Boghossian v. Permacharts, 2011 ONSC 3783

CITATION: Boghossian v. Permacharts, 2011 ONSC 3783

DIVISIONAL COURT FILE NO.: DC-09-547-0000

DATE: 20110617

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Boghossian Legal Professional Corporation, Plaintiff/Respondent

AND:

Permacharts Inc., Carmine Bello, Silvana Bello and Charles Ticker, Defendants/Appellants

BEFORE: Aston J.

COUNSEL: Richard Macklin, for the Plaintiff/Respondent

Antonio Conte, for the Defendants/Appellants

HEARD: June 10, 2011

AMENDED ENDORSEMENT

[1] Permacharts Inc. and Carmine Bello appeal to the Divisional Court from the Small Claims Court judgment of Deputy Judge R. Priddle dated October 30, 2009 awarding the plaintiff $4,355 plus pre-judgment interest and costs.

Motion to Adduce Fresh Evidence

[2] As a preliminary matter, the appellants seek to introduce fresh evidence on the appeal. The main thrust of the appeal is that the plaintiff, a lawyer, perjured himself and gave false evidence which was critical to the outcome at trial. To establish that allegation, the appellants seek to introduce:

(i) an invoice for a corporate search by a company called Cyberbahn, dated May 1, 2008;

(ii) a time ledger sheet from the plaintiff’s PC Law program which is different from the trial exhibit found at tab 9 of the Appeal Book and Compendium; and

(iii) a series of emails between the parties referred to at the trial but not marked as an exhibit.

[3] The respondent on appeal does not object to the latter. I have considered the emails as part of the trial record rather than as fresh evidence.

[4] Before hearing submissions on the appeal, I dismissed the motion to adduce this fresh evidence with reasons to follow. These are the reasons.

[5] The appellant relies on the date of the Cyberbahn invoice as critical evidence refuting the plaintiff’s trial testimony on two points. First, the plaintiff testified that he sent his first account for professional services on August 31, 2007. It included the Cyberbahn corporate search as a disbursement, when in fact that disbursement was not incurred until May of 2008. Second, the plaintiff testified that Silvana Bello was named in the plaintiff’s formal Retainer Agreement which he says he sent to the defendants March 21, 2007 when that same corporate search revealed her position with Permacharts Inc. The date of the Cyberbahn invoice refutes the plaintiff’s evidence.

[6] Simply put, the appellant alleges that the plaintiff’s account for services of August 31, 2007 and the Retainer Agreement he produced at trial were manufactured by the plaintiff some time after May 1, 2008 and constitute a deliberate attempt on his part to mislead the Court. The defendants deny receiving the August 31, 2007 Statement of Account from the plaintiff, evidence that is seemingly “corroborated” by Mr. Bello’s email in April, 2008.

[7] Though the Cyberbahn invoice was not produced at trial, the plaintiff’s Claim attached a copy of his account for services dated August 31, 2007, including a disbursement for the corporation search with GST at 5%. The 5% rate for GST only came to apply as of January 1, 2008. In August, 2007, the rate was 6%. This discrepancy in the GST rate is right in the pleading served on the defendants. However, the discrepancy was apparently only noticed some time after the trial was over. Had Mr. Bello noticed it earlier, he could have asked for a copy of the Cyberbahn invoice at the pre-trial conference or in some other manner before the trial. More importantly, he could have cross-examined the plaintiff on the discrepancy, even without the actual Cyberbahn invoice. He did not do so.

[8] The plaintiff’s explanation for the discrepancy and inconsistency is outlined in paragraphs 25 to 28 of his Factum on this motion. The original account was for fees of $1,680.00 plus GST at 6%. The account was cancelled and retyped in 2008 for fees of $1,680, the $18.00 disbursement for Cyberbahn and GST at 5%. When that was done the date was not changed; it remained dated August 31, 2007 though changed and resubmitted to the defendants in 2008. The difference in total is $1.70. Significantly, the plaintiff’s accounts receivable as of December 31, 2007 disclose a receivable from the defendants of the original 2007 amount - $1,680 plus GST at 6%. The plaintiff’s explanation is independently corroborated by his accountant/bookkeeper in a letter answering an undertaking on the plaintiff’s cross-examination. See tab 4 of the Appellant’s Book of Exhibits on Motion for Fresh Evidence. Not only is the plaintiff’s explanation plausible, it is probably true. It refutes the alleged perjury.

[9] With respect to the time dockets, Mr. Bello made no attempt at trial to cross-examine the plaintiff on the time spent doing corporate legal work or the nature of the services rendered and billed by the plaintiff. Specifically, he did not challenge the plaintiff’s right to charge $350 an hour for work spent essentially collecting the plaintiff’s own account. The proposed “fresh evidence” does not reveal any difference between the trial exhibit and the “new” summary except as to format. No inference of fraud can reasonably be inferred from this “new evidence”.

[10] With respect to the date the Retainer Agreement was first created, the documents at pages 22 and 26 of the appellants Book of Exhibits on the motion for fresh evidence also refute the appellants’ allegation of after-the-fact fabrication of documents by the plaintiff. The “properties” of that document confirm its creation March 21, 2007.

[11] I reject the submission that the proposed fresh evidence establishes perjury or fraud. It does not even support a reasonable inference of perjury or fraud in light of the other evidence on the motion, in particular the independently corroborated explanations of the plaintiff.

[12] Nor does the proposed fresh evidence otherwise meet the test in R. v. Palmer [1980] 1 S.C.R. (S.C.C.) at p. 13.

The Appeal

[13] The issue on appeal is not what the trial judge should have done or might have done on different evidence. The appeal is limited to the trial record. The standard of review is articulated in Houssen v. Nikolaisen 2002 SCC 33, [2002] 2 S.C.R. 235.

[14] The standard of review on a question of law is correctness. The standard of review for questions of fact and inferences of fact is that such findings are not to be reversed unless it is established that the trial judge made a “palpable and overriding error”. On questions of mixed law and fact, the evaluation is on a standard of correctness if the error of law can be separated from the facts; otherwise the more deferential standard of palpable and overriding error is applied.

[15] In this case, the scope of appellate review is constrained by the fact that the plaintiff’s evidence was hardly challenged on cross-examination and by the fact that only limited defences were actually put to the trial judge.

[16] Mr. Bello disputed personal liability and testified that only Permacharts Inc. retained the plaintiff. The trial judge held otherwise. He accepted the testimony of the plaintiff that “whether or not there was a [written or formal] retainer agreement” there was an oral agreement between Mr. Bello and Mr. Boghossian. The trial judge preferred the testimony of the plaintiff and accepted it over that of the defendant on this point. There is no basis upon which to interfere with that finding of fact.

[17] Mr. Bello claimed that on a quantum meruit basis, the value of the legal services rendered was less than the $1,782.50 in the plaintiff original account for services dated August 31, 2007. The trial judge found that $350 per hour was a “reasonable rate”. He accepted the plaintiff’s unchallenged evidence on the hours spent. The trial judge extended those findings to the additional time which had not originally been billed, including the time spent collecting the original account for services. Though not explicitly addressed in the reasons, the trial judge also implicitly allowed the plaintiff to reverse a “courtesy discount” in the original account for services, upon which no voluntary payment on account had every been made by any of the defendants. The appellant has failed to demonstrate on this appeal that on the trial record there is any error of law or error in legal principle. Nor has the appellant demonstrated any palpable and overriding error in findings of facts or mixed fact and law.

[18] The appeal is therefore dismissed.

Costs

[19] The costs of this appeal including the motion to introduce fresh evidence are staggering in relation to the amount of money in issue. However, the judgment amount is the tip of the iceberg. The hotly contested issue stems from Mr. Bello’s allegation that the plaintiff, a lawyer, obtained the judgment by perjury and fraud. From the plaintiff’s prospective, the stakes could not be higher.

[20] It was entirely reasonable for the plaintiff’s lawyers to spend almost eighty hours preparing for this appeal, including the motion for fresh evidence and cross-examinations on the affidavit evidence. With disbursements and a counsel fee for the attendance in court on the argument of the motion, the claim for costs of almost $20,000 on a partial indemnity basis and $38,114.87 on a full indemnity basis is not out of line for the successful defence against the appellants’ allegations. In fact, if I were satisfied that the appellants’ allegations were made without a reasonable basis I would order costs on a full indemnity scale.

[21] However, I cannot ignore the fact that there is at least some corroborative evidence (the Cyberbahn invoice) which lends objective support to the appellants’ apparently genuine belief in the substance of his allegations. Importantly, the alternative explanations and corroborative supporting evidence from the plaintiff were only offered up very late in the appeal process. I also have to consider that the plaintiff himself admits that his trial testimony on at least two important points was inaccurate – that is to say the reason Silvana Bello’s name was included in his formal Retainer Agreement and the discrepancy between his invoice mailed August 31, 2007 and the one that was attached to his claim and tendered as evidence at trial.

[22] Though these admissions only come out in the course of the motion to admit fresh evidence, and though I have dismissed that motion, I must nevertheless take into account the entire Appeal Record on the question of costs and not just the Trial Record. The plaintiff’s evidence at trial was careless and inaccurate. Given the date of the Cyberbahn invoice, it was not unreasonable for the defendant to conclude that it was deliberately inaccurate, at least not until a satisfactory alternative explanation had been provided.

[23] The plaintiff is entitled to the costs of the appeal. The amount of money at issue would probably cap those costs at $4,000 to $5,000. I find the plaintiff is entitled to more than that because of the allegations of fraud and perjury. Though there was some justification for those allegations as I have already noted, they were extreme in their rhetoric. That level of rhetoric continued, even escalated, after the plaintiff’s corroborative evidence for his explanations had been provided.

[24] That continuation is deserving of censure.

[25] The appellants are to pay costs fixed at $10,000 all inclusive.

Aston J.

Date: June 17, 2011