Nunatsiaq Online
NEWS: Nunavut October 24, 2016 - 9:59 am

In lawyer-versus-lawyer case, Nunavut judge wants protections for plaintiffs

Now in a conflict, lawyer Alan Regel stands down from lawsuit against Geoffrey Budden

JIM BELL
Lawyers will return to court on March 17, 2017 for a hearing to decide on a third party motion that James Morton, acting for Newfoundland lawyer Geoffrey Budden, has made against Edmonton lawyer Alan Regel. Regel, who was representing some of Budden's former Nunavut clients, had in 2015 commenced a legal action against Budden alleging Budden improperly took small amounts of money from each of his clients, including the application of HST. But Morton alleges Regel has also improperly charged HST to the same clients. At least until that issue is resolved, Regel may no longer represent those plaintiffs, since he is now in a conflict of interest. (FILE PHOTO)
Lawyers will return to court on March 17, 2017 for a hearing to decide on a third party motion that James Morton, acting for Newfoundland lawyer Geoffrey Budden, has made against Edmonton lawyer Alan Regel. Regel, who was representing some of Budden's former Nunavut clients, had in 2015 commenced a legal action against Budden alleging Budden improperly took small amounts of money from each of his clients, including the application of HST. But Morton alleges Regel has also improperly charged HST to the same clients. At least until that issue is resolved, Regel may no longer represent those plaintiffs, since he is now in a conflict of interest. (FILE PHOTO)

Alan Regel, an Edmonton lawyer who in 2015 filed a lawsuit against Newfoundland lawyer Geoffrey Budden on behalf of some of Budden’s former Nunavut clients, agreed Oct. 21 at the Nunavut Court of Justice in Iqaluit to stand down from that case until at least mid-March of 2017.

The affair started in 2015, when Regel, representing a group of Budden’s ex-clients, filed a lawsuit alleging Budden improperly took small amounts of money from each of the Ed Horne sexual abuse survivors for whom Budden had won a damage award that the governments of Nunavut and the Northwest Territories agreed to pay.

But Regel now finds himself in a conflict of interest, since he must defend against a retaliatory third-party action filed this past August by Budden’s lawyer, James Morton.

In it, Morton essentially alleges Regel is doing what Regel alleged Budden was doing: improperly charging HST.

“A lawyer cannot represent someone in an action if they are also a party in that action… A lawyer cannot act for a plaintiff and defend himself in that same lawsuit,” Nunavut Justice Paul Bychok said.

This means the main action in the case will sit in limbo until the court, likely some time next year, rules on the third party motion that Morton filed on Budden’s behalf against Regel.

To fight that motion, Regel has hired another Edmonton lawyer, John Rossal, to represent him.

After listening to Bychok outline the issues in the case Oct. 21, Rossal said Regel and his firm will discontinue actions on behalf of the plaintiffs suing Budden and that he will notify each plaintiff. Morton also said he would take “no more steps” between now and next March.

“This is a very strange situation,” Rossal said in court.

Bychok also told lawyers he wants to ensure full protection for the legal rights of the Budden ex-clients who Regel had been representing. Many of them are victims of ex-teacher Ed Horne’s sexual abuse.

To that end, Bychok wants those numerous plaintiffs—many of whom may be unaware of what’s going on—to receive notice of the case and be given a chance to get their own lawyers prior to a hearing on the third-party action set for March 17, 2017.

“I want to be sure they know what is happening. I want to be sure they know they have a right to a lawyer,” Bychok said.

And Bychok ordered lawyers not to file documents within the publicly accessible case file for the matter that reveal the names and addresses of plaintiffs.

That’s because the names of all sexual abuse survivors who have filed lawsuits at Nunavut court, including Ed Horne survivors, must be blacked out in publicly available documents.

For example, Regel had filed more than 200 pages of documents into the publicly available case file earlier this month that contain names and contact information for sexual abuse survivors.

But from now on, lawyers must file two copies of each document, Bychok ordered.

One copy, contained identifying information, will be sealed from public view. The other copy, to be placed in the public case file, will redact such information.

“The Nunavut Court of Justice has rules which we expect lawyers to follow,” Bychok said.

Regel’s original statement of claim against Budden was later replaced by a second one that contained a greater number of claimants, Regel said in a recent email to Nunatsiaq News, sent prior to Oct. 21.

Budden, a lawyer based in Mt. Pearl, Nfld., had since 2001 worked with numerous survivors of Horne’s sexual abuse, winning two awards in lawsuits filed against the GN and the GNWT: a settlement in 2002 worth $21.5 million, and a settlement in 2011 for a second group of claimants worth $15 million.

Regel alleged in the legal action against Budden that, when distributing individual payments to survivors, Budden charged his clients for things that he should not have charged them for, including HST.

(“HST” means “harmonized sales tax,” a single sales tax that combines the federal GST with a provincial sales tax and is applied at point of sale. Nunavut does not have an HST.)

This means, among other things, Budden must repay those HST amounts to his clients, Regel claimed.

But this past August, Budden’s lawyer, James Morton, filed his third party motion. It alleges that Regel was also improperly applying HST.

“Mr. Budden is saying, if I have to pay HST, then Mr. Regel should have to pay that too,” Bychok said in a plain-language summary of the issue.

Until that issue is decided, Bychok wants full protection for the legal rights of the plaintiffs.

Some people from communities outside Iqaluit listened to the Oct. 21 hearing via a telephone connection. Others sat in the courtroom gallery.

But it’s not clear how many of them understand what’s happening in court or even know what’s going on.

“This is a very important issue and it’s very important that all plaintiffs who wish to participate… get a chance to do so,” Bychok said.

To do that, the court will likely send out notices and public advertisements to plaintiffs saying they have the right to seek their own legal counsel, with information on how to contact the Nunavut law society to get a referral to a lawyer.

Bychok set March 17 as the date for a hearing on Morton’s third-party motion, and also set aside March 29, 30 and 31 if more time is needed to hear from other lawyers.

And there’s one more thing, Bychok said: “There is no crisis in the Nunavut Court of Justice.”

Some media reports have suggested that the six-member Nunavut bench, which now contains two vacancies due to recent retirements, is not functioning at full capacity.

But Bychok said that although the Nunavut court is looking forward to getting two new judges, “the ship of state, if I can call it that, is sailing just fine.”

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