ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 12-37203
DATE: 2013-06-28

B E T W E E N:

HARVEY MACDONALD

Don Morris, for the Plaintiff Respondent

Plaintiff

• and -

MCAP SERVICE CORPORATION, KEY PRIME INC., DELTA PROPERTY MANAGMENT LTD., EVA LAKE and CHAITONS LLP

Andrea Hill, for the Defendant Moving Party

Defendants

HEARD: June 27, 2013 at Hamilton

LOFCHIK, J.

REASONS FOR DECISION

1This is a motion by the defendants Eva Lake (“Lake”) and Chaitons LLP (“Chaitons”), for an order dismissing the claim against them on the basis that it discloses no reasonable cause of action and is frivolous, vexatious and an abuse of process. The motion is brought under Rule 21.01(1)(b) and Rule 21.01(3)(d) of the Rules of Civil Procedure.

2Lake and Chaitons acted for the defendant MCAP Service Corporation (“MCAP”), in a mortgage enforcement proceeding brought against the plaintiff.

3The plaintiff did not defend the mortgage enforcement proceeding and, eventually, the property that was the subject of the mortgage was sold under power of sale.

4Lake and Chaitons advised the plaintiff that he was responsible for removing his personal possessions from the property and provided him with contact information for the property management company in order that he might make the necessary arrangements.

5The plaintiff did not retrieve his personal possessions. They were removed and stored by the defendant’s Delta Property Management Ltd. and Key Prime Inc. and, eventually the personal possessions were disposed of by the storage company.

6Following the sale of the property, Lake and Chaitons provided the plaintiff with the transfer documents, an accounting, a release indemnity and a statutory declaration for tax purposes.

7Chaitons, in a series of email exchanges with the plaintiff required that he execute a release in favour of Chaitons and MCAP, and their agents before they would forward to him the surplus funds which they held in trust from the power of sale proceedings. He refused to do so telling Chaitons he wished to sue MCAP for damages for wrongfully deposing of all his personal possessions and property.

8The plaintiff ultimately did provide a signed statutory declaration for tax purposes and, in return the trust ledger and the net surplus proceeds of sale of the property were sent to him.

9The plaintiff’s claim against Chaitons is for damages arising out of Chaitons alleged improper withholding of the surplus proceeds from the mortgage sale.

10The plaintiff alleges that Chaitons was improperly attempting to extort the full and final release respecting the wrongful disposal of his personal possessions by withholding the surplus funds in the approximate amount of $45,414.23 properly due for at least seven months.

LAW

11Under Rule 21, a defendant may move before a judge:

(a) To strike out a pleading on the ground that it discloses no reasonable cause of action; or

(b) To have action dismissed on the grounds that the action is frivolous, vexatious or otherwise an abuse of process of the court.

Rule 21.01(1)(b) and 21.01(3)(d), Rules of Civil Procedure.

12A claim will be struck if it clear and obvious that no cause of action is disclosed. The issue is whether, assuming the alleged facts to be true, the action is nevertheless certain to fail.

Hamid v. Milaj et al., 2013 ONSC 2104 at para. 9

13The test under Rule 21 focuses on the facts that are pleaded. If the facts as pleaded are capable of supporting a claim in law, the pleading should not be struck merely because the pleader has failed to attach the appropriate legal label to the facts.

Lawrence v. Peel Regional Police Force et al., 2005 3934 (ON CA)

14The definition of a frivolous action is, “one which, on its face, is so unreal that no reasonable or sensible person could bring it”. Similarly a “frivolous and vexatious proceeding” is one which is “hopeless factually” and which is “plain and obvious…cannot succeed.” The allegations in the impugned pleading are assumed to be true unless they are plainly incapable of proof.

Hunt v. Carey Canada Inc., 1990 90 (SCC), 1990 CarswellBC 216 (S.C.C.) at paras. 23-27, 33.

King Estate v. King, 1999 CarswellOnt 1797 (Gen. Div.) at para. 17.

15There is no duty upon a lawyer to, or in favour of an opposing party to act ethically. That is a duty which is owed to the court. As the duty is not owed to a plaintiff he cannot bring an action based upon it.

Brignolio v. Desmarais, Keenan, 1995 CarswellOnt 4761 (Gen. Div.) at paras. 15-18

16A lawyer, acting for one party in a proceeding does not owe a duty of care or a fiduciary duty to the opposite party. Therefore complaints relating to an opposing solicitor’s unethical conduct or negligence do not provide a basis for a cause of action.

Hamid v. Milaj et al., supra

Brignolio v. Desmarais, Keenan, supra

Shuman v. Ontario New Home Warranty Program, [2001] O.J. No. 4102 (S.C.J.)

Geo. Cluthe Manufacturing Co. Ltd. v. ZTW Properties Inc. (1995), 1995 10684 (ON SC), 23 O.R. (3d) 370 (Div. Ct.) at 380

ANALYSIS

17The allegations against the defendants Lake and Chaitons involving issues of professional conduct and a breach of ethical duty do not give rise to an action for damages because the duty is not owed to the opposite party, (the plaintiff) but to the Court, and in Ontario to the Law Society of Upper Canada, the governing body of the legal profession. Thus a claim based on breach of an ethical duty is untenable. Similarly, the negligence claims against opposing counsel cannot succeed in law. Lake and Chaitons were retained by MCAP in its litigation against the plaintiff. They owed no duty of care or fiduciary duty to the plaintiff therefore they are not liable in negligence. The claim in this regard is certain to fail and must be struck.

18This claim meets the test for frivolous, and vexatious because the claim is grounded on the meritless suggestion that a lawyer who acts for a plaintiff in a proceeding is personally liable to the opposing party for the tort of abuse of process and for punitive and aggravated damages arising from the proceeding. The plaintiff has failed to plead how the mortgage enforcement proceeding gives rise to a claim for abuse of process against the lawyers for the mortgagee. The elements of the tort of abuse of process as set out in Harris v. Glaxo Smith Kline Inc., 2010 ONCA 872, 2010 CarswellOnt 9696 (Ont. C.A.) at paras. 27 and 28 have not been made out.

19In the result, order to go striking out those portions of the amended statement of claim that relate to claims against Lake and Chaitons as disclosing no reasonable cause of action and as being frivolous and vexatious.

20The successful defendants are entitled to their costs of this motion. If costs cannot be agreed upon submissions to costs may be made in writing with the successful defendant delivering their submissions within 10 days of the release of these reasons, the plaintiff to have 10 days following receipt of the defendants submissions to respond and the defendants to have a further 5 days to reply to the submissions of the plaintiff as to costs. Submissions as to costs to be no more than 5 pages double spaced in minimum 14 font type.

Lofchik J.

Released: June 28, 2013

COURT FILE NO.: 12-37203
DATE: 2013-06-28

ONTARIO
SUPERIOR COURT OF JUSTICE

B E T W E E N:

HARVEY MACDONALD

Plaintiff

• and –

MCAP SERVICE CORPORATION, KEY PRIME INC., DELTA PROPERTY MANAGMENT LTD., EVA LAKE and CHAITONS LLP

Defendants

REASONS FOR JUDGMENT

Lofchik J.

TRL:mg