Lawyer taken to task for ‘derogatory comments’ about junior counsel appeals master’s order

Toronto lawyer taken to task for making “derogatory comments” about his opposing counsel is appealing a master’s endorsement in a case that considers the judiciary’s role in policing interactions between members of the bar.

“I believed it then and I still believe it was appropriate,” says David Midanik in explaining his actions in Beatrice Leaseholds Ltd. v. Shainhouse.

The comments follow Superior Court Master Ronald Dash’s findings about comments he likened to bullying a junior member of the bar. In a case dealing with the ownership of assets and the transfer of funds, Midanik, counsel for the plaintiffs, had sent an e-mail to the defendants’ counsel, Mark Ross, suggesting he was in a conflict of interest and may have breached the Rules of Professional Conduct by “knowingly pleading a falsehood” in his statement of defence and counterclaim.

Midanik then said he was going to bring a motion to have Ross removed from the record but six weeks later said he had decided not to go ahead with it. There was no reason given for the withdrawal, Dash found in his Sept. 10 reasons in Shainhouse. In his decision regarding costs for the abandoned motion, the master was critical of Midanik’s actions.

The withdrawal gave Ross no opportunity to clear his name, the master said, adding the accusation would continue “to hang as a cloud over his head for the duration of this action.”

“These references by Mr. Midanik were in my view meant to demean Mr. Ross’s competence and bully him as a junior member of the bar,” wrote Dash.

“There is no place for such comments in communications between solicitors. They were unnecessary and did nothing to advance the position of the plaintiffs.”

The master also said it was “interesting” that Midanik referred to the Rules of Professional Conduct when they also say a lawyer should avoid making “ill-considered or uninformed” accusations about opposing counsel.

“While I do not find, nor is it my role to determine, that Mr. Midanik has violated the Rules of Professional Conduct, there is little doubt in my mind that the remarks were unprofessional, abusive, and offensive,” wrote Dash.

It’s up to the Law Society of Upper Canada to decide if Midanik’s actions constitute professional misconduct, added Dash, who ordered about $4,000 in favour of Ross for the amount he spent reviewing the allegations and retaining a lawyer to defend himself in relation to the withdrawn motion. Had the lawyer made the comments in court, Dash said he could have made a cost award on a substantial indemnity basis.

“Such derogatory comments, if made to the court about opposing counsel, could result in an award of substantial indemnity costs. Mr. Midanik’s conduct, however, was restricted to communications between counsel and were not contained in any documents filed by him with the court.

“Therefore, while the demeaning conduct would not be grounds to award an elevated level of costs by itself, taken together with the allegations of fraudulent conduct which were not substantiated when the plaintiffs withdrew their motion to remove Mr. Ross, I am of the view that costs should be on a substantial indemnity scale.”

Midanik calls Dash’s comments “unfair.” The master “did not take into consideration the submissions I made,” Midanik tells Law Times.

In writing to Ross about what he saw as wrongdoing, Midanik says he was merely fulfilling his obligations as counsel to point out the concerns he had. Asked why he didn’t provide reasons for withdrawing his motion, Midanik says he felt disclosing them would have breached solicitor-client privilege.

Midanik notes he’ll appeal Dash’s decision.

The main case in Shainhouse involves three children of Beatrice Shainhouse (and their companies) who sued their siblings and their respective companies over the ownership of assets and the use and transfer of funds. In an e-mail to Ross, who’s representing the defendants, Midanik said he was in conflict of interest because he was once counsel of record to one of the related companies, R.M.S. Environ Solv Inc.

Midanik said Ross could potentially be a material witness on the ownership of the shares of R.M.S. as it relates to the current case. He also said Ross’ claim in his pleadings that Beatrice Leaseholds had bought R.M.S. is false.

In his notice of appeal, Midanik said Dash didn’t have jurisdiction to make the order. He also suggested the master’s comments about his conduct amounted to a finding of professional misconduct and is something he had no jurisdiction to make.

“The master erred in finding that the Plaintiffs’ counsel tried to bully Mr. Ross or that his remarks were unprofessional, abusive or offensive,” the notice of appeal states.

Having practised law for the last nine years, Ross says he isn’t exactly a junior counsel. The master made the remarks because he picked up on the tone of Midanik’s notes, says Ross. “One of the things I suppose the master seized on was that at some point [Midanik] said, ‘I suggest you consult with senior counsel and tell them about all of your actions,’” says Ross.

“It wasn’t meant really as an advice as much as it was a put-down although I’m not that junior.”

Ross says Dash’s comments weren’t a surprise to him. “It’s tough to have the courts come in, especially in the heat of a battle, and really police counsels’ conduct. [But] there are certain lines that from time to time get crossed and I think it is well within a master or judge’s jurisdiction to sometimes weigh in on those and keep counsel in check.”

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