Court File and Parties

COURT FILE NO.: CV-16-548028 DATE: 20160610 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Charles Thomas Polanski, Plaintiff – AND – Sharon Ruth Ann Scharfe and Law Society of Upper Canada, Defendants

BEFORE: Justice E.M. Morgan

COUNSEL: Charles Thomas Polanski, in person J. Stanley Jenkins, for the Defendant, Sharon Ruth Ann Scharfe Fredrick Schumann, for the Defendant, Law Society of Upper Canada

HEARD: June 2, 2016

Endorsement

[1] The Plaintiff is a former law student who was terminated from his articling position at Legal Aid Ontario (“LAO”) a mere two weeks into his articling year.

[2] He has sued his supervisor and articling principal, Sharon Scharfe, for professional negligence and breach of professional duty. At the same time, he has sued the Law Society of Upper Canada (“LSUC”) for failing to ensure that Ms. Scharfe’s duties as articling principal were carried out as required by the applicable regulations.

[3] Both Defendants bring motions under Rule 21 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, seeking to strike the Statement of Claim for failure to state a cause of action.

I. What happened?

[4] I do not know what happened to abort the Plaintiff’s articles. These motions are argued on the basis of the pleading alone. One can read and re-read the rather brief Statement of Claim, but nothing will reveal why the Plaintiff was fired.

[5] To make a short story long, the pleading does not disclose what led to the unfortunate situation in which the Plaintiff now finds himself and what, if anything, he did to deserve having his career cut short at such an early stage. Nor does it reveal why his employer, LAO, dismissed him, what steps Ms. Scharfe as articling principle took or did not take culminating in the termination of his articles, or what LSUC as regulator did or did not do in response to this situation, etc. For inexplicable reasons – except, perhaps, for the fact that the Plaintiff is representing himself and is by definition inexperienced, having been fired after all of two weeks as an articling student – the pleading leaves much of the factual basis of the claim unstated.

[6] As far as one can gather from the Statement of Claim and the Plaintiff’s legal submissions, the allegation is simply that an articling principal has certain statutory obligations to supervise a student, and LSUC has certain regulatory duties to ensure that the principal’s obligations are fulfilled. The Plaintiff relies heavily on section 10.36 of the Lawyer Licensing Process Policies, which states that “a Candidate or principal may terminate articles where problems arise between the candidate and the principal that cannot be resolved to the satisfaction of both the candidate and the principal.”

[7] The Plaintiff states that there was no unresolvable problem between himself and Ms. Scharfe. Without citing any further authority, he then submits that section 10.36 affords him a cause of action against Ms. Scharfe since the articling principal is specifically referenced in this section, and against LSUC since it is LSUC’s own licensing process that he alleges has been breached. The claim, in essence, is simply that termination at this early stage of articles entails a breach of the respective obligations of his principal and LSUC. There is literally nothing more to be gleaned from the claim.

II. The Law Society of Upper Canada

[8] As against LSUC, the answer to the Plaintiff’s action is straightforward.

[9] In the first place, section 10.36 of the Lawyer Licensing Process Policies places no specific duty on LSUC, and there can be no cause of action against LSUC for breach of that non-existent duty. The section is addressed to the relationship that prevails between the principal and the articling student, and nowhere addresses the regulator’s role.

[10] The Plaintiff in his submissions suggests that in allowing his articles to be prematurely terminated, LSUC has not carried out the “articling program” that it is mandated to administer, and that it has therefore failed to provide the “service” that it must provide. This, however, mischaracterizes LSUC’s role. LSUC is the regulator of the lawyer licensing procedure, not a service provider or program administrator. LSUC no more administers an “articling program” or provides a “service” for licensees than Canada Revenue Agency administers a “taxation program” or provides a “service” for taxpayers. That is simply not the function of the regulatory body.

[11] In any case, LSUC has a statutory immunity from this type of claim.

[12] Section 9 of the Law Society Act, R.S.O. 1990, c. L.8 provides LSUC with immunity for “any act done in good faith in the performance or intended performance of any duty or in the exercise or in the intended exercise of any power under this Act, a regulation, a by-law or a rule of practice and procedure, or for any neglect or default in the performance or exercise in good faith of any such duty or power.” This immunity is as broadly stated as could be, and encompasses the entire regulatory mandate of LSUC.

[13] In Conway v Law Society of Upper Canada, 2016 ONCA 72, the Court of Appeal confirmed the breadth of the statutory immunity under section 9 of the Law Society Act. Only in the event of bad faith or malice on the regulator’s part could a claim be sustained in the face of the statutory immunity. As the Court put it at para 22 of Conway, “Mere negligence in the good faith performance of the LSUC’s duties or functions is not enough to establish liability.”

[14] In Finney v Barreau du Quebec, [2004] 2 SCR 17, 2004 SCC 36, the Supreme Court of Canada considered a similar immunity provision in the parallel Quebec legislation, and extended the narrow exemption from immunity from bad faith on the part of the Barreau to gross negligence. Assuming that this extension would apply equally to LSUC under the Law Society Act, the Plaintiff would have to plead gross negligence and, most importantly, a set of facts which could amount to gross negligence. The present claim is, even on the most generous reading, pleaded as a case of ordinary negligence, not gross negligence.

[15] Not only has the Plaintiff failed to plead facts which take the claim outside the scope of the section 9 immunity, it is virtually impossible to conjure up a set of facts that would suffice under the circumstances. The Plaintiff makes it clear in his submissions that he has no such knowledge, and that his claim is premised simply, and solely, on the fact that he was terminated and that LSUC’s regulations did not permit that to happen.

[16] Accordingly, not only is LSUC immune from the present claim, but the Plaintiff has not established any grounds on which he could amend his pleading to get around this immunity. In RWDI Air Inc. v N-SCI Technologies Inc., 2015 ONCA 817, at para 14, the Court of Appeal observed that, “Where a plaintiff seeks leave to amend its claim to make new allegations, but it is clear that he does not have knowledge of, and therefore cannot plead, the material facts to support the allegation, leave to amend may be refused.”

[17] The claim against LSUC discloses no cause of action, and there is no prospect that an amendment to the Statement of Claim will cure this fundamental defect in the pleading.

III. The articling principal

[18] Turning to the claim against Ms. Scharfe, her counsel points out that there is no claim against LAO resulting from the Plaintiff’s dismissal from his employment. The claim is strictly against Ms. Scharfe, herself an employee of LAO, in her capacity as the Plaintiff’s articling principal.

[19] Counsel for Ms. Scharfe contends that this omission is fatal to the Plaintiff’s claim. He analogizes the situation to that in Polimeni v Danziger, [1995] MJ No 445 (Man QB), which entailed a suit by a medical trainee against two doctors who supervised him at a hospital. There, the court indicated that if the supervisor/employee is not acting for personal gain, it is the employer who must be sued, not the supervisor/employee.

[20] In addition, Ms. Scharfe’s counsel distinguishes Ms. Scharfe from the defendant in Gichuru v Smith, 2010 BCSC 234, 2010 BCCA 352. There, the claimant sued his law firm employer and his articling principal for termination while an articling student. The court allowed the principal to be sued personally along with the firm because the principal was the directing mind of the sole practice law firm. Ms. Scharfe, of course, is not in that position with respect to Legal Aid Ontario. She is herself just one more employee of LAO. Although she is in a supervisory role vis-à-vis the Plaintiff, she is not LAO’s directing mind the way a lawyer is the directing mind of his own sole practice.

[21] Ms. Scharfe does not contend that an articling principal has no duties to fulfill; rather, her position is that those duties are narrowly circumscribed. She relies on Funnel v Peat, Marwick, Mitchell (1974), 97 DLR (3d) 459, 467 (BCSC), where the court commented on the licensing process for chartered accountants to the effect that, “the object of the statutory ‘scheme’ is to provide students with an opportunity to qualify for professional standing and not to ensure regularity or tenure of employment.” Similarly, for the lawyer licensing process, counsel for Ms. Scharfe qualifies the duty of care of the principal to the student as encompassing guidance, providing “meaningful work”, administering the professional responsibility examination, and filing the proper paper work.

[22] This characterization of the principal’s duties toward the articling student concedes that there are professional responsibility issues at stake. An articling principle must be a lawyer herself, and although the duties of a lawyer/principal to an aspiring licensee are different than the duties of a lawyer to a client, they are part of the principal’s professional responsibilities once the role of articling principal is taken on. It is at least arguable that a breach of these responsibilities is actionable for professional negligence. There is enough of a potential cause of action in this relationship to pass the low threshold set out in Hunt v Carey, [1990] 2 SCR 959; that is, if a reasonable cause of action can be made out it ought not be struck at the pleadings stage even if there is a potential defense.

[23] The Plaintiff’s problem here is not so much that the pleading discloses no cause of action known to the law, but that there is insufficient factual support for a cause of action in professional negligence. Ms. Scharfe’s breach of duty is asserted as a bald fact, with nothing further to indicate what she did to allegedly fail to fulfill her professional duties or to fall below the requisite standard of care. Rule 25.06(1) provides that a pleading should contain “a concise statement of the material facts on which the parties relies”. The pleading in issue here studiously refrains from revealing the material facts on which the Plaintiff relies in bringing his claim.

[24] In Witten v Bhardwaj, Master Haberman provided a useful summary of the type of material facts that should be included in a Statement of Claim alleging negligence. As the learned Master outlined it:

Generally, a fact is considered ‘material’ when it constitutes a necessary element of the cause of action grounding the suit and supports the theory of the case as advanced by the party pleading it in a legally relevant manner. For example, in a tort action such as this one, the material facts are those that:

• explain who the parties are;
• identify the event or events giving rise to the claim;
• explain why each party has been sued, by listing what each has done or failed to do to cause or contribute to their damages; and
• details the damages suffered and the ensuing losses.

[25] The Plaintiff’s claim of professional negligence against Ms. Scharfe, while theoretically stating a viable cause of action, is entirely bereft of material facts. Without amendment, it cannot stand.

IV. Disposition

[26] The claim against LSUC is struck out, without leave to amend.

[27] The claim against Ms. Scharfe is struck out, with leave to amend in order to include the material facts necessary to support a cause of action in professional negligence. Any Amended Statement of Claim shall be served on counsel for Ms. Scharfe within 30 days of today’s date, failing which the Statement of Claim is hereby struck without leave to further amend.

[28] Although both Defendants were successful on this motion (with LSUC slightly more successful than Ms. Scharfe), I am inclined to exercise my discretion under section 131 of the Courts of Justice Act by not granting costs to those parties. The Plaintiff is a former law student who has suffered a great blow. He made it all the way through law school only to have his articles – i.e. his career as a lawyer – terminated at an early stage. LSUC and LAO (which represents Ms. Scharfe here) are institutional embodiments of the legal profession, and it does not seem appropriate under the circumstances for the profession to impose its legal costs on a disappointed student in the Plaintiff’s position.

[29] There will be no costs for or against any party.

Morgan J. Date: June 10, 2016