Daneluzzi v. Daneluzzi, 2015 ONSC 229

CITATION: Daneluzzi v. Daneluzzi, 2015 ONSC 229 NEWMARKET COURT FILE NO.: DC-14-724-00 and CV-07-83139-00 DATE: 20150112

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

Alfredo Daneluzzi and Landina Daneluzzi Plaintiffs

– and –

876336 Ontario Limited, Robert Marchioni, Stan Jospeh Grmovsek, Chantal Marie Grmovsek, Legal Link Corporation and Sandrex Corporation Defendants

COUNSEL: Maurice J. Neirinck, for the Plaintiffs Emily Stock, for the Defendants, Legal Link Corporation and Sandrex Corporation

HEARD: January 9, 2015

RULING

McKelvey J.:

Overview

[1] This is a motion for leave to appeal the decision of Justice Corkery on a motion for summary judgment brought by the plaintiffs in this action. On the motion, the defendants, Legal Link Corporation and Sandrex Corporation (“Sandrex”) took the position that not only should the plaintiff’s motion be dismissed, but that the action itself should be dismissed against Sandrex on the basis that the plaintiffs have not led evidence to establish a prima facie case.

[2] In his decision, the motion judge dismissed the plaintiffs’ motion for summary judgment, and denied the defence request that the plaintiffs’ action should be dismissed.

[3] Somewhat surprisingly, both parties have sought leave to appeal the decision of the motion judge. For different reasons they both agree that leave should be granted. But while both parties agree that leave should be granted, this court must still satisfy itself that the criteria for granting leave are satisfied.

[4] For the reasons that follow, I am not satisfied that the necessary criteria for granting leave have been met and have therefore concluded that both motions for leave should be dismissed.

Legal Principles

[5] Rule 62.02(4) of the Rules of Civil Procedure sets out the criteria which must be satisfied before leave is granted. The rule provides as follows:

(4) Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

[6] In the present case, both parties rely on both subsections (a) and (b) to support their position.

Facts

[7] The background facts are set out in the decision of the motion judge. Essentially, the plaintiffs invested money on the security of a mortgage. However, according to the parties on these motions, the mortgage was subsequently transferred fraudulently by the co-defendants and discharged a day later. The property which was mortgaged was later sold to an innocent third party.

[8] Sandrex was responsible for processing the mortgage related transactions on the province’s electronic registration system.

[9] The plaintiffs’ claim against Sandrex is a claim in negligence for processing the mortgage transfers.

[10] On the motion before the motion judge, neither the plaintiffs nor Sandrex introduced any expert opinion as evidence of the standards applicable to professionals, such as Sandrex, engaged in the registration of documents.

Position of the Plaintiffs on the Leave to Appeal Motion

[11] On the motion before me, the plaintiffs maintained that the motion judge did not consider whether a duty was owed by Sandrex to the plaintiffs. The plaintiffs appeared to proceed on the assumption that if a duty was owed, liability would inevitably follow. There was reference to some evidence which did raise legitimate concerns about the operations of Sandrex. For example, Sandrex kept virtually no records of the transactions, apart from the documents which were registered, and there was no clear evidence as to what documentation Sandrex had at the relevant time. Sandrex made reference in its evidence to the usual practices which were followed at the time, which did not include keeping any records other than the registration itself. In addition, the authorized user of the electronic registration system allowed her identity and password to be used by other employees of Sandrex, which effectively means that the person who made the transfers could not be identified.

[12] In fact, the endorsement of the motion judge makes it clear that the issue of a duty of care was not a live issue on the motion before him. In his decision, the motion judge states,

Both sides on this motion acknowledge that the defendants owed the plaintiffs a duty of care. The particular issue on this motion is to determine, if possible, what standard of care was owed to the plaintiffs and whether these defendants breached that standard of care.

[13] The endorsement of the motion judge makes it clear that in order to establish liability, the plaintiffs would require some expert opinion as to what standards apply to the professionals who processed the transactions complained of. This is reflected in his decision where he states, “while the common law duty has typically turned to the reasonable person to determine the appropriate standard of care generally, the determination of particular obligations associated with specific persons and conduct usually will require opinion evidence.” Later on the motion judge states,

This is a case that requires the evidence of an expert to determine the appropriate standard of care. However, neither party has filed an expert report on this motion. I have no opinion evidence to assist me in determining the applicable standard of care for paralegals performing electronic registrations for real property in 2003 in Ontario.

[14] On the above basis, while there were certainly areas of concern raised about the conduct of Sandrex, the motion judge dismissed the plaintiffs’ motion for summary judgment. I am in general agreement with the motion judge on this issue. The need for expert opinion on professional standards was recently reviewed by the Court of Appeal in Meady v Greyhound Canada Transportation Corp., 2015 ONCA 6. In that decision, the court states,

The general standard of care of a professional, such as a police officer, is a question of law, but the content of the standard of care in a particular case is a question of fact. As such, the content of the standard will generally require expert evidence….this is, however, subject to the exception for “non-technical matters or those of which an ordinary person may be expected to have knowledge.”

[15] The plaintiffs’ failure to adduce expert evidence was a reasonable basis for the motion judge to decline making a finding of liability in favour of the plaintiffs. The court reasonably required evidence as to what standards applied to professionals like Sandrex at the time of the transfers in question. The evidence of Sandrex is that these policies were changing over time, especially as the Ministry introduced updated guidelines in an apparent effort to cope with a rash of fraudulent transactions which were surfacing after the introduction of the electronic registration system.

[16] For the above reasons, I do not see a basis to conclude that there are any conflicting decisions applicable to the present case, nor is there any reason to doubt the correctness of the motion judge’s decision. In any event, the issues here do not raise an issue of such importance that make it desirable to grant leave.

The Position of the Sandrex

[17] The position of Sandrex is that having found that the plaintiffs had not met the burden of establishing a breach of the standard, the motion judge was obliged to dismiss the action, which he declined to do. The defendants maintained that the motion judge inappropriately reversed the onus of proof onto the defendant. They refer to the motion judge’s comments, where he states,

I am not persuaded that the onus necessarily rested on the plaintiffs as the moving party on this motion to provide the necessary expert evidence. The Daneluzzi’s main argument rests on the fact that Sandra Saroli’s name appears as having signed the transfer of charge acting for the Daneluzzis. This statement is clearly false. While the precise meaning of a name under the words “signed by” followed by the statement “acting for” on an electronic registration is unclear, it may shift the burden to the defendants to adduce evidence, including expert evidence, to show why this was not a clear breach of the standard of care owed by paralegals.

[18] It is acknowledged that in having dismissed the plaintiffs’ motion for summary judgment, it was open to the motion judge to consider a dismissal of the plaintiffs’ action even though the defence had not brought their own motion for summary judgment.

[19] The motion judge’s comments about the shifting burden of proof may, when considered in isolation, be controversial. In the Law of Torts in Canada by Fridman (3d) at page 383, the author comments on the onus of proof in a claim for the tort of negligence. He states,

The general rule is that the plaintiff must prove all of the elements of the tort of negligence. Thus, in addition to establishing that the defendant owed him or her a duty of care, the plaintiff must also show that the defendant breached that duty by some act or omission that constitutes negligence, the failure to observe the appropriate standard of care. The plaintiff’s obligation is to convince the court on the balance of probabilities that it was more likely than not that his or her loss was caused by negligence on the part of the defendant. If this is done, the defendant then has the task of calling into question the prima facie inference of negligence. Throughout, however, the ultimate or legal burden of proof is on the plaintiff. By establishing a prima facie case, the plaintiff succeeds in shifting the evidentiary or provisional burden of proof onto the defendant. If the defendant is subsequently able to discharge that burden by providing satisfactory evidence of non-negligence, nothing more is required of him or her, leaving the legal burden on the plaintiff as it was at the beginning of the trial. Should the plaintiff fail to adduce evidence that proves negligence, or fail to produce evidence from which a reasonable inference may be drawn that the defendant acted negligently, the plaintiff will not succeed.

[20] Sandrex argues that because the motion judge did not find that the plaintiffs established a prima facie claim in negligence, there was no basis for a shifting of the onus of proof to the defence. While the motion judge’s comments on the shifting burden of proof may be controversial, it is apparent that when one looks at the overall context of his comments that the substance becomes more clear. The motion judge prefaced his comments on the burden of proof by the following statement.

This is a case in which the interest of justice required that the applicable standard of care be determined at a trial with the benefit of expert evidence.

[21] In the present case, neither the plaintiff nor defendant chose to introduce any evidence with respect to the standard of care. It is fair to say that the comments of the motion judge were directed towards the ability of the court to make a fair decision without the benefit of any expert opinion. The absence of any expert opinion is an omission shared by both the plaintiffs and Sandrex. The obligation on the plaintiffs was particularly important, however, as they brought the motion for summary judgment. The comments of the motion judge with respect to the interest of justice requiring expert opinion is consistent with existing caselaw and is reflected in the Supreme Court of Canada decision in Hyrniak v. Mauldin, 2014 SCC 7. In their decision, the Supreme Court comments that a trial is not required if a summary judgment can achieve a fair and just adjudication. The court notes,

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment.

[22] The court goes on to comment that on a summary judgment motion the evidence need not be equivalent to that at trial, but must be such that the judge is “confident that she can fairly resolve the dispute.”

[23] It must be borne in mind that on a summary judgment motion, the objective remains to achieve a fair and just result. In this case, the motion judge concluded that there was insufficient evidence before him to find for the plaintiffs on the motion before him. The motion judge, in my view, was not obliged to make a finding on the defence position, although it was within his right to do so, if he felt that a just determination could be made on the merits. The motion judge declined to exercise his discretion because he felt it was not “in the interest of justice” to do so. The decision of the motion judge in this regard appears to be fully consistent with the principles outlined in the Supreme Court of Canada decision in Hyrniak.

[24] I therefore conclude that the exercise of discretion by the motion judge is not inconsistent in a material way with another decision, nor is their good reason to doubt the correctness of the decision with respect to the position of Sandrex. Finally, the issues do not raise matters of general importance which justify the granting of leave.

[25] For the above reasons, both motions for leave to appeal the decision of the motion judge are dismissed.

[26] The parties have previously advised me that there should be no order as to costs with respect to this motion.

Justice M.K. McKelvey

Released: January 12, 2015