Date: 19990120
Docket: T-577-87
BETWEEN:
IMPERIAL OIL LIMITED
and its subdivision PARAMINS
Plaintiff
- and -
THE LUBRIZOL CORPORATION
and LUBRIZOL CANADA, LIMITED
Defendants
- and -
DR. FRED W. BILLMEYER JR.
Intervenor
REASONS FOR ORDER
NADON J.:
[1] This is an application by the plaintiff for an order removing the law firm of Lang Michener, as solicitors of record for the defendants. On Friday, January 15, 1999, I dismissed the plaintiff"s application. These are my reasons.
[2] In these proceedings the plaintiff is seeking to set aside, pursuant to Rule 17331 of the Federal Court Rules, C.R.C., c. 663, a judgment rendered by Mr. Justice Cullen on September 17, 1990. By his judgment, the learned Judge concluded that the plaintiff Imperial Oil had infringed the defendants" patent. The thrust of the plaintiff"s case herein to set aside Mr. Justice Cullen"s judgment is that Dr. Fred Billmeyer Jr., an expert witness retained by the defendants, deliberately misled Mr. Justice Cullen in that he knowingly gave false evidence during the course of the trial, which evidence Mr. Justice Cullen relied on in concluding that the plaintiff had infringed the defendants" patent. In its memorandum of fact and law, at paragraph 3 thereof, the plaintiff puts the matter as follows:
| 3. The essence of Imperial"s case is that Dr. Billmeyer followed a course of conduct, established by him by Lubrizol, which resulted in his giving false evidence at trial, evidence upon which the trial judge relied in making a finding of infringement against Imperial. In particular, Imperial alleges that at the instance of Lubrizol and its inside and outside counsel, Dr. Billmeyer did not conduct himself as an expert witness should but, instead, Dr. Billmeyer was recruited to become a member of Lubrizol"s litigation team and took an active role in developing and implementing a litigation strategy to prove that Imperial had infringed the patent in issue. |
[3] The plaintiff"s application to set aside Mr. Justice Cullen"s decision was filed in the early part of January 1997. Shortly thereafter, the defendants filed a motion seeking the dismissal of the plaintiff"s application. In March 1997, the plaintiff filed a fresh notice of motion under Rule 1733. The defendants sought particulars of certain allegations contained in the fresh notice of motion and, on April 10, 1997, Mr. Justice Cullen refused to compel the plaintiff to provide the particulars sought by the defendants on the ground that there was no legal basis to order particulars where they were sought in respect of allegations made in a motion. Mr. Justice Cullen"s order was appealed and was heard by the Court of Appeal with an appeal by the plaintiff in regard to another order made by Mr. Justice Cullen whereby he refused to order the defendants to produce certain documents sought by the plaintiff. The appeals were heard on May 15, 1997 and the Court of Appeal made the following order:
These two appeals were set down for hearing together. They are attacks on two preliminary rulings by the Trial Division. The first is refusing Imperial Oil"s document production request. The second is refusing Lubrizol"s request for particulars. All of this was in the context of an application under Rule 1733 to set aside a judgment based, inter alia , on serious allegations of fraud. In preparation for the hearing, we all came to the view that, given the nature of the allegations, it was almost inconceivable that the 1733 application be decided without a trial. Rule 327 makes provision for precisely this kind of application. We raised this matter with counsel, who agreed that they should approach the Trial Division for appropriate direction. The hearings of these appeals are adjourned sine die so that parties may act accordingly.
[4] As appears from the above, the Court of Appeal strongly suggested to the parties that, in view of the serious allegations of fraud made by the plaintiff, there should be a trial of the issue and referred to Rule 3272 of the Federal Court Rules.
[5] On June 23, 1997, the plaintiff filed and served a statement of claim in the trial of issues under Rule 1733. At paragraphs 22 and 23 of its statement of claim, the plaintiff makes the following allegations:
| 22. Dr. Billmeyer gave the false testimony aforesaid either knowing it to be untrue or being reckless as to whether it was true or false. |
23. In either case, the testimony was fraudulent within the meaning of Rule 1733.
[6] The plaintiff then goes on to provide particulars of the alleged fraud. Finally, at paragraph 51 of its statement of claim, the plaintiff makes the following allegation:
51. The Plaintiff states that the finding of infringement by this Court was based on Dr. Billmeyer"s evidence. The trial judgment was therefore induced by evidence that was put forward by Lubrizol fraudulently, or recklessly as to its truth and falsity. In the alternative, Lubrizol is vicariously responsible for the fraud of its expert witness.
[7] On June 30, 1997, the defendants filed their statement of defence. At paragraphs 16 through 20, the defendants state the following:
| 16. Dr. Billmeyer was initially retained by Lubrizol about mid 1989 to act as an expert in relation to the Canadian trial proceedings against Imperial Oil Limited ("Imperial") for infringement of Canadian Patent No. 1,094,044 (the "Patent"). During 1989, Dr. Billmeyer was called upon to explain certain aspects of the theory and practice of polymer chemistry as it related to the subject matter of the Patent. |
| 17. About January 4, 1990, Dr. Billmeyer attended a meeting at which the issue was raised of his performing certain tests to measure the Mn values of certain PIB samples by the GPC method utilizing Lubrizol"s Waters 200 GPC. Prior to accepting this function, he was made aware by Lubrizol that the description of the task was as follows: |
| Do GPC Mc determination which are proper and fully defensible under both U.S. and Canadian patent specifications ... that is one set of values done with a calibration and with standards as described in the U.S. detail. |
| 18. Dr. Billmeyer accepted that task and carried it out fully and correctly in all material respects. |
| 19. In conducting his tests, Dr. Billmeyer acted as a scientist and formed his own conclusions based on his scientific judgment at the time. He did not have or perform any mandate from Lubrizol to reach results contrary to his best scientific judgment. |
20. In giving his evidence of the Canadian trial he testified frankly and honestly, stating the facts and his opinions as he honestly believed them at the time.
[8] In August 1997, the plaintiff filed a reply and joinder of issue to the defendants" statement of defence.
[9] Between September 10 and November 26, 1997, the plaintiff and the defendants completed their examinations on discovery. On November 14, 1997, Mr. Justice Cullen ordered that the trial of the Rule 1733 issue would commence in Toronto on February 2, 1998. He also ordered that the Commission Evidence of Dr. Billmeyer should commence on Monday, December 8, 1997. Dr. Billmeyer"s Commission Evidence was taken in Toronto between December 8 and December 18, 1997. Mr. Justice Cullen was appointed commissioner for that purpose. On January 8, 1998, Ian Binnie, Q.C., the plaintiff"s leading counsel in this matter, was appointed to the Supreme Court of Canada. On January 26, 1998, by reason of that appointment, Mr. Justice Cullen adjourned the trial to May 11, 1998, so as to enable the plaintiff"s new counsel to familiarize themselves with the file.
[10] On March 24, 1998, plaintiff"s new counsel wrote to counsel for the defendants to advise that it was the plaintiff"s intention to raise as an issue the conduct of certain lawyers of the firm of Lang Michener. Counsel for the plaintiff suggested that Lang Michener should immediately cease its representation of the defendants in the present matter. On April 22, 1998, the present motion to remove Lang Michener was served and filed.
[11] For reasons which I need not go into, Mr. Justice Cullen removed himself from this file and, as a result, the trial was adjourned to April 12, 1999.
[12] Mr. Slaght, for the plaintiff, submits that Lang Michener should be removed in view of the likelihood that lawyers of that firm will be giving evidence at the trial. I should point out that Mr. Nelligan, counsel for the defendants, has indicated that his clients do not intend to call any member of the Lang Michener firm as a witness. There is also no indication from the plaintiff that it intends to call lawyers from Lang Michener to prove its case. In Heck v. Royal Bank, (1993), 22 C.P.C. (3d) 63, the Divisional Court of the General Division of the Ontario Court of Justice dealt with, inter alia, a motion to disqualify counsel on the basis that a lawyer from the firm would be called as a witness at trial. In deciding this issue, the Divisional Court, at pages 71 to 73, made the following comments:
| Issue 2 - Trial Counsel Acting where Firm Member or Associate is, or is likely to be, a Trial Witness |
| There is some overlap of this issue with the discussion above. The point arises directly from the Membery appeal. |
| The arguments raised in favour of removing the law firm representing Membery include a possible appearance of impropriety, or, that counsel calling, or questioning his own partner is representing in more than the usual way, that the evidence is true. |
| There is also an argument that a conflict of interest occurs when such a witness is called by the other side. The argument is that the witness will be called to assist the party against whom his firm is acting. As a firm member the witness has an interest in seeing the plaintiff succeeds. If called as a defence witness, he must testify honestly even if that will assist the defendants. It is argued this may result in a conflict of interest. |
| This latter argument was accepted in Kitzerman v. Kitzerman (January 25, 1993), unreported decision of Master Donkin, (Ont. Master), Action No. 72584/91Q at Toronto. |
| In argument in this case, defence counsel argued there would be an appearance of impropriety if the Graham, Wilson Green firm was not removed and relied heavily on statements made in MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235 at p. 1263, Sopinka J. |
| In that decision Sopinka J. noted the importance of public confidence in the integrity of the legal profession and the administration of justice. |
| The facts in this case are significantly different from those in MacDonald. There, the issue involved the removal of a firm of solicitors where a junior lawyer changed firms. While with one firm the lawyer assisted junior counsel acting for one side of the litigation, the firm the lawyer joined subsequently acted for the opposing side. The Supreme Court upheld the disqualification of the second firm. |
| Many of the issues in that case do not arise in this appeal. In particular there is no reasonable apprehension in the mind of a client that confidential information given to one law firm would be disclosed to the opposite party. |
| I believe courts should be reluctant to make what may be premature orders preventing solicitors from continuing to act. In view of the expense of litigation and the enormous waste of time and money and the substantial delay which can result from an order removing solicitors, courts should do so only in clear cases. I adopt the approach taken on this point in Carlson v. Loraas Disposal Services Ltd. (1988), 30 C.P.C. (2d) 181 (Sask. Q.B.), at p. 188. |
| As discussed in the Carlson decision, an application to remove counsel can be made to the trial judge when it is certain there is a problem. In this case Mr. Green may, or may not be, subpoenaed to testify. Concessions or admissions may be made which will obviate the need to call him as a witness. The evidence he could give may be readily obtainable from other witnesses. As issues are developed, or resolved during trial, his evidence may not be required at all. A trial judge will be in a much better position to determine if his firm should be disqualified. |
| I do not accept the argument that when a lawyer is compelled to testify against the "other" side in a lawsuit the lawyer"s firm must always be prevented from acting in the lawsuit. There are a variety of scenarios which might develop at, or during, trial. The possible conflict as discussed in the Kitzerman decision (supra) should not automatically result in a law firm"s removal. In the course of litigation an honest witness is often compelled to give evidence which will assist a party that witness feels is "opposite". I do not agree that such a possible conflict requires removal in all cases. There may be some where it does. I am not persuaded that decision should be made at this pre-trial stage of the proceedings in this case. |
| It should also be borne in mind that all applications to remove solicitors from the record are not brought with the purest of motives. The expense and delay involved in retaining new counsel may work to the substantial benefit of opposing party in some cases. |
| Courts should also carefully consider the right of a client to be represented by counsel of choice. |
| I accept submissions made by counsel for the Advocates" Society that in these applications a court should approach the matter by following a flexible approach and consider each on its own merits. A variety of factors should be considered. These will include: |
| - the stage of the proceedings; |
| - the likelihood that the witness will be called; |
| - the good faith (or otherwise) of the party making the application; |
| - the significance of the evidence to be led; |
| - the impact of removing counsel on the party"s right to be represented by counsel of choice; |
| - whether trial is by judge or jury; |
| - the likelihood of a real conflict arising or that the evidence will be "tainted"; |
| - who will call the witness if, for example, there is a probability counsel will be in a position to cross-examine a favourable witness, a trial judge may rule to prevent that unfair advantage arising; |
| - the connection or relationship between counsel, the prospective witness and the parties involved in the litigation. |
Conclusion
Applying that approach to this case it is my view the order removing the Graham, Wilson and Green firm was prematurely made in this case and should be reversed.
[13] I agree entirely with the Divisional Court that a motion to disqualify lawyers should be approached in a flexible way and that each case should be considered on its own merits. I am also of the view that the factors proposed by the Divisional Court are useful in coming to a conclusion on such an application. The following reasons lead me to the conclusion that Lang Michener, should not, at this stage, be removed as solicitors for the defendants.
[14] Firstly, as I indicated earlier, neither side has indicated that it intends to call, as a witness, lawyers from Lang Michener to prove their case. Secondly, the trial which is now fixed to commence on April 12, 1999, had been fixed to commence on February 2, 1998 but was postponed when Mr. Justice Binnie was appointed to the Supreme Court of Canada. At that time, the plaintiffs had not raised any issue with respect to the participation of Lang Michener as solicitors for the defendants. Thirdly, during the course of the examinations on discovery which took place between September 10 and November 26, 1997, Peter E. J. Wells, Donald N. Plumley and Donald H. Wright, lawyers of Lang Michener, attended and participated in the discoveries as co-counsel to lead counsel John P. Nelligan. With respect to the Commission Evidence of Dr. Billmeyer, the evidence was led by Mr. Plumley with Mr. Nelligan as co-counsel. At no time whatsoever, did the plaintiff object to the participation of Lang Michener lawyers in the proceedings. At the commencement of Dr. Billmeyer"s Commission Evidence, Mr. Binnie, for the plaintiff, made a request that witnesses be excluded. Mr. Nelligan informed Mr. Justice Cullen that the defendants did not, at the present time, intend to call as witnesses lawyers from Lang Michener. When these discussions took place, Messrs. Wells and Wright of Lang Michener were present in Court. Mr. Binnie, at page 4 of the transcript, made the following statement:
MR. BINNIE: That is why I would ask, My Lord, that the transcript be treated in accordance with an Order of Exclusion so that it would not be shown to fact witnesses on either side. Insofar as the issue about lawyers is concerned, on my friend"s statement that he does not now anticipate calling anybody in the room, then perhaps we can deal with it as the occasion requires, as Your Lordship has said. I would like the basic Order in place, because there may be many other people in Lubrizol and elsewhere who will be called as factual witnesses. I don"t know, and I would like those people not to have access to what Dr. Billmeyer has said in advance of giving their own testimony.
[15] I should mention that Mr. Nelligan was retained by the defendants because of the possible allegations of impropriety against Lang Michener lawyers. Mr. Nelligan so informed the Court of Appeal during the May 15, 1997 hearing. After the plaintiff"s new counsel wrote to Mr. Nelligan with respect to the removal of Lang Michener as solicitors for the defendants, Mr. Nelligan wrote back proposing that Mr. Plumley should continue to examine witnesses with respect to technical matters unrelated to the issue of the "mandate3" given to Dr. Billmeyer and that he, Mr. Nelligan, would deal with those matters related to the "mandate", general credibility and fraud. In his memorandum of facts and law concerning the present application, Mr. Nelligan, in dealing with this proposal, makes the following submissions at paragraph 36:
36. "Disqualification of counsel, and his removal from the record in ongoing proceedings, civil or criminal, is a step that should not be undertaken where there is a clear, responsible alternative and where such an order is not mandated by fundamental fairness and the public interest in the due administration of justice..." In this case a clear and responsible alternative has been implemented. The availability of Mr. Nelligan and his proposal to deal with any evidence from or about Lang Michener lawyers, if such evidence is to be led:
| (a) provides the court with independent and objective counsel to lead and deal with any such evidence; |
| (b) provides Lubrizol with independent legal advice in connection with such evidence and issues; |
| (c) avoids any embarrassment to the court or counsel from having to deal with submissions by a lawyer regarding the evidence of one of his or her colleagues; and |
| (d) eliminates any concerns regarding the appearance of justice while protecting the efficiency and integrity of the proceedings, the right of the client to have counsel of its choice and of the court to have the assistance of knowledgeable counsel dealing with their respective issues with the appropriate detachment. |
[16] I am of the view that it is premature to remove Lang Michener as solicitors for the defendants. For the time being, I am satisfied that the ongoing participation of certain lawyers of Lang Michener does not discredit, nor does it tend to discredit, the administration of justice. In my view, the protection of the public"s confidence in the administration of justice does not, at the present time, require the removal of Lang Michener. If and when a lawyer of Lang Michener is called upon to testify, and I am not unmindful of the fact that there is a possibility that a lawyer of that firm may be called, I will deal with the matter in such a way so as to safeguard the integrity of our system of administering justice. Should the removal of Lang Michener as solicitors for the defendants be the proper safeguard, then I will not hesitate to act accordingly.
[17] Before concluding, I should say a few words concerning my decision in International Business Machines v. Printech Ribbons Inc. et al. (1994), 1 F.C. 692. In that case, I had to decide whether the plaintiff"s attorneys should be removed on the ground that a lawyer of the firm signed an affidavit which the plaintiff filed in the record. Firstly, I had to decide whether the law firm could act in regard to the motion in respect of which the affidavit had been filed. Secondly, I had to decide whether the law firm could remain as attorneys of record, and thus represent the plaintiff at the trial.
[18] In deciding that case as I did, I clearly relied on the decision of Ferguson J. in Heck v. Royal Bank of Canada (1993), 12 O.R. (3d) 111. Ferguson J."s decision was appealed to the Divisional Court. That court"s decision, which I have already referred to, reversed Ferguson J."s order removing the law firm. As I also indicated earlier, I am in full agreement with the view expounded by the Divisional Court.
[19] In International Business Machines, I concluded that the application to remove was well founded in regard to the motion to strike but that, in regard to the main proceedings, the application was premature. After referring with approval to the dissenting judgment of Marceau J.A. in Enerchem Ship Management Inc. v. Coastal Canada (The), [1988] 3 F.C. 421, and to the decision of Walker J. of the Saskatchewan Court of Queen"s Bench in Carlson v. Loraas Disposal Services Ltd. (1988), 30 C.P.C. (2d) 181, I made the following statement at pages 708-709:
I am therefore of the view that I cannot, at this stage of the proceedings, make the order requested by the defendants, i.e. to remove the law firm from the entirety of the proceedings in this litigation. In any event, it is not clear to me that Mr. MacDonald"s evidence is relevant or will be relevant to the issues that will have to be determined by the trial judge.
This does not however, resolve the problem in so far as it relates to the motion to strike. As the matter now stands, Mr. MacDonald"s affidavit is before the Court and will no doubt be relied upon by the plaintiffs in defending the defendants" motion to strike.
Whether the issue arises at trial, or shortly before trial as in Heck, or at a preliminary stage in the proceedings, as in the case at bar is, in my view, irrelevant. In all instances, the independence of counsel is paramount. Exceptions should not lightly be permitted.
[20] As I have already indicated, there is much to be said for the view taken by the Divisional Court in Heck. It allows the courts, in any given case, to deal with the facts as they present themselves. I recognize that the view that I expressed in International Business Machines does not allow for the same flexibility which the Divisional Court suggests should be taken by the courts.
[21] For these reasons, the plaintiff"s application to remove the firm of Lang Michener as attorneys for the defendants was dismissed with costs in the cause.
| Ottawa, Ontario "MARC NADON" |
| January 20, 1999 JUDGE |
1 1733. A party entitled to maintain an action for the reversal or variation of a judgment or order upon the ground of matter arising subsequent to the making thereof or subsequently discovered, or to impeach a judgment or order on the ground of fraud, may make an application in the action or other proceeding in which such judgment or order was delivered or made for the relief claimed. 1733. Une partie qui a droit de demander en justice l"annulation ou la modification d"un jugement ou d"une ordonnance en s"appuyant sur des faits survenus postérieurement à ce jugement ou à cette ordonnance ou qui ont été découverts par la suite, ou qui a droit d"attaquer un jugement ou une ordonnance pour fraude, peut le faire, sans intenter d"action, par simple demande à cet effet dans l"action ou autre procédure dans laquelle a été rendu ce jugement ou cette ordonnance.
2 327. Upon any motion the Court may direct the trial of any issue arising out of the motion, and may give such directions with regard to the pre-trial procedure, the conduct of the trial and the disposition of the motion as may seem expedient. 327. Sur toute requête, la Cour pourra prescrire l"instruction d"un point litigieux soulevé à l"occasion de la requête, et pourra donner, au sujet de la procédure préalable à l"instruction, de la procédure d"instruction et la décision sur la requête, les directives qu"elle estime opportunes.
3 The word "mandate" comes from certain allegations made by the plaintiff in its statement of claim. At paragraphs 18, 19 and 20 thereof, the plaintiff alleges that:
18. Nevertheless, between January and May 1990, as hereinafter particularized, Lubrizol offered and Dr. Billmeyer accepted a mandate that evolved step-by-step ultimately to include the following assignments: ...(Footnote Number 3 - cont"d)
19. Dr. Billmeyer accepted the original and successive stages of the Mandate knowing that the Mandate did not call for results determined by an independent and proper scientific inquiry but to "match" results needed by Lubrizol to prove its case. Particulars of the communication of pre-determined results presently known to Imperial Oil include: ...
Instead of ignoring or putting aside Lubrizol"s directions aforesaid, Dr. Billmeyer set about fulfilling Lubrizol"s Mandate putting aside what he knew or should have known to be true facts, as hereinafter described.
20. In the period February to April 1990, Dr. Billmeyer carried out the Mandate by: ...