CITATION: Bleta v. Floriri Village Investments Inc., 2018 ONSC 5466
DIVISIONAL COURT FILE NO.: 626/16 DATE: 20180917
ERRATUM DATE: October 3, 2018
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
LEROY A. BLETA
Neil Kotnala, for the Plaintiff (Appellant in Appeal)
Plaintiff (Appellant in Appeal)
– and –
FLORIRI VILLAGE INVESTMENTS INC.
David S. Strashin, for the Defendant (Respondent in Appeal)
Defendant (Respondent in Appeal)
HEARD at Toronto: September 17, 2018
C. HORKINS J. (Orally)
[1] This is an appeal from the trial decision of Deputy Judge E. Prattas dated November 25, 2016.
[2] In summary, the Deputy Judge dismissed the claim for payment of two accounts for legal services. The facts in large part are not in dispute and I will deal with them now.
[3] The plaintiff/appellant is a lawyer. He provided legal services to the defendant/respondent, Floriri Village Investments Inc., the respondent company. The respondent company is a family business that the appellant's father started in 1983.
[4] Shares in this company were issued equally to the appellant and his sister Bertha. Their father was the sole officer and director until his death in 2008. While their father was alive, the brother provided legal services on many occasions to the family company.
[5] This legal work was done pursuant to an oral retainer between the brother and the company, specifically the father who was controlling the company. In total, the brother was retained to provide legal services on 15 occasions. The services started after 1990 when the brother became a lawyer.
[6] The brother and father on behalf of the company, agreed that the brother would be paid a flat rate of $250 an hour for his legal services. On each occasion, the brother provided the company with invoices and was paid. After the father's death, the brother became the sole officer and director of the family company and he continued to do legal work for the business. He provided legal services on four occasions after the father's death.
[7] On the first two occasions, he billed for his services and was paid. On the third and fourth occasions, the brother provided legal services to the company and he was not paid. These accounts are the subject of this appeal.
[8] At some point, there was a falling out between the brother and sister. After their father's death, the brother continued as sole officer and director until December 2014. At this point, the sister became the sole officer and director. Both siblings continued to be equal shareholders of the company.
[9] The accounts in question were not billed to the company until October 30, 2015. As noted in the Deputy Judge's decision, this was about one year after work was completed on one matter and one year and five months after completion of the second matter.
[10] The first account involved litigation between the company and others. The sister was cross-examined during the litigation. The litigation concluded in June 2014.
[11] The second matter involved the sale of a piece of property and this matter concluded in October 2014.
[12] It is obvious from the record that the sister knew about the two legal matters and the work her brother was doing.
[13] By the time the accounts were issued, the sister was the sole officer and director of the family business. The company did not pay the invoices.
[14] The company (in essence, the sister) refused to pay the invoices because there was no agreement to pay them.
[15] At trial, the company disputed the accounts because there was no written retainer and no letter or documentation to prove that there was a retainer to pay the brother. The sister testified that she was unaware of the two accounts and did not know about them until she received the Small Claims Court claims.
[16] When the siblings parted way, the sister was never told that the company had an outstanding liability to the brother for the unpaid legal services.
[17] The Deputy Judge correctly stated that the brother had the onus to prove on a balance of probabilities that there was a retainer to provide legal services and be paid for the services at $250 an hour flat rate.
[18] The brother relied on the historical oral relationship between himself and the company that existed while his father was alive and continued for two further accounts after his death.
[19] While the Deputy Judge considered this long standing history of their oral retainer, she was not satisfied that there was an oral agreement to pay the brother for the legal services on the two occasions in question.
[20] The brother argues that in the face of the undisputed oral retainer evidence, it was a palpable and overriding error to conclude that the oral retainer did not apply to the two accounts in question.
[21] The Deputy Judge made several findings to support her decision. The real estate transaction concluded in October 2014 and the brother could have, but did not hold back any money to cover his account. He also could have obtained authority to do so and he did not.
[22] The Deputy Judge found that this was consistent with her finding that the brother never intended to send an account and be paid. She also relied on the fact that the brother did not send an account for the real estate deal until October 2015.
[23] The Deputy Judge also relied on the fact that the litigation had concluded in June 2014 and the brother's fees were not shown as a liability on the company records.
[24] Further, as the judge noted, there was no evidence that the brother even brought his accounts to his sister's attention. The Deputy Judge stated at para. 21 of her reasons as follows:
There was no evidence that Bertha agreed to assume this liability or obligation of Floriri, especially since he never brought it to her attention at any time. He could have told her about it and he could have advised the defendant in writing, but he failed to do so. Had he done so, it would have alerted her much earlier on so she would have had an opportunity to deal with it at separation time. The plaintiff was wearing two hats, but as a lawyer in my view he had an obligation to inform his sister (who was the incoming sole officer and director) and his client, the corporation, that an account would be coming, and report to his client on a timely basis.
[25] Lastly, the judge found the sister to be a reliable witness. She found her evidence to be reasonable and found the brother's decision not to render accounts until long after the work was done, to be curious.
[26] The standard of review on an appeal from a judge's order is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. On questions of law, the standard is correctness, on questions of fact, the standard is palpable and overriding error and on questions of mixed fact and law, the court stated in Housen, there is a spectrum. Where there is an extricable legal principle, the standard of review is correctness. However, with respect to the application of the correct legal principles to the evidence, the standard is palpable and overriding error.
[27] With respect to findings of fact, an appellate court may "substitute its own view of the evidence and draw its own inferences of fact where the trial judge is shown to have committed a palpable and overriding error or made findings of fact that are clearly wrong, unreasonable or unsupported by the evidence". See H.L. v Canada (Attorney General), 2005 SCC 25, 2005 1 SCR 401 at para. 4.
[28] In that case, the Supreme Court went on to say that the language of palpable and overriding error and clearly wrong encapsulates the same principle that an appellate court will not interfere with the trial judge's findings of fact unless it can plainly identify the imputed error and that error has shown to effected the result.
[29] This appeal in my view is concerning because the brother clearly did the legal work. This is not in dispute but he has not been paid as he was in the past. However, I am not satisfied that the Deputy Judge made any palpable and overriding errors as the Supreme Court has defined the test.
[30] I say this because circumstances between the brother and the company and specifically the sister had changed by 2014 and it was open to the Deputy Judge to consider the totality of the facts as she did.
[31] The Deputy Judge was in the best position to consider and assess the credibility of the parties. I see no basis for second guessing her assessment.
[32] The brother also argues that the judge erred because she did not consider the legal principle of unjust enrichment. I reject this ground of appeal. It was not raised by the brother in his claim and not argued at trial. Nevertheless the brother argues on this appeal that the Deputy Judge ought to have considered this legal principle and allowed judgment in his favour because the company was unjustly enriched.
[33] The brother, though self-represented at trial, is a practicing lawyer. I reject the argument that the Deputy Judge erred by not considering a legal argument that the brother, who is a lawyer, never pleaded or argued. He had the training to raise such an issue and chose not to do so.
[34] For all of these reasons, the appeal is dismissed.
[35] I have endorsed the Respondent's appeal Book and Compendium as follows: "Appeal heard. Oral reasons provided. Appeal is dismissed. No costs are awarded."
___________________________ C. HORKINS J.
Date of Reasons for Judgment: September 17, 2018
Date of Release: September 18, 2018
CITATION: Bleta v. Floriri Village Investments Inc., 2018 ONSC 5466
DIVISIONAL COURT FILE NO.: 626/16 DATE: 20180917
ERRATUM DATE: October 3, 2018
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
LEROY A. BLETA
Plaintiff
(Appellant in Appeal)
– and –
FLORIRI VILLAGE INVESTMENTS INC.
Defendant
(Respondent in Appeal)
ORAL REASONS FOR JUDGMENT
C. HORKINS J.
Date of Reasons for Judgment: September 17, 2018
Date of Release: September 18, 2018
ERRATUM DATE: October 3, 2018
CITATION: Bleta v. Floriri Village Investments Inc., 2018 ONSC 5466
DIVISIONAL COURT FILE NO.: 626/16 DATE: 20180917
ERRATUM DATE: October 3, 2018
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
LEROY A. BLETA
Neil Kotnala, for the Plaintiff (Appellant in Appeal)
Plaintiff
(Appellant in Appeal)
– and –
FLORIRI VILLAGE INVESTMENTS INC.
David S. Strashin, for the Defendant (Respondent in Appeal)
Defendant
(Respondent in Appeal)
HEARD at Toronto: September 17, 2018
ERRATUM TO ORAL REASONS GIVEN BY JUSTICE C. HORKINS
ON SEPTEMBER 17, 2018
The following paragraphs have been corrected:
In paragraph 11, reference to February 2015 is replaced with October 2014.
In paragraph 21, reference to February 2015 is replaced with October 2014.
In paragraph 22, reference to February 2015 is replaced with October 2015.
Erratum Date: October 3, 2018
___________________________ C. HORKINS J.