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The Commercial List lives on

|Written By Julius Melnitzer

All is quiet on the western front. Or at least west of Toronto’s City Hall in the Canada Life building on University Avenue, where the Ontario Superior Court’s Commercial List has taken up residence.

The Commercial List court has a new home in the Canada Life building and a whole new feeling under the direction of Justice Sarah Pepall.

It’s also been about a year since former justice James Farley, the most famous Commercial List judge in the history of the court - certainly the only one to grace the cover of ROB Magazine - left the bench to join McCarthy Tétrault LLP.

Along with his brilliance, creativity, and energy, Farley had a knack for making a lot of noise. Twice removed from the Commercial List amid rumours that lawyers were unhappy with his strong-arm methods of forcing settlement and habit of dressing down counsel regardless of their standing in the profession, Farley was nothing if not controversial.

“Justice Farley’s personality got in the way of his judiciousness,” Gary Luftspring of Goodman & Carr LLP told Law Times several years ago. “From time to time, he was very rude and could be quite difficult on a real personal level. There is no question that people had problems in terms of dealing with him.”

The rudeness, said another senior counsel, was “frequently unnecessary, no question about it.”

Farley’s 2001 reasons in Re Bakemates International Inc. are indicative of his tendency to personal invective.

In his eight-page, 29-paragraph endorsement, Farley excoriates Toronto lawyer Paul Pape’s conduct and performance in the case. In it, Farley:

•    makes pejorative reference to Pape’s “audacity” in expecting that he would be allowed to cross-examine the representative of the receiver in the case;

•    suggests that Pape had followed an improper procedure in failing to do a follow-up “interview” with the receiver;

•    implies that Pape’s questions of the receiver were inappropriate and had “disappointed” him;

•    refers to Pape’s questions as an “unfortunate and ill-based attempt on [the receiver’s] character”;

•    states that Pape “ought to have known better”;

•    concludes that Pape “did not have the time to properly research matters but instead relied on the spade work of his clients, the Parravanos, without checking”; and

•    asserts that Pape “did not appear to have a good idea of the general duties of an ‘interim receiver (or of a ‘monitor’) and of a ‘receiver’ nor of the specific duties of same in this situation vis-à-vis his thrust with respect to a leg up on the learning curve ramp up.”

Pape is a respected and well-known barrister of 30 years’ experience whose high-profile successes include convincing the Ontario Court of Appeal to allow the Bre-X litigation to proceed in negligent misrepresentation against the company’s insiders, directors, and officers.

At the time, one senior counsel familiar with the case called Farley’s remarks “beyond the pale, especially when the Advocates’ Society and other professional organizations are leading a movement towards more civility in the courtroom.”

Another called Pape a “superb barrister” and added: “Justice Farley didn’t accomplish anything except embarrassing Pape in front of his clients and colleagues. Even if Pape had made an error in the way he handled the case, as we all do, it is not indicative of his lengthy, distinguished career.”

Eventually, however, the Court of Appeal upheld Farley’s judgment in Bakemates without commenting on his treatment of Pape.

As usual, there was no problem with the result at which Farley arrived, just the way in which he got there.

In any event, even Farley’s self-acknowledged “Irish temper” - which reportedly led him to throw a volume of the Rules of Civil Procedure at an out-of-province lawyer, narrowly missing him - did not hinder his court’s ascension to domestic and international renown for its responsiveness and flexibility.

And that suited him perfectly, because, by all accounts, he was a man who loved the limelight.

“There was always a feeling that everything had to cross Farley’s desk, that he was the only one really qualified to look after the really important matters,” says Richard Jones of Aylesworth LLP. “That’s one of the reasons he ended up with all the high-profile cases like Air Canada, Stelco, Cadillac Fairview, and Olympia & York.”

Which is not to deny that Farley bordered on invaluable. But not irreplaceable.

“Life goes on,” says Derrick Tay of Ogilvy Renault LLP. “People also wondered about what would happen to the commercial list when [Justice] Lloyd Houlden retired.”

What happened when Farley retired was that the insolvency bar remained in good hands.

“Without diminishing the importance of Justice Farley, I think it’s fair to say that the Commercial List lived on without missing a beat,” says David Bish of Goodmans LLP.

But nowadays, there’s much less of that “central command” feeling in the court.

“You just don’t have the same level of a single judge staying with one case and taking carriage throughout,” Tay says.

Which is not all good. “I think the process has become a little more expensive because of the need to re-educate the various judges who might show up on a case,” Tay says.

Motions are also a more common feature of insolvency cases these days.

“If Farley was running a case, people would be terrified of bringing tactical motions,” Tay says. “He just wouldn’t hear them. Instead he sent people out to the hallways to negotiate.

Scott Bomhof of Torys LLP’s Toronto office is of similar mind.

“The judges on the Commercial List today have a greater tendency to see that the rules and policies of the court are followed or to force lawyers to explain why they have not been followed,” Bomhof says.

By way of example, judges now at least require counsel to explain late filings before admitting them into evidence, a technicality to which Farley paid little attention.

“I think that’s making counsel a little more willing to think about the rules and get things out on time,” Bomhof says.

Still, Jones believes that the post-Farley court doesn’t yet have a definitive collective imprint.

“But there’s going to be one because of the high quality of the bench,” he says.

By way of example, Jones points to Justice Geoff Morawetz, who “has a different, much more gentle style than Farley, yet is very academically and intellectually strong”; to Justice Peter Cumming, who is “getting to play the tough judge role”; and to the supervising judge, Justice Sarah Pepall, “who brings more of an administrative approach than Farley ever did.”

For his part, Bish points to Justice John Ground as the experienced mainstay of the court after Farley’s departure, while Bomhof lauds the entire group as “judges with a wealth of knowledge in commercial and insolvency matters.”

All of which augurs well for the clients, the people that really matter.

“Things may have changed somewhat procedurally but from a substantive perspective I remain very happy with the quality of the decision-making on the Commercial List,” says Tay.

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