Court File and Parties

CITATION: Sokoloff Professional Corp. v. Mahoney, 2015 ONSC 2007

DIVISIONAL COURT FILE NO.: 1/15

DATE: 20150327

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: WENDY SOKOLOFF PROFESSIONAL ASSOCIATION/Plaintiff/Respondent

AND:

WAYDE MAHONEY, KEVIN MAHONEY, and CAROL MAHONEY and JOSEPH FALCONERI, Defendants/Appellants

BEFORE: Janet Wilson, J.

COUNSEL: Ryan Caesar, for the Plaintiff/Respondent

Bryan Rumble, for the Defendants/Respondents

HEARD at Toronto: March 10, 2015 in writing

ENDORSEMENT

The Application for Leave to Appeal

[1] The Defendants seek leave to appeal to the Divisional Court from the decision of Belobaba, J. dated October 30, 2014 dismissing their motion for summary judgment. He concluded that the question of whether the limitation period had expired required a trial on the issue of discoverability, and that it was not appropriate to determine the matter by way of motion.

[2] I conclude that neither of the conjunctive requirements of Rule 62.02(4)(a) or (b) has been met. There are no conflicting decisions on this issue, and it is not desirable that leave to appeal be granted. There is no reason to doubt the correctness of the decision made, and the appeal does not raise issues of importance.

[3] Clearly judgment should not be granted in favour of the Defendants dismissing this action, although I am not sure that this matter requires a trial. It appears the essential facts disclosed in the motion record are undisputed. Applying the robust fact finding powers defined by the Supreme Court in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 and the principles of proportionality it appears that analysis would justify the conclusion that there is no valid limitation defence.

The Facts

[4] The Defendant Wayde Mahoney was injured in a motor vehicle accident and retained the Plaintiff to represent him. In this action, the Plaintiff seeks payment for legal fees incurred during the period that she represented him from 2006 to 2009.

[5] When the file was transferred from the Plaintiff to new counsel, the disbursements incurred by the Plaintiff in excess of $50,000.00 were paid. Further, as a condition of transferring the file, new counsel, Mr. Falconeri undertook in a letter dated November 5, 2009 to protect the Plaintiff’s account:

We, of course, will pay your reasonable disbursements and we undertake to protect your reasonable account from any settlement or Judgment, subject to my client’s right to an assessment.

[6] Wayde Mahoney also undertook to pay the Plaintiff’s account. He confirmed in an email on October 29, 2009 that “We will protect ur file and when my case settles you will be payed the money that is owed to you will be protected til I settle my case”.

[7] These undertakings were never withdrawn.

[8] The Plaintiff was not notified that the matter was settled shortly after the file had been transferred to Mr. Falconeri.

[9] In February 2010 the Mahoney defendants sued the Plaintiff for negligence. LawPro has brought a summary judgment motion to dismiss this claim.

[10] In March 2010, after the claim was initiated against the Plaintiff she confirmed with the Defendants that she was seeking a low figure of $75,000.00 for outstanding fees and confirmed that these fees would have to be paid. By this time she was aware that the case had been settled.

[11] At no time did Falconeri advise that he would not respect his clear undertaking to pay the Plaintiff’s account, subject to the defendants’ right to an assessment. It is the Plaintiff’s position that

“At all material times, neither Falconeri or Wayde said that they would not be paying my account. I verily believe that the Defendants are estopped from reneging on their promise and invoking a limitation period defence”.

In addition, I verily believe that it was reasonable to rely upon the undertaking of a fellow solicitor, as the requirements of a Solicitor to uphold said undertaking is codified in the Rules of Professional Conduct.”

[12] The docketed time which the Plaintiff claims in this action amounts to $92,886.00. The dockets were forwarded by the Plaintiff to the Defendant Falconeri in February 2012. The Statement of Claim in this action was initiated on February 13, 2013, as the account remained unpaid and the Defendants argued that the limitation period had expired.

Conclusions

[13] I am of the view that it would have been open to the motions court judge to determine the issue of the limitation defence under the Hryniak principles in favour of the Plaintiff, even though it was the Defendants who initiated the summary judgment motion. If a party triggers a summary judgment motion, judgment may in fact be granted to the opposing party: Heydary Hamilton PC v. Bay St. Document Systems Inc., 2011 ONSC 4607, [2011] O.J. No. 6010 at para 64 citing Manulife Bank of Canada v. Conlin, [1996] 3 S.C.R. 415 at p. 448. Presumably the Plaintiff did not make the argument that judgment should be granted in her favour, accounting for the approach taken by the motions judge.

[14] The Supreme Court has summarized the elements of promissory estoppel as: “The party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position.” (Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 50 at paragraph 13)

[15] There is also clear case law that a solicitor’s undertaking as well as a client’s undertaking is enforceable, can be relied upon, and stops the clock running for the purpose of a limitation defence unless revoked. In Tembec Industries Inc. v. Lumberman’s Underwriting Alliance, (2001), 52 O.R. (3d) 334, [2001] O.J. No. 72 at paras 21-22, Ground J. held that an undertaking to pay a specified amount in damages gives rise to promissory estoppel where the recipient of the undertaking relied on it. Such reliance is expressly contemplated by a solicitor who gives an undertaking, as Wilton-Siegel J. held in Bogoroch & Associates v. Sternberg, [2005] O.J. No. 2522 at para 38.

[16] There were clear undertakings in writing given by the Defendants’ counsel, as well as the personal defendant Wayde Mahoney to protect the Plaintiff’s account, and the defendants at no time advised the Plaintiff that the undertaking was revoked. The Plaintiff is entitled to rely on a solicitor’s undertaking, as well as the undertaking of a client. Promissory estoppel can operate as an answer to a limitation defence if the plaintiff can make out all of the requisite elements (Montcap Financial Corp. v. Schyven, 2011 ONSC 4030, [2011] O.J. No. 2919 at paragraph 28; Tembec Industries Inc. v. Lumberman’s Underwriting Alliance, (2001), 52 O.R. (3d) 334, [2001] O.J. No. 72at paragraphs 21-22).

[17] Following the principles outlined in Hryniak, to try to recoup the lost costs in a failed summary judgment motion, this matter should be set down for a summary trial to determine the limitation period issue, using the record that was before the motions judge, supplemented as necessary with oral evidence.

[18] If the parties wish, they may file the motion record as the trial record in this matter upon paying the requisite fee and obtain a summary trial date with Janice Dickie at the Civil Trial office.

Costs

[19] I requested counsel to file brief written submissions as to costs, and they have done so. I have reviewed the written submissions as to costs submitted by the parties. In the circumstances I fix the costs of this in writing application for leave to appeal in the amount of $3200.00 payable by the Defendants to the Plaintiff.

Janet Wilson, J.

Date: March 27, 2015