COURT FILE NO.: CV-18-593524 DATE: 2019/06/05

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Rosemary Cremer, Plaintiff

• and - THE LAW SOCIETY OF ONTARIO, Defendant

Counsel: Mark A. Russell and Seta Boyadjian for the Plaintiff Ian S. Epstein and Sheldon Inkol for the Defendant

HEARD: May 23, 2019

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] The Plaintiff Rosemary Cremer sues The Law Society of Ontario for breach of fiduciary duty, breach of trust, negligence, misfeasance in public office, and infliction of mental injury and/or emotional distress.

[2] The Law Society moves for a summary judgment. It submits that Ms. Cremer’s claim is statute-barred under the Limitations Act, 2002 [1]. It submits that the Law Society enjoys statutory immunity from negligence claims. It submits that absolute privilege applies to any claim based on the allegation that the Law Society’s agent swore a false affidavit. It submits that Ms. Cremer’s claim for interest, investment income, or costs is an abuse of process because it should be dealt with by the judge seized of the court appointed trusteeship. Thus, the Law Society submits that Ms. Cremer’s action should be dismissed, or, in the alternative, portions of her Statement of Claim should be struck as an abuse of process and for advancing no tenable cause of action.

[3] At the hearing of the summary judgment motion, the Law Society abandoned its argument that Ms. Cremer is estopped from bringing her action because she signed an acknowledgment and final release before receiving the funds that were held by the Law Society.

B. Factual Background

[4] The Law Society is the governing body of the legal profession in Ontario. It regulates, licenses and disciplines Ontario’s lawyers and licensed paralegals pursuant to the Law Society Act [2], and the Law Society’s rules, regulations, and guidelines.

[5] Ms. Cremer was a bookkeeper at the law firm of James & Associates, whose primary practice area was real estate. James & Associates is the law firm of Kenneth James.

[6] Ms. Cremer was employed as an assistant bookkeeper from 1988 to 1995. She became a senior bookkeeper in 1995 and worked with the firm until 2012. Ms. Cremer was also a client of the firm having retained it in relation to her personal mortgage investments portfolio.

[7] In 2011, Ashin Dastani, a former client of the firm, was arrested and charged with offences under the Criminal Code in relation to exporting ephedrine. In June 2012, the Royal Canadian Mounted Police laid charges against Mr. James, another client of the Firm, and Ms. Cremer in relation to the Dastani case.

[8] Ms. Cremer was granted bail. It was a condition of her bail that she not receive funds in excess of $10,000.00.

[9] On June 27, 2012, Mr. James voluntarily suspended his practice pending disposition of the criminal charges, and he assigned the firm’s trust account to the Law Society Trustee Services Department.

[10] Mr. James provided the Law Society with a trust listing in which “Matter #47” indicated a trust balance of $302,642.27 for Ms. Cremer. The money was being held in trust for Ms. Cremer with respect to two mortgage investments; namely, the Belair mortgage and the Abela mortgage.

[11] On July 4, 2012, Mr. James’ license to practice law was temporarily suspended by the Law Society while it investigated allegations of fraudulent real estate transactions.

[12] Larry Hadbavny, Senior Legal Counsel and Assistant Manager of Trustee Services had carriage of the James Trusteeship.

[13] On September 12, 2012, Mr. Cremer’s criminal counsel, Seth Weinstein, provided Trustee Services with Ms. Cremer’s mortgage investment file that contained the documentation that substantiated her claim to the trust funds held as Matter #47.

[14] On May 28, 2013, Mr. Hadbavny wrote to Ms. Cremer’s lawyer, Andrea Rossanese of Friedman & Associates. He advised that Trustee Services had determined that the $302,642.27 was being held in trust to the credit of Ms. Cremer. Mr. Hadbanvy provided a release and an authorization and direction to be signed by Ms. Cremer to direct the Law Society to pay her $302,642.27.

[15] Because of her bail conditions, Ms. Cremer felt that she could not accept the $302,642.27, and she declined to sign the direction or the release.

[16] On January 14, 2014, Mr. Hadbavny left the Law Society for private practice. Carriage of the James Trusteeship was assumed by Nadia Musclow of the Law Society’s Trustee Services Department.

[17] On February 18, 2014, the Law Society commenced an application against Mr. James for a court-appointed trusteeship under the Law Society Act. Within the trusteeship application, the Law Society disputed that Ms. Cremer was the beneficial owner of the $302,642.27 associated with Matter #47.

[18] In March 2014, Ms. Cremer’s lawyer, Michah Goldstein, also of Friedman & Associates, informed Ms. Musclow that Ms. Cremer was now in a position to sign the direction and accept the funds. Mr. Goldstein demanded the release of the Matter # 47 funds “failing which we will have to pursue remedies on her behalf”.

[19] Ms. Musclow advised Ms. Goldstein that she needed input from Margaret Cowtan, the manager of Trustee Services. Ms. Musclow was concerned about some of the entries that had been made into Ms. Cremer’s trust account including a $2.0 million deposit and a $500,000 withdrawal in the summer of 2011.

[20] On April 30, 2014, Ms. Goldstein was advised that the allocation to Ms. Cremer in the trusteeship application, matter #47, was being disputed because Ms. Cremer was a co-worker and co-accused of Mr. James.

[21] On May 7, 2014, Justice McEwen granted the trusteeship under the Law Society Act. He seized himself of the James Trusteeship. The determination of whether Ms. Cremer was the beneficial owner of the trust funds became part of the trusteeship proceeding.

[22] Mr. Goldstein and Ms. Musclow continued to discuss resolution of Ms. Cremer’s claim. The Law Society requested more information, including information about transactions unrelated to Ms. Cremer’s mortgage investments and related to the criminal proceeding. Mr. Goldstein advised Ms. Musclow that to the extent the Law Society needed more information regarding the Belair and Abela mortgage investments, Ms. Cremer would provide the information, but otherwise the Law Society’s requests were overbroad.

[23] On June 11, 2014, in correspondence, Ms. Goldstein reminded Ms. Musclow that the Law Society had already resolved Ms. Cremer’s claim and had offered to pay the money in exchange for Ms. Cremer signing the direction and release. He enclosed a copy of the release that had been signed by Ms. Cremer on June 3, 2014, and he asked that the Matter #47 Funds now be released to her.

[24] On June 12, 2014, Ms. Musclow advised Mr. Goldstein that the matter was not resolved, and she invited him to submit further information that would assist in the allocation of the Matter #47 funds.

[25] Nothing of any moment appears to have happened for the next year until in August 2015, Ms. Musclow left the Law Society to go into private practice. Catherine Phillips assumed primary carriage of the James Trusteeship.

[26] On November 3, 2015, the criminal charges against Ms. Cremer were stayed. Ms. Cramer acting on her own, wrote several letters to the Law Society as well as to Scott Fenton, the court-appointed Referee who had custody of the files seized from the law firm by the RCMP. In this correspondence, dated November 12, 2015, November 16, 2015, November 24, 2015, and December 6, 2015, Ms. Cremer protested her treatment by the Law Society. She especially complained about the conduct of Ms. Musclow.

[27] On December 10, 2015, Ms. Cremer swore an affidavit. She deposed that: (a) the Law Society’s decision to deny her the Matter #47 Funds was improper; (b) Mr. Hadbavny’s offer to disburse the funds in September 2013 was a “bail trap” meant to cause her to violate her bail conditions; (c) the Law Society had cooperated with and disclosed personal and privileged information to the RCMP; (d) the Law Society had manipulated its distribution charts to mislead the court; (e) the Law Society was seeking to expand the Trusteeship for the sole reason of obtaining the court’s sanction of its over-reach to obtain files that were privileged; (f) the Law Society had been violating her rights and privileges for three years; and (g) Ms. Musclow’s conduct had caused hardship, deprivation, and suffering since the Law Society took custody of the Matter #47 Funds in July 2012.

[28] On January 7, 2016, Mr. James was tried and acquitted of all criminal charges.

[29] On January 11, 2016, acting again on her own, Ms. Cremer wrote the Law Society and stated that she was now free to pursue the Law Society for damages, since the charges against her had been stayed. She demanded payment of the Matter #47 Funds by January 21, 2016. Ms. Cremer copied the letter to criminal counsel Seth Weinstein, former counsel Micah Goldstein, and current counsel Mark A. Russell.

[30] The Law Society did not pay the Matter #47 Funds by the deadline. Its position was that further information was required to substantiate Ms. Cremer’s entitlement to the funds.

[31] On February 1, 2016, Ms. Cremer wrote a letter to the Law Society’s external counsel on the James Trusteeship to advise that information provided by the Law Society to her former counsel was demonstrably false and that after more than three-and-a-half years of deceit and delay, it was now too late for the Law Society to undo the harm it had caused her.

[32] On March 24, 2016, Catherine Phillips swore an affidavit in support of a motion to, among other things, expand the James Trusteeship. It was the Law Society’s position that a more comprehensive trusteeship was required because of the findings of the criminal court and the discovery of a possible fraud. The affidavit was commissioned by Ms. Musclow, who had been retained by the Law Society in March of 2016 to act as external counsel.

[33] In her Statement of Claim, Ms. Cremer alleges that Ms. Philip’s affidavit contained knowingly false information which the Law Society relied on to support its position that the Trusteeship should be expanded.

[34] On April 22, 2016, Justice McEwen heard Mr. James’ motion to discharge the receivership. Ms. Cremer attended the hearing. Justice McEwen allowed her to speak, and she complained that although the Law Society had originally been prepared to release the $302,642.27, it had changed its mind and was refusing to pay her.

[35] Justice McEwen adjourned Mr. James motion sine die. He directed that there would be case conferences where clients could attend to discuss entitlement claims. Justice McEwen’s endorsement stated “[i]n particular I have advised that Ms. Rosemary Cremer can participate in the case conference to deal with the issues of her alleged trust monies.”

[36] On May 11, 2016, there was a case conference. The Law Society denied that Ms. Cremer was entitled to the $302,642.27 being held in trust. It repeated its demand for disclosure of information unrelated to the two mortgages. The Law Society, however, indicated that it would review Cremer’s claim, and it asked for Ms. Cremer to submit an affidavit about her mortgage investments. Ms. Cremer did so.

[37] On June 21, 2016, Ms. Cremer wrote to Ms. Musclow and accused the Law Society of dishonest alterations to its distribution charts over the previous four years to hide its real agenda, of actively assisting the RCMP. Ms. Cremer wrote that she found it particularly distressing and distasteful that the Law Society would hire Ms. Musclow because it was her conduct that gave her cause to sue the Law Society, which she intended to so.

[38] The matter remained unresolved, and Ms. Cremer attended case conferences on June 23, 2016, and July 8, 2016. These conferences also failed in resolving the matter.

[39] On September 22, 2016, the Law Society brought a motion for directions. It sought an order freezing any payout of funds from the trusteeship, including any payment to Ms. Cremer. In its Notice of Motion, the Law Society stated that it was unable to determine the allocation of Ms. Cremer’s funds.

[40] On October 25, 2016, Justice McEwen ordered the Law Society to pay Ms. Cremer $302,642.27.

[41] On or about November 7, 2016, the Plaintiff wrote separate letters to Musclow and Phillips, in which she stated that the Law Society had known since before Ms. Musclow’s departure that she intended to sue both the Law Society and Ms. Musclow to recover the losses she had sustained as a result of their breach of trust and a four year campaign of duplicity and malice.

[42] The Matter #47 Funds were distributed to the Plaintiff on or about November 16, 2016, pursuant to an Acknowledgement and Direction executed by the Plaintiff on November 11, 2016.

[43] Ms. Cremer’s Statement of Claim was issued on March 8, 2018.

[44] As a result of the LSO’s disciplinary proceedings against James, his license to practice law was revoked on June 26, 2017. His appeal to the LSO’s Tribunal Appeal Division was dismissed on July 16, 2018. An appeal before the Ontario Superior Court of Justice is pending.

C. Discussion and Analysis

1. Jurisdiction to Grant Summary Judgment

[45] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the court shall grant summary judgment if: “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.” With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced. Rule 20.04 (2.1) states:

20.04 (2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

[46] Hryniak v. Mauldin does not alter the principle that the court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial. The court is entitled to assume that the parties have advanced their best case and that the record contains all the evidence that the parties will present at trial. [3] Thus, if the moving party meets the evidentiary burden of producing evidence on which the court could conclude that there is no genuine issue of material fact requiring a trial, the responding party must either refute or counter the moving party’s evidence or risk a summary judgment. [4]

[47] In Hryniak v. Mauldin [5] and Bruno Appliance and Furniture, Inc. v. Hryniak [6], the Supreme Court of Canada held that on a motion for summary judgment under Rule 20, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers introduced when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[48] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rules 20.04 (2.1) and (2.2). As a matter of discretion, the motions judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole. To grant summary judgment, on a review of the record, the motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him or her to draw the inferences necessary to make dispositive findings and to fairly and justly adjudicate the issues in the case. [7]

[49] If a judge is going to decide a matter summarily, then he or she must have confidence that he or she can reach a fair and just determination without a trial; this will be the case when the summary judgment process: (1) allows the judge to make the necessary findings of fact; (2) allows the judge to apply the law to the facts; and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. [8] The motion judge is required to assess whether the attributes of the trial process are necessary to enable him or her to make a fair and just determination. [9] To grant summary judgment, on a review of the record, the motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him or her to draw the inferences necessary to make dispositive findings and to fairly and justly adjudicate the case.

[50] In the immediate case, I agree with the Law Society’s submission that the case at bar is an appropriate case to determine whether or not Ms. Cremer’s claims against the Law Society are statute-barred.

2. Is Ms. Cremer’s Claim Statute-Barred?

[51] The Law Society submits that as early as March 2014, when Ms. Cremer’s lawyer, Michah Goldstein, informed Ms. Musclow that Ms. Cremer was demanding the release of the Matter # 47 funds “failing which we will have to pursue remedies on her behalf” that the two-year limitation period for suing the Law Society had begun to run. It submits that if the limitation period did not begin to run in 2014, it certainly began to run in 2015 or in 2016 when Ms. Cremer inundated the Law Society with correspondence and affidavits that spelled out her complaints about Ms. Musclow’s and about the Law Society’s handling of her demand to be paid the monies held in trust.

[52] Ms. Cremer’s counterargument is that until it was determined that she was the beneficial owner of the Matter #47 funds, it was not appropriate for her to commence an action against the Law Society. Ms. Cremer submits that based on the facts specific to her claim, the legally appropriate start date of the two-year limitation period was October 25, 2016, which was the day her beneficial ownership of the funds was confirmed by Justice McEwen’s order.

[53] If this submission is correct, then her action, which was commenced on March 8, 2018, is timely and not statute-barred.

[54] The relevant provisions of the Limitations Act, 2002 are sections 1, 4, and 5, which are set out below:

Definitions

1. In this Act,

“claim” means a claim to remedy an injury, loss or damage that occurred as a result of an act or omission; ….

BASIC LIMITATION PERIOD

Basic limitation period

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

Discovery

5. (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

Presumption

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[55] Prior to the enactment of s. 5(1)(a)(iv) of the current Limitations Act, 2002, the judge-made discoverability principle governed the commencement of a limitation period. The discoverability principle stipulated that a limitation period begins to run only after the plaintiff has the knowledge, or the means of acquiring the knowledge, of the existence of the facts that would support a claim for relief. [10] The discoverability principle conforms with the idea of a cause of action being the fact or facts which give a person a right to judicial redress or relief against another. [11]

[56] The discoverability principle continues to operate, and indeed has been codified by the Limitations Act, 2002, but its operation has been adjusted by s. 5(1) (a)(iv), and thus subject to s. 5(1)(a)(iv), a limitation period commences at its earliest when the plaintiff discovers the underlying material facts or, alternatively, when the plaintiff ought to have discovered those facts by the exercise of reasonable diligence, but because of s. 5(1)(a)(iv), discoverability may be postponed.

[57] Subject to the adjustment made by s. 5(1)(a)(iv), with respect to the basic limitation period of two years under the Limitations Act, 2002, a claim is “discovered” on the earlier of the date the claimant knew - a subjective criterion - or ought to have known - an objective criterion - about the claim. [12]

[58] The discoverability of a claim for relief involves the identification of the wrongdoer, and also, the discovery of his or her acts or omissions that constitute liability. [13] It is not enough that the plaintiff has suffered a loss and has knowledge that someone might be responsible; the identity and culpable acts of the wrongdoer must be known or knowable with reasonable diligence. [14]

[59] For the limitation period to begin to run, it is not necessary that the plaintiff know the full extent or quantification of his or her damages; rather, the period begins to run with the plaintiff’s subjective or objective appreciation of being damaged, i.e., of being worse off than before the defendant’s conduct. [15]

[60] Section 5(1) (a)(iv) of the Limitations Act, 2002 adjusts the operation of the discoverability principle, and s. 5(1)(a)(iv) can have the effect of delaying the commencement of the running of limitation period. Where a person knows that he or she has suffered harm; i.e., when the plaintiff knows the elements of ss. 5(1)(a)(i),(ii), and (iii), the delay lasts until the day when a proceeding would be an “appropriate” means to remedy the harm having regard to the nature of the injury, loss or damage.

[61] The appropriateness factor of 5(1)(a)(iv) introduces some uncertainty in the operation of the Limitations Act, 2002 but it also introduces some flexibility and fairness in the application of the discovery principle, which presumptively operates against the claimant as soon as a cause of action becomes objectively apparent. [16] In Markel Insurance Co. of Canada v. ING Insurance Co. of Canada [17], the Court of Appeal held that for s. 5(1) (a)(iv) to have a delaying effect, there must be a juridical reason for the person to wait; i.e., there must be an explanation rooted in law as to why commencing a proceeding was not yet appropriate. Appropriateness must be assessed on the facts of each particular case, including taking into account the particular interests and circumstances of the plaintiff. [18]

[62] Courts have held that a proceeding is not legally appropriate until other dispute resolution mechanisms including statutory remedies have been exhausted. [19] In Brown v. Baum [20], the defendant doctor continued to treat his patient to try to fix the problems that arose from an initial surgery that the plaintiff knew might support a negligence claim, but the court held that it was not appropriate for the patient to sue the doctor then and the limitation period did not begin to run until after the doctor had completed his efforts to improve the outcome of the original surgery. [21] In Presidential MSH Corp. v. Marr, Foster & Co. LLP. [22], after the defendant accountant filed the plaintiff’s tax returns late and the plaintiff lost tax credits, the accountant recommended that the plaintiff retain a tax lawyer to appeal the assessment. Reversing the motions judge, the Court of Appeal held that it was not appropriate to sue the accountant for professional negligence until the outcome of the assessment process had been determined. In Chimienti v. Windsor (City) [23], the Court of Appeal found that the plaintiff was justified in waiting for the verdict in his criminal trial before commencing a civil claim for negligent and malicious investigation against the defendants; the Court stated that, “there is something of a logical inconsistency in asking a civil court to rule on the propriety of a criminal prosecution before the criminal court has had the opportunity to assess the merits of the underlying charge.” In Winmill v. Woodstock Police Services [24], after an altercation with the police, the plaintiff was charged with assault and resisting arrest. Over two years later, after he was acquitted of the charges, the plaintiff sued for battery and a majority of the Court of Appeal held that his claim was not statute-barred because commencing an action was not appropriate until after the criminal charges were resolved.

[63] In the immediate case, I agree with Ms. Cremer’s argument that it was not appropriate for her to commence legal proceedings against the Law Society until after Justice McEwan’s order.

[64] In asserting that Ms. Cremer had not rebutted the presumption that the limitation period had begun to run, the Law Society relied on Presley v. Van Dusen [25], which is somewhat odd because the Presley case is a case where the running of the limitation period was postponed because it was inappropriate for the plaintiffs to have commenced a court action when they were relying on the assurances of the defendant contractor that he would return to fix the septic system that for years was spilling foul-smelling effluent.

[65] Presley v. Van Dusen provides a helpful discussion of the law associated with when a resort to court proceedings is appropriate and rather supports Ms. Cremer’s argument that her claim was timely in the circumstances of the immediate case.

[66] I conclude that Ms. Cremer’s claims against the Law Society are not statute-barred.

3. Should the Claim in Negligence be Struck Out?

[67] The Law Society submits that the portions of the Statement of Claim relating to negligence should be struck out on the basis that the Law Society enjoys statutory immunity under s. 9 of the Law Society Act, which states:

9. No action or other proceedings for damages shall be instituted against the Treasurer or any bencher, official of the Society or person appointed in Convocation for any act done in good faith in the performance or intended performance of any duty or in the exercise of in the intended exercise of any power under this Act, a regulation, a by-law or a rule of practice and procedure, or for any neglect or default in the performance or exercise in good faith of any such duty or power.

[68] Statutory immunity, however, does not apply to shield the Law Society from claims in negligence if malice or a lack of bona fides is established. [26]

[69] There is a genuine issue requiring a trial about whether s. 9 is available as a defence for the Law Society.

4. The Allegation that Ms. Phillips Swore a False Affidavit

[70] The Law Society submits that Ms. Philips has pled a cause of action based on the allegation that Ms. Philips swore a false affidavit dated March 24, 2016 in support of a motion to expand the James Trusteeship. It submits, however, that any claim arising from this allegation cannot succeed, as the affidavit is subject to the protection of the doctrine of absolute privilege and it is settled law that statements published on occasion of absolute privilege are not actionable. [27] It, therefore, asks that this claim be struck out as showing no reasonable cause of action.

[71] It is not clear to me that Ms. Cremer is actually basing any cause of action on Ms. Philips’ affidavit, which seems to be pleaded as a particular of the Law Society’s alleged malice or bad faith, but it was clear to me that the Law Society was motivated to have this possible claim struck out because if there was a claim based on the March 24, 2016 affidavit, then Ms. Cremer’s action, which was commenced on March 8, 2016, would be timely.

[72] As it happens, for the reasons set out above, Ms. Cremer’s action is timely without regard to Ms. Philip’s affidavit.

[73] Since it is not clear to me that there is any cause of action being based on Ms. Philip’s affidavit, and since the allegation may be relevant to the matter of bad faith, and since the Law Society’s attack on the pleading comes after it has taken the fresh step of delivering its Statement of Defence, I shall not strike out this pleading, and rather I shall leave this matter for the trial judge to deal with it as he or she may be advised.

5. Should Portions of the Claim be Struck Out as an Abuse of Process?

[74] It is the Law Society’s position that portions Ms. Cremer’s claim should be struck as an abuse of process as re-litigation. a. More precisely, in her Statement of Claim, Ms. Cremer alleges that the Law Society improperly requested and/or obtained privileged files from the Referee in the Trusteeship that had been seized in the criminal proceedings. However, on December 14, 2015, Justice McCarthy ordered that James’ client files should be kept by the Superior Court at Newmarket, and in his endorsement, Justice McCarthy noted that no documents had been provided by the Referee to the Law Society. The Law Society submits therefore that this pleading should be struck. b. More precisely, in her Statement of Claim Ms. alleges that the Law Society failed to provide her with notice of various motions during the course of the Trusteeship. However, s. 49.49 of the Law Society Act provides that an application for an order under a trusteeship may be made without notice, and moreover, in his endorsement of July 10, 2015, Justice McEwen confirmed that it was not necessary for the Law Society. The Law Society submits therefore that this pleading should be struck. c. More precisely, Ms. Cremer seeks as part of her damages claim the legal expenses incurred in the amount of $14,928.32 that she incurred to obtain the release of the Matter #47 Funds and during the course of the Trusteeship she had demanded interest on her funds. However, by endorsement released October 25, 2016, Justice McEwen ordered the Matter #47 Funds be released to the Plaintiff and Justice McEwen made no order for the payment of legal costs, investment income or interest to the Plaintiff. It is the Law Society’s position that the proper procedure to claim costs, interest or investment income would have been through submissions to Justice McEwen and therefore Ms. Cremer’s claims for costs are therefore an abuse of process and should be struck.

[75] I see no abuse of process or any need to strike the portion of the pleadings with respect to these matters. Once again, the attack on the pleadings comes late after the Law Society has delivered its statement of defence.

[76] Some of the impugned allegations are part of the narrative more than they are re-litigation and appear to be relevant to Ms. Cremer’s allegations that the Law Society acted in bad faith, and if there is some double counting in the amount of damage claimed or if it is the case that Ms. Cremer is estopped from making certain claims, these are more matters that can be addressed by the trial judge. Further, no court has dealt with Ms. Cremer’s claim for damages for lost income and interest and it is not clear whether the court in the Trusteeship proceeding can resolve those claims given that Ms. Cremer is not a party to those proceedings.

[77] Therefore, I shall not be striking any portions of Ms. Cremer’s Statement of Claim.

D. Conclusion

[78] For the above reasons, the Law Society’s motion is dismissed.

[79] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with Ms. Cremer’s submissions within twenty days from the release of these Reasons for Decision followed by the Law Society’s submissions within a further twenty days.

Perell, J.

Released: June 5, 2019

Footnotes:

[1] Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. [2] Law Society Act, R.S.O. 1990, c. L.8. [3] Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 S.C.R. 372 at para. 11; Dawson v. Rexcraft Storage & Warehouse Inc., [1998] O.J. No. 3240 (C.A.); Bluestone v. Enroute Restaurants Inc. (1994), 18 O.R. (3d) 481 (C.A.). [4] Toronto-Dominion Bank v. 466888 Ontario Ltd., 2010 ONSC 3798. [5] Hryniak v. Mauldin, 2014 SCC 7. [6] Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8. [7] Campana v. The City of Mississauga, 2016 ONSC 3421; Ghaeinizadeh (Litigation guardian of) v. Garfinkle Biderman LLP, 2014 ONSC 4994, leave to appeal to Div. Ct. refused, 2015 ONSC 1953 (Div. Ct.); Lavergne v. Dominion Citrus Ltd., 2014 ONSC 1836 at para. 38; George Weston Ltd. v. Domtar Inc., 2012 ONSC 5001. [8] Hryniak v. Mauldin, 2014 SCC 7 at paras. 49 and 50. [9] Hryniak v. Mauldin, 2014 SCC 7 at paras. 51-55; Wise v. Abbott Laboratories, Ltd., 2016 ONSC 7275 at paras. 320-336; Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (Trustees of) v. SNC-Lavalin Group Inc., 2016 ONSC 5784 at paras. 122-131. [10] Kamloops v. Nielson (1984), 10 D.L.R. (4th) 641 (S.C.C.); Central Trust Co. v. Rafuse (1986), 31 D.L.R. (4th) 481 (S.C.C.); Peixeiro v. Haberman, [1997] 3 S.C.R. 549. [11] Lawless v. Anderson, 2011 ONCA 102 at para. 22; Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161 at p. 170 (C.A.). [12] Ferrara v. Lorenzetti, Wolfe Barristers and Solicitors, 2012 ONCA 851 at paras. 33 and 70. [13] Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161 (C.A.); Ladd v. Brantford General Hospital (2007), 88 O.R. (3d) 124 (S.C.J.). [14] Mark v. Guelph (City) (2011), 2010 ONSC 6034, 104 O.R. (3d) 471 (S.C.J.); Zurba v. Lakeridge Health Corp. (2010), 2010 ONSC 318, 99 O.R. (3d) 596 (S.C.J.); Greenway v. Ontario (Minister of Transportation) (1999), 44 O.R. (3d) 296 (Gen. Div.). [15] Pickering Square Inc. v. Trillium College Inc., 2014 ONSC 2629, aff’d 2016 ONCA 179; Hamilton (City) v. Metcalfe & Mansfield Capital Corp., 2012 ONCA 156. [16] Pepper v. Sanmina-Sci Systems (Canada) Inc., 2017 ONSC 1516. [17] Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, 2012 ONCA 218. [18] Winmill v. Woodstock Police Services, 2017 ONCA 962; Independence Plaza 1 Associates, L.L.C. v. Figliolini, 2017 ONCA 44; 407 ETR Concession Co. v. Day, 2016 ONCA 709, rev’g 2019 ONSC 6409; Kadiri v. Southlake Regional Health Centre, 2015 ONSC 621 aff’d, 2015 ONCA 847; U-Pak Disposals (1989) Ltd. v. Durham (Regional Municipality), 2014 ONSC 1103. [19] 407 ETR Concession Co. v. Day, 2016 ONCA 709 at para. 40, rev’g 2014 ONSC 6409; U-Pak Disposals (1989) Ltd. v. Durham (Regional Municipality), 2014 ONSC 1103, at paras. 22-25; Kadiri v. Southlake Regional Health Centre, 2015 ONSC 621, at paras. 52-57, affd, 2015 ONCA 847. [20] Brown v. Baum, 2016 ONCA 325. [21] See also Chelli-Greco v. Rizk, 2016 ONCA 489. [22] Presidential MSH Corp. v. Marr, Foster & Co. LLP., 2017 ONCA 325. [23] Chimienti v. Windsor (City), 2011 ONCA 16. [24] Winmill v. Woodstock Police Services, 2017 ONCA 962. [25] Presley v. Van Dusen, 2019 ONCA 66. [26] Conway v. Law Society of Upper Canada, 2016 ONCA 72; Calvert v. Law Society of Upper Canada (1981), 32 O.R. (2d) 176 (H.C.J.). [27] Salasel v. Cuthbertson, 2015 ONCA 115; Admassu v. Macri, 2010 ONCA 99; Sauve v. Merovitz [2006] O.J. No. 4266 (S.C.J.), aff’d 2008 ONCA 70, leave to appeal to the S.C.C. ref’d [2008] S.C.C.A. No. 138; Big Pond Communications 2000 Inc. v. Kennedy (2004), 70 O.R. (3d) 115 (S.C.J.).