Executive Summary: Key Legal and Evidentiary Issues

• Whether Joel Levitt, counsel for the plaintiff Caretek, had a disqualifying conflict of interest arising from a prior solicitor-client relationship with the defendant Shaila Bajwa.
• A solicitor-client relationship was found to exist because Levitt drafted the 2022 trust agreement and advised Shaila on her responsibilities and exposure as trustee.
• Confidential information relevant to the action — including knowledge of the income-splitting arrangement and Shaila's non-involvement in the business — was imparted to Levitt, making disqualification automatic under MacDonald Estate v. Martin.
• Whether Levitt was also a likely material witness on the pivotal issue of Gulwant Bajwa's knowledge of the income splitting before 2024.
• The court balanced the litigant's right to counsel of choice against the paramount public interest in preserving the integrity of the justice system.
• Costs of the motion remain undetermined, with the parties urged to agree or file written submissions by set deadlines.

Facts of the case

Caretek Integrated Business Solutions Inc. was incorporated in 2008. Bikram Bajwa held two-thirds of its shares and ran its day-to-day operations, while his brother Gulwant Bajwa held one-third and described himself as a "silent investor" who was not involved in daily operations until after Bikram died on January 15, 2024. In August 2022, lawyer Joel Levitt drafted a trust agreement under which Bikram's wife, Shaila Bajwa, held Bikram's shares in trust. Levitt met with Shaila, explained the agreement, witnessed her execution of it, and answered her subsequent questions about the agreement and her role as trustee. In the underlying action, Caretek alleges that between 2012 and 2024 Shaila received approximately $1.5 million from the Corporation while providing no services to it, and that Shaila and Bikram conspired to defraud the Corporation. Punitive damages are sought against Bikram for breach of fiduciary duty. Shaila's defence is that the payments formed part of a longstanding income-splitting arrangement with Bikram. Levitt, who was aware of the income splitting at least as of 2022, now represents the Corporation in this litigation against Shaila, who is in effect its two-thirds shareholder through the trust agreement he drafted and the sole beneficiary under Bikram's Will. Shaila moved to remove Levitt as counsel of record for the plaintiff.

Legal principles and professional conduct rules at issue

The court's jurisdiction to remove counsel flows from lawyers' status as officers of the court, as established in MacDonald Estate v. Martin, and does not depend on the rules of professional conduct. Disqualification is an extreme remedy requiring the highest level of restraint, yet the right to counsel of choice must yield to the paramount public interest in preserving the integrity of the justice system and its appearance. Under the Law Society of Ontario's Rules of Professional Conduct, a "client" is the person to whom the lawyer provides legal services — not necessarily the person who pays — and the relationship can arise without formality, a signed retainer, or payment of a fee. Section 3.4-10 of the Rules prohibits lawyers from acting against former clients in the same or related matters where the lawyer holds relevant confidential information that may prejudice the former client. On such a motion, the moving party must show a previous solicitor-client relationship related to the matter at hand; once established, the court infers that relevant confidential information was imparted unless the solicitor objectively satisfies the court otherwise, and where relevant confidential information was received, disqualification is automatic.

Reasoning and analysis

Justice Chozik rejected the arguments advanced on Levitt's behalf that Gulwant retained him, that he played a merely administrative role, that the trust agreement is not in issue, and that no confidential information was received. The court found that a solicitor-client relationship existed between Levitt and Shaila: he provided her with legal services and advice when he drafted the trust agreement and advised her, before and after execution, about her potential liability, responsibilities, and exposure as trustee. Although Gulwant may have referred Shaila to Levitt, Shaila — not Gulwant — received the legal service. The court further found that Levitt received confidential information directly relevant to the action, including knowledge of the income-splitting arrangement between Bikram and Shaila and confirmation that Shaila was not involved in running the Corporation. Following MacDonald Estate v. Martin, no assurances or undertakings could mitigate the risk of misuse, because a lawyer cannot compartmentalize his mind to screen out what was learned from the client. On the second issue, the court held that Levitt is a necessary witness on a material issue: he knew of the income splitting at least as far back as 2022, while the Statement of Claim he prepared asserts that Gulwant did not learn of it until 2024. His evidence may be necessary to contradict Gulwant's claims and challenge his credibility on this pivotal question, and a lawyer cannot "wear two hats" as both counsel and witness.

Ruling and outcome

The motion was allowed, making the defendant Shaila Bajwa the successful party. Joel Levitt was ordered removed as counsel of record for Caretek in the action, with the court concluding that the public interest in preserving confidence in the administration of justice outweighed Caretek's interest in retaining its counsel of choice. No monetary amount was ordered or awarded in the decision: the parties were urged to agree on the costs of the motion, failing which they may exchange written costs submissions — the defendant's due by July 10, 2026, and the plaintiff's responding submissions by July 24, 2026 — with a parallel schedule applying to costs of the earlier motion to appoint a litigation administrator.