ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-08-00358105
DATE: 20131217
BETWEEN:
MARIO TEDESCO
Plaintiff
– and –
LORNE WOLFSON and TORKIN MANES COHEN ARBUS LLP
Defendants
Marco Drudi and Ann Hatsios, for the Plaintiff
Sean Dewart and Adrienne Lei, for the Defendants
HEARD: September 16, 17, 18, 19, 20, 23 and 24, 2013
t. mcewen j.
reasons for decision
[1] The plaintiff, Mario Tedesco (“Tedesco”), brings this action against the defendants, Lorne Wolfson (“Wolfson”), and the firm in which he practices, Torkin Manes Cohen Arbus LLP. Tedesco claims that Wolfson was negligent while acting for him in a matrimonial lawsuit. For the reasons below I dismiss the action.
OVERVIEW
[2] In 1975, Tedesco married Gloria Tedesco (“Mrs. Tedesco”). Mrs. Tedesco did not generally work outside of the home except for some employment with Tedesco’s own construction businesses. The Tedescos separated in October 1999. Mrs. Tedesco retained a lawyer by the name of Salvatore Manella (“Manella”) to act for her while Tedesco retained Wolfson.
[3] Thereafter, Manella and Wolfson began negotiating the terms and conditions of a separation agreement. During this time, Wolfson advised Tedesco that full financial disclosure was required. In this regard, Tedesco utilized the services of his accountant, Domenic Torelli (“Torelli”).
[4] Ultimately, financial disclosure was provided in the summer of 2000 in which Tedesco included a Financial and Net Family Property Statement dated July 17, 2000. The documentation included a list of assets, organizational charts of Tedesco’s various companies, audited financial statements and tax returns of both Tedesco and Mrs. Tedesco.
[5] Ultimately, it is not disputed that the disclosure provided by Tedesco and Torelli was accurate with the exception of a $60,000 loan and perhaps some other very minor issues that were relatively benign. Tedesco’s assets were valued at slightly more than $4 million. Most of these assets involved the construction businesses that he owned at the time of the separation.
[6] In July 2000, Tedesco was arrested by police and charged with, amongst other things, conspiracy to murder Mrs. Tedesco. At this trial, Tedesco downplayed the significance of the charges, and it appears as though Mrs. Tedesco was of the belief that her husband would not plan to murder her. Notwithstanding this, in 2002 Tedesco ultimately pled guilty to one count and was sentenced to 27 months in prison. He was released after approximately seven months in January 2003.
[7] Despite this turn of events, Wolfson and Manella, throughout 2000 and early 2001, continued to negotiate the terms of a separation agreement and proposals were exchanged between them. Of note is the fact that Mrs. Tedesco never requested spousal support during the negotiations. It is also not contested that Tedesco did not want to pay spousal support, and wanted a clean break from Mrs. Tedesco. The negotiations therefore proceeded without any discussions or negotiations about entitlement to or the quantum of spousal support. Discussions were held with respect to the fact that Ms. Tedesco expected to be self-supporting from the income that she could earn from the equalization payment she was seeking.
[8] On November 1, 2000, Manella wrote to Wolfson offering to settle all issues. It was agreed that Tedesco’s income was $85,000 per year. In the offer, Manella proposed that some child support be paid. In addition to child support he proposed that Tedesco pay $2.1 million as an equalization payment to resolve the issues. There were also some modest outstanding issues, including the distribution of certain chattels, that were also still being discussed. It was noted at the time that Mrs. Tedesco could expect to earn approximately $108,000.00 per year in interest from the equalization payment.
[9] Ultimately, in April 2, 2001, Tedesco and Mrs. Tedesco entered into a separation agreement that provided for, amongst other things, child support, a waiver of spousal support and an equalization payment of $2,027,897.60. Some of the money had already been paid while the rest would be paid over time.
[10] With respect to the issue of the waiver of spousal support, the agreement contained the following paragraphs that are of note:
9.1 Each of the parties:
(a) is financially independent;
(b) does not require financial assistance from the other;
(b) releases the other from obligations to provide spousal support pursuant to the Family Law Act, Succession Law Reform Act or any other statute or law of Ontario or any other jurisdiction; and
(c) releases all rights to claim or obtain support pursuant to the Family Law Act, Succession Law Reform Act, or any other statue or law of Ontario or any other jurisdiction form the other.
9.2 The parties realize that their respective financial circumstances may change in the future by reason of their health, cost of living, their employment, financial mismanagement, financial reversals, inheritance or otherwise. No change whatsoever will give either party the right to claim support from the other pursuant to the Family Law Act, Divorce Act, Succession Law Reform Act, or any other statute or law of any jurisdiction even if the change is a catastrophic, drastic, material, profound or radical one, whether or not the change was foreseeable, foreseen, unforeseen, whether or not the change is causally connected to the marriage or subsequent cohabitation, and whether or not such change arises from a pattern of economic dependency related to the marriage or subsequent cohabitation. The parties specifically agree that:
(a) The Husband and Wife have been fully compensated for his or her contributions to the marriage and subsequent cohabitation, therefore, they have suffered no economic hardship or disadvantage as a result of the breakdown of the relationship;
(b) There have not been any economic advantages or disadvantages to either of them that have not been fully compensated in the arrangements set out in this agreement; and
(c) Each party acknowledges the obligation of his or her ability to be self-sufficient and that he or she is solely responsible for his or her own support.
9.3 The parties acknowledge and agree that they have considered the economic consequences of the marriage and subsequent cohabitation and its breakdown in agreeing to the final release of spousal support above. The parties have specifically considered the provisions and factors set out in sections 15 and 17 of the Divorce Act and sections 30 through 33 of the Family Law Act in agreeing to the provisions in this paragraph.
9.4 Each party acknowledges that his or her solicitor has advised him or her of recent rulings of the Ontario courts in which the court has awarded spousal support, notwithstanding that full releases in respect of spousal support had been contained in a separation agreement previously entered into between the parties. Notwithstanding these rulings, the parties to this agreement agree and intend that no change in circumstances whatsoever, including but not limited to those set out in paragraph 9.2 above, will entitle either party to apply to a court for spousal support. This agreement and this paragraph, in particular, may be pleaded as a complete defence to any claim brought by either party for spousal support in contravention of the terms of this paragraph.
9.5 In the event that either party commences an application, petition or action for spousal support at any time in the future, the applicant/petitioner agrees to pay to the respondent/defendant as liquidated damages for the breach of this agreement an amount equal to the amount awarded by the Court for spousal support plus the costs on a solicitor and client basis incurred by the respondent/defendant in defending that proceeding.
17.1 Within 30 days of receipt of each equalization payment installment set above, the Wife shall provide the Husband with written documentation from a qualified financial planner confirming that the Wife has invested through a qualified financial planner the principal balance of the equalization payment installments received by the Wife up to that date (except those funds used to purchase the Wife’s new home). In the event that the Wife fails to provide such documentation, the Husband shall not be required to make any further equalization payment installments until the Wife provides this documentation. Should this situation arise, no interest shall accrue on any unpaid equalization payment installments.
[11] The separation agreement also contained the following solicitor’s attestation:
36.1 Each solicitor signs this agreement not only in his or her capacity as witness but also to attest that he or she explained to the client the meaning and implications at law of each provision of this agreement.
[12] Wolfson also signed a Certificate and Affidavit of Solicitor that provided, amongst other things, as follows:
3 I have advised the said Mario Tedesco with respect to this agreement and I believe that he is fully aware of the nature and consequences of this agreement on and in light of his present and future circumstances and is signing it voluntarily.
[13] In June 2001, Mrs. Tedesco retained a new lawyer, Kathryn Boyd (“Boyd”). In December 2001, Boyd sent a letter to Wolfson demanding additional payments over and above those provided for in the separation agreement.
[14] It also became apparent that Mrs. Tedesco had spent a great deal of the monies that she had received by way of the equalization payment.
[15] Wolfson and Tedesco met to discuss this development, and Wolfson advised Tedesco that the exact nature of the issues being raised by Mrs. Tedesco were unknown. Wolfson also advised that depending on the nature of the dispute, Wolfson might have to be called as a witness and that if Tedesco wanted to change lawyers he should do so at that time. Tedesco declined the offer.
[16] As the matter progressed it became apparent that Mrs. Tedesco was challenging the separation agreement on three grounds:
(i) Tedesco did not make proper financial disclosure prior to the agreement being signed;
(ii) she was under duress at the time that the agreement was entered into; and
(iii) the agreement was unconscionable as it did not provide for spousal support.
[17] Notwithstanding the fact that Tedesco spent the latter half of 2002 in jail, the matrimonial litigation proceeded. Mrs. Tedesco was questioned by Wolfson in November of 2002, and Mrs. Tedesco’s medical productions were obtained concerning the issue of duress.
[18] In 2003, Wolfson obtained a psychiatric opinion with respect to the issue of duress that he did not feel was helpful, and so the report was not served. In August 2003, Tedesco and Wolfson met, and a $50,000 offer was made to Boyd to try to resolve the outstanding litigation. There was no response. In September 2003, Mrs. Tedesco again retained new counsel, Dan Monteith (“Monteith”). Monteith began to make significant disclosure requests.
[19] The litigation proceeded. Case conferences were held and Monteith questioned Tedesco in August of 2005. Wolfson recommended that a higher offer of settlement be made. He advised Tedesco that any offer under $300,000 would likely be rejected. Tedesco thought this amount was too high. Tedesco authorized an offer of $100,000. Again, there was no response. Wolfson recommended to Tedesco that they proceed to mediation-arbitration with mediator Philip Epstein (“Epstein”). The mediation took place over three days: April 17, 2007, a brief session in July 2007 and January 19, 2008.
[20] Tedesco’s bargaining position was hampered by the fact that his income had steadily and dramatically risen in the years leading up to January 2008. As noted, in 2001, the parties to the matrimonial litigation accepted that his salary was $85,000.00. At the time of the mediation, Tedesco testified that he was earning approximately $100,000.00 per year. It was also noteworthy that Torelli prepared a financial statement that was used at the mediation which disclosed that Tedesco’s combined total income arising from both his personal income and his businesses in 2001 was approximately $430,000.00. This had risen steadily and in the 2007 business year provided Tedesco with a combined total income of approximately $1,850,000.00. Notwithstanding how one calculated Tedesco’s income, it was clear that it had risen dramatically between 2001 and 2008. Mrs. Tedesco, meanwhile, still had no income.
[21] At the mediation, Mrs. Tedesco continued to raise the arguments of non-disclosure, duress and unconscionability. At the third day of mediation, Wolfson and Tedesco were accompanied by Torelli, who continued to assist with calculations concerning the assets owned by Tedesco. Late in the day on January 19, 2008, an agreement was reached. Epstein dictated a memorandum of understanding to record the terms of the agreement. He then asked all of the participants if they agreed with the terms and everyone, including Tedesco and Mrs. Tedesco, acknowledged their approval of the agreement. Wolfson, Tedesco and Epstein all shook hands, and Epstein congratulated Tedesco on reaching an agreement. In his testimony, however, Tedesco claimed that he was confused and unhappy as to what took place and did not feel that there was an agreement. It is an assertion that is untenable given the testimony this trial which will be discussed further below. Generally, the agreement called for $1,000,000 to be paid in the first year in lump sum, spousal support over five years totalling $800,000 and various options after five years depending on Tedesco’s retirement. The entire agreement was somewhat in excess of $3,000,000.
[22] On January 28, 2008, Tedesco spoke with Wolfson and advised that he would not complete the agreement. After further discussions between Wolfson, Tedesco and Torelli, Tedesco ultimately changed lawyers. In late February 2008, Tedesco retained a new solicitor, Valois Ambrosino (“Ambrosino”). Mrs. Tedesco brought a motion to enforce the settlement, and Tedesco opposed the motion. It was heard on July 28, 2008. At that time Rogers J. ordered the trial of an issue. The trial commenced in May 2010. The matter settled during the trial. The settlement guaranteed payments to Mrs. Tedesco of $2.4 million. The settlement also provided for prospective future payments that could total up to approximately $1 million depending on Tedesco’s retirement age, his business activities and Mrs. Tedesco’s life expectancy (at the time of the settlement she had a cancer scare). The ultimate settlement, if all payments are ultimately made, will be in the neighbourhood of $3.4 million.
[23] Tedesco submits that Wolfson was negligent for the following two reasons:
(i) The April 2001 separation agreement did not provide for spousal support, making it vulnerable to attack; and
(ii) Wolfson should not have acted for Tedesco subsequent to April 2001. In doing so, he failed to properly advise Tedesco of the apparent risks that the separation agreement would be set aside due to the failure to provide for spousal support, which another lawyer would have done in the circumstances.
[24] Counsel for Tedesco concedes, however, that if on the balance of probabilities, I were to conclude that the April 2001 settlement agreement would have been set aside due to the issue of duress, the action must fail.
Analysis
Duress
[25] I will first deal with the issue of duress since a finding in favour of Wolfson would end the action.
[26] In this regard, I find that the defendants have failed to establish on the balance of probabilities that the separation agreement would have been set aside on the basis of duress. In my view, the record is insufficient to make such a finding, particularly since neither party called Mrs. Tedesco or Manella to give evidence on this issue. Furthermore, the following factors are of significance:
• Wolfson was advised by Manella that neither he nor Mrs. Tedesco took the threat seriously;
• Mrs. Tedesco and Manella continued to negotiate the terms of the separation agreement, and certainly there is no evidence that any concessions were made or that Mrs. Tedesco departed from her earlier settlement position because of fear or duress; and
• the medical opinion obtained by Wolfson was unhelpful on the issue as were Mrs. Tedesco’s clinical notes and records.
[27] Wolfson had good reason to be concerned that the separation agreement could be overturned on the basis of duress, and there was a reasonable possibility that this could occur. I cannot, however, conclude that Mrs. Tedesco would have been able to successfully overturn the separation agreement on the basis of duress.
(i) Was Wolfson Negligent for Failing to Provide for Spousal Support in the Separation Agreement?
[28] For the reasons below, I find that Wolfson was not negligent.
[29] With respect to the standard of care, Wolfson does hold himself out as having particular expertise in the area of family law. He has been certified by the Law Society of Upper Canada as a specialist in the area. Accordingly, he ought to be held to a higher standard and not that of a reasonably competent solicitor or ordinary prudent solicitor, but rather that of a reasonably competent expert in family law: see Confederation Life Insurance Co. v. Shepherd, McKenzie, Plaxton, Little & Jenkins, (1992) 29 R.P.R. (2d) 271 (Ont. Gen. Div.).
[30] Where there are discrepancies between the evidence of Wolfson and Tedesco, I accept the evidence of Wolfson. Wolfson’s testimony was more consistent and logical. Even Tedesco’s counsel conceded that there were inconsistencies in Tedesco’s testimony. Tedesco’s demeanor in the witness stand suggested he was attempting to carefully craft his answers to advance his position in the litigation rather than provide honest answers. For example, one of the disputes between the parties centers around whether an agreement was reached at the mediation with Epstein in 2008. The evidence at this trial of Tedesco, Torelli and Wolfson demonstrate, in my view, that Tedesco accepted at the time that an agreement had been reached. While there may have been some legal basis to avoid enforceability, I do not accept Tedesco’s evidence that he left the mediation believing there was no agreement. His own evidence in this regard was very contradictory and at odds given by the evidence by Torelli and Wolfson.
[31] Furthermore, when one considers the character of the parties, Tedesco’s character, given his behaviour in the matrimonial litigation, has been shown to be lacking. Both Tedesco and his counsel conceded that Tedesco pled guilty to a charge concerning the conspiracy to murder Mrs. Tedesco. The law is settled that I am able to consider a prior criminal record as a relevant factor in determining whether a witness should be believed. I do not accept Tedesco’s explanation that he pled guilty solely because he was offered a favourable sentence that would allow him to operate his business.
[32] Concerning the 2001 separation agreement, there is no dispute that Wolfson drafted an excellent agreement with respect to the issue of spousal support that provided Tedesco with the greatest amount of certainty available given the inherent risks of such an agreement. Tedesco accepts this and the experts that were called by both parties agree that the agreement was well drafted. Rather, Tedesco, takes the position that the document stipulated in paragraph 9.4 that the parties could not successfully pursue litigation to overturn the terms of the agreement with respect to the waiver of spousal support. He submits that this was not adequately explained to him by Wolfson. As a result, he believed that further litigation by Mrs. Tedesco could not be pursued when in fact it was certainly possible and did, in fact, happen.
[33] I accept Wolfson’s evidence that he recalls the meeting with Tedesco, although he cannot recall all of the exact wording at the meeting. This makes good sense given the passage of time. Wolfson provided his testimony based on his general recollection and his usual practice. He recalled that he explained to Tedesco the implications of paragraphs 9.4 and 9.5, and the limitations on enforceability given the state of the case law. He also informed Tedesco that there were risks that the separation agreement could be set aside on the basis that no spousal support was provided for in the agreement. I also accept Wolfson’s evidence that Tedesco “wasn’t happy with that but that he understood it”. I further accept Wolfson’s testimony that paragraph 36.1, as well as the Certificate and Affidavit of Solicitor, confirm the fact that he explained the implications to Tedesco as he has described above.
[34] Tedesco’s evidence on this point, much like his other evidence, was inconsistent and at times contradictory. In his examination in chief, Tedesco testified that Wolfson never told him that the lack of spousal support might make the separation agreement vulnerable. In cross-examination, however, Tedesco gave contradictory evidence as to whether he remembered the meeting at all. He further gave vague evidence about whether Wolfson advised him of recent court rulings that awarded spousal support notwithstanding full releases, or whether it was not discussed in any way, shape or form. Overall, I found Tedesco’s evidence about this critical meeting to be far less than satisfactory, and do not accept his evidence that Wolfson did not provide a fulsome explanation.
[35] Finally, with respect to this issue, if I were to accept Tedesco’s position I would have to accept that Wolfson, for inexplicable reasons, when dealing with a significant matter, failed to follow his usual practice. I decline to do so.
[36] Based on the foregoing, I find that Wolfson discharged his obligation as an expert in family law in explaining to Tedesco all of the implications, positive and negative, of the release of spousal support.
[37] Wolfson never confirmed his explanation in writing by way of any form of separate correspondence, which would have been prudent, but I find that this was unnecessary in the light of the above findings, and the fact that paragraph 36.1 of the separation agreement, as well as the Certificate and Affidavit of Solicitor, confirm that an explanation was provided in the fashion described by Wolfson. Mrs. Tedesco did not want spousal support. Tedesco did not want to pay spousal support and sought a quick end to his financial obligations. In these circumstances, Wolfson met the standard of care in attempting to protect Tedesco from a subsequent attack on the separation agreement, and adequately explained the ramifications to Tedesco.
(ii) Should Wolfson Have Continued to Acted for Tedesco Once Mrs. Tedesco Sought to Set Aside the Separation Agreement?
[38] Counsel for Tedesco concedes that if he is unsuccessful with respect to the first issue above then this issue becomes academic. I will, however, continue on to consider this issue as to whether Wolfson should have continued representing Tedesco.
[39] Once again, I find for Wolfson on this issue for the reasons below.
[40] Both parties called expert evidence on the issue as to whether Wolfson should have carried on with the retainer or whether he should have insisted that Tedesco retain other counsel. William Clayton (“Clayton”) provided evidence on behalf of Tedesco while Thomas Dart (“Dart”) provided evidence on behalf of Wolfson. Both experts were eminently qualified to provide expert opinion on this issue. I accept that their opinions are thoughtful and honestly held. I prefer, however, the opinion of Dart over Clayton.
[41] Clayton generally opined that Wolfson should have declined to act and should have referred Tedesco out to another lawyer. The reasoning behind Clayton’s opinion was the fact that once the settlement agreement came under attack, Wolfson, as an advocate, should not be part of the narrative where there is a possibility that he could be a witness. Clayton’s comments were predicated on the fact, amongst other things, that it would be awkward for Wolfson to continue to defend an agreement that he gave advice on and that the nature of the allegations could shift over time. He felt Wolfson would be in a conflict.
[42] Dart, on the other hand, concluded that Wolfson could continue to act. He testified that there was no attack launched by Mrs. Tedesco with respect to the drafting of the agreement, and as such he found it difficult to understand why Wolfson could not continue to act. In this case, both Tedesco and Mrs. Tedesco wanted to end the matter with a lump sum and neither was interested in spousal support. Dart testified that in those circumstances, a lawyer should accept the instructions and advise of the risks. Thereafter, Dart was of the opinion that Wolfson was in no position to give evidence and could therefore continue to act.
[43] As noted, I agree with Dart’s opinion in this regard. While I accept that Clayton’s opinion could be considered prudent, it is overly-cautious based on the fact situation in this case. Given my findings above concerning the parties’ disinterest in paying or receiving spousal support, Wolfson’s well-drafted separation agreement and his clear warnings of the risk, there is no reason why he could not continue to represent the interests of Tedesco.
[44] Furthermore, I do not accept Tedesco’s argument that Wolfson did not adequately advise Tedesco of the risk that spousal support would be ordered when Wolfson continued to act as counsel. There is a clear difference of opinion between Wolfson and Ambrosino with respect to this issue. Ambrosino thought a lack of spousal support was the most significant issue while Wolfson thought that duress was the most significant issue concerning Mrs. Tedesco’s attempts to set aside the agreement. In my view, however, these are simply honest disagreements between Wolfson and Ambrosino. Wolfson clearly put the issue of spousal support before Tedesco both at the time the separation agreement was entered into and thereafter while he continued to act. There is no evidence that Wolfson, as a result of him being the drafter of the separation agreement, attempted to downplay or failed to appreciate the risks concerning spousal support. Further, at trial, Tedesco’s counsel criticized Wolfson for not being proactive in attempting settlement and recommending higher sums to resolve the litigation. The evidence, however, discloses that the situation remained fluid insofar as Tedesco’s earnings were concerned, and he would not provide Wolfson with instructions to offer over $100,000.
[45] Accordingly, this claim must also fail.
causation
[46] Counsel for Tedesco concedes that Tedesco’s claim would fail if he had to prove it on the balance of probabilities.
[47] He submits, however, that the proper approach would be to analyse the claim on a “lost chance” basis. In this regard he relies upon the decision of the Court of Appeal in Folland v. Reardon (2005) 2005 1403 (ON CA), 74 O.R. (3d) 688 (C.A.), in which the court gave effect to this argument and held as follows:
73 Whatever the scope of the lost chance analysis in fixing liability for tort claims based on personal injuries, lost chance is well recognized as a basis for assessing damages in contract. In contract, proof of damage is not part of the liability inquiry. If a defendant breaches his contract with the plaintiff and as a result a plaintiff loses the opportunity to gain a benefit or avoid harm, that lost opportunity may be compensable. As I read the contract cases, a plaintiff can recover damages for a lost chance if four criteria are met. First, the plaintiff must establish on the balance of probabilities that but for the defendant’s wrongful conduct, the plaintiff had a chance to obtain a benefit or avoid a loss. Second, the plaintiff must show that the chance lost was sufficiently real and significant to rise above mere speculation. Third, the plaintiff must demonstrate that the outcome, that is, whether the plaintiff would have avoided the loss or made the gain depended on someone or something other than the plaintiff himself or herself. Fourth, the plaintiff must show that the lost chance had some practical value.
[48] Counsel for Wolfson does not disagree with this approach but submits that even on a lost chance basis Tedesco’s claim should fail. I agree.
[49] Assuming that Wolfson was negligent, one must firstly consider whether Tedesco had a chance to avoid a subsequent loss. I accept that Tedesco can satisfy this criterion. I accept the possibility, however slim, that had Tedesco essentially given away his entire net worth in the agreement, that he would have had a chance at avoiding the separation agreement being set aside. Accordingly, he had a chance at avoiding a loss.
[50] This leads to the second part of the test, namely that the lost chance must rise above mere speculation. In my view, it is mere speculation that Tedesco could have avoided the ultimate result, and thus I find that Tedesco does not satisfy this stage of the test. Tedesco had given away half of his net worth in the 2001 settlement. To extract some degree of finality he would have had to pay much more money at this stage, and there is no evidence that he had a willingness or ability to do so. Further, it is not reasonable to assume that any of the parties or their solicitors could have anticipated the material change in circumstances that occurred thereafter, that being Mrs. Tedesco’s quick dissipation of most or all of the funds, and Tedesco’s rapid increase in yearly income. It is not uncommon in family law litigation to experience material changes in circumstances. Courts will set aside separation agreements in appropriate circumstances where this occurs based on the authority in Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303. Wolfson was fully aware that Miglin was winding its way through the courts in 2001 when he drafted the agreement. It was released by the Supreme Court of Canada in 2003 while the separation agreement was being attacked. The proposition that Tedesco had a chance to avoid a loss is further made speculative in light of the argument that was being put forth by Mrs. Tedesco concerning duress, because it had a reasonable possibility of succeeding.
[51] Third, it cannot be said that Tedesco would have done something differently had the full risks concerning the lack of spousal support been explained to him. As noted above, I do not find his evidence to be at all credible on this point, and he admitted that he wanted to end the matter with Mrs. Tedesco and not pay spousal support. I do not accept his evidence that he would have done anything differently. I accept the argument of Wolfson’s counsel that Tedesco wanted to pay as little as possible given the acrimony that he held towards his wife and the resulting desire to end all financial ties with her.
[52] Fourth, Tedesco has not established the lost chance had some practical value. I cannot see any real value that was lost. The financial situation of the parties changed radically after the agreement was entered into. It is not reasonable to conclude that anyone could have predicted the change in fortunes of Tedesco and Mrs. Tedesco that made the agreement susceptible to attack. I accept the argument of Wolfson’s counsel, which was conceded by Clayton, that it is only theoretically possible that Tedesco could have made a sufficiently large enough payment when the settlement agreement was entered into so as to guarantee that Mrs. Tedesco could never succeed in a subsequent attack on it. Clayton agreed the number would have to be very large.
[53] Although the facts of this case are unusual given the financial fortunes of the parties following the separation agreement, as well as the issue of duress given Tedesco’s guilty plea, the claim follows a familiar pattern in family law litigation: a material change occurred with respect to the parties’ financial fortunes that made the separation agreement susceptible to attack. Even if it were Wolfson’s fault in failing to provide for spousal support in the separation agreement, I cannot conclude that Tedesco was deprived of any opportunity other than the opportunity to essentially give away all that he owned at the time of the separation agreement. This is obviously not a plausible or realistic option that would have or could have been pursued by him.
damages
[54] In the event that I am incorrect with respect to causation and liability, I will proceed with the assessment of the plaintiff’s damages. The parties agree that any assessment of damages is difficult in a case such as this one. No case law was provided to support their submissions.
[55] Tedesco submits that a reasonable assessment of damages would consist of Tedesco receiving the $440,000 in legal fees he paid to Wolfson and Ambrosino subsequent to Mrs. Tedesco attempting to set aside the 2001 separation agreement, plus the $1 million paid as a lump sum for support in the ultimate settlement, less 50% for contingencies for a total of $720,000. Tedesco would waive any claim concerning the payments of ongoing spousal support.
[56] Counsel for Wolfson submits that this is a flawed methodology. He first points to the fact that $260,000 of the legal fees was incurred after the 2008 settlement was entered into with Epstein. He submits Wolfson should have no exposure to those damages since there was no reasonable basis to continue on with litigation. Further, he submits that the proper analysis would involve looking at what was paid in the 2001 settlement agreement, and then look at what was ultimately paid in 2008, and ultimately deduct what would have to have been paid in 2001 to avoid setting aside the agreement in 2008. Lastly, after 2008 no damages could be found since Tedesco engaged in a futile effort to set aside the agreement that he had agreed to at the Epstein mediation.
[57] Counsel for Wolfson submits that it is an impossibility to try to determine what this amount is since Tedesco went on to earn $1.8 million per year, and Mrs. Tedesco spent most or all of the money that she received by way of the settlement agreement.
[58] Counsel further submits that the number would have been so high in 2001 that it would have effectively taken all of Tedesco’s net worth, and this would bring any damage assessment to zero since he could never have offered to pay it.
[59] I agree with counsel for Wolfson. The amount that Tedesco would had to have paid in 2001 to avoid having the separation agreement set aside is so high it effectively cancels out any damages Tedesco would be entitled to for the losses arising from what he eventually paid.
[60] If I am wrong in concluding that Wolfson was not negligent for continuing to act for Tedesco after 2001, Tedesco is still not entitled to damages. The evidence demonstrated that Tedesco was unwilling to pay $300,000 on Wolfson’s recommendation as an attempt to settle the matter in 2005. Tedesco eventually settled for a significantly higher figure. It is highly unlikely, if not completely unlikely, that Tedesco would have successfully settled the matter had he retained a lawyer other than Wolfson.
[61] Although to a certain extent I agree that, assuming Wolfson was negligent in not providing for spousal support, Tedesco might well be entitled to legal fees incurred by the litigation following the 2001 agreement, there is no realistic figure that I can assess to compensate for this.
[62] First, any costs of litigation following the 2008 mediation should not be borne by Wolfson, as I have found that Tedesco resiled from a settlement to which he agreed. Tedesco failed to establish that Wolfson should be held responsible for any legal fees incurred after Tedesco’s decision to back out of the agreement.
[63] Second, with respect to any legal fees incurred between 2001 and 2008, I have already concluded that Tedesco had a merely speculative chance of avoiding the separation agreement being set aside. As a result, I cannot attribute any figure to the legal fees on a “lost chance” basis because Tedesco had no real chance of avoiding the losses he alleges.
disposition
[64] The claim is dismissed. If the parties are unable to agree on costs, submissions may be made in writing. Wolfson shall deliver brief submissions within 21 days and Tedesco 10 days thereafter.
T. McEwen J.
Released: December 17, 2013
COURT FILE NO.: CV-08-00358105
DATE: 20131217
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARIO TEDESCO
Plaintiff
– and –
LORNE WOLFSON and TORKIN MANES COHEN ARBUS LLP
Defendants
REASONS FOR DECISION
T. McEwen J.
Released: December 17, 2013