CanWest headquarters in WinnipegJOHN WOODS/The Canadian Press
In what a lawyer for the Law Society of Upper Canada called a "fiasco," two of Conrad Black's lawyers will have to wait another week for a disciplinary hearing after their law firm, Torys LLP, failed to turn over 168 boxes of files until just days before proceedings were to begin.
A hearing was supposed to begin Monday April 26 in the case of Darren Sukonick and Beth DeMerchant, both accused of conflict-of-interest for their role in the sale of Lord Black's Hollinger newspaper empire. But Law Society lawyer Paul Stern immediately requested a week-long delay as proceedings got under way.
Mr. Stern told the three-member disciplinary panel at Osgoode Hall in Toronto that Torys revealed last week that it had failed to turn over thousands of pages of files on the sale of the newspapers to CanWest Global Communications Corp., despite being asked for those documents in 2006.
Mr. Stern said the Law Society's lawyers had spent the past week scrambling to examine the new documents, after having been "left in the dark" and "sideswiped" by the omission. In addition to the 168 boxes, Mr. Stern said, Torys produced yet another 11 compact discs of documents on Sunday.
"You have to picture it, we were getting ready … when we learned of this massive foul-up last Monday," Mr. Stern said. "So we have had less than a week to deal with it."
Mr. Stern said the Law Society was obligated to go through the new material to try to "salvage something from this fiasco caused by non-production by Torys."
Torys called the mishap an inadvertent "oversight" and said it had intended at all times to provide the Law Society with all of the relevant documents.
Both Ronald Foerster, a lawyer acting for Torys, and John Laskin, a senior partner with the prestigious Bay Street firm, addressed the panel to apologize for and explain the error. The law firm described the problem as a "miscommunication" with the company actually compiling the documents on compact discs.
Mr. Foerster said he initially believed all of the documents, including scanned hardcopy files, e-mails, notes and memorandums, had been turned over in 2007.
But it turned out that scanned versions of hardcopy documents from the law firm's Hollinger International Inc. file on sales of assets to CanWest Global were left out. Purely electronic documents associated with that file, such as e-mails, were handed over in 2007, he said.
Citing an e-mail he sent to a Torys clerk co-ordinating the documents, he said he must have mixed up two different file numbers. "Looking at this, my only explanation is I transposed and confused these two files."
Philip Campbell, the lawyer for Ms. DeMerchant, said no one regrets the delay more than his client and Mr. Sukonick, who have had the allegations hanging over them since they were made public last May.
The law society alleges the pair engaged in professional misconduct by representing Chicago-based Hollinger International while at the same time advising Lord Black and two former Hollinger executives. They are accused of failing to fully disclose this alleged conflict-of-interest and failing to obtain the "informed consent" of their clients.
The allegations centre on the so-called non-compete payments paid to Lord Black and his executives after Hollinger's papers were sold to CanWest and Osprey Media. During Lord Black's 2007 trial in Chicago, in which he was convicted of fraud, the court heard allegations that the Torys lawyers recommended that the non-competition payments did not need to be disclosed to shareholders.
The Law Society also alleges the two were wrong to advise Lord Black in his decision to renounce Canadian citizenship for a seat in Britain's House of Lords. That move, the society alleges, could have hurt Hollinger, because it endangered the National Post's eligibility for tax breaks under foreign ownership rules.
If the three-member Law Society panel finds that the pair broke the profession's rules, the penalties could include reprimands, fines, suspensions, or the complete revocation of their licences to practise law.
Mr. Sukonick, still with Torys, and Ms. DeMerchant, now retired, have said previously in statements issued through their lawyers that they "worked entirely within the Law Society's rules and accepted professional practices." Their firm has also publicly supported them.