SUPERIOR COURT OF JUSTICE - ONTARIO

B E T W E E N:

RE: Law Society of Upper Canada

Applicant

• and -

John Dzelme

Respondent

BEFORE: F.L. Myers J.

COUNSEL: Julia Wilkes, for the Applicant

John Dzelme, the Respondent, In Person

HEARD: August 8, 2014

ENDORSEMENT

[1] The Law Society of Upper Canada seeks a permanent injunction prohibiting the respondent, John Dzelme, from practising law, from providing legal services, and from holding himself out as a person who may practice law or provide legal services in Ontario. It also seeks to prohibit Mr. Dzelme from practising law and providing legal services through his website. Under section 26.1 of the Law Society Act R.S.O. 1990, c.L.8, (the “Act”) only those licensed by the Law Society may practise law and provide legal services in Ontario or hold themselves out as entitled to do so. Mr. Dzelme is not licensed.

[2] After hearing the parties, I released a short endorsement in which I granted the relief described below prohibiting Mr. Dzelme from continuing to contravene section 26.1 of the Act for reasons to follow. These are my reasons.

Background

[3] The Law Society is responsible for protecting the public’s interest in relation to the practice of law and the provision of legal services in Ontario. It is responsible for licensing lawyers and paralegals in Ontario and, by corollary, enforcing the provisions of the Act which prohibit unlicensed people from providing legal services or practising law.

[4] There is a contest in the evidence between Mr. Dzelme and the evidence of a number of his former clients that is relied upon by the Law Society. However, just looking at Mr. Dzelme’s own documents - the emails sent by Mr. Dzelme to his clients, the services described and promised in his contracts and on his website, and the services provided as described in his invoices - it is apparent that for a fee Mr. Dzelme provides services to assist his clients in their legal proceedings. Among other things, Mr. Dzelme prepares documents for use in the clients’ family law proceedings. He provides his views as to the strategy to be adopted in those proceedings. He researches and explains case law and applicable statutes to his clients, and otherwise provides many of the services provided by a lawyer in connection with family law proceedings.

[5] Mr. Dzelme has his clients enter into contracts delineating the services to be provided, but which also acknowledge that Mr. Dzelme is not a lawyer, cannot provide legal advice and is deemed not to be providing legal advice. In providing documents, for example, Mr. Dzelme argues that he is simply providing his own intellectual property to the clients for them to use at their own risk if they choose to do so.

Small Claims Court Proceedings

[6] In 2012, Mr. Dzelme sued a client in Small Claims Court. In his Claim, he sought payment for “my consulting and legal services of her family lawsuit between her and her former husband”. This is a most telling admission of Mr. Dzelme’s understanding of his services. In oral reasons provided on July 16, 2013, Deputy Judge Collinson held that Mr. Dzelme was claiming fees for legal services and struck out the lawsuit for violation of the Act. In a written endorsement dated July 16, 2013 Deputy Judge Collinson held:

It is clear from the pleadings and the submissions made in this motion that the plaintiff’s action is for the recovery of “legal services”. The plaintiff is neither a solicitor nor a paralegal authorized to provide legal services by the Law Society of Upper Canada.

[7] Mr. Dzelme appealed this decision to the Divisional Court. By endorsement dated June 10, 2014, the Honourable Justice Tzimas held as follows:

While it appears that the Respondent did not necessarily come with clean hands insofar as her understanding of the services she was obtaining were concerned, the Deputy Judge did not err in either fact or law to conclude that the Appellant’s claim against the Respondent was for the recovery of fees on account of “legal services”. In the face of an invoice by the Appellant that claims for a range of services rendered to the Respondent, all in relation to her Family Law claim, the reference and reliance on the Contract between the Appellant of the Respondent is of no assistance. The descriptions of the vast majority of the items are legal or court-related. The appellant’s contention that:

a. the legal precedents from lawyers that he shares;

b. the narratives that he writes for his clients to insert, if they wish, into legal forms and documents;

c. the commentaries and thoughts that he collects and shares;

d. the strategic analysis he engages in with his clients;

e. the role-plays relating to upcoming legal proceedings; and

f. the simplification of the legal process to make it less intimidating and more accessible;

are all educational activities and support is misleading, worrisome, and borderline disingenuous. They are legal services. Since the Appellant is neither a lawyer nor a Paralegal, the Deputy Judge was correct to conclude that the Appellant was incapable of recovering any fee, reward and disbursement. The Court paid extensive attention to the Appellant’s own evidence of what his services amounted to and was correct in its conclusion.

This appeal is hereby dismissed.

Additional Facts

[8] A list of services similar to those set out by Tzimas J., was contained in another invoice sent by Mr. Dzelme to a different client in 2011. The substance of the services described by Mr. Dzelme is clear enough. They, too, involve the provision of documents, law and strategic advice for use by the client in her family law proceeding. Mr. Dzelme simply seeks to define them away as non-legal either by reliance upon his form of contract, his intellectual property, and in this case, due to a letter purportedly sent by the latter client.

[9] The evidence is also clear that through his website, Mr. Dzelme sells services to clients as an alternative to them retaining a lawyer. He purports to provide educational services, by selling videos such as: How to Create a Compelling Factum, How to Appeal a Judges Final Order or Judgement-Ontario, and How to Appeal a Small Claims Court Judgment in Ontario.

The Law

[10] Subsection 26.3(a) of the Act provides:

26.3 (1) On the application of the Society, the Superior Court of Justice may,

(a) make an order prohibiting a person from contravening section 26.1, if the court is satisfied that the person is contravening or has contravened section 26.1;

[11] The relevant provisions of section 26.1 of the Act provide:

Prohibitions Non-licensee practising law or providing legal services

26.1 (1) Subject to subsection (5), no person, other than a licensee whose licence is not suspended, shall practise law in Ontario or provide legal services in Ontario.

Non-licensee holding out, etc.

(2) Subject to subsections (6) and (7), no person, other than a licensee whose licence is not suspended, shall hold themself out as, or represent themself to be, a person who may practise law in Ontario or a person who may provide legal services in Ontario.

[12] Subsections 1(5), 1(6) and 1(7) of the Act provide guidance as to the meaning of the terms “legal services”, “provision of legal services” and “representation in a proceeding” as follows:

Provision of legal services

(5) For the purposes of this Act, a person provides legal services if the person engages in conduct that involves the application of legal principles and legal judgment with regard to the circumstances or objectives of a person.

Same

(6) Without limiting the generality of subsection (5), a person provides legal services if the person does any of the following:

1. Gives a person advice with respect to the legal interests, rights or responsibilities of the person or of another person.

2. Selects, drafts, completes or revises, on behalf of a person,

i. a document that affects a person’s interests in or rights to or in real or personal property,

ii. a testamentary document, trust document, power of attorney or other document that relates to the estate of a person or the guardianship of a person,

iii. a document that relates to the structure of a sole proprietorship, corporation, partnership or other entity, such as a document that relates to the formation, organization, reorganization, registration, dissolution or winding-up of the entity,

iv. a document that relates to a matter under the Bankruptcy and Insolvency Act (Canada),

v. a document that relates to the custody of or access to children,

vi. a document that affects the legal interests, rights or responsibilities of a person, other than the legal interests, rights or responsibilities referred to in subparagraphs i to v, or

vii. a document for use in a proceeding before an adjudicative body.

3. Represents a person in a proceeding before an adjudicative body.

4. Negotiates the legal interests, rights or responsibilities of a person.

Representation in a proceeding

(7) Without limiting the generality of paragraph 3 of subsection (6), doing any of the following shall be considered to be representing a person in a proceeding:

1. Determining what documents to serve or file in relation to the proceeding, determining on or with whom to serve or file a document, or determining when, where or how to serve or file a document.

2. Conducting an examination for discovery.

3. Engaging in any other conduct necessary to the conduct of the proceeding. 2006, c. 21, Sched. C, s. 2 (10).

[13] In Law Society of Upper Canada v. Augier, [2013] ONSC 451, Goldstein J. wrote:

[9] The Law Society has an important role in protecting the public from the activities of unlicensed and unregulated persons holding themselves out to be lawyers and paralegals. The Respondent, for example, is not required to carry professional liability insurance, keep books and records for inspection by the Law Society, or maintain a trust account for client funds that can be audited by the Law Society. Indeed, the Law Society would have no right or ability to carry out a spot audit or any other kind of check in relation to the activities of the Respondent, as it would for a licensed legal professional. That is why the Law Society has a duty to seek remedies against unauthorized persons practicing law or holding themselves out as legal professionals.

[14] Justice Goldstein then considered the test that governs the issue of whether to grant an injunction under the Act. At paragraph 11 of Augier, supra, Goldstein J. adopted the test set out by Dawson J. in R. v. IPSCO Recycling Inc., 2003 FC 1518, 2003 FCJ No. 1950,

[51] On the basis of the authorities cited by the parties I am satisfied that where a statute provides a remedy by way of injunction, different considerations govern the exercise of the court’s discretion than apply when an attorney general sues at common law to enforce public rights. The following general principles apply when an injunction is authorized by statute:

(i) The court’s discretion is more fettered. The factors considered by a court when considering equitable relief will have a more limited application. See: Prince Edward Island (Minister of Community and Cultural Affairs) v. Island Farm and Fish Meal Ltd. 1989 276 (PE SCAD); Maple Ridge (District) v. Thornhill Aggregates Ltd. 1998 6446 (BC CA).

(ii) Specifically, an applicant will not have to prove that damages are inadequate or that irreparable harm will result if the injunction is refused. See: Shaughnessy Heights Property Owners’ Association v. Northup (1958), 1958 289 (BC SC); Manitoba Dental Association v. Byman and Halstead (1962), 1962 392 (MB CA); Canada (Canadian Transportation Accident Investigation and Safety Board) v. Canadian Press, [2000] N.S.J. No. 139 (S.C.) (QL).

(iii) There is no need for other enforcement remedies to have been pursued. See: Saskatchewan (Minister of the Environment) v. Redberry Development Corp., 1987 4588 (SK QB).

(iv) The court retains a discretion as to whether to grant injunctive relief. Hardship from the imposition and enforcement of an injunction will generally not outweigh the public interest in having the law obeyed. However, an injunction will not issue where it would be of questionable utility or inequitable. See: Saskatchewan (Minister of the Environment) v. Redberry Development Corp., supra; Maple Ridge (District) v. Thornhill Aggregates Ltd., supra; Capital Regional District v. Smith 1998 6490 (BC CA).

(v) It remains more difficult to obtain a mandatory injunction. See: Canada (Canadian Transportation Accident Investigation and Safety Board) v. Canadian Press, supra.

Mr. Dzelme’s Position

[15] Mr. Dzelme contests the evidence of his former clients and impugns their motives as they had fee disputes with him. However, as written above, the facts that I have found concerning the scope of the services offered by Mr. Dzelme come from his own documents. I have not found it necessary to rely on the contested former clients’ narratives.

[16] Mr. Dzelme complains about prior orders of Firestone J. and Himel J. that dealt with the schedule for this proceeding. He did not appeal those orders and they remain in full force and effect.

[17] In his factum, Mr. Dzelme claims that his constitutional rights are being violated, that he cannot obtain a fair hearing in Ontario, that his former clients’ complaints to the Law Society have been withdrawn, that his contract governs the outcome of this case, and that he and his website are not governed by the Act. He raises an issue under the Limitations Act, 2002, S.O. 2002, c 24, Sch B. He also claims that his work is his own intellectual property and he seems to argue that by attaching this label, he cannot be found at the same time to be in breach of the Act. None of his arguments carry any weight.

[18] There is no constitutional argument made in Mr. Dzelme’s factum (apart from the introductory passages in which he simply asserts that he has one). He has not delivered a Notice of Constitutional Question nor brought an application for a constitutional remedy. He raised no constitutional issues at the hearing.

[19] The fact that Mr. Dzelme’s clients are said to have withdrawn their complaints to the Law Society (if true) is not relevant to the issues before the Court. Similarly, the existence of terms and disclaimers in the clients’ contracts is also irrelevant. Mr. Dzelme submits that “Nobody has the right to go into [sic] behind the “Contract” and arbitrarily redefine the intent and will of the signatories who agreed to its terms and conditions despite what the LSUC argues”. The Act looks at the services provided and measures the services against the statutory standards. In section 26.3, the Legislature assigns the task of making that assessment to the Superior Court of Justice regardless of how Mr. Dzelme and his clients’ may choose to define the services. People cannot contract out of statutory provisions designed to protect the public interest such as those at issue in this matter.

[20] Nor is the Limitations Act, 2002 relevant. Even if it applies, the relief sought is prospective. Mr. Dzelme confirmed at the hearing that he continues to carry on business and his website continues to be up and running. In paragraph 18 of his Factum, Mr. Dzelme argues that he is providing a valuable public service to which the definitions of legal services contained in the Act do not apply. The issue is whether Mr. Dzelme is acting in contravention of the Act today and ought to be prohibited from continuing to do so.

Analysis

[21] Justice Tzimas has already held that the services provided by Mr. Dzelme are “legal services” in respect of the client matter that was before her. It is not open to Mr. Dzelme to relitigate that finding. At the hearing of this application, Mr. Dzelme argued that the findings of Tzimas J. are res judicata which he said prevents the Law Society from seeking the prohibition that it seeks in this Court. Correctly understood however, the doctrine of res judicata and the related doctrine of issue estoppel do not to prevent the applicant from bringing these proceedings. The Law Society was neither a party nor a privy to Mr. Dzelme or his former client whom he sued for fees. Moreover, the findings made by Tzimas J. were not adverse to the Law Society’s interest. However, the final orders made in the Small Claims Court proceeding do prevent Mr. Dzelme from challenging the findings made against him that the services that he provided to that client amounted to legal services provided in breach of the Act.

[22] In any event, even if the doctrines of res judicata and issue estoppel do not apply, I agree with Tzimas J. Without trying to be exhaustive, it is more than sufficient to note that under paragraphs (7)(1) and (3) of section 1 of the Act, by providing draft documents to clients for use in their legal proceedings and providing clients with advice and applicable law concerning steps in the proceedings, Mr. Dzelme is “representing” his clients in those proceeding. Similarly, the documents and advice provided by Mr. Dzelme concerning his clients’ proceedings fall plainly within the words of paragraphs 6(1), 6(2)(i) and (v), and 6(4) of section 1 of the Act. During the hearing, Mr. Dzelme confirmed that he conducts legal research for his clients. He said that he analyzes and synthesizes the relevant legal principles and provides his views on the applicable law to his clients to help them in their proceedings. Understanding and advising on the relevant law in relation to a proceeding before a Court is a central, fundamental legal service.

[23] Both in person and through his website, Mr. Dzelme is offering legal services to the public in Ontario despite his lack of a licence. I choose to avoid commenting on Mr. Dzelme’s competency (or lack thereof). Quality assessment is reserved for licensed professionals under the Act. Mr. Dzelme must be prohibited from continuing to contravene section 26.1 of the Act because he lacks of the vital safeguards of licensure such education, training, and the other safeguards listed by Goldstein J. in Augier, supra. In my view, the public needs and is entitled to protection from Mr. Dzelme offering unlicensed legal services.

Relief

[24] After the hearing, I provided the parties with the following short Endorsement:

For reasons to follow in the next several days, an Order will issue under subsection 26.3(a) of the Law Society Act R.S.O. 1990, c.L.8, (the “Act”) prohibiting Mr. Dzelme from providing legal services and from practising law in Ontario including doing so through his website winningcourtstrategies.com. The Order will include a prohibition against Mr. Dzelme advertising or holding himself out as a person who may practise law or provide legal services in Ontario.

Mr. Dzelme is on notice that this Order is based on the subsections 1(5), 1(6), 1(7) and section 26.1 of the Act. It applies to prohibit Mr. Dzelme from providing the services set out in the Act despite his contracts with clients and his intellectual property rights, if any. Without limiting the generality of the foregoing, Mr. Dzelme is prohibited from all things falling within the statutory definitions at subsections 1(5) through (7) of the Act including: providing advice to clients to assist them in legal proceedings, performing legal research for clients to assist them in legal proceedings, reviewing documents with clients to assist them in legal proceedings, advising clients on legal strategy to assist them in legal proceedings, negotiating for clients concerning their legal interests, drafting documents and forms, in whole or in part, for use by clients in legal proceedings. It makes no difference if the legal services are provided verbally, in writing, over the internet, or by video.

Mr. Dzelme shall remove from the internet his website www.winningcourtstrategies.com.

There should be no question of clarity of what is prohibited by this Order.

Costs will be dealt with in my reasons.

The applicant shall send its draft Order to me through Judges’ Administration at 361 University Ave. for review and signature. I dispense with any requirement to obtain the approval of the respondent to the form and content of the draft Order.

[25] As to his website, regardless of where his site is hosted, Mr. Dzelme is using it to advertise in Ontario, to clients in Ontario, under contracts entered into in Ontario, for services to be performed in Ontario, in relation to Court proceedings in Ontario, and in return for payments to be made to Mr. Dzelme in Ontario. He also provides legal services to his clients by means of the videos that he provides to them in relation to their cases. This case does not raise any interesting questions of jurisdiction with respect to internet regulation. My Order is enforceable in personam against Mr. Dzelme in Ontario regardless of where he has to go or call to alter or take down his website.

[26] The Law Society seeks its costs. The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c ). The Court must consider as well as the application of the principle of proportionality in Rule 1.04(1). Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v. Public Accountants Council (Ontario) 2004 14579 (ON CA), at paras 26 and 37. This application involves a commercial service being provided by the respondent for a profit. I see no reason why costs should not follow the event as is the ordinary course for commercial litigation. In my view it is fair, reasonable and proportionate for Ms. Dzelme to pay forthwith the Law Society’s costs on a partial indemnity basis fixed in the amount of $18,000.

­____________________________ F.L. Myers J.

Date: August 11, 2014