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Lawyers - Conflict of Interest

Terceira v. Labourers International Union of North America (Ont CA, 2014)

In this case the Court of Appeal clarified the distinction between the issues of appearance of bias and a lawyer's conflict of interest where an OLRB adjudicator over a case had previously been retained by one of the parties:
[26] Before this court, it was accepted by all parties that the test set forth in Wewaykum was applicable and not that in MacDonald Estate. This court and others, as well as the OLRB, have consistently applied a reasonable apprehension of bias test to address adjudicators’ prior professional relationships: see, for example, Rando Drugs Ltd. v. Scott, 2007 ONCA 553 (CanLII), 86 O.R. (3d) 641 (Ont. C.A.), leave to appeal to S.C.C. refused, [2007] S.C.C.A. No. 494; Re Marques and Dylex Ltd. (1977), 1977 CanLII 1157 (ON SC), 18 O.R. (2d) 58 (Ont. Div. Ct.); Brick and Allied Craft Union, Local 5 v. International Union of Bricklayers and Allied Craftworkers, Local 6 (2000), 65 C.L.R.B.R. (2d) 287 (OLRB); and Re Suguitan, 2006 CanLII 2415 (ON SC), 2006 CanLII 2415 (S.C.).

[27] The distinction between a claim of conflict of interest by a lawyer and reasonable apprehension of bias by an adjudicator is significant for a number of reasons. In MacDonald Estate, which addresses a lawyer’s potential conflict of interest, the Supreme Court found, at p. 1260, that the imparting of confidential information is presumed to occur. In contrast, in Wewaykum, which addresses a claim of reasonable apprehension of bias of an adjudicator, the Supreme Court established, at para. 59, that impartiality of the adjudicator is presumed. Indeed, there is a strong presumption of judicial (or in this case adjudicative) impartiality and integrity: Ontario Provincial Police v. MacDonald, 2009 ONCA 805 (CanLII), 255 O.A.C. 376, at para 44.

[28] The rules governing a lawyer’s conflict of interest stem, in part, from the existence of a fiduciary relationship and a duty of loyalty owed to the client: Canadian National Railway Co. v. McKercher LLP, 2013 SCC 39 (CanLII), [2013] 2 S.C.R. 649, at paras. 19, 48; R. v. Neil, 2002 SCC 70 (CanLII), [2002] 3 S.C.R. 631, at pp. 640-644 and MacDonald Estate, at pp. 1243-1246. In contrast, the adjudicator’s duty is anchored in principles of procedural fairness including impartiality: Wewaykum, at paras. 57-59.

[29] The distinction has important implications for the OLRB administrative function. In selecting its adjudicators, the OLRB draws upon the expertise of practitioners from within the labour and employment bar. A presumption of disqualification would operate to disregard this practical reality. As stated by Morden J. in Re Marques and Dylex Ltd., at p. 70: “Most, if not all of those appointed [to the OLRB], are bound to have some prior association with parties coming before the Board.” Having said that, there will of course be instances of adjudicative bias as, for instance, where a decision-maker has a material pecuniary interest in a proceeding.

[30] By applying the incorrect test, the Divisional Court failed to apply the presumption of impartiality. The Divisional Court also failed to conduct a contextual analysis, which requires consideration of a number of factors that are relevant to the reasonable apprehension of bias test: Wewaykum, at paras. 74-93. The inquiry into an allegation of apprehension of bias by an adjudicator is “highly fact-specific” and is evaluated on an objective standard: Wewaykum, at paras. 73, 77. The person considering the alleged bias must be reasonable and the apprehension of bias must be reasonable: Wewaykum, at para 73. To succeed in this case, the Employees would have to establish that reasonable, right-minded and properly informed persons would think that the Vice-Chair was consciously or unconsciously influenced by his participation, about seven years earlier, in a matter resolved at the pleadings stage and of which the Vice-Chair said he had no knowledge of any parts material to the proceeding before him.

[31] Given the foregoing, I must consider anew the issue of reasonable apprehension of bias. For the following reasons, I would reinstate the Vice-Chair’s decision.

[32] Fundamentally, the Employees failed to rebut the presumption of impartiality that attached to the Vice-Chair.

[33] The proceeding before the Vice-Chair was a hearing dealing with preliminary motions submitted by LIUNA and Local 183 and, as such, was limited in scope. Mr. O’Brien’s length of service with an entity related to Local 183, if relevant at all, was only germane to the remedial stage of the Application. This was not before the Vice-Chair.

[34] No materials or record of any kind were filed in support of a claim of reasonable apprehension of bias. This is particularly noteworthy given that the client was making the bias allegation rather than an opposing party who might not possess any such materials. The Employees submit that they were unaware that the Vice-Chair was to preside until they entered the hearing room. That said, they did not seek an adjournment.

[35] Mr. O’Brien’s retainer ended about seven years prior and settled at the pleadings stage. It did not include unfair labour practice complaints against LIUNA or Local 183. Examined objectively, there was an inadequate nexus between the factual matrix before the Vice-Chair and the prior retainer by Mr. O’Brien. Furthermore, the Vice-Chair noted, at para. 7 of his reasons dated March 30, 2012:
There was no suggestion by counsel for the applicants that I am in possession of confidential information from Mr. O’Brien that would negatively affect his interests or the interests of the other applicants in this proceeding.

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