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NCA notes prepared by Iman M.
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ff$mrfl€sa v #a-my g*## Stil

L # suimffi &€, fu5 fuirmd Y mxa# *" * E?#w w*rkiarg fl*r ffi.

Issue - what is the standard to be applied in determining whether a law frrm should be disqualified from
continuing ta act in litigation by reason of a COI?
Analysis - this is a disqualifiiing COI

&aarxx-pffitr& E*rru&

l. Did la*.yer receive confidential info attributable to a solicitor and client relationship
relevantto tle rnatter athand
. there was a prior relationship related to the retainer from which it is sought to remove the
solicitor

. could should infer that confidential info was impaired UNLESS the solicitor satisfies the court that
no information was imparted which could be relevant

. satisfaction must withstand the scrutiny of the reasonably informed member of the public
2. is there a risk that the info wiII be used to the preiudice of the client?

. a lavrryerwho has relevant confidential info is automatically disqualified from acting against a
client or former client

. with respect to partners or associates in a firm, the concept of imputed knowledge is unrealistic
given the size of modern firms

however, may drawthe inference that lawyers who worktogether share confldence, UNLESS the court is
satisfled on the basis of clear and convincing evidence that all reasonable meazures have been taken to
ensure no disclosure will occur by the tainted lawyer to t}re rnembers of the firm engaged against the
former client

such reasonable measures include institutional mechanisms o Chinese walls o cones of silence

.
until the governing bodies of the legal profession approve of these measures and adopt rules
respecting their operation, its unlikely that a courtwould accepttheir existence as evidence of
effective screening
undertakings and conclusory statements in affidavits insufficient
o difficult to veri$r
o public not likely to be satisfied without additional guarantees

court concerned with 3 competing values

$ concern to maintain high standards-of the legal profession and the integrity of the iustice
system
$ the countervailing value that a litigant should not be deprived of his or her choice of counsel
without good cause
$ the desirability of permitting reasonably mobility in the legal profession

9
NCA notes prepared by Iman M.
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es[*k for these.
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,Appellant's solicitor was assisted by iunior member of his firm who was privy to many
confidences. |unior member later joined law firm representing respondent. Appellant applied to
provincial superior court to have Iaw firm representing respondent declared ineligible due to
conflict ofinterest. Application granted but then reversed by Court ofAppeal

Issue: What is the standard applied when considering disqualification due to conflict of interest?

Holding: Appeal allowed: Court of Appeal iudgement set aside, superior court judgement restored
.Standard that applies: \A/hether firm can provide clear and convincing evidence that disclosure
did/will not occur + whether reasonably informed person satisfied that no disclosure
occurred/will occur

ffiemsmxaBexg

.Conflict of lnterest threatens the integrity cf the system; creates appearance of impropriety. Three
values to consider:

1. High standards oflegal profession and integrity ofjustice system

2. Litigant should not be deprived of hislher choice of counsel without good cause. Not an absolute
right, subject to reasonable limits

3. Desirability of perrnitting reasonable mobility in legal profession. Emergence of all-purpose

firms = mergers & more mobility of lauryrers. Conflict of interest can arise more readily, doesn't
mean should make standard for what constitute conflict of interest more lax

Use of confidential mat[er not susceptible to proof so test includes reasonable person standard

informed person of the public would be satisfied that na use of confidential info
i.e. reasonably
occurred tpuntt perception

Y es€ s"#qexg &"#s H qax mm'ff&mm.m ffi Ekse&F* x-*: gB :

1. Did lawyer receive confidential info attributable to solicitor-client relationship relevant

to the matter at hand?

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ffimtr**

.Lawyer who is heavily involved with client is irrebuttably presumed to have received and
imparted coafidential information [since lawyers t]rat work together are presumed to share
confidences) '/

.Sanctity of communication is essential in order to maintain the confidence of the public and the
integrity of profession

"Our judicial qtstem cannot functian properly if daubt or suspicion exrsr in the mind af the public that the
confidential informatian disclosed by o client ta a lawyer may be revealed"

10
NCA notes prepared by Iman M.
For personal reference only. You should not have paid for these.

Strotherv.3464920 Canada Inc,, ?007 SCC 24. [2007J 2 SCR 177

The background facts

.Robert Strcther was a partner at Davis & Co., a Vancouver law firm. His speciality was film-based
tax shelter investments. He initially represented a company called Monarch Entertainment under
an exclusive written retainer agreement, which prevented Davis from acting for competitors in
film financing schemes.

.However, the Minister of Finance announced amendments to Canadian tax law to do away with
film-based tax shelters. Strother told Monarch that the shelter vehicles were effectively dead, so
Monarch wound dor,vn its business and the written Davis retainer expired.

.Darc, a former Monarch employee approached Strother with a new idea for a way around the
government poliry, Strother agreed to help the employee start a business, getting a favourable tax
ruling, and taking a major share in the new business {became partner with Darc in new business).

.Despite t}te lapse in the

lwitten retainer, Monarch continued its relationship with Davis & Co. to
explore other tax-driven investment schemes. But Strother did not tell Monarch of the way around
the closing of tax shelters or the favourable tax ruling. Once Monarch did learn the facts, it sued
Strotler and Davis & Co.

Issue: Did Strother and Davis violate their duty to Monarch?

.Although Monarch's particular tax-shelter retainer had come to an end, Monarch still retained
services from Davis fon a more limited retainerJ. Was it part of Strother's duty to provide candid
advice on all matter relevant to the continuing retainer?

l,Vhat did the Supreme Coufi decide?

.The Supreme Court, by a 5-4 maiority, upheld the British Columbia Court of Appeal's finding that
Strother had acted in breach of his fiduciary duty to Monarch. when he set up a rival business. bu!
failed to advise Monarch how it could take advantage of a tax ruling.

-Could Strother's take a personal interest in a business directly competing with Monarch's
business? Orwas there a riskthat his representation of Monarch would be seriously compromised
by his own stake?

'Strothe/s personal interest affected his ahility to provide zealsus representation to

Monarch.

.But the Supreme Court felt that the Court of Appeal erred in making an excessive disgorgernent
remedy. /
Instead of requiring Strother to pay to Monarch all af his profits from his competing film business,
he was required to account for his personal profit gained directly from his film business and from
his earnings as a law firm partner derived from billings to Monarch, but only for a fifteen month
period, while he was acting both as a partner in the law firrn and as a business competitor of
Monarch. Once he resigned from the partnership, he had no duties to his former client, Monarch.

Wfum€ d*es &fu* dmc€s$€p$e xsaffiffixft. fuB- &fu* ffmxam#$mm &*g*$ px"#ff'#mrua*xx?

11
NCA notes prepared by Iman M.
For personal reference only. You should not have paid for these.

The Strother case arises from unusual facts, but its irnplications are important forall lawyers.
1. The courts take conflicts seriously, and will impose sanctions for breach. This case has been lengthy,
public and expensive.

2. The Supreme Court reaffirmed its so-caltred bright-line test ir fr- v. NeiI, and provided additional
guidance on how it is to be applied.

3. While t}re scope of a lanryer's retainer is governed by contract, the larryer-client relationship
is overlaid wittr certain fiduciary responsibilities which are imposed by law. Those duties
may go beyond what the parties have cantracted for.
$ource of the duty is not iust contractual {i.e. the retainer}, it arises foom circumstances
creating a relationship of trust and confidence from which flow obligations of loyalty and
hansparency

4. Loyalty includes putting the client s business ahead of the lawyer's business.

5. tawyers are at risk if they sngage in outside businesses in direct cornpetition with clients.
Their duty to zealously represent their client's interests may be compromised by their
personal stake. Lawfirms should closelyscrutinizethe activities oftheirpartners in external
businesses. They may face liabilities if there is a problexr.

6. Lawyers must be candid in their advice to clients, but must not reveal confidential information of
otler clients.

( 7. Retainer agreements are important in

--- defining
---------o the ---r- of the work and the relationship.
--- scope
\_
B. Lar,vyers can act for comrnercial competitors as long as they can properly and fully represent the
legal interests of both clients.

9. In some highly specialized practice areas or particularly in small communities, some degree of
overlapping representation is inevitable. Clients may be taken to have consented to situations that
might otherwise be conflicts, depending on the evidence.

10. The normal use of prior work-product as models or precedents within law firm is perfectly
acceptable as long as the first client's confidential information is not employed. "Rerycling
precedents is the life-blood ofcorporate law practice".

12
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For personal reference only. You should not have paid for these.

- GM: three points on representations and the law

a) Courts don't expect counsel to search out unreported cases, although if counsel knows of an
unreported case in point, he must bring it to court's attention
b) "On point" does not mean cases whose resemblance tc case at bar is in the facts; it means cases
that decide a point of law
c) Counsel cannot discharge his duty by' ^c: :::-:- -; :: :etermine whether there is a relevant
authority; in this context ignorance rs rc
=,:-::
y, fssac Esfafe
F: - Facts of a case were entirely parallel to e ::s: ::::-- -.: Dy the Alberta Court of Appeal which
neither counsel referred to in their factun- :=s: :: :-: '::: :rat counsel for the plaintiff had appeared
for the plaintiff in that case as well
I: - What happens to a lawyer when they tr)':: :-::-:- -=;-lge?
J: - For D,.,simply a scheme to get around rulss ::-.:: :;? -s: the solicitor
A: - Here, the judge happened to know of the :as= ,,,: ::: ':- :cunsel to bring it up in oral submissions
but neither did
- When judge mentioned case, P's :c--s: -:-.-::-::" it; judge's knowledge triggered
counsel's disclosure of his knorvlec_c: :' :
- Conversely, counsel for D was nc::,.,:-a :':ase
- Therefore, counsel can't fail to d sclos= : - :ese is "d st ngu:siable"; it's judge's role to decide if it's
d istingu ishable
R: - The duty to bring relevant law to attention of the court is founded on proposition that
counsel has obligation to court to assist in duly administering the law, as well as a duty to
his client and that, in some circumstances, the former may override the latter

IV. ADVOCACY AND CIVILITY

- "Civility" as applied by law societies has 2 central meaningsl
a) Includes requ rement that lawyers treat each other and those Darticipating in justice system, with
degree of politeness
b) Includes obliEaticns-also enshrined independently in LS ::;=s cf conduct-on lawyers to act fairly,
honestly and v'ii:h irtmost integrity in their dealings with otf'€- ....,e-s and members of the court

- Civility helps to e.s!rre lawyers uphold their duties as officers c.:-e ::-rl and improve public,s
perception of the adr-r nistration of justice

- Sources of the oL lgation include:

- Court's inhe-ent.lurisdiction to govern proceedings in courir::- -: -: -g lawyers'conduct within
those proceeC,n gs
- Codes of ccnCiJCt contemplate high level of lawyer civility
- Best practrce :;vility codes provide guidance for courts, lav;,e-s :-: --:_ a:c.s
- Lawyers'i,.;" personal ethics play important self-regulatinE -::

tli7nt w,v'Lt.
1'.t.;., I '

F: - Schreiber ser.,ec Mulroney with a statement claim; M C s: -:3: '- - s: :: : r .f ON

- s's counsei Anka agreed that while jurisdictlon issue was being resolved, M would not file a
statement cf cefence a nd he would not be notec in deia u lt
- The parties then had disagreement and Anka obtained deia-:, :r|.t:aa,, :. ns agreement with
Mulroney. .M then moved to set aside the default I agatnst - -
I: - Did Anka do anythrng wrong?
J: - For the former Pl,'1,. actroris taken by s's counsel to obtarn ::.:-lt j rvere egregious and wrong;
counsel breached his cbligations to ct and counsel for M
A - M indicated clear intention to defend the action by arguing :"at ON lackeo'3urrsdiction over matter
- If P obtains default J to rvhich he is not entitled, default r,jT: s to be set aside
- Anka breached his agreement with M's lawyer Prehogan ..,hen ne sought default J, an egregious
breach he had no right to commit and s had no right to rns.rJct Anka to commit
- He also did not grve Prehogan any advance notice he ,.jas going to note M in default or take
default J proceedings - this constitutes sharp practice and breaches principles of civility
- Instead, he continued to conceal the fact that he had sought defauit J by suggesting there *ere
interlocutory matters to be dealt with
R: - Lawyers who breach their agreement not to seek default J will have the J overturned

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 NCA notes prepared by Iman M. Cbuusf LUUF
For personal reference only. You should not have paid for these.
| ftesofirtqTbu
PART SEVEN _ oTHER
LAyyYER DUTTES
1. CO[,,NSELLING AND NEGOTIATION

1) cENERAL
- See professianal Conduct
Handbook, chapters 1_3 kkrahan 6 fS tLl C,l+
- Counselling often takes place
- Consider impact ol..n:gd
in private -rGs
foi
settings
ettricaf
kt* 3
and content of those rutes
r",. i"''riiil[);iR".ur"s
;,?THjil; H::,tli, uno-ot',",.,.i,r", proressionar condu*
such as
"r
3 ,j-L h,, \ canlorsr
,:'H!!i:,?iii:i:fffii[ importanr service or re,ins
them whar the raw is, esp.
"1i:.,X,!Ji'r',?livide ("
;iL'# 5'iTilt"'':ffLi,t*'rtSTi;';;" or conrlictins decisions, rawyer
must arso provide his
e cof'l0ofid&
- Lawyer may also f,"ru
to ,ppifii't,e f"* to clientt circumstances
- Client may ask lawyer to
.O"ld" frirn toJto proceed n6{- lf asir+
;:-iff fflffiL:::?:,':,:#i'';,":':l[xiHH:,.ytT:ll*,:::g,lll.,3*'".express,v or imp,ici,y 1ll or Qn nr
- Important ethical issues:
a) Can lawyer ever advise client
b) Can lawyer provide to break law? 9.,- I Jr\
"o"iitln"i1"liil""L*o bv client as a basis for subsequent {wv V'( ogac,>rion
decision to break

;ix::xlil:":x",?""11iil",#5:;:::i,i'",;?,,,1."il,-i,:::i"J"ii:,"::,:::., rawver is ob,iged ro be honest

k, f11rn#nn
in BC, and no norrn of pra*ice
;#iii';;J,[fotiatins ro crarify misundersrandinss
on beharf of the B*t\*oY b. v IP
L%tj) -
of
side ^
a ,"ty rP corr
c hrrrl , TLris
2} COUNSELLIT{G AND TLLEGAL &er cbx
COHDUCT onY
2 Q',s: te +t" lor,,yer'{s
a) Is it ever permislibr," f:t
a taywer to:dyise a ctient
to break the taw? e<
;iilil#.X::Xiff*.::':[H".:Ti]"11e,aw to ;i;;;"",l;se ro chanense a raw that is P-d
- can advise wr,.t r.* i''uni"il;,"#,'#ffi1?";#rTiilxrrl:.ii,,i..,*
".
ilJXiil""?J;ir ever, r"*v.is oE .'iri"" *,ii*"rii #'.-#iin" crient ";;* J;"un *"
to subsequentry
,u*
- lrjst becaus"
l-l:yJ:i
- If crienr asks about
feelsstronglv a!_ot{ a cause doesn,t
make it ethicary correct
M.o shs | .r f\rtstli
possiuiiitv oJ
d"itrng caugnt, may raise guesrions
\qCI+
,:::Tjj: r.Jl""Xt,[TnT.:n:ff::F"o suicide, urv ro advise a crienr
mish*rurnp a rawyerr own a borrmue d r\y f" I I
-l3A Rule: "A lawyer shall not counsel
, -o,l a client tr .tb ( (
i.*;#'##.1:::3."ifJ ',ii"i'.ifl!1ll;1,?"...1?::,r.1?:J::"5:l:i." XttL
P:l';,:i'ff/,lx ffJ;i.v.,,""t, " tr tawyo6 I M+.ivl
lntario Rute: *When
,u*r".,:l:l,.not knowingty urr,*].1-o..er.,fouJege
a,glieni, ,tt{ hn,r*ut )
*:1 "L:.]n'
crime' 6r,r"g"it.#r.t,
" (broader)
[H'fi!lii.'
- Therefere, in BC,
or instru* the crie'ni;; h.*
to viorate rhe raw and avoid .0 ?\ bec 1
{^/ (
can assist but probably can,t ^
encourage
hpus<
e L"yu J ({
tue 0 ovi'l l'b an absco Jo anJ_

surJ I

34
l{eu: I oar& f (. a
&"+1 &" alvrg he. bo sl.q
coo tl hru fuctuc skps22
NCA notes prepared by Iman M. u cTshTfm#ru * * t-{H"l te * ff a*
For personal reference only. You should not have paid for these.

D oui J !-b,n ( Eo ," )

o Cotu + CounSr[or a,,r J a Jv ocak L
R, o &,tn..,'Frtty A'i&,'"f
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h.,J ,^,onte& atr o??os,lc r*ar'l*?iF nd;
Prrt-e& +t{ li{-n,s fust % Trrfu* ll^r,
"

23
NCA notes prepared by Iman M.
For personal reference only. You should not have paid for these.

- Lawyer counseled client to

- Is the lawyer permitted to counsel to access
- No, for LS.. .lawyer guilty of professiona I m isconduct order?
A: - S argued he had intended t* bring v*riati**
application but had never done so
- However r court rejects this a rg'f
Circ msta nces in which lawyer may counsel
u
very limited client to ignore terrns of a mandatory court
order are
a) Lawyer must have reasonable and honest
a child and he must make immediate
belief that there,s.imminent risk or danger
application to to
b) rf court makes decision not to varv ;;";;il;;;;;-r;;',,iL* have issues determined
"ou.t-to must..trust in the
the legal svstem" and adhere to ct oJaer efficacy or
- Here' there was no imrninent.is* o.ainier and can ti,ui i""r. iluir nea.ing for a permanentchange
to the chitd that wouii'nur" justified lawyert
- Lawyer who cor:nsels client to disobe"f
terms ol ct o.oe. unollrin", ctt effectiveness behaviour
brings system ofjustice into aisrepute' and
- such behaviour seG undesirable'eximple
R: - The circumstances in wrricrr irre for ordinary citizens, lawyers and law students
countenanced are oi";i;;;i;Li,ii.v of any sort can be
co-..;sering
?xqeTely- narrow, trave impticit i" ttt"r"-i'ie elements of reasonable and
honest berief of there being i--i".rir.j"r rr;;;;;;.,,""t co-exist with the
be ln immeaiite "r.6"airv appricati"'" i.",i
::t;;ffiXg::?ffiif" t".. to have the issues

3) OTHER TSSUES rN couNsELLrNG

; i[:ffitr?/, iX:J'*:t:;5i:to provide business, rinanciat or srratesic advice; ir they do. shourd crearry
anv limitations on their abiritv to provide
;"*:ti.:Ti::.*TH i[?ffit non-resat advice, e.s. no

- If lawyer provides non-leg-ai advice,

o.pens the possibility of client suing him in negligence if advice
turns
HH:?:l::1'""fiJii::r';FjL:1J::'J;otio--,l."a ov rawv.,.;i p.li",lion"r insurance, which
covers

- If lawyer discovers he has made

an error that could damage client's posltion,
client and discuss how to.n1gc9eo., incruains he should promptly notify
iiniiory ai..riiil
;;;:ib'#,y or a craim asainsr rawyer
rnsist that crient outaii inoele;d;ilL;;i'.fi.-"i;io,*
;:-irf:'J:l;jd another rawyer) berore
also insist on independent legal advice
;rt:ru::.tn"'ld wrt client,s transactions in which lawyer
has

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