Court Information

COURT OF APPEAL FOR ONTARIO DATE: 20231016 DOCKET: COA-22-CV-0318

Miller, Harvison Young and Thorburn JJ.A.

BETWEEN

OZ Optics Ltd. Plaintiff (Appellant)

and

Diane Lesley Evans and Samuel Edgar Schwisberg Defendants (Respondents)

Counsel: Michael B. Lesage, for the appellant Michael R. Kestenberg and Aaron Hershtal, for the respondent Samuel Edgar Schwisberg William Pepall and Spencer Jones, for the respondent Diane Lesley Evans

Heard: October 13, 2023

On appeal from the judgment of Justice Marie-Andrée Vermette of the Superior Court of Justice, dated October 17, 2022, with reasons reported at 2022 ONSC 5890.

Reasons for Decision

[1] The appeal was dismissed from the bench following the appellant’s oral submissions. The following are the court’s reasons.

[2] The respondents are both lawyers who were employed by the appellant as general counsel under virtually identical employment agreements.

[3] The appellant sued each of the respondents for breach of contract, as well as claims in tort framed as breach of fiduciary duty, conspiracy with intent to injure, and negligent performance of a service.

[4] The respondents were successful on a motion for summary judgment and the action was dismissed.

[5] The appellants appealed from the dismissal on the bases that:

(1) the motion judge erred in determining that a trial of the action was not required, and that the claims were capable of adjudication by way of summary judgment motion;

(2) with respect to the respondent Evans, that the motion judge erred in failing to find that she had breached a term of her employment by servicing other clients during her employment with the appellant; and

(3) with respect to the respondent Schwisberg, the motion judge erred in not finding that that he breached his employment agreement by failing to satisfy his obligations under a holdover clause which required that he continue to represent an affiliated entity in ongoing litigation.

[6] The argument that the motion judge erred in finding the action was amenable to adjudication by way of summary judgment is significantly undercut by the appellant having consented to proceed by way of summary judgment. Further, and as explained below, the arguments advanced to support the necessity of a trial each depend on recasting the litigation to focus on collateral issues which the motion judge found were unconnected to any damage the appellant claimed to have suffered.

[7] With respect to Evans, the appellant argued that Evans breached the employment contract by servicing other clients, which was not permitted without written consent. The motion judge was able to make a finding in this regard on the record before her, and determined that the work Evans did was of a technical nature to wind down her former practice, and was not a breach of the contract. That was a finding open to her on the record. In any event, and as the motion judge found, the appellant did not satisfy its burden of establishing that any loss the appellant claimed to have suffered could have flowed from such a breach, or indeed from any of the torts that were alleged. The findings that Evans was prevented from continuing to provide services to the appellant because of incapacity resulting from a stroke – a finding that the appellant does not dispute – and that the appellant had not proven the facts needed to support the tort claims was determinative of all of the claims against Evans.

[8] With respect to Schwisberg, the argument on appeal is that he failed to honour his commitments under a holdover clause, which required him to continue to service the appellant on a matter that was proceeding to trial until a suitable replacement could be found. The motion judge made findings that Schwisberg had agreed to continue to represent the appellant, but the appellant insisted on imposing terms that were inconsistent with Schwisberg’s obligations as an officer of the court. Furthermore, the motion judge found that the appellant’s action in filing a notice of change of solicitor was compelling evidence that the appellant had found a suitable replacement, absolving Schwisberg of any continuing obligation. These findings were amply supported by the record before the motion judge and did not require a trial.