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Cold Calls and Conflicts: Sikes v. Encana Corporation

In Sikes v Encana Corporation, Justice Bell held that Smart & Biggar should not be removed as counsel for Encana.

The plaintiffs owned a Canadian patent application, which they sought to enforce against Encana in 2008. Sikes, a principal of the plaintiffs, contacted two law firms, neither of which was able to represent the plaintiffs because of potential conflicts of interest. The second firm referred Sikes to Garland, a lawyer at Smart & Biggar.

Sikes and Garland spoke over the phone for approximately 15 minutes in June 2008. Garland indicated that he would complete a conflict of interest check. Garland later informed Sikes that Smart & Biggar could not act for the plaintiffs and recommended other law firms. The plaintiffs ultimately retained another law firm to enforce the patent.

Encana retained Smart & Biggar to defend it against the claim by the plaintiffs. In February 2015, the plaintiffs wrote to Smart & Bigger to alert them to the past communications between Garland and Sikes. Smart & Biggar reviewed its records of the communications and concluded that there was no conflict of interest.

The plaintiffs brought a motion seeking to remove Smart & Biggar as counsel for the defendants. Sikes and Garland both filed affidavits. The Prothonotary characterized Sikes’ evidence as self-serving, vague, uncorroborated, and misleading, based on his cross-examination. The Prothonotary dismissed the motion, concluding that there was no solicitor and client relationship between Sikes and Garland and that no relevant confidential information had been provided to Garland.

The plaintiffs appealed the Prothonotary’s decision. Justice Bell noted that the standard of review on the appeal was “very high” because the decision was discretionary, made by the case management judge, and based on factual and credibility findings.

Applying the McDonald Estate test, Justice Bell dismissed the appeal because he agreed with the Prothonotary’s conclusion that a solicitor and client relationship between Sikes and Smart & Biggar had not been established.

A copy of Justice Bell’s decision may be found here. Prothonotary Lafrenière’s decision may be found here. Sikes has appealed Justice Bell’s decision to the Federal Court of Appeal.

Aitken Klee LLP represented Encana on the appeal and underlying motion.