The majority findings of the SCC ruling essentially say law firms can handle clients in the same field and that, since some firms specialize, this is going to happen. However, the lawyer has to exercise a sense of fairness in the dealings by not favouring one client over the other. When a competitive situation arises that can lead to a conflict of interest, it is the lawyer who must defuse it by disclosing information or if that information is confidential, suggesting one client seek another firm to look into the matter. The SCC faulted Strother in that area, saying that when he made an agreement to go into business with Sentinel, he was compromised. “The conflict compromised Strother’s duty to ‘zealously’ represent Monarch’s interests,” the SCC ruling states, and he had a personal stake in keeping Monarch uninformed, even if it didn’t ask about new rulings.

Justice Ian Binnie, writing for the majority, found that fiduciary duty “may include obligations that go beyond what the parties expressly bargained for” and that Monarch was dealing with “a professional adviser, not used car salesmen or pawnbrokers whom the public may expect to operate on a basis of ‘didn’t ask, did tell.’ ”

Chief Justice Beverley McLachlin, writing for the minority, drew the issue back to the scope of the retainer, which set out the work required by Strother. “The lawyer owes the client a duty to act loyally for the client in performing as agreed in the retainer. The duty of loyalty is not a duty in the air. It is attached to the obligations the lawyer has undertaken pursuant to the retainer. It is not conflict of loyalties in the abstract that raises problems, but conflicting duties — duties that are determined by the retainer.”

McLachlin wrote that the trial judge had correctly explored the change in the retainer relationship. “Given the changed nature of the lawyer-client relationship, there is no reason to conclude that Strother’s capacity to loyally and zealously perform the very limited duties owned to Monarch under the 1998 oral retainer would be affected by his taking a personal interest in Sentinel Hill,” she wrote.

She also did not support the majority decision that Strother entered into conflict when taking an interest in Sentinel’s business. Although the fact Strother “stood to make a great deal of money from the business interest . . . might well raise a concern” that he put his own interests ahead of Monarch, she points out that the trial judge extensively explored that issue and found that to not be the case.

Strother says he finds the assumption that fiduciary duty extends beyond an agreement “frighteningly onerous.” Strother, who once taught law at the universities of B.C. and Alberta, has been a partner in numerous large law firms, and authored papers on taxation issues, says there now exists a blurring of the duties that lawyers must perform. “If you bump into someone [that you do work for on a casual basis] on the golf course and have a casual conversation and they ask an off-the-cuff question that you answer and the advice doesn’t work out, are you in breach of contract and fiduciary duty?” he asks, adding “the flip side is just as onerous.” If as a result of the golf-course inquiry, a lawyer returns to his office and does extensive research, would the client be willing to accept a bill?

Strother favours clear retainers. If he had to do it all over again, he says, “I would have reduced my engagement to Monarch to writing and not accepted any work from 1997 onward without clear written instruction outlining the engagement.”

The whole experience, he says, has been insightful and aware of those caught in the machinery of the legal system, often without the resources to plead a case. It has given him greater belief in the validity of trail judge findings, he says, as appeal courts and the SCC really only deal with “snap-shots” of trial cases.

The legal costs of the defences for Strother and Darc (who was also named in earlier proceedings but received a dismissal) is expected to run between $2 million and $3 million, Strother anticipates. “If I had not been supported by the law firm and my friends, I would never had been able to bring this matter to light. I am extremely grateful.”

Strother, who has been working as an independent Vancouver tax consultant, says he may venture into new business opportunities, decide to teach again, or even venture back into law. “I think I have become more sensitive to people who are down on their luck and I realize that there for the grace of God, go I. I think I have changed for the positive. I never welcomed this experience but it has taught me how important it is to have friends and support to get you through difficult times.”

— Jean R. Sorensen

 jean_sorensen@telus.net