Mann v Mann, 2023 SKCA 104

Court of Appeal for Saskatchewan Docket: CACV4091 Citation: Mann v Mann , 2023 SKCA 104 Date: 2023-09-07 Between: James Mann and Farms and Families of North America Inc. (carrying on business as Farmers of North America) Appellants (Applicants) And Jason Mann, AgraCity Crop & Nutrition Ltd., Peter Bergbusch, K.C., and Miller Thomson LLP Respondents (Respondents) Before: Schwann, Kalmakoff and Drennan JJ.A. Disposition: Appeal dismissed Written reasons by: The Honourable Mr.

Justice Kalmakoff In concurrence: The Honourable Madam Justice Schwann The Honourable Madam Justice Drennan On appeal from: QBG-SA-00948-2017 (Sask QB), Saskatoon Appeal heard: May 25, 2023 Counsel: James Mann for the Appellants Robert Hawkes, K.C., for Jason Mann Randall Sandbeck, K.C., for AgraCity Crop & Nutrition Ltd., Peter Bergbusch, K.C., and Miller Thomson LLP Kalmakoff J.A. I.

Introduction [ 1 ] James Mann [James] and Farmers and Families of North America Inc. (carrying on business as Farmers of North America) [FNA] appeal against a decision in which a judge of the Court of King’s Bench, sitting in Chambers, dismissed their application for an order requiring AgraCity Crop & Nutrition Ltd. [AgraCity] to retain and instruct counsel through its board of directors, and an order disqualifying Peter Bergbusch, K.C. (as he then was) and Miller Thomson LLP from acting as counsel for AgraCity ( Mann v Mann , 3 October 2022, Saskatoon QBA-SA-00948-2017 and QBA-SA-01336-2018 (KB) [ Chambers Decision ]). [ 2 ] For the reasons that follow, I have concluded that the appeal must be dismissed.

II. Background [ 3 ] The application that led to the Chambers Decision arose in the course of complex, multi-fronted and ongoing litigation between James, his brother, Jason Mann [Jason], and various corporate entities in which they hold controlling stakes. A. The players [ 4 ] James and Jason are equal shareholders in AgraCity and are both directors and officers of that corporation. Jason is the president, and James is secretary-treasurer. [ 5 ] James is the sole registered shareholder of FNA and its operating mind. Although James is not a lawyer, he was given leave to represent FNA in these proceedings.

Accordingly, for the purposes of these reasons, when I refer to an argument made or a position taken by James, it will be understood that he is also speaking for FNA. [ 6 ] FNA was incorporated under the laws of Alberta and is authorized to conduct business in Saskatchewan. AgraCity was incorporated pursuant to the provisions of The Business Corporations Act , RSS 1978, c B-10 [ SBCA ], since repealed by The Business Corporations Act, 2021 , SS 2021, c 6 [ SBCA 2021 ]. [ 7 ] AgraCity and FNA are both large corporations, with millions of dollars in annual sales.

The business affairs of the two corporations are substantially intertwined. AgraCity sells farm products but, under a complicated business arrangement, it does so only to farmers who are members of FNA. Even though James and Jason once ran these corporations and several others together, their views as to how AgraCity and FNA should function and interact with one another diverged, leading to a breakdown in their relationship, the development of hostilities and, ultimately, protracted litigation. B. The ongoing litigation, in a nutshell [ 8 ] For several years now, AgraCity has been under Jason’s management.

The reasons for this are multilayered but, for the purposes of this appeal, can be summarized as follows. In early 2017, James took steps to oust Jason from positions of authority within

AgraCity. Jason alleged that this had been done as part of an improperly constituted shareholders meeting and, in July of 2017, heinstituted proceedings against James and AgraCity, by filing an originating application, and seeking various oppression remedies under theSBCA.

In the context of those proceedings, Danyliuk J. made an order that effectively preserved the status quo of the businessarrangements between James and Jason in relation to AgraCity and some of their other corporate entities while matters in dispute werelitigated (Mann v Mann (13 July 2017) Saskatoon, QB No. 948 of 2017 (Sask QB) [Danyliuk Order]).

In addition to a number of otherterms, the Danyliuk Order contained a provision that: …Jason Mann shall continue to act as president and managing director of AgraCity Crop & Nutrition Ltd. and in that role he shall not takeany steps or conduct himself in a manner that is outside the ordinary scope of business. [9] The Danyliuk Order was later affirmed by an order made by Gabrielson J. on December 21, 2017, who also directed a trial onthe issue surrounding the validity of the shareholders’ meeting that purported to remove Jason as a director of AgraCity (Mann v Mann (21December 2017) Saskatoon, QBG 948 of 2017 (Sask QB)).

In July of 2018, on a without notice application made by Jason and AgraCity,Rothery J. granted an order that, among other things, removed James as signing authority for AgraCity (Mann v Mann (17 July 2018)Saskatoon, QBG 948 of 2017). [10] In August of 2018, FNA filed a statement of claim against Jason and AgraCity.

Various other proceedings have followed. [11] A history of certain aspects of the multi-faceted litigation between James and Jason and their many corporate entities is set outin a number of decisions, including Mann v Mann, 2022 SKCA 138 at paras 4–11, Mann v Mann, 2022 SKCA 94 at paras 16–24 [LeurerFiat]; Mann v Mann, 2023 SKCA 99 at paras 6–22 [Genesis Decision]; Mann v Mann, 2023 SKCA 100 at paras 7-39; and Mann v Mann /Farms and Families of North America Inc. v AgraCity Crop & Nutrition Ltd. (28 September 2018) Saskatoon, QBG 948 of 2017 / QBG1336 of 2018 (Sask QB)). [12] For the sake of the analysis that will follow in relation to this appeal, it is sufficient to understand that Miller Thomson has beeninvolved in representing or providing legal advice to AgraCity throughout, as was Mr.

Bergbusch, who was a partner in that law firm untilhis appointment to the bench in October of 2022. At some points in the past, Mr. Bergbusch and Miller Thomson had also acted as legalcounsel in certain matters for James, FNA, and various other corporate entities in which James held a controlling stake. C. The application for disqualification [13] In May of 2020, James, in both his personal capacity and on behalf of FNA, brought an application for an order disqualifyingMr.

Bergbusch and Miller Thomson from representing AgraCity, and an order that AgraCity be limited to retaining counsel through itsboard of directors. Briefly stated, James took the view that, because of their past association with him and the corporate entities in whichhe was involved, Mr.

Bergbusch and Miller Thomson had received confidential information attributable to a solicitor and clientrelationship, and that there was a risk that such information could be used to his prejudice in the present litigation. [14] James also asserted that, because he remains on the board of directors for AgraCity, he should be entitled to a say in whorepresents that corporation in the ongoing litigation.

This assertion was rooted in James’s view that only a corporation’s board of directorscan make decisions about retaining and instructing counsel for it and, despite the Danyliuk Order, he continues to be a director ofAgraCity, meaning that Jason was not entitled to unilaterally select counsel for that corporation. D. The Chambers Decision [15] The Chambers judge refused to grant the relief that James requested. Dealing first with the application for an order limitingAgraCity to retaining counsel authorized by its board of directors, the Chambers judge described this application as a “misguided non-starter”.

He went on to say: [5] …The practical effect of such an order would mean that both James and Jason would have to agree on counsel for AgraCity. Thereason that other actions involving James and Jason are before the Court is that they are unable to agree on almost everything. By way of[the Danyliuk Order], Jason, as president of AgraCity, was put in charge of making day-to-day decisions respecting the operations ofAgraCity. Jason’s authority was restricted in part by [the Danyliuk Order] which prevented Jason from having AgraCity take action thatwas not within its ordinary course of business.

Since that order was made, Jason has been running AgraCity as an ongoing businessenterprise. It is a significant business corporation, having sales in the millions of dollars. James has not had input into the day-to-daybusiness operations of AgraCity since that order. [6] There have been numerous applications involving the relationship between James Mann and Farms and Families of North AmericaInc. [FNA] on the one hand and Jason Mann and AgraCity on the other. Quite properly, James, in his personal capacity and as the soleshareholder of FNA, has been looking after his own interests in respect of the court action.

It is obvious to the Court that to insert specificdecision-making authority in the board of directors would create a stalemate in this aspect of the operations of AgraCity. It would also becontrary to [the Danyliuk Order]. [7] In looking at the history of these actions, it is clear that significant disputes in the operations of AgraCity have been raised againstit by James Mann personally or by FNA, his wholly owned corporation.

A number of the applications have resulted in rulings againstJames with finding that his conduct vis-a-vis AgraCity, has been contrary to the interests of AgraCity. [16] Turning next to the application to remove Mr. Bergbusch and Miller Thomson as counsel for AgraCity, the Chambers judgebegan by canvasing the legal principles set out in MacDonald Estate v Martin, (SCC), [1990] 3 SCR 1235 [MacDonaldEstate], and by noting that the determination of whether counsel should be disqualified for conflict of interest in circumstances such asthose in this case turned on two questions: “

(1) Did the lawyer receive confidential information attributable to a solicitor-clientrelationship relevant to the matter at hand?

(2) Is there a risk that it will be used to prejudice the client?” (Chambers Decision at para 13). [17] The Chambers judge then examined the “facts presented to determine the nature of the relationship that has existed between

James and FNA on one side and Miller Thomson LLP and Peter Bergbusch, K.C., on the other” (at para 14). In that respect, he observed that, although Mr. Bergbusch and Miller Thomson had been engaged by James in his personal capacity and as external corporate counsel for FNA in the past, those retainers related to matters that had occurred, and had been resolved, “years before the current dispute” concerning James, Jason and AgraCity, and that none of the instances in which Mr.

Bergbusch and Miller Thomson had represented James and/or FNA had any “temporal or factual relationship to the dispute that the parties are now involved in” (at para 14). [ 18 ] The Chambers judge also reviewed the evidence pertaining to a matter that had occurred in 2017, where a lawyer from Miller Thomson other than Mr. Bergbusch had dealings with the parties: [15] In 2017, a dispute occurred between Jason and James regarding the operation of FNA and AgraCity. This dispute resulted in the action in QBG 1548 of 2017.

Counsel was requested to prepare a Unanimous Shareholders Agreement as there was a gridlock by James and Jason about the operations of AgraCity. James and Jason each had their own legal counsel in respect of this issue. Mr. Bergbusch was not involved in any of the discussions respecting the dispute. This matter was handled by Stewart Berringer, another lawyer in Miller Thomson LLP. Mr. Berringer's affidavit indicates that he spoke with James’s lawyer, Scott Waters, on two occasions and to Jason Mann on another occasion. Mr.

Berringer deposed that he prepared a standard Unanimous Shareholders Agreement for discussion but that James and Jason retained another law firm to work on the agreement, and he had no further involvement in this file and took no notes from his discussion. No Unanimous Shareholders Agreement was ever arrived at. [ 19 ] Then, after referring to and citing passages from Canadian National Railway Co. v McKercher LLP , 2013 SCC 39 , [2013] 2 SCR 649 [ McKercher ], and Kelln v Mryglod , 2020 SKQB 237 [ Kelln ], the Chambers judge observed that James bore the onus of demonstrating that the present retainer of Mr.

Bergbusch and Miller Thomson by AgraCity was sufficiently related to any previous retainer in which they had acted for James to give rise to a conflict of interest. He concluded that James had not met that onus, saying: [19] James has not provided such evidence.

His primary complaint appears to relate to the notion that on the previous unrelated actions, Counsel has become aware of the thought processes and approaches that James takes to litigation and, as such, Counsel is put in a conflict of interest as this is confidential information that could be used against James to his detriment. [ 20 ] This type of information is not what is contemplated by the Court as seen in the case of CNR v McKercher … … [ 21 ] I now return to the two questions that must be answered to determine if a conflict of interest exists.

First, did the lawyer receive confidential information attributable to its solicitor and client relationship relevant to the matter at hand James, quite properly states that the Court should infer confidential information was disclosed to Counsel once it is shown that a relationship existed at some point in time which sufficiently related to the retainer for which it is thought to remove Counsel. That, however, still requires that confidential information attributable to the relationship relevant to the matter at hand must exist.

There is nothing in the previous relationships that is relevant to the issues before the Court at the present time. The information received by Counsel all relates to unrelated legal actions. It is true that there are number of these other legal actions; however, they do not involve the disputes between the parties as exists in the current action. The previous relationship is not relevant to the matter at hand. Given that finding, there is no risk that the information can be used to the prejudice of the client . We do not get to the second issue because of this. (Emphasis added) III.

Issues [20] James’s notice of appeal is somewhat difficult to follow but, based on his factum and his oral submissions, I understand him to assert that the Chambers judge erred in three ways: (

a) By determining that Jason did not require the approval of AgraCity’s board of directors to retain and instruct legal counsel; (

b) By finding that Mr. Bergbusch and Miller Thomson should not be disqualified from acting for AgraCity on the basis of conflict of interest; and (

c) By awarding costs to Jason and AgraCity. [21] James also contended, in his notice of appeal, that the Chambers judge had erred by delaying his decision on the disqualification application until the Leurer Fiat had been rendered in relation to a similar application that he had brought in this Court. However, as James did not pursue that argument during the appeal hearing, I take him as having recognized the lack of merit in it, and as having abandoned it. IV. Standard of Review [ 22 ] James contends that the Chambers judge made various legal and factual errors in dismissing the applications.

Questions of law, such as whether a judge has correctly identified and applied the legal test that pertains to the question at hand, are reviewable for correctness. Questions of fact and mixed law and fact are reviewable on the standard of palpable and overriding error ( Housen v Nikolaisen , 2002 SCC 33 at paras 19–37 , [2002] 2 SCR 235). V. Analysis A. Did the Chambers judge err by determining that Jason did not require the

approval of AgraCity’s board of directors to retain and instruct legal counsel? [23] Under this heading, James contends that the Chambers judge erred in law when he concluded that Jason could retain andinstruct legal counsel to act for AgraCity absent the approval of the remainder of AgraCity’s board of directors (i.e., James). In that regard,James asserts that it is “well-established law” in this jurisdiction “that a corporation can only retain counsel to represent it as authorized bythe board of directors”. [24] In support of this proposition, James points to s. 102(1) of the

Canada Business Corporations Act, RSC 1985, c C-44 [CBCA],and similar provisions in the SBCA as specific statutory provisions which, he says, provide that the board of directors has the authority tomanage or supervise the management of the corporation’s business and affairs, including the power to retain and instruct counsel on behalfof the corporation.

James also cites BCE Inc. v 1976 Debentureholders, 2008 SCC 69, [2008] 3 SCR 560 [BCE]; and Houweling NurseriesLtd. v Fisons Western Corporation (1988), (BC CA), 37 BCLR (2d) 2, 49 DLR (4th) 205 (CA) [Houweling], asdecisions which have held that the authority to retain and instruct counsel on behalf of a corporation can only be exercised by its board ofdirectors. [25] I am not persuaded by this aspect of James’s argument. [26] It is well-accepted in Canadian law that the directors of a corporation can delegate certain aspects of their authority to othercorporate officers or to a managing director (see, generally, Genesis Decision at para 52).

The question of what can be delegated is amatter of statute and the particulars of the corporate bylaws. In Corporate Law in Canada: The Governing Principles, 3rd ed(Mudgeeraba: Scribblers Publishing, 2006), Bruce Welling summarizes the two kinds of delegation that can occur: Boards of directors don’t make all corporate decisions. All jurisdictions permit the board to delegate some of their powers, although it iscommon to specify certain areas of long-range planning or important corporate decisions that can’t be delegated. There are two types ofdelegation.

The first type involves delegation to a committee of the board of directors or to a “managing director.” The latter term will be familiar topractitioners of corporate law and is now statutorily recognized in most Canadian jurisdictions. A managing director or a committee ofthe board may exercise any of the powers of the board of directors except those statutorily excluded. … … The second type of delegation is second nature to corporations.

It is standard practice for directors to designate corporate “offices” and todelegate to their incumbents (“officers”) the daily running of the corporate machinery. … (at 320-1, emphasis added) [27] In terms of the relevant statutory framework, I would begin by observing that AgraCity is incorporated under the laws ofSaskatchewan. That means the SBCA applies, not the CBCA. [28] As I have already noted, the SBCA was repealed and replaced by the SBCA 2021.

Although the SBCA applies to thecircumstances at hand because of when the relevant events occurred, I would also observe that my analysis here would be the samewhether conducted under the SBCA or the SBCA 2021, as the provisions of the SBCA that are relevant to this appeal were replaced byvirtually identical provisions in the SBCA 2021. [29] Turning to James’s argument, I can see nothing in the legislative provisions to which he refers that explicitly states that theauthority to manage the business and affairs of a corporation can only be exercised by the board of directors as a whole.

Nor is thereanything in those provisions, or anywhere else in the SBCA, that precludes a board of directors from delegating such responsibilities toindividual officers. [30] In that regard, although s. 97(1) of the SBCA (now, s. 9-1 of the SBCA 2021) provides that, subject to any unanimousshareholder agreement, the directors of a corporation have the authority to exercise, manage, supervise and direct the management of thebusiness affairs of the corporation, it does not say that all directors must agree on everything.

In fact, the SBCA explicitly provides forsituations in which any powers that can be exercised by a board of directors may be delegated to a managing director, or to individualdirectors or officers, under the bylaws of the corporation. In that regard, see s. 110(1) and s. 116 (now s. 9-16 and s. 9-22(1) of the SBCA2021). [31] As set out above, the Danyliuk Order provided that “[Jason] shall continue to act as president and managing director ofAgraCity”.

While there was no evidence to suggest that AgraCity’s directors had appointed Jason – or anyone else for that matter – as amanaging director, there was no dispute about the fact that Jason was, at all relevant times, its president, and that James was its secretaryand treasurer. This is significant because it establishes that, although James and Jason were both equal shareholders and were bothdirectors of AgraCity, their roles were not made equal when the company was formed.

The responsibilities and powers assigned byAgraCity’s corporate bylaws to the office of president are quite different than those assigned to the offices of secretary and treasurer. [32] Of particular significance in the context of this appeal, AgraCity’s bylaws, in s. 82, explicitly provide that its president “shall becharged with the general supervision of the business and affairs of the corporation”, and that “[e]xcept when the board has appointed ageneral manager or managing director, the president shall also have the powers and be charged with the duties of that office”.

As I havejust mentioned, there was no evidence that AgraCity had appointed a general manager or managing director, meaning that Jason, aspresident, effectively filled those roles.

Section 83 of AgraCity’s bylaws states that the general manager has the authority to oversee the“general management and direction … of the corporation’s business and affairs and the power to appoint and remove any and all … agentsof the corporation not elected or appointed directly by the board and to settle the terms of their employment and remuneration”. In short,the bylaws furnish Jason, as president of AgraCity, with all the authority he needed to unilaterally engage counsel on behalf of thecorporation, because that is something that falls within the general supervision of AgraCity’s business and affairs.

[ 33 ] I also see nothing in the decisions referred to by James that suggests a corporation can only retain and instruct counsel if there is a consensus amongst its board of directors, or that all directors must necessarily have a say in such decisions where the corporation has enacted bylaws that explicitly delegate the relevant powers to a particular officer. The portion of BCE to which James refers – paragraphs 39–40 of that decision – speak only of the fiduciary obligations of directors, and the need for them to act in the best interests of the corporation.

As for Houweling , I see nothing in the decision that even remotely touches on the question of who has the authority to retain and instruct counsel on behalf of a corporation. [ 34 ] Moreover, there are also decisions which support the proposition that it is customary for the president of a corporation to be able to retain and instruct legal counsel to defend a proceeding brought against the corporation (see, for example: H & N Enterprise Inc. v Novacation Inc., 2020 NSSC 303 at para 13 ) . [ 35 ] I also find no merit in James’s argument that the Chambers judge made factual errors in reaching the conclusion that he did on this point.

In this regard, James takes particular issue with the Chambers judge’s findings that (

i) he did not have any input in the day-to- day business of AgraCity at the time of the application, (ii) that placing the decision regarding the retention of counsel for AgraCity in the hands of the board of directors (i.e. he and Jason) would create a stalemate, and (iii) he had acted contrary to AgraCity’s best interests at various points throughout the history of the litigation. I see no palpable or overriding error in any of these factual conclusions; they are all amply supported by the record.

I would also note that the Danyliuk Order, which is still in effect, confirmed Jason’s authority to continue to act as AgraCity’s president. The arguments that James raises here appear to be collateral attacks on that order, that were properly rejected by the Chambers judge. [ 36 ] At bottom, by ruling as he did on the application, the Chambers judge determined that it would not be appropriate to make an order that would require a party in a legal dispute to allow the opposing side to participate in choosing counsel for them.

Such a ruling, in this instance at least, is self-evidently correct and reveals no legal or factual error. I agree with the Chambers judge’s assessment that James’s application in that respect was a “misguided non-starter”. B. Did the Chambers judge err by finding that Mr. Bergbusch and Miller Thomson should not be disqualified from acting for AgraCity on the basis of a conflict of interest? [ 37 ] It is common ground that, at certain points in the past, Mr.

Bergbusch and other lawyers from Miller Thomson were retained to provide legal services for James and FNA. [ 38 ] Under the second branch of his argument, James contends that the Chambers judge erred by determining that no conflict arose from this past representation that would disqualify Mr. Bergbusch and Miller Thomson from acting as counsel for AgraCity in the present litigation. [ 39 ] Mr. Bergbusch was appointed as a Justice of the Court of King’s Bench on October 31, 2022, so the question of whether he is in a position of conflict is now moot.

However, as Miller Thomson continues to act for AgraCity, the question raised by this ground of James’s appeal must be answered. In that respect, Miller Thomson does not disagree that other lawyers in the firm may have been privy to confidential information that Mr. Bergbusch may have obtained from James in the context of a solicitor-client relationship.

It argues that the Chambers judge properly found that no conflict existed, because any confidential information Miller Thomson may have received from a previous solicitor-client relationship with James (or FNA) was not relevant to the present retainer. [ 40 ] James, on the other hand, builds his argument on the notion that the Chambers judge erred by failing to appreciate the unique nature of his approach to business, and how a lawyer’s understanding of that approach could be used to his disadvantage, even if the current retainer was completely unrelated, in any factual sense, to the matter in which that lawyer had previously acted for him.

To put that another way, James says the Chambers judge erred by approaching the question of whether Miller Thomson and its lawyers had obtained any confidential information from their previous solicitor-client relationship with him or FNA that was relevant to their current retainer by AgraCity from a temporal standpoint, rather than a foundational standpoint. James asserts that the confidential information Mr. Bergbusch possessed about his approach to business is as relevant today as it was a decade ago, and that it permeates every bit of the ongoing litigation.

In short, James says the prior solicitor-client relationship gave Miller Thomson’s lawyers intimate knowledge of how his business “house” was built and, as a result, Miller Thomson has the tools it needs to tear that house down. 1. The governing principles [ 41 ] Lawyers and law firms owe a duty of loyalty to their clients. There are three salient dimensions to this duty: (1) a duty to avoid conflicting interests; (2) a duty of commitment to the client’s cause; and (3) a duty of candour ( McKercher at para 19 ; Hong v Hong , 2023 ABCA 33 at para 8 ).

As it relates to former clients, the lawyer’s main duty is to refrain from misusing confidential information; a lawyer cannot act in a matter where they may use confidential information obtained from a former client to the detriment of that client ( McKercher at paras 23–24 ). [ 42 ] Where it is alleged that a new matter places a lawyer or law firm in a conflict of interest, courts apply the test articulated in MacDonald Estate at 1260. As set out above, and as the Chambers judge recognized, this test asks two questions:

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

(2) Is there a risk that it will be used to the prejudice of the client? [ 43 ] A lawyer who possesses relevant confidential information is automatically disqualified from acting against a former client ( MacDonald Estate at 1261) and, if the lawyer’s new retainer is “sufficiently related” to the matters on which they had worked for the former client, a rebuttable presumption arises that the lawyer possesses confidential information that raises a risk of prejudice ( MacDonald Estate at 1260; McKercher at para 24 ). [ 44 ] While the focus of the MacDonald Estate inquiry must remain on the protection of a client’s confidential information and

guarding against its potential misuse, the jurisprudence also cautions against casting the nets of relevance and sufficient relation so widelyas to require the disqualification of counsel at the mere suggestion of a conflict, or to permit the issue of conflict to be successfully raisedfor purely tactical reasons, as Cromwell J.A. (as he then was) observed in Brookville Carriers Flatbed GP Inc. v Blackjack Transport Ltd.,2008 NSCA 22 [Brookville]: [52] It is important, in my view, that this principle not be applied too broadly.

One must not lose sight of the important right ofparties to retain and instruct the counsel of their choice or of lawyers to earn a living free of undue restriction. Moreover, one must notignore the possible strategic use of applications to disqualify counsel.

As Binnie, J. pointed out in [R v Neil, 2002 SCC 70] at para. 14,“[i]f a litigant could achieve an undeserved tactical advantage … by ... using ‘the integrity of the administration of justice’ merely as a flagof convenience, fairness of the process would be undermined.” [45] A similar sentiment was expressed in Skii km Lax Ha v Malii, 2021 BCCA 140 [Malii], where Abrioux J.A., writing for theCourt, stated the following about the “sufficient relation” standard: [37] The sufficient relation standard is at the heart of this appeal.

Courts have frequently cautioned against an overbroad application ofthis aspect of the test given the “draconian effect of the remedy sought”, namely disqualification of a party’s chosenrepresentation: Stewart v Stewart, 2016 BCSC 2256 [Stewart] at para. 50; Le Soleil [Le Soleil Hospitality Inc. v Louie, 2010 BCSC 1954]at para. 32; Sandhu v Mangat, 2018 BCCA 454 [Sandhu] at paras. 39 and 43.

However, a party’s freedom to be represented by the counselof their choice must also be balanced against the public interest in protecting the high standards of the legal profession and the “integrityof our system of justice”, both of which are threatened when potential conflicts of interest arise: MacDonald Estate at 1243. [46] The question of whether two retainers are sufficiently related to give rise to the presumption that a lawyer possesses relevantconfidential information is a question of fact (Brookville at para 57).

The party asserting a conflict bears the onus in this respect and mustprovide something more than bald assertions to discharge it; there must be clear and cogent evidence to support such a finding on abalance of probabilities (Sandhu v Mangat, 2018 BCCA 454 at para 46).

In Malii, Abrioux J.A., whose reasoning I adopt, described thenature of what is required in that regard, saying: [38] In this regard, courts have stressed that the confidential information that could reasonably be expected to be disclosed in theformer retainer must be relevant to the matter at hand and “must be capable of being used against the client in some tangiblemanner”: McKercher at para. 54; Kaila v Khalsa Diwan Society, 2004 BCCA 236 [Kaila] at para. 63; MacDonald Estate at 1261.

Theparty asserting a conflict must demonstrate a sufficient relation with “clear and cogent evidence, not bald assertions”: Sandhu at para. 46. [39] A sufficient relation is not established by the mere fact that the legal issues in the two retainers “intersect and overlap” (Sandhu atpara. 48) or that the lawyer acquired relevant “legal knowledge and skills” during the former retainer (Greater Vancouver (RegionalDistrict) v Melville, 2007 BCCA 410 at para. 30).

Similarly, the possibility that a lawyer has insight into their former client’s “general …litigation philosophy” (McKercher at para. 54) will generally not suffice.

Specific “points of connection” or insight acquired into theformer client’s strengths and weaknesses, character and personality traits, or litigation strategy in the present matter will be moresignificant: Le Soleil at paras. 34–36. [40] The rule does not apply to information that was “already notorious or was received for the purpose of being used publicly orotherwise disclosed in the conduct of the client’s affairs”: Le Soleil at para. 31, citing Ott v Fleishman (1983), (BC SC),46 B.C.L.R. 321 (S.C.). (Emphasis added) 2.

The principles applied [47] I am not persuaded that the Chambers judge erred in determining that no disqualifying conflict exists in this case. Let meexplain why I reach that conclusion. [48] The Chambers judge began his analysis by recognizing the proper legal test, as set out in MacDonald Estate. He thenproceeded, as that decision and its progeny instruct, to examine the nature of the solicitor and client relationship that existed betweenJames and FNA, and Mr. Bergbusch and Miller Thomson.

In the course of that analysis, he observed that any matter in which Mr.Bergbusch and/or Miller Thomson had acted for James or FNA had “concluded years before the current dispute”. He also found that“none of the representation by [Mr. Bergbusch or Miller Thomson] has a temporal or factual relationship to the dispute that the parties arenow involved in” (Chambers Decision at para 14).

These latter findings are factual in nature, and I see no palpable or overriding error inthem, as they are conclusions that were open to the Chambers judge on the evidentiary record before him. [49] The Chambers judge, citing McKercher, also correctly observed that a lawyer may not represent one client whose interests areadverse to the immediate interests of another client, even if the matters are unrelated (Chambers Decision at para 16). He concluded,however, that such a situation was not present in this case, because James and FNA were not current clients of Mr.

Bergbusch or MillerThomson and had not been for several years (at para 17). Once again, this conclusion is one supported by the factual record, and rooted ina correct identification and application of the governing law. [50] Citing Kelln and Chapters Inc. v Davies, Ward & Beck LLP (2001), (ON CA), 52 OR (3d) 566 (CA), theChambers judge correctly noted that the onus was on James to show that the two retainers were sufficiently related to give rise to aconflict and, in that respect, recognized that a bald assertion was not enough, but that clear and cogent evidence was required.

TheChambers judge found that James had not provided such evidence, because his affidavit amounted to little more than an expression of hisbelief that Mr. Bergbusch and Miller Thomson had become aware of his general thought processes and the approach he took to litigation.The Chambers judge concluded that this was not what the authorities, including McKercher, recognized as evidence that would support afinding of conflict.

[ 51 ] I see no error in this conclusion that would invite intervention on appeal. [ 52 ] While the jurisprudence suggests that the fact that a lawyer has attained an understanding of a former client’s strengths and weaknesses is a factor to be considered under the first branch of the MacDonald Estate test, the mere possibility that a lawyer has gained insight into a former client’s general litigation philosophy is not enough to establish a sufficient relation between the two retainers under that branch ( McKercher at para 54 ). [ 53 ] In this regard, the Chambers judge properly recognized that the key question to be determined was whether the information that Mr.

Bergbusch or Miller Thomson might have obtained from representing James in the past was relevant to the current retainer. As set out in McKercher , that meant the onus was on James to lead sufficient evidence to establish that there was a real risk that Mr.

Bergbusch or Miller Thomson had gained information about his strengths, weaknesses, business philosophy, litigation strategies, or some other relevant matter that could be used in a tangible way to his detriment. [ 54 ] As I have just discussed, the Chambers judge found that onus had not been met because James had not provided clear and cogent evidence to that effect.

That factual finding is supported by the evidentiary record, as all that James was able to put forward in that respect was a general assertion that lawyers from Miller Thomson had, by virtue of having represented him and FNA in the past, become familiar with his overall approach to business and his litigation strategy. As McKercher notes at paragraph 54 , a “bald assertion” to that effect is not enough. [ 55 ] In short, the Chambers judge correctly identified the relevant law and correctly applied it.

He made factual findings that are supported by the evidence and are otherwise free from palpable or overriding error. This ground of James’s appeal cannot succeed. C. Did the Chambers judge err in awarding costs to Jason and Miller Thomson? [ 56 ] The Chambers judge awarded fixed costs, in the amount of $2,000 each, to Jason and Miller Thomson.

Costs awards are quintessentially discretionary and should only be set aside on appeal if the court of first instance made an error in principle or if the costs award is plainly wrong ( Sun Indalex Finance, LLC v United Steelworkers , 2013 SCC 6 , [2013] 1 SCR 271). [ 57 ] In this case, James’s appeal against the costs award is entirely premised on his assertion that the Chambers judge erred in the way he disposed of the substantive application. As set out above, I have rejected that argument, and would dismiss the substantive appeal.

It has not been suggested that the Chambers judge otherwise erred in principle in fixing costs, or that the award is plainly wrong. It follows, then, that this ground of appeal must also be rejected. VI. Conclusion [ 58 ] For the foregoing reasons, I would dismiss the appeal. I would award one set of costs to Jason, and one set of costs to Miller Thomson, calculated in the usual way. “Kalmakoff J.A.” Kalmakoff J.A. I concur. “Schwann J.A.” Schwann J.A. I concur. “Drennan J.A.” Drennan J.A.