CITATION: Doerr v. Sterling Paralegal, 2014 ONSC 2335
COURT FILE NO.: DC-13-00002019-000
DATE: 2014/04/14
DIVISIONAL COURT
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JANICE LYNN DOERR
Self-representing
Appellant
- and -
STERLING PARALEGAL
David S. Lipkus
Respondent
HEARD: April 11, 2014
ON APPEAL FROM THE RULING OF DEPUTY JUDGE REEVES DATED JULY 3, 2013
LEACH J.
[1] This is an appeal to the Divisional Court, pursuant to s.31(a) of the Courts of Justice Act, R.S.O. 1990, c.C.43, from a final order made in the Small Claims Court, (by Deputy Judge Reeves, sitting in London), entirely dismissing the appellant’s action therein.
[2] The appeal came before me alone pursuant to s.21(1) of the same legislation, which provides that a single judge of the Divisional Court may hear and determine such an appeal.
[3] The appellant seeks an order setting aside the dismissal of her Small Claims Court action, thereby permitting her action to proceed to trial in that court.
[4] For the reasons that follow, I find that the appeal must be allowed, with the order of the motions judge being set aside so that the appellant’s claim may proceed to trial in the Small Claims Court.
Background
[5] The circumstances leading to the present appeal are as follows:
- In November of 2008, the appellant Ms Doerr commenced an action in the Small Claims Court, (not the proceeding in respect of which the current appeal is being advanced), against a London lawyer who had represented the appellant in a proceeding before the Canadian Human Rights Tribunal. The claim sought damages for alleged professional negligence on the part of that London lawyer.
- Ms Doerr commenced that initial Small Claims Court action on her own, and continued to represent herself in that proceeding for approximately 2 years. In or around November of 2010, however, she then retained the paralegal services of “Sterling Paralegal”, the named defendant in this proceeding, which provided services through a paralegal named Tom Schoenleber.
- In April of 2011, the initial Small Claims Court action was about to proceed to trial before Deputy Judge Little. This apparently prompted a settlement meeting, which took place on April 21, 2011, shortly before commencement of the scheduled trial. The circumstances surrounding that settlement meeting, and efforts to document the result it produced, are very much in dispute and lie at the heart of the present litigation.
- According to Ms Doerr:
- She had made it very clear to Mr Schoenleber, at all times, that she would not agree to any settlement of the initial Small Claims Court action for anything less than the $10,000 being claimed.
- Mr Schoenleber attended the settlement meeting on his own, without Ms Doerr, and without any authority from Ms Doerr to settle the initial Small Claims Court action for any sum less than the full amount of her claim.
- Mr Schoenleber nevertheless then engaged in discussions resulting in a purported agreement to settle Ms Doerr’s claim against the London lawyer in exchange for a payment of $2,500, the exchange of mutual releases, and formal dismissal of Ms Doerr’s claim on a “without costs” basis.
- Immediately before commencement of the scheduled trial, Mr Schoenleber then advised Ms Doerr of the purported settlement, presenting her with corresponding Minutes of Settlement, and indicating that Ms Doerr was obliged to sign off on the settlement. Ms Doerr then did so, under duress.
- Ms Doerr’s action against the London lawyer then was formally dismissed by Deputy Judge Little, without costs.
- According to the defendant:
- Immediately before the scheduled trial, Mr Schoenleber was presented with an offer to settle Ms Doerr’s claim against her London lawyer in exchange for a payment of $2,500, provision of a release, and formal dismissal of the action on a “without costs” basis;
- Mr Schoenleber then met with Ms Doerr and explained the terms of the proposed settlement.
- Ms Doerr instructed Mr Schoenleber to accept the proposed terms of settlement, whereupon Minutes of Settlement then were drafted and executed by the parties, including Ms Doerr.
- Ms Doerr’s action against the London lawyer then was formally dismissed by Deputy Judge Little, without costs.
- After formal dismissal of Ms Doerr’s Small Claims Court action against her London lawyer, counsel representing that lawyer supplied Mr Schoenleber with a proposed release for execution by Ms Doerr, along with a cheque for $2,500. However, Ms Doerr refused to execute the release. According to the defendant, Ms Doerr was “reluctant to do so” during a meeting with the defendant after formal dismissal of the action and, despite further efforts by the defendant to follow up in that regard, Ms Doerr never provided the defendant with an executed copy of the release or an explanation for her failure to do so.
- On June 17, 2011, (approximately 2 months after the purported settlement), the defendant contacted Ms Doerr to say that the 2,500 cheque was being returned to counsel representing the London lawyer because Ms Doerr had refused to comply with the terms of settlement.
- The defendant then returned the cheque to counsel representing the London lawyer, and advised Ms Doerr that the retainer between Ms Doerr and the defendant was at an end.
- Ms Doerr apparently took no steps to set aside the formal dismissal of her Small Claims Court action against the London lawyer. However, she has continued to reject the propriety of the purported settlement. In that regard, she not only refused acceptance of funds pursuant to the settlement, but on May 10, 2013, commenced a new and separate proceeding against the defendant, alleging that the settlement reached without her authority, and documented under duress, resulted in her loss of the $10,000 she was claiming from her London lawyer.
- At a mandatory settlement conference held on July 3, 2013, Deputy Judge Reeves then made the aforesaid order, dismissing Ms Doerr’s action against the defendant. The endorsement and reasons of the Deputy Judge, set forth on the “Settlement Conference Memorandum”, read in their entirety as follows: “Order to go dismissing this action. In my view, this action is an abuse of process (#2162-08) and pursuant to Rules 12.02(1)(c) and 12.02(2)1 and 13.05(1) apply.” [Sic.]
[6] The “#2162-08” referenced in the endorsement corresponds to the file number of the Small Claims Court action by Ms Doerr against her London lawyer, which was formally dismissed pursuant to the purported settlement.
[7] The particular Small Claims Court rules referenced by the Deputy Judge in his endorsement, including margin notes published with the subordinate legislation, read as follows:
RULE 12 – AMENDMENT, STRIKING OUT, STAY AND DISMISSAL …
Motion to Strike out or Amend a Document
12.01(1) The court may, on motion, strike out or amend all or part of any document that …
(c) is inflammatory, a waste of time, a nuisance or an abuse of the court’s process.
(2) In connection with an order striking out or amending a document under subrule (1), the court may do one or more of the following:
- In the case of a claim, order that the action be stayed or dismissed.
RULE 13 – SETTLEMENT CONFERENCES …
Orders at Settlement Conference
13.05(1) A judge conducting a settlement conference may make any order relating to the conduct of the action that the court could make.
[Emphasis added.]
Party positions
[8] The appellant Ms Doerr had no notice in advance of the settlement hearing that the defendant would be seeking an order dismissing her claim, and frankly is not at all sure why her claim was dismissed.
[9] In her notice of appeal, Ms Doerr speculates that the Deputy Judge, “without hearing any evidence” to resolve the factual issues obviously in dispute between the parties, and having “failed to consider” Ms Doerr’s allegation that she “was subjected to duress by the defendant, who forced [her] to sign the Minutes of Settlement”, nevertheless must have decided, “by implication”, that Mr Schoenleber in fact had authority to settle the earlier action by Ms Doerr against the London lawyer.
[10] If so, Ms Doerr questions the propriety of the parties’ fundamental factual dispute being effectively decided against her without trial.
[11] In essence, Ms Doerr takes the position that it was improper and unjust for the Deputy Judge to effectively grant summary judgment, dismissing her claim, while purporting to address an “abuse of process”.
[12] In response, the defendant submits:
- that the rules of the Small Claims Court confer broad discretion on judges of that court to make procedural and substantive orders during a settlement conference;
- that this includes orders striking out or dismissing a claim;
- that such orders, based on “a valid exercise of judicial discretion”, are entitled to deference and may be set aside only if “based on an error of law, a palpable and overriding error of fact, the consideration of irrelevant factors or the omission of factors that ought to have been considered, or if the decision was unreasonable”; and
- that no such failings are present in this case.
[13] In particular, the defendant says that characterization of Ms Doerr’s claim as an “abuse of process” by the Deputy Judge was entirely reasonable because:
- a consideration of the underlying evidence (and signed Minutes of Settlement in particular) makes it clear the claim against the defendant was completely without merit; and
- even if all the “bald assertions” in Ms Doerr’s claim are accepted as true, it is “plain and obvious” that the dismissed action was “an attempt to re-litigate” Ms Doerr’s settled claim against her London lawyer.
Analysis
[14] In my view, the paucity of reasons given by the Deputy Judge for complete and final dismissal of Ms Doerr’s claim is, in itself, a serious concern.
[15] Although counsel for the respondent/defendant suggested that possible insufficiency of reasons was a mere “technicality”, on which disposition of the appeal should not be based, such an approach is not consistent with fundamental principles of justice repeatedly emphasized by our courts, and by the Supreme Court of Canada in particular. For example, as emphasized by Justice Binnie in R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, at paragraph 55:
The delivery of reasoned decisions is inherent in the judge’s role. It is part of his or her accountability for the discharge of the responsibilities of his office. In its most general sense, the obligation to provide reasons for a decision is owed to the public at large.
[16] Not every failure or deficiency in reasons provides a ground of appeal, and regard will be had to the time constraints and general press of business facing the courts below, as well as the nature and importance of the decision being rendered at first instance.
[17] However, reasons should be sufficient to serve a number of functional and inherently important purposes, including those of ensuring that parties are not left in doubt as to why a decision has been reached, and providing both the parties and an appellate court with a sufficient basis for exploring the merits of an appeal.
[18] In the words of Justice Binnie, the judge at first instance must provide reasons “which are sufficient to serve the purpose for which the duty is imposed; i.e., a decision which, having regard to the particular circumstances of the case, is reasonably intelligible to the parties and provides the basis for meaningful appellate review of the correctness of the trial judge’s decision”. See R. v. Sheppard, supra, at paragraph 55.8.
[19] The Divisional Court repeatedly has emphasized that similar considerations apply to decisions of the Small Claims Court, notwithstanding recognition of its busy docket and its focus, by design, on the delivery of timely decisions with a minimum of expense and formality.
[20] For example, more than 24 years ago, Justice Griffiths had this to say in Thompson v. Butkus (1980), 28 O.R. (2d) 368 (Div.Ct.), at pp.369-370:
It is unfortunate that the learned trial judge omitted to give more detailed reasons for the dismissal, because in the result I am required to speculate to some extent as to the probable grounds for dismissal of the action. …
I cannot over-emphasize the desirability of Judges giving meaningful reasons, however short, in all cases for the judgment rendered following the hearing of the viva voce evidence. This was the point emphasized in the above decisions … This was the point emphasized in the above decisions and it applies no less to hearings in the Small Claims Court. A failure to give reasoned decisions, in my view, tends to undermine confidence in the tribunal, in that the unsuccessful party may feel that he has been the victim of an arbitrary decision. As well, the failure to give reasons in some cases may totally frustrate any right of appeal.
[21] Although Justice Griffiths was dealing in that case with an appeal from a Small Claims Court decision rendered after trial, his comments and concerns apply with equal force, I think, to orders dismissing a Small Claims Court action after a Deputy Judge has heard informal submissions at a settlement conference.
[22] Divisional Court emphasis on such concerns has continued through the years, and into more recent appellate review of proceedings in the Small Claims Court. See, for example, the comments of Justice Molloy in Baptiste v. Obermuller, [2010] O.J. No. 5111 (Div.Ct.), at paragraphs 12-13:
It is necessary to recognize the reality of a busy small claims court. It must also be acknowledged that the delivery of a decision in a timely way is an important goal in that court. Nevertheless, the fundamental principles of fairness and natural justice require a reasoned decision. …
At a minimum, the reasons for a decision must be sufficient for the parties to understand the basis for it and allow for meaningful appellate review. … Bald assertions and generalizations are not sufficient for this purpose.
[23] The legislator itself has recognized such concerns, particularly in relation to orders made at settlement conferences in the Small Claims Court. In particular, by way of O.Reg. 44/14, ss.12(1) and 12(16), due to take effect on July 1, 2014, formal amendments will be made to Rule 13.05 of the Small Claims Court rules, so as to indicate, expressly, that a judge who conducts a settlement conference and makes an order dismissing an action must do so “with written reasons”.
[24] As reflected in the authorities noted above, this legislative amendment does not create an obligation to render sufficient reasons; it merely provides express confirmation of an obligation that already exists pursuant to fundamental principles of fairness and natural justice.
[25] With that in mind, I now return to the specifics of the case before me.
[26] As noted above, the endorsement and reasons of the Deputy Judge, set forth on the “Settlement Conference Memorandum”, read in their entirety as follows:
Order to go dismissing this action. In my view, this action is an abuse of process (#2162-08) and pursuant to Rules 12.02(1)(c) and 12.02(2)1 and 13.05(1) apply. [Sic.]
[27] In my view, the endorsement offers almost nothing in the way of an explanation for the decision of the Deputy Judge.
[28] The first sentence obviously is simply a statement of what the Deputy Judge was doing, without itself providing any indication of why he was doing it.
[29] Similarly, the listing of various rules of the Small Claims Court, in the second sentence of the endorsement, mere confirms the basis of jurisdiction permitting the Deputy Judge to make a dismissal order, without offering much if any guidance as to why that jurisdiction was being exercised.
[30] In that regard, referring to Rules 12.02(1) and 13.05(1) does nothing more than incorporate, by way of reference, the reality that:
a) in connection with an order striking out any document, a court may, in the case of striking out a claim, order that the action be dismissed; and
b) a judge conducting a settlement conference may make any order relating to the conduct of the action that the court could make.
[31] This effectively offers nothing by way of substantive reasons for the decision that dismissed Ms Doerr’s claim.
[32] Similarly, in my view, the reference to Rule 12.02(1)(c) cannot sensibly be viewed as any meaningful expansion of the substantive reasons otherwise offered by the Deputy Judge for his decision. It is merely the rule confirming jurisdiction to strike out any document that “is inflammatory, a waste of time, a nuisance or an abuse of the court’s process”, (emphasis added); a jurisdiction the Deputy Judge was purporting to exercise in the immediate wake of his express finding that Ms Doerr’s action was an abuse of process. It says nothing as to why or how the Deputy Judge found the action was an abuse of process.
[33] In that regard, I expressly reject the submission, made by counsel for the respondent/defendant, that the reference to Rule 12.02(1)(c) should be read as an indication that the Deputy Judge found that all aspects of Rule 12.02(1)(c) applied to Ms Doerr’s claim; i.e., that the Deputy Judge was saying the action was not only an abuse of process, but “inflammatory, a waste of time, a nuisance [and] an abuse of process”.
[34] As emphasized by our Court of Appeal in Van de Vrande v. Butkowsky, 2010 ONCA 230, [2010] O.J. No. 1239 (C.A.), at paragraphs 17 and 20, the criteria of an action being “inflammatory”, “a waste of time”, or “a nuisance”, found in Rule 12.02(1)(c), are conceptually distinct from and additional to the comparatively narrow grounds of an action being “frivolous”, “vexatious” or “an abuse of process”, referenced in Rule 21.01(3) of Ontario’s Rules of Civil Procedure. Indeed, addition of the criteria of “inflammatory”, “a waste of time”, or “a nuisance” to Rule 12.02(1)(c) “was intended to lower the very high threshold set by r.21.01(3)(d)’s reference to actions that are frivolous, vexatious, or an abuse of process”.
[35] In his brief endorsement, the Deputy Judge expressly identified and relied upon a finding that Ms Doerr’s action was “an abuse of process”, which in turn means a finding that the action was dismissed because it somehow was regarded as meeting that “very high threshold” for dismissal of an action. In the circumstances, it seems neither fair nor appropriate to suggest that the Deputy Judge, by referring generically to Rule 12.02(1)(c), was really indicating an intention to dismiss the action on the basis of one or more of the other less demanding criteria listed therein.
[36] In my view, having regard to the above, the substantive reasons of the endorsement made by the Deputy Judge therefore reduce to nothing more than a statement that “this action is an abuse of process (#2162-08)”.
[37] But how was Ms Doerr’s action against her paralegal advisor, (effectively for breach of contract and/or negligence in relation to execution of the paralegal’s duties under the retainer relationship), an abuse of process?
[38] Counsel for the respondent/defendant suggested that Ms Doerr’s action was found to be an abuse of process because, on reviewing the parties’ intended evidence and considering submissions made at the settlement conference, the Deputy Judge came to the conclusion that Ms Doerr’s action would not succeed. Counsel suggested that the bringing of a claim apparently destined to fail on its merits was itself something that properly could be characterized as “an abuse of process”.
[39] I find that suggestion problematic for a number of reasons.
[40] First, it adopts an inordinately broad view of what constitutes an “abuse of process”, and corresponding lowers the “very high threshold”, (noted above), required for such a characterization. Based on my review of the authorities, “abuse of process” connotes something far more egregious than mere commencement of an action unlikely to succeed. There must be some true “abuse” of the right to pursue litigation, such as use of legal process primarily to accomplish a purpose for which it was not designed, or commencement of a further proceeding to reopen and re-litigate claims or issues that already have been finally decided by an earlier proceeding.
[41] Second, if the Deputy Judge did indeed base his dismissal of the action on a summary review of the evidence and corresponding informal determination of the merits without a trial, that would suggest veiled use of a summary judgment jurisdiction and procedure which are not available in the Small Claims Court, according to the Court of Appeal’s ruling in Van de Vrande v. Butkowsky, supra.
[42] Third, based on the minimal indications provided by the Deputy Judge, his “abuse of process” conclusion was not focused on any kind of ultimate merits review, but on some kind of perceived problem arising from the fact that there had been an earlier proceeding in the Small Claims Court; i.e., “this action is an abuse of process (#2162-08)”. [Emphasis added.] That numerical reference corresponded to the court file number of the previous Small Claims Court action Ms Doerr commenced against her former London lawyer; i.e., the earlier claim for solicitor negligence resolved by the settlement arrangements giving rise to the present litigation.
[43] Reading the endorsement of the Deputy Judge as generously as possible, he apparently viewed Ms Doerr’s action against Sterling Paralegal as an “abuse of process” because it was an improper attempt to reopen and re-litigate the earlier claim which had been settled.
[44] If so, I respectfully disagree.
[45] Although Ms Doerr’s second Small Claims Court Action unquestionably stemmed from matters associated with conduct and resolution of her first Small Claims Court Action, the nature and focus of the two claims were fundamentally distinct and different in character.
[46] In the first action, Ms Doerr’s claim targeted the alleged negligence of her London lawyer in relation to the conduct of a human rights proceeding.
[47] In the second action, Ms Doerr’s claim targeted the alleged breach of retainer agreement and/or negligence of her paralegal in relation to his conduct of the litigation against the London lawyer. In particular, she was focused on the separate and very discrete issue of whether her paralegal settled her earlier claim without authorization, and then applied duress to make Ms Doerr sign documentation ostensibly confirming what allegedly had been presented to her as a fait accompli. There is absolutely nothing to suggest that her paralegal’s competence or conduct was raised, litigated or decided in the first proceeding.
[48] In short, Ms Doerr was not attempting to re-litigate the same issue or claim.
[49] Moreover, even if the second Small Claims Court action did tangentially raise certain facts or issues relevant to the first action, (e.g., the amount of damages Ms Doerr might successfully have recovered from her London Lawyer if her claim in that regard had not been settled), it is well-established that, in Ontario, lawyers have no immunity from negligence claims based on their conduct of litigation. Policy concerns associated with the possible re-litigation of issues raised and decided in previous proceedings, (including concerns about the re-litigation of stale cases, the need for finality, and the danger of inconsistent results), while recognized as legitimate, have been subordinated to other policy interests that are advanced by permitting clients to sue lawyers for their negligence. See, for example: Leslie v. Ball (1863), 22 U.C.Q.B. 512; Wade v. Ball (1870), 20 U.C.C.P. 302; Demarco v. Ungaro (1979), 21 O.R. (2d) 672 (H.C.); Wong v. Thomson, Rogers, [1994] O.J. No. 1318 (C.A.); and Wernikowski v. Kirkland, Murphy & Ain (1999), 50 O.R. (3d) 124 (C.A.).
[50] Having carried out an extended review of the relevant authorities in Wernikowski v. Kirkland, Murphy & Ain, supra, the Court of Appeal summarized the law of Ontario as follows, at paragraph 45:
There is no per se rule that negligence actions against lawyers that involve a re-litigation of issues decided in a previous proceeding are an abuse of process. The mere fact that the negligence action will involve the re-litigation of issues finally decided in prior proceedings will not, standing alone, warrant the striking of the claim as an abuse of process.
[Emphasis added.]
[51] If that is the law of Ontario in relation to negligence actions against lawyers, it seems to me that the same principles and approach should apply a fortiori to negligence actions against paralegals.
[52] I see nothing in the particular circumstances of this case to suggest any other abuse of process concerns, such as improper motive.
[53] More to the point, nothing in the extremely brief and cryptic endorsement of the Deputy Judge raised or suggested any other abuse of process concerns, apart from a simple reference to the fact that Ms Doerr’s current action stemmed from an earlier related action that had been concluded.
[54] In the circumstances, the Deputy Judge offered no sufficient or valid reason whatsoever for dismissal of Ms Doerr’s claim against Sterling Paralegal, and in my view there was no basis for that dismissal.
Disposition
[55] For the reasons outlined above, the appeal is allowed and the order of the Deputy Judge dismissing Ms Doerr’s action against Sterling Paralegal is set aside, so that her action may proceed to trial.
[56] Rule 13.08 of the Small Claims Court rules dictates that “a judge who conducts a settlement conference in an action shall not preside at the trial of the action”. For greater certainty, however, a direction also will issue that the trial of this matter shall take place before a different Small Claims Court judge than the one who made the order giving rise to this appeal.
Costs
[57] In an effort to minimize the time and expense being devoted to this matter, I asked the parties, at the end of the hearing before me, to make submissions indicating their respective positions on costs in the event of success.
[58] The defendant/respondent submitted a bill of costs indicating that, if the appeal was dismissed, Sterling Paralegal would be seeking costs in the amount of $3,073.07, (inclusive of fees, disbursements and HST). This was said to include considerable time spent by an associated and student, who carried out a detailed review of the multiple copies of appeal books and facta delivered by Ms Doerr to see if there were any material differences. (There nevertheless were no such differences. As a lay person, Ms Doerr simply seems to have misunderstood the provisions of the Courts of Justice Act and the Rules of Civil Procedure, concerning the number of judges who would be hearing her appeal and the number of appeal books that would be required.)
[59] In response, Ms Doerr simply indicated that she thought the amount of costs sought by Sterling Paralegal was “unfair” and excessive. She asked for the more modest sum of $600-700 if she was successful on the appeal. She had not retained a lawyer, (and accordingly required no reimbursement in that regard). However, she had spent considerable time pursuing the appeal on her own, and had incurred disbursements associated with filing her appeal and preparing her materials. Ms Doerr nevertheless did not provide a bill of costs confirming the precise nature of the time spent on the matter, or the sums spent on disbursements.
[60] Having regard to all the circumstances and the factors outlined in Rule 57.01(1) of the Rules of Civil Procedure, (including, in particular, Ms Doerr’s complete success on the appeal, the importance of the appeal to survival of her claim, the underlying amount in dispute, and the reasonable expectations of both parties as indicated by their respective cost submissions), costs of the appeal are awarded to the appellant Ms Doerr, fixed at $600.00.
“Justice I. F. Leach”
Justice I. F. Leach
Released: April 14, 2014
CITATION: Doerr v. Sterling Paralegal, 2014 ONSC 2335
COURT FILE NO.: DC-13-00002019-000
DATE: 2014/04/14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JANICE LYNN DOERR
Appellant
- and -
STERLING PARALEGAL
Respondent
REASONS FOR JUDGMENT ON APPEAL
LEACH J.