Court File and Parties
COURT FILE NO.: 100/13 and 20/15 DATE: 2016-06-27 ONTARIO SUPERIOR COURT OF JUSTICE
Court File No.: 100/13 B E T W E E N: ANDRZEJ JANIK Plaintiff R. Kennaley, for the Plaintiff/ Moving Party
- and -
PAUL M. STILLMAN Defendant J. Margie, for the Defendant/ Responding Party
Court File No.: 20/15 B E T W E E N: ANDRZEJ JANIK Plaintiff - and - THE ESTATE OF ANTHONY OLSZOWY, DECEASED Defendant R. Kennaley, for the Plaintiff/ Moving Party J. Campbell, for the Defendant/ Moving Party
HEARD: March 9, 10 and 11, 2016 The Honourable Justice C.D. Braid
JUDGMENT ON MOTIONS
I. INTRODUCTION
1The plaintiff Andrzej Janik (“Janik”) sued two lawyers in two separate actions, seeking damages for breach of contract and negligence. The defendant Paul Stillman (“Stillman”) is a civil litigator and the defendant Anthony Olszowy (“Olszowy”) was a commercial and estates lawyer.
2Janik sued Stillman first (“the Stillman action”). In his statement of defence, Stillman denied responsibility and blamed Olszowy, but did not advance a third party claim. Janik initially denied that Olszowy was responsible, but sued him later in a separate action (“the Olszowy action”), out of an abundance of caution, because of Stillman’s position in the first action.
3Motions for summary judgment have been brought by the defendant Olszowy (in his own action) and the plaintiff Janik (in both actions). The defendant Stillman argues that the motion against him should be dismissed. At the direction of the court, these motions were argued together.
II. FACTS
4Numerous affidavits, transcripts of cross-examinations and supporting documents were filed on these motions. Having reviewed the evidence, I make the following findings of fact:
A. The Defendants
5Olszowy was a lawyer who was called to the bar in 1986, and had a general practice focusing on real estate, estates and commercial matters. Except for uncontested estate proceedings, his practice did not include any litigation work.
6Olszowy passed away on September 19, 2015, and there was an order to continue the action against his estate. For ease of reference, where I refer to any liability of Olszowy as the defendant, I include his estate.
7Stillman is a lawyer who was called to the bar in 1971 and practices mainly civil litigation. Although the defendants were not law partners, Stillman shared office space with Olszowy.
B. The Dispute Between Janik and Szyszka
8In or about 2008, Janik verbally agreed with Peter Szyszka (“Szyszka”) to build a house in Mount Pleasant, Ontario (“the property”). Each of them was to contribute to the purchase price; provide labour and management; and pay subcontractors. In late 2009, before the construction was complete, they had a disagreement and Szyszka banned Janik from the property.
9Janik met with Olszowy and asked him to draw up a contract to reflect his verbal agreement with Szyszka. Olszowy drafted a joint venture agreement which was signed by Janik. Szyszka refused to sign the agreement.
10Title to the property was in Szyszka’s name. In January of 2010, Szyszka transferred the property from his own name into joint ownership for himself and his wife.
C. Registration of the Construction Lien and Commencement of an Action
11Janik wanted to protect his claim to an interest in the property. He met with Olszowy, and they discussed placing a lien on title. Olszowy believed that a lien would be appropriate because Szyszka banned Janik from the property and had effectively denied Janik’s ownership interest in the property. On March 9, 2010, Olszowy registered a Claim for Lien for $257,913 on the property.
12Olszowy told Janik that he was not a litigation lawyer and that he did not practice construction lien law. Olszowy knew that Janik needed to start a court action in order to perfect the lien. Olszowy told Janik that he needed a litigation lawyer and introduced him to Stillman.
13Janik retained Stillman and the Statement of Claim was issued on April 19, 2010 (“the lien action”). Pursuant to the Construction Lien Act, Janik had two years from the date the claim was issued to set the lien action down for trial, failing which the lien would expire.
14Stillman was noted as the only counsel of record for the plaintiff in the lien action. Stillman opened a file called “Janik re Construction Lien Act”.
D. Scope of the Retainers
15In the motions before me, the parties made lengthy submissions regarding the scope of the retainers of the two lawyers and, in particular, whether Stillman’s retainer was limited.
16I find that Stillman assured Janik that he had the expertise and the ability to handle the lien litigation, and that Stillman knew that Olszowy was not a litigation lawyer.
17Based on discussions with Stillman, Janik believed the following:
i. Stillman was a civil litigator with construction law experience; ii. Stillman was his lawyer in the lawsuit and would make recommendations for the best course of action in the lawsuit; iii. Stillman would make recommendations to protect Janik’s interest in the property and to make sure that the Claim for Lien did not expire; and, iv. Stillman did not advise Janik that his retainer in the lien action was limited in any way.
18Janik and Olszowy agree that Olszowy’s role was limited to providing general business advice, in exploring settlement possibilities and in assisting with communications. They also agree that Olszowy was specifically not retained to represent him, advise him and/or protect his interest in the litigation commenced to preserve his interests in the proceeds of sale, nor to enforce the claim for lien or otherwise protect his interest in the property. Janik states that, at all material times, he relied on Stillman as his solicitor of record to complete these tasks.
19I specifically make the following findings of fact:
i. Stillman was Janik’s litigation lawyer and his lawyer of record; ii. Neither Stillman nor Olszowy discussed the roles and responsibilities that each of them would take on with respect to Janik’s retainer; iii. Neither of the lawyers prepared a retainer agreement to limit their retainer; and, iv. Neither of them discussed a limited retainer role with Janik.
E. Time Limits in Lien Action
20Stillman knew that, within two years, the lien action had to be set down for trial, failing which the lien could be removed. Olszowy was not aware of the two-year requirement to set down a construction lien action. Janik believed that Stillman would ensure that his lien did not expire, and he did not know to what extent (if any) Stillman was relying on Olszowy.
21Stillman had a diarization system but he did not diarize the two-year period. He has no notes or other written record of any of his contacts with Janik or Olszowy. He does not have a written record to reflect Janik’s instructions.
22Stillman did not know whether Olszowy was aware of the two-year deadline with respect to the lien. Stillman assumed that Olszowy diarized the two-year deadline but did not discuss this with him. Stillman did not diarize it himself because he believed that, if there was a limitation period, someone would come and instruct him to deliver a trial record.
F. Meetings with Janik
23Janik, Stillman and Olszowy met together on at least three occasions before March of 2011. Between March of 2011 and December of 2012, Janik left to work in Saudi Arabia. He returned to Ontario for three weeks in the fall of 2011.
24By early 2012, Janik was concerned about the slow progress of the lien action. In January of 2012, Janik consulted another lawyer, who was prepared to take over the litigation. A few days later, Janik met with Stillman and Olszowy to discuss his concerns. Janik and Olszowy both state that Stillman reassured Janik about the progress of the lien action and that Olszowy did not make similar assurances. Stillman denies making reassurances to Janik, although he has no notes of that meeting.
25Despite his concerns, Janik did not change lawyers. This is consistent with his evidence, in that Stillman’s reassurances convinced him not to change lawyers. I find, as a fact, that Stillman reassured Janik that he would move the matter forward; that he (Stillman) could handle the case; and that Janik was in good hands.
G. Steps Taken in the Lien Action
26From April of 2010 to February of 2012, Stillman sent or received approximately 43 letters to and from opposing counsel on the lien action. Olszowy assisted with settlement negotiations. In one letter dated May 13, 2010, Olszowy stated that he was acting as co-counsel with Stillman.
27In February of 2012, Szyszka served his defence in the lien action. Szyszka took the position that Janik was not entitled to a lien because he was an owner under the Construction Lien Act and could not file a lien against himself. Szyszka also said that his efforts to sell the property were being impeded by the lien.
H. Expiration of the Two-Year Deadline and Stillman’s Consent to Vacate Lien
28Pursuant to the Construction Lien Act, a plaintiff must set a lien action down for trial within two years of issuing the Statement of Claim. The two-year deadline in the lien action against Szyszka was April 18, 2012. That date passed without notice or discussion.
29On October 16, 2012, a bank lawyer wrote to Stillman and observed that the construction lien had expired six months earlier. The lawyer requested that the lien and certificate of action be removed from title. This was the first time that Stillman realized that the two-year period had expired. Stillman took no action, even though he knew Janik would be vulnerable if the lien was removed. He did not forward the letter to Janik or advise him of the contents.
30On January 11, 2013, the same lawyer wrote a follow-up letter to Stillman asking for a response to the first letter.
31In the motion before me, Stillman argues that Janik never had a valid lien because he was an owner and not a contractor. At some point, Stillman decided that the lien was not the appropriate remedy. Stillman believed that, since Janik was asserting an ownership interest in the property, he had no right to lien himself. It is not clear when Stillman came to this conclusion, although it is evident that he did not advise Janik of this opinion until after the lien was removed. Given his belief that the lien was not the proper legal remedy, and in light of the fact that the lien had expired, Stillman decided that it would be appropriate to consent to the removal of the lien.
32Olszowy states that he was unaware that Stillman was considering consenting to the removal of the lien. Stillman believes that he “would have” spoken to Olszowy about the request from counsel to vacate the lien but does not have a specific recollection of that and has no notes of such a discussion.
33Stillman believed that Olszowy would have diarized the date of the lien expiry. Stillman assumed that Olszowy must have let the date pass because the lien was vulnerable and the lien would not be worth defending. Stillman did not contact Janik to tell him that the lien had expired because he “felt that would be going behind Olszowy’s back.”
34In April of 2013, Stillman consented to an order vacating the lien. Stillman did not communicate with Janik about the consent or the order, and stated that he “didn’t really see any reason to (notify Janik)”.
35Stillman did not advise Janik that he could apply to register a Certificate of Pending Litigation or a Caution on title to continue protecting his interest in the property. Stillman knew that, once the lien was vacated, the property was vulnerable and could be sold.
I. Sale of the Property and Retainer of New Counsel
36On May 5, 2013, the property sold for $369,500 and Szyszka received a net payment of $360,340 as the proceeds of sale. On May 31, 2013, Janik’s daughter met with Stillman, who advised her that the lien was “gone”.
37Upon learning of the sale of the property, Janik changed counsel. A Notice of Change of Lawyer was delivered to Stillman, who refused to deliver up his file. Janik brought a motion to compel the delivery of the file and Stillman consented. New counsel moved to amend the pleadings in the lien action to include claims for constructive and statutory trusts in the proceeds of the sale of the property.
J. Orders in the Lien Action and Collection Efforts Against Szyszka
38On December 20, 2013, Justice Lococo dismissed a summary judgment motion brought by Szyszka in the lien action. Justice Lococo stated that, because of conflicting evidence, “the possibility of Mr. Janik being ultimately found to be a contractor entitled to claim a construction lien against the property cannot be excluded.” He also granted leave to Janik to amend the Statement of Claim.
39On December 2, 2014, Justice Nightingale awarded partial summary judgment to Janik for the sum equal to his share of the contributions to the property. The court directed that the trial proceed on the accounting issues and other issues in the claim and ordered that Szyszka pay money into court as security for costs.
40On March 3, 2015, after trial, Justice Flynn granted judgment to Janik against Szyszka for $265,563.62 including $65,000 in costs (“the Szyszka judgment”). Janik has recovered $53,000 on that judgment, which was the amount paid into court prior to trial pursuant to Justice Nightingale’s order.
41In the Stillman and Olszowy actions, the damages sought include $212,478.84 owing on the Szyszka judgment plus $1,848.16, which was the costs of the motion to force Stillman to turn the file over to his new lawyer. Janik’s claims in these actions are based on the fact that he lost his security in the property which has led to an inability to collect on the Szyszka judgment.
42Counsel for Stillman and Olszowy submit that Janik has failed to mitigate his damages in these actions because he has not made sufficient efforts to collect from Szyszka. On the other hand, Janik submits that his collection efforts have been appropriate. Janik has Szyszka’s bank records that were filed in support of the motion before Justice Nightingale in 2014. After the trial, Janik requested and received sworn voluntary financial disclosure from Szyszka (in lieu of a judgment debtor examination). Janik has registered a tracing order on Szyszka’s current property.
43Janik states that he does not have the money to aggressively pursue further collection efforts against Szyszka. Although he may be entitled to be indemnified for any reasonable collection efforts that he makes, he is concerned about what efforts will be perceived as reasonable and is hesitant to make any further efforts to collect from Szyszka without further direction of the court or absent an agreement for indemnification for any costs incurred.
44On August 5, 2015, counsel for Janik wrote to counsel for Stillman and Olszowy to ask whether their clients were willing to indemnify Janik for all costs incurred by Janik in pursuing reasonable mitigation efforts to recover from the judgment debtors in the underlying action (namely the Szyszkas). The defendants did not agree to indemnify Janik for his collection efforts.
III. ANALYSIS
A. Summary Judgment
45The court shall only grant summary judgment if it is satisfied that there is no genuine issue requiring a trial. Pursuant to rules 20.04(2)(a) and (2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the court shall consider the evidence submitted by the parties and may exercise any of the following powers for the purpose of determining whether there is a genuine issue requiring a trial, unless it is in the interest of justice for such powers to be exercised only at a trial:
- Weighing the evidence.
- Evaluating the credibility of a deponent.
- Drawing any reasonable inference from the evidence.
46In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada clarified the test to apply on a summary judgment motion. There will be no genuine issue requiring a trial if the evidence permits the court to make a fair and just determination on the merits. This will be the case when a motion for summary judgment (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.
47What is fair and just depends on the nature of the issues, and the nature and strength of the evidence. There is an obligation on each party to “put its best foot forward.” The responding party must present its best case or risk losing: Canada Mortgage and Housing Corp. v. Greenspon, 2015 ONSC 6882, at para. 28.
B. This is an Appropriate Case for Summary Judgment
48In the case before the court, Stillman argues that there are a number of material facts in dispute, and therefore this is not an appropriate case for summary judgment. Although the parties disagree on certain factual points, it is my view that the facts that are relevant to the issues can be properly determined on a summary judgment motion.
49There is little factual dispute between the evidence of Janik and Olszowy regarding the terms of the retainers of the two defendant lawyers. However, Stillman’s evidence on the retainer issue is quite different from that of Janik and Olszowy. Unfortunately, Stillman provided his affidavit after Olszowy passed away, so Olszowy did not have an opportunity to respond to it. In addition, Olszowy was not cross-examined on his affidavit.
50Stillman did not keep notes of any of his discussions with Olszowy and/or Janik. In particular, there were no notes or emails to confirm that Olszowy would assume responsibility to diarize the lien expiry dates and to advise the client of updates with respect to the lien. In addition, although Stillman states that his retainer was limited, there are no notes, letters or emails to confirm a limited retainer. Janik and Olszowy both disagree with Stillman’s recollection on these important points.
51Stillman’s affidavit and evidence during cross-examination contain many instances where he stated that he “would have” done certain things but is unable to say for certain whether he did, in fact, do those things. Stillman has little recollection of many of his meetings with Janik and Olszowy and he has no notes or other documents to support his version of events. Where the evidence of Stillman differs from that of Janik and Olszowy, I prefer the evidence of Janik and Olszowy.
52Stillman states that his retainer was limited. However, his consent to remove the lien without receiving instructions from Janik was not a step taken by a lawyer with a limited retainer. Although Stillman may have had his own perceptions and assumptions of his limited retainer in the lien action, I find that this was never specifically discussed with the client. Having considered the consent to remove the lien, together with Stillman’s lack of documentation and poor recollection (on certain critical points), I find that Stillman’s retainer was not limited.
C. Viability of the Construction Lien and Causation of Damages Suffered
53The parties agree that the Construction Lien Act only permits the registration of a lien if one is a contractor or workman. If a person has an interest in the property, he is considered an owner and cannot register a lien. If in fact Janik was a joint venture partner, he could not register a lien on the property.
54Stillman argues that Olszowy gave incorrect legal advice regarding the lien, and that it was this original error that caused Janik to suffer the loss. I reject this argument. Although the lien was arguably the incorrect legal remedy, it successfully preserved Janik’s interest in the property. The damages that Janik suffered, namely the non-preservation of equity in the property, only began when the lien was removed from title. Whether or not the lien was the correct legal mechanism, it accomplished the goal of preserving the equity. In this case, no damage was suffered from the registration of the lien, but rather damage was caused by the lifting of the lien without putting an alternative order in place to protect Janik’s interest in the property.
55If a lien was the incorrect legal remedy, a Certificate of Pending Litigation or a Caution could have arguably been registered on title in its place. Although it is not certain that Janik would have been successful when seeking those registrations on title, neither Stillman nor Olszowy ever suggested that these alternative instruments could be registered to protect Janik’s interest in the property.
56The lien action was not set down for trial within two years and expired. The following points in time were critical to protecting Janik’s interest in the property:
i. Once Stillman received Szyszka’s statement of defence, he should have advised Janik of the potential consequences of Szyszka pleading the “not a contractor, therefore no lien” defence; as well as the admission by Szyszka that Janik was a joint-venture owner and partner. ii. Stillman was aware, as early as March 30, 2011, that the lien was of “questionable validity.” As soon as Stillman concluded that a lien was not the appropriate legal remedy, he had an obligation to advise Janik. iii. When Stillman realized that Janik may have better causes of action, he (Stillman) should have discussed them with Janik. iv. Once Stillman became aware that the two-year time limit had passed without the matter being set down for trial, he had an obligation to advise Janik that the lien had expired. v. When Stillman received correspondence from counsel seeking his consent to remove the lien, he had an obligation to advise Janik and to seek instructions from him before consenting to removal of the lien. vi. Once Stillman decided that he would consent to remove the lien, he had an immediate obligation to advise Janik that the lien was about to be removed. He also had a duty to tell Janik that Szyszka wanted the lien removed so that he could sell the property, and that the sale was likely imminent.
At all of these points in time, Stillman had an obligation to provide Janik with information and to discuss other possible legal remedies that could protect Janik’s interest in the property.
D. Expert Opinions Not Required
57The court does not require an expert to provide an opinion regarding the conduct of the lawyers. The general standard by which a lawyer's conduct is measured is a question of law: Fellowes, McNeil v. Kansa General International Insurance Co. (2000), 138 O.A.C. 28 (C.A.), at para. 11; Krawchuk v. Scherbak, 2011 ONCA 352, at para. 125. Whether the lawyer has met that obligation is a question of fact: Wong v. 407527 Ontario Ltd. (1999), 179 D.L.R. (4th) 38 (Ont. C.A.), at p. 47.
58In my view, the court does not require expert evidence to determine the issues.
E. Duty to Mitigate
59The defendants argue that Janik has an obligation to exhaust his remedies to collect judgment before pursuing them for the shortfall. The burden to prove a failure to reasonably mitigate lies with the defendants: see Red Deer College v. Michaels (1975), 57 D.L.R. (3d) 386 (S.C.C.). In this case, the defendants have failed to establish that Janik failed to take reasonable steps to mitigate his loss. As previous courts have observed, the defendants are not in a position to too closely scrutinize the reasonableness of the innocent party’s attempt to mitigate.
60I find that Janik has taken reasonable steps to mitigate the damages. He is currently living and working in Saudi Arabia, and it would be a financial hardship to pursue the collection efforts any further.
F. Admissions in the Olszowy Action
61Janik served a request to admit on Olszowy, and certain facts were admitted by Olszowy. Janik’s counsel now argues before me that, even though he served the request to admit, those admissions are only applicable to Olszowy. Janik argues that this does not mean that he himself admitted those facts, and says that he should not be bound by those admissions.
62I reject this argument. In my view, Rule 51, which is entitled “Admissions”, was clearly drafted to permit admissions to be made in the course of an action in order to narrow issues. A formal admission is a concession made by a party that a certain fact or issue is not in dispute. It is conclusive proof of the matter admitted.
63To suggest that somehow a party is not bound by the admissions that he himself proposed to the other side and that were accepted by the other side is erroneous. If that were the case, any party who admits a proposed admission must also make that same request to admit to the other side in order to ensure that the other party would be bound by the admissions that they first proposed. This would be an absurd application of the Rule.
64There has not been a formal request by Janik’s counsel to withdraw the admissions. Even if there were such a request, I would not give effect to it. Many of the admissions are supported by the evidence of Janik and Olszowy, and by the pleadings. These admissions were made between the parties in the Olszowy action and are only admissions of fact in that action. They do not apply to the Stillman action.
65I find that the following admissions of fact have been made in the Olszowy action, and are therefore conclusive proof of the matters admitted:
i. Olszowy advised the plaintiff that he was not a civil litigator and did not practice construction. For that reason, Olszowy referred Janik to Stillman. ii. Stillman commenced and was the lawyer of record in the construction lien action. Janik believed and understood that Stillman would represent him in the action. iii. Janik believed and understood that Stillman would recommend the best course of action a) in the lawsuit; and b) to protect his interest in the property. iv. Janik believed and understood that Stillman would advise him of any risks associated with the manner in which they were proceeding. v. Janik relied on Stillman to do whatever was required to ensure that his lien did not expire. vi. Stillman reported to Janik’s daughter that the lien had expired. He did not suggest that Olszowy had been responsible to ensure the lien had not expired or to push the lien action along to judgment. vii. No document has been produced to show that Olszowy or Janik told or authorized Stillman to consent to an order vacating the lien from title.
66In the context of Olszowy’s action, the admissions set out above are significant. In light of the findings of fact that I have made with respect to Stillman’s actions, and in light of these admissions, I find that Olszowy was not responsible for Janik’s losses.
67In the result, the motion by Olszowy for summary judgment is granted. The action against Olszowy is dismissed and the motion for summary judgment against Olszowy is also dismissed.
G. The Duty of Care Owed by the Lawyer to the Client
68Negligence by a solicitor gives rise to liability in both tort and contract law: see Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147. The relevant standard of care is "reasonable competence and diligence" as S.M. Grant and L.R. Rothstein explain in Lawyers' Professional Liability, 2nd ed. (Markham, Ont.: Butterworths, 1998) at p. 17:
The standard of care and skill expected of a lawyer is reasonable competence and diligence. Thus, it is not sufficient to establish liability to show that a lawyer has made an error in judgment or shown ignorance of some particular part of the law; the error or ignorance must be that which a reasonably competent lawyer would not have made or demonstrated.
69This standard of care is both an implied term of the contractual retainer as well as a common law duty enforceable in tort law: see Kalish v. Rosenbaum (2009), 100 O.R. (3d) 169 (S.C.).
70The Court in HSBC Securities (Canada) Inc. v. Davies, Ward & Beck, [2004] O.J. No. 3806 (S.C.), at para.75, set out the duty of care owed by a lawyer to the client:
In general, the standard of competence expected of a solicitor is not perfection, but rather that of a reasonably competent and diligent practitioner. This standard is derived from Groom v. Crocker, [1938] 2 All E.R. 394 (Eng.C.A.), a decision which has been adopted and consistently cited by Canadian courts. Based on this standard, a lawyer's obligations have been described as follows:
a) To be skillful and careful; b) To advise his clients on all matters relevant to his retainer, so far as may be necessary; c) To protect the interests of his client; d) To carry out instructions by all proper means; e) To consult with his client on all questions of doubt which do not fall within the express or implied discretion left to him; and f) To keep his client informed to such an extent as may be reasonably necessary, according to the same criteria.
71Where there is no written retainer agreement or letter confirming the scope of retainer, the solicitor cannot limit his mandate to anything less than that required of a reasonably competent and diligent solicitor. Any ambiguity about the mandate shall be resolved against the solicitor. To do otherwise is to leave a client without the quality of legal services he would otherwise be entitled to as a matter of law and the freedom to retain and instruct another solicitor of choice if so advised: see ABN Amro Bank v. Gowling, Strathy and Henderson (1994), 20 O.R. (3d) 779 (Gen. Div.); and HSBC Securities v. Davies, Ward & Beck.
72A solicitor should not accept a brief that limits the ordinary authority or responsibility of counsel. This is thought to be universally recognized: see Duca Community Credit Union Ltd. v. Tay, [1995] O.J. No.3282 (Gen. Div.).
73Even when there is a limited retainer in place, solicitors still have a duty to advise their clients of any material information that comes to the solicitor’s attention and about which the client should be informed: see HSBC Securities v. Davies, Ward & Beck.
74A solicitor has a duty to warn the client of the legal consequences and risks involved in a course of action, and of exercising reasonable care and skill in advising him. If he fails to warn the client and it appears probable that the client would not have taken the risk if he had been so warned, the solicitor will be liable: see Kalish v. Rosenbaum.
75When a lawyer is the solicitor of record, he has a professional duty to ensure that the file is properly handled and the case is advanced in a timely way. The fact that another lawyer may be involved is irrelevant to that duty: see Aubid v. Minister of Citizenship and Immigration, 2007 FC 228. In my view, this is particularly true when there are significant consequences for the lawyer’s inaction, such as the lapsing of the two-year time limit to set a matter down for trial in a construction lien action.
76Applying these principles to the facts of the case at bar, I am satisfied that Stillman did not carry out his retainer with reasonable competence and diligence. As the solicitor of record in the lien action, Stillman should not have limited his mandate in the manner that he describes in this case. Further, there is ambiguity in the retainer that must be resolved against Stillman. I find that Stillman did not advise Janik, either verbally or in writing, regarding Stillman’s perceived limitations about his retainer.
77Not only did Stillman neglect to inform Janik of the potential risk of the removal of the lien and possible steps that could be taken to preserve his interest in the property, he actually consented to the lien being removed from title. He did so without getting instructions from the client and without notifying the client once he had done so. Even though Stillman was of the belief that the construction lien was the wrong remedy, he failed to raise this opinion with Janik and failed to offer advice as to alternative remedies to preserve his interest in the property.
78But for Stillman’s failure to keep the client fully informed, I find that Janik would have instructed:
i. That a trial record be served; ii. That he bring a motion to amend pleadings; iii. That he tie up the land through a Caution or Certificate of Pending Litigation; and/or, iv. He would have retained new counsel.
79Stillman failed to act in a careful manner; he failed to advise Janik of his belief as to the limits of his retainer; he failed to protect Janik’s interests; he failed to consult with Janik and obtain his instructions when he should have; and failed to keep Janik informed of significant steps in the lien action. Stillman’s primary duty was to the client, so he should not have held back information from Janik for fear of harming the relationship between Olszowy and his client. This complete failure to act was a dereliction of duty. Stillman is therefore liable.
IV. QUANTUM OF DAMAGES
80The damage suffered by Janik was the loss of security that protected his interest in the property. The quantum of damages was determined in the lien action and is not subject to review by this court. Janik is entitled to be put back in the position that he would have been in, but for the actions (or inaction) of Stillman. These damages were reasonably foreseeable as a consequence of the lawyer’s inaction.
81Since Stillman failed to protect Janik’s interest in the property, the amount of the damages is the shortfall from the Szyszka judgment that Janik is unable to collect, namely $212,478.84.
82Stillman argues that the $65,000 costs order made against Szyszka should not be included in the calculation of damages in the Stillman action. However, the Szyszka judgment includes the principal amount plus the costs order, and Janik has been unable to collect both amounts. I find that these losses are a direct result of the loss of security in the property and should be included in the calculation of damages.
83Janik also seeks damages of $1,848.16 for costs to bring a motion to force Stillman to turn the Szyszka file over to his new lawyer. In my view, a request for reimbursement of these costs should have been addressed at the time of that motion or as part of the consent to resolve that motion. The plaintiff has not proven that these costs were incurred as a result of Stillman’s failure to act with reasonable competence and diligence. I am not satisfied that this amount should be awarded as damages in this action.
84In addition, Janik seeks $15,049.30, which were his unrecovered costs of defending Szyszka’s motion to dismiss the Lien Action. These costs were incurred in addition to the $65,000 costs order noted above, and no previous court order was made requiring Szyszka to pay this amount. I find that these losses do not flow from the loss of security on the property, and Janik has not proven a basis upon which this amount should be awarded.
V. DISPOSITION
85In the result, the action against the defendant Olszowy is dismissed.
86The action against the defendant Stillman is allowed. Stillman is liable in tort and contract for breach of his duty of reasonable competence and diligence as Janik’s solicitor of record in the lien action.
87Accordingly, judgment is granted in favour of Janik in the Stillman action in the amount of $212,478.84 plus prejudgment interest pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43.
88Stillman shall be credited with any amounts recovered from the Szyszka action.
VI. COSTS
89In the event that the parties cannot agree as to costs, they are directed to provide written submissions as to costs. The submissions shall be no longer than two typed pages, double-spaced, in addition to any relevant offers or Bill of Costs. The successful parties on the motions shall provide costs submissions by July 29, 2016, and the other party shall provide any response by August 15, 2016.
Braid J. Released: June 27, 2016
COURT FILE NO.: 100/13 and 20/15 DATE: 2016-06-27 ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N: ANDRZEJ JANIK Plaintiff - and - PAUL M. STILLMAN Defendant
ANDRZEJ JANIK Plaintiff - and – THE ESTATE OF ANTHONY OLSZOWY, DECEASED Defendant
REASONS FOR JUDGMENT CDB
Released: June 27, 2016