2011 NBCA 59, 2011 NBCA 59

COURT OF APPEAL OF NEW BRUNSWICK 28-09-CA 68-09-CA TRIFIDUS INC. (Plaintiff) APPELLANT - and - SAMGO INNOVATIONS INC. (Defendant) RESPONDENT - and - SAMUEL GAUDET (Defendant) RESPONDENT - and - CLAUDE GAUTHIER (Third Party) RESPONDENT TRIFIDUS INC. (Demanderesse) APPELANTE - et - SAMGO INNOVATIONS INC. (Défenderesse) INTIMÉE - et - SAMUEL GAUDET (Défendeur) INTIMÉ - et - CLAUDE GAUTHIER (Mis en cause) INTIMÉ Trifidus Inc. v. Samgo Innovations Inc. et al., 2011 NBCA 59 Trifidus Inc. c.

Samgo Innovations Inc. et autres, 2011 NBCA 59 CORAM: The Honourable Justice Richard The Honourable Justice Bell The Honourable Justice Quigg CORAM : L’honorable juge Richard L’honorable juge Bell L’honorable juge Quigg Appeal from decisions of the Court of Queen’s Bench: March 5, 2009 and April 24, 2009 Appel des décisions de la Cour du Banc de la Reine : Le 5 mars 2009 et le 24 avril 2009

History of the Case: Historique de la cause : Decisions under appeal: Unreported -- MC/0102/08 dated March 5, 2009 andApril 24, 2009 Décisions frappées d’appel : Décisions inédites : MC/0102/08, datées du 5 mars2009 et du 24 avril 2009 Preliminary or incidental proceedings: [2009] A.N.-B.

No. 424 Procédures préliminaires ou accessoires : [2009] A.N.-B. no 424Appeal heard: January 13, 2011 Appel entendu : Le 13 janvier 2011 Judgment rendered July 7, 2011 Jugement rendu : Le 7 juillet 2011 Reasons for judgment by: The Honourable Justice Quigg Motifs de jugement : L’honorable juge Quigg Concurred in by: The Honourable Justice Richard Souscrit aux motifs : L’honorable juge Richard Concurring in part: The Honourable Justice Bell Motifs concordants en

partie : L’honorable juge Bell Counsel at hearing: For the appellant: Martin Aubin For the respondents: Samuel Gaudet, representing himself and Samgo Claude Gauthier, representing himself Avocats à l’audience : Pour l’appelante : Martin Aubin Pour les intimés : Samuel Gaudet, pour lui-même et pour Samgo Claude Gauthier, pour lui-même

THE COURT The appeal with respect to the motion judge’s decision regarding the conflict of interest is denied. The appeal is allowed with respect to his decision regarding the application of Rules 17.01 and 2.01 of the Rules of Court . Justice Bell offers concurring reasons with respect to the latter issue. LA COUR L’appel relatif à la décision concernant le conflit d’intérêts, rendue par le juge saisi de la motion, est rejeté. L’appel est accueilli concernant sa décision sur l’application des règles 17.01 et 2.01 des Règles de procédure .

Le juge Bell a rendu des motifs concordants concernant la deuxième question. The following are the reasons delivered by BELL, J.A. (Concurring in part) [1] I have had the benefit of reading the thorough and comprehensive reasons of my colleague, Justice Quigg. While I agree with her disposition of both issues raised in this appeal, I must, with respect, express my disagreement with her conclusion that in appropriate cases, trial judges have the discretion to permit non-lawyers to represent corporations.

As so aptly stated by the majority, the Rules of Court of many Canadian provinces have been amended to grant trial judges discretion in this regard. The New Brunswick Rules of Court have not been so amended. [2] In addition to the very persuasive jurisprudence cited by the majority, I am reinforced in my view by the following observations. First, the language of Rule 17.01 is unambiguous in requiring that corporations be represented by a solicitor.

Corporate litigants are listed along with parties under disability and those acting in a representative capacity, as belonging to a class of litigants which must be represented by a lawyer. Second, if trial judges enjoy the discretion to alter the clear language of the Rules in the case of corporate litigants, it follows that same discretion must exist with respect to parties under disability and those acting in a representative capacity.

Given the vulnerability of parties under disability, if the Legislature or the Lieutenant-Governor in Council intended that they could be represented by someone other than an officer of the Court, it should be spelled out in clear language. My colleagues may be correct that trial judges should have the discretion, in appropriate circumstances, to permit corporations to be represented by non-lawyers.

However, given the current language of Rules 17.01 and 2.01 , the determination of whether that discretion exits, and the parameters within which it should be exercised, are, in my respectful view, matters for the Legislature or the Lieutenant-Governor in Council, and not this Court. ______________________________ B. RICHARD BELL, J.A.

The judgment of the Court was delivered by QUIGG, J.A. I. Int roduction [4] With leave, Trifidus Inc. appeals two decisions of the Court of Queen’s Bench arising from the same hearing. The first decision dismissed its motion requesting the court to order Samgo Innovations Inc. to be represented by a solicitor. The second decision concerned the judge’s order for the removal of Trifidus’ solicitor, from the record, as the result of an allegation of conflict of interest. II.

Factual and Procedural Background [5] In 1998, Samuel Gaudet retained the services of a lawyer, Martin Aubin, to complete the financing and purchase of his personal residence. In May 2004, Claude Gauthier and Mr. Gaudet retained Mr. Aubin’s services to incorporate Trifidus Inc., a company which holds the rights to the trademark name, production and sale of a stringed instrument invented by them, known as the “tritare”. [6] There is disagreement between the parties regarding who attended Mr. Aubin’s office to provide the incorporation instructions. Messrs. Aubin and Gauthier recount that Mr.

Gauthier attended alone. However, Mr. Gaudet says he also attended, and that he and Mr. Gauthier retained Mr. Aubin due to Mr. Gaudet’s previous dealings with Mr. Aubin. Mr. Aubin says that once the incorporation documents were ready to be executed, both men attended his office. Messrs. Gaudet and Gauthier were equal shareholders of the corporation. Mr. Aubin says that his sole mandate was to prepare the incorporation documents and the corporate minute book. He did not provide any further services to Trifidus or Mr. Gaudet. [7] In the interim, Mr.

Gaudet became involved in a second company, Samgo Innovations Inc. [Samgo], as a shareholder and principal. Samgo is federally incorporated and is involved with the manufacturing and marketing of a single product called “Perfectone”, a portable, electronic ear-training device for musicians. It is not a stringed instrument. [8] In November 2006, Mr. Gauthier contacted Mr. Aubin’s office to advise of the difficulty he was experiencing with the corporation, and concerns he had regarding the protection of Trifidus’ interests. Mr. Gauthier told Mr. Aubin that Mr.

Gaudet was utilizing property belonging to Trifidus to advance his personal interests as well as the interests of Samgo. In December 2006, Mr. Aubin forwarded a letter to Mr. Gaudet explaining Gauthier’s position and requesting that he correct the situation. During 2007, Mr. Aubin corresponded and met with a lawyer representing Mr. Gaudet and Samgo, but nothing was resolved. In December 2007, Mr. Aubin received correspondence from Mr. Gaudet’s lawyer alleging Mr. Aubin was in a conflict of interest as he had incorporated Trifidus on behalf of both Messrs. Gaudet and Gauthier and had represented Mr.

Gaudet in the past. [9] At this point, Mr. Gauthier instructed Mr. Aubin to file a motion with the Court of Queen’s Bench requesting permission to commence an action in the name of Trifidus against Mr. Gaudet and Samgo. The motion was heard on January 11, 2008. Mr. Gaudet represented both himself and Samgo. Although there appears to have been some discussion regarding the absence of a lawyer for Samgo at the time, the hearing continued. There was no mention of a possible conflict of interest. A decision was rendered on

January 23, 2008, and Mr. Gauthier’s motion was allowed. A Notice of Action with Statement of Claim attached was filed and served byTrifidus. A Statement of Defence was not filed in a timely manner and Gaudet and Samgo were noted in default on March 12, 2008. Mr.Gaudet and Samgo filed a motion seeking the removal of the default judgment and both were represented by counsel at the November25, 2008, hearing. On that date, an order was signed by a judge of the Court of Queen’s Bench, setting aside the default judgment. [10] On March 5, 2009, a hearing was held wherein Mr. Aubin represented Trifidus, and Mr.

Gaudet represented bothhimself and Samgo. Mr. Gaudet had previously filed a notice of change of solicitor indicating he would be representing Samgo. At theconclusion of the hearing the judge determined Mr. Gaudet could represent Samgo and reserved decision regarding the issue of thepotential conflict of interest. III. Motion Judge’s Decision [11] Although both issues were heard at the same hearing, the motion judge dealt with the two issues before himindependently. The request by Trifidus to have Rule 17 followed strictly was disposed of by the judge at the end of the hearing on March5, 2009.

The judge determined he could, “in the proper administration of justice”, interpret Rule 17 with the assistance of Rule 1.03 (2)and Rule 2.01, such so that he could allow Samgo to be represented by Mr. Gaudet. I will flesh this out in the analysis to follow. Withrespect to the conflict of interest issue, the judge issued a decision dated April 24, 2009, wherein he found Mr. Aubin was indeed in aconflict of interest and was to remove himself from the file. Trifidus applied for leave to appeal the decision regarding Rule 17. Leavewas granted in April 2009.

Leave to appeal the decision dealing with the issue of conflict of interest was granted on May 22, 2009. OnDecember 21, 2009, this Court consolidated the two appeals. IV. Issues [12] Trifidus seeks an order setting aside the decisions of the motion judge. The Notices of Appeal contain 15 groundsof appeal alleging the judge made palpable and overriding errors of fact and errors of law. I believe the grounds can be condensed asfollows:

(1) The motion judge erred in law in determining that Mr. Aubin was in a conflict of interest and in ordering his removal as solicitor ofrecord.

(2) The motion judge erred in law in determining that, notwithstanding Rule 17, corporations may be represented by non-solicitors. V. Analysis A. Standard of Review [13] If there is discretion under Rule 17, then both decisions under appeal are discretionary in nature. Drapeau J.A. , ashe then was, described the standard of review for cases such as these in Saint John Shipbuilding Ltd. v. Bow Valley Husky (Bermuda)Ltd., 2002 NBCA 41, 251 N.B.R. (2d) 102: It is beyond dispute that the decision under appeal is discretionary.

That being so, intervention by this Court is appropriate only if theMotions Judge misdirected himself on the law and, as a consequence, applied the wrong principles in reaching his conclusion ormisapprehended the evidence to such an extent that the decision’s factual substratum cannot reasonably support the result. See CanadianBroadcasting Corp. v.

New Brunswick Broadcasting Co. (2000), (NB CA), 230 N.B.R. (2d) 332 (C.A.), per DaigleC.J.N.B., at para. 26. [para. 28] [14] As such, an appeal against a discretionary order may only be allowed in situations where the motion judgemisdirected himself on the law, did not apply proper principles, or has misapprehended the facts to such an extent that an injustice wouldresult.

B. Conflict of Interest [15] It is obvious from the analysis undertaken by the motion judge that he properly directed himself on the law andconsidered the evidence before him pertaining to the allegation of conflict of interest. The motion judge found that Mr. Aubin was in aconflict situation and, as such, he should remove himself from the record. The judge relied upon the principles set forth in MacDonaldEstate v. Martin, (SCC), [1990] 3 S.C.R. 1235, [1990] S.C.J. No. 41 (QL). In Lafferty v. N.B. Coal Ltd. (1998), (NB CA), 190 N.B.R. (2d) 1, [1995] N.B.J.

No. 622 (C.A.) (QL) Ryan J.A. says: The jurisdiction of courts to remove solicitors from the record in matters of this nature comes from the fact that lawyers are officers ofthe court. The conduct of lawyers in legal proceedings which may affect the administration of justice is thus subject to this supervisoryjurisdiction. See MacDonald Estate at p. 1245. Sopinka J. said at page 1244, para. f, in discussing the solicitor and client privilege: ... This tradition assumes particular importance when a client bares his or her soul in civil or criminal litigation.

Clients do this in thejustifiable belief that nothing they say will be used against them and to the advantage of the adversary. Loss of this confidence woulddeliver a serious blow to the integrity of the profession and to the public's confidence in the administration of justice. [para. 6] [16] In this case, the judge reviewed the appropriate jurisprudence, the proper sections of the Professional Code ofConduct of the NB Law Society and gave reasons for his finding that a conflict of interest existed in the circumstances. As Daigle, C.J.states in Canadian Broadcasting Corp. v.

New Brunswick Broadcasting Co. (2000), (NB CA), 230 N.B.R. (2d) 332,[2000] N.B.J. No. 450 (C.A.) (QL): […] In my view, the motions judge's conclusion is consistent with the principles and the test set out in MacDonald Estate and it issupported by the evidence presented before him. Since CBC's argument that the motions judge erred in law is based in part on his failureto discuss the applicable principles of law, it seems to me axiomatic that the review for correctness of the motions judge's decision wouldbe easier had he articulated explicitly the reasons underlying his conclusion.

This Court would then be in a better position to assess hisapplication of the legal principles to the facts of this case as well as his analysis of the evidence. However, as CBC invokes the criterionof the "correctness of the order or decision in question" (rule 62.03(4)(b)) as a ground for seeking leave to appeal, the inquiry must bewhether the motions judge's ruling is wrong in law, not merely whether his analysis is flawed or incomplete. The absence of precisereasons for the judge's conclusion does not dispense this Court from considering the correctness of that conclusion.

More importantly,however, as a matter of law, the motions judge's finding of a perception of conflict posits that the two questions that typically arise incases of conflict of interest, as noted by Justice Sopinka, must be answered in the affirmative before such a finding can be made.Otherwise, if either of the two questions is answered in the negative (to wit, (1) that the solicitor whose removal is being sought is not inpossession of relevant confidential information, or (2) that there is no risk that such relevant information will be used to the prejudice ofthe client) there could not be a finding of a perception of a conflict of interest or impropriety which would reflect adversely on theintegrity of the administration of justice.

In such cases, even the possibility of real or perceived prejudice would be lacking. A perceptionof a conflict cannot be found on mere speculation, or even on the basis of the judge's subjective assessment of the circumstances of thecase. [para. 29] [17] It is apparent from his decision that the motion judge had no doubt Aubin was in a conflict of interest.

As Ryan J.A.says in Lafferty: The gist of the test then in this case is whether the public, represented by the reasonably informed person, would be satisfied that no useof confidential information would occur, bearing in mind that the use of confidential information is a matter usually not susceptible ofproof.

Therefore, once it is shown by the client that a previous relationship existed and that the retainers are similar, the court shouldinfer that confidential information was imparted unless the solicitor now acting contrary to his or her former client's interests satisfies thecourt that no relevant information passed. I conclude, as did McLellan J., that to permit the intended appellant's law firm to continue to act would be perceived by the public asplacing Hector Lafferty in an unfair position when this action goes to trial.

An indispensable requisite of the justice system is that therebe an unqualified perception of its fairness as viewed by the general public. For a more detailed review of the test relating to conflict seepages 1259 to 1263 of MacDonald Estate v. Martin. [paras. 10-11] [Emphasis added.]

As there must be a perception of fairness, I would not disturb the motion judge’s finding that Mr. Aubin is in a conflict of interest. C.

Rule 17.01 of the Rules of Court [18] Rule 17.01 reads as follows: 17.01 Where Solicitor is Required A party to a proceeding may commence or defend the proceeding in person without being represented by a solicitor unless that party is under disability, is acting in a representative capacity, or is a corporation. 17.01 Nécessité ou non d’un avocat Nul n’est tenu de se faire représenter par un avocat pour introduire une instance ou pour présenter une défense, à l’exception des corporations et des personnes frappées d’incapacité ou agissant en qualité de représentant [19] Trifidus seeks a strict

interpretation of the Rule. The motion judge determined that it was within his discretion to use Rule 1.03(2) to assist him in the

interpretation of Rule 17.01. He also relied on Rule 2.01 . These Rules read as follows: 1.03

Interpretation […]

(2) These rules shall be liberally construed to secure the just, least expensive and most expeditious determination of every proceeding on its merits. […] 2.01 The Court Dispensing with Compliance The court may at any time dispense with compliance with any rule, unless the rule expressly or impliedly provides otherwise. 1.03 Principes d’interprétation […]

(2) Les présentes règles doivent recevoir une interprétation libérale afin d’assurer une solution équitable de chaque instance sur le fond, de la façon la moins coûteuse et la plus expéditive. […] 2.01 Dispense de la cour La cour peut en tout temps dispenser de l’observation d’une règle, à moins que celle- ci ne l’interdise de façon expresse ou implicite. D. Acquired rights of corporations [20] The common law endows individuals with a right to self-representation. The legal identity of corporations shares some features with that of individuals, but corporations also have several unique legal privileges. Corporations are considered “entit[ies]

having authority under law to act as a single person distinct from the shareholders who own it” (see Bryan A. Garner, Black’s Law Dictionary, 8th ed., (St. Paul, Minnesota: Thomson, 2004), s.v. “corporation”, p. 365). Historically, corporations have enjoyed bothlimited liability and certain tax advantages not available to individuals (see Pratts Wholesale Ltd. v. Canada, [1998] T.C.J. No. 171 (TaxCt.) (QL) at para. 7). These benefits are offset by other legal obligations. The obligation to be represented by a lawyer in legalproceedings is one of these.

Unlike individuals, who are legally and logically capable of self-representation, corporations must inevitablyrely on representation by individual agent. Even if the agent is the corporate director and sole shareholder, he or she is still considered tobe legally distinct from the corporation and, therefore, a third party to it. If individuals do not have the right to be represented by a thirdparty other than a lawyer, neither do corporations. In 2272539 Manitoba Ltd. v. Manitoba (Liquor Control Commission), (MB CA), [1996] M.J.

No. 422 (C.A.) (QL), the vice-president, who was also director and majority shareholder of the appellantcorporation, attempted to represent the corporate appellant. She was not a lawyer. The court questioned her entitlement to be heard. Instaying the appeal pending the appellant’s decision as to whether it wished to retain a lawyer or abandon its appeal altogether, TwaddleJ.A. stated: The traditional view is that expressed by Viscount Simon L.C. in Tritonia Ltd. et al. v.

Equity and Law Life Assurance Society, [1943]A.C. 584 (H.L. (Sc.)) at p. 586: When an appeal is argued before the House of Lords, no one has any right of audience except counsel instructed on behalf of a party or(when the litigant is a natural person) the party himself. In the case of a corporation, inasmuch as the artificial entity cannot attend andargue personally, the right of audience is necessarily limited to counsel instructed on the corporation's behalf.

One rationale for the rule was expressed by Viscount Simon in this way (at p. 587): Such a rule, limiting a right of audience on behalf of others to members of the English or Scottish or Northern Irish Bars, secures that theHouse will be served by barristers or advocates who observe the rules of their profession, who are subject to a disciplinary code, and whoare familiar with the methods and scope of advocacy which were followed in presenting arguments to this House. [paras. 2-3] [21] He goes on to say: The rule excluding corporate officers as advocates has its roots in public policy.

Courts function best in our adversarial system when bothsides are represented by a qualified advocate. So widely is this recognized that legal aid is available in appropriate cases for thoseindividuals who lack the means to retain counsel independently. This does not mean that an individual is not permitted to appear inperson if legal aid is not available or if the individual litigant chooses not to seek it, but the policy is to encourage qualifiedrepresentation whenever possible. To this end, even an individual litigant who does not have legal counsel is only permitted to appear in person.

In superior courts,unqualified agents are not permitted. If it were otherwise, the efficiency of the courts would be compromised. It is in keeping with this policy that corporate officers are generally not permitted to appear on behalf of their corporations in this Court.Unlike individuals, corporations cannot appear "in person". Nor is there a need for special privileges. A corporation exists only as aneconomic unit. If it lacks the means to retain legal counsel, its very existence is put in doubt.

Natural people may be in jeopardy of goingto jail, of suffering personal indignities or of being bothered by noise or smell or unwanted attention, but a corporation can only beaffected by a change of figures on its balance sheet. The incorporation of a company carries with it advantages and disadvantages. Those who incorporate it limit their liability for theobligations of the company and separate the company income from their own for tax purposes. On the other hand, shareholders of acompany engaged in litigation must usually arrange for legal counsel to be retained.

But for this disadvantage, corporate officers could cause impecunious corporations to litigate hopeless causes without fear of personalliability for even the other side's costs. In this Court, meritless appeals by impoverished corporations would be encouraged. This wouldnot serve the public interest.

In these circumstances, it is my opinion that whatever its effect in the Queen's Bench may be, Q.B. Rule 15.01(2) is inapplicable to proceedings in this Court. The common-law rule requiring a corporation to appear by legal counsel, received in this province in 1870 and unaltered since by statute, is alive and well as far as this Court is concerned. The Court may grant dispensation from this rule in exceptional circumstances, but what these are will have to be determined from time to time.

Certainly, none are present in the case at bar . [paras. 16-21] [Emphasis added.] Therefore, the traditional view that corporations must be represented by counsel was upheld. [22] In British Columbia Telephone Co. v. Rueben , [1982] B.C.J. No. 1713 (C.A.) (QL) Esson J.A., as he then was, stated: […] It was held that corporations are now in the same position as natural persons. That end is achieved if the officer or alter ego is treated as the company.

If the plaintiff's contention was to be accepted, the result would be to give corporations a right which natural persons do not have, i.e. the right to be represented in court by someone other than a lawyer. It should be noted that the asserted right is not confined to appearances before the Provincial Court.

If the plaintiff is right, any corporation can be represented in any court by any person authorized by it. [para. 14] [23] Furthermore, if corporations were permitted to appear in court through an officer, director or other employee i ndividuals could be placed in the position of serving as both corporate counsel and witness at the same time. In Gang Ranch Ltd. v. Canada (Registrar of Trade Marks ), [1987] F.C.J.

No. 581 (T.D.) (QL) , the sole shareholder, officer and director of a corporation applied for leave to continue prohibition proceedings on behalf of the corporation against the Registrar of Trade Marks and to act as its counsel throughout. In dismissing this application, Collier J. stated: I heard the Father Don's case at the trial motion level. I refused to allow the sole director to act for the corporation. In Canrens Systems Corporation et al. v.

The Queen et al . (T-1418-86, reasons dated June 25, 1986), my colleague Muldoon, J. said, at pp. 5-6: Here the applicants plead poverty and their consequent inability to retain solicitors or counsel for the corporate plaintiff. They say that they cannot interest counsel to act for the corporate plaintiff even on the basis of a contingent fee. From their point of view that is unfortunate because they assert with some plausibility that they can make good at least some of the allegations expressed in the statement of claim by means of documentation either in their possession or amenable to discovery.

If, as was doubted by the Appeal Division, there be some discretion vested in the court to accede to the applicant's request, it is not appropriate to exercise any such discretion here. According their wish would mean that they would alternate their roles as "counsel" and witness on any interrogatories, examinations for discovery and at trial.

Such roles would likely become entangled and questions, if any, of privilege as between the applicants in their would-be roles as "counsel" for the corporate plaintiff and in their respective capacities of representing themselves in person, might very likely confound the plaintiff's own case or cases, as well as the defence.

To paraphrase Collier, J. in the Father Don's case, it is undesirable, in the circumstances, to have the applicants appearing both as witnesses and advocates on behalf of the company, as well as each on his own behalf in person. [para.7] The fact that the corporation was unable to retain counsel due to its inability to pay, as well as the possibility of the “agent” acting as both “counsel” and “witness”, resulted in the corporation being denied the possibility of self-representation. E.

Requirements of the New Brunswick Law Society [24] A further issue to be addressed is the requirement prescribed by Law Society legislation that only lawyers are permitted to practice law. If a corporation were permitted to be represented in court by an individual other than a lawyer, that individual might be in violation of the prescribed requirement.

[25] Sections 33(1) and 35 of the Law Society Act , 1996 , S.N.B. 1996, c. 89 , provide as follows: Authority to practice law 33

(1) Subject to subsections (2) to (5), no person except the following shall practice law: (

a) a practicing member of the Society in good standing; (

b) a professional corporation; (

c) a student-at-law, to the extent allowed by the rules; and (

d) a student of the Faculty of Law of the University of New Brunswick or the Université de Moncton during the period the student is participating in a legal aid or clinical law program operated by or under the supervision of the Faculty or under the authority of an enactment. (added July 1, 2009) […] Holding out 35 Unless qualified to practice law under subsection 33(1), (4) or (5), no person shall (

a) use any title, name or description with the intent of representing to the public that the person is qualified to practice law in New Brunswick, or (

b) offer to do, or represent that the person is qualified to do, anything referred to in the definition “practice of law” in

section 2. Exercice du droit 33

(1) Sous réserve des paragraphes (2) à (5), seuls peuvent exercer le droit :

a) les membres praticiens qui sont en règle;

b) les corporations professionnelles;

c) les stagiaires, dans la mesure permise par les règles;

d) un étudiant de la faculté de droit de l’Université de Moncton ou de l’Université du Nouveau-Brunswick, pendant qu’il participe à un programme d’aide juridique ou de clinique juridique administré par la faculté ou sous la surveillance de celle-ci ou en vertu d’un texte législatif. (ajout du 1 er juillet 2009) […] Publicité trompeuse 35 À moins d’avoir qualité pour exercer le droit en vertu des paragraphes 33(1), (4) ou (5), il est défendu à toute personne :

a) d’utiliser un titre, une appellation ou une désignation quelconque dans le but de faire croire au public qu’elle a qualité pour exercer le droit au Nouveau-Brunswick;

b) d’offrir d’accomplir − ou de faire croire qu’elle a qualité pour accomplir – les actes mentionnés dans la définition « exercer le droit » de l’article 2. [26] In Aylward’s Ltd. v. St. Lawrence (Town), [1988] N.J. No. 59 (C.A.) (QL) , a municipality commenced an action

against a corporation for unpaid business taxes. As the defendant had not been represented by counsel, the trial judge adjourned the matter for one day. The defendant was still not represented by counsel when the hearing resumed. The hearing proceeded and the judge awarded judgment in favour of the municipality. The defendant appealed.

In dismissing this appeal, Goodridge C.J.N. stated in his concurring reasons: To permit an agent to appear as counsel for a corporation is to afford to a corporation a right not available to an individual, a right to be represented in court by a person who is not a barrister. [para. 30] […] An agent whether he be an independent person, an employee or a senior officer of a corporation is nothing more than an agent. When he appears in court on behalf of a corporation he is acting as a barrister and this he is not entitled to do unless he is a member of the Law Society.

The effect is that the Law Society Act creates a right in a corporation which cannot be exercised without violating the other provisions of the Act . [para. 39] Thus, the Court was unwilling to afford a corporation a right which is not permitted a natural person. [27] O’Neill J.A., for the majority, stated : Can a person other than a solicitor appear on behalf of a corporation at a trial?

The Law Society Act, 1977 , prohibits persons other than members in good standing of the Law Society of Newfoundland from practicing or acting as a barrister or solicitor in any court and from commencing, carrying on or defending any action or proceeding before a court or a judge on behalf of any other person. [para. 74] […] To incorporate into s. 86(

c) of The Law Society Act the statutory definition of person in the

Interpretation Act and thereby permit a limited liability company to be represented in court by a person, albeit one of its senior officers, who is not a lawyer, would be to afford to that company a right not afforded to a natural person. [para.76] […] M r. Fabian Aylward is not a member of The Law Society and none of the exclusions set out in s. 86 of The Law Society Act applies to him. I agree with the conclusion of the trial judge, that the respondent could only appear by a solicitor. The words of Viscount Simon, L.C. in Tritonia, Ltd. v. Equity and Law Life Ass. Soc. [1943] 2 All. Eng.

Rep. 401 at page 403, dealing with the limiting of the right of audience on behalf of others are worthy of note: Such a rule, limiting a right of audience on behalf of others to members of the English or Scottish or Northern Irish Bars, secures that the House will be served by barristers or advocates who observe the rules of their profession, who are subject to a disciplinary code, and who are familiar with the methods and scope of advocacy which are followed in presenting arguments to this House. [paras. 83-84] Regardless of the access to justice argument, the Court found that to allow a corporation to be represented by an individual who is not a

lawyer would be contrary to the will of the legislature and the Law Society Act. The Court further found the litigation was of suchcomplexity that it would entail a long and difficult trial. The request for a non-lawyer to represent the corporation was denied. [28] In Leyson Holdings Inc. v. Her Majesty the Queen in Right of Newfoundland and Labrador, 2008 NLTD 62, [2008]N.J. No. 105 (S.C.) (QL), aff’d 2008 NLCA 66, [2008] N.J. No. 360 (C.A.)(QL), the defendants sought a stay of proceedingscommenced by the plaintiff corporation until the plaintiff was represented by a lawyer.

In granting the request for a stay, Harrington J.stated: I accept that Mr. Rockwood has diligently attempted to secure legal counsel to carry this proceeding forward. It is clear that in theabsence of any funds within the Company or personally, he has not been able to persuade legal counsel to undertake the Company'sclaim on a contingency basis. Mr. Rockwood contends that his company is facing a denial of access to justice if Rule 5.07(1) and ss. 76(1)(

a) of the Law Society Actare strictly enforced, thereby losing the opportunity to bring the Company's claim to trial. Mr. Rockwood asserts that the rules should be flexibly applied when a small corporation is faced with the financial challenge ofpursuing claims against the Government and a large financial institution. [paras. 18-20] […] I am satisfied that to permit Mr. Rockwood to continue with this claim to trial is to act contrary to the express will of the legislatureunder ss. 76(1)(

a) of the Law Society Act. Even if the explicit provisions of the Law Society Act were not in place, I would exercise the Court's authority under Rule 2.01(2)(

d) tostay the Company's proceeding until legal representation is obtained because it would be unjust to allow a trial of this claim to proceed inthe manner the Company seeks. This case is of sufficient complexity that I believe it will take a considerable amount of time to conduct a trial. While Mr.

Rockwood hasbeen effective in making oral submissions during case management and submitting relevant jurisprudence for this application, many ofhis interrogatories and demands for documents demonstrate a lack of understanding of the issues that may be relevant to the Company'sclaim and how to focus witnesses on the proper presentation of evidence, particularly the examination of witnesses, many of whomwould be cross-examined in their capacities as employees of either of the Defendants. The impecuniosity of both the Company and Mr.

Rockwood would cause an injustice to the Defendants, since there is no hope ofimposing any cost consequences on the Company if a lengthy trial leads to a dismissal of the Company's claim. Mr.

Rockwood and theCompany would be escaping the burdens of incorporation discussed by the Supreme Court in Kosmopoulos, supra, para. 11. [paras. 47-50] [Emphasis in original.] [29] Harrington J. did recognize that under rare circumstances judicial discretion could be appropriately employedto make an exception permitting a corporate officer to represent his or her company: As I have mentioned, much of the sparse jurisprudence in which leave has been granted for corporate representatives to act as counsel,involve situations where a court application deals either with a specific legal point without substantial evidence or involves proceduralmatters in the course of litigation.

It is rare to find a decision where courts have granted leave for corporate officer representation of acorporation when a full trial is in the offing. I note one recent decision of Quinn, J. of the Ontario Superior Court of Justice in Hammondv. Smith et al., (ON SC), [2004] O.J. No. 3255 where leave was granted to the defendant, Mr. Smith, to represent hisco-defendant company. However, the reasons indicate that the judge was greatly influenced by the fact that the Plaintiff's case wasalready faced with a self-represented individual defendant at the time of the application. (See paras. 9-11).

I do not find this case to bepersuasive authority here. [para. 57]

[30] However, on appeal, the Court took an inflexible approach in interpreting both Rule 5.07(2) and s. 76(1)(

a) of theLaw Society Act. Rowe J.A. stated: It is clear that both s. 76(1)(

a) of the Law Society Act and rule 5.07(2) prohibit Mr. Rockwood from appearing for Leyson Holdings Inc.To me, that disposes of the matter. [para. 23] [Emphasis in original.] […] Mr. Rockwood cannot represent Leyson Holdings Inc. because, first, the Law Society Act says he cannot and, second, because rule 5.07says he cannot. Inherent jurisdiction cannot be exercised so as to conflict with either "relevant statutes or the rules of court". [para. 26] [Emphasis in original.] F.

Historical Perspective on New Brunswick’s Rules of Court [31] When the Rules of Court were adopted in 1982, the Companies Act, R.S.N.B. 1973, c. C-13 had just been replacedby the Business Corporations Act, S.N.B. 1981, c. B-9.1. With the arrival of the new Business Corporations Act in 1981, companieshaving a sole shareholder and director could now be incorporated.

Previously, in order to incorporate a company, three individuals had tobe the incorporators and they all had to become shareholders of the company. [32] When revising the New Brunswick Rules of Court, the drafters initially intended to adopt the revised Rules of NovaScotia. However, they decided to use the revised Rules of Ontario as a model and those Rules were generally adopted (see Julian A.G.Dickson, “A Capsule

Summary: Revision of the Rules of Court in the Province of New Brunswick” (1982), 31 U.N.B.L.J. 282). InOntario, in 1982, the Rule dealing with representation of corporations by solicitors was Rule 6.

It stated: Plaintiff suing in person – No one but a solicitor, or a plaintiff in person, may issue a writ. [Emphasis in original.] In Holmested & Gale, Ontario Judicature Act and Rules of Practice, Vol. 1, looseleaf (Toronto: Carswell, 1968) the authors providecommentary on Rule 6 as prohibiting non-solicitors from representing companies: A company can neither sue nor defend in person, and a managing director of a company is not competent to act in person for thecompany. A company can sue or defend only by a solicitor: Scriven v. Jescott (1908) 126 L.T.

Jour. 100; plaintiff seeking order as towhether defendant corporation could continue to be unrepresented by solicitor: R. v. Air Age Distributors Ltd. (FC),[1981] 2 F.C. 740 (T.D.). The right of a corporation to appear in court, assuming there is such a right, is restricted to persons who areofficers of the corporation and does not extend to employees or other persons: B.C. Telephone Co. v.

Reuben, (BC SC),29 C.P.C. 79, 38 B.C.L.R. 392, [1982] 5 W.W.R. 428, 138 D.L.R. (3d) 549 (S.C.). […] A person who was not a member of the law society was precluded from acting as counsel for a corporation even if that person was thedriving force, the only shareholder, officer and director of the corporation. The corporation was required to have a qualified solicitor

represent its interests: Professional Signs Crafters

(1988) Ltd. v. Wedekind (1993) (AB KB), 8 Alta. L.R. (3d) 11(Alta. Master). [p. 706] [33] It is a safe assumption that New Brunswick’s Rule 17.01 was modeled on Ontario’s former Rule 6. Ontariosubsequently amended its Rules to reflect realities of the economy and the evolution of various types of companies. Rule 15.01(2) nowgoverns corporate representation, and it reads: A party to a proceeding that is a corporation shall be represented by a lawyer, except with leave of the court. R.R.O. 1990, Reg. 194, r.15.01 (2); O.

Reg. 575/07, s. 1. [34] Most other provinces which have a rule similar to our Rule 17.01, have also amended their rule to either allowauthorized officers of the corporation to represent the corporation (Nova Scotia and Manitoba), or, like Ontario, to provide anopportunity for parties to seek leave to waive the requirement of representation by a solicitor (Saskatchewan and Prince Edward Island).These amendments give the courts greater flexibility to facilitate access to justice in appropriate circumstances. Newfoundland andLabrador and British Columbia do not have a provision dealing with self-representation.

The Alberta Rules have a provision respectingthe selection of a corporate representative at the opposing party’s request. [35] Notwithstanding the development in other provinces, New Brunswick has not amended its Rules of Court to allowexplicitly corporate representation by a non-lawyer. The question is whether the Rules, as currently worded, are nevertheless flexibleenough to allow this in certain circumstances. G. Application of these principles [36] As described above, there are two impediments to the relief the motion judge granted allowing Mr. Gaudet torepresent Samgo.

The first is Rule 17.01 and the other is s. 33 of the Law Society Act. The judge addressed only the first, and found hecould overcome it. In my view, he was right that in some cases s. 17.01 can be overcome and that the Rules provide judicial discretionsuch that in some rare instances a non-lawyer could represent a corporation. The vehicle for judicial discretion in this regard is Rule2.01, which states that “[t]he court may at any time dispense with compliance with any rule, unless the rule expressly or impliedlyprovides otherwise”.

As Rule 17.01 does not itself provide for discretion, judges should always begin with the presumption that Rule17.01 requires corporations to be represented by solicitors. However, there may be rare cases where Rule 2.01 may require otherwise soas ensure the objectives set out in Rule 1.03 are met. [37] In my view, the onus for obtaining a dispensation of the requirements of Rule 17.01 is on the party who seeks it andthe dispensation under Rule 2.01 must be obtained before a non-lawyer can represent a corporation.

In ruling on such a motion, the judgewill consider all relevant circumstances, which may include the following:

(1) Is the individual seeking waiver of the requirement a sole shareholder and sole director of the corporation?

(2) If not, is it a closely held corporation, such as a family owned company, making the request with the consent of the othershareholders?

(3) Does the corporation lack the financial resources to pursue or defend the action in question?

(4) Is there merit to the action or defence (a higher threshold than raising a serious issue)?

( 5 ) Is the matter being considered a narrow issue of law, or do the complexities of the case require a trial? ( 6 ) Is the representative proposed by the corporation capable of pursuing or defending the action having regard to the complexity of the matter? ( 7 ) Is the corporation capable of and willing to pay costs, if ordered (not impecunious)? ( 8 ) Would the other party potentially be exposed to greater costs, if represented by a solicitor? [38] The purpose of a dispensation under Rule 2.01 is to prevent an injustice. However, an injustice may also result if Rule 17.01 is disregarded.

Thus, the judge will have to determine and balance the effects of applying Rule 2.01 . If injustice would occur to any of the other parties, Rule 2.01 should generally not be applied. The threshold must be high. [39] Although I find the judge was correct in holding he had discretion to dispense with the strict compliance of Rule 17.01 , I find, with respect, that he did not apply the proper principles in exercising his discretion. In hindsight, he did not entertain any of the relevant criteria. He simply held he had discretion and without more allowed Mr. Gaudet to represent Samgo.

As pointed out earlier, applying the wrong principles opens up a discretionary decision to appellate intervention. [40] The motion judge was faced with an officer and shareholder (Gaudet), of a small business (Samgo), who wanted to represent a company of which he held 75% of the shares. He had, by way of affidavit, the permission of the other shareholders to represent Samgo in the action. However, this case does not concern a limited question of law. The issues involved are of such legal complexity that they will entail a trial, which will take a considerable amount of time and legal expertise.

There is a likelihood that Gaudet would have to alternate his role as “counsel” and “witness” for examinations for discovery as well as at trial. The further allegations of Gaudet regarding the impecuniosity of Samgo could cause an injustice to the plaintiff if it were successful. These factors alone, without having to consider more, sufficiently tip the balance against allowing Mr. Gaudet to represent Samgo.

This is not one of those rare instances where Rule 17.01 should be dispensed with. [41] Even if the judge had been correct to dispense with Rule 17.01 , he nevertheless would have had to overcome s. 33 of the Law Society Act and hold that what Mr. Gaudet proposed was not the practice of law. It may be that representation in a court proceeding of a corporation by an officer or employee of the corporation is not practicing law within the meaning of the term in s. 33. I note for example that in proceedings under the former Small Claims Act , S.N.B. 1997, c.

S-9.1, and under the current Rule 80 of the Rules of Court , corporations may be represented by an officer or employee. Thus, it might be argued that the legislator never intended these types of representations to fall within the ambit of the “practice of law” as contemplated by the Law Society Act . That point was never fully argued before us and no one gave notice to the Law Society, which would undoubtedly have an interest in the

interpretation of its governing legislation. Considering my conclusion that s. 2.01 ought not to be applied in these circumstances to dispense with the requirements of Rule 17.01 , I leave the

interpretation of s. 33 of the Law Society Act for another day. VII. Disposition [42] For these reasons, I would dismiss the appeal regarding the conflict of interest situation. I would allow the appeal and set aside the judge’s ruling that Rule 17.01 could be dispensed with in this case. Considering the divided result, I would not make any award of costs. _______________________________ KATHLEEN A. QUIGG, J.A. I CONCUR: ______________________________ J.C. MARC RICHARD, J.A.

Version française des motifs rendus par LE JUGE BELL (motifs concordants en partie) [1] J’ai eu l’avantage de lire les motifs exhaustifs et approfondis de ma collègue, la juge Quigg. Bien que je souscrive à sa décision sur les deux questions en litige soulevées dans cet appel, je dois, avec égards, exprimer mon désaccord sur sa conclusion voulant que les juges de première instance, dans les cas appropriés, aient le pouvoir discrétionnaire d’autoriser quelqu’un d’autre qu’un avocat à représenter des sociétés ou corporations.

Comme la majorité l’a si bien dit, les Règles de procédure d’un bon nombre de provinces du Canada ont été modifiées de manière à accorder un tel pouvoir discrétionnaire aux juges de première instance. Les Règles de procédure du Nouveau-Brunswick n’ont pas été modifiées ainsi. [2] En plus de la jurisprudence très convaincante mentionnée par la majorité, mon opinion est renforcée par les observations suivantes. Tout d’abord, le libellé de la règle est sans ambiguïté, en exigeant qu’une corporation soit représentée par un avocat.

Les corporations qui sont parties à un litige sont mentionnées, avec les personnes frappées d’incapacité ou agissant en qualité de représentant, comme appartenant à la catégorie des parties qui doivent être représentées par un avocat. Deuxièmement, si les juges de première instance jouissent du pouvoir discrétionnaire de modifier les prescriptions claires des Règles dans le cas des corporations qui sont parties à un litige, il s’ensuit que le même pouvoir discrétionnaire doit exister à l’égard des personnes frappées d’incapacité ou agissant en qualité de représentant.

Étant donné la vulnérabilité des personnes frappées d’incapacité, si l’intention de l’Assemblée législative ou du lieutenant-gouverneur en conseil était que ces personnes puissent être représentées par quelqu’un d’autre qu’un auxiliaire de justice, ils auraient dû l’indiquer en termes clairs. Mes collègues ont peut-être raison de dire que les juges de première instance devraient avoir, dans des circonstances appropriées, le pouvoir discrétionnaire d’autoriser les corporations à être représentées par quelqu’un d’autre qu’un avocat.

Toutefois, étant donné le libellé actuel des règles 17.01 et 2.01 , c’est, à mon respectueux avis, à l’Assemblée législative ou au lieutenant-gouverneur en conseil, et non à notre Cour, qu’il appartient de déterminer si ce pouvoir discrétionnaire existe et les limites de son exercice.