J. U.F.C. A.D. 1994 No. 812 J.C.S. IN THE COURT OF QUEEN'S BENCH (FAMILY LAW DIVISION) JUDICIAL CENTRE OF SASKATOON BETWEEN: SANDRA ANNE MORSKY APPLICANT (PETITIONER) -and- WAYNE ANDREW MORSKY RESPONDENT (RESPONDENT) A. Wiebe for the petitioner E.F.A. Merchant for the respondent FIAT HUNTER J. July 2, 1996 This is an application by the respondent, WayneAndrew Morsky, to disqualify and to remove the law firm ofRobertson Stromberg from acting for the petitioner, SandraAnne Morsky in this action. These are the facts. The petitioner and respondent separated on October 1, 1992. The petitioner retained Alma Wiebe of Walker Plaxton in Saskatoon to act for her in this action. On May 23, 1995, Karen Prisciak ("Prisciak") of the Robertson Stromberg firm was retained to act as co-counsel for the plaintiff. The respondent retained Jo-Ann Parker ("Parker") of the Griffin Toews Maddigan firm in Regina to act for him in this action. The respondent owns shares in Paul Morsky Ltd. and the firm of Griffin Toews Maddigan were solicitors for that company since approximately 1984 and the value of the shares in this company is key component of the matrimonial property dispute between the parties. Parker conducted examinations for discovery of the petitioner in September, 1994. Further, Parker deposes that: In my role as legal counsel for Wayne Morsky received confidential information regarding his corporate interests and negotiations on matters relating to settlement of property, maintenance, custody and access. acknowledge that my former law firm, Griffen, Toews, Maddigan, did act for Paul Morsky Ltd. was privy to confidential information about the company. The respondent terminated the services of Parker in December, 1994, and he then retained the Merchant law firm to continue to act for him in this action. In May, 1996, Parker became contract lawyer with the Robertson Stromberg law firm. By letter dated May 7, 1996 the Merchant firm wrote to Prisciak as follows: Jo-Ann Parker has recently joined your law firm. Jo-Ann Parker is Mr. Morsky's former lawyer. Your office is in very substantial conflict position. Could you please confirm that you will withdraw as Mrs. Morsky's counsel immediately. Failing this confirmation, we will be launching an immediate application to have your firm removed as Mrs. Morsky's solicitor. On May 1, 1996, during discussion between Prisciak and Parker it was confirmed by Prisciak that Parker had previously acted on behalf of the respondent in this action. On May 23, 1996, the Merchant firm wrote second time to Prisciak and stated that "We think inviting you to resign for second time is very relevant in relation to costs." Parker is located in the Regina office and Prisciak is located in the Saskatoon office of the Robertson Stromberg firm. Parker as contract lawyer will not share in the billings generated by Prisciak's work on this file and the Regina office cannot access any computer files located in the Saskatoon system unless requested by lawyer or secretary to be transmitted. Prisciak authored screening policy to insulate Parker from any discussions about this action. The memorandum is dated June 14, 1996 and addressed to "All Lawyers and staff in the Saskatoon and Regina offices of Robertson Stromberg". The text of the memorandum states: As you know, Jo-Ann Parker joined our firm in May of 1996. She was previously acting on behalf of Wayne Andrew Morsky in lawsuit involving his spouse, Sandra Anne Morsky. Karen Prisciak of the Saskatoon office was and is retained to act on behalf of Sandra Anne Morsky along with Alma Wiebe of Walker Plaxton. In accordance with the Code of Professional Conduct Chapter VA the Law Society has set up certain guidelines to be used when new lawyer to the firm has previously acted for client that is now in opposition to present client's interest. Jo-Ann Parker is in this position given that she has acted on behalf of Wayne Morsky and Karen Prisciak is now acting on behalf of Sandra Morsky. Accordingly, it is necessary for Robertson Stromberg to set up certain procedures to screen Jo-Ann Parker from any and all involvement with the Morsky lawsuit. It is essential that all lawyers and support staff with the Robertson Stromberg firm take measures to ensure that Jo-Ann Parker has no contact with the Morsky lawsuit. It is our responsibility as lawyers and support staff to ensure that Jo-Ann Parker is effectively screened from any and all matters relating to the Morsky lawsuit. In particular, all lawyers and secretaries must ensure the following: 1.They do not have any discussion regarding the current status of the Morsky lawsuit or any information relating to the representation of Wayne Morsky, the Morsky family or any Morsky corporate interests. 2.There shall not be any discussions regarding the present Morsky lawsuit or the prior representation of Wayne Morsky and the Morsky family or the Morsky corporate holdings. 3.Jo-Ann Parker shall not have access to the files relating to the Morsky lawsuit. No one shall assist Ms. Parker in any requests for information relating to the Morsky lawsuit. It is extremely important that this policy be adhered to. ANY VIOLATION OF THIS POLICY WILL RESULT IN SANCTIONS WHICH MAY INCLUDE DISMISSAL FROM ROBERTSON STROMBERG. The Supreme Court of Canada established the standard to be applied in determining whether law firm should be disqualified from continuing to act in an action by reason of conflict of interest. In Martin v. Gray, [1990] S.C.R. 1235, 1990 CanLII 32 (SCC), 77 D.L.R. (4th) 249 (S.C.C.) the court emphasized the need to ensure the public confidence in the integrity of the justice system and held that it was essential that fundamental professional standards be maintained. In particular the public perception of the appearance of justice in all legal proceedings is essential. In determining whether to remove law firm on the basis of conflict of interest, the court stated that the test to be applied is whether reasonably informed person can be satisfied that no use of confidential information would occur. In applying this test, the court must ask: (1)Did the lawyer receive confidential information attributable to the solicitor and client relationship relevant to the matter at hand? (2)Is there risk that it will be used to the prejudice of the client? With respect to the first question as to whether the lawyer received confidential information, there is presumption that such confidential information passes between lawyer and client by virtue of former solicitor and client relationship, unless the lawyer satisfies the court that no such information was imparted that could be relevant. The court noted that this would be "a difficult burden to discharge". Here, it is admitted by Parker that she did receive confidential information because she represented the respondent in this specific matrimonial action from 1992 through to December, 1994. Now Robertson Stromberg must discharge the burden of proving that no confidential information has passed. Since the decision in Martin v. Gray, the Saskatchewan Law Society amended the code of conduct to provide for rules where member transfers from one law firm to another. Chapter VA, rule (4) states: Where the transferring member actually possesses relevant information respecting the former client which is confidential and which, if disclosed to member of the new law firm, may prejudice the former client, the new law firm shall cease its representation of its client in that matter unless: (b) the new law firm establishes, in accordance with subrule (8), that: (i)it is in the interests of justice that its representation of its client in the matter continue, having regard to all relevant circumstances, including: (A)the adequacy of the measures taken under (ii), (B)the extent of prejudice to any party, (C)the good faith of the parties, (D)the availability of alternative suitable counsel, and (E)issues affecting the national or public interest, and (ii) it has taken reasonable measures to ensure that no disclosure to any member of the new law firm of the former client's confidential information will occur. The question which must be addressed is whether, inthe circumstances, the screening measures ensure that nodisclosure will occur and satisfy the evidentiary burdenimposed on the law firm. The difficulty in the instant caseis that no measures were taken prior to or at the time thatParker joined the law firm to ensure confidentiality of formerclient information. There is no doubt that Robertson Stromberg was put on notice very early in May that the respondent viewed them as being in conflict of interest position. There was discussion as early as May 1, 1996 between Prisciak and Parker but no steps were taken until the June 14, 1996 memorandum to take reasonable measures to ensure that no disclosure of information would occur. The timeperiod before taking appropriate steps or making sufficienteffort to preserve the confidentiality of the respondent'sconfidential affairs is completely inadequate in thecircumstances of this case. Accordingly, Parker and Robertson Stromberg have failed to discharge the onus and the presumption must stand. The second question, whether there is risk that the confidential information will be used to the prejudice of the client, the court in Martin v. Gray stated that once the presumption arises and is not rebutted, the lawyer's disqualification is automatic and no assurances or undertakings not to use the information will avail. As stated in Re Chua, 1995 CanLII 3082 (BC SC), [1996] W.W.R. 121 (B.C.S.C.) at 127: If the question of conflict concerns an individual lawyer who has acted in the past for former client, the answer is simple. He or she is automatically disqualified from acting and no assurances or undertakings not to use the information will avail. In Jans v. Coulter (G.H.) Co. (1992), 1992 CanLII 8216 (SK CA), 105 Sask. R. (Sask. C.A), the court confirmed that actual breach of confidentiality is not necessary. At p. 10 the court said: we do not accept counsel's contention that the Martin case requires finding that there is risk of breach of confidentiality before court will restrain law firm from acting in this type of case. Rather, each case points to some aspect of perceived prejudice to the litigants or to the process. Accordingly, Prisciak and the law firm of RobertsonStromberg are disqualified from acting for the petitioner inthis action. Further, since Alma Wiebe is co-counsel and has been involved in the file since commencement, the disadvantage that might otherwise have been experienced by the petitioner in disqualifying Prisciak should not occur. There were four other orders requested as well, namely: (1)pursuant to rule 229(1), that the petitioner appear for further examination for discovery in Saskatoon in July, 1996; (2)that the petitioner may not admit into evidence any without prejudice offers of settlement forwarded by Robertson Stromberg or any alleged without prejudice offers of settlement; (3)that this motion and all documents related to this motion be sealed; (4)for solicitor client costs payable to the (applicant) respondent. With respect to the issue of further examinations for discovery, the petitioner was examined by Parker in September, 1994. The respondent was examined for discovery November 8, 1995. The trial is set to proceed this fall. The respondent feels it is necessary to update the financial information and current values of some assets prior to trial. Because two years has elapsed, further examinations may beappropriate in the circumstances. There will be an order thatthe petitioner shall attend at a further examination at a dateand time to be arranged in consultation between counsel and on10 days' notice of the date set for the examination and thepayment of proper conduct money. If the updated information is not necessary for the trial, then the petitioner may request that the trial judge deal with the matter by way of costs at trial. This court will not make rulings with respect to thematters of evidence at trial as those matters ought to bedetermined by the trial judge. Accordingly, the applicationfor an order with respect to without prejudice offers ofsettlement and to have the motion and documents related tothis motion sealed are dismissed. Because the major portion of this motion was dedicated to the issue of the removal of Prisciak as co-counsel, the respondent, Wayne Andrew Morsky, shall have the costs of this motion which fix at $300 payable within 15 days of the date of this judgment.
FIAT. An application to disqualify and remove a solicitor and law firm from acting for the petitioner. Steps were not taken to ensure that no disclosure of information would occur for a month after the firm was put on notice. At issue was whether the screening measures taken ensured that no disclosure would occur and satisfied the evidentiary burden imposed on the law firm. HELD: The solicitor and the law firm were disqualified from acting for the petitioner in the action. Because two years had lapsed further examinations were appropriate and an order issued for the petitioner to attend a further examination. If the updated information is not necessary for trial the petitioner may request costs at that time. The application for an order with respect to without prejudice offers of settlement was dismissed as matters of evidence were to be determined by the trial judge.  1)Since the decision in Martin v. Gray the Law Society amended the code of conduct to provide for rules where a member transfers from one law firm to another. 2)The difficulty in this case was that no measures were taken prior to or at the time the solicitor joined the firm to ensure confidentiality. The time period before taking appropriate steps was completely inadequate.  3)The second question, whether there was a risk that the confidential information will be used to the prejudice of the client, Martin v. Gray stated that once the presumption arises and is not rebutted, the lawyer's disqualification is automatic and no assurances or undertakings not to use the information will avail. 4)The respondent was awarded the costs of the motion fixed at $300.