Stephanie Werner, Robert J. Hooper, Robert J. Hooper Professional

Corporation and Hooper Law Offices, 2015 ONSC 2955

COURT FILE NO.: CV-14-47180 HAM

DATE: 2015-05-12

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: D. Robert Findlay Law Office Professional Corporation, Plaintiff

AND:

Stephanie Werner, Robert J. Hooper, Robert J. Hooper Professional Corporation and Hooper Law Offices, Defendants

BEFORE: The Honourable Mr. Justice D.J. Gordon

HEARD: April 1, 2015

COUNSEL: G. Mackenzie for moving parties, Robert J. Hooper, Robert J. Hooper Professional Corporation and Hooper Law Offices

G. Sheppard for responding party, D. Robert Findlay Law Office Professional Corporation

The Honourable Mr. Justice D.J. Gordon

ENDORSEMENT

[1] The individuals in this lawsuit are lawyers. Stephanie Werner was an employee of the plaintiff firm, D. Robert Findlay Law Office Professional Corporation (herein referred to as the “Findlay law firm” or “Mr. Findlay”). In 2013, she resigned from her position and thereafter commenced employment with her co-defendants, Robert J. Hooper, Robert J. Hooper Professional Corporation and Hooper Law Offices (herein referred to as the “Hooper law firm” or “Mr. Hooper”). A number of clients of the Findlay law firm then directed the transfer of their files to the Hooper law firm.

[2] As a result of the transfer of files, and the manner it is alleged such occurred, Mr. Findlay commenced this action. He seeks damages of $1,250,000:

a) As against Ms. Werner “for breaches of fiduciary duty, trust, good faith and/or loyalty”; and

b) As against Mr. Hooper “for knowing assistance with respect to the abovementioned breaches … as well as the knowing receipt of funds as a consequence thereof”

as set out in paragraph 1(a) and (b) of the fresh as amended statement of claim.

[3] Mr. Hooper moves for summary judgment, dismissing the action against him, on the basis Mr. Findlay has failed to show, and cannot show, “knowing assistance” as alleged. For the reasons that follow, the motion is granted.

BACKGROUND

[4] Mr. Findlay is the principal of the Findlay law firm. Mr. Hooper is the principal of the Hooper law firm. Both firms are located in Hamilton, Ontario, practicing in the area of personal injury law, primarily on a contingency fee basis. This area of law has become highly competitive.

[5] Ms. Werner was employed as an associate lawyer by Mr. Findlay for approximately four years. Her compensation was said to be composed of salary with a bonus structure related to billings. In August 2012, Ms. Werner contacted Mr. Hooper regarding possible employment with his firm. After a number of meetings, Mr. Hooper presented an offer of employment on February 6, 2013. This employment offer contained the following terms:

1. Annual salary of $67,500.

2. The first $500,000 of billings collected, exclusive of disbursements and HST, you will receive 10 per cent of those billings. Billings in excess of $500,000, you will receive 12 per cent bonus.

3. On files that are transferred from your present office to my office, you will receive 25 per cent of the first $500,000 in fees billed, exclusive of disbursements and HST, and 30 per cent on all billings in excess of $500,000.

Ms. Werner accepted the offer on February 12, 2013.

[6] That same day, Ms. Werner delivered a written notice of resignation to the office manager of the Findlay law firm, effective February 26, 2013. On February 13, 2013 Ms. Werner was directed to leave the Findlay law firm premises. It was alleged by Mr. Findlay that Ms. Werner had announced to the office staff that she would be contacting clients to transfer files. Ms. Werner commenced working at the Hooper law firm on February 19, 2013.

[7] Correspondence from Mr. Findlay to Ms. Werner, dated February 14, 2013 and delivered that day, put her on notice, saying:

Dear Stephanie,

This is in follow up to your resignation as an employee from our offices tendered on February 12^th, 2013. As was discussed following your resignation, the existing clients of this office are just that – clients of this office. You are likely aware that the retainer agreement sets out that the firm is retained. In addition, all files in the office are here due to the firm’s reputation and marketing efforts. I am not aware of any files that were referred as a result of your presence in the office.

It has come to our attention today that you are in the process of actively contacting clients who have an existing relationship with this office and a retainer for our services. We are further aware of you soliciting meetings with our clients, presumably for the purpose of having them sign a further retainer agreement for your services. At least two existing clients of this office have advised that you have contacted them since leaving this office to arrange for a change in representation.

This behavior is a complete violation of the non-solicitation restriction set out in the Rules of Professional Conduct. Specifically, Rule 3 states that you are prohibited from contacting “a person who has retained another lawyer for a particular matter to change his or her lawyer for that matter, unless the change was initiated by the person”. Given that the clients would have been previously unaware of your departure, it seems unlikely that any client would have initiated contact with you for the purposes of changing lawyers. (emphasis in original)

Please accept this letter as notice that if you continue to breach the Rules of Professional Conduct, we will have no alternative but to contact the Professional Responsibility Office of the Law Society with our concerns of these deliberate and serious violations of your professional obligations.

Yours very truly,

D. Robert Findlay

[8] Thirty-one clients signed directions, on and after February 14, 2013, to transfer their files to the Hooper law firm. On March 14, 2013 Ms. Werner and Mr. Hooper delivered an undertaking to Mr. Findlay “… to protect the reasonable fee accounts … or as otherwise lawfully assessed … [and] will hold such litigation proceeds in trust pending payment of such accounts”.

LITIGATION

[9] This action was commenced by statement of claim issued on April 9, 2013. The order of Lofchik J., granted April 22, 2014, granted leave to amend. Reference was previously made to the claim in paragraph 1 of the fresh as amended statement of claim. The allegations of ‘knowing assistance” are set out in paragraphs 21, 22 and 27, namely:

21. The plaintiff states that at all material times the defendant Hooper was knowingly, intentionally and purposefully acting in concert with the defendant Werner to the detriment of the plaintiff for the specific and common purposes of enriching themselves. Pursuant to their mutual goals and design, on February 22, 1013, the defendants delivered to Findlay Attorneys twenty-four signed Directions and Authorizations transferring these clients’ files to Hooper Law Offices, which documents were all dated before February 20, 2013. Additional Directions and Authorizations were subsequently received, for a total of thirty-one clients of Findlay Attorneys (the “Lost Clients”). Although Mr. Hooper and Ms. Werner have executed Solicitors’ Undertakings requiring them to protect the reasonable fee accounts of Findlay Attorneys to be agreed upon or as assessed, out of any proceeds of litigation, any such payments would not reflect the actual contingency value of these files.

22. As a consequence, the plaintiff states that the defendant Hooper should be held liable for (i) his knowing assistance in the breaches of fiduciary duty, trust, good faith and/or loyalty as herein pleaded, and/or (ii) his knowing receipt of money unlawfully obtained in breach of trust, good faith, loyalty and/or fiduciary obligations.

23. At all material times, the defendant Hooper knew of the defendant Werner’s machinations and purposefully encouraged and facilitated the transfer of client files from Findlay Attorneys to his law firm in breach of duties at law and in equity as herein pleaded.

[10] In the statement of defence, dated June 12, 2014 the Hooper law firm denies the allegations, specifically pleading at paragraphs 18 – 21:

Hooper Law’s Involvement in the Transfer of Client Files

18. At all material times, Hooper Law’s sole involvement in the transfer of client files from the Plaintiff to Hooper Law was to remind Ms. Werner of her professional obligations.

19. Ms. Werner was responsible for all matters relating to the transfer of the clients’ files from the Plaintiff to Hooper Law, which included communicating with the clients to determine whether they wished to continue to be represented by the Plaintiff or to transfer their files to Ms. Werner at her new firm.

20. Neither Robert Hooper nor Hooper Law had any contact with the clients prior to Ms. Werner’s joining Hooper Law. Neither Robert Hooper or Hooper Law played any role in obtaining directions from clients transferring their files to Ms. Werner at her new firm.

21. Contrary to the allegations in paragraphs 21-23, 27, and 33 of the Fresh as Amended Statement of Claim, Robert Hooper and Hooper Law did not knowingly assist, encourage, or facilitate the transfer of the clients’ files from the Plaintiff to Hooper Law. Robert Hooper and Hooper Law specifically deny that they “cherry picked” financially lucrative client files that were on the verge of final resolution. Robert Hooper and Hooper Law played no part in communicating, directly or indirectly, with clients for whom Ms. Werner had acted while employed by the Plaintiff, and in fact most of the transferred files were not financially lucrative.

DISCUSSION

i) Action Against Ms. Werner

[11] Ms. Werner does not seek summary judgment dismissing the action, at least at this time. Her counsel did not participate in this motion. Reference was made by counsel as to some of the evidence pertaining to Ms. Werner’s activities, including portions of her discovery transcript. Such was done to provide context in terms of the claim against the Hooper law firm and the issues that arise on this motion.

[12] In the circumstances, it would not be appropriate to provide any assessment of the evidence or the claim pertaining to Ms. Werner. That is a matter for another day, perhaps at trial.

[13] The claim against Mr. Hooper is separate and distinct in law; however a prerequisite to such a claim is the breach of some duty owed by Ms. Werner to Mr. Findlay. “Knowing assistance” relates to such alleged breach. Accordingly, to consider the claim against Mr. Hooper in this motion for summary judgment, I will assume Mr. Findlay has met that threshold step.

ii) Transfer of Files – Law Society Guidelines

[14] In its article Leaving a Law or Legal Services Firm, dated June 2009, the Law Society of Upper Canada makes reference to “…a significant number of complaints…” received regarding the transfer of files to lawyers departing from law firms. The article attempts to assist lawyers in providing an overview of the professional responsibilities in such circumstances.

[15] The following is a summary of the article as it relates to this case:

a) the client has the right to choose his or her legal representative;

b) the law firm and the departing lawyer have a joint and individual duty to keep the client informed;

c) the client must be told in a timely manner that the lawyer with whom he or she has been dealing is leaving the law firm;

d) the client should be told of the options for continued representation by:

i. the law firm;

ii. the departing lawyer; or

iii. a new lawyer chosen by the client;

e) the recommended procedure is for the law firm and the departing lawyer to agree on how and when the client is to be notified;

f) failing such agreement, the departing lawyer should advise the client in a neutral manner of the departure and the client’s options;

g) the law firm and the departing lawyer must not abandon the client;

h) a client who chooses to follow the departing lawyer should confirm his or her wishes in writing and provide a direction to the law firm regarding the transfer of the file and any funds in trust; and

i) the departing lawyer should consider providing an undertaking to the law firm to protect the firm’s account to facilitate the file transfer.

[16] Ms. Werner and Mr. Findlay, as solicitors of record for each client once retained, shared the professional responsibility for the client, at least until the file was transferred to the Hooper law firm. Responsibility includes liability for handling the client’s matter.

[17] In her examination for discovery on October 22, 2014 Ms. Werner was asked questions pertaining to her departure and clients being informed. The following excerpts were referred to by counsel on this motion:

38. Q. I see. All right, and what happened at that interview?

A. I attended his office at lunch. We talked about – he mentioned the fact that he wasn’t sure yet whether he wanted to hire a clerk or a lawyer, and that some other people were also contacting him, other lawyers. So it was very – it was in the very early stages of anything. But we did discuss, you know, what I would be looking for in terms of salary. He disclosed to me his usual bonusing practices, which were similar to Findlay’s in some ways. He asked me whether, you know, whether clients would be – whether I had my own clients that I thought I would be bringing. I said, well, I don’t have my own clients, but there are clients at Findlay’s, I’m not sure whether any of them would choose to follow me if I left. But it’s possible.

56. Q. When did you start meeting with your clients concerning your departure?

A. Well, I wasn’t meeting with my clients concerning my departure. I had – near the end of the fall, I decided that it was good practice – in our field, matters settle in the fall. So it’s a good time to try and get a handle on your files, figure out what’s settleable, and figure out if it’s not settleable what needs to happen to make it settleable next year perhaps. So you know, come – I think I was in my fourth or fifth year of call at that point, you know, starting to develop more practice management skills, and this seemed a good matter of practice.

So I had my clients coming in one by one, just to go through their file and see on the ones that were in a position to settle, what’s it worth and what are your expectations, here is what I think we should offer. On the ones that weren’t ready to settle, here’s a one-year plan for your file. Here’s what you can expect in the next one year on your file, whether it’s discoveries, or defence medicals.

Those meetings, during those meetings that were taking place, I’m saying from … from the point when I knew I was leaving, I – for some clients I did tell them, just so you know – and these were the clients who I thought would be most affected and feel most let-down by my sudden departure, if it was a sudden departure or whatever kind of departure it be. So clients that I’d worked with for years, and that really trusted me, I got – when they were in for their end-of-year or start-of-year meetings, one-year-plan-type meetings, I said, “Just so you know, I will be leaving the firm soon. But you know, rest assured you have options here. Like you can stay, there will be another lawyer assigned to you here. If you want to reach me, I can be reached. Or there are other firms.” But that was on a select – that was maybe five – four to five people.

69. Q. Did you ever have any discussions with Mr. Hooper about the number of Findlay files you expected to bring with you?

A. Yes.

70. Q. Can you tell me about those discussions?

A. He asked how many clients I thought might follow me. I said, “I don’t know. I have close relationships with quite a few of them.” So I don’t remember, but I just said, “There are a number that will probably want to keep working with me, because we’ve worked well together for a good few years.”

71. Q. How did the subject come up between you and Mr. Hooper? Was he interested in the files you were bringing, the specific files that you thought you might bring?

A. What do you mean by interested?

72. Q. In the details?

A. I don’t think he asked me the details of them at that time.

119. Q. How many did you contact?

A. I went through my whole list of clients, and I contacted I think … if not all of them the vast majority of them, because some of them I didn’t have accurate contact information for. So I contacted as many as I could.

[18] The examination for discovery of Mr. Findlay occurred on October 29, 2014. The following excerpts relate to the Law Society guidelines:

218. Q. All right, fair enough. Now you gave some evidence when Mr. Squire was asking you questions about being familiar with the Law Society’s guidelines on what should occur when a lawyer leaves one law firm and goes to another?

A. Yes.

219. Q. And I am showing you a document titled, “Leaving a law or legal services firm,” which is dated June 2009, but it is on the Law Society’s website now. Is that the document you had in mind when you were answering Mr. Squire’s questions?

A. Yes, there was this document. There was one that was – I believe the caption was, “Leaving a law or legal services firm,” same caption, but then it said, “checklist”.

220. Q. All right, yes. And they are both on the Law Society’s website?

A. Exactly.

221. Q. Were you familiar with that document at the time you wrote your letter of February 14^th, exhibit four?

A. No.

MR. MACKENZIE: May we mark this as exhibit five, please?

---EXHIBIT NO. FIVE: Law Society guideline, “Leaving a law or legal services firm.”

222. Q. And exhibit five, the Law Society guideline, at the first paragraph of page two, the second sentence says: “Clients should be told of their options for continued representation by the firm, by the departing firm member, if he or she will still be practicing law or providing legal services, or by a new lawyer or paralegal chosen by the client. Notification should be sent in writing.” Now were you aware when you wrote the February 14^th letter, Mr. Findlay, of that practice?

A. No.

[19] In his affidavit, affirmed January 13, 2015, Mr. Hooper says:

10. At our December 18, 2012 meeting I cautioned Ms. Werner that she must abide by the Law Society of Upper Canada’s guidelines respecting the transfer of client files. I made it very clear to Ms. Werner that clients must be given three choices, namely, (1) to stay with Mr. Findlay’s firm, (2) to direct that their files be transferred to Ms. Werner at her new firm, or (3) to direct that their files be transferred to a third lawyer.

11. I have at all times believed, and continue to believe, that Ms. Werner abided by her obligations under the Law Society of Upper Canada’s guidelines with respect to the transfer of client files.

iii) Other Evidence As To Hooper Law Firm

[20] Sara Jones is a case manager employed by the Findlay law firm. On February 14, 2013 she had a telephone conversation with Mr. Hooper regarding Ms. Werner. In her “Memo To File”, dated April 1, 2013 Ms. Jones wrote:

MEMO TO FILE – Author: Sara Jones

On February 14, 2013 I played some phone tag with Rob Hooper, whom I had called because of Stephanie advising she was leaving our office. I had guessed that Stephanie was going to Rob Hooper’s office when she announced she was quitting, and she asked me not to say anything to Rob and Shannon, since her arrangements with Rob Hooper had not been totally ironed out.

Rob Hooper called me back and left a message on my voice mail with his cell phone number. The message is saved on my voice mail. I called him back after picking up the message.

We discussed that Stephanie was in fact coming to his office and that that he and Stephanie had been having discussions about her moving for many weeks, and it sounded like maybe months – at least since the fall of 2012.

When I told Rob about what we were aware of, that Stephanie was contacting our clients and attempting to take them with her and sign new retainer agreements in favour of his office – Rob didn’t think there was any problem with that.

He told me that he thought it was somewhat ironic that Stephanie had left our firm “12 years to the day” (or 10?) since he had been escorted out of Morris Law Group and had taken a number of their clients with him. He said that he did not believe Stephanie’s conduct was improper and that “although he hadn’t asked her to do it, he wasn’t going to tell her to stop”.

He also said that he thought that we should try to work out what money would be owed to our office later, likely at a private mediation, which is what he had done with Morris’ office.

[21] Ms. Jones also provided an affidavit on this motion, sworn February 12, 2015. It provides the following comments:

13. When I spoke to Rob Hooper, he indicated that it was interesting that Ms. Werner had been “walked to the door” of our office 12 years to the day that he had been “walked to the door” at Morris Law Group, where he had previously worked.

14. He said that he had taken quite a number of files with him when he left and that “he knew how far to go” and what was proper and improper. He said that he had ultimately settled his own situation with Bill Morris via mediation, and he anticipated that we would do the same with he/Ms. Werner.

15. When I told him that our information was that Ms. Werner was directly and specifically soliciting our clients to leave our firm and go to his, he said: “I didn’t tell her to do it, but I’m not going to tell her to stop.” He said he did not think that what Ms. Werner was doing was in any way improper and that he had done essentially the same thing when he left Morris Law, so he knew how far she could go and that it would eventually get worked out.

[22] Mr. Hooper responds to Ms. Jones’ evidence in his supplementary affidavit, sworn February 23, 2015, as follows:

4. As I stated in my previous affidavit, when I met with Ms. Werner on December 18 2012 I cautioned her that she must abide by the Law Society of Upper Canada’s guidelines respecting the transfer of client files, and that clients must be given three choices, namely (1) to stay with the Plaintiff’s firm, (2) to direct that their files be transferred to Ms. Werner at her new firm, and (3) to direct that their files be transferred to a third lawyer.

5. As I also stated in my previous affidavit, when Ms. Werner joined my firm I had – and I still have – no reason to believe that she breached any fiduciary or trust obligations owed to the Plaintiff. If she did commit any such breaches, I had no knowledge of any such breach.

6. I have the following comments on the affidavits of Sara Jones, a long term employee of the Plaintiff, sworn February 12 and February 19 2015.

a) In paragraphs 12 through 15 of her February 12 affidavit and in the memo to file dated April 1 2013 that is attached as Exhibit 1 to her February 19 affidavit, Ms. Jones refers to a telephone conversation I had with her on or about February 14 2013. I recall that conversation. [Ms] Jones’s recollection of it is inaccurate in several respects.

b) Ms. Jones left a message asking me to return her call. As I had discussed with Ms. Werner the three choices clients were to be given, when I learned that she wished to speak to me I believed Ms. Jones may be calling to discuss working out a joint letter informing clients of their choices.

c) I was out of the office on February 14 (though not on discoveries, as stated by Ms. Jones). I returned her call on my cellphone, and we connected while I was driving. The conversation concluded while I was in my garage, where I was losing the connection.

d) Although I did mention to Ms. Jones that I was familiar with the choices that clients should be given in part because I had left the firm headed by Bill Morris almost exactly 12 years earlier, I did not say that I was “walked to the door” at that time as Ms. Jones swears in paragraph 13 of her February 12 affidavit (and I note that she did not use the quoted language in the memo to file attached as Exhibit 1 to her February 19 affidavit). In fact when Mr. Morris and I agreed to part ways I continued to work at his firm for a further two weeks to prepare file transfer memos and to ensure the appropriate transition of files.

e) I did not tell Ms. Jones that I took “quite a number” of files with me when I left Mr. Morris’s firm (again, I note this language is not used in the memo to file attached as Exhibit 1 to her February 19 affidavit). In fact only a small proportion of the clients I worked for at Mr. Morris’s firm directed that their files be transferred to me at my new firm. More importantly, Mr. Morris and I agreed that the clients should be given the choice whether to stay at his firm or direct that their file be transferred and the clients were in fact given that choice.

f) I did not say to Ms. Jones that I “knew how far to go” as she asserts in paragraph 14 of her February 12 affidavit (yet again, this language does not appear in the memo to file attached as Exhibit 1 to her February 19 affidavit) but she is right that I told her that I knew what was proper and what was improper.

g) In the second last paragraph of the memo to file attached as Exhibit 1 to Ms. Jones’s February 19 affidavit she states that I said that I did not believe that Stephanie’s conduct was improper and that “although he hadn’t asked her to do it, he wasn’t going to tell her to stop”. Ms. Jones is right that I did not believe Ms. Werner’s conduct was improper, as I understood that she was telling clients of the choices available to them as I had cautioned her to do. I tried to impress on Ms. Jones that it was the clients’ choice who was going to continue to act for them. I invited Ms. Jones and Mr. Findlay to call me the following day to discuss writing a letter to the affected clients, but I received no follow up call at any time in response to this invitation.

In the last paragraph of the memo to file attached as Exhibit 1 to her February 19 affidavit Ms. Jones states that I told her that we should work out what money would be owed to the Plaintiff’s office later, likely at a private mediation. In fact I have made sure that the Plaintiff has been paid any amounts due to it as files formerly handled by the Plaintiff have settled, and no mediation or arbitration has been necessary.

iv) The Client’s Rights

[23] The Law Society of Upper Canada guidelines reflect the long standing principle that the client’s rights are paramount. While the law firm and the lawyer have an interest in the file, and a duty to maintain proper records, it is the client’s file. The client has the right to be kept informed with respect to the matter retained. He or she also has the right to choose legal representation and to change at any time. When such occurs, the client’s file must be transferred to the new lawyer or law firm, subject in some cases to a solicitor’s lien. The common and accepted practice on the file transfer, as here, is for the receiving firm to undertake to protect the former law firm’s account.

[24] The Law Society guidelines adopt legal principles that have existed for some time. See, for example: Loreto v. Little, 2010 ONSC 755, at paras. 30-35; and Grillo v. D’Angela, 2009 CarswellOnt II (S.C.J.), at paras. 39-40.

[25] There is nothing improper in a departing lawyer contacting a client for the purpose of informing him or her of such event. Indeed, as the Law Society guidelines state, there is a duty to do so. Contacting the client for the purpose of solicitation of a retainer is not permitted.

[26] The right of the client to choose legal representation is part of the unique personal relationship with a professional that sets it apart from other business activities. See: Loreto, supra, at paras. 30-32; Aquafor Beech Ltd. v. Whyte, 2010 ONSC 2733, at para. 73; and Vertlieb Anderson v. Nelford, 1989 CarswellBC 206 (B.C.Co.Ct.), at para. 21.

[27] The transfer of a file does not trigger a possible claim by the former law firm. Rather, a claim may only succeed if the departing lawyer is in breach of a duty owed to that law firm.

v) Knowing Assistance

[28] Pleadings provide the framework for the case. Here, in his fresh as amended statement of claim, Mr. Findlay alleges Mr. Hooper is liable for “knowing assistance” in Ms. Werner’s breaches of fiduciary duty, trust, good faith and/or loyalty.

[29] Regardless as to which duty is owed by the departing lawyer, liability of the new law firm, or lawyer, only arises if he or she “…knowingly assisted in a fraudulent and dishonest breach of trust. This type of liability is referred to as knowing assistance”. See: Gold v. Rosenberg, 1997 333 (SCC), [1997] 3 S.C.R. 767 (S.C.C), at para. 26.

[30] In this case, Mr. Findlay must establish the following essential elements:

a) there was a trust;

b) Mr. Hooper had actual knowledge of the existence of the trust;

c) Ms. Werner perpetuated a dishonest and fraudulent breach of trust; and

d) Mr. Hooper had actual knowledge of, or was wilfully blind to, and participated in Ms. Werner’s dishonest and fraudulent breach of trust.

See: Gold, supra, at paras. 19 and 34; Air Canada v. M&L Travel Ltd., 1993 33 (SCC), [1993] 3 S.C.R. 787 (S.C.C.), at pp 808-810; Citadel General Assurance Co. v. Lloyd’s Bank, 1997 334 (SCC), [1997] 3 S.C.R. 805 (S.C.C), at paras. 19-24; and Harris v. Leikin Group Inc., 2011 ONSC 3556, at para. 294, aff’d 2011 ONCA 790, at para. 8.

[31] It is the fourth element above that is of interest on this motion. Is there a genuine issue requiring a trial?

vi) Test For Summary Judgment

[32] Rule 20.04, Rules of Civil Procedure, provides:

DISPOSITION OF MOTION

General

20.04 (2) The court shall grant summary judgment if,

a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or

b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

Powers

(2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

[33] In Hryniak v. Mauldin, 2014 SCC 7, the Supreme Court of Canada addressed the summary judgment process, in particular with reference to the principle of proportionality. At paragraph 49, Karakatsanis J. provided the following direction with respect to the test under Rule 20.04:

49 There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[34] At paragraphs 56-60, she expanded on the test, particularly having regard to the “interests of justice”, saying:

56 While I agree that a motion judge must have an appreciation of the evidence necessary to make dispositive findings, such an appreciation is not only available at trial. Focussing on how much and what kind of evidence could be adduced at a trial, as opposed to whether a trial is “requir[ed]” as the Rule directs, is likely to lead to the bar being set too high. The interest of justice cannot be limited to the advantageous features of a conventional trial, and must account for proportionality, timeliness and affordability. Otherwise, the adjudication permitted with the new powers – and the purpose of the amendments – would be frustrated.

57 On a summary judgment motion, the evidence need not be equivalent to that at trial, but must be such that the judge is confident that she can fairly resolve the dispute. A documentary record, particularly when supplemented by the new fact-finding tools, including ordering oral testimony, is often sufficient to resolve material issues fairly and justly. The powers provided in Rules 20.04(2.1) and 20.04(2.2) can provide an equally valid, if less extensive, manner of fact finding.

58 This inquiry into the interest of justice is, by its nature, comparative. Proportionality is assessed in relation to the full trial. It may require the motion judge to assess the relative efficiencies of proceeding by way of summary judgment, as opposed to trial. This would involve a comparison of, among other things, the cost and speed of both procedures. (Although summary judgment may be expensive and time consuming, as in this case, a trial may be even more expensive and slower.) It may also involve a comparison of the evidence that will be available at trial and on the motion as well as the opportunity to fairly evaluate it. (Even if the evidence available on the motion is limited, there may be no reason to think better evidence would be available at trial.)

59 In practice, whether it is against the “interest of justice” to use the new fact-finding powers will often coincide with whether there is a “genuine issue requiring a trial”. It is logical that, when the use of the new powers would enable a judge to fairly and justly adjudicate a claim, it will generally not be against the interest of justice to do so. What is fair and just turns on the nature of the issues, the nature and strength of the evidence and what is the proportional procedure.

60 The “interest of justice” inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice, and be the most proportionate, timely and cost effective approach.

[35] Lastly, at paragraph 66, Karakatsanis J. provided a roadmap approach to a motion for summary judgment as follows:

66 On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[36] Hryniak is recognized as “a shift in culture” regarding the litigation process. Since that decision, our Court of Appeal has provided further commentary, summarized as follows:

a) Summary judgment is not imperative in every case but only when clearly in the interests of justice to do so. The motions judge must be mindful of the risk evidence may not be property analysed. See: Trotter v. Trotter, 2014 ONCA 841, at para. 49; and

b) Summary judgment should not be granted, in part, where the trial judge would develop a fuller appreciation of complex circumstances, having regard to the risk of inconsistent findings. See: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para. 37; and Hamilton (City) v. Their & Curran Architects Inc., 2015 ONCA 64, at para. 22.

[37] While Hyrniak has changed the focus on motions for summary judgment, existing principles regarding evidence still apply. The onus is on the moving party; however, the responding party must put his best foot forward and cannot rely on the hope of better evidence at trial.

ANALYSIS

[38] In this case, the issues requiring determination, either at this stage or at trial are well defined. The dispute is with the evidentiary record.

[39] The evidence that Mr. Findlay relies on with respect to the claim against Mr. Hooper consists of:

a) the examination for discovery of Ms. Werner;

b) the employment contract; and

c) the telephone conversation between Ms. Jones and Mr. Hooper.

This evidence, individually and collectively, does not establish the basis for a claim on “knowing assistance”. If there is more or better evidence, it should have been tendered on the motion.

[40] Relying on the examination for discovery of Ms. Werner, Mr. Sheppard says, “from the outset of these negotiations, Mr. Hooper made it clear that any offer of employment carried with it an expectation that Ms. Werner would be able to bring Findlay Law clients with her to his firm.” With respect, I disagree. As set out in the transcript previously, Ms. Werner reported only that Mr. Hooper asked as to whether she had her own clients that she would be bringing to his firm. There is nothing improper in such an inquiry. In my view, it is a standard question on an interview of an associate lawyer with some experience.

[41] The complaint regarding the employment contract is with the higher bonus structure on billings for files transferred to Mr. Hooper’s firm. Mr. Sheppard describes this as an “inducement” and “a significant financial incentive to transfer as many files as possible” in terms of Mr. Hooper assisting or participating in Ms. Werner’s breach of a duty owed to Mr. Findlay. Mr. Mackenzie submits the bonus structure is a standard provision to reward a new associate for bringing files to the firm.

[42] The only evidence referred to is that from Ms. Werner. She described Mr. Hooper’s bonusing practices as “similar” to Mr. Findlay’s. I agree with the comment by Mr. Mackenzie. There is nothing improper in the bonus structure and certainly does not support the allegation against Mr. Hooper without further evidence.

[43] The evidence of Ms. Jones, at its highest, can be interpreted as putting Mr. Hooper on notice regarding the conduct of Ms. Werner. Mr. Hooper responded to Ms. Jones by saying he did not think Ms. Werner was doing anything improper. In his affidavits, Mr. Hooper expands on this comment by referring to her duty to inform clients and having cautioned Ms. Werner that she must abide by the Law Society guidelines.

[44] Mr. Hooper’s evidence on this item and with respect to all other matters is of critical importance on this motion for two reasons:

i) he addresses the Law Society guidelines that are the focus in transferring files and in the claims in this case; and

ii) his evidence is uncontradicted.

[45] Mr. Findlay has not challenged the evidence of Mr. Hooper. There was no examination for discovery or cross-examination of Mr. Hooper on his affidavits.

[46] The onus is on the moving party in this motion for summary judgment. When, as here, the moving party tenders evidence that meets the test, the responding party must put his best foot forward. Evidence that is not challenged will, if reasonable, be accepted. I do so in this case. Otherwise, it would allow the responding party to defeat a motion by relying on speculation or optimism of further or better evidence at trial. That would be contrary to the principles previously discussed.

[47] Further, credibility cannot be said to be a factor in requiring a trial. Unless the evidence is inherently unreasonable, credibility does not arise when that evidence is uncontradicted and not challenged.

[48] And so I conclude there is no evidence to support the allegation of knowing assistance either in the form of actual knowledge or wilful blindness. Indeed, the evidence is to the contrary. It was unchallenged that Mr. Hooper was well aware of the lawyer’s duty to inform clients on leaving a firm and the manner in presenting the options for the client.

[49] Whether Ms. Werner complied with her duty or not is not a matter that relates to Mr. Hooper. There is no evidence to establish he had actual knowledge or was wilfully blind to any alleged breach. On this evidentiary record, I conclude Mr. Hooper did all that was required. Accordingly, Mr. Findlay has no hope of success in his claim against Mr. Hooper. Dismissal at this stage is clearly appropriate.

[50] Mr. Findlay’s complaint regarding payment of his accounts pursuant to the undertaking of Mr. Hooper was not pleaded. Regardless, it does not relate to the claim presented herein but can be addressed in another forum.

SUMMARY

[51] For these reasons, the motion is granted for summary judgment dismissing the action as against Mr. Hooper and the Hooper law firm.

[52] If the parties are unable to resolve the issue of costs, counsel are directed to deliver brief written submissions, along with any supporting documents, to my chambers in Cayuga within 30 days.

Gordon, J.

Released: May 12, 2015

Stephanie Werner, Robert J. Hooper, Robert J. Hooper Professional

Corporation and Hooper Law Offices, 2015 ONSC 2955

COURT FILE NO.: CV-14-47180 HAM

DATE: 2015-05-12

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

D. Robert Findlay Law Office

Professional Corporation

Plaintiff

• and -

Stephanie Werner, Robert J. Hooper,

Robert J.Hooper Professional Corporation

and Hooper Law Offices

Defendants

ENDORSEMENT

D.J. Gordon, J.

Released: May 12, 2015