Wiebe v. Jonet Construction Ltd., 2021 BCSC 617

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Wiebe v. Jonet Construction Ltd., 2021 BCSC 617 Date: 20210407 Docket: S36718 Registry: Chilliwack Between: Walter Wiebe Plaintiff And Jonet Construction Ltd. and H.P. Construction Ltd. Defendants Before: The Honourable Madam Justice Walkem Reasons for Judgment Counsel for the Plaintiff: A. Taghizadeh Counsel for the Defendant Jonet Construction Ltd.: J.K.R. Bienvenu Counsel for the Defendant H.P. Construction Ltd.: D.R.E. Lester, QC J.C. Legaree Place and Dates of Hearing: Chilliwack, B.C. March 1, 2021 Place and Date of Judgment: Chilliwack, B.C.

April 7, 2021 FACTS [ 1 ] Walter Wiebe is involved in a civil litigation dispute (the “Wiebe matter”) where he alleges he was wrongfully dismissed by the defendants H.P. Construction Ltd. (“H.P.”) and Jonet Construction Ltd. (“Jonet”). Mr. Wiebe alleges that H.P. and Jonet are sufficiently proximate and intertwined such that they are the same employer. [ 2 ] In the Wiebe matter, Mr. Wiebe is represented by Mr. Lawrence Smith of Sorensen Smith LLP (“Sorensen Smith”). H.P. is represented by Ms. Jessie Legaree of RDM Lawyers LLP (“RDM”). Jonet is represented by Mr. J. Kyle Bienvenu of Hira Rowan LLP. Ms.

Amelia Cline originally worked for RDM and now works for Sorensen Smith. This chambers application was made by H.P. and Jonet for an order that Sorensen Smith be restrained and disqualified from continuing to represent Mr. Wiebe in the Wiebe matter, citing Ms. Cline’s conflict of interest. [ 3 ] Ms. Cline was not on file as legal counsel for H.P. when she worked at RDM. Sorensen Smith takes the position that Ms. Cline did not have, or share, confidential information regarding the Wiebe matter, and that they have adequate internal safeguards in place to protect against any potential conflict of interest.

H.P. and Jonet submit that Ms. Cline was privy to confidential solicitor-client information on the Wiebe matter gained in the context of a shared working environment, most notably, her conversations with Ms. Legaree. [ 4 ] Ms. Cline informed RDM and Ms. Legaree that she had been hired by Sorensen Smith on August 18, 2020. [ 5 ] On August 19, 2020, Ms. Legaree emailed Ms. Cline, with the subject heading “Sorensen Smith files”, indicating there were two files they had spoken “quite a bit about so [it] would be a conflict”. Those two files were listed in the email, and included the Wiebe matter. Ms.

Cline replied the same day, “Duly noted!”. (Collectively, I refer to this exchange as the “Conflict Notification”.) [ 6 ] Ms. Legaree’s evidence was that she and Ms. Cline had discussed the Wiebe matter on numerous occasions, sharing what she considered to be confidential information that would prejudice H.P.’s interests if shared with Mr. Wiebe. Ms. Legaree described her communication with Ms.

Cline in the course of their shared employment at RDM, saying they “communicated nearly daily and often discussed our files, including strengths and weaknesses of claims and bouncing ideas off each other regarding strategy.” Ms. Legaree’s

evidence was that she spoke with Ms. Cline “numerous times” about the Wiebe matter specifically, on topics including: analysis of the state of the law; the merits of the claim in relation to H.P. and Jonet; and settlement offer(s). [ 7 ] Ms. Cline started work at her new firm Sorensen Smith on October 5, 2020. Upon commencing employment, Ms. Cline had an interview with a senior lawyer, Mr. Smith, to review the files that she would work on. The Wiebe matter was included on that list. On October 6, 2020, Ms. Cline texted Ms. Legaree advising that she would be attending discoveries with her in November. Ms.

Legaree was concerned that this referred to the Wiebe matter, as she had just set November dates for that file, and communicated that she thought Ms. Cline was conflicted out. [ 8 ] Although Ms. Cline was referring to a separate matter in her October 6, 2020, text, she responded to Ms. Legaree that she was a “horrible listener”, indicating she did not recall discussions on the Wiebe matter. [ 9 ] Ms. Legaree was concerned, and consulted with a Law Society Practice Advisor. On October 16, 2020, Ms.

Legaree sent a letter to Sorensen Smith asking what measures had been taken to ensure no disclosure of confidential solicitor-client information had taken place regarding the Wiebe matter and asking about the timing of such steps. The letter stated that H.P. did not consent to Sorensen Smith continuing to act as counsel for Mr. Wiebe. Further, it stated that if any discussions took place with Ms. Cline about the Wiebe matter, Sorensen Smith was disqualified as counsel. [ 10 ] On October 16, 2020, Mr. Smith emailed Ms. Legaree stating: I have not had any substantial discussions with [Ms.

Cline] regarding this file. I gave her a list of files when she joined the firm and told her where each file was in terms of the litigation. With this matter I explained discoveries were coming up and she could work on those with me. She came back to me later and explained that RDM was counsel and perhaps she should not be involved in the file. I understood [Ms.

Cline] did personal injury at RDM and did not think she was involved with any employment matters and would not be in possession of any confidential information respecting this file, but agreed to reassign the file to another lawyer out of an abundance of caution. [ 11 ] On October 16, 2020, Mr. Bienvenu wrote asking what measures had been taken by Sorensen Smith to remove itself from representation of Mr. Wiebe. In the Wiebe matter, Mr. Wiebe argues that there is a commonality of interests between H.P. and Jonet.

While Jonet disputes the commonality of interest, if there were common interests, Jonet expressed concern that confidential solicitor- client information gained from H.P. may have been shared that prejudiced their interests. [ 12 ] On November 3, 2020, having received appointments on October 27, 2020, to examine each of the defendants on November 17, 2020, Ms. Legaree wrote to Mr. Smith reiterating her concern: My client does not consent and from what we can tell, no such steps as recommended in the Code of Professional Conduct were taken to protect H.P.’s confidentiality.

The file was in fact discussed in the presence of Ms. Cline with respect to the status of the litigation and upcoming discovery. [ 13 ] On November 6, 2020, Mr. Smith sent a letter to both defendants advising that:

a) Mr. Sorensen has not and will not have any involvement in relation to this matter.

b) Ms. Cline will not discuss this matter or any information relating to this matter with anyone else at our law firm.

c) No member of our law firm will discuss this matter with Ms. Cline or in her presence. Nobody will discuss the file while Ms. Cline is in the room or within earshot. Mr. Smith’s letter concluded: [W]hile I appreciate your client’s concern over the potential for conflict, we will stake our professional reputations on the fact that this matter will never be discussed between Ms. Cline and anyone else in our office. Hopefully this provides your clients with some comfort. [ 14 ] On November 13, 2020, Ms. Legaree advised Mr.

Smith by email: Please be advised that my client remains deeply uncomfortable and feels betrayed that his confidentiality was or may have been breached by a failure of Sorensen Smith LLP to take the appropriate measures to protect his confidentiality until a month after Ms. Cline commenced employment. The file name [Walter Wiebe v. Jonet Construction & H.P. Construction] was provided to Ms. Cline and identified as a conflict prior to her commencing employment. There were numerous discussions regarding this file, including strategy and law, while Ms. Cline was an employee of RDM. [ 15 ] On December 14, 2020, Ms.

Cline shared with Ms. Legaree a text message of what appears to be a screenshot of an email sent to her by Mr. Sorensen dated November 13, 2020, which reads as follows: “FYI – we just received an email from [Ms. Legaree] which in part says…”.

The excerpt from the above November 13, 2020 email was then set out. [ 16 ] In an affidavit, Henry Penner, director of H.P., noted his expectation that anyone with access to H.P.’s information at RDM would not be in a future position to use that information contrary to H.P.’s interests, and stated he was “deeply uncomfortable” that measures to protect confidential information were not taken at the outset of Ms. Cline’s employment with Sorensen Smith. [ 17 ] In their application response, Sorensen Smith indicate that at the commencement of her employment, on October 5 or 6, 2020, Mr.

Smith had a telephone call with Ms. Cline and named files she would be working on, and discussed where each file was in terms of procedural steps in litigation. These files included the Wiebe matter. [ 18 ] Though the timing is unclear, it was “during the week of October 5, 2020” (per the affidavit of Daniel Sorensen, dated February 23, 2021) that Ms. Cline raised the concern about a potential conflict of interest. Ms. Cline was removed from the Wiebe matter during

the week of October 5. Conceivably, Ms. Cline could have remained on the file for anywhere from one to five days, as the precise datesof Ms. Cline’s appointment to the file, and her subsequent removal, are unclear. On or about October 7, another lawyer was appointed tothe file. [19] An internal screen was then created within Sorensen Smith to prevent Ms. Cline from being exposed to, or exposing, confidentialinformation on the Wiebe matter with other lawyers or staff at the firm. The physical file on the Wiebe matter was placed in a lockedfiling cabinet and the electronic file was password-protected. [20] Mr.

Sorensen (otherwise uninvolved with the Wiebe matter) was assigned to discuss the conflict allegation with Ms. Cline.Ms. Cline informed him she had done no work on the file at RDM, and denied any discussions with Ms. Legaree on the merits of theclaim. A subsequent text from Ms. Legaree refreshed Ms.

Cline’s memory, though her position was that their discussions were “high-level discussions about the relevant points of law” and did not involve confidential information (Application Response of SorensenSmith). [21] A letter was sent out on November 6, 2020, informing all parties of the steps that had been taken within Sorensen Smith tosafeguard against the conflict of interest. Sorensen Smith says that, although the letter went out on November 6, 2020, the measures hadbeen implemented during the week of October 5, 2020, but were “further finalized” in the first week of November.

They further arguethat, although Mr. Sorensen forwarded to Ms. Cline a copy of the email sent by Ms. Legaree on November 13, 2020, the communicationprovided Ms. Cline with an update on the conflict issue. [22] Sorensen Smith’s position is that Ms. Cline had not worked on the Wiebe matter at RDM, no confidential information wasshared with respect of the Wiebe matter with, or by, Ms. Cline, and so there is no conflict of interest. The only discussion about theWiebe matter at Sorensen Smith occurred during Ms. Cline’s October 5 or 6, 2020 on-boarding discussion with Mr.

Smith, where noconfidential information was shared. THE LAW Basis for Seeking to Remove a Lawyer [23] Chief Justice McLachlin writing for the majority of the Supreme Court of Canada in Canadian National Railway Co. v.McKercher LLP, 2013 SCC 39 [McKercher] identified two potential types of prejudice that “clients may suffer when counsel hasconflicting interests” (at para. 23).

First, “prejudice as a result of the lawyer’s misuse of confidential information obtained from a client”,and, second, “prejudice arising where the lawyer ‘soft peddles’ his representation of a client in order to serve his own interests, those ofanother client, or those of a third person”.

McLachlin C.J. noted that a “lawyer’s main duty to a former client is to refrain from misusingconfidential information” (at para. 23). [24] Determining actual or real risk involves two questions: (1) did the lawyer receive relevant confidential information arising fromthe solicitor-client relationship, and (2) is there a risk that the information will be used to the prejudice of that client’s interests:McKercher at para. 24 and Macdonald Estate v. Martin, (SCC), [1990] 3 S.C.R. 1235 at 1260 [Martin]. [25] In Griffin v.

Griffin, 2020 BCSC 1249 [Griffin], Justice Milman summarized the legal principles relevant to the Court’s inherentpower to disqualify counsel in the event of a conflict of interest. Regarding the question of the risk of use of confidential informationagainst the interest of a former client, Justice Milman summarized the state of the law from Martin (Griffin at para. 48): [D]isqualification will be automatic where it is the same individual lawyer who is in possession of relevant confidential information froma previous retainer.

Where, as here, the previous retainer was handled by another lawyer in the same firm, however, the answer is said tobe less clear. In such cases, there remains, “a strong inference that lawyers who work together share confidences,” an inference that thecourt may draw in the absence of “clear and convincing evidence that all reasonable measures have been taken to ensure that nodisclosure will occur by the ‘tainted’ lawyer to the member or members of the firm who are engaged against the former client” (atp. 1260).

In cases like this one involving lawyers who have transferred from other firms, the “reasonable measures” will generally bethose set out in the professional conduct rules of governing bodies like the Law Society of British Columbia. [26] Madam Justice Southin once paraphrased the question to ask to determine whether a conflict of interest occurred in Martin aswhether “a reasonable member of the public who is in possession of the facts would conclude that no unauthorized disclosure ofconfidential information had occurred or would occur”: Baumgartner v.

Baumgartner, (1995) 122 D.L.R. (4th) 542, (B.C.C.A.) at para. 45 [Baumgartner]. Inferences of Lawyers Working Together [27] In Martin, Sopinka J. suggested there exists a “strong inference” that lawyers working at the same firm share confidences (at1262). An inference may be drawn that lawyers working together in the same firm will share confidences about matters they are workingon, such that actual knowledge may be presumed.

This is a presumption a party can rebut where it shows clear and convincing evidencethat reasonable measures were taken such that no disclosure occurred or is likely to occur by a transferring lawyer to another firm whoare engaged against a former client.

The structure of this rebuttable presumption accomplishes two outcomes: avoiding making courtsrely on “trust me” statements from lawyers and providing the public with guarantees that confidential information will “under nocircumstances be used”: Martin at 1263. [28] Confidential protected information is not limited to the facts of a case, but may include discussions amongst lawyers in a firmrelated to strategy and legal

interpretations in the context of a particular case.

Code of Professional Conduct [ 29 ] The Law Society’s Code of Professional Conduct for British Columbia (the “ Code ”) Rules 3.3 and 3.4 address confidentiality and a lawyer’s duty to avoid conflicts of interest. The Code provides guidance about the professional conduct standards expected of lawyers in order to guard confidential client information while transferring firms. While the Code provisions do not bind the Court, they provide an indication of what a reasonable person might be entitled to expect from a legal professional: Cewe Estate v.

Mide-Wilson , 2009 BCSC 975 at para. 89 . [ 30 ] Generally, client confidentiality is protected in order to preserve “full and unreserved communication” between lawyer and client ( Code commentary, R. 3.3-1 at fn 1).

The Code allows a lawyer to disclose confidential information to the extent reasonably necessary to identify and resolve conflicts of interest arising from a lawyer’s transferred change of employment, but limits that disclosure so as not to compromise solicitor-client privilege or to in anyway prejudice clients: R. 3.3-7. [ 31 ] Rule 3.4-18 contemplates a situation where either a transferring lawyer or the new law firm becomes aware that it is reasonable to believe that the transferring lawyer has confidential information relevant to the new law firm’s matter for its clients, or, the new law firm represents a client in a matter that is the same as, or related to, a matter in which the former law firm represents, or represented, its client.

The purpose of this Rule is to deal with actual knowledge; imputed knowledge will not give rise to disqualification ( Code commentary, R. 3.4-18 at fn 1). [ 32 ] Under Rule 3.4-20, if the transferring lawyer actually possesses confidential information relevant to a matter respecting the former client that may prejudice their interest, the new law firm must cease its representation of its client in the matter.

The new law firm may be able to continue to act where the former client consents, or the new law firm has taken steps to ensure there will be no disclosure of the former client’s confidential information, and has also advised the former client of the measures taken. [ 33 ] The Law Society’s commentary on R. 3.4-20 outlines steps for a law firm to take to identify conflicts before hiring a transferring lawyer. It is suggested that after completing the interview process, but before hiring the transferring lawyer, the new law firm should determine whether conflicts exist.

The failure of a transferee law firm to build an effective firewall immediately upon learning of the potential for disclosure will, aside from extraordinary circumstances, result in the law firm’s disqualification: Freyn v. Bank of Montreal , 2002 NBCA 69 at para. 77 ; Poehler v. Langer , [1999] B.C.J. No. 217 at para. 45 . A key question to be asked is “whether their delay created an unacceptable risk of disclosure of confidential information”: Robertson v.

Slater Vecchio , 2008 BCCA 306 at para. 41 [ Slater Vecchio ]. [ 34 ] The commentary to R. 3.4-20 (at fn 3) outlines a set of steps that can be taken; noting that taking only some steps may be adequate in some cases, while taking all may not be enough in others: Guidelines: How to screen / measures to be taken 1. The screened lawyer should have no involvement in the new law firm’s representation of its client in the matter. 2.

The screened lawyer should not discuss the current matter or any information relating to the representation of the former client (the two may be identical) with anyone else in the new law firm. 3. No member of the new law firm should discuss the current matter or the previous representation with the screened lawyer. 4. The firm should take steps to preclude the screened lawyer from having access to any part of the file. 4.1 The measures taken by the new law firm to screen the transferring lawyer should be stated in a written policy explained to all lawyers and support staff within the firm. 5.

The new law firm should document the measures taken to screen the transferring lawyer, the time when these measures were put in place (the sooner the better), and should advise all affected lawyers and support staff of the measures taken. 6.

These guidelines apply with necessary modifications to situations in which non-lawyer staff leave one law firm to work for another and a determination is made, before hiring the individual, on whether any conflicts of interest will be created and whether the potential new hire actually possesses relevant confidential information. [ 35 ] The Code commentary further addresses screening for potential conflicts while hiring (at fn 4–7). [ 36 ] In Slater Vecchio , the hiring firm took steps at the outset of the transferring lawyer’s employment to protect any potential confidential information.

The Court of Appeal concurred with the chambers judge that the hiring firm had “acted diligently to establish a firewall” from when the transferring lawyer accepted the employment offer, and that these efforts were “sufficient to displace any ‘new risk’ that confidences would be disclosed” ( Slater Vecchio at para. 27 ). Extensive steps were taken both before and immediately following the transferring lawyer’s commencing work at the new firm. He was not assigned, nor did he work on, any files with his old firm.

However, his physical workspace was within the vicinity of, and not segregated from, other lawyers working on those files. Disqualification is a rare remedy [ 37 ] In S.B v. J.M., 2019 ONSC 6128 [ S.B. ], the Ontario Superior Court highlighted the importance of courts being alive to the possibility that disqualification applications may be tactical and prone to abuse. Additionally, as a result of disqualification applications relying on the court’s inherent jurisdiction, Fryer J. opined that they are a tool that should be used sparingly ( S.B. at paras. 38–40 ).

In Baumgartner , our Court of Appeal explained that the remedy of disqualification is essentially “an application to the equitable jurisdiction of the court to protect the applicant from a loss of the confidentiality to which the solicitor/client relationship entitles [them]” (at para. 28).

[ 38 ] Disqualification of a lawyer carries significant consequences for the lawyer, law firm, and the client they will be disqualified from representing. McKercher suggests that disqualification is “generally the only appropriate remedy” (at para. 63) where there is a need to prevent misuse of confidential information. When disqualification is considered solely to protect public confidence in the integrity of the administration of justice, but where there is no overriding concern about misuse of confidential information, other factors must be weighed in the consideration.

Countervailing considerations could include protecting a client’s right to choose their lawyer, and a lawyer’s right to employment mobility ( McKercher at para. 22 ). ANALYSIS [ 39 ] The Wiebe matter was identified as a potential conflict by Ms. Legaree as early as August 19, 2020. The Conflict Notification was issued before Ms. Cline commenced employment at Sorensen Smith. It appears that no further steps were taken by Ms. Cline to notify Sorensen Smith of this conflict, nor did Sorensen Smith and Ms. Cline address the conflict themselves, until some point during the week of October 5, 2020, after Ms.

Cline had been assigned, albeit temporarily, to act on the Wiebe matter. [ 40 ] Ms. Legaree was clear that her discussions with Ms. Cline about the Wiebe matter included confidential information protected by solicitor-client privilege. Ms. Legaree was concerned enough about solicitor-client confidentiality that, upon learning that Ms. Cline was joining Sorensen Smith, she issued the Conflict Notification, in an effort to prospectively protect H.P.’s confidential solicitor-client information. Surely, if Ms.

Cline disagreed that she was in receipt of confidential solicitor-client information through her discussions with Ms. Legaree, the time to raise it was when she first received the Conflict Notification. She could have disputed that she was in receipt of any confidential information; she could have asked for clarification; she could have said she had no idea what Ms. Legaree was talking about. She did not. Instead, her response (“Duly noted!”) confirms that there was an issue about confidential information on the Wiebe matter. [ 41 ] The fact Ms. Cline and Mr.

Smith discussed the Wiebe matter, that the Conflict Notification was issued before Ms. Cline commenced employment with Sorensen Smith, and that Ms. Cline was actually assigned the file in the course of a discussion with senior counsel, is sufficient to clearly satisfy the risk of disclosure of confidential information under Slater Vecchio and Martin . [ 42 ] Lawyers are allowed to transfer between firms. Clients have the right to choose their legal representation.

However, this must be balanced against the need of the public (and clients of lawyers and law firms) to trust in the inviolability of the solicitor-client relationship, and that information shared between a lawyer and their client will be protected. As part of a law firm environment where lawyers share information about files, and consult about legal strategy and seek advice amongst each other, I am persuaded that Ms. Cline had access to confidential legal information regarding the Wiebe matter through her discussions with Ms. Legaree. The undisputed Conflict Notification supports this

interpretation. [ 43 ] H.P. and Jonet argue that none of the firewalling steps discussed in Slater Vecchio were taken prior to, or at the outset, of Ms. Cline’s employment with Sorensen Smith. This assertion is borne out by the fact that Ms. Cline was originally assigned to assist with upcoming discoveries on the Wiebe matter, despite Ms. Cline having received the Conflict Notification highlighting the clear conflict of interest concerns. Neither Sorensen Smith nor Ms. Cline took pre-emptive steps to screen for and address conflicts before she started her employment.

Sorensen Smith explains the lack of pre-emptive steps it took upon hiring Ms. Cline as flowing from their understanding that her practice was solely personal injury. Yet, Ms. Cline was also specifically alerted to the conflict on the Wiebe matter prior to the transfer through the Conflict Notification.

Sorensen Smith’s strategy of relying solely on the transferring lawyer to raise potential conflicts clearly did not work in this case. [ 44 ] Sorensen Smith attempts to distinguish Slater Vecchio by arguing it is distinguishable because the transferring lawyer in that case was actively involved in the defence of seven lawsuits and was the defendant solicitor on record for six of the lawsuits. He met with two of these clients after being offered (but having not yet accepted) a job with the new firm. They argue that Ms.

Cline was not a lawyer of record on the Wiebe matter. [ 45 ] I do not find this argument persuasive. That Ms. Cline was not a lawyer of record does not mean she did not have access to confidential information ( Martin ). In this case, the “strong inference” that lawyers within a law firm share confidences, is crystalized by the Conflict Notification, that specifically states that confidential information about the Wiebe matter was shared.

The generalized duty to protect solicitor-client privilege that always exists for a lawyer (including one who has access to privileged solicitor-client information in the course of their day to day interactions within a firm), settled into a focused duty upon Ms. Cline’s receipt of the Conflict Notification which identified a specific conflict concern with the Wiebe matter to protect H.P.’s confidential information. [ 46 ] The measures taken by Sorensen Smith after the fact were not sufficient to mitigate any of the risks of prejudice.

Subsequent to their notification during the week of October 5 that there was a conflict concern about the Wiebe matter, the file was locked and password protected, an internal firewall was instituted to prevent discussions or sharing of information, and Ms. Cline was removed from the file. If the actions taken by Sorensen Smith had been taken before Ms. Cline commenced work, or even before she was assigned the file, they may have been sufficient.

Steps taken after the breach occurred cannot remedy or erase that breach. [ 47 ] There is a public interest in mobility of lawyers, and in allowing parties to choose their own legal representation. Here, these concerns are outweighed by conflict of interest and the risk of potential disclosure of privileged information. Mr. Wiebe has invested time, resources, and trust establishing a relationship with legal counsel. He will be forced to find new counsel well into his litigation.

H.P. and Jonet have legitimate concerns that confidential information obtained through a solicitor-client relationship may have been disclosed in ways that prejudice their legal interests. This is not an ideal situation by any means. [ 48 ] Even if no confidential information exchanged hands, the very fact that Ms.

Cline went from acting for one firm that represented H.P. in the Wiebe matter — where she was privy to confidential solicitor-client information significant enough to trigger that firm to issue the Conflict Notification — to being appointed to act as counsel for the opposing party in that same action, albeit for under the space of a week, raises issues of significant concern such that I am satisfied that Sorensen Smith should not be allowed to continue to act on this file.

CONCLUSION [ 49 ] I have concluded that Sorensen Smith should be disqualified from continuing to act for Mr. Wiebe on this matter. [ 50 ] H.P. and Jonet are entitled to their costs in this matter as against Sorensen Smith. “A. Walkem, J.”