Woessner v. The Queen (June 28, 2017 – 2017 TCC 124, Campbell J.).
Précis: The Crown moved to disqualify taxpayer’s counsel on the basis that lawyers of the firm would be material witnesses at trial. The Court allowed the motion, with costs.
Decision: This is a good example of the relatively rare phenomenon of a counsel being removed for conflict of interest, in this case the fact that a number of lawyers at the firm would be likely be material witnesses at trial:
 The Respondent brings this motion to remove the Appellant’s lawyer, Matthew Clark, and his law firm, Shea Nerland Calnan LLP (“Shea Nerland”), as counsel of record, in this appeal on the grounds of a conflict of interest. The Respondent also requests an extension of time to complete the remaining steps of the litigation together with costs of this motion. The Respondent alleges that a conflict of interest will arise because one or more partners and a former associate of the law firm are likely to be called as witnesses at the hearing with the result that Mr. Clark will be unable to properly represent the Appellant.
The nub of the issue was that the counsel’s law firm was deeply enmeshed in the tax shelter that was at the heart of Mr. Woessner’s tax appeal:
 Removal of counsel of record will always be an extreme remedy and must not be ordered except in the clearest of cases. The conflict of interest giving rise to the request for disqualification must be real, substantial and ongoing. If the conflict is contingent, remote or premature, the removal should not be granted (Essa, at paragraphs 43 and 47).
 Essentially, all of the factors outlined in Essa, with the exception of the right of the Appellant to choose his own counsel, favour the granting of this motion. The degree to which Shea Nerland appears to be immersed in the promotion and management of the alleged tax shelter scheme and the likely importance of the testimony of Mr. Nerland and Mr. Mamdani, necessitate an order for the removal of Appellant counsel and the law firm in order to maintain the reputation of the administration of the judicial system and to avoid the appearance of impropriety to the public.
 If I allowed Appellant counsel to remain as counsel of record and let this scenario play out at the hearing, there is also an extremely high likelihood of conflict arising to the detriment of the Appellant, Mr. Woessner. This risk is not minimal or remote in these circumstances but actual and likely. Consequently, it is unrealistic to conclude that Mr. Clark will be able to balance his obligations to his partners and colleagues with his professional obligations to his client, Mr. Woessner. Therefore this risk places the present case squarely within the scope of the concern identified by the Federal Court of Appeal in Cross-Canada Auto Body Supply.
 The multiple conflicts, that are likely to arise in these circumstances, are evident. Although the Appellant has apparently received full disclosure and has consented to his counsel continuing, the second problem relating to the administration of justice cannot be waived. There may be conflicts between Appellant counsel’s obligations to Mr. Woessner to present his case in the most favourable light and counsel’s obligations of objectivity in view of his law firm’s central involvement in this Appellant’s investment. As noted in some of the jurisprudence, this conflict cannot be waived by a client where that conflict involves counsel, as an officer of the Court and his role within the justice system. The assumption that counsel, who is representing a client and fulfilling his duty to the court at the same time, will be independent of undue influences, is a requirement of our system. When counsel of record has the type of intricate “connection” to a witness, as in this case, there can be no assurances to the court, the public or the client that counsel, in fact and in appearance, will act objectively in those duties. Hence the high probability of appearance of impropriety in the public’s eyes.
 These comments bring me back to the central question to be asked and that is whether a fair-minded, reasonably informed member of the public would conclude, in the circumstances of the present case, that there is a compelling reason for disqualifying counsel of record such that the proper administration of justice requires it. For the reasons I have outlined, I am granting the Respondent’s motion together with costs for removal of Appellant counsel, as well as the law firm, Shea Nerland.
 Both parties had also agreed that the Appellant would pay $237.00 to the Respondent to indemnify the Respondent for costs associated with the Appellant’s cancellation of the scheduled examination for discovery. I order those costs in the amount of $237.00 to be paid forthwith. The Appellant shall have 60 days from the date of this Order and Reasons for Order to find alternate counsel and to advise both Respondent counsel and the Court. After the Appellant has found alternate counsel, both parties shall have 60 days from the date the Appellant has advised the Court of his new counsel, to contact and advise the Court with respect to a proposed timeline for the remaining steps in the litigation.
Thus the motion was allowed with costs.
Comment: This case is a bit of a cautionary tale of firms serving as both planners and tax counsel in what CRA might regard as aggressive transactions.