Keddy Estate v. National Life Insurance Co. of Canada Ltd. et al., 2006 NSSC 161

• Judge: Hood, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: April 21, 2006
• Jurisdiction: Nova Scotia
• Citations: 2006 NSSC 161;(2006), 244 N.S.R.(2d) 356 (SC)

Keddy Estate v. Nat. Life (2006), 244 N.S.R.(2d) 356 (SC);

    774 A.P.R. 356

MLB headnote and full text

Temp. Cite: [2006] N.S.R.(2d) TBEd. MY.032

Sandra E. Oxner and The Estate of the Late Donald P. Keddy by its Personal Representative, Sandra. E. Oxner (plaintiffs/applicants) v. National Life Insurance Company of Canada Limited, a body corporate, and 3032948 Nova Scotia Limited, a body corporate (defendants/respondents)

Mary Cynthia Keddy and Cynthia Jane Keddy, by her litigation guardian, Mary Cynthia Keddy (plaintiffs/applicants) v. 3032948 Nova Scotia Limited, a body corporate, and National Life Insurance Company of Canada Limited, a body corporate (defendants/respondents)

(SH 205028; 205007; 2006 NSSC 161)

Indexed As: Keddy Estate v. National Life Insurance Co. of Canada Ltd. et al.

Nova Scotia Supreme Court

Hood, J.

May 26, 2006.

Summary:

Plaintiffs in two related actions applied to have the defendants' counsel disqualified on the basis of conflict of interest.

The Nova Scotia Supreme Court allowed the application.

Barristers and Solicitors - Topic 1611

Relationship with client - Conflict of interest - Conduct of action against former client - Oxner sued the defendants as personal representative of her husband's estate and in her own right - Oxner applied to have the defendants' law firm disqualified - The Nova Scotia Supreme Court held that Oxner had established a previous relationship with one of the firms that merged to become the defendants' law firm - The court referred to a case that concluded that duties of confidentiality and loyalty owed to a former client were owed equally to the former client's personal representative - Further, Nova Scotia's Legal Ethics & Professional Conduct Handbook defined "client" as including "anyone to whom a member owes a duty of confidentiality, whether or not a solicitor-client relationship exists between them" - In addition, Oxner's husband held shares in trust for her, and several of the affidavits from lawyers at the original firm did not specifically say that they never represented Oxner - See paragraphs 17 to 27.

Barristers and Solicitors - Topic 1611

Relationship with client - Conflict of interest - Conduct of action against former client - Keddy was a director and officer of KMI, which went into receivership and later filed for bankruptcy - A Bill of Sale executed by the bankruptcy trustee transferred certain assets of KMI to 303 - 303 retained Patterson Palmer to act for it in relation to dealings with the bankruptcy trustee - 303 alleged that it now owned certain life insurance policies and that the previous assignments of those policies and beneficiary designations made under those policies were not effective - In two actions Keddy's widow, ex-wife and daughter claimed to be entitled to the proceeds of those policies - They applied to have Patterson Palmer disqualified as 303's counsel for conflict of interest - 303 retained new counsel (McInnes Cooper) - Patterson Palmer and McInnes Cooper merged - The Nova Scotia Supreme Court held that McInnes Cooper was disqualified from acting for 303 because of a conflict of interest - Patterson Palmer had previously represented Keddy respecting trust agreements - The trust agreements and insurance policies were inter-related.

Barristers and Solicitors - Topic 1615

Relationship with client - Conflict of interest - Where lawyer joins opposite party's lawyer's firm (incl. merger of firms) - The Nova Scotia Supreme Court stated that "Law firm mergers are a reality and bring with them the potential for conflicts of interest when such mergers occur. I am satisfied that measures exist and can be taken to prevent disclosure or risk of disclosure of confidential information when law firms merge. But, in my view, they are only effective where there was no pre-existing conflict of interest." - See paragraph 137.

Cases Noticed:

MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd., [1990] 3 S.C.R. 1235; 121 N.R. 1; 70 Man.R.(2d) 241; 77 D.L.R.(4th) 249; [1991] 1 W.W.R. 705, refd to. [para. 13].

MacDonald Estate v. Martin - see MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd.

Martin v. Gray - see MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd.

Phillips v. Goldson et al., [2003] O.T.C. 1092; 68 O.R.(3d) 737 (Sup. Ct.), folld. [para. 18].

Bank of Montreal v. Dresler et al. (2002), 253 N.B.R.(2d) 37; 660 A.P.R. 37 (C.A.), appld. [para. 54].

Choulakos Woodburn McKenzie Maranda Ltd. v. Smith, Lyons, Torrance, Stevenson & Mayer, [1994] B.C.J. No. 1660 (S.C.), refd to. [para. 68].

Duncan v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1981), 646 F. 2d 1020 (U.S. Ct. App., 5th Cir.), refd to. [para. 70].

Manville Canada Inc. v. Ladner Downs (1992), 63 B.C.L.R.(2d) 102 (S.C.), affd. (1993), 25 B.C.A.C. 121; 43 W.A.C. 121; 76 B.C.L.R.(2d) 73 (C.A.), refd to. [para. 71].

Gallagher and Lumsden v. Wood et al. (1995), 142 N.S.R.(2d) 127; 407 A.P.R. 127 (C.A.), refd to. [para. 73].

Gould v. Shirley et al. (1998), 170 N.S.R.(2d) 360; 515 A.P.R. 360 (C.A.), refd to. [para. 73].

Davies, Ward & Beck v. Baker and McKenzie et al. (1998), 111 O.A.C. 352; 40 O.R.(3d) 257 (C.A.), refd to. [para. 77].

Magnes v. Magnes (1999), 175 Sask.R. 282 (Fam. Div.), dist. [para. 79].

Brown v. Hodsoll, [1986] O.J. 26 (H.C.), dist. [para. 149].

Authors and Works Noticed:

Nova Scotia Barristers' Society, Legal Ethics and Professional Conduct: A Handbook for Nova Scotia Lawyers (1991), c. 6 [paras. 57, 85]; 6A [para. 18 et seq.].

Counsel:

K. Michael Tweel, for the applicants, Sandra E. Oxner et al.;

John P. Barry, Q.C. for the applicants, Mary Cynthia Keddy et al.;

John P. Merrick, Q.C., for the respondents.

This application was heard on April 21, 2006, in Halifax, N.S., by Hood, J., of the Nova Scotia Supreme Court, who delivered the following decision on May 26, 2006.