Defence lawyers face a conflict in measuring their conduct against unclear standards of civility, a witness at Joe Groia’s disciplinary hearing testified last week.
“I would much rather defend my client vigorously . . . and take the risk of being criticized later rather than pull my punches because I was concerned about being in these types of proceedings,” said Nicholas Richter, who worked with Groia on the John Felderhof case at the centre of the Law Society of Upper Canada disciplinary hearing.
Richter, who argued the term civility is difficult to define in the context of courtroom behaviour, was testifying at Osgoode Hall last week as the defence began presenting its evidence to the three-member panel on Groia’s behalf.
Representing Groia is Earl Cherniak, a partner with Lerners LLP. Unlike the law society, which relied exclusively on court documents to present its evidence, Groia’s counsel elected to examine witnesses last week.
“The evidence that we will call will be very critical of the [Ontario Securities Commission] and its approach in the case,” Cherniak told the panel Monday morning.
He added that the evidence presented by Groia’s counsel aims to show that Groia and his legal team had a reasonable belief that the OSC was taking an all-costs approach to securing a conviction of his client Felderhof, the former vice chairman at Bre-X Minerals Ltd.
The first witness called to testify on behalf of Groia was Peter Roy, a partner with Roy Elliott O’Connor LLP. Roy said he was representing BMO Nesbitt Burns in a litigation dispute related to the Bre-X affair at the time of Felderhof’s trial and was following the case closely.
Much of Cherniak’s examination of Roy focused on establishing the necessity for Groia’s insistence on full disclosure of various documents.
“You have to know what the company has; otherwise, you’re not building a solid foundation for attacking expert opinion,” he said.
During his examination, Roy was critical of the testimony at Felderhof’s trial of Graham Farquharson, president of Strathcona Mineral Services Ltd., who in a report identified warning signs Bre-X should have noticed when examining for gold deposits in Busang, Indonesia.
“Mr. Farquharson testified that he saw his job as assisting the [OSC] in getting a conviction,” he said. “It was clear to me that this wasn’t what an expert should do in this case.”
Roy added that Farquharson’s report benefited from the perspective of hindsight and that many mining companies were interested in the alleged deposits in Busang at one time.
“It’s safe to say that every major mining company in the world was trying to buy Bre-X,” Roy said.
Felderhof, now 71 and running a restaurant in the Philippines, suggested in his testimony Tuesday morning that the OSC turned to what he felt was a lynch-mob mentality against him as media coverage of the Bre-X affair grew.
“To me, the [OSC] was forced into a position that they needed a scapegoat,” he said.
Felderhof said that while he estimates there were close to 1 million documents to sort through in order to defend himself, the prosecution didn’t use most of them in its case.
“They solely relied on the evidence presented by Mr. Graham Farquharson . . . which to me is very nonsensical,” he said.
While acknowledging he wanted an aggressive lawyer, Felderhof attested to Groia’s character by explaining that he continued to act as his Canadian counsel even though he has been unable to pay him since October 2005. To date, Felderhof owes Groia nearly $2 million.
Richter, who worked with Groia prior to leaving Groia & Co. Professional Corp. to establish his own practice, outlined in detail the concerns the defence team had about the OSC’s objectivity from the time it received initial disclosure in August 1999.
“The thing that was most surprising to me was that we received a number of binders of documents with the covering letter indicating those were documents that the OSC intended to tender at trial,” he said.
“I had never before received disclosure where the disclosures were organized around the case the prosecutor was intending to bring [forth],” Richter added.
According to Richter, members of Groia’s defence team collected more than 235 bankers’ boxes of disclosure between December 1999 and March 2000 following their application for additional hard copy materials. From those, they were able to produce more than 90 binders used in Felderhof’s defence.
Richter was also critical of the conduct of former OSC litigators Jay Naster and Ian Smith, who argued on behalf of the regulator for the first phase of Felderhof’s trial.
He said he noted a difference in the defence’s ability to work with the OSC when lawyers Emily Cole and Frank Marrocco took over from Naster and Smith in the second phase of the trial.
“The atmosphere [between the defence and OSC] was night and day,” Richter said.
During a lengthy cross-examination of Richter, Tom Curry, counsel for the law society and a partner with Lenczner Slaght Royce Smith Griffin LLP, asked him if he agreed with the characterization of Groia’s behaviour by former Ontario Superior Court justice Archie Campbell.
Campbell, who in 2002 rejected the OSC’s request to have Justice Peter Hryn removed from the proceedings, was critical of Groia’s behaviour.
“There is a lot that happens in a courtroom that isn’t reflected in the record,” Richter responded, noting it was difficult to grasp the context of Groia’s statements from the court record alone.
Groia, who joined the OSC in the mid 1980s and was once its head of enforcement, said while testifying Thursday that he had nothing but the highest regard for the regulator and hasn’t had an issue with it since the Bre-X case concluded.
“We still have tough cases [with the OSC] . . . but since Mr. Marrocco and Ms. Cole took over [the Bre-X file], I’ve never had a cross word with anyone there,” he said.
For related content, see "Groia defends 'forceful advocacy'" and "Hearing will send a chill: Groia."