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Former client suing Aird & Berlis, Winkler

|Written By Helen Burnett

A copyright case involving two internet companies has culminated in one of the parties suing its former lawyer and law firm, alleging he “breached his duty of candor to the court” and “undermined the dignity of the legal process.”

Howard Winkler, a partner with Aird & Berlis LLP and a specialist in civil litigation, was originally hired as lead counsel by plaintiff Netbored Inc. in 2003, after the company claimed that one of its former employees, who later joined defendant Avery Holdings Inc., breached its copyright. Winkler denies the claims made against him.

According to the statement of claim, Avery started an action against Netbored in Ontario Superior Court in November 2003, alleging interference with its contractual negotiations and economic interests. After Winkler received an extension of time to file a defence, he allegedly advised Netbored to start an action in Federal Court against Avery, alleging “breach of copyright, misuse of confidential information, and breach of contractual relations.”

The company also noted that, on behalf of Netbored, Winkler sought an Anton Piller order and interim injunction ex parte without notice to Avery or its solicitors. The company claims that “up to and on Dec. 15, 2003, Winkler did not advise Avery’s counsel that he intended to use the time granted in the extension to file a fresh claim in Federal Court and seek injunctive relief rather than filing a defence in the Ontario action.”

Avery applied for a review of the Anton Piller order, looking for it to be vacated, following which Netbored hired a new firm to represent them at the review and respond to Avery’s allegations that Winkler acted improperly.

The final Federal Court decision in the case between Netbored Inc. and Avery Holdings Inc. was released in October 2005, with Justice Roger Hughes vacating the Anton Piller order and noting among other things, that the plaintiffs’ “evidence and submissions to the judge who granted the Anton Piller order lacked candor.”

Netbored claims that it was following this decision that the company “became aware of the consequences and resulting damages resulting from Winkler’s conduct.” Its pleadings include that Winkler “undermined the dignity of the legal process,” “failed to tell the court of his discussions with the Avery solicitors” regarding the Ontario court action, and that he “improperly sought relief the Federal Court could not grant,” with respect to issues of confidential information.

These allegations have not been heard or proven before a court of law.

Winkler told Law Times the statement of claim was served on the eve of the commencement of an assessment initiated by Aird & Berlis against Netbored in relation to unpaid accounts. He noted that Aird & Berlis was not counsel for Netbored at the hearing before Hughes and that it will be the position of the defendants that Hughes’ findings referred to in the statement of claim have been mischaracterized by the plaintiffs.

Both sides are also claiming harm to reputation, with Netbored noting in its statement of claim that the “defendants’ conduct” has also caused the company embarrassment and harm to its reputation in the business community.

Winkler says the allegations in the statement of claim, “which publicly impugn my honesty, integrity, and professional reputation will be vigorously defended.”

Netbored notes that as a result of the matter, it has incurred fees of over $1.1 million, resulting from Hughes’ costs order to Avery, fees payable to Aird & Berlis, and experts’ fees.

According to the statement of claim filed in January with the Ontario Superior Court, Netbored is claiming damages of $900,000 plus interest “for the recovery of all professional fees paid and incurred” as well as the forfeiture of $400,810 in fees paid or incurred to Aird & Berlis.

They are also claiming damages of $1 million for “breach of contract” regarding the copyright claim, $500,000 for “breaches of trust, confidence, retainer, and fiduciary duties,” which they claim resulted in Hughes vacating the Anton Piller order.

Also claimed are punitive damages of $500,000, damages in restitution, pre- and post-judgment interest, and costs.

Andrew Sanfilippo, a lawyer with O’Donnell Robertson & Sanfilippo, counsel for Winkler and Aird & Berlis in relation to this claim, says he has delivered a demand for particulars, and is awaiting a response. A statement of defence has not yet been filed.

“Our clients deny the allegations advanced against them in this proceeding, and will plead accordingly at the appropriate time,” he says.

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