Court File and Parties

GBF Associates Inc. v. Findlay Law Office, CITATION: 2014 ONSC 4903

COURT FILE NO.: DC14-549

DATE: 2014-08-22

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: GBF Associates Inc., plaintiff, appellant

AND: D. Robert Findlay Law Office Professional Corporation, defendant, respondent

BEFORE: Mr Justice Ramsay

COUNSEL: Mr Douglas O. Smith for appellant; Mr Don Morris for respondent

HEARD: 2014-08-22

ENDORSEMENT

[1] The plaintiff appeals the order of a deputy judge of the Small Claims Court to stay the action pending disposition of an action in Superior Court to which neither the plaintiff nor the defendant is a party.

[2] The plaintiff was retained by the defendant law firm to provide an assessment and report with respect to its client, a child who was suing for damages suffered when he was knocked down by a car. The plaintiff made the assessment and provided the report and sues for its fees of about $17,000. The defendant pleads that the plaintiff was only asked to fill in a form called an OCF-22, which is an application to the no-fault insurer for funding for the assessment and report, before going ahead and undertaking the assessment.

[3] In staying the action, the judge said this:

On balance I find that the disbursement of the Findlay Law firm, which is the plaintiff’s account, should properly go before the judge having jurisdiction of this matter to be approved pursuant to Rule 7.08. To find that the defendant law firm is liable for any part of the plaintiff’s claim not approved by the judge would mean … that they have to pay or have to underwrite the risk. I think this is not what is intended by Rule 7.08. I think if the fee is not reasonable, it should be adjusted to what the judge having jurisdiction of the matter considers to be reasonable. And to have this court adjudicate on the amount of the claim and give judgment against [the defendant] would mean essentially that … a disbursement that could possibly be found to be unreasonable would be binding on [the defendant]. I do not think that that is the result that was intended by Rule 7.08. So I find that the disbursement, i.e. the invoice of the plaintiff … should be subject to approval of the judge having jurisdiction under Rule 7.08 in the matter of [the defendant’s client] and I am going to stay the action of the plaintiff in this court until [that] matter has been finally disposed of and the fees and disbursements approved pursuant to Rule 7.08.

[4] In doing so the judge terminated the plaintiff’s right to participate in the process in which its invoice would be judged. The order was therefore a final order: Suresh v. Canada, [1998] O.J. No. 5275 (CA). The plaintiff has the right to appeal from a final order under s.31 of the Courts of Justice Act.

[5] The parties agree that if the decision can be appealed, the standard of review is correctness.

[6] In my view the judge was in error in applying Rule 7.08. Rule 7.08 is designed to protect litigants who are under a disability, not lawyers. Whether a disbursement is reasonable for the purposes of approval of an infant settlement involves different considerations from a contract action between a service provider and the law firm that allegedly contracted for the service, as the defendant concedes in paragraph 8 of its factum. The Superior Court judge’s view of the disbursement would not necessarily be of any guidance to the small claims judge who hears the contract action. Moreover, it is not certain that the matter will be settled or that costs will ever be ordered. Rule 7.08 had no application to the matter before the deputy judge.

[7] The proper place to determine whether a contract was entered into, and what were its terms, is the Small Claims Court in the action in which the plaintiff seeks to enforce the contract. The principle that favours avoiding a multiplicity of proceedings does not apply to the present circumstances.

[8] The stay of proceedings was incorrectly ordered and it worked injustice to the plaintiff.

[9] I allow the appeal, vacate the stay of proceedings and direct that the matter proceed to trial before the Small Claims Court differently constituted.

J.A. Ramsay J.

Date: 2014-08-22