COURT FILE AND PARTIES

COURT FILE NO.: CV-05-CV-373099

DATE: 20131224

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: WILLIAM MALAMAS,

Plaintiff

AND:

CRERAR PROPERTY CORP., STEWART J. L. ROBERTSON, GEORGE

FOULIDIS, CHRIS TATSIS, PANAGIOTA TATSIS, GARY CAPLAN, AND

TEPLITSKY COLSON LLP

Defendants

BEFORE: Newbould J.

COUNSEL: William J. O’Hara, for the plaintiff

William Malamas, self-represented

HEARD: December 16, 2013

ENDORSEMENT

[1] The defendants Gary Caplan and Teplitsky Colson LLP move for summary judgment dismissing this action as against them. For the following reasons, the motion is granted and the action against them is dismissed with costs.

[2] After lengthy proceedings, Mr. Malamas was declared a vexatious litigant and ordered not to proceed with various actions, including this one. Instead of letting it sit, Mr. Caplan and Teplitsky Colson LLP have moved for summary judgment to have the action dismissed.

Nature of claim

[3] This action was commenced by Mr. Malamas on February 25, 2009. In so far as Mr. Caplan and Teplitsky Colson LLP, with whom he practised at the time, are concerned, it is claimed that Mr. Caplan failed to properly represent Mr. Malamas on a motion heard by Lederman J. on December 20, 2001. In his fresh as amended, amended statement of claim dated August 19, 2009 and issued on August 20, 2009, Mr. Malamas pleaded that Mr. Caplan breached his fiduciary duties owed to Mr. Malamas and that Mr. Caplan participated in a conspiracy with the defendant George Foulidis.

[4] During argument on this motion, Mr. Malamas insisted that he was not suing Mr. Caplan in negligence. However, in a letter following argument, Mr. Malamas said he was suing Mr. Caplan in negligence and he referred to paragraph 11 of his reply which pleads that “In the alternative, the plaintiff states that Caplan was negligent and that Caplan breached his duty of care to the plaintiff”. No particulars of the negligence were provided.

[5] This action relates to a property at 671 Danforth Avenue that was owned by Mr. Malamas. The property was mortgaged to Mutual Trust Company, later named Clarica Trust Company. Mr. Malamas claims that officers of Clarica took false and illegal steps to cause Clarica to refuse to renew the mortgages and to declare them in default which led to the property being sold to the defendant Crerar Property Corp., a company controlled by the defendant Stewart J.L. Robertson. He claims that Mr. Caplan entered into a conspiracy with the defendants Foulidis, Crerar and/or Robertson in an attempt to have the property sold to Mr. Foulidis by Crerar at below market value.

[6] The heart of the allegation against Mr. Caplan is that he had an “intimate” relationship with Mr. Foulidis resulting in Mr. Foulidis having influence and control over him. Mr. Malamas claims that Mr. Foulidis caused Mr. Malamas to retain Mr. Caplan and that Mr. Foulidis, using his influence and control over Mr. Caplan, induced Mr. Caplan to breach his fiduciary duty to Mr. Malamas. Mr. Malamas had brought an interlocutory motion to restrain Clarica from selling this and two other nearby properties prior to the trial. He claims that Mr. Caplan failed to properly represent his interests on the interlocutory injunction motion, which was dismissed, which prevented him from regaining control over 671 Danforth. He claims this was all to the end to have Mr. Foulidis obtain the propery from Crerar. There is no claim that Mr. Foulidis ended up buying the property and the evidence is to the contrary. 671 Danforth was sold to the defendants Chris and Panagiota Tatsis and Mr. Malamas does not claim that Mr. and Mrs. Tatsis were fronting for Mr. Foulidis.

[7] Mr. Malamas claims that Mr. Caplan breached his fiduciary duty by failing to disclose his relationship with Mr. Foulidis and that Mr. Foulidis was interested in purchasing the property. This latter pleading is inconsistent with a plea in the statement of claim that after inducing Mr. Malamas to retain Mr. Caplan, Mr. Foulidis disclosed to Mr. Malamas his interest in acquiring the property and asked Mr. Malamas to assign his rights in it to him, which Mr. Malamas refused to do. Mr. Malamas claims that on the cross-examination of one of the officers of Clarica who had been acting illegally, the officer admitted that the mortgage on 671 Danforth was not in arrears at the time that Clarica refused to renew the mortgage, and that on the injunction motion before Lederman J., Mr. Caplan intentionally failed to refer to the admission in oral argument. He claims that Mr. Caplan failed to bring a motion or advise him to bring a rule 51 motion to regain ownership of 671 Danforth based on the Clarica officer’s admission.

Test on motion for summary judgment

[8] The tests on a motion for summary judgment were recently discussed in some detail in Combined Air Mechanical Services Inc. v. Flesch (2011), 2011 ONCA 764, 108 O.R. (3d) 1 (C.A.). The Court referred to three types of cases generally amenable to summary judgment motions. The second type is what is applicable in my view. The Court stated:

[42] The second type of case encompasses those claims or defences that are shown to be without merit. The elimination of these cases from the civil justice system is a long-standing purpose well served by the summary judgment rule. As stated by the Supreme Court of Canada in Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 S.C.R. 372, [2008] S.C.J. No. 14, 2008 S.C.C. 14, at para. 10:

The summary judgment rule serves an important purpose in the civil litigation system. It prevents claims or defences that have no chance of success from proceeding to trial. Trying unmeritorious claims imposes a heavy price in terms of time and cost on the parties to the litigation and on the justice system. It is essential to the proper operation of the justice system and beneficial to the parties that claims that have no chance of success be weeded out at an early stage. ...

[9] This case is not the third type of case involving an issue that cannot be said to have no chance of success, for which Combined Air articulated a new test of an ability to have a full appreciation of the evidence.

[10] It is still the case that on a motion for summary judgment, each side must put its best foot forward with respect to the existence or non-existence of material issues to be tried. A party is not entitled to sit back and rely on the possibility that more favourable facts may develop at trial. See Combined Air at para. 56 and Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 1996 7979 (ON SC), 28 O.R. (3d) 423 at p. 434.

Analysis

[11] The heart of the claim against Mr. Caplan is that he had an intimate relationship with Mr. Foulidis which led him to being induced by Mr. Foulidis to intentionally act against Mr. Malamas’ interests. There is not, however, any credible evidence to support that allegation.

[12] Mr. Caplan in his affidavit has denied these allegations. He said the only relationship he had with Mr. Foulidis was as his lawyer and social friend and he never allowed Mr. Foulidis to control him or deliberately lose the motion before Lederman J. He said he pointed out all of the material evidence to Lederman J. and made sure he understood that the mortgage was not in arrears at the time the mortgagee refused to extend the mortgage. On his cross-examination, Mr. Caplan denied having an intimate relationship with Mr. Foulidis.

[13] In his statement of claim, Mr. Malamas pleaded in paragraph 69 the following:

69. Caplan, in a discussion with the plaintiff in Caplan’s office, admitted of his intimate relationship with Foulidis. Caplan said: “George made me feel so good. I’ll do anything for George.”

[14] However, in his affidavit on this motion, Mr. Malamas provided no such evidence. That is telling. He referred only to Mr. Foulidis as Mr. Caplan’s “alleged intimate partner”. He did not say who if anyone made this allegation. On his cross-examination of Mr. Caplan, he asked Mr. Caplan if he had told Mr. Malamas what Mr. Malamas had pleaded in paragraph 69 of his statement of claim. Mr. Caplan said “I don’t recall anything like that”. Thus there is no evidence of any relationship between Mr. Foulidis and Mr. Caplan that would have led Mr. Caplan to be influenced by Mr. Foulidis.

[15] In his affidavit, Mr. Malamas claimed that Mr. Caplan intentionally failed to do a number of things. However, not one iota of evidence was provided to support the claim that Mr. Caplan acted intentionally in failing to do things. The statements of Mr. Malamas were assertions only, not cogent evidence.

[16] Mr. Malamas in argument said he would like to examine Mr. Foulidis to see if he bought the property at 761 Danforth, to ask him of his relationship with Mr. Caplan and to see if Mr. Foulidis participated in the conspiracy and that a trial is necessary to have all of the evidence considered. He has, however, not provided any cogent evidence that needs to be weighed at a trial.

[17] On October 2, 2013, this motion for summary judgment was scheduled to be heard on December 16, 2013. On November 12, 2013 Mr. Malamas served a motion for an order permitting him to serve a summons to witness to examine Chris Tatsis and to compel him to produce documents and to permit him to serve a summons to witness to Mr. Foulidis compelling him to produce documents and to examine him. Material opposing this was filed on behalf of Mr. Caplan on December 2, 2013, although it was not brought to my attention. During the week of December 9, I think on December 10, I had a conference call with Mr. O’Hara and Mr. Malamas and asked where the parties were regarding the motion for summary judgment to be heard the following week. Mr. Malamas said he was ready to proceed, as did Mr. O’Hara. This was not the first time that Mr. Malamas had served a motion and then not followed through with it. It happened several times during the vexatious proceedings application.

[18] Mr. Malamas is not entitled without leave to have discovery in this action in light of the vexatious proceeding order made against him. When a person has been declared to be a vexatious litigant, that person has an onus in seeking to continue a proceeding to establish that the proceeding is not an abuse of process and that there are reasonable grounds for the proceeding. See section 140 (4) of the Courts of Justice Act. I do not see any reasonable grounds to permit this action to go to trial, nor were there reasonable grounds to permit an examination of Messrs. Tatsis or Foulidis prior to this motion. The reason is that there was no evidence at all that either of them would have any evidence that would support Mr. Malamas’ position. It was clearly a fishing expedition. Moreover, the relevance of anything that Mr. Tatsis could say on the claims against Mr. Caplan escapes me.

[19] In his motion material, Mr. Malamas referred only to his pleadings. He also asserted that the vexatious proceeding application was an abuse of process and was brought by Mr. Caplan and Mr. Foulidis, among other unnamed persons, for a collateral and improper purpose, namely to discredit Mr. Malamas’ evidence in another case that Mr. Foulidis had used bribery to obtain favours from the City of Toronto. It was not necessary for me to decide the motion, because Mr. Malamas said he was prepared to proceed with the motion for summary judgment without the motion being decided, but had I found it necessary to decide his motion, I would have dismissed it.

[20] As stated, one of the allegations against Mr. Caplan is that he failed to advise Mr. Malamas to bring, and failed to bring, a motion to regain ownership of the property based on the admission of the Clarica officer that the mortgages were not in arrears at the time that Clarica refused to renew the mortgage. The mortgages permitted renewal if there were no events of default during their terms.

[21] There is no cogent evidence to support this allegation. When Mr. Caplan was retained by Mr. Malamas on December 8, 2001, Mr. Malamas had already prepared and served his notice of motion and had delivered a factum. The notice of motion first requested an order setting aside the notice of sale delivered by Clarica for 671 Danforth, an order giving possession of the property to Mr. Malamas or, in the alternative an interim, interlocutory and permanent injunction restraining Clarica from selling or foreclosing on the property and an order declaring that the previous private appointment of a receiver by Clarica be declared null and void. Mr. Malamas asserted in argument that Mr. Caplan should have argued the first points in the notice of motion to regain the property based on the admissions of the Clarica officer.

[22] However by the time the motion was heard, what was requested was only an interlocutory injunction. That was what was in the factum that had been amended by Mr. Caplan and clear from the endorsement of Lederman J. Mr. Malamas had attended at the cross-examination of the Clarica officer and had a copy of the factum that was used. He also attended at the hearing before Lederman J. He has offered no evidence that he instructed Mr. Caplan to argue before Lederman J. that the property should be returned to him. He did assert in his affidavit that his motion included a request for an order that he be given possession of the property based on the clear admission by the Clarica officer. That clearly was not true, however, because the notice of motion was drawn by Mr. Malamas and dated November 26, 2001 whereas the admission was obtained by Mr. Caplan in the cross-examination of that officer on December 3, 2001.

[23] Moreover, on December 21, 2001, the day after the hearing before Lederman J., Mr. Caplan wrote to Mr. Malamas to confirm the events since he had been retained. He said he had been retained to act in respect of the injunction proceedings, and that he had advised Mr. Malamas from the outset that the chances of enjoining the mortgagee were virtually nil given the lapse of time before the motion was brought. Mr. Malamas did not write back to deny any of this or to say that Mr. Caplan failed to argue anything.

[24] Instead, on December 28, 2001, before Lederman J. had delivered his decision in his endorsement of January 4, 2002, Mr. Malamas wrote Mr. Caplan and said that as he had retained Mr. Caplan to represent him at the hearing of the motion, and as the motion had been dealt with, he no longer required Mr. Caplan’s services. There was no suggestion that something should have been argued that was not. Mr. Malamas cannot now argue that Mr. Caplan should have taken any further steps.

[25] Even if Mr. Malamas had properly pleaded a claim in negligence against Mr. Caplan, which he did not, there is no evidence at all that Mr. Caplan failed to argue before Lederman J. the admission of the Clarica officer that the mortgage on 671 Danforth was not in arrears when Clarica refused to renew it. To the contrary, Lederman J. referred to the argument of Mr. Caplan that the mortgagees were acting in bad faith by refusing the mortgagors their right to exercise their renewal option when not in default.

[26] Even had Mr. Caplan intentionally or negligently failed to argue the point, it is quite clear that Lederman J. would have dismissed the injunction motion in any event. He found serious laches, acquiescence and delay in bringing the action. Clarica had taken possession of the property and the two other properties, had attorned the rents and run the properties for three years and had spent almost $1 million in repairs. Lederman J. also held that the properties were commercial properties and that damages would suffice. He held that the plaintiffs could offer no undertaking as to damages and there was no basis for an undertaking to be dispensed with. He also referred to the fact that the plaintiffs continued to refuse to make any mortgage payments on the properties.

[27] Thus Mr. Malamas cannot prove any damages in this action and on that ground alone cannot succeed in this action. I came to the same conclusion in my endorsement of June 18, 2012 in the vexatious proceedings application. See [2012] O.J. No. 2786 at para. 78. Mr. Malamas had argued in that proceeding that he had good causes of action in his various actions, including his action against Mr. Caplan and Teplitsky Colson LLP. He is impermissibly attempting to re-argue the point on this motion.

[28] There are also limitation issues. Mr. Caplan acted for a very brief time, from December 8 to December 28, 2001. Mr. Malamas was aware of everything that Mr. Caplan did or did not do at the time. He claims in his statement of claim that Mr. Caplan admitted to him an intimate relationship with Mr. Foulidis at the time, although as I have found, there is no evidence at all of such a relationship.

[29] According to section 24(5) of the Limitation Act, 2002, if the claim was discovered before January 1, 2004, the old limitation periods apply. The former limitation period for conspiracy or negligence was 6 years, which would have well expired before this action was commenced on February 25, 2009 by a notice of action.

[30] Mr. Malamas argues that there is an act of conspiracy that took place within six years of the action being commenced. On March 21, 2003, 671 Danforth was sold to Chris and Pangiotta Tatsis, a date slightly less than six years before this action was commenced on February 25, 2009. Mr. Malamas asserts that this sale was part of the conspiracy involving Mr. Caplan. I fail to see how that could be the case. It was pleaded that Mr. Caplan did what he did for the purposes of having the property sold to Mr. Foulidis. Any sale to Mr. and Mrs. Tatsis could not be in furtherance of such a conspiracy. In his affidavit, Mr. Malamas states that he is not alleging anywhere in the statement of claim that Mr. and Mrs. Tatsis were fronting for Mr. Foulidis.

[31] Mr. Malamas also refers in his factum to a sale of 671 Danforth on February 1, 2010 by Mr. and Mrs. Tatsis to a company 671 Danforth Avenue Inc. and asserts that is in furtherance of the continuing conspiracy. There is no evidence at all that the transferee has anything to do with Mr. Foulidis, and it cannot be any part of the alleged conspiracy involving Mr. Caplan.

[32] Mr. Malamas asserts that because there was no limitation period for actions for breach of fiduciary duty before the new Limitations Act, 2002, his action against Mr. Caplan for breach of fiduciary duty is not statute barred. I would not give effect to this argument. The essential claim is that Mr. Caplan participated in a conspiracy that included Mr. Foulidis having control over him and that as a result, such control led Mr. Caplan to fail to argue the admission point before Lederman J. It is not pleaded that Mr. Caplan on his own went about breaching a fiduciary duty to Mr. Malamas. The claim is more akin to an intentional tort than a breach of fiduciary duty.

[33] In any event, after the more than seven year delay in bringing this action, laches would no doubt defeat any claim for breach of fiduciary duty.

Conclusion

[34] It is clear that Mr. Malamas has no chance of winning this action against Mr. Caplan and Teplitsky Colson LLP. The motion for summary judgement is granted and the action is dismissed.

[35] Mr. Caplan and Teplitsky Colson LLP are entitled to their costs. Brief written submissions may be made, no longer than three pages in length, along with a proper cost outline, within 10 days. Mr. Malamas will have a further 10 days to make brief written reply submissions, no longer than three pages.

Newbould J.

Date: December 24, 2013