DATE: 20010523

DOCKET: M27054 (C27477)

COURT OF APPEAL FOR ONTARIO

RE: ROBERT E. MARTIN (Plaintiff/Respondent) –and– CLIFFORD GOLDFARB, FARANO, GREEN and ALEKSANDRA KUROWSKA-BARRIE (Defendants/Appellants (Moving Parties))

BEFORE: FINLAYSON and CARTHY JJ.A. and THEN J. (ad hoc)

COUNSEL: Geoffrey D.E. Adair, Q.C., for the appellants (moving parties)

William G. Dingwall, for the respondent

HEARD: May 9, 2001

E N D O R S E M E N T

I. Background

[1] This action bearing Court File No. 44653/90, and a companion action bearing Court File No. 99-CV-176075, were brought respectively by Robert E. Martin (“Martin”) and two corporations he controls (Newmarket Golf and Country Club Limited and Martinvale Estates Limited) against the defendant solicitors, claiming damages arising out of solicitor’s negligence and breach of fiduciary duty.

[2] The within action proceeded to trial before the Honourable Mr. Justice Lederman on September 24, 1996. In reasons released on May 7, 1997, Lederman J. awarded judgment in favour of the plaintiff Martin in the amount of $5,949,447.00, plus prejudgment interest (the “Judgment”).

[3] Following the hearing of evidence, but prior to the release of Lederman J.’s reasons, the plaintiff Martin settled with the co-defendant Aleksandra Kurowska-Barrie for $475,000.00.

[4] The defendants Clifford Goldfarb (“Goldfarb”) and Farano, Green (“Farano”) appealed Lederman J.’s award of damages to this court. They are the moving parties in this motion.

[5] Subsequent to the Judgment, but prior to the hearing of the appeal, Martin brought a motion in this court for an order lifting the stay of a money judgment provided for by Rule 63.01 of the Rules of Civil Procedure. In response thereto, the moving parties made a voluntary advance payment pursuant to s. 120(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, in the amount of $600,000.00. In return for this voluntary advance and as contemplated by s. 120(2), Martin executed and delivered a document entitled “Satisfaction Piece, Receipt and Direction” which specifically acknowledges “…receipt of the sum of $600,000.00 as a partial payment toward the amount owing under the above-mentioned Judgment. The undersigned acknowledges and agrees that the said Judgment is partially satisfied to the extent of $600,000.00 …”.

[6] The appeal from the Judgment was heard by this court on May 19 and 20, 1998. By Order dated August 26, 1998 (the “Order”), the Judgment as it related to damages was set aside and Martin was ordered to pay the defendants their costs of the appeal. Further, paragraph 2 of the Order provided that the “assessment of damages to the Respondent [Martin] personally be remitted back to the Trial Judge to determine the proper award for damages.” Paragraph 4 of the Order further provided that Goldfarb and Farano “pay to the Respondent [Martin] his costs of the trial relating to liability, to be assessed as determined by the Trial Judge.” Subsequently, the trial judge fixed those costs in the amount of $146,866.47, including interest to the date of the August 26, 1998 order.

[7] After Lederman J. fixed the amount of costs, Martin threatened to levy execution on the award of costs. The moving parties herein brought a motion before Lederman J. to restrain Martin from levying execution on the costs award. This motion was dismissed when Lederman J. ruled that he did not have jurisdiction to suspend the operation of an order of the Court of Appeal.

[8] According to the moving parties, Martin took no steps whatsoever to collect upon or enforce the $146,866.47 judgment for costs from the date of this court’s order, August 4, 1998, until December 2000. Thereafter, Martin forced the moving parties, under threat of levying execution against them, to deliver a bank draft to cover the costs of $146,866.47. There is some controversy about the present status of this draft.

[9] The related action commenced by Newmarket Golf and Country Club Limited and Martinvale Estates Limited has been stayed, the defendants having obtained an order from Master Abrams requiring Martin to post security for costs in three installments totaling $95,000.00, plus G.S.T. The plaintiff corporations appealed the decision of Master Abrams and the appeal was dismissed by the Honourable Mr. Justice Lamek. The plaintiff corporations have now obtained leave to appeal that order to the Divisional Court.

II. Motion now before this court

[10] Before this court, the moving parties requested an order nunc pro tunc, staying the operation of paragraph 4 of the Order, until further order of this court, and an order requiring the plaintiff and his solicitors to remit to the defendants the costs paid pursuant to paragraph 4, forthwith. They rely upon Rule 59.06 (1) and (2) which provides:

59.06 (1) An order that contains an error arising from an accidental slip or omission or require amendment in any particular on which the court did not adjudicate may be amended on a motion in the proceeding.

(2) A party who seeks to,

(b) suspend the operation of an order;

(d) obtain other relief other than that originally awarded,

may make a motion in the proceeding for the relief claimed.

[11] The motion is grounded in the moving parties’ submission that the sole current liability of the defendants is the costs of the trial relating to liability, as determined by Lederman J., and that the voluntary advance payment made in respect of the defendants’ liabilities to the plaintiff exceeds the amount now owing. Accordingly, the moving parties argue that in the circumstances, the plaintiff ought not to be permitted to enforce a judgment obligation in respect of which an amount in excess of the obligation was paid by way of voluntary advance payment and a Satisfaction Piece given. We agree. It is further submitted that the moving party is entitled to credit for the $475,000.00 paid to the co-defendant Kurowski-Barrie but that matter is not before us.

III. Disposition

[12] The parties to the appeal did not disclose the fact of the advance payment of $600,000.00 to this court, nor should they have. At the time it was not an issue in the appeal and accordingly the court made no provision for it in the Order. If the treatment of the advance payment had been in issue, the court would have been obliged to adjudicate on the matter. Since the status of the draft in the implementation of the Order has now been called into question it is appropriate that the court have recourse to Rule 59.06 to remedy that omission by suspending the operation of part of the Order.

[13] In the circumstances described above, it is obvious that the moving parties are entitled to credit against their advance payment of $600,000.00 and should not be subject to demands for further payments until this particular credit line is exhausted. The true state of accounts between the parties to this motion will not be known until Lederman J., or some other trial judge, makes the determination called for in paragraph 2 of the Order. We are aware of the argument of the responding party that he is obliged to put up security in the companion action in which the two corporations are plaintiffs, but that action is not part of this “proceeding” within the meaning of Rule 59.06.

[14] Accordingly, the motion is granted and paragraph 4 of the Order is suspended pending the final disposition under paragraph 2 of that Order. If the draft in question has not been cashed it should be returned. If it has, the proceeds of the draft should be returned.

[15] There are no costs on this motion.

Signed: “G.D. Finlayson J.A.”

“J.J. Carthy J.A.”

“Edward Then J. (ad hoc)”