Act . In his March 23, 2017 affidavit, Mr. Sinclair states: (

i) I was personally present, along with Mr. Speight, at a meeting of the Governance Committee on May 25, 2015. At that meeting, Mr. Speight raised the issue of the identity of the [Corporation] as a Crown Corporation and I was asked to seek advice of legal counsel

on behalf of the [Corporation] with respect to same; (ii) I was personally present, along with Mr. Speight, at a meeting of the [Corporation] Board on June 8, 2015 where the issue of the identity of the [Corporation] as a Crown Corporation was discussed again; (iii) I received legal advice in writing with respect to the status of the [Corporation] as a Crown Corporation on July 14, 2015. This information was immediately forwarded to Mr.

Speight by e-mail, in his capacity as Governance Committee Chairperson, and placed on the Agenda for discussion at the next meeting of the Committee ; (iv) I personally shared this legal advice with Mr. Speight and other Directors at a meeting of the Governance Committee on September 15, 2015 and at a meeting of the [Corporation] Board on September 28, 2015 . [Emphasis added throughout.] [ 36 ] Initially, both Mr. Mockler and Mr. Speight opposed the motion. Each filed two affidavits designed to rebut the presumptions of disclosure and misuse adopted in MacDonald Estate . Mr. Speight swore he had not informed Mr.

Mockler he was a director of the Corporation and had not disclosed to him any confidential information. As for Mr. Mockler, it is his sworn evidence he only found out Mr. Speight was a director of the Corporation in January 2017 and that he believes Mr. Speight never communicated any confidential information to him. Reliance was also placed on affidavit evidence by Mr. Lévesque denying any knowledge of confidential information having been relayed by anyone to Mr. Mockler, confirming his wish to be represented by Mr. Mockler and detailing the significant prejudice he claims would be visited upon him if Mr.

Mockler were removed. In a third affidavit, which was filed for the purposes of a follow-up hearing, Mr. Lévesque admits he was aware, from the outset of Mr. Mockler’s involvement, that Mr. Speight was a director of the Corporation. He, too, failed to inform Mr. Mockler of this fact. [ 37 ] In late June 2017, Mr. Speight relented in his opposition to the motion for removal insofar as it concerned him, and consented to an order restraining him “from disclosing to [Mr. Lévesque] or any other person information he obtained as a director of the [Corporation], except as required by law”.

The Consent Order, which was signed by the motion judge on June 27, also provided: 1. […]; 2. Richard Speight, Q.C. shall return all copies of documents he has in his possession or control that he received in his capacity as a director of the [Corporation] to counsel for the [Corporation] and destroy all electronic copies of such documents. 3. Pending the resolution of the Motion, Mr. Speight will have no further involvement in assisting the Plaintiff or any representative on his behalf or Mr.

Mockler or the Mockler Firm in this proceeding or any other proceeding arising out of or related to the facts pleaded in the Amended Notice of Action with Statement of Claim Attached. [ 38 ] Mr. Mockler contends that, if any relief was justified, a continuation of the Consent Order would have been a proportionate and sufficient response to the motion for removal. [ 39 ] In his September 28, 2017 decision, the motion judge made the following observations before concluding, after hearing the parties over the course of eight days, Mr.

Mockler had a disqualifying conflict of interest: […] in this action the Plaintiff [Mr. Lévesque] has been assisted by Mr. Speight, while Mr. Speight was a director of the Defendant [Corporation]. The Plaintiff says Mr. Speight spent “countless hours discussing strategy, tactics and issues with Mr. Mockler” and “upwards of 500 hours” working on the Plaintiff’s case. [para. 88] […]

Mr. Speight was a director of the [Corporation], not its solicitor. However, he had been exposed to privileged legal opinions provided to the [Corporation] with respect to issues in this litigation. He was a party to other private discussions at the Board of Directors. He also had access to various documents and records of the [Corporation] as a director and as Chair of the Board’s Governance Committee. [para. 90] […] The principles set out by Justice Sopinka in MacDonald Estate as extended to a director of a corporation by Chief Justice Daigle in CBC apply to the facts of this case. I conclude:

a) Mr. Speight’s relationship with the [Corporation] exposed him to confidential information;

b) that information was relevant to this proceeding;

c) there is a risk that information will be used to the prejudice of the [Corporation];

d) Mr. Speight spent a lot of time helping Mr. Mockler initiate this action;

e) the public represented by the reasonably informed person would not be satisfied that no use of confidential information from the [Corporation] would occur; […]. [para. 92] [ 40 ] Those findings led the judge to order: (1) the removal of Mr. Mockler and his professional corporation as solicitors of record for Mr. Lévesque;

(2) Mr. Lévesque or anyone on his behalf, directly or indirectly be prohibited from communicating with or receiving advice or information from Mr. Mockler, his firm or Mr. Speight with respect to the proceeding or any other similar proceeding, until further order; (3) the continuation of the June 27, 2017 interim Consent Order signed by Mr.

Speight until the conclusion of the trial of the action or further order; and (4) a further hearing into the motion’s request for an order of costs and “an order for the review by the Court or by a third party solicitor appointed by the court of the Plaintiff’s file and the removal of all confidential or privileged documents or records of information belonging to” the Corporation (para. 96). [ 41 ] By order dated November 27, 2017, the judge directed Mr. Lévesque to pay costs of $10,000 to the Province and the Corporation, and costs of $10,000 to the Trustees . Those costs were to be paid within 30 days.

They remain outstanding. Despite this arguable contempt of court, we exercised our discretion in favour of hearing Mr. Lévesque. [ 42 ] Mr. Mockler and his professional corporation appeal, seeking reversal of the September 28, 2017 removal order and the November 27, 2017 order for costs against Mr. Lévesque, their re-installation as solicitors of record, and costs throughout.

In the Supplementary Notice of Appeal, they allege the motion judge: 1. […] erred in law and misdirected himself when he determined that he had no discretion to refuse removal of the Appellants as solicitors for the Plaintiff and in so doing he failed to weigh adequately or at all the factors necessary to determine whether or not he should make the order requested on the motion; 2. […] failed to consider issues of proportionality or the public perception test adequately or at all, but simply transferred to his consideration of the motion the principles set out in the MacDonald Estate decision and did thereby fail to consider adequately, or at all, differences in the facts between the case at bar and those in MacDonald Estate and, accordingly, erred in law in the application of the said decision to the facts in the case at bar; 3. […] also gave no consideration to the constitutional right of the Plaintiff to have counsel of his choice and failed to weigh that right in the balance with the applicable facts and principles of proportionality, thus depriving himself of important and serious grounds for the exercise of his discretion;

4. […] failed to address the submissions of the Appellants in respect of relevant trust issues and the application of principles of waiveras they related to certain of the evidence, and did thereby err in law; and 5. […] made adverse credibility findings regarding Richard Speight in a manner contrary to the principles of Browne v. Dunn (asapplied by this Court), which said findings were without foundation and adversely reflected on the Appellants, and thereby erred in lawand arrived at an incorrect Decision. [43] All respondents, other than Mr.

Lévesque, oppose the appeal and submit the motion judge’sdecision is legally and factually unimpeachable by this Court. III. Reasons for Disposition A. General observations [44] Judicial disqualification of a solicitor of record is a discretionary decision that attracts a highlydeferential standard of review on appeal.

As noted in our introductory remarks, where the correct legal principles are identified andapplied, a removal order can only be set aside if it is the result of a palpable and overriding error in the assessment of the evidence or ifthe exercise of discretion at the root of the order is unreasonable in the sense that nothing in the record can justify it: Saint JohnShipbuilding Ltd. v. Bow Valley Husky (Bermuda) Ltd., 2002 NBCA 41, 251 N.B.R. (2d) 102 and Canadian Broadcasting Corp. v. NewBrunswick Broadcasting Co. (2000), (NB CA), 230 N.B.R. (2d) 332, [2000] N.B.J.

No. 450 (C.A.) (QL), per DaigleC.J.N.B., sitting as a single judge. Correctness is the governing standard of review for only one issue: whether the right legal principleshave been brought to bear on the determination of the motion for removal. All other findings must stand unless unreasonable, aconclusion that cannot be reached in respect of findings of fact without identifying a palpable and overriding error in the assessment ofthe evidence. [45] The motion judge concluded the principles formulated by the majority in MacDonald Estateapply to the facts of this case.

In our view, that understanding of the law is correct. Subject possibly to exceptions based on public policyconsiderations, like cases involving “whistleblowing” for the greater good, those principles stand to be applied to dispose of motions forremoval where the respondent solicitor is in possession, without legal entitlement, of confidential information arising from a solicitor-client relationship. The source of the confidential information need not have made its acquisition as solicitor for the proprietor; it issufficient if the confidential information is attributable to a solicitor-client relationship.

As noted in Celanese Canada Inc. v. MurrayDemolition Corp., 2006 SCC 36 , [2006] 2 S.C.R. 189, [2006] S.C.J. No. 35 (QL), “the relevant elements of the MacDonaldEstate analysis do not depend on a pre-existing solicitor-client relationship. The gravamen of the problem here is the possession byopposing solicitors of relevant and confidential information attributable to a solicitor-client relationship to which they have no claim ofright whatsoever” (para. 46).

We pause to emphasize the appeal is resolved without deciding whether Canadian Broadcasting Corp. v.New Brunswick Broadcasting Co. correctly determined the MacDonald Estate analysis applies to confidential information attributable toany and all relationships of confidence. [46] As a director of the Corporation, Mr. Speight was privy to legal advice provided by its solicitorswith respect to issues at the heart of the litigation, and he had undertaken not to disclose that information to outsiders.

Although, Mr.Speight had not acted as solicitor for the Corporation, the confidential information he acquired as a director was attributable to asolicitor-client relationship between the Corporation and its advising solicitors. That being so, and as correctly determined by the motionjudge, the relevant elements of the MacDonald Estate analysis informed the determination of the joint motion by the Province and theCorporation for removal of the appellants as solicitors of record for Mr.

Lévesque. [47] After setting out his understanding of the applicable principles, the judge made the followingfindings of fact or mixed fact and law:

a) Mr. Speight’s relationship with the [Corporation] exposed him to confidential information;

b) that information was relevant to this proceeding;

c) there is a risk that information will be used to the prejudice of the [Corporation];

d) Mr. Speight spent a lot of time helping Mr. Mockler initiate this action;

e) the public represented by the reasonably informed person would not be satisfied that no use of confidential information from the [Corporation] would occur;

f) thus, Mr. Mockler has a disqualifying conflict of interest. [motion decision, para. 92] [ 48 ] In our view, none of those findings is the product of a palpable and overriding error in the assessment of the evidence. [ 49 ] Moreover, we are not persuaded Mr. Mockler’s removal is an unreasonable disposition. The facts, as settled by the motion judge primarily on the basis of Mr. Sinclair’s affidavit evidence, the salient parts of which are set out in paragraph 35 hereinabove, are: for more than 15 months, Mr. Speight was simultaneously an active contributing member of Mr.

Mockler’s legal team and a director of the defendant Corporation and, as such, he was privy to privileged legal advice with respect to key issues raised in the Amended Statement of Claim. [ 50 ] Mr. Mockler’s initial lack of knowledge of Mr. Speight’s Board membership is without significance. Mr. Speight was a key member of Mr. Mockler’s legal team and, just as importantly, Mr. Mockler’s client, Mr. Lévesque, knew Mr. Speight was, at all material times, a director of the Corporation. As for Mr. Mockler, he learned in January 2017 Mr.

Speight had been on the Board from the time of his retainer in August 2015 until October 1, 2016, yet he took no steps to remove him from his team and end their interaction. Rather, like Mr. Speight, Mr. Mockler insisted there was no conflict of interest and that Mr. Speight was duty bound to share with Mr. Lévesque qua pensioner, and presumably himself, all confidential information he acquired as a director. The Consent Order precluding Mr.

Speight from further sharing confidential information was only signed in late June 2017. [ 51 ] In this case, we are concerned with more than a risk that confidential information might be knowingly and explicitly shared to the prejudice of the Corporation. In our view, Mr. Speight’s sworn statements that he did not reveal confidential information to Mr. Mockler is no answer to the motion for removal. He drafted the Statement of Claim, the Amended Statement of Claim and a 124-page Brief in opposition to the motion for

summary judgment, and engaged in tactical and strategic discussions with Mr. Mockler over “countless” hours, as a member of Mr. Mockler’s legal team . It is likely those key documents and discussions were shaped, wittingly or unwittingly, by Mr. Speight’s knowledge of the legal advice to which he became privy while a director of the Corporation. Admittedly, we do not know the tenor of the legal advice in question, but we do know the Corporation saw fit to secure an indemnity agreement from the Province with respect to the transfer of the pension trust fund to the Trustees .

It can be reasonably surmised the legal advice adverted to the risk, perhaps raised through an over-abundance of caution, that the process dictated by legislation might leave the door ever-so-slightly open to liability on the part of the Corporation. Broadly speaking, when one side in litigation knows the arguments that will bring to the fore potential risks or vulnerabilities referenced in confidential legal advice provided to the other side, the latter’s ability to make its case is compromised.

An otherwise unwarranted settlement may become an option worthy of consideration. [ 52 ] Moreover, like the motion judge, we are unswayed by the complaint that Mr. Lévesque is being denied counsel of his choice. This consideration is trumped by the need to protect the integrity of the justice system. Furthermore, Mr. Lévesque is the author of his own misfortune: he knew Mr. Speight was a director of the Corporation and, for whatever reason, he withheld that information from Mr. Mockler. Had Mr. Lévesque shared this information, Mr. Mockler could have severed, early on, his relationship with Mr.

Speight and instructed both Mr. Lévesque and Mr. Speight to do what the June 27, 2017 Consent Order would eventually prescribe. Mr. Mockler would then have had, at least arguably, a stronger defence against the motion for removal. Finally, the litigation, while longstanding, is in its early stages. Recall the pleadings are not closed and discovery has not taken place. [ 53 ] We now turn to the individual grounds of appeal with a view to addressing, albeit succinctly, the main issues that underlie each. B.

Ground 1 The motion judge erred in law and misdirected himself when he determined that he had no discretion to refuse removal of the appellants as solicitors for the plaintiff and in so doing he failed to weigh adequately or at all the factors necessary to determine whether or not he should make the order requested on the motion;

[54] Two lines of argument purport to substantiate this ground. First, Mr. Mockler argues the motionjudge erred in finding Mr. Speight owed a duty of confidentiality to the Corporation. That would be so because of the fiduciarydisclosure obligations he contends were owed by the Corporation and Mr. Speight (as one of its directors) to Mr. Lévesque as abeneficiary of the pre-2014 Plan with vested pension benefits. Second, Mr. Mockler contends the motion judge failed to appreciate hecould fashion a remedy short of removal.

(1) The duty of confidentiality [55] In our view, Mr. Speight owed a duty of confidentiality to the Corporation. If that duty did notarise, as a matter of law, from his position as a director of the Corporation, it certainly flowed from the Corporation’s Code of Ethics andBusiness Conduct Policy, and his agreement to abide by its dictates. [56] Moreover, Mr. Mockler advised the judge that the resolution of the motion for removal did notrequire he determine whether Mr. Speight owed a duty to disclose the Corporation’s confidential information to Mr. Lévesque and othermembers of the pre-2014 Plan.

A party to an appeal will be allowed to resile from positions taken in first instance only in exceptionalcircumstances. This is not one of those cases.

(2) Judicial discretion in fashioning the remedy [57] Mr. Mockler’s submission under this rubric is that the disposition of a motion for a solicitor’sremoval involves the exercise of judicial discretion. This is indisputably so: Beetham v. Markessini (1997), (NBCA), 190 N.B.R. (2d) 193, [1997] N.B.J. No. 579 (C.A.) (QL), Canadian Broadcasting Corp. v. New Brunswick Broadcasting Co. andSaint John Shipbuilding Ltd. v.

Bow Valley Husky (Bermuda) Ltd. [58] In his reasons for decision, the motion judge opined that whether a lawyer should be removed isnot a question that stands to be determined “on such terms as may be just” (para. 81). Mr. Mockler submits this statement reveals adeeply flawed understanding of the law in that it excises judicial discretion from the disposition-shaping process.

In our view, thissubmission reflects a misunderstanding of the motion judge’s approach to adjudication in this case. [59] After making the observation referenced in the preceding paragraph, the judge added the centralquestion on a motion for removal stood to be decided by following “the principles, rules and directions established by the higher courtsin previous decisions or precedents” (para. 81). The judge’s view was simply that previous decisions by the Supreme Court of Canadaand other rulings, notably the decision of Daigle, C.J.N.B. in Canadian Broadcasting Corp. v.

New Brunswick Broadcasting Co.,provided “principles, rules and directions” which he was duty-bound to apply, and those “principles, rules and directions” led him toconclude the appropriate disposition was the removal of Mr. Mockler as solicitor of record for Mr. Lévesque, and not the less draconianmeasure he advocated. [60] In our view, the judge’s reasons for decision and his disposition are not tainted by the errorsalleged in this ground of appeal. Accordingly, it fails. C.

Ground 2 The motion judge failed to consider issues of proportionality or the public perception test adequately or at all, but simply transferred tohis consideration of the motion the principles set out in the MacDonald Estate decision and did thereby fail to consider adequately, or atall, differences in the facts between the case at bar and those in MacDonald Estate and, accordingly, erred in law in the application of thesaid decision to the facts in the case at bar; [61] Mr.

Mockler contends the motion judge overlooked “the applicable factual matrix in attemptingto apply the circumstances of the instant matter to those in the MacDonald Estate and CBC cases”. With respect, this criticism is whollyunfounded. Indeed, a fair reading of the judge’s reasons reveals he understood the relevant “factual matrix” and was alive to the factualdifferences between the present case and those cases. The judge found the differences neither warranted a derogation from the test andguidelines espoused in MacDonald Estate and Canadian Broadcasting Corp. v.

New Brunswick Broadcasting Co., nor justified allowingMr. Mockler to remain solicitor of record.

[ 62 ] Mr. Mockler also submits the judge failed to consider “the public perception test” in association with the principle of proportionality. He submits an order short of removal would have been proportionate bearing in mind the June 27, 2017 Consent Order, which precluded any further involvement by Mr. Speight in the litigation, and Mr. Lévesque’s right to counsel of his choosing.

This submission is captured by the following excerpt from the Appellants’ Submission: Given appropriate judicial concern with even the appearance of conflict, a proportional order, which would also have reasonably preserved the administration of justice, by simply proscribing Mr. Speight’s continued involvement, could easily have been crafted. Such a proportional order (as was eventually given voluntarily by Mr. Speight) would have cured any apprehension that going forward in the file Mr.

Speight might be in a position to disclose relevant confidential information, inadvertently or otherwise. [para. 53] [ 63 ] Significantly, Mr. Mockler acknowledges in the Appellants’ Submission that “written and oral arguments of proportionality were made to the motion judge, suggesting a balancing of the interests of Mr. Lévesque and the defendants and the perception of the man on the street who would see Mr. Lévesque’s lawyer of choice being removed” (para. 54).

Evidently, the arguments rooted in the proportionality principle that fuel this ground of appeal were put to the motion judge and he declined to give effect to them. In our view, the judge could reasonably conclude that, in the particular circumstances of this case, removal was the appropriate outcome. That being so, reversal is out of the question. [ 64 ] This ground of appeal has not been substantiated. D.

Ground 3 The motion judge also gave no consideration to the constitutional right of the plaintiff to have counsel of his choice and failed to weigh that right in the balance with the applicable facts and principles of proportionality, thus depriving himself of important and serious grounds for the exercise of his discretion; [ 65 ] This ground mischaracterizes the analysis undertaken by the motion judge. His reasons for decision show he was alive to the importance of Mr. Lévesque’s choice of counsel.

However, the judge found, in our view quite reasonably, that this consideration was overshadowed by other important factors, principally the need to preserve the integrity of our system of justice, which is of paramount importance under the authority of MacDonald Estate . In other words, a litigant’s right to be represented by counsel of his or her choice, while indisputably important, is far from absolute. In a case like the present one, that right must yield to “the paramount public interest in preserving the integrity of the justice system”: Saint John Shipbuilding Ltd. v.

Bow Valley Husky (Bermuda) Ltd . , para. 77 . [ 66 ] There is no merit to this ground of appeal. E. Ground 4 The motion judge failed to address the submissions of the appellants in respect of relevant trust issues and the application of principles of waiver as they related to certain of the evidence, and did thereby err in law; and [ 67 ] The animating complaint here is that the motion judge “not only ignored the trust issues raised by the motion with respect to Mr.

Speight’s position, but also failed to address the implied waiver of any privilege associated with allegedly confidential information, and wholly failed to consider how those issues impacted the question of disclosure of allegedly confidential information.” [ 68 ] The “trust issues” relate to Mr. Mockler’s submission that Mr. Speight did not owe any duty of confidentiality to the Corporation because of the disclosure obligations arising from the fiduciary relationship between, on the one hand, the Corporation and its directors, and on the other, the pensioners.

We rejected this submission in dealing with Ground 1. Nothing further need be said on the subject.

[ 69 ] The submission regarding waiver is predicated on the theory that Mr. Speight was appointed to the Board to represent the interests of the pensioners, and “by that very appointment the province would necessarily have waived any objection to him reporting trust information to the beneficiaries.” [ 70 ] Mr. Mockler cites no jurisprudence in support of this submission. In our view, it is based on an erroneous

interpretation of s. 6(d)(ii), now repealed, of the New Brunswick Investment Management Corporation Act under which Mr. Speight was appointed to the Board.

Section 6(d)(ii) simply provided for the appointment by the Lieutenant-Governor in Council of “a member of the public service superannuation plan in respect of which the Corporation acts as trustee of the pension fund referred to in

section 27 of the Public Service Superannuation Act ”. [ 71 ] We note the appointing authority was the Lieutenant-Governor in Council, not the Plan membership. Moreover, nothing in s. 6(d)(ii) or any other provision of the New Brunswick Investment Management Corporation Act displaces the general rule that directors’ duties are owed exclusively to the corporation. [ 72 ] In our view, Mr.

Speight was appointed to the Board to bring to the table the insights and judgment he developed over the course of a distinguished professional career as well as any concerns he might have as a member of the Plan, all with a view to contributing to the Corporation’s discharge of its investment mandate. Nothing in his appointment under s. 6(d) (ii) operated as a waiver of confidentiality. We are comforted in this view by Mr.

Speight’s agreement to comply with the Corporation’s confidentiality rules; at the very least, that agreement confirms he understood no waiver of confidentiality arose from his appointment. [ 73 ] The case for acceptance of this ground of appeal has not been made. F. Ground 5 The motion judge made adverse credibility findings regarding Richard Speight in a manner contrary to the principles of Browne v.

Dunn (as applied by this Court), which said findings were without foundation and adversely reflected on the appellants, and thereby erred in law and arrived at an incorrect decision. [ 74 ] In his reasons for decision, the motion judge described Mr. Speight’s conduct as surreptitious. In the judge’s view this surreptitiousness rendered the veracity of his affidavit evidence suspect: As well, Mr. Speight did not disclose his involvement in suing the [Corporation] to anyone at the [Corporation].

He even “initially refused to recuse himself from the discussions of the Board of the [Corporation] relating to this action”. His failure to disclose his involvement in suing the [Corporation] and his initial failure to recuse himself suggests that he was acting surreptitiously. Such conduct makes it difficult to attach any weight to the various statements in his affidavits such as “I do not recall receiving any legal advice” and “at no time did I discuss any information that I received as a director” during those “countless hours discussing strategy, tactics and issues with Mr.

Mockler”. [paras. 60-61] [ 75 ] In the Appellants’ Submission, Mr. Mockler articulates the following complaint: The adverse credibility finding against Mr. Speight had a direct impact on the position of the Appellants as solicitors for Mr. Lévesque. In the MacDonald Estate case, the Supreme Court left the door open for a solicitor to bring forth evidence to challenge any presumption of a conflict of interest. The Supreme Court noted this would ordinarily be difficult. The finding that Mr.

Speight acted surreptitiously and that little weight could therefore be given to his denials impacted directly on the veracity of Mr. Mockler at the same time. Mr. Mockler says in his affidavits that he received no confidential or privileged information from Mr. Speight. At the same time, Mr. Speight says in both of his affidavits that he disclosed no confidential or privileged information to Mr. Mockler. If Mr. Speight is disbelieved, then Mr. Mockler must be disbelieved as well. Such a judicial assessment against Mr. Speight dramatically and drastically impacts Mr. Mockler’s credibility.

The Motions Judge made adverse credibility findings against Mr. Speight without any consideration for the very adverse impact that such findings would have on Mr. Mockler’s ability to “open the door wide”, as the Supreme Court indicated in the MacDonald Estate case was the right of any solicitor. [paras. 79-80]

[76] The rule in Browne v. Dunn (1894), 1893 CanLII 65 (FOREP), 6 R. 67 (H.L.), [1893] J.C.J. No.5 (QL), has no application where the party adducing the testimonial evidence could and should have addressed reasonably predictablegrounds for impeaching the witness’ credibility (see R. v. Gillis, 2014 NBCA 58, 426 N.B.R. (2d) 1, paras. 92-96). Mr. Mockler bore theburden of showing there had been no disclosure, let alone misuse, of confidential information Mr. Speight acquired while on the Board.The discharge of this heavy burden was made particularly difficult by Mr.

Speight’s significant contribution as a member of the Mocklerlegal team. The credibility of Mr. Speight’s denials of disclosure became a legitimate issue as soon as Mr. Mockler filed with the courtMr. Speight’s affidavit evidence in opposition to the motion seeking his removal. Mr. Mockler ought to have known Mr.

Speight’sfailure to inform him of his Board membership and his failure to apprise the Board of his role in the prosecution of the underlying actioncould, unless satisfactorily explained, be reasonably viewed by the motion judge as “surreptitious” and lead to adverse credibilityfindings. [77] That said, we prefer to dispose of this ground of appeal on the basis that Mr. Mockler’saffidavits and the “undertakings and conclusory statements” they contain are not “acceptable” as rebuttal evidence. They are certainlynot objectively verifiable.

In MacDonald Estate, the majority provides the following guidelines on this topic: A fortiori undertakings and conclusory statements in affidavits without more are not acceptable. These can be expected in every case ofthis kind that comes before the court. It is no more than the lawyer saying “trust me”. This puts the court in the invidious position ofdeciding which lawyers are to be trusted and which are not. Furthermore, even if the courts found this acceptable, the public is not likelyto be satisfied without some additional guarantees that confidential information will under no circumstances be used.

In this regard I amin agreement with the statement of Posner J. in Analytica, supra, to which I have referred above, that affidavits of lawyers difficult toverify objectively will fail to assure the public. [para. 50] [78] This ground of appeal is bereft of merit. IV. Conclusion [79] It is for the reasons set out hereinabove that we dismissed the appeal after hearing counsel forall parties.

We wrap up the proceedings by ordering the appellants pay one set of costs in the amount of $5,000 to the Province and theNew Brunswick Investment Management Corporation, one set of costs in the amount of $2,500 to the respondent Unions and one set ofcosts in the amount of $2,500 to the respondent Trustees. At the hearing, counsel for the respondent, Guy Lévesque, requested, aftersome hesitation, that the appellants be ordered to pay his costs on appeal. Since Mr. Lévesque has supported the appeal throughout, we decline to make an award of costs in his favour.

Version française du jugement de la Cour rendu par LA COUR I. Introduction [1] Près de 30 ans après Succession MacDonald c. Martin, (SCC), [1990] 3 R.C.S. 1235, [1990] A.C.S. no 41 (QL), cet arrêt guide toujours les tribunaux pour trancher les motions visant à déclarer un avocatinhabile à agir dans une instance en cours en raison d’un conflit d’intérêts. Dans Succession MacDonald, la question s’est posée dans lecontexte d’un procès au cours duquel une avocate représentant une

partie a changé d’emploi et a été engagée par le cabinet d’avocatsreprésentant la

partie adverse. Le juge Sopinka, s’exprimant au nom de la majorité, a élaboré un critère à deux volets servant à ordonnerla radiation de l’inscription au dossier de ce cabinet. Premièrement, l’avocat a-t-il pris connaissance de renseignements confidentiels,grâce à des rapports antérieurs d’avocat à client, qui concernent l’objet du litige? Deuxièmement, y a-t-il un risque que cesrenseignements soient utilisés au détriment du client? Les réponses à ces questions centrales reposent sur des présomptions réfutables :l’avocat ayant changé de cabinet a communiqué, ou communiquera, des renseignements confidentiels et ceux-ci ont été utilisés, ou

seront utilisés, au détriment du client concerné. Ces présomptions ne seront pas réfutées par de simples engagements et affirmations catégoriques objectivement non vérifiables contenus dans les affidavits sous serment de l’avocat visé par la déclaration d’inhabilité ( Succession MacDonald , par. 50 ) . [2] Le critère et les lignes directrices qui sont énoncés par la majorité dans Succession MacDonald doivent s’appliquer aux motions visant à déclarer l’avocat de l’intimé inhabile à agir, lorsqu’il est en possession, sans droit, de renseignements confidentiels découlant de

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