T-1607-92
J-Star Industries, Inc. (Appellant) (Opponent).
v.
Berg Equipment Co. (Canada) Limited
(Respondent) (Applicant)
INDEXED AS: J-STAR INDUSTRIES, INC. V. BERG EQUIPMENT
CO. (CANADA) (TD.)
Trial Division, Denault J.—Ottawa, August 18 and
October 1, 1992.
Barristers and Solicitors — Conflict of interest — Non-law
yer personnel — Application to remove Scott & Aylen as trade
mark agents and solicitors of record for respondent, and for
order prohibiting them from advising respondent with respect
to trade-mark — Appellant alleging conflict of interest as for
mer secretary to appellant's solicitor now working for respon
dent's solicitor — Arguing public perception of possible lack of
fairness in legal process and Court should exercise supervisory
jurisdiction to disqualify Scott & Aylen to ensure proper
administration of justice — Application denied — Discussion
of MacDonald Estate v. Martin, [19901 3 S.C.R. 1235, (con-
flict of interest where solicitor changing firms) — Whether
"public represented by reasonably informed person would be
satisfied no use of confidential information would occur"
Presumption confidential information imparted not applying to
non-lawyer personnel — Client must show non-lawyer person
nel now employed by opposing counsel involved in preparation
of client's case in such way as to have become privy to confi
dential information while employed by client's counsel
Untenable to presume secretary received confidential informa
tion relevant to appellant's interest in trade-mark — Measures
taken to terminate secretary's continued involvement in matter
sufficient — Reasonable member of public would not believe
appellant's confidential information at risk — Reasonable per
son would not lose confidence in administration of justice if
Scott & Aylen continues to represent respondent.
CASES JUDICIALLY CONSIDERED
CONSIDERED:
MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235;
(1990), 77 D.L.R. (4th) 249; [1991] 1 W.W.R. 705; 70
Man. R. (2d) 241; 121 N.R. 1.
REFERRED TO:
Meredith & Finlayson v. Canada (Registrar of Trade
marks), T-1108-90, Cullen J., judgment dated 2/7/92,
F.C.T.D., not yet reported.
AUTHORS CITED
Law Society of Upper Canada, Professional Conduct
Handbook, Toronto, 1990.
APPLICATION to remove Scott & Aylen as trade
mark agents and solicitors of record for respondent
and prohibiting them from advising respondent with
respect to trade-mark. Application dismissed.
COUNSEL:
Peter Dauphine for appellant (opponent).
Kenneth E. Sharpe for respondent (applicant).
SOLICITORS:
Potvin & Company, Ottawa, for appellant
(opponent).
Scott & Aylen, Ottawa, for respondent (appli-
cant).
The following are the reasons for order rendered in
English by
DENAULT J.: This is an application by the appellant
for an order removing both Scott & Aylen, Patent and
Trade-mark Agents and Scott & Aylen, Barristers and
Solicitors, as agents and solicitors of record for the
respondent and for an order prohibiting these firms
from continuing to advise and represent the respon
dent in matters relating to the trade-mark "James-
way". The grounds of this motion relate to an alleged
conflict of interest arising out of the change of
employment of a secretary, Dorothée Paquin, who,
having worked for the appellant's solicitor on matters
involving the appellant's interest in the trade-mark at
issue in this appeal, now finds herself employed by
the respondent's solicitor.
Background:
On June 30, 1988, the respondent, Berg Equip
ment Co. (Canada) Limited, filed application No.
610,300 to register the trade-mark "Jamesway" for
use in association with a variety of wares which can
be categorized generally as farm equipment. On April
7, 1989, the appellant, J-Star Industries, Inc., filed a
statement of opposition to the respondent's applica
tion. An oral hearing of this matter was held before
the Trade-marks Opposition Board on April 16, 1992.
On April 30, 1992, David J. Martin, acting on behalf
of the Registrar of Trade-marks, rendered a decision
rejecting the appellant's opposition. The appellant
has appealed the Registrar's decision to this Court
and now seeks to prevent the Scott & Aylen firms
from further advising and representing the respondent
in matters relating to the "Jamesway" trade-mark.
From the outset of proceedings involving the
rights in the "Jamesway" mark, the appellant has
been represented by the law firm of Potvin & Co. and
the associated patent and trade-mark agency practice
of Kirby, Eades, Gale, Baker & Potvin (hereinafter
referred to as "KEGB & P"), and in particular by J.
Guy Potvin, a partner in both firms. The issue of
ownership of the rights in this trade-mark have
formed the subject-matter of litigation in at least one
other instance in which Potvin & Co. and Scott &
Aylen have represented opposing parties. 1
Dorothée Paquin was employed as a legal secre
tary to J. Guy Potvin from October 1986 to April 10,
1992. She worked for Mr. Potvin while he was asso
ciated with the law firm of Scott & Aylen and fol
lowed him in 1989 when he left Scott & Aylen to
found the law firm of Potvin & Co.
While employed by Mr. Potvin, Dorothée Paquin
performed routine secretarial duties which included
her taking dictation and typing correspondence and
other documents related to the appellant's interests in
the "Jamesway" mark. On April 10, 1992, Ms.
Paquin left her employment with Mr. Potvin to return
to Scott & Aylen, where she began to work for Mr.
Terrence McManus, the solicitor representing the
respondent in these proceedings.
I Meredith & Finlayson v. Canada (Registrar of Trade
marks) (T-1108-90), a s. 45 proceeding in respect of Registra
tion No. 21 2 / 4 6349 for the trade-mark "Jamesway".
Since the date of Ms. Paquin's transfer of employ
ment, the appellant has attempted to obtain an order,
first from the Registrar of Trade-marks and now from
this Court, disqualifying the Scott & Aylen firms from
further representing the respondent in matters involv
ing the "Jamesway" trade-mark.
At the hearing before the Trade-marks Opposition
Board, the hearing officer, David J. Martin, rejected
the appellant's request for an order disqualifying the
Scott & Aylen firms. Although he stated that he had
no jurisdiction to make such an order, Mr. Martin
added that even if he had had the requisite jurisdic
tion, he would nonetheless have rejected the appel
lant's request. 2
The appellant argues that Ms. Paquin's past
involvement with the appellant's file and her subse
quent transfer of employment to the offices of the
respondent's solicitor creates a conflict of interest in
that there now exists a possibility that confidential
information, which was imparted to her previous
employer and to which she had access, could now be
misused to the appellant's prejudice. According to
the appellant, the circumstances complained of raise
a public perception of a possible lack of fairness in
the legal process and, consequently, this Court should
2 More specifically, in reference to the appellant's claim of
the existence of a disqualifying conflict of interest in this case,
the Registrar stated: "In the present case, even if there is the
potential for the communication of confidential information
(which is somewhat remote in the circumstances of this case),
there is no risk that it will be used to the prejudice of the oppo
nent. As I indicated in my April 14 letter, at this stage of the
opposition, we are dealing only with legal argument on an evi-
dential record that was finalized long before the secretary
changed firms. I can see no way in which the secretary's
change in employment three days prior to the opposition hea
ring could result in any prejudice to the opponent. Even if she
imparted confidential information to the lawyer who is a
partner in the law firm associated with the applicant's agent
and this information fell into the hands of the individual who
represented the applicant at the oral hearing, I do not see how
this would assist that individual in making legal argument on a
fixed evidential record. The opponent's agent assured me that
it could although he was unable to provide any hypothetical
examples to support his case."
exercise its supervisory jurisdiction to disqualify the
Scott & Aylen firms to ensure the proper administra
tion of justice.
Evidence:
In support of its motion, the appellant relied,
essentially, on the affidavits of J. Guy Potvin, David
Morris, Laura McArthur, Stacey Cook and Colette
Truax.
In his affidavit dated July 15, 1992, Mr. Potvin
refers to his earlier affidavit, sworn on April 15,
1992, in which he describes, in greater detail, the
above-stated facts leading up to this motion. In his
second affidavit, Mr. Potvin describes his firm's inef
fective attempts to discover, by means of correspon
dence sent to Scott & Aylen, whether the respondent
would be seeking alternative counsel to represent it
in its appeal of the Registrar's decision. The repre
sentations of counsel for the respondent, at the hear
ing of this motion, established quite clearly that the
respondent intends to retain Scott & Aylen for the
remainder of these proceedings.
David Morris, an articling student with Potvin &
Co., states in his affidavit, that during the hearing of
this matter before the Trade-marks Opposition Board,
"Terrance McManus represented to the hearing
officer that his secretary, Dorothée Paquin, would not
be involved in any of the work relating to the `James-
way' trade-mark matters, and that all related work
would be given to another secretary in the Scott &
Aylen firm". In her affidavit, Laura McArthur, a legal
assistant with the law firm of Potvin & Co., describes
a telephone call she received from Dorothée Paquin.
It appears from this affidavit that, on July 13, 1992,
Ms. Paquin would have called the offices of Potvin &
Co. to inquire about a page which was missing in the
reasons for judgment forwarded to Scott & Aylen in
the case of Meredith & Finlayson v. Canada (Regis-
trar of Trade-marks), supra, a case in which the law
firms of Scott & Aylen and Potvin & Co. represented
opposing interests in a dispute involving the "James-
way" trade-mark.
The affidavits of Stacey Cook, a legal secretary at
the firm of Potvin & Co., and Colette Truax, a secre-
tary at KEGB & P, were submitted to this Court in
sealed envelopes at the hearing of this motion. Coun
sel for the appellant insisted that these affidavits be
submitted under confidential seal given the sensitive
nature of the subject-matter contained therein.
Appended to these affidavits are copies of documents
and correspondence, contained in the appellant's file,
which were prepared by Dorothée Paquin during the
course of her employment with J. Guy Potvin.
In addition, the parties filed the affidavit and
cross-examination of Dorothée Paquin, in which the
issues of her knowledge of the confidential informa
tion contained in the appellant's file and the possibil
ity of her breaching such confidences were examined.
In their representations to this Court, counsel for
both parties relied on the decision of the Supreme
Court of Canada in the case of MacDonald Estate v.
Martin (hereinafter referred to as "MacDonald
Estate"). 3 In addition, counsel for the appellant dis
cussed the rules and commentaries set out in the Law
Society of Upper Canada's Professional Conduct
Handbook and several cases in which the American
courts have discussed the issue of conflict of interest
as it relates to "non-lawyer personnel".
Issue:
The sole issue to be determined in this application
is whether Dorothée Paquin's involvement with the
appellant's file while she was employed by the appel
lant's solicitor and her subsequent employment with
the law firm of Scott & Aylen create a disqualifying
conflict of interest for the Scott & Aylen firms in
these proceedings and in future matters dealing with
the respondent's interests in the "Jamesway" trade
mark.
Discussion:
Although counsel for both parties referred, at
length, to the findings of the Supreme Court of
Canada in the case of MacDonald Estate, supra, the
principles set out therein cannot be directly applied to
the circumstances of this case to conclusively deter
mine the issue before the Court. An analysis of the
approach taken by the Supreme Court in MacDonald
3 [1990] 3 S.C.R. 1235.
Estates does, however, provide an excellent starting
point for the resolution of the issue of conflict of
interest as it applies to "non-lawyer personnel".
In the MacDonald Estate case, the Supreme Court
was asked to determine the appropriate standard to be
applied in determining whether a law firm should be
disqualified from continuing to act in a particular
case by reason of a conflict of interest. The issue
arose in the context of a solicitor who had been privy
to the confidences of one party to a dispute and later
joined the firm representing the opposing party in the
action. In the reasons given for the majority of the
Court, Mr. Justice Sopinka begins by setting out the
three competing values to be considered in determin
ing whether there exists a disqualifying conflict of
interest. More specifically, Mr. Justice Sopinka
states:
In resolving this issue, the Court is concerned with at least
three competing values. There is first of all the concern to
maintain the high standards of the legal profession and the
integrity of our system of justice. Furthermore, there is the
countervailing value that a litigant should not be deprived of
his or her choice of counsel without good cause. Finally, there
is the desirability of permitting reasonable mobility in the legal
profession?
I should point out that the third factor outlined in
this passage is not relevant in the case before this
Court, since Ms. Paquin is a secretary and not a
member of the legal profession. However, the Court
accepts that some consideration should also be given
to the desirability of permitting reasonable mobility
to "non-lawyer personnel" in their chosen field of
endeavour.
In the case of MacDonald Estate, Mr. Justice
Sopinka goes on to state that the appropriate test to
be applied in conflict of interest situations is whether
"the public represented by the reasonably informed
person would be satisfied that no use of confidential
information would occur" . 5 The Court then sets out
the following two questions of relevance to the issue
[at page 12601:
(1) Did the lawyer receive confidential information attributable
to a solicitor and client relationship relevant to the matter at
hand? (2) Is there a risk that it will be used to the prejudice of
the client?
4 Ibid., at p. 1243.
5 Ibid., at p. 1260.
Following his criticism of the "substantial relation
ship" test applied by the American courts in response
to the first question outlined above, 6 Mr. Justice
Sopinka sets out the following "rebuttable presump
tion", inherent to the lawyer/client relationship:
"once it is shown by the client that there existed a previous
relationship which is sufficiently related to the retainer from
which it is sought to remove the solicitor, the court should
infer that confidential information was imparted unless the
solicitor satisfies the court that no information was imparted
which could be relevant " 7
In my opinion, such a presumption does not apply
to the relationship between a client and his solicitor's
secretary. Furthermore, although there may be a
strong inference that lawyers who work in the same
firm share confidences, 8 I do not believe that a simi
lar inference can be drawn with respect to the
exchanges between lawyers and their secretaries. In
the case of "non-lawyer personnel", it must be shown
by the client that the person now employed by oppos
ing counsel was involved in the preparation of the
client's case in such a way as to have become privy
to confidential information while employed by the
client's counsel. It is quite simply untenable to pre
sume that Ms. Paquin received confidential informa
tion relevant to the appellant's interest in the "James-
way" trade-mark, by the very nature of her
relationship to the client or his solicitor.
In the MacDonald Estate case, the junior member
of the firm in question had been actively involved in
the preparation of the appellant's case and was privy
6 More specifically, Mr. Justice Sopinka states (at p. 1260):
In answering the first question, the court is confronted with
a dilemma. In order to explore the matter in depth may
require the very confidential information for which protec
tion is sought to be revealed. This would have the effect of
defeating the whole purpose of the application. American
courts have solved this dilemma by means of the «substan-
tial relationship» test. Once a «substantial relationship» is
shown, there is an irrebuttable presumption that confidential
information was imparted to the lawyer. In my opinion, this
test is too rigid. There may be cases in which it is establis
hed beyond any reasonable doubt that no confidential infor
mation relevant to the current matter was disclosed. One
example is where the applicant client admits on cross-exa
mination that this is the case. This would not avail in the
face of an irrebuttable presumption.
7 Ibid.
8 Ibid., at p. 1262.
to many confidences disclosed by the appellant to the
primary solicitor assigned to the case, prior to trans
ferring to the firm representing the respondent in the
action. The evidence adduced before this Court does
not establish a similar involvement on the part of
Dorothée Paquin. There was no evidence to indicate
that she had attended any meetings at which confi
dential information had been imparted by the appel
lant or during which any case strategy had been dis
cussed. Furthermore, a review of the affidavit
evidence containing copies of the correspondence
and documents prepared by Dorothée Paquin in rela
tion to the appellant's file did not disclose any confi
dential information which, in the hands of the
respondent, could possibly be used against the appel
lant's interests.
The Court is satisfied, in the circumstances of this
case, that the measures taken by Mr. McManus to ter
minate Dorothée Paquin's continued involvement in
this matter are sufficient, despite Ms. Paquin's admis
sions on cross-examination that she may have inad
vertently prepared routine correspondence for Mr.
McManus relating to this case in the past. In my
opinion, a reasonable member of the public would
not believe, in this case, that the appellant's confiden
tial information was at risk. Further, I am not con
vinced that such a reasonable person would necessa
rily lose confidence in the administration of justice
given this Court's decision to allow the Scott & Aylen
firms to continue to represent the respondent despite
Ms. Paquin's "secretarial" involvement with the files
of both parties to this action.
Upon considering the submissions of counsel and
reviewing the evidence presented, I conclude that
there exists no disqualifying conflict of interest in
this case. Consequently, the appellant's motion is
denied with costs.
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