Justice Gladys Pardu, writing for a unanimous Court of Appeal panel which included Justice Kathryn Feldman and Justice Lois Roberts in Paulus v. Fleury has added a further layer of context to the ongoing discussion in society as to the extent and limits of a lawyer’s duty to advocate on behalf of a client.
The facts of this case are quite simple. During a pretrial conference in an action for damages resulting from a motor vehicle accident, counsel for the plaintiffs made submissions indicating that he had “independent” witnesses to the collision who would testify on behalf of his clients. Counsel described the witnesses as “good people … independent … solid … good witnesses”. The case settled at the pretrial conference when the defendant’s counsel agreed to settle the claim for $850,000.00. Immediately after the pretrial, defendant’s counsel got a call from his own investigator indicating that it was likely that the “independent” witnesses’ son in fact lived across the street from the plaintiffs and might not be so independent after all. The defendant’s counsel wrote to the plaintiffs’ counsel the next day to repudiate the settlement.
The motion judge who initially was tasked with the question of whether or not to enforce the settlement, found that the statement made by the plaintiff’s counsel as to the independence of the witnesses was not a true statement and that plaintiff’s counsel knew the statement was untrue or was at the least reckless as to its truth. The motion judge found that counsel had a duty to opposing counsel not to knowingly make misleading statements and that the statement amounted to the lawyer having committed a civil fraud which induced the defendant to settle the case. The motion judge refused to enforce the settlement.
The plaintiffs appealed and asked that the settlement be enforced. The Court of Appeal allowed the appeal and enforced the settlement.
The decision from the Court of Appeal is of interest for a variety of reasons, but one of the more salient points is the comments made about the extent a lawyer may go in representing a client. In overturning the motion judge, the Court found that inaccurate statements or submissions made by counsel do not amount to civil fraud if either there is a reasonable basis for them, or if counsel is not knowingly misleading the court, i.e. is acting in good faith. In this case the Court found that plaintiff’s counsel’s statement as to the independence of the witnesses was both reasonably stated and made in good faith.
The Court pointed out that in almost every trial, at least one counsel’s submissions will be rejected as unsustainable. By definition, a losing party’s counsel will have made factual or legal arguments that are rejected by the judge or jury. Specifically the court noted that in a personal injury trial one counsel may submit that the evidence shows the plaintiff has made a full recovery. The opposing counsel may submit that the evidence shows that the plaintiff will suffer lifetime impairments.
The Court found that the motion judge’s ruling means that judicial disagreement with an opinion or submission by counsel in the course of judicial proceedings could result in a finding of civil fraud. The Court of Appeal found such a notion incompatible with the duty of counsel to advocate on behalf of his or her client. This conclusion plays a necessary role in ensuring that counsel is able to fulfill the duty of “resolute advocacy” that is owed to each client.
The Court acknowledged that mistakes by lawyers are not an infrequent occurrence. While counsel may lose credibility if they are not scrupulously careful about factual assertions or if they advance arguments with no reasonable foundation, that does not mean that such conduct should amount to civil fraud unless there is neither a reasonable basis for the statements nor a good faith belief in their accuracy.
This decision does not mean that there may not be some circumstances where a factual misrepresentation by counsel in judicial proceedings amounts to deceit or civil fraud. In fact, the Court provided as an example where it noted a lawyer could be liable for deceit. The example provided was if a lawyer tendered as evidence a forged cheque evidencing payment of a debt in an action on that debt, and did so knowing that the cheque was a false document. In those circumstances the Court surmised there would be no reasonable basis for the factual assertion; nor could it be said that the statement was made in good faith.
The message from the Court of Appeal’s decision in Paulus v. Fleury is that in order to facilitate a society where clients have access to “resolute” advocacy, a lawyer is given leeway to make submissions with a wide degree of latitude so long as the submission has either a reasonable basis or is being made in good faith.
Aryeh Samuel is the author of this blog and an associate at ZTGH. If you have a question about this decision or a similar file, please contact Aryeh.