Sunday, February 04, 2007

Law Firm That Drew Previous Will Disqualified From Acting in Wills Variation Act Claim

Can a law firm act for two children making a claim to a greater share of their father's estate under the Wills Variation Act, RSBC 1996, c. 490, if the law firm had previously acted for the father including drawing an earlier will?

In a recent decision, Knoglinger v. Solbakken, 2007 BCSC 157, Madam Justice Dorgan held that it was a conflict of interest for the law firm of Cox, Taylor in Victoria, B.C. to act for the plaintiff children. The law firm had previously represented their father, Rudolf Knoglinger, real estate matters, and one of the law firm's lawyers, Mr. Van Driesum, had drawn wills for Rudolf Knoglinger and his wife in 1996.

Rudolf Knoglinger made a new will dated April 28, 2005. After his death, two of his children retained the law firm of Cox, Taylor to apply to court to vary the new will. Cox, Taylor had no involvement in making the 2005 will.

In holding that it was a conflict of interest for Cox, Taylor to act for the two children, Madam Justice Dorgan applied the following tests set out in the leading case, MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235:

[10] Mr. Justice Sopinka set out a two-part test to determine whether a conflict exists between a former client and a current client (at 1260):
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?

[11] Mr. Justice Sopinka recognized the dilemma the first question creates. How can this question be answered, when such an answer would require that confidential information be revealed? He answered this question through the "sufficient relationship" test at 1260-61:

... [O]nce 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. This will be a difficult burden to discharge. Not only must the court's degree of satisfaction be such that it would withstand the scrutiny of the reasonably informed member of the public that no such information passed, but the burden must be discharged without revealing the specifics of the privileged communication. Nonetheless, I am of the opinion that the door should not be shut completely on a solicitor who wishes to discharge this heavy burden.
Madam Justice Dorgan found a sufficient connection between Cox, Taylor's prior representation of Mr. Rudolf Knoglinger and the current lawsuit to disqualify the law firm from acting for the two children. She said,

[16] In the case at bar, I am particularly concerned by the fact that the plaintiffs' solicitors drew a will for the testator in 1996. It is reasonable to assume that Mr. Van Driesum, as a competent lawyer, then reviewed with the testator the nature of his assets, potential claims against his estate, his obligations to provide for, among others, his three children, one of whom is the half-sibling of the other two; namely those matters which have the potential of triggering claims under the Wills Variation Act. Such a consideration might well include discussions, albeit nuanced of inter-family relationships and dynamics. Further, it should be noted that prior to 1996, according to the amended statement of claim, the financial affairs of the plaintiffs, the defendant Thomas Knoglinger, and the testator, were co-mingled to some extent. In these circumstances, it is reasonable to assume that relevant confidential information would be disclosed, or at the very least, that the potential for such disclosure exists. When, as here, the former client has not waived, and indeed cannot waive, solicitor client privilege, the issue is truly highlighted.

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