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newsmakers Torys lawyers at centre of LSUC case derailed by 'fiasco' over boxes of evidence BY GLENN KAUTH lawyers have been proven. So far, the hear- ings have faced many procedural hurdles, including the incident involving the boxes. At the time, Ron Foerster, the Borden Ladner Gervais LLP partner representing Torys, took the blame for the mishap by not passing on the materials to the LSUC in advance of the hearing. Foerster explained the mix-up by noting Hearings against two Torys LLP law- yers came to a halt after the firm failed to hand over 168 boxes of materials to the law society. I t is a case that garnered as much atten- tion for its procedural mishaps as the allegations that sparked it in the first place. In April, as Law Society of Upper Canada disciplinary hearings were set to begin against two Torys LLP lawyers, panel members learned the firm had inad- vertently failed to turn over 168 boxes of materials related to the case. As a result, they were forced to adjourn the proceed- ings while law society staff frantically sorted through them. The matter deals with conflict of interest allegations against lawyers Darren Sukon- ick and Beth DeMerchant stemming from the sale of Hollinger empire newspaper assets several years ago to Canwest Global Communications Corp. and Osprey Media Holdings Inc. Sukonick remains a partner at Torys, while DeMerchant is no longer practising. The law society allegations, outlined in notices of application last year, include the claim that the lawyers worked on Hollinger's sale of newspaper assets to Canwest "which included the provision of non-competition 4 December 2010 covenants and payments in respect of which the interests of two or more of your clients were not aligned." The allegations go on to suggest the law- yers had a solicitor-client relationship with Hollinger and a group of its subsidiaries, as well as recipients of non-competition pay- ments, such as Conrad Black and former Hollinger executives Peter Atkinson and John Boultbee. In particular, the law society alleges the lawyers were in a conflict of interest on that file with regard to "who was to receive compensation for their non-competition covenant; how much was to be received; what was the true purpose of the non- competition payments; what was required to be publicly disclosed in connection with the payments; and what was the appropriate tax treatment for the payments," according to the notices. According to the law society, the lawyers were also in a conflict when they helped Black renounce his Canadian citizen- ship, a move the LSUC alleged could hurt Hollinger. None of the allegations against the two it dated back to 2007, when Torys had been sending materials to an outside company for scanning onto CDs. In instructing a clerk who was sending the materials off, Foerster mistakenly included the 168 boxes on a list of matters he believed the law society had already received. It was Philip Campbell, DeMerchant's lawyer, who thought to dou- ble-check that the LSUC did in fact have them, a move that sparked the adjournment in April along with embarrassing headlines about the error. But the law society quickly made its way through the boxes, which got the hearings back on track. Still, the proceedings faced even more hurdles when, just as they were about to resume, the panel learned that Sukonick's lawyer Ian Smith had fallen ill and spent the night in hospital. At the same time, questions over whether the hearings would remain open to the public bogged things down even more as lawyers dealt with uncertainty over whether third par- ties whose documents are at the centre of the allegations would waive their solici- tor-client privilege. The issue was of key concern given the ongoing litigation over Hollinger. According to The National Post, the panel eventually decided to hold secret hearings into the issues related to Black's renunciation of his citizenship. In the meantime, Torys reached a settle- ment earlier this year in its litigation with Hollinger Inc. While the law firm admitted no liability in that matter, the proceedings against Sukonick and DeMerchant remain ongoing with dates set for Dec. 13-16.