Judges rebuke lawyers in spat over settlement for victims of Nunavut sex offender

A spat between lawyers in a case involving the victims of convicted sex offender Ed Horne prompted judges from the Nunavut Court of Appeals to issue some stern words in Iqaluit on Feb. 11.

Horne molested dozens of children while working as a teacher in Nunavut in the 1970s and 1980s.

“Our overarching problem here is, why are the plaintiffs being held hostage between the two law firms?” Justice Kevin Feehan said to a courtroom full of lawyers.

“And how do we get the plaintiffs out from between the two law firms? That’s the moral question as well as the legal question we need to wrestle with.”

Justice Frans Slatter echoed a similar sentiment.

“This case is in the category of, ‘You can’t make this stuff up,’” said Slatter.

Justice Jolaine Antonio sat alongside Feehan and Slatter to hear arguments on a motion in a case that began five years ago but hasn’t made much progress since.

In 2015, lawyer Alan Regel filed a lawsuit against lawyers Geoffery Budden and Stuart Morris on behalf of some of the plaintiffs in the second Horne settlement.

That settlement, reached in 2011 for $15.5 million, involved 66 complainants. An earlier settlement, reached in 2002 worth $21.5 million, involved 85 victims of Horne. Budden represented plaintiffs in both cases.

In his 2015 lawsuit, Regel alleged Budden and Morris withheld money and improperly collected GST from their clients, hiding these actions behind dense legal terms. Those allegations have not been proven in court.

The Nunavut Law Society launched its own investigation into Budden in 2016.

That same year, Budden and Morris filed a counterclaim against Regel, called a third-party notice. They alleged Regel also erred in his representation of the same plaintiffs.

Justice Paul Bychok then suspended Regel’s original claim, on behalf of the victims of Horne, until the third-party issue could be dealt with.

Lawyers for Regel then filed a motion for the courts to quash the third-party notice—which brings us to the Feb. 11 hearing at the Court of Appeal.

Jon Rossal represented Regel and the motion to quash the third-party application. Toby Kruger represented Budden and Morris to defend the application. And Michael Penner was on hand as a “friend of the court.” Penner’s role was not to officially represent the plaintiffs but to express their views.

“The plaintiffs I spoke to universally expressed frustration at this process, going back to their original representation,” Penner said.

“I am happy to hear questions coming from the bench on how we can move this along.”

The third-party notice should be struck because Bychok should never have allowed it, Rossal told the judges.

The first problem arises from the broad language of the court rule Bychok used to assess the notice, Rossal said.

The second problem is that Bychok used the Nunavut context to broaden that rule even more, he added.

And the third-party notice was clearly a delay tactic intended to bring Regel’s lawsuit against Budden and Morris to a halt, said Rossal.

“If that’s not an abuse of process, I don’t know what is.”

But Kruger said the delay was not intentional and should not be laid at the feet of either party.

Bychok applied the correct rule and context in assessing the third-party notice, Kruger told the Court of Appeals.

And it is not for this court to override that assessment by a local judge, he added.

Kruger also called Regel out for not pursuing another remedy Kruger said was available to the plaintiffs.

If they wanted to recoup wrongly collected GST, then they could have applied on behalf of the plaintiffs directly to the Canadian Revenue Agency to get that money back, Kruger said.

“That expired on [Regel’s] watch … the plaintiffs got bad advice.”

But the judges appeared skeptical of this argument.

“Do we know enough about the CRA process to know how they could’ve gone through it?” Antonio asked.

Kruger said Regel is alleging Budden and Morris withheld GST, so Regel must know something about the CRA’s process.

“Without knowing the date the GST was taken off, how much was taken off, the registration number of the remitter—all of that would have to be known for them to go that route,” Slatter said.

Antonio also questioned the timing of Budden and Morris’ third-party application.

“The timing of all of this, the third-party notice being asserted, does raise concerns,” she said.

The judges reserved their decision on the motion to strike the third-party notice until a future date.

If the judges agree to quash the third-party notice, the lawsuit against Budden and Morris would likely go ahead.