MAGNES V. MAGNES QB99059 Date of Judgment: January 11, 1999 Number of Pages: 11 Q.B. No. 015964 J.C. R. IN THE QUEEN`S BENCH (FAMILY LAW DIVISION) JUDICIAL CENTRE OF REGINA BETWEEN: JANIE MAGNES PETITIONER (RESPONDENT) and HOWARD MAGNES RESPONDENT (APPLICANT) AND D.I.V. A.D. 1996 No. 669 J.C. R. IN THE QUEEN`S BENCH (FAMILY LAW DIVISION) JUDICIAL CENTRE OF REGINA BETWEEN: D.A.L.(F.)PETITIONER (RESPONDENT BY COUNTER-PETITION) and D.A.L.RESPONDENT (PETITIONER BY COUNTER-PETITION) Ronald J. Miller for Howard Magnes and D.A.L.(F.) David A. Gerrand for Olive, Waller, Zinkhan Waller law firm JUDGMENT DAWSON J. January 11, 1999 [1] This is an application for a determination as to whether the law firm of Olive, Waller, Zinkhan & Waller is in a position of conflict of interest with respect to the matrimonial files of Magnes v. Magnes and L. (D.A.F.) v. L. (D.A.) and whether the firm may remain as counsel for Janie Magnes and D.A.L. in those proceedings. [2] Fred Zinkhan of the Olive, Waller, Zinkhan Waller law firm (hereinafter referred to as "Olive Waller") acts as counsel for Janie Magnes and D.A.L. with respect to their matrimonial disputes. Prior to September 8, 1998, Sherri Fitzsimmons was lawyer practising law with the law firm of Hunter Miller. Hunter Miller acts as counsel for Howard Magnes (the previous spouse of Janie Magnes) and D.A.L.(F.) (the previous spouse of D.A.L. ). While employed at Hunter Miller, Ms. Fitzsimmons was involved in working on the matrimonial files for Howard Magnes and D.A.L.(F.). [3] On August 17, 1998, Ms. Fitzsimmons received telephone call from Fred Zinkhan. Mr. Zinkhan inquired as to whether Ms. Fitzsimmons would be interested in interviewing for lawyer`s position with his firm. The conversation lasted approximately two minutes on this topic and no other topic was discussed. On August 18, 1998, Ms. Fitzsimmons received telephone call from Victor Dietz, another lawyer at the Olive Waller firm. He called to arrange an interview date. On August 26, 1998, Ms. Fitzsimmons interviewed with Victor Dietz and Pat Quaroni also lawyer at the Olive Waller firm. Then on August 28, 1998, Victor Dietz called Ms. Fitzsimmons and made verbal offer of employment. The terms of the offer were confirmed in writing on that same date. The written offer of employment was identical to the verbal offer of employment and contained the following provision for conflicts: 5. Conflicts:A listing of potential conflict files will be provided with the requirement that you not access, review or in any way have any connection with those files. On September 2, 1998, Ms. Fitzsimmons called Mr. Dietz and verbally accepted the offer of employment. She agreed to commence working on Tuesday, September 8, 1998, which was the first office day after the September long weekend. [4] On Friday, September 4, 1998, Ms. Quaroni sent several intra-office e-mail transmissions regarding the measures to be taken by Olive Waller to ensure that Ms. Fitzsimmons not have any access to the files in which she had potential conflict. The e-mail confirmed that all potential conflicts had to be identified by the end of the work day on September 4, so that screening measures could be taken before September 8. On that same day, September 4, the conflicting files were identified. memorandum was sent to all members of the firm, lawyers and staff, noting the conflicting files and instructing them to ensure that Ms. Fitzsimmons not be privy to these files, not work on these files, and not have access to these files. Fred Zinkhan responded by e-mail to Ms. Quaroni, on that same date, with respect to the Magnes and L. files and identified that he was concurrently instructing his legal assistant, Diane Van Drunen, to place the Magnes and L. files in secure location, not accessible to Ms. Fitzsimmons. Mr. Zinkhan concurrently e-mailed Ms. Van Drunen with these instructions. Ms. Van Drunen received the e-mail on the morning of Tuesday, September 8, 1998 and she immediately moved the two files to locked filing cabinet. This filing cabinet remains locked at all times. [5] On September 4, 1998, Ms. Quaroni prepared memorandum addressed to Ms. Fitzsimmons. The memorandum identified all potential conflicts and requested Ms. Fitzsimmons' acknowledgment that she was not to work on or have any access to those files. On September 8, 1998, when Ms. Fitzsimmons arrived at the Olive Waller firm she received the memorandum listing all potential conflict files. This memorandum included the Magnes and L. files. On that same date she had meeting with Pat Quaroni with respect to the conflict files. Ms. Quaroni again confirmed that Ms. Fitzsimmons was to have no contact with those files. Ms. Fitzsimmons confirmed to Ms. Quaroni that she would not participate in representing Ms. Magnes or Mr. L., nor would she disclose any information to Olive Waller respecting her former clients, Howard Magnes and D.A.L.(F.). She also confirmed that she would not disclose confidences of clients of her former firm nor would she disclose any confidences of clients of her new firm. [6] In addition, the firm instituted procedure to ensure that the Magnes and L. files are only removed from the locked filing cabinet when absolutely necessary. If either file is up for review in the diary system, Ms. Van Drunen simply advises Mr. Zinkhan that such file is up for review, in order to avoid the files being removed from the locked filing cabinet. In the event that Mr. Zinkhan is going to work on either the Magnes or L. file, Ms. Van Drunen removes the file from the locked filing cabinet and places it in Mr. Zinkhan`s office. Upon completion of the work, the file is returned to the locked cabinet. The Magnes and L. files are only on Ms. Van Drunen`s desk when she is actually working on them. Again, upon completing any work, the file is returned to the locked cabinet. Ms. Van Drunen controls access to the keys to the locked filing cabinet. Ms. Van Drunen is also under direct instructions to refer any questions with respect to this file to Mr. Zinkhan only. The only individuals within the firm who work on these two files or who have any knowledge on these two files are Fred Zinkhan, Dianne Van Drunen, Pat Quaroni and Patrice Krueger, lawyer. [7] On Friday, September 11, 1998, at 9:35 a.m. Fred Zinkhan sent an e-mail to Ms. Quaroni regarding computer security. In particular, he wanted to ensure that Ms. Fitzsimmons` assistant, Sharon Don, not have any computer access to the Magnes and L. files. Prior to sending the e-mail, Mr. Zinkhan confirmed that Sharon Don had not in fact done any work in relation to the Magnes and L. files and confirmed there had been no inadvertent access. Mr. Zinkhan requested that Ms. Van Drunen secure all data files in relation to the Magnes and L. files on the firm`s computerized network environment. That is, he instructed her to either encode or remove all work product from the system with respect to the files. Ms. Van Drunen received the e-mail on the morning of Monday, September 14, 1998. She immediately moved all documentation with respect to these two files to secure directory on the computer network. Ms. Van Drunen and the firm`s network administrator are the only persons within the firm who have the ability to access the data on these files. [8] Ms. Fitzsimmons swore an affidavit in this application that she has not had any conversations with anyone associated with the Olive Waller firm concerning the Magnes and L. matters, nor has she had any conversations with Ms. Magnes or Mr. L.. She also swore that she has not had access to those two files, nor has she had computer access to information on these files. She attested as well that she took no documents, notes, computer disks or any other documents relating to the Magnes or L. files from the Hunter Miller firm upon leaving. Ms. Fitzsimmons also provided an undertaking in her affidavit that she will not discuss the Magnes or L. matters with anyone within the Olive Waller firm or the Hunter Miller firm. Mr. Zinkhan`s affidavit indicates that his firm advised both Janie Magnes and D.A.L. that if either of them felt any objection to Olive Waller`s continued representation on their matter as result of Ms. Fitzsimmons joining their firm, the firm would withdraw. [9] The Supreme Court of Canada in MacDonald Estate v. Martin, 1990 CanLII 32 (SCC), [1991] W.W.R. 705, enunciated the standards to be applied in determining whether disqualifying conflict of interest exists. The court stated it is concerned with three competing values. There is first of all, the concern to maintain the high standards of the legal professional and the integrity of our system of justice. Secondly, there is the countervailing value that litigant should not be deprived of his or her choice of counsel without good cause. And thirdly, there is the desirability of permitting reasonable mobility in the legal profession. The test that is to be applied to determine whether there is such disqualifying conflict must be such that the public, represented by the reasonably- informed person, would be satisfied that no use of confidential information would occur. The court went on to say that two questions must be answered: (1) Did the lawyer receive confidential information attributable to solicitor and client relationship relevant to the matter at hand? and, (2) Is there risk that it will be used to the prejudice of the client? The Supreme Court noted in MacDonald Estate v. Martin that there is strong inference that lawyers who work together share confidences. The court should therefore draw this inference, unless satisfied on the basis of clear and convincing evidence, that all reasonable measures have been taken to ensure that no disclosure will occur by the "tainted" lawyer to the members of the firm who are engaged against the former client. [10] It must be noted that the Law Society of Saskatchewan in response to the decision of the Supreme Court of Canada in MacDonald Estate v. Martin, amended The Law Society of Saskatchewan, Code of Professional Conduct (adopted by The Benchers of The Law Society of Saskatchewan in Convocation on September 26, 1991, effective October 1, 1991 [updated April 4, 1997]) (the "Code") in 1995, to provide for rules relating to conflicts of interest when member transfers from one firm to another. The relevant portions of the Code are: Chapter VA, Conflicts of Interest Firm Disqualifications (4) 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: (a)the former client provides written consent to the new law firm`s continued representation of its client, or (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. (8) Anyone who has an interest in, or who represents party in, matter referred to in this Rule may apply to the Society or to court of competent jurisdiction for determination of any aspect of this Rule.... Due diligence (9) member shall exercise due diligence in ensuring that each member and employee of the member`s law firm, and each other person whose services the member has retained: (a)complies with this Rule, and (b)does not disclose: (i) confidences of clients of the firm, and (ii) confidences of clients of another law firm in which the person has worked. [11] The Code also provides Guidelines for the members respecting the "reasonable measures" that should be taken to ensure that no disclosure to any member of the new law firm of the former client`s confidential information will occur. Those guidelines include the following: 1. The screened member should have no involvement in the new law firm`s representation of its client. 2. The screened member should not discuss the current matter or any information relating to the representation of the former client (the two may be identical) with anyone else in the new law firm. 3. No member of the new law firm should discuss the current matter or the prior representation with the screened member. 4. The current client matter should be discussed only within the limited group which is working on the matter. 5. The files of the current client, including computer files, should be physically segregated from the new law firm`s regular filing system, specifically identified, and accessible only to those lawyers and support staff in the new law firm who are working on the matter or who require access for other specifically identified and approved reasons. 6. No member of the new law firm should show the screened member any documents relating to the current representation. 7. The measures taken by the new law firm to screen the transferring member should be stated in written policy explained to all lawyers and support staff within the firm, supported by an admonition that violation of the policy will result in sanctions, up to an including dismissal. 8. Affidavits should be provided by the appropriate firm members, setting out that they have adhered to and will continue to adhere to all elements of the screen. 9. The former client, or if the former client is represented in that matter by member, that member, should be advised: a.that the screened member is now with the new law firm, which represents the current client, and b.of the measures adopted by the new law firm to ensure that there will be no disclosure of confidential information. 10.The screened member should not participate in the fees generated by the current client matter. 11.The screened member's office or work station should be located away from the offices or work stations of those working on the matter. 12.The screened member should use associates and support staff different from those working on the current client matter. [12] These Guidelines were adopted from the Canadian Bar Association`s Task Force report entitled: "Conflict of Interest Disqualification: Martin v. Gray and Screening Methods (February, 1993). The Code points out that they "are intended as checklist of relevant factors to be considered. Adoption of some of the guidelines may be adequate in some cases, while adoption of them all may not be sufficient in others.". [13] In the present case, the first question to be determined is whether Ms. Fitzsimmons received confidential information from her clients, Howard Magnes and D.A.L.(F.), attributable to solicitor and client relationship relevant to the matter at hand while at the Hunter Miller firm. There is general presumption that such confidential information passes between lawyer and client by virtue of the solicitor and client relationship, unless the lawyer satisfies that there was no such receipt of confidential information. Ms. Fitzsimmons worked on both of these files while at the Hunter Miller firm and was, by the time she left that firm, solicitor for Mr. Magnes. am satisfied that she received confidential information from both clients. [14] The second question then to be determined is whether there is risk that the confidential information will be used to the prejudice of the clients, Howard Magnes and D.A.L.(F.)`? must be satisfied on the basis of clear and convincing evidence, that all reasonable measures have been taken to ensure that no disclosure will occur by Ms. Fitzsimmons to the members of Olive Waller firm. That is, must be satisfied on clear and convincing evidence that the screening measures taken by Olive Waller ensure that no disclosure will occur. [15] Ms. Fitzsimmons and the Olive Waller firm have put in place many of the screening measures suggested by the Guidelines in the Code. Ms. Fitzsimmons has indicated that she has not had any conversations with anyone associated with the Olive Waller firm concerning the Magnes and L. matters, nor has she had any conversations with Ms. Magnes or Mr. L., nor has she had access to those two files. She has attested that she has had no computer access to information on these files. She attested as well that she took no documents, notes, computer disks or any other documents relating to the Magnes or L. files from the Hunter Miller firm upon leaving. Ms. Fitzsimmons also provided an undertaking in her affidavit that she will not discuss the Magnes or L. matters with anyone within the Olive Waller firm or the Hunter Miller firm. She has indicated that the only discussions she had with Olive Waller regarding the two files involved identifying the conflicting files and the discussions involving the screening procedures. accept that no information has been shared. These undertakings, while necessary to the screening measures, are not enough. There must be independently verifiable procedures which have been taken to ensure there is no prejudice to Ms. Magnes and Mr. L.. [16] Here, there are numerous independently verifiable steps which have been taken by the Olive Firm to implement screening. The members of the Olive Waller firm, both lawyers and support staff, have been instructed in writing not to discuss either the Magnes or L. matters or Ms. Fitzsimmons` prior representation of those clients with her. The Magnes file and the L. file are physically segregated from the Olive Waller`s regular filing system in locked cabinet. The files are specifically identified, and accessible only to those lawyers and support staff in Olive Waller who are working on the matter. Only four members of the firm, three lawyers and one support staff, work on either of these files. The computer files are encoded and segregated on the firm's network and access is limited to two persons, neither being Ms. Fitzsimmons or her secretary. The members of the Olive Waller firm were instructed not to discuss the matters or share with Ms. Fitzsimmons any documents relating to the two files. Ms. Fitzsimmons` assistant, Sharon Don, is not an individual who was or will be working on either of the files, or who has access to either the physical files or the computer files. [17] Affidavits have been provided by Ms. Fitzsimmons, Fred Zinkhan, Pat Quaroni, Victor Dietz and Sharon Van Drunen, the appropriate and relevant firm members, confirming that they have adhered to and will continue to adhere to all elements of the screen. Mr. Magnes and Ms. L., Ms. Fitzsimmons` former clients, have been advised through their solicitors, Hunter Miller, that Ms. Fitzsimmons is now with the Olive Waller firm. They have also been advised, through their solicitors, of the measures adopted by the Olive Waller firm to ensure that there will be no disclosure of confidential information. Ms. Fitzsimmons has had no involvement in the representation of either Janie Magnes or D.A.L. since the date she started her employment at Olive Waller. [18] The Hunter Miller firm is concerned that the screening measures were done so quickly that they may have not actually occurred by the time Ms. Fitzsimmons commenced employment on September 8, 1998. Hunter Miller also points out that the segregation of the computer files on the firm`s computer network took place four working days after Ms. Fitzsimmons started her employment. In addition, Hunter Miller points out that although all Olive Waller firm members were advised, in writing, of the measures being taken to screen Ms. Fitzsimmons and were advised they were to adhere to the screening policy, the written instructions were not supported by specific written admonition that violation of the policy would result in sanctions, up to and including dismissal. [19] am satisfied on the basis of the evidence filed that all the screening measures, with the exception of the computer file segregation occurred prior to the arrival of Ms. Fitzsimmons. am also of the opinion that the instructions to firm members of the restrictions being placed on all firm members regarding the conflicting files carried with them the implicit notice of sanctions in the event the policy was not adhered to. Further, despite the fact that the computer segregation occurred few days after Ms. Fitzsimmons` arrival, neither Ms. Fitzsimmons nor her assistant had any access to the computer files in question during that time or since. [20] I am satisfied that the screen is sufficient in the circumstances of this case. There is not a risk of real mischief in this case. While Hunter Miller`s concerns are legitimate and should be taken seriously, on behalf of their clients, on balance, I find no real risk to Mr. Magnes nor Mrs. D.A.L.(F.) that either would be prejudiced if Mr. Zinkhan, Ms. Quaroni and Ms. Krueger of the Olive Waller firm, continue to act, so long as the screen is in place and is adhered to. In my view, having regard to all of the relevant circumstances, including the good faith of the parties, the adequacy of the measures taken to avoid disclosure of any confidential information and the extent of prejudice to the respective parties, Olive Waller has met the legal test enunciated by Mr. Justice Sopinka. A reasonable member of the public, in possession of the facts and aware of the screening procedures set in place, would conclude that no unauthorized disclosure of confidential information had occurred or would occur. [21] In the circumstances, Olive Waller may continue to represent Janie Magnes and D.A.L.. There will be no order as to costs.
In issue was whether the law firm was in a conflict of interest with respect to two matrimonial files and whether the firm could remain as counsel for the spouses. HELD: 1)A lawyer with Olive Waller acts as counsel for Janie Magnes and Daniel L'Heureux. The lawyer who recently joined the law firm of Olive Waller had worked on both files of the opposing spouses while practicing law with another firm. At the time she left she was the solicitor for Mr. Magnes. She had received confidential information from both opposing spouses. 2)The screen was sufficient and there was not a risk of mischief in the circumstances of this case. There was no real risk that either would be prejudiced if the law firm continued to act. A reasonable member of the public, in possession of the facts and aware of the screening procedures set in place, would conclude that no unauthorized disclosure of confidential information occurred or would occur. There were numerous independently verifiable steps taken by the subsequent firm to implement screening. Both lawyers and support staff were instructed in writing not to discuss either matters or the lawyer's prior representation of those clients with her. The files were physically segregated from the regular filing system in a locked cabinet. The files were specifically identified and accessible only to those lawyers and support staff who were working on the matter. The computer files were encoded and segregated on the firm's network and access was limited to two people. 3)There was no order as to costs.