COURT OF APPEAL FOR ONTARIO

CITATION: Baradaran v. Alexanian, 2016 ONCA 533

DATE: 20160705

DOCKET: C61252

Rouleau, van Rensburg and Benotto JJ.A.

BETWEEN

Manoucher Baradaran

Plaintiff (Appellant)

and

Shahen A. Alexanian, Shahen A. Alexanian Law Firm, Shahen Alexanian Professional Corporation

Defendants (Respondents)

Manoucher Baradaran, acting in person

Louis Century and Charles Sinclair, for the respondents

Heard: June 24, 2016

On appeal from the order of Justice Robert F. Goldstein of the Superior Court of Justice, dated October 14, 2015.

ENDORSEMENT

[1] This is an appeal from an order striking certain paragraphs of a statement of claim.

[2] The appellant commenced an action against the respondent Shahen Alexanian, a lawyer, and his law firm and professional corporation. The appellant claims damages for breach of certain “service agreements” under which he claims to be owed various fees for working on Mr. Alexanian’s client files. He also asserts claims for solicitors’ negligence in respect of five actions in the Superior Court.

[3] The respondents moved to strike, without leave to amend, paragraphs 17 to 21 of the statement of claim. Each paragraph contained allegations of solicitors’ negligence in respect of a different underlying claim. The motion to strike was brought under rules 21.01(3)(d) and 25.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the basis that the relevant paragraphs were frivolous and vexatious or an abuse of the process of the court. The motion was supported by a lengthy affidavit from Mr. Alexanian. The appellant filed a lengthy affidavit in response to the motion.

[4] The motion judge granted the motion and struck the impugned paragraphs, without leave to amend. He found the paragraphs to be “clearly vexatious and an abuse of process”.

[5] Paragraphs 17 and 18 contain allegations of solicitors’ negligence in respect of an action against a dentist and an action against a former lawyer. The actions were dismissed or struck as statute-barred, and the motion judge noted that the appellant had not consulted Mr. Alexanian until the claims were barred and that he insisted on going ahead in the face of Mr. Alexanian’s advice (that the claims were likely statute-barred and had no chance of success). Paragraph 19 claims solicitors’ negligence in an action claiming the return of a deposit on a time share property. The motion judge struck the paragraph which he characterized as alleging a failure to attend at trial, on the basis that the appellant had delivered a notice of intention to act in person. Paragraph 20 sought damages for solicitors’ negligence in a personal injury action alleging that an object was dropped on the appellant in the course of a flight. The action was dismissed for delay by the Registrar and then restored, after which Mr. Alexanian was served with a notice of change of lawyer. Paragraph 21 sought damages for solicitors’ negligence in respect of the appellant’s representation by Mr. Alexanian in an action against a travel agency claiming damages, among other things, for lost luggage. The motion judge struck paragraphs 20 and 21, stating that Mr. Alexanian issued the claims, pursued productions and had scheduled discoveries when the appellant sued him, and that he ceased work for obvious reasons. The motion judge noted that the claims were still outstanding.

[6] The motion judge awarded substantial indemnity costs against the appellant in the sum of $11,008.87.

[7] The appellant raises two main issues on appeal. First, he alleges bias based on certain earlier dealings with the motion judge, and the way in which the motion was handled. The appellant also asserts that the motion judge ignored evidence that supported his claim, and that he was prevented from directing the motion judge to such evidence because of the way the motion was conducted.

[8] The respondents deny that there was bias on the part of the motion judge, and contend that the hearing proceeded in a manner that was fair to the appellant, because he had the opportunity to address all of the motion judge’s justifiable concerns about his pleading. The motion judge’s decision to strike the impugned paragraphs of the statement of claim were based on Mr. Alexanian’s affidavit evidence that demonstrated that the claims against him were frivolous and an abuse of the process of the court. The court was entitled to receive affidavit evidence from both parties, and to prefer Mr. Alexanian’s evidence over that of the appellant.

[9] For the reasons that follow, the appeal is allowed.

[10] First, the motion judge erred in approaching the motion, which was a motion to strike pleadings under rules 21.01(3)(d) and 25.11, as though he were determining a motion for summary judgment under rule 20. While the motion judge could consider evidence on such a motion, the evidence on which he based his decision went to the merits of the claims. The motion judge accepted the solicitor’s evidence, that the appellant had been advised that two of the actions the respondent had been retained to litigate were ill-conceived and he accepted the solicitor’s account of what transpired in his handling of all of the actions. In doing so, the motion judge did not address obvious inconsistencies in the evidence, including the appellant’s assertion in his own affidavit that Mr. Alexanian said he had “a great chance to win [the] claims”. From comments in the transcript it is apparent that the motion judge considered the solicitor’s evidence to be uncontradicted.

[11] The propriety of the use of rules 21 and 25 was not addressed by the motion judge in the court below.

[12] In this court, the respondents sought to justify the decision of the motion judge as being properly made under rule 25.11. First, the respondents asserted that, since rule 25.11 permitted evidence to be filed on such a motion, the judge did not err in considering such evidence in making his decision, even if the evidence he considered went to the merits. Second, the respondents argued that the motion judge could have converted the pleadings motion into a motion for summary judgment and that no prejudice resulted to the appellant because he knew the issues he had to meet.

[13] We reject these arguments.

[14] The purpose of a motion to strike paragraphs in a statement of claim is to weed out claims that have no possibility of success. Pleadings motions are brought early in the litigation and before the opposing party has pleaded in response. When a pleading is struck, the court must consider whether to grant leave to amend. A summary judgment motion, by contrast, can only be brought after pleadings are exchanged: rule 20.01(3). This is for good reason. Summary judgment disposes of the merits of a claim or defence.

[15] The court will only strike out a claim on the basis that it is frivolous or vexatious or an abuse of the process of the court, in the clearest of cases and where it is plain and obvious that the case cannot succeed. One must guard against converting such motions into summary judgment motions: Miguna v. Toronto Police Services Board, 2008 ONCA 799, 243 O.A.C. 62, at paras. 16 and 21. In that case, Blair J.A. addressed the very point made by the respondents – that the motion judge was entitled to evaluate the merits of the appellants’ claims because affidavit evidence was admissible on the motion. He stated, at para. 34:

Evidence is admissible in relation to a rule 25.11 motion or in relation to the "frivolous and vexatious" aspect of a motion under rule 21.01(3)(d). It does not follow, however, that such a motion may be turned into an evidentiary disposition. The test remains: is it plain and obvious that the claim cannot succeed? The test is not whether it is unlikely the claim will succeed. Nor is the process one of weighing and assessing the evidence against the allegations as if the motion were a trial or a request for summary judgment.

[16] This means that, while evidence is admissible in a motion under rules 25.11 and 21.01(3)(d), the evidence must be relevant to, and considered for the purposes of, the motion that is before the court. In other words, the ability to file evidence in a pleadings motion does not change the character of the motion, which is not to determine the merits, but to decide whether the pleading should be struck, as having no chance of success because it is frivolous and vexatious or an abuse of process. For these reasons, we reject the respondents’ contention that the motion judge was acting within the proper scope of rules 21.01(3)(d) and 25.11 in striking the relevant paragraphs of the statement of claim based on Mr. Alexanian’s affidavit evidence.

[17] We also reject the respondents’ alternative argument that the motion judge was entitled to convert the motion to a summary judgment motion, where the appellant had the opportunity to tender evidence and to respond to the motion judge’s questions about the merits of his claim. Rule 20 permits a summary judgment motion to be brought only after pleadings have been exchanged: in this case no statement of defence had been delivered. Further, the appellant was entitled to rely on the notice of motion, and the relief sought by the respondents, which was to strike certain paragraphs in his pleading, and not for summary judgment. Finally, certain interchanges in the transcript show that the appellant was taken by surprise at the motion judge’s approach, when he was challenged on the merits of the claim. And, to the extent that the motion judge considered the merits, he was wrong to state that there was no evidence to contradict that of Mr. Alexanian.

[18] It is clear from both the endorsement and the transcript of the hearing before the motion judge, that he approached this case as a summary judgment motion. While he used the term “vexatious” liberally in both his endorsement and his comments in court, and labeled the paragraphs in the pleading as well as the entire action as vexatious and an abuse of process, the motion judge conducted a merits-based analysis of the evidence. Indeed, he commented at the end of his endorsement that the appellant’s claim was “entirely without merit”. Further, the fact that the motion judge struck the paragraphs without leave to amend, without giving proper or any consideration to whether the claims were capable of being amended, reinforces the conclusion that he approached the motion as a summary judgment motion and not as a motion respecting pleadings.

[19] Finally, we note that there were issues raised by the appellant about bias, and his concerns with respect to how the matter proceeded and comments made at the hearing. In light of our decision, we need not deal with that ground of appeal.

[20] For these reasons the appeal is allowed. The order striking paragraphs of the appellant’s statement of claim is set aside, as is the order of the motion judge granting substantial indemnity costs against the appellant. The respondents will have 20 days to deliver their statement of defence. There will be no costs of the motion at first instance. Costs of the appeal are fixed in the sum of $2,000, inclusive of disbursements and applicable taxes, payable by the respondents to the appellant.

“Paul Rouleau J.A.”

“K. van Rensburg J.A.”

“M.L. Benotto J.A.”