Court of Appeal for Ontario

Date: 20240222 Docket: COA-23-CV-0839

Before: Lauwers, Miller and Harvison Young JJ.A.

Between:

Robyrt H. Regan Plaintiff (Appellant)

and

Alfred J. Esterbauer, Koskie Minksy LLP and John Doe No. 1 Defendants (Respondents)

Counsel: Peter I. Waldmann, for the appellant Gavin Tighe and Kevin Mooibroek, for the respondents Alfred J. Esterbauer and Koskie Minsky LLP

Heard: February 20, 2024

On appeal from the judgment of Justice Robert J. Nightingale of the Superior Court of Justice, dated May 29, 2023, with reasons reported at 2023 ONSC 2905.

Reasons for Decision

[1] The appellant, Robyrt Regan, is a formerly licensed lawyer under suspension by the Law Society of Ontario. Mr. Regan started an action against the respondents, Alfred Esterbauer and his law firm, claiming $15 million in damages for negligent legal advice and ineffective assistance during the contempt proceedings described below. The action was dismissed by the motion judge under r. 21.01(3)(d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the basis that it was frivolous, vexatious, or otherwise an abuse of process.

[2] We dismissed the appeal with reasons to follow. These are the reasons.

The Context

[3] Mr. Regan was counsel for Robert Bortolon in litigation involving the Business Development Bank of Canada (BDC). In that case, LeMay J. issued a production order on March 11, 2015 requiring Mr. Regan to provide BDC access to documents in his possession. On March 16, 2015, Mr. Regan sent a letter to Mr. Bortolon’s lawyer proposing an arrangement by which he would not produce a large volume of documents in his possession, but instead would send them to Mr. Bortolon, upon payment of his outstanding legal fees. In the letter, Mr. Regan described the documents as containing inconsistencies that are “likely to be highly prejudicial to your clients.”

[4] Nine of about fifteen boxes of documents Mr. Regan delivered to Mr. Bortolon went missing. BDC brought a contempt motion against both Mr. Regan and Mr. Bortolon.

[5] Mr. Regan retained Mr. Esterbauer and his firm to defend the contempt motion, but on a limited retainer, the scope of which is somewhat disputed. Mr. Esterbauer’s evidence was that Mr. Regan would retain full control over the response to the motion, and Mr. Esterbauer’s role would be limited to appearing as counsel at the hearing using motion materials Mr. Regan was to prepare. Mr. Regan’s evidence was that he retained Mr. Esterbauer on a general basis to represent him in the contempt proceeding, and that it was Mr. Esterbauer’s idea to have Mr. Regan draft the responding materials in order to save costs.

[6] Three days after Gray J. heard the contempt motion, Mr. Regan informed Mr. Esterbauer that an Undertakings and Refusals Chart had mistakenly not been included in the responding materials. Mr. Regan contends that the missing chart would have demonstrated his compliance with the order of LeMay J. Mr. Esterbauer wrote to BDC’s lawyers on the issue. On the same day, however, Gray J. issued his decision, reported at 2016 ONSC 4084, which found Mr. Regan to be in contempt of the LeMay J. production order.

[7] Mr. Regan retained Mr. Esterbauer to represent him at the penalty hearing on September 26, 2016. Mr. Regan filed two supplementary affidavits and delivered a draft factum to Mr. Esterbauer. The second affidavit contained the missing Undertakings and Refusals Chart. Gray. J. referred to this material, but took the view that Mr. Regan was not entitled to attempt to persuade him that he was not in contempt of the LeMay J. order. Mr. Regan was sentenced to 90 days’ imprisonment.

[8] Mr. Regan again retained Mr. Esterbauer to appeal the contempt order and penalty to this court, which, in reasons reported at 2017 ONCA 663, dismissed Mr. Regan’s appeal on liability. This court found that the motion judge did not make any palpable and overriding error in his findings of fact and did not err in finding Mr. Regan to be in contempt of the LeMay J. order. While confirming the serious nature of Mr. Regan’s contempt, the panel reduced his sentence to 45 days’ incarceration. This court later declined to hear a request from Mr. Regan to vary his custodial sentence. Mr. Regan instructed Mr. Esterbauer to bring an application for leave to appeal to the Supreme Court of Canada, which was denied.

[9] Mr. Regan argues that Mr. Esterbauer ought to have moved quickly to bring the missing Undertakings and Refusals Chart to the attention of Gray J. before he rendered his contempt judgment. He also argues that Mr. Esterbauer ought to have brought a fresh evidence motion before this court to introduce expert medical evidence concerning the alleged effects of Mr. Bortolon’s harassment of Mr. Regan.

Analysis

[10] In order to succeed in his claim against the respondents, Mr. Regan must establish that, but for the respondents’ alleged negligence or breach of contract, the contempt finding by Gray J. and the decision of this court on appeal would have been different. We reject each of the grounds Mr. Regan raises.

[11] First, as the motion judge correctly found, this challenge amounts to an impermissible collateral attack on the decisions of Gray J. and this court on appeal: Lang Michener LLP v. King, 2017 ONSC 1917, at paras. 26-32, rev’d on other grounds, 2018 ONCA 471. On that basis, the motion judge correctly allowed the motion to dismiss Mr. Regan’s action as an abuse of process.

[12] Second, the motion judge made no error in rejecting Mr. Regan’s submissions that it was Mr. Esterbauer’s responsibility to adduce the additional evidence. The motion judge accepted Mr. Esterbauer’s evidence on the disputed scope of the retainer. He said, at para. 38:

Despite there being no cross-examinations on the parties’ affidavits, the evidence, as indicated above, supports Esterbauer’s position that his retainer was limited to appearing as counsel for Regan on the contempt motion based on the detailed affidavit materials and legal documents Regan was to prepare and did prepare including the motion and appeal records, facta and case law authorities.

[13] The motion judge added, at para. 39:

Esterbauer had only minimal involvement in regard to the steps leading up to the hearing of the liability portion of the motion and did not go on record. Regan was an experienced civil and commercial litigation lawyer who was well-versed in evidence issues as noted in the detailed legal documents including the facta and case brief he prepared and the test to be applied by a court in a contempt of court motion.

[14] The motion judge concluded, at para. 40: “I prefer and accept the evidence of Esterbauer over that of Regan on that issue.” It is trite law that this court owes deference to the motion judge’s finding in the absence of an extricable error of law or a palpable and overriding error of fact.

[15] Third, there is no merit to the argument that Mr. Regan could have escaped the contempt finding had Mr. Esterbauer adduced the additional evidence. The motion judge found that the contempt finding by Gray J. was based on Mr. Regan’s evident collusion with his former client Mr. Bortolon. This was a sound finding, since Gray J. said, at para. 50:

The evidence admits of only one conclusion: Mr. Bortolon and Mr. Regan made a deal under which Mr. Regan’s claim against Mr. Bortolon would be satisfied, in exchange for which the highly prejudicial documents in the possession of Mr. Regan would be given to Mr. Bortolon. While unstated, the clear inference was that Mr. Bortolon would see that none of the incriminating documents would find their way to counsel for the applicant. That is indeed what happened.

[16] Gray J. added, in the reasons for sentence, at para 29:

It is clear, in my view, that an initial contempt finding may be revisited only where the contemnor purges his or her contempt or, in exceptional circumstances, where new facts or evidence have come to light after the contempt finding was made. It cannot seriously be contended, in my view, that either Mr. Bortolon or Mr. Regan has purged his contempt. In view of my findings in my original reasons for judgment, it is doubtful that they could do so. Effectively, I found that incriminating documents had been sent to Mr. Bortolon by Mr. Regan, and that they had then disappeared. I found that this course of action was part of a deal that was made between Mr. Regan and Mr. Bortolon. It is highly unlikely that the court could be satisfied that all relevant documents have been subsequently produced.

[17] Neither the complaints against Mr. Esterbauer nor the documents he is alleged to have failed to adduce in Mr. Regan’s favour before Gray J. or this court address this central and overwhelming finding of contemptuous collusion against Mr. Regan. The motion judge did not err in dismissing the action.

Disposition

[18] The appeal is dismissed with costs fixed as agreed at $20,000, all inclusive.

“P. Lauwers J.A.”

“B.W. Miller J.A.”

“A. Harvison Young J.A.”