COURT FILE NO.: 12-469146

DATE: 20131009

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LIAQAT CHAUDHRY and 5 STAR HAVELI INTERNATIONAL, Plaintiffs

AND:

FALCONER CHARNEY LLP and THEODORE P. CHARNEY, Defendants

BEFORE: CHIAPPETTA J.

COUNSEL: A.Schorr, for the Plaintiffs

M. Kestenberg, for the Defendants

HEARD: October 1, 2013

ENDORSEMENT

Overview

[1] The defendants, Falconer Charney LLP (the “Firm”) and Theodore P. Charney (“Charney”), bring this motion for summary judgment to dismiss the action. The plaintiff, Liaqat Chaudhy (“Chaudhry”), commenced the action. Chaudhry was at all material times the principle of the corporate plaintiff, 5 Star Haveli International (“5 Star”).

[2] In their Statement of Claim (the “claim”), the plaintiffs seek damages for intentional infliction of mental suffering and torture. The plaintiffs filed no evidence, conflicting or otherwise, to support this specific motion. Counsel’s factums and oral submissions did not speak to this specific cause of action. I conclude that the plaintiffs’ failure to file evidence is sufficient to award summary judgment dismissing the motion for damages from intentional infliction of mental suffering and torture.

[3] The plaintiffs also seek damages for negligence, breach of contract, and total disregard of duties and obligations that the defendants owed to the plaintiffs. The plaintiffs submit that there are material facts in dispute regarding the duty of care and breach of contract. They argue that these are genuine issues requiring a trial. Therefore, the plaintiffs submit that a summary dismissal is not appropriate.

[4] I find that a summary dismissal is appropriate. The plaintiffs failed to file any evidence of a right to damages if the trier of fact finds a breach occurred. The paper record includes genuine issues regarding the negligence and breach of contract. However, the failure to bring evidence on damages renders the conflicting record moot and is sufficient to award summary judgment dismissing the plaintiffs’ claim.

Background

[5] The Firm’s long-time client, Dil Muhammad (“Dil”), referred the plaintiffs to the Firm. Chaudhry authorized Dil to give instructions to the Firm on Chaudhry’s personal behalf and 5 Star’s behalf. In or around late 2007 or early 2008, Chaudhry and/or 5 Star retained the Firm to represent them in four litigation matters. Dil agreed to be jointly and severally liable with the plaintiffs for all of the Firm’s accounts. The subject action concerns two of the four litigation matters.

[6] The first matter, the “Khan action,” involved an application for an injunction brought on short notice by Raza Khan, a former business partner of Chaudhry. The Firm successfully resolved the injunction on terms favourable to Chaudhry. The application was subsequently converted into an action. The plaintiffs’ evidence is that they never authorized the Firm to bring a motion to strike the Statement of Claim or seek a stay of proceedings. The defendants’ evidence is that they received instructions to strike the Statement of Claim and the plaintiffs knew about this motion. The paper record does not permit a resolution of this conflict.

[7] The plaintiffs claim that they suffered damages from the defendants’ delay in filing the statement of defence and the legal costs of unauthorized actions.

[8] The second matter, the “Ul Haq action”, involved a contract between the plaintiffs and Ul Haq, a pop star from Pakistan. The contract provided that Ul Haq would perform two concerts in Canada in May 2005. The concerts did not proceed. The plaintiffs sued Ul Haq for breach of contract. Ul Haq brought a separate defamation action against the plaintiffs. The plaintiffs retained the Firm to represent them in both actions, serving a Notice of Change of Solicitors with respect to both actions on or about February 15, 2008.

[9] A settlement meeting occurred on or about May 19, 2008. In attendance was Charlena Claxton (“Claxton”) of the Firm, Dil, Chaudhry, Haq, and Haq’s solicitor, Jerry Levitan (“Levitan”). They reached a tentative agreement. Claxton prepared a draft Settlement Agreement. The defendants claim they did not reach a settlement at this time because Chaudhry changed his mind. The plaintiffs deny this. The defendants filed no direct evidence from Claxton or Levitan. The paper record does not permit a resolution of this conflict.

[10] The defendants claim there was another settlement meeting and tentative agreement during the 2008 Labour Day weekend. Again, the plaintiffs failed to conclude the settlement. Chaudhry reneged on material terms previously agreed upon at the meeting. He informed Claxton that he was not prepared to proceed with an agreement on those terms. Claxton therefore did not send the draft agreement to Levitan so as not to prejudice Chaudhry’s position. Chaudhry was supposed to contact Claxton with revised terms, whereupon Claxton would redraft the agreement to reflect Chaudhry’s new terms.

[11] The plaintiffs deny this. They claim the second settlement meeting occurred at Levitan’s residence in the first week of August 2008 over the long weekend. The parties clarified and settled all matters during that meeting. Again, Charney did not attend and sent Claxton. Claxton was supposed to prepare and send final documents to Levitan no later than November 28, 2008 in order for Ul Haq to perform four shows in 2009. The defendants failed to send the final settlement documents to Levitan. Although, one invoice mentions that the final settlement was e-mailed to Levitan. There is inconsistency between Chaudhry and Dil’s evidence regarding the November 28, 2008 deadline. Dil was not cross-examined on his affidavit filed in response to this motion. The paper record does not permit a resolution of this conflict.

[12] In or around mid-September 2008, the plaintiffs paid their outstanding accounts with the defendants, but did not provide a further retainer as requested by the defendants. The defendants therefore advised Chaudhry that they had stopped working on all his files until they received the further retainer. The defendants rely on an e-mail from Dil dated September 30, 2008 wherein he writes that the Ul Haq action “has been resolved. We will pay the balance and will take over directly with the Artist, to get concert dates”. The defendants submit that the e-mail shows Dil took over the Ul Haq litigation himself. The plaintiffs submit that the e-mail merely shows Dil believed that the actions had been settled but for signing the final documents; he would thereafter work with Ul Haq to schedule the shows. Dil is not a lawyer and the defendants have represented Dil for a long time. The paper record does not permit a resolution of this conflict.

[13] In or around December 2009, the plaintiffs paid the defendants $949.25 for their outstanding account for the Ul Haq action. The file was provided to the plaintiffs’ new solicitor, Mr. Malik (“Malik”), in or around February 17, 2010. On March 3, 2010, Malik filed a Notice of Change of Lawyer. In June 2010, Malik wrote to Levitan inquiring whether the defendants had ever sent him a draft Settlement Agreement confirming the terms of the settlement. Levitan responded and confirmed that he never received a final draft Settlement Agreement.

[14] The plaintiffs claim they suffered damages because the defendants did not complete the settlement by November 28, 2008.

Analysis

[15] The Ontario Court of Appeal states that the purpose of the amended Rule 20 in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 “is to eliminate unnecessary trials, not to eliminate all trials”: Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1, at para. 38. Rule 20.04(2.1) requires that I consider the paper record submitted by the parties to determine if there is a genuine issue requiring a trial. I may also weigh evidence, evaluate credibility, and draw reasonable inferences, unless I conclude that it is in the interest of justice for these powers to be exercised only at trial. In determining whether I should exercise the powers under Rule 20.04(2.1), the Court of Appeal directs the following in Combined Air at para. 50:

In deciding if these powers should be used to weed out a claim as having no chance of success or be used to resolve all or part of an action, the motion judge must ask the following question: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?

[16] As reviewed above, the paper record demonstrates significant conflict on key issues that require determinations of credibility. In my view, I am not in a position to develop a full appreciation of the evidence and issues to render findings on negligence or breach of contract. The trier of fact will be far better equipped to resolve the conflicts and render dispositive findings of liability. The trier of fact will benefit from hearing oral evidence in the context of the trial process, including oral evidence from Claxton, Levitan, and Dil.

[17] Nevertheless, I should use my authority under Rule 20.04(2.1) to weed out the plaintiffs’ claim. The plaintiffs failed to produce any evidence of damages. Their claim has no chance of success, even if the trier of fact finds the defendants liable for negligence and breach of contract.

[18] Regarding the Khan action, the plaintiffs have not demonstrated that they suffered damages as a result of the defendants’ failure to file a statement of defence for four months. The plaintiffs submit that they are entitled to a return of legal fees if the trier of fact finds that the defendants were not instructed to proceed with the motion. However, the plaintiffs agree that the defendants’ surviving counterclaim includes the Khan account. The counterclaim will properly address any damages in the form of payment for unauthorized services.

[19] Regarding the Ul Haq action, the plaintiffs failed to sufficiently establish that they would be entitled to damages if there is a finding of negligence or breach of contract by the defendants. For example, there is no evidence that the plaintiffs suffered a loss because the defendants failed to finalize the settlement by November 28, 2008.

[20] In an effort to establish damages, the plaintiffs filed invoices for radio, television, and newspaper advertisements from April and May 2005, the time period when Ul Haq was to perform under the contract. The plaintiffs also filed a May 2005 Audit Report by Ticket Master. The plaintiffs signed an agreement with Molson Amphitheatre in April 2005 to reserve Molson Amphitheatre for Ul Haq’s May 2005 show. The plaintiffs submit that these documents are sufficient to establish a prima facie claim to damages should the defendants be found liable in negligence or breach of contract.

[21] I disagree. These documents substantiate damages that may flow from the Ul Haq action. There is no evidence of damages as a direct result of the defendants’ alleged failure to finalize settlement of the Ul Haq action by November 28, 2008.

[22] Dil claims that Charney “damaged this case beyond repair” and “is personally responsible for all the losses, loss of income and future loss as a result of a badly bruised and damaged reputation of … Chaudhry”. However, the plaintiffs filed no evidence that the Ul Haq action has been damaged at all, let alone beyond repair. The only evidence is that the action is ongoing. The plaintiffs did not produce any evidence that they experienced a loss of income or a damaged reputation as a result of the defendants’ alleged failure to meet the November 2008 deadline.

[23] The plaintiffs failed to submit any evidence relating to the following:

1. Efforts made and impediments met since July 2009 to effect a settlement of the Ul Haq action in accordance with the draft agreement of September 2008;

2. The plaintiffs, Dil, or Malik pursued a settlement agreement in accordance with the one reached in principle in 2008 and it was rejected as a result of missing the alleged November 28, 2008 deadline;

3. A settlement similar to the one reached in principle in 2008 is no longer possible;

4. The Ul Haq action and the damages sought therein, including the costs thrown away from 2005, has been abandoned or the loss is not collectable (rather, the evidence is that the Ul Haq action is ongoing);

5. Ul Haq is no longer popular and therefore will not attract the fan base as he would have attracted in 2009 (rather, the evidence is that he remains popular);

6. The concerts had to be in 2009 or not at all;

7. The concerts will not be as profitable today as they would have been in 2009.

[24] In Coast-to-Coast Industrial Development Co. v. 1570706 Ontario Inc., 2005 Carswell Ont. 2088 (S.C.), Speigel J. considers a motion for summary judgment where the responding party did not produce any evidence of damages to support her counterclaim. Relying on Continental Insurance Co. v. Almassa International Inc. (2002), 2002 CanLII 79661 (ON SC), 39 C.C.L.I. (3d) 129 (Ont. S.C.), Speigel J. concludes at para. 33 that the failure to bring evidence of damages is sufficient to award summary judgment dismissing the counterclaim against all moving parties. In my view, Coast-to-Coast applies to this case even though it precedes the Rule 20 amendment and Combined Air.

[25] In Combined Air at para. 56, the Court of Appeal confirms that the obligation that each side must “put its best foot forward” with respect to material issues to be tried continues to apply under the amended Rule 20. In this case, the plaintiffs failed to bring evidence that they suffered damages as a result of the defendants’ alleged negligent conduct or breach of contract.

[26] The purpose of the amended Rule 20 is to eliminate unnecessary trials. In my view, a trial of this action is unnecessary as no damages will flow to the plaintiffs, regardless of the trier of fact’s findings of liability. I conclude that the summary judgment process is “an appropriate means for effecting a fair and just resolution of the dispute before the court”: Combined Air, at para. 38.

Disposition

[27] For reasons noted above, I grant the defendants’ motion for summary judgment dismissing the plaintiffs’ claim. The defendants’ cross-claim continues, but should properly be transferred to Small Claims Court.

Costs

[28] The parties are encouraged to agree on an appropriate award for costs. If they are unable to agree, the parties may file written submissions to me of not more than two pages. The defendants shall submit first within 30 days of this motion. The plaintiffs shall submit within 20 days thereafter.

CHIAPPETTA J.

Date: October 9,2013