Court of Appeal for Ontario

DATE: 20220412 DOCKET: C69573

Doherty, Huscroft and Harvison Young JJ.A.

BETWEEN

Marmer Penner Inc. Plaintiff (Respondents in Appeal)

and

Felicia Vacaru (a.k.a. Felicia Purcaru) Defendant (Appellant/Moving Party)

and

Legge & Legge and John Legge Defendants (Respondents in Appeal)

Counsel: Felicia Vacaru, as self-represented Tanya Pagliaroli, for the respondents Legge & Legge and John Legge Michael E. Girard, for the respondent, Marmer Penner Inc.

Heard: March 28, 2022 by video conference

On appeal from the judgment of Justice William S. Chalmers of the Superior Court of Justice, dated June 14, 2021, with reasons reported at 2021 ONSC 3785.

REASONS FOR DECISION

[1] The respondent, John Legge, and his law firm, Legge and Legge (“Legge”), acted for the appellant, Felicia Vacaru (“Ms. Vacaru”), in her divorce proceedings. The respondent, Marmer Penner Inc. (“Marmer”), was retained to provide forensic accounting advice during the divorce proceedings.

[2] Although Ms. Vacaru paid substantial fees to Marmer, she did not pay all of the fees claimed by Marmer. Marmer sued her for the outstanding amount and sued Legge on the basis that he had given Marmer a personal undertaking to honour the fees.

[3] Ms. Vacaru defended on the basis that there was an oral agreement that Marmer would limit its fees to a specified amount and, that in any event, Marmer had overcharged for some of the services provided. Ms. Vacaru also counterclaimed, alleging negligence by Marmer.

[4] Ms. Vacaru crossclaimed against her co-defendant, Legge, alleging negligence by Legge in the course of the divorce proceedings. Ms. Vacaru maintained Legge had failed to take proper steps to prevent her husband from dissipating his assets during the proceedings. The negligence allegations focused on one specific property owned by the husband and his girlfriend and the events in early June 2008.

[5] Marmer was successful in the main action. The trial judge granted judgment against Ms. Vacaru and Legge. Ms. Vacaru had abandoned her counterclaim against Marmer on the eve of trial. The trial judge also dismissed Ms. Vacaru’s crossclaim against Legge.

[6] Ms. Vacaru appeals the judgment in the main action and the judgment dismissing her crossclaim. She also seeks leave to appeal the costs awarded to Marmer.

[7] Ms. Vacaru brings a motion to adduce fresh evidence on the appeal. The fresh evidence relates to both the appeal in the main action and the appeal from the dismissal of the crossclaim.

[8] Marmer and Legge submit the motion to admit fresh evidence should be refused and the appeal dismissed.

The Fresh Evidence Motion

[9] The proposed fresh evidence consists of Ms. Vacaru’s affidavit with a number of exhibits attached.

(i) The proposed fresh evidence on the main action

[10] On the main appeal, Ms. Vacaru proffers Legge’s discovery evidence taken in 2014 as fresh evidence. She has attached the transcript of that evidence to her affidavit.

[11] Ms. Vacaru submits that Legge’s discovery evidence contains answers that support her position that Marmer overbilled her and undertook to limit its pretrial fees to $40,000. Ms. Vacaru contends she was not allowed to ask Legge questions about his understanding of the fee arrangement with Marmer because of an agreement that had been reached by Legge and Marmer prior to trial. The proposed fresh evidence is offered to support Ms. Vacaru’s claim that had she been allowed to question Legge at trial on his understanding of Marmer’s fees, his answers would have assisted her in defending the claim brought by Marmer.

[12] Legge and Marmer did reach an agreement prior to trial in respect of Legge’s defence of Marmer’s claim. Counsel put the content of that agreement on the record at the outset of the trial. According to counsel for Marmer and Legge, Legge acknowledged his personal undertaking to honour Marmer’s fees and committed to abide by that undertaking. Legge also undertook that he would make no submissions at trial in respect of the fee claimed by Marmer.

[13] According to the trial judge (Reasons, paras. 16-19), Legge was not questioned in-chief or in cross-examination about any limit that had been agreed upon with respect to Marmer’s fees. When asked by the trial judge, Legge indicated that Marmer had agreed to limit its fees to $40,000 to the completion of trial. His testimony was consistent with his Statement of Defence. The trial judge ultimately rejected this evidence.

[14] The transcript of Legge’s discovery existed and was available at trial. To the extent that the rules of evidence and rules of practice permitted, Legge’s discovery was available to Ms. Vacaru at trial.

[15] Ms. Vacaru claims she was prevented from effectively using the discovery evidence at trial by the rulings of the trial judge. The merits of this argument stand or fall on the trial record and are not affected by the contents of Legge’s discovery. If Ms. Vacaru’s complaint is with the trial judge’s ruling, the proposed fresh evidence is irrelevant. If Ms. Vacaru seeks to use the discovery evidence to give added weight to an argument she unsuccessfully made at trial, the transcripts do not qualify as fresh evidence.

[16] A review of Legge’s discovery evidence reveals nothing that could possibly have affected the result in the main action at trial. There is no basis upon which it could reasonably be said that the contents of Legge’s discovery could be expected to have had any impact on the trial judge’s decision in the main action.

[17] Legge’s discovery evidence is not admissible as fresh evidence on the appeal in the main action.

(ii) The fresh evidence on the appeal in the crossclaim

[18] On the appeal from the dismissal of the crossclaim, Ms. Vacaru seeks to introduce as fresh evidence emails from two former employees of Legge and two opinion letters from a person identified as a “court qualified, certified questioned document examiner”. The documents which Ms. Vacaru seeks admitted as fresh evidence are attached as exhibits to her affidavit. There is no affidavit from the former employees or the “questioned document examiner”.

[19] Ms. Vacaru submits that the emails and opinions support her assertion made at trial that Legge had presented false evidence and deliberately attempted to mislead the court in respect of notes of two conversations involving Legge and Ms. Vacaru.

[20] Evidence is admissible on appeal only if it would have been admissible at trial under the governing rules of evidence: R. v. O’Brien, [1978] 1 S.C.R. 591. The documents in issue, which are attached to Ms. Vacaru’s affidavit, are hearsay in every sense of that word. They are out-of-court statements allegedly made by non-witnesses (the former employees and the document examiner) offered in this proceeding through the testimony of a witness in the proceeding (the affiant, Ms. Vacaru) as evidence of the truth of the contents of the statements made by the non-witnesses. The documents in the form tendered are not evidence of the truth of anything, and cannot be received as fresh evidence on appeal.

[21] Even if the documents could qualify as evidence, they do not meet the other criteria required for the admissibility of fresh evidence. The documents relate to notes summarizing meetings involving Ms. Vacaru and Legge on February 7, 2008 and March 4, 2008. Ms. Vacaru submits the notes relating to the March 4, 2008 meeting, filed by Legge at trial, were missing two of the five pages and that the pages had been reordered by Legge to make it appear as though the contents of part of the notes was properly attributable to Ms. Vacaru, when in reality the notes reflected statements made by Legge.

[22] The bona fides of the notes of the two meetings, especially the March 4, 2008 meeting, was litigated at trial. Ms. Vacaru’s position at trial was the same as the position advanced on appeal. She maintains that the evidence demonstrated that Legge deliberately fabricated and falsified evidence by removing some of the pages referable to the March 4th meeting, and reordering the remaining pages. Ms. Vacaru does not suggest that cross-examination on these notes had a direct impact on the substantive issues at trial. She does, however, vigorously maintain that cross-examination on the notes would severely undermine Legge’s credibility on all material matters, including those relating directly to the events underlying the crossclaim.

[23] The fresh evidence does not advance Ms. Vacaru’s attack on Legge’s credibility for the following reasons:

• At trial, Legge acknowledged he could not disagree with Ms. Vacaru’s suggestion as to the proper order of the pages referable to the March meeting. Neither he nor Ms. Vacaru authored the notes;
• Legge did not refuse to produce the originals of the notes at trial; and
• At trial, Legge offered an explanation for the missing two pages. A complete version of the document was found in Legge’s affidavit of documents and in the appellant’s trial exhibits. The proposed fresh evidence sheds no light on the believability of Legge’s explanation for the missing two pages.

[24] The appellant offered no explanation for her failure to adduce the evidence offered on appeal at the trial. Legge’s credibility was front and centre, as was Ms. Vacaru’s argument that he attempted to mislead the court in respect of the notes. Had she believed her attack on Legge’s credibility would be buttressed by admissible evidence from the document examiner or Legge’s former employees, she could have taken steps to obtain that evidence at trial.

[25] Finally, Ms. Vacaru has not satisfied us that the proposed evidence would have made any difference to the outcome. Her case on the crossclaim failed for many reasons, some of which (e.g. causation) had nothing to do with Legge’s credibility. The fresh evidence offered to attack Legge’s credibility could not possibly have had any effect on the trial judge’s findings on those matters that did not turn in any way on Legge’s credibility.

[26] The emails and opinion letters are not admissible as fresh evidence on appeal.

The Appeal in the Main Action

[27] Ms. Vacaru raises two issues on the main appeal. She takes issue with the trial judge’s finding that Marmer did not agree to a fixed fee for its services prior to trial, and did not overcharge or double-bill Ms. Vacaru. These are findings of fact.

[28] The trial judge reviewed the evidence relating to the nature of the retainer between Marmer and Ms. Vacaru at length. He set out Ms. Vacaru’s position. The evidence overwhelmingly supported Marmer’s claim. At para. 83 of his reasons, the trial judge summarized some of that evidence. His ultimate conclusion, at para. 87, is fully supported by the evidentiary record. Ms. Vacaru has not demonstrated any palpable or overriding error in the trial judge’s factual analysis.

[29] The second issue raised by Ms. Vacaru relates to the agreement between Legge and Marmer concerning Legge’s position in the main action. Ms. Vacaru submits that the trial judge failed to ensure that she had access to the written version of that agreement.

[30] Although Marmer and Legge had apparently intended to reduce their agreement to writing, there was no written agreement. The terms of their agreement were, however, clearly set out in counsel’s opening submissions. Nothing in the agreement prevented Ms. Vacaru from cross-examining Legge, both on the terms of the agreement with Marmer and on any matters relevant to either the main action or the crossclaim.

[31] We were not referred to any ruling by the trial judge limiting Ms. Vacaru’s questioning of Mr. Legge in respect of his agreement with Marmer. Ms. Vacaru claims she did not appreciate she could not cross-examine Legge on his arrangements with Marmer. Whether that is in fact the case is irrelevant on appeal. There is nothing capable of attributing any misunderstanding Ms. Vacaru may have had to anything said or done by the trial judge. Nor is there anything indicating the trial judge may have been aware that Ms. Vacaru was under any misunderstanding.

[32] The appeal in the main action is dismissed.

The Appeal in the Crossclaim

[33] The trial judge found the crossclaim failed for several reasons. He held Ms. Vacaru failed to prove Legge breached the applicable standard of care and also failed to prove any causal link between Legge’s alleged negligence and Ms. Vacaru’s damages. The trial judge further held that Ms. Vacaru’s claim was barred by the applicable provision of the Limitations Act, 2002, S.O. 2002, c. 24. If the trial judge was correct on any one of these three findings, Ms. Vacaru’s crossclaim could not succeed.

[34] The negligence claim against Legge arose out of events on or about June 2, 2008. Legge learned that Ms. Vacaru’s husband was in discussions with the CIBC in respect of placing a mortgage on one of his properties. Ms. Vacaru claimed that, in the context of the ongoing litigation, and knowing what Legge knew about the character of her husband, Legge should have immediately taken steps to protect Ms. Vacaru’s interests by obtaining a restraining/non-depletion order in respect of the property on which her husband was seeking a mortgage. Ms. Vacaru also maintained Legge should have registered existing orders on the title to that property and put the bank on notice of Ms. Vacaru’s claim and the outstanding orders.

[35] The trial judge considered the standard of care issues at paras. 91-110 of his reasons. He properly identified the legal principles and considered the evidence, in particular the competing evidence of the two experts offered by Ms. Vacaru and Legge. He ultimately preferred the defence expert on most issues. The trial judge gave reasons for accepting the evidence of the defence expert.

[36] The trial judge’s findings are findings of fact. The trial judge’s findings of fact are reasonable and reflect no misapprehension of the evidence. There is no basis upon which this court can interfere with those findings.

[37] On appeal, in addition to re-litigating issues determined by the trial judge, Ms. Vacaru argued that Legge was negligent in failing to register a temporary non-depletion order made by Justice Jarvis in respect of the husband’s property. Neither expert offered any opinion as to whether the order of Justice Jarvis was registrable at the relevant time, or whether a reasonable lawyer in Legge’s position would have registered that order on title. In the absence of that kind of expert evidence, there can be no finding that the failure to register the order of Justice Jarvis constituted negligence.

[38] The appellant’s arguments aimed at the standard of care findings cannot succeed.

[39] The appellant’s causation arguments suffer from a similar shortcoming. After reviewing the causation arguments at trial (paras. 111-16), the trial judge concluded:

There’s simply no evidence upon which I can rely to find that even if there had been a breach of the standard of care, the breach caused Ms. Vacaru’s damages. Mr. Niman [Ms. Vacaru’s expert] testified that Herman J.’s and Belobaba J.’s orders were not binding on the bank. Mr. Dart [Mr. Legge’s expert] testified that the bank would not have done anything with a letter from Mr. Legge that enclosed Herman J.’s order. If Mr. Legge had served CIBC with Herman J.’s order or obtained a restraining order against CIBC, Mr. Purcaru [the husband] could have gone to a different bank, or Ms. Seliverstova [the husband’s girlfriend] could have mortgaged the property at 37 Gloucester Street.

[40] The appellant attempts to avoid the absence of evidence in the trial record by pointing to case law which she says demonstrates that banks have taken steps to freeze accounts in circumstances similar to the circumstances of her case. A trial judge can only make findings of fact based on evidence. The contents of law reports are not evidence and cannot be used to fill evidentiary gaps.

[41] Ms. Vacaru focused much of her submission on her interpretation of the rules governing the kinds of orders that can be made in settlement conferences and trial management proceedings. This argument misses the point. The issue in a solicitor’s negligence action is not whether a rule could be interpreted to permit a certain kind of order in a given situation. Instead, the issue is what a reasonable solicitor could be expected to do or not do in the particular circumstances. That inquiry usually hinges on expert evidence and not on submissions about the kinds of orders that a particular rule may or may not contemplate. Even if a rule could be read as permitting a certain kind of order in a given situation, it does not follow that the failure to apply for that order amounts to negligence.

[42] The appeal from the dismissal of the crossclaim is dismissed.

The Costs Appeal

[43] The appellant seeks leave to appeal the costs order made in the main action. She challenges only the costs awarded to Marmer in defence of the negligence claim advanced by Ms. Vacaru by way of counterclaim in the main action. Ms. Vacaru abandoned her crossclaim just before trial.

[44] The trial judge awarded Marmer costs on a substantial indemnity basis in the counterclaim. In doing so, he relied on Marmer’s offer to settle the crossclaim on the basis that it would be dismissed without costs.

[45] The appellant briefly addressed her costs appeal in oral argument. Her complaint is exclusively with the quantum of the order.

[46] Leave to appeal costs is granted sparingly. As there is no reason to doubt the correctness of the award of costs on a substantial indemnity basis, we see no reason to grant leave exclusively on the quantum question.

Conclusion

[47] The motion to adduce fresh evidence is dismissed. The appeal in the main action is dismissed. The appeal in the crossclaim is dismissed. The motion for leave to appeal costs is dismissed.

[48] The parties may submit written argument in respect of the costs of the appeal. The argument is not to exceed three pages. The respondents will file their submissions within 30 days of the release of these reasons. Ms. Vacaru shall file her submissions within 30 days of receipt of the submissions of Marmer and Legge.

“Doherty J.A.” “Grant Huscroft J.A.” “A. Harvison Young J.A.”