Giglio et al. v. Peters et al. Peters et al. v. Giglio et al. [Indexed as: Giglio v. Peters]
99 O.R. (3d) 129
Court of Appeal for Ontario,
Laskin, Feldman and LaForme JJ.A.
September 25, 2009
Civil procedure -- Costs -- Costs against solicitor personally -- Defendant settling plaintiff's action and bringing motion under rule 57.07(1) of Rules of Civil Procedure for order for costs against plaintiff's solicitor personally -- Solicitor bringing motion to strike out rule 57.07 motion on ground that it was barred by two-year limitation period in s. 4 of Limitations Act -- Motion judge properly dismissing solicitor's motion -- Rule 57.07 motion not constituting "proceeding . . . in respect of a claim" for purposes of s. 4 of Act -- Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, s. 4 -- Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 57.07.
Limitations -- Motions -- Motion within action not constituting "proceeding" for purpose of s. 4 of Limitations Act -- Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, s. 4.
The plaintiff and the defendant settled their dispute in November 2005. In June 2008, the defendant brought a motion under rule 57.07(1) of the Rules of Civil Procedure for an order for costs against the plaintiff's solicitor personally. The solicitor brought a motion to strike out the rule 57.07 motion on the grounds that it was barred by the two-year limitation period in s. 4 of the Limitations Act, 2002 and that it was an abuse of process. The motion was dismissed. The solicitor appealed.
Held, the appeal should be dismissed.
The rule 57.07 motion was not a "proceeding . . . in respect of a claim" for the purposes of s. 4 of the Act. The word "proceeding" in s. 4 of the Act has the same meaning as "proceeding" in rule 1.03 of the Rules. "Proceeding" under rule 1.03 refers to the commencement of litigation either by action or application, and not [page130] to a motion within an action. The rule 57.07 motion was not an abuse of process. There was no evidence that it was brought for an improper purpose. Neither the delay, nor the fact that the defendant filed a complaint against the solicitor with the Law Society at the same time he brought the motion sustained a finding of improper motive.
APPEAL from the order of Morawetz J. of the Superior Court of Justice dated December 15, 2008 dismissing a motion to strike a motion for an order for costs against the solicitor personally.
Cases referred to
Imoney Corp. v. Quebecor Communications Inc., [2002] O.J. No. 4447 (C.A.), affg [2002] O.J. No. 4309, [2002] O.T.C. 486, 118 A.C.W.S. (3d) 9 (S.C.J.); Meady v. Greyhound Canada Transportation Corp. (2008), 90 O.R. (3d) 774, [2008] O.J. No. 2338, 2008 ONCA 468, 53 C.P.C. (6th) 1, 61 M.V.R. (5th) 195, 294 D.L.R. (4th) 152, 166 A.C.W.S. (3d) 763, 240 O.A.C. 188; Placzek v. Green, [2009] O.J. No. 326, 2009 ONCA 83, 307 D.L.R. (4th) 441, 69 C.P.C. (6th) 42, 245 O.A.C. 220
Statutes referred to
Courts of Justice Act, R.S.O. 1990, c. C.43, s. 106 Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 1, 4
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 1.03, (1) [as am.], 21, 57.07 [as am.], (1) [as am.], (c) [as am.], (2) [as am.]
Authorities referred to
Willis, John, "Statute Interpretation in a Nutshell" (1938), 16 Can. Bar Rev. 1
Alfred J. Esterbauer and Jeff Van Bakel, for appellant Eddy Joseph Battiston, a non-party. Terrence J. O'Sullivan and Tracy L. Wynne, for respondent.
The judgment of the court was delivered by
LASKIN J.A.: -- A. Introduction
1The respondent Victor Peters and Albert Giglio were business partners. They had a falling-out, which led to litigation between them. For part of the litigation, Giglio was represented by the appellant Eddy Joseph Battiston. Peters and Giglio eventually settled their dispute. After the settlement was concluded, Peters brought a motion under rule 57.07(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for an order that Battiston personally pay his costs of the litigation. [page131]
2Battiston then brought his own motion, [See Note 1 below] which is the subject of this appeal, for an order striking out Peters' rule 57.07 motion. Battiston put forward two grounds for his motion: Peters' rule 57.07 motion is barred by the two-year limitation period in s. 4 of the Limitations Act, 2002, S.O. 2002 c. 24, Sch. B.; and Peters' motion is an abuse of process.
3Morawetz J. rejected both grounds and dismissed Battiston's motion. Battiston now appeals to this court. For the reasons that follow, I agree with the motion judge's decision and would therefore dismiss Battiston's appeal.
B. Background Facts (1) Business dealings between Peters and Giglio
4Peters is a lawyer. In the early 1990s, he and Giglio were each involved in the waste disposal business. In 1993, they and others combined their businesses in a company named Universal. By 1995, however, Peters and Giglio decided that they no longer wanted to be in business together. In December 1995, they reached an agreement whereby Peters bought Giglio's interests in Universal. The agreement included a covenant by Giglio not to compete with Universal.
(2) The litigation between Peters and Giglio
5By 1997, each side claimed that the other had breached the 1995 agreement. Giglio sued Peters for damages for breach of contract, breach of fiduciary duty, negligence, misrepresentation, conspiracy and oppression. Peters defended the action and counterclaimed against Giglio, Cam Tenaglia and others. Peters alleged that Giglio and Tenaglia owned and operated a waste disposal business called Preferred Recycling Inc. He claimed that by doing so, Giglio had breached his non-competition covenant in the 1995 agreement and that Tenaglia had induced the breach. Giglio's action and Peters' counterclaim were started within the limitation period.
6Both Giglio and Tenaglia retained Battiston to act for them. In their reply and defence to counterclaim, both Giglio and Tenaglia denied that Giglio had an interest in Preferred.
(3) Giglio and Tenaglia change their evidence
7Between 1997 and 2001 the parties exchanged documents and conducted examinations for discovery. In the initial [page132] discoveries, Giglio and Tenaglia continued to deny that Giglio had an interest in Preferred.
8In the fall of 2001, Tenaglia retained new counsel, and in early 2002, Giglio did the same. From then on, Battiston had no role in the litigation.
9Shortly after Giglio and Tenaglia had retained new lawyers, they produced documents showing that Giglio had a 50 per cent interest in Preferred. They each gave further evidence on discovery correcting their earlier denials.
(4) Settlement of the litigation
10In November 2005, Peters and Giglio settled their litigation. Minutes of Settlement were signed in January 2006. Under the settlement, Giglio paid Peters $150,000. Another term of the settlement required Giglio and Tenaglia to provide an affidavit in support of Peters' contemplated rule 57.07 motion seeking costs from Battiston and any Law Society complaint filed again Battiston. Because the settlement contemplated Peters' motion, the action itself, though resolved, remains outstanding. It has not been dismissed.
(5) Peters' rule 57.07 motion
11Peters brought his motion in the action in June 2008. He attributed the delay to the difficulty in obtaining affidavits from Giglio and Tenaglia. Peters relies on rule 57.07(1)(c), which provides that a court may make an order requiring the lawyer personally to pay the costs of another party to the litigation. Rule 57.07(1) states in its entirety the following:
57.07(1) Where a lawyer for a party has caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default, the court may make an order, (a) disallowing costs between the lawyer and client or directing the lawyer to repay to the client money paid on account of costs; (b) directing the lawyer to reimburse the client for any costs that the client has been ordered to pay to any other party; and (c) requiring the lawyer personally to pay the costs of any party.
12Orders under this rule are understandably rarely made. In this case, Peters alleges, among other things, that Battiston caused costs to be incurred without reasonable cause by advising Giglio to bring unfounded claims, by knowingly participating in the giving of false testimony and by encouraging his clients to be dishonest. The validity of these allegations remains to be determined on the motion itself. [page133]
C. Analysis
First issue: Is Peters' rule 57.07 motion barred by s. 4 of the Limitations Act, 2002?
13Section 4 of Ontario's Limitations Act, 2002 provides:
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
14Peters "discovered" the basis for the costs order he seeks against Battiston in late 2001 and early 2002 when Giglio and Tenaglia changed their evidence. He did not bring his motion until 2008. Therefore, if his motion is subject to s. 4, it is well beyond the two-year prescription period and would be statute-barred.
15The resolution of this issue turns on whether Peters' motion is a "proceeding . . . in respect of a claim". Thus, we must decide whether Peters' motion is a "proceeding", and if it is, whether it is in respect of a "claim". For the reasons set out below, I have concluded that Peters' motion is not a "proceeding". That conclusion is supported by recent case law from our court, and by the context and legislative purpose of the statute. It is therefore not necessary to decide whether Peters' motion is in respect of a "claim".
16The word "proceeding" is not defined in the Limitations Act, 2002. Battiston submits that it should be given a very broad meaning, which would encompass Peters' motion, in order to achieve the overriding purpose of the statute: to prevent stale claims from going forward. Battiston notes that he was not a party to the litigation and ceased to have any role in it after 2002. Yet six years later, Peters seeks a costs order against him.
17In support of his submission, Battiston relies on the definition of "proceeding" in Black's Law Dictionary, and on cases in the Superior Court such as Imoney Corp. v. Quebecor Communications Inc., [2002] O.J. No. 4309, [2002] O.T.C. 486 (S.C.J.), affd [2002] O.J. No. 4447 (C.A.) defining "proceeding" in other contexts. Black's Law Dictionary, 9th ed., defines "proceeding" as "an act or step that is part of a larger action". On its face, this definition is broad enough to include a motion in an action.
18In the Imoney case, the defendant brought a motion under s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 to stay the plaintiff's summary judgment motion. Section 106 gives the court discretion to "stay any proceeding". Although she declined to grant the stay, Hoy J. held that she had jurisdiction to do so. Relying on the definition in Black's Law Dictionary, [page134] she held that a motion for summary judgment is a "proceeding" under s. 106.
19The meaning of "proceeding" in s. 4 of the Limitations Act, 2002 is a question of statutory interpretation. As with any question of statutory interpretation, context and legislative purpose are paramount considerations. In the well-known and often-quoted words of the late Professor John Willis, "words, like people, take their colour from their surroundings" ("Statute Interpretation in a Nutshell" (1938), 16 Can. Bar Rev. 1 at 6). Neither a dictionary meaning of a word nor the meaning of that word in a different statutory context is determinative.
20Here the word "proceeding" appears in a statute that, as Battiston points out, seeks to bar stale claims. However, in the context of a prescriptive statute, the legislation seeks to bar the commencement of stale litigation, not steps within litigation that has been commenced within the statutory time period.
21In the light of this context and the statute's purpose, and in the absence of any definition of "proceeding" in the statute itself, successive panels of this court have turned to the definition of "proceeding" in the Rules of Civil Procedure. Both Feldman J.A. in Meady v. Greyhound Canada Transportation Corp. (2008), 2008 ONCA 468, 90 O.R. (3d) 774, [2008] O.J. No. 2338 (C.A.) and, later, Simmons J.A. in Placzek v. Green, 2009 ONCA 83, [2009] O.J. No. 326, 245 O.A.C. 220 (C.A.) have held that the word "proceeding" in s. 4 of the Limitations Act, 2002 has the same meaning as "proceeding" in rule 1.03 of the Rules of Civil Procedure.
[22] "Proceeding" under rule 1.03 refers to the commencement of litigation either by action or application; it does not refer to a motion within an action. Thus, under rule 1.03(1): -- "Proceeding" means an action or application; -- "Action" means a proceeding that is not an application and includes a proceeding commenced by statement of claim, notice of action, counterclaim, cross-claim, or third or subsequent party claim; and -- "Application" means a proceeding commenced by notice of application.
23Under these definitions, a motion within an action is not a "proceeding". Indeed, "motion" is defined in rule 1.03(1) to mean "a motion in a proceeding or an intended proceeding". Peters' motion under rule 57.07 is an unusual kind of motion because it is brought against a non-party. Yet our rules provide for just such a motion. But it remains a motion, and, moreover, a [page135] motion in the existing action between Peters and Giglio and other parties. It is not a "proceeding" under s. 4 of the Limitations Act, 2002.
24To give effect to Battiston's submission would mean that the two-year limitation period in s. 4 would govern many steps in the litigation. Many motions in the litigation -- for example, a summary judgment motion -- would each have its own two-year limitation period. This would make litigation, as we know it, unworkable.
25I also note that rule 57.07(2) provides that the court on its own initiative can make an order for costs against a lawyer. Again, if we were to give effect to Battiston's submission, the court itself would be subject to the two-year limitation prescription period, a proposition that, in my view, is untenable.
26Peters and Battiston also disagreed on whether the order Peters seeks is a "claim" under s. 4 of the Limitations Act, 2002. Claim is defined in s. 1 of the Act to mean "a claim to remedy an injury, loss or damage that occurred as a result of an act or omission". Battiston argues that this definition is broad enough to cover the relief Peters seeks. Peters argues to the contrary. As I have said, it is unnecessary to resolve this debate because even if Peters' motion is in respect of a claim, it is not a proceeding in respect of a claim.
27I would not give effect to this ground of appeal.
Second issue: Is Peters' rule 57.07 motion an abuse of process?
28The motion judge ruled that Peters' motion did not constitute an abuse of process. Battiston submits that the motion judge erred in his ruling, and advances three arguments to support his submission. First, he contends that the motion judge made no finding that Battiston incurred costs needlessly. Second, he contends that Peters' real motive for bringing this motion is not to recover his costs, but for the improper purpose of punishing Battiston. Third, he contends that Peters recovered his costs as part of his settlement with Giglio and therefore would be overcompensated if the court ordered costs against Battiston.
29I do not accept these arguments. Battiston's contentions may well be live issues on the rule 57.07 motion itself, but none afford a basis to prevent that motion from being heard on its merits.
30On Battiston's first contention, it is true the motion judge made no finding that Battiston had incurred costs needlessly or "without reasonable cause". Whether that finding ought to be made is an issue for the motion judge on the rule 57.07 motion. Indeed, unless the court makes that finding, it cannot make a [page136] costs order against Battiston. That the motion judge did not make this finding does not transform Peters' rule 57.07 motion into an abuse of process. It simply means that the merits have yet to be heard.
31Battiston's second contention, that Peters brought his motion for an improper motive, fails for lack of any supporting evidence. Battiston chose not to cross-examine Peters, Giglio or Tenaglia on their affidavits filed on the rule 57.07 motion, and chose not to file his own affidavit evidence.
32Instead, Battiston points to the two-year delay before Peters brought his motion and to the Law Society complaint Peters filed against Battiston contemporaneously with his motion as some evidence of improper motive. Standing alone, however, without any other evidence, neither the delay nor the Law Society complaint credibly sustains a finding of improper motive. On the record before the motion judge, the claim of improper motive was entirely speculative.
33On Battiston's third contention, under the terms of the settlement agreement between Peters and Giglio, Peters received no payment for costs. The agreement expressly provided that the $150,000 Peters did receive was for damages. Whether, as Battiston claims, this characterization of the $150,000 was contrived to permit Peters to bring his rule 57.07 motion is an issue to be resolved on the hearing of the motion.
34For these reasons, I would not give effect to Battiston's claim of abuse of process.
D. Conclusion
35I agree with the motion judge that Peters' motion under rule 57.07 seeking costs of the litigation from Battiston is not barred by s. 4 of the Limitations Act, 2002, and it is not an abuse of process.
36I would therefore dismiss Battiston's appeal with costs in the amount of $10,000, inclusive of disbursements and GST.
37Battiston's alternative request for the trial of the issue is a matter best dealt with by the judge hearing the rule 57.07 motion.
Appeal dismissed.
Notes
Note 1: Under Rule 21 of the Rules of Civil Procedure.