The Ontario Court of Appeal court ruled in favour of a lawyer accused of breaching the deemed undertaking rule yesterday but denied him costs because of his decision to stand as counsel in a case in which he was personally involved.
Donald Ricciuto took lawyer Peter Callahan and three other defendants to court, alleging the lawyer shared his debtor information with John Somers, Ricciuto’s father-in-law. Callahan represented himself and the other respondents in the case.
Ricciuto claimed the lawyer found out about a bank writ against him, and the reduced amount the bank was willing to accept, when he represented his wife in a matrimonial litigation. He accused Callahan of sharing this information with Somers, whose company then acquired the debt.
At the appeal court, Ricciuto argued the application judge erred by relying on evidence given by Callahan during his submissions.
“We do not accept this submission,” a three-judge appeal court panel ruled in Ricciuto v. Somers. “Although Mr. Callahan was named respondent in the application, the appellant consented to his appearance as counsel.”
Still, the court wasn’t convinced Callahan should have stood as counsel while also representing clients in a case he was himself involved.
“Although we appreciate that the respondent did not object to Mr. Callahan’s appearing as counsel either here or below, the reality is that he was named respondent and that his conduct was central to the factual circumstances giving rise to both the application and this appeal,” said the court, ruling the lawyer will not receive costs. “He should not have appeared as counsel in either forum.”
A lawyer working on a similar case says conflict of interest cases could arise in cases where a lawyer acts for himself as well as others.
“There’s always a risk that the clients’ interest and lawyer’s interest may be different,” the lawyer says, adding that independent legal advice must be sought in that case. He added he is surprised the court made those comments without looking into whether or not such options were needed or considered.
In Ricciuto’s other basis for appeal, the court found Callahan could not have breached the deemed undertaking due to a chronological discrepancy between when the debt was acquired and the lawyer learned about the writ against Ricciuto.
“This was a factual finding made by the application judge. In our view, there was sufficient material in both the Ricciuto and Somers affidavits to support her conclusion,” the court said. “It is far removed from being a palpable and overriding error.”