Court of Appeal for Ontario
Date: 20210407 Docket: C68561
Juriansz, Nordheimer and Jamal JJ.A.
BETWEEN
Edward Goldentuler Plaintiff (Respondent)
and
Simmons Dasilva LLP and Ray Thapar Defendants (Appellants)
Counsel: Sean Dewart and Adrienne Lei, for the appellants Edward Goldentuler, in person
Heard: April 6, 2021 by videoconference
On appeal from the order of Justice Jill Cameron of the Superior Court of Justice, dated July 14, 2020 with reasons reported at 2020 ONSC 4315.
Reasons for Decision
[1] The defendants appeal from the order of the motion judge that dismissed their motion, pursuant to r. 21.01(3)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to dismiss this action on the basis that the plaintiff is without legal capacity to commence or continue the action. At the conclusion of the hearing, we allowed the appeal with reasons to follow. We now provide our reasons.
[2] The essential background facts are that the respondent's late brother was a lawyer in private practice. Before his death, he commenced an action against a group of former employees who had removed 120 client files from his office in the dead of night and deleted his electronic records concerning the stolen files.
[3] The respondent, who is also a lawyer, obtained an order to continue the action in the name of his late brother's Estate. The claim proceeded to an uncontested damages assessment and the Estate obtained judgment for $318,174.55.
[4] Thereafter, purportedly in his capacity as Estate trustee, the respondent retained the appellants to pursue an appeal in this Court. The appeal was successful and the damages award in favour of the Estate was increased to $901,791.71. [1]
[5] The appellants were successful in having the judgment satisfied, but a dispute arose concerning their fees for the appeal, following which the respondent commenced this solicitor's negligence action in his own name and in his personal capacity. He seeks $2 million in damages, alleging that the appellants fell below the standard of care in conducting the appeal.
[6] The appellants brought a motion to dismiss the action on the grounds that the respondent does not have legal capacity to sue them, as the appellants had acted for the Estate, not the respondent personally. Further, the appellants submitted that it was only the Estate that could have suffered any damages from the alleged negligence, not the respondent personally.
[7] In response to the motion, the respondent alleged for the first time that the Estate's chose-in-action against the ex-employees had been assigned to him, before the Estate retained the appellants, as part of his purchase of his late brother’s law firm from the Estate.
[8] The motion judge dismissed the motion to dismiss the action. In doing so, the motion judge found as a fact that the appellants were aware that the respondent had purchased the law firm from his late brother’s wife, who was the executor of the Estate. A copy of the agreement had been sent to the appellants’ lawyers by the respondent on February 7, 2020 in response to their motion to dismiss. The motion judge then stated the core issue she was to determine. She said, at para. 29:
However, the issue is not whether the defendants knew about the purchase of the law firm. The issue is who retained the defendants on the appeal, therefore who was owed a duty of care by them and who would be affected by the outcome of the appeal.
[9] The motion judge concluded that the respondent had capacity to bring the action. She based this conclusion on two facts: (i) the account for legal fees was directed to the respondent and (ii) the respondent was the only party who could have been affected by the outcome of the appeal since he had purchased the law firm.
[10] In our view, the motion judge made a palpable and overriding error in her determination of the motion. She did so by not addressing the crucial question that she herself had stated, that is, who retained the appellants? The answer to that question is clear, it was the Estate. It was the Estate in whose name the original litigation was continued, it was the Estate that was the party on the appeal, and it was the Estate for whose benefit the damage award was increased. On that latter point, we note that it was the Estate to whom payment was made on the ultimate judgment and it was the Estate on whose behalf the retainer agreement with the appellants was signed.
[11] We would add that nothing of consequence turns on the fact that the account for legal fees was directed to the respondent. He was the individual who provided instructions to the appellants on behalf of the Estate. The addressee of the account does not change on whose behalf the appellants were retained. We also note that the account was expressly stated to be for fees relating to the matter of “Estate of Henry Goldentuler v. Robert Crosbie et al”.
[12] In light of our conclusion, it is unnecessary to address the arguments regarding the possible application of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34 to this case. However, the fact that we do not need to address those arguments should not be taken as meaning that we agree with the position taken by the motion judge on the issue, or on her interpretation of the Act.
[13] The respondent does not have a personal claim arising from the retainer of the appellants given the party on whose behalf the appeal was brought and on whose behalf the appellants were retained. He does not, therefore, have capacity to bring the solicitor’s negligence claim.
[14] In the event of this result, in his factum, the respondent asked that this court amend the title of proceeding to add the proper plaintiff. It is simply too late for the respondent to seek such relief. Among other reasons, we do not have any indication whether the Estate would be prepared to be added as a plaintiff in this action. The consent of the Estate would be necessary for that purpose. It also does not address what appears to be some potential difficulties with the original action.
[15] It is for these reasons that the appeal was allowed and the order below set aside. In its place, the motion is granted, and the action is dismissed. The appellants are entitled to their costs of the appeal in the agreed amount of $9,000 inclusive of disbursements and HST. As also agreed, the costs award below is reversed so that it is now in favour of the appellants.
“R.G. Juriansz J.A.”
“I.V.B. Nordheimer J.A.”
“M. Jamal J.A.”
