The plaintiff’s lawyer had previously represented the defendant Credit Union in small collections matters from 1993-2008. The plaintiff was the CEO of another Credit Union and the lawyer advised both the plaintiff and the other Credit Union with respect to the employment agreement. In 2012, after the plaintiff’s Credit Union had been acquired by the defendant, the lawyer represented him in negotiating his new employment agreement with the defendant. The plaintiff was eventually fired after his previous employer exercised its option to amalgamate with the defendant. The defendant brought a motion to have the lawyer removed as solicitor on record for the plaintiff due to a conflict of interest. The court dismissed the motion on the basis that the amalgamation did not cause the lawyer to be in a conflict of interest against the defendant, and there was no evidence that the lawyer’s previous retainers with the defendant were sufficiently related to the retainer in respect of the wrongful termination action so as to disqualify him from acting for the plaintiff.

Administrative law – Barristers, solicitors, notaries and paralegals – Professional governance and discipline – Solicitor-client privilege – Conflict of interest

DeRosa v. Pace Savings & Credit Union Ltd., [2014] O.J. No. 1939, 2014 ONSC 935, Ontario Superior Court of Justice, February 21, 2014, C.J. Brown J.

The defendant brought a motion for an order removing the plaintiff’s lawyer as solicitor of record on the basis of a conflict of interest. Counsel for the plaintiff, Tanner, had acted for the defendant, Pace Savings & Credit Union on a number of occasions between 1993 and 2008, mainly regarding small collection files. Then, between 2009 and 2012, Tanner acted for McMaster Savings & Credit Union with respect to various matters, including a negotiation with Pace of an asset purchase agreement whereby Pace acquired the assets and assumed the liabilities of McMaster. Pace had its own counsel for that agreement.

The plaintiff had been employed as McMaster’s CEO. Tanner had advised McMaster and the plaintiff jointly and with their consent with respect to their employment agreement. In 2012, Tanner acted for the plaintiff in negotiating his new employment agreement with Pace. Pace had independent counsel during those negotiations. After the asset purchase agreement closed, as per a term in the agreement, McMaster exercised its option to amalgamate with Pace and shortly thereafter, the plaintiff’s employment was terminated. In the wrongful termination action, Pace objected to Tanner’s representation of the plaintiff on the basis that he had previously acted for McMaster regarding its employment agreement with the plaintiff, and following the amalgamation, McMaster and Pace were one and the same, precluding Tanner from acting against Pace. It argued in the alternative that the previous collections work he had done for it precluded him from acting.

The Ontario Superior Court of Justice held that there was no conflict of interest warranting the removal of Tanner as the plaintiff’s solicitor. It disagreed that by virtue of the amalgamation, Tanner was in a conflict of interest with Pace. It was not satisfied that Tanner acted other than solely for the plaintiff in negotiating the employment agreement with Pace. While Pace was a former collections client of Tanner’s, there was no evidence that such retainers were sufficiently related to the present retainer so as to disqualify Tanner from acting in the wrongful termination action.

This case was digested by Kara L. Hill of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact her directly at khill@harpergrey.com or review her biography at http://www.harpergrey.com.

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