Ontario – lawyer’s duty of candour not limited to appearances in court, extends also to arbitration

To address a scheduling issue in court, Mr. Justice Marvin Kurz in Haaksma v. Taylor, 2020 ONSC 2656 relied on rules of professional conduct which expressly stipulate that a lawyer’s duty of candour in ex parte proceedings applies not just to courts but also to arbitrators, mediators and others who resolve disputes, regardless of their function or the informality of their procedures.  Kurz J. emphasized that an exchange can qualify as ex parte even if the other party is aware of the exchange but, due to circumstances, cannot adequately respond or make submissions due, for example, to insufficient notice.  The duty of candour requires lawyers to take particular care to be accurate, candid and comprehensive in presenting a client’s case so as to ensure that the decision-maker is not misled. 

Kurz J. was tasked with deciding whether a proposed motion qualified as “urgent” within the meaning of the Ontario Superior Court of Justice’s recent March 15, 2020 “Notice to the Profession, the Public and the Media Regarding Civil and Family Proceedings” (“Notice”) and its follow up April 2, 2020 Addendum (“Addendum”).  The Notice issued as part of efforts “[t]o protect the health and safety of all court users and to help contain the spread of the 2019 novel coronavirus (COVID-19)”.

In deciding whether the request qualified as “urgent”, Kurz J. addressed a lawyer’s duty of candour in ex parte proceedings.  The Notice and the Addendum provided a party with an “exceptional level of access” to the court which, though copied to the other party, did not trigger an automatic right of reply by the other party.

[19] While, as set out above, a request for leave to bring an urgent motion before the court is not a formal motion, it is a request for a form of relief from the court in what is intended to be a summary process. Even if the proposed moving party’s letter to the court is served on the opposing side, it is one that does not invite a response unless requested.

[20] Thus, the process called for under the Notice and the Addendum presents counsel with an exceptional level of access to a judge. That direct access is available merely by writing to the Court. In non-COVID-19 times, such unilateral correspondence is not appropriate or acceptable (see Rule 1.09 of the Rules of Civil Procedure [RRO 1990, Reg 194]”.

Kurz J. referred to the Supreme Court of Canada decision in Ruby v. Canada (Solicitor General), 2002 SCC 75 (CanLII), [2002] 4 SCR 3 paras 25-26 to confirm which type of interactions with a decision maker qualify as ex parte.  Such interactions qualify as ex parte even in the presence of the other party. 

[25] Ex parte, in a legal sense, means a proceeding, or a procedural step, that is taken or granted at the instance of and for the benefit of one party only, without notice to or argument by any adverse party: Attorney General of Manitoba v. National Energy Board, 1974 CanLII 1239 (FC), [1974] 2 F.C. 502 (T.D.).  The circumstances in which a court will accept submissions ex parte are exceptional and limited to those situations in which the delay associated with notice would result in harm or where there is a fear that the other party will act improperly or irrevocably if notice were given.  For instance, temporary injunctions are often issued ex parte in order to preserve the status quo for a short period of time before both parties can be heard (to prevent the demolition of a building, for example).

[26] Ex parte proceedings need not be held in camera.  Indeed, ex parte submissions are often made in open court (in interlocutory matters, for example).  In fact, an order will still be considered ex parte where the other party happens to be present at the hearing but does not make submissions (for instance, because of insufficient notice):  Royal Bank v. W. Got & Associates Electric Ltd., 1994 CanLII 8922 (AB QB), [1994] 5 W.W.R. 337 (Alta. Q.B.), at para. 10, aff’d 1997 ABCA 136 (CanLII), [1997] 6 W.W.R. 715 (Alta. C.A.), aff’d (without reference to this point) 1999 CanLII 714 (SCC), [1999] 3 S.C.R. 408.  On the other hand, other ex parte proceedings are, by necessity, not held in public.  An application for a wiretap authorization, for instance, must be made both ex parte and in camera”.

Kurz J. then observed that “it appears that the request to determine urgency, while administrative, represents an ex parte communication”.  He explained that the request is ex parte even if the other party has notice of it because the Notice and the Addendum do not call for response unless the court requests one.

Referring again to Ruby v. Canada (Solicitor General), 2002 SCC 75, [2002] 4 S.C.R. 3, Kurz J. commented that the Supreme Court had set “a very high bar” for the duty for candour in ex parte proceedings.

Turning to the Law Society of Ontario’s Rules of Professional Conduct (adopted June 22, 2000 and amended October 24, 2013), Kurz J. identified Rule 5.1-1Advocacy” as the relevant code of conduct regarding the duty of candour, remarking that the duty “is not limited to appearances before the court”.

5.1-1 When acting as an advocate, a lawyer shall represent the client resolutely and honourably within the limits of the law while treating the tribunal with candour, fairness, courtesy, and respect”.

The Commentary to Rule 5.1-1 follows the statement of Rule 5.1-1, expanding on the scope of the duty and the circumstances in which the lawyer is expected to honour the duty of candour.  That scope and those circumstances include alternative dispute resolution processes.  Though Kurz J. referred expressly to paras 2 and 6 of the Commentary to Rule 5.1-1, the balance of the Commentary merits reproducing to be complete:

[1] Role in Adversarial Proceedings – In adversarial proceedings, the lawyer has a duty to the client to raise fearlessly every issue, advance every argument and ask every question, however distasteful, that the lawyer thinks will help the client’s case and to endeavour to obtain for the client the benefit of every remedy and defence authorized by law. The lawyer must discharge this duty by fair and honourable means, without illegality and in a manner that is consistent with the lawyer’s duty to treat the tribunal with candour, fairness, courtesy and respect and in a way that promotes the parties’ right to a fair hearing in which justice can be done. Maintaining dignity, decorum and courtesy in the courtroom is not an empty formality because, unless order is maintained, rights cannot be protected.

[2] This rule applies to the lawyer as advocate, and therefore extends not only to court proceedings but also to appearances and proceedings before boards, administrative tribunals, arbitrators, mediators and others who resolve disputes, regardless of their function or the informality of their procedures.

[3] The lawyer’s function as advocate is openly and necessarily partisan. Accordingly, the lawyer is not obliged (except as required by law or under these rules and subject to the duties of a prosecutor set out below) to assist an adversary or advance matters harmful to the client’s case.

[4] In adversarial proceedings that will likely affect the health, welfare or security of a child, a lawyer should advise the client to take into account the best interests of the child, if this can be done without prejudicing the legitimate interests of the client.

[5] A lawyer should refrain from expressing the lawyer’s personal opinions on the merits of a client’s case to a court or tribunal.

[6] When opposing interests are not represented, for example, in without notice or uncontested matters or in other situations in which the full proof and argument inherent in the adversarial system cannot be achieved, the lawyer must take particular care to be accurate, candid and comprehensive in presenting the client’s case so as to ensure that the tribunal is not misled.

[7] The lawyer should never waive or abandon the client’s legal rights, such as an available defence under a statute of limitations, without the client’s informed consent.

[8] In civil proceedings, a lawyer should avoid and discourage the client from resorting to frivolous or vexatious objections, attempts to gain advantage from slips or oversights not going to the merits or tactics that will merely delay or harass the other side. Such practices can readily bring the administration of justice and the legal profession into disrepute”.

Even in the particular circumstances, including the impact of COVID-19 on judicial hearings, Kurz J. emphasized that the duty persists.  “Courts, litigants and the public are entitled to assume that the communications made with the court in these difficult times, seeking what is, for this limited time, a form of exceptional relief, will meet the duty of candour described by the [Rules of Professional Conduct]”.  

Applying those principles stated by the case law, Rule 5.1-1 and the Commentary, Kurz J. then considered the particular facts of the exchanges submitted to him.

urbitral note – First, the analysis set out by Kurz J. applies equally to arbitration.  An exchange with an arbitral tribunal can qualify as ex parte even if the other arbitral party is copied on or aware of the exchange, due to circumstances in which that other party cannot adequately respond or “does not make submissions (for instance, because of insufficient notice”.  Ex parte includes the inability to respond despite being present.  Such cases are albeit rarer than being absent but the courts do recognize that such cases can exist.

Second, the duty of candour, applicable in arbitration, requires that “the lawyer must take particular care to be accurate, candid and comprehensive in presenting the client’s case so as to ensure that the tribunal is not misled”.  The requirement to be accurate, candid and comprehensive is not compromised merely because parties to a dispute opt for a more flexible dispute resolution process.  Informality, if sought and included by the parties in their particular arbitration process, does not come at the cost of those components of candour.

Third, breach of the duty of candour could justify a post-award challenge involving the manner in which decisive steps were taken in an arbitration if the breach of the duty of candour amounts to a breach of natural justice.