CITATION: Alan Clausi PC v. Bullock, 2016 ONSC 8094
COURT FILE NO.: 14-62873
DATE: 20161230
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Alan Clausi Professional Corporation, Plaintiff/Responding Party
AND
James Bullock, Defendant/Moving Party
BEFORE: Mr. Justice Calum MacLeod
COUNSEL: John Cardill, for the Plaintiff/Responding Party
J. Alden Christian, for the Defendant/Moving Party
HEARD: December 1, 2016
COSTS ENDORSEMENT
[1] This was a motion to fix the costs of a summary judgment motion[^1] and the underlying action. The motion was scheduled for a half day. It is unfortunate that the motion had to be argued and it is unfortunate I now have to write reasons. Unfortunate because it occupied the time of the court and the time of experienced advocates that might better have been used in delivering justice elsewhere. Unfortunate because I am certain it is an embarrassment to everyone involved. And unfortunate because a modicum of common sense and flexibility at any stage of the proceeding would have avoided it all.
[2] Ordinarily the moving party who has been successful in dismissing most of an action by means of a summary judgment motion would be entitled to costs of the motion. Because the remaining portion of the action should have been in Small Claims Court, there is a powerful argument that the defendant should also have the costs of discoveries and other steps necessary in Superior Court but not in in Small Claims. Given my finding that the claim as drafted was an improper and abusive attempt to put pressure on the defendant by launching a frivolous claim, there is considerable justification for awarding those costs on a substantial indemnity scale.
[3] The only ameliorating consideration is the fact that the plaintiff was ultimately successful in obtaining reduction in the expert’s fee and a finding that the defendant had wrongfully failed to return the retainer. While the plaintiff’s strategy of launching an inflated claim for damages to collect this relatively minor debt should not be condoned, in fairness it should be observed that the plaintiff was not entirely incorrect in the underlying dispute. At best however, this might justify costs to the plaintiff on the Small Claims scale and offsetting those costs against the costs awarded to the defendant.
[4] On behalf of the plaintiff Mr. Cardill made a somewhat unusual argument. He acknowledged that his client had acted foolishly in initiating the law suit but he submitted that the defendant’s counsel had compounded this by responding in kind. He urged that this case be regarded as one of “co-operative stupidity” and that no one should be rewarded with costs. I suppose this would be the judicial equivalent of sending the children to bed without any supper when a parent is told “he started it.”
[5] Now that I am privy to the entire history of offers to settle and missed opportunities, there is some attraction to the Cardill solution. This is indeed a case in which proportionality, common sense, communication, and traditions of collegiality appear to have been largely ignored. As a consequence costs were incurred and judicial resources consumed out of all proportion to the real issues in dispute. It now appears the action could have been easily resolved at a preliminary stage for a nominal amount. Instead there were discoveries, motions, summary judgment an assessment of an expert’s fees and finally a contest about costs.
[6] After careful consideration I am not persuaded that the defendant should be deprived of his costs. Sadly, this conclusion requires a detailed examination of who did what and an allocation of fault.
Background
[7] The facts are stated in greater detail in my reasons for granting summary judgment.[^2] As set out in those reasons, the genesis of this dispute was a spat between a lawyer and an expert.
[8] James Bullock is an experienced insurance broker who often serves as an expert in cases dealing with insurance claims. He was retained by Alan Clausi, an Ottawa lawyer who was acting on behalf of a client denied insurance benefits. Mr. Clausi had hoped to obtain an opinion that might be useful to his client in pursuing the insurer and which might assist in settling the case at an upcoming mediation. When it became apparent the expert could not assist, Mr. Clausi instructed the expert to stop work, send him a bill and return the balance of the $5,000.00 retainer.
[9] Mr. Bullock eventually sent a bill for $2,768.50 and proposed to refund the balance of the retainer. Believing he was overcharged and had no work product to show for it, Mr. Clausi then threatened to sue Mr. Bullock. Subsequently he launched this action in the name of his professional corporation claiming damages against the defendant for $95,000.00 for breach of fiduciary duty, misrepresentation and other damages. Of course he also sought the return of the $5,000.00 retainer or the balance thereof. On being advised of the lawsuit Mr. Bullock had retained the funds.
[10] As I found when the matter came before me by way of summary judgment motion, the inflated claim was without foundation and had all the hallmarks of abuse of process. The worst the expert could possibly have been guilty of was overcharging for work he had not done. There was never any substance to a claim for damages.[^3] If litigation was ever appropriate, the matter should have been handled in Small Claims Court.
[11] Summary judgment was not the end of the matter. Although I dismissed most of the claim, there remained the fact that the balance of the retainer had not been returned and the proper quantum of the expert’s bill had to be determined. I referred the amount of the bill to the assessment officer.
[12] Given the amount in dispute, I had encouraged the parties to settle the amount of the bill and assumed they might do so. That is not what happened. The plaintiff retained outside counsel to represent it on the assessment. Mr. Bullock of course had already retained counsel.
[13] The assessment proceeded on July 26, 2016. The report of Assessment Officer Bender is appended to this decision. She reduced the expert’s fee to $1,500.00 inclusive of HST but did not award costs of the assessment hearing. No one opposed the motion and it was accordingly confirmed by the passing of time.
[14] This brings the action to an end except for the question of costs. It was for the latter purpose that the parties convened before me on December 1, 2016.
History of the Litigation
[15] We must begin by examining the genesis of the dispute. Mr. Clausi retained an expert in the hope that the expert might assist his client. This is a routine if not daily step in the practice of civil litigation. It is also one that the Law Society has seen fit to address in the Rules of Professional Conduct.
[16] Pursuant to Chapter 7 of the Rules, besides their legal obligation, lawyers have an ethical obligation to ensure that experts and others retained during the conduct of litigation are paid unless they have made other arrangements.[^4] Commentary 2 under the heading of “meeting financial obligations” advises that when “a lawyer retains a consultant, expert, or other professional, the lawyer should clarify the terms of the retainer in writing, including specifying the fees, the nature of the services to be provided, and the person responsible for payment.”[^5] That was not done here.
[17] Review of the correspondence and e-mails put in evidence reveal that Mr. Clausi followed a practice that at one time was widespread amongst the bar. He was careful not to put any instructions to the expert in writing and as soon as it appeared the expert would not be providing a useful report he immediately advised him “do not reduce anything further to writing” and that he did not wish to receive “any memo or any report.” This was in 2014 at a time before the Court of Appeal had disposed of Moore v. Getahun[^6] and there was uncertainty as to what might have to be disclosed under Rule 31.06 (3).
[18] I express no view on the propriety of avoiding documenting counsel’s substantive instructions to the expert. I would not like to be taken as approving of that practice but I am aware that it was widespread and the issue is not before me. It would nevertheless have been prudent to follow the advice in “Commentary 2” mentioned above. Had the scope of the work and the basis of the fee been documented, much of the subsequent misunderstanding could have been avoided. Of course Mr. Bullock could also have taken responsibility for documenting his fees but he is not a lawyer subject to the Rules of Professional Conduct.
[19] The next problem was the inappropriate escalation of the dispute. In the e-mail terminating the retainer of Mr. Bullock, Mr. Clausi had written: “please advise as to the amount of time you have spent on reviewing the materials, and invoice me up to date.” Although he now deposes that he thought he was to receive a report for a “flat fee,” clearly this e-mail was an invitation to bill him for the time spent by the expert. In fact two days later he sent another e-mail saying “could you bill me for you [sic] time and return the balance …”
[20] Upon receipt of the invoice, Mr. Clausi e-mailed Mr. Bullock indicating that: “I can’t justify that sort of bill for a review of the documents, especially since right now I have no report or substantive analysis of the issues,” and he went on to question the hourly rate. He concluded by asking: “Can you let me know what you can do about this bill because ultimately it is my client’s and I will have to speak to him about this.” There was nothing improper in the tone of this communication or in asking the expert to consider a reduction. Nor was there anything wrong with the response. Mr. Bullock advised that his usual hourly rate was $450.00 per hour and he had reduced it to $350.00 “out of consideration for the situation.”
[21] It was at this point that matters went entirely off the rails. Instead of taking responsibility for failing to confirm the hourly rate or terms of retainer at the outset, Mr. Clausi e-mailed back saying he felt he had received no “value for money,” that he saw at most four to five hours of work to review the materials and speak with him, and that experts “normally charge $100 per hour maximum for this sort of work.” He stated that he would agree to pay $700.00 plus HST.
[22] Mr. Bullock’s response remained restrained. He updated his account to add HST but did not reduce it. He stated that “if you were looking for a pro bono case, it should have been explained at the time of engagement,” and he provided the name of another potential expert.
[23] The response to this was to threaten litigation, including that his “client will claim all damages interest and costs,” and advising Mr. Bullock to be “100% certain as to what you want to bill on this matter because it will be litigated if your account is excessive.” The response to this was for Mr. Bullock to explain (correctly in my view) that “I am not an advocate for your case and my work is/was not contingent on finding information supportive of your case.” He added “you have my account” and that in response to the warning of litigation, he had retained counsel, and he provided the name of Mr. Geller at Doucet McBride LLP.
[24] Let me pause here to simply note that the difference between the offer to pay ($700.00 plus HST) and the amount of the invoice ($2,768.50 inclusive of HST) was less than $2,000.00. Since the assessment officer eventually determined that an appropriate fee would have been $1,500.00, with the benefit of hindsight it is clear that a modest degree of flexibility would have avoided what came later. In any event the dispute was one that was well within the limits of Small Claims Court.
[25] The fault in failing to establish the fee in advance and in failing to document it was Mr. Clausi’s. It was part of his duty as a lawyer to deal fairly and clearly with an expert and, as set out in the commentary, the Law Society expects lawyers to ensure that the terms of retainer are made clear. Of course this does not mean a lawyer cannot protest overbilling or underperformance but they are supposed to avoid this kind of dispute if possible.
[26] On the other hand, Mr. Bullock could have avoided further escalation by either reducing his account or at least refunding the balance of the retainer as he had said he would do. He did neither. He had no justification for withholding the balance of the retainer other than the threat of litigation.
[27] On December 16, 2014 Mr. Clausi caused this action to be commenced. As noted earlier, it was not commenced in the name of his client nor in the name of his law firm but in the name of Alan Clausi Professional Corporation. One must infer from this that the action had nothing to do with protecting the interests of a client but only recovering damages allegedly suffered by the plaintiff corporation. It is easy to imagine that the retainer had been paid by the plaintiff corporation but much harder to imagine how the defendant could ever have been liable in damages to Mr. Clausi through his professional corporation. In fact there was never any substance to the inflated claim.
[28] It is hard to overstate how improper it was for a lawyer to commence an action such as this against an expert he had retained in the circumstances outlined above. It was not simply foolish. It was a blatant attempt to bully the defendant by commencing inflated abusive and frivolous litigation.
[29] Lawyers representing clients are expected to do so fairly, honestly and honourably. They are to avoid sharp practice, abusive tactics or trickery. They are obliged to discourage clients from frivolous or vexatious litigation and they are to at all times treat the court or other tribunals with candour, fairness, courtesy and respect.[^7] No less should be expected of a lawyer acting as a litigant particularly if he or she is litigating against a person retained in the conduct of his or her professional practice. Commencing this litigation in this manner was at best a profound error in judgment. It is an error shared by Mr. Gardiner. Mr. Clausi through his professional corporation was the plaintiff but Mr. Gardiner was (and is) the lawyer of record.
[30] The plaintiff corporation was represented by Clermont Clausi Gardiner & Associates with David Gardiner as lawyer of record. It was Mr. Gardiner’s name which appeared on the statement of claim. The defendant retained McBride Bond Christian LLP. A statement of defence was served on January 30, 2015. Lindsey Park was lawyer of record for the defendant.
[31] The statement of defence contained a statement that because the claim “contains allegations that are seriously prejudicial to the Defendant’s character and reputation,” the defendant would be seeking full indemnity costs. This notice is in accordance with jurisprudence indicating that where dishonesty or professional misconduct are alleged in a pleading and the plaintiff is unsuccessful, costs on a higher scale are appropriate.[^8]
Offers to Settle and Other Attempts at Resolution
[32] On February 6, 2015 after delivering the defence as indicated above, the defendant also served a Rule 49 offer to settle. The defendant offered to return $3,000.00 to the plaintiff and to have the action dismissed without costs if the offer was accepted by February 16, 2015. This was in effect an offer by the defendant to reduce his fee to $2,000.00 inclusive of HST.
[33] Instead of accepting that offer Mr. Gardiner wrote back on February 9, 2015 to advise that he “would recommend” acceptance of the offer but he would also require payment of $354.74 for the costs of the action.
[34] Two observations must be made at this point. Firstly the parties were $354.74 apart and secondly the offer to settle by paying $3,000.00, being a Rule 49 offer, was still open for acceptance.
[35] On February 11, 2015 Mr. Gardiner sent a follow up letter stating that he was “prepared to recommend” that his client settle for the amount of $3,000.00 payable within 14 days. Why he did not simply accept the offer to settle made on February 6 has never been explained. Presumably he needed instructions from Mr. Clausi and was unable to get them. In any event the action could clearly have been resolved if Ms. Park and Mr. Gardiner had seized this opportunity. It as this point that those time tested dispute resolution tools such as the telephone or a shared coffee at Starbucks might have been usefully employed.
[36] Rather than taking these steps, Ms. Park responded on February 12, 2015 by withdrawing the February 6 offer (which Mr. Gardiner had effectively indicated he would accept) and reducing it. She made a new Rule 49 offer to return $2,500.00 to the plaintiff and to dismiss the action without costs if the offer was accepted by February 16, 2015. She did not take this step on her own initiative. Ms. Park was at that point a second year associate supervised by senior counsel. Her letter indicates that she had spoken with the client. So rather than concluding a settlement for the $3,000.00 offered on February 6, the defendant decided to reduce the offer by $500.00.
[37] On February 25, 2015 Mr. Gardiner wrote on behalf of the plaintiff making a formal offer to settle. This was an offer to accept $3,000.00 as an all-inclusive settlement providing the offer was accepted by March 6, 2015. This was not a Rule 49 offer since it stated that it was withdrawn if not accepted. It was of course precisely the same offer that Ms. Park had made three weeks earlier.
[38] So in February of 2015 two things were clear. Firstly the plaintiff was not serious about pursing the claim for $95,000.00. Secondly the action could have been settled by Mr. Bullock paying back $3,000.00 of the $5,000.00 retainer he was still holding. This did not occur.
[39] Mr. Gardiner then sent a Rule 49 offer on March 25, 2015 in which he offered to settle for $3,000.00 plus pre-judgment interest and costs to be agreed or assessed. Over the ensuing months he made two or three other offers to settle for similar amounts. In December of 2015 he sent an e-mail indicating that the Rule 49 offer remained outstanding for purposes of trial but also making an unequivocal offer to settle for $3,000.00 all-inclusive open for acceptance until December 31, 2015.
[40] Of course by that time the parties had run up costs on discoveries. The discovery of Mr. Bullock took place on March 30, 2015 in Toronto. The examination of the plaintiff took place on May 11, 2015 in Ottawa.
[41] Although it does not factor into the costs award because no motion was brought and there was never a resumption of the discovery, the discovery of Mr. Clausi was interrupted by an incident which was described in the previous reasons.[^9] I will not repeat the facts here except to say that Mr. Gardiner overreacted to a comment made by Mr. McBride in the course of the examination for discovery of Mr. Clausi which was being conducted by Ms. Park.
[42] Perhaps Mr. McBride should not have interjected as he did but to terminate the discoveries over his comment was unjustified. In fact Ms. Park’s question about any evidence of malice on the part of Mr. Bullock was entirely legitimate and it was Mr. Gardiner who improperly interfered in the examination by demanding that Ms. Park define “malice”. This incident is demonstrative of the failure of common sense and courtesy that had come to characterize this matter. Seeking punitive damages and then pretending there was anything unclear about the meaning of the word “malice” is frankly ridiculous.
[43] In any event the discovery demonstrated that there was no substance to a damage claim and there was no evidence to support any loss by the plaintiff corporation beyond the retainer itself.[^10]
[44] The next step was the summary judgment motion which took place on March 31, 2016.
Analysis
[45] As indicated at the outset, the appropriate disposition of costs in a case like this would ordinarily be costs of the summary judgment motion and the action on a substantial indemnity scale. This would be justified by the fact that the plaintiff is a lawyer (through his professional corporation) who launched a frivolous piece of litigation in this court in which he impugned the professional reputation of the defendant.
[46] The question is whether the costs should be reduced in any way because of the missed opportunities to resolve the action at a preliminary stage. In particular, should the defendant be penalized for withdrawing and reducing its offer when the action could clearly have been resolved by returning $3,000.00? That would have been a better result for the defendant than the finding that an adequate fee was $1,500.00 (thus requiring a notional refund of $3,500.00 of the $5,000.00 retainer).[^11]
[47] As set out above, Mr. Cardill acknowledges that his client acted foolishly in bringing this action but he was equally adamant that the defendant and his counsel should be taken to task for running up unnecessary costs. In his submission, there should be no costs. Subsequent to the hearing he provided me with a recent decision of Justice Hackland in Kavanagh v. Feihl Estate in which Hackland J. took counsel to task for unreasonably taking steps technically permitted by the rules but in the court’s view “a waste of the Court’s time and an unnecessary expenditure of costs for both parties.”[^12]
[48] Justice Hackland’s disposition was entirely appropriate in the circumstances of the case before him. In that case the plaintiff had commenced the action against several defendants in a motor vehicle accident for what the court held to be entirely legitimate reasons. Once it became apparent that there was no liability on the part of one of the defendants, the plaintiff attempted to discontinue the action but that defendant would not consent. Instead the defendant launched a summary judgment motion. This was found to be an abuse of process designed simply to run up costs and punish the plaintiff. Justice Hackland stayed the summary judgment motion and awarded costs against the defendant. A factor in that decision was the fact that defence counsel had previously been admonished by the court in very similar circumstances.
[49] This is not the situation I am faced with. Here the bulk of the plaintiff’s claim was frivolous and vexatious from the outset. The action was commenced in the Superior Court when but for the grafting on of the fanciful portion of the claim, it would have been properly brought in Small Claims Court. I found this to be abuse of process. The summary judgment motion brought by the defendant was almost entirely successful and it shortened the proceeding dramatically.
[50] The courts of this province do not exist for the benefit of lawyers although lawyers of course have the same rights as other citizens to access the courts for legitimate purposes. But lawyers as officers of the court and as “ministers of justice” holding special rights, privileges and knowledge also have duties and responsibilities. They should know better than to launch frivolous litigation to bully a person with whom they have a minor disagreement.
[51] There is nevertheless some attraction to Mr. Cardill’s submissions. With the benefit of hindsight, this action could have been easily settled and arguably proceeding with discoveries and the summary judgment motion were steps that were entirely unnecessary. No well-informed and rational client exercising common sense and given the choice of paying $250.00 or $500.00 to settle the action, or running up over $50,000.00 in legal costs, would have chosen the latter. The problem is that the plaintiff never abandoned this aspect of the claim, refused to move the matter to Small Claims Court and resisted the summary judgment motion.
[52] In the final analysis, it is not appropriate to deny the defendant his costs. The plaintiff purposely raised the stakes by bringing an improper action. The plaintiff declined to abandon the frivolous components of the claim and move it to small claims court. The plaintiff failed to accept the defendant’s offer to settle when it was open for acceptance even though it tried to make the very same offer later. The plaintiff never abandoned the excessive claims and continued to insist they were justified even while attempting to settle for $3,000.00.
[53] Rule 57.01 (1) and (2) read as follows:
Factors in Discretion
57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen
unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been
admitted;
(h) whether it is appropriate to award any costs or more than one set of costs
where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
Costs Against Successful Party
(2) The fact that a party is successful in a proceeding or a step in a proceeding does not prevent the court from awarding costs against the party in a proper case.
[54] In this case besides factor (0.a), indemnity, I consider factors (a) proportionality, (e) conduct of the plaintiff, (f) frivolity and vexatiousness, and (g) refusal to admit the claim was inflated as relevant.
[55] The defendant is entitled to costs of the motion and the action and, for the reasons given above, I agree this is a case for substantial indemnity costs. On the other hand, I agree that the quantum of costs is unreasonably high. Ms. Park was the lawyer of record. The dockets show considerable involvement by two senior counsel. When considering what costs should be assessed against the opposite party in litigation, it is important to look not at what internal arrangements might be appropriate inside the law firm handling the matter or at what the actual retainer with the client might justify but at the costs it is reasonable for the other party to bear.[^13]
[56] Under the circumstances, while I am awarding costs against the plaintiff on a substantial indemnity scale, I am reducing the amount I would otherwise order to take into account the modest success in what I am calling the small claims court action and some duplication in effort by various counsel working on the file.
[57] I am reducing the amount to be indemnified by a third. No serious issue was taken with the disbursements. I therefore order that the plaintiff pay costs of $36,300.00 to the defendant and judgment may issue accordingly.
Mr. Justice C. MacLeod
Date: December 30, 2016
SCHEDULE A – REPORT OF THE ASSESSMENT OFFICER
COURT FILE NO. 14-62873
DATE: August 19, 2016
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Alan Clausi Professional Corporation, Plaintiff
AND
James Bullock, Defendant
COUNSEL: J. Alden Christian, for James Bullock, defendant
John J. Cardill, for Alan Clausi Professional Corporation, plaintiff
HEARD: July 26, 2016
REPORT
[1] This is a reference in accordance with paragraph 52 of the endorsement of Master C. MacLeod, dated May 5, 2016. “A reference under this rule may be directed by the referring judicial officer to herself or himself, to another judge or master in certain circumstances or to “a registrar or other officer of the court”. Although I could by this means direct a reference to myself, given the amount in dispute and the nature of the issue, the matter is ideally suited to the Assessment Officer. The Assessment Officer in Ottawa must regularly deal with the value of expert bills when reviewing disbursements. In addition, the Assessment Officer may have dates available more readily than I do. Accordingly there will be a reference to the Assessment Officer at Ottawa to determine the amount owing.”
[2] In accordance with paragraph 60 of the endorsement of Master MacLeod, the costs of the reference will be at the discretion of the referee.
Background
[3] This reference is to deal with issue of expert services of James Bullock.
[4] The parties agreed that an order should have been taken out with respect to the reference by the plaintiff, Alan Clausi Professional Corporation. This was not done. However, both parties indicated their desire on July 26, 2016 to continue with the assessment as this would be the most efficient and expeditious matter to proceed. I granted this request as neither party wished a further delay.
[5] It is agreed that Mr. Clausi contacted Mr. Bullock by telephone in mid July 2014. The telephone conversation was confirmed with a brief letter and a retainer cheque in the amount of $5,000 along with a CD containing approximately 600 pages of documents on July 16, 2015.
[6] On July 31, 2014, Mr. Bullock received, via email, attachments containing medical information for his review. It is Mr. Bullock’s evidence that these documents amounted to several hundred additional pages.
[7] The parties agree that no discussion occurred regarding an hourly rate at this time until after Mr. Bullock submitted his account to Mr. Clausi.
[8] The parties agree that Mr. Bullock told Mr. Clausi during a telephone conversation on August 23 or 24, 2014 that his review of the documents did not help his case, but neither did they harm his case.
[9] On August 25, 2015, Mr. Clausi wrote to Mr. Bullock and advised him not to “reduce anything further to writing. I do not wish to receive at this time any memo, or any report. Please advise as to the amount of time you have spent on reviewing the materials, and invoice me up to date.``
[10] A September 18, 2104 invoice, in the amount of $2,768.50 representing 7 hours at $350.00 and $318.50 HST was provided to Mr. Clausi.
[11] Mr. Bullock testified that he had reduced his fees as a response to the plea from Mr. Clausi that his client was having financial difficulties and now had to retain a medical expert. Mr. Bullock stated during his evidence that $8,000 would have been a fair fee for the work he did. This included, the review of approximately 950 pages documents and the two telephone conversations with Mr. Clausi.
[12] Mr. Clausi believes that the work done by Mr. Bullock was of no value to his client and that the fees should be reduced to zero.
[13] Mr. Bullock testified that he had spent 25 hours reading and reviewing the materials. He knew that he would not be paid for this entire time. He compiled two binders of information and dockets. Only one binder was available at the hearing but it was not introduced into evidence. The second binder containing the dockets was not produced. The binder is presumed to have been destroyed.
[14] Mr. Bullock reacted badly to Mr. Clausi’s threat to sue him in an email dated September 18, 2014.
[15] It is confirmed that the $5,000 retainer was not, nor was any portion, returned to Mr. Clausi or his corporation.
[16] Mr. Bullock testified that he did read all the documents and was quite prepared to provide an opinion to Mr. Clausi. While it is clear that there was work done on this file, I have reduced the account to what I consider to be a fair and just amount given that no work product is available to substantiate the time spent.
[16] I asked Mr. Clausi if any or all of the disbursement for Mr. Bullock’s fees had been paid by the insurance company. At the hearing, Mr. Clausi explained that he had not forwarded the disbursement cost to the client as he felt that he could not bill the client for a report never received. Upon further questioning, Mr. Clausi informed me that he had asked that the disbursement be paid by the insurance company as part of the negotiations for settlement. However, he confirmed via telephone with the insurance company, Manulife, on July 26, 2106, that no amount had in fact been paid.
[17] On August 10, 2016, the day the parties were to attend for my decision, I received correspondence from Mr Clausi`s representative attaching an email, dated July 28, 2016 from Manulife and a letter from Mr. Clausi, dated August 2, 2016, informing his counsel that in fact, $1,384.25 had been received from Manulife towards the overall payment of this disbursement. I note this fact for information purposes only as the amount does not factor into my decision.
Decision
[18] After careful review of the materials provided, and of the sworn testimony of Mr. Alan Clausi and Mr. James Bullock, the account was assessed at $1,500.00 inclusive of HST.
Costs
[19] Counsel submitted costs outlines on August 10, 2016 for consideration. These outlines were reviewed after the decision was rendered. Mr. Christian, McBride Bond Christian LLP, sought costs of $7,244.35. Mr. Cardill, solicitor for the plaintiff, submitted partial indemnity costs at a rate of $6,871.46 and full indemnity costs of $11,238.03.
[20] No costs were awarded to either party.
CITATION: Alan Clausi PC v. Bullock, 2016 ONSC 8094
COURT FILE NO.: 14-62873
DATE: 20161230
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Alan Clausi Professional Corporation, Plaintiff/Responding Party
AND
James Bullock, Defendant/Moving Party
BEFORE: Mr. Justice Calum MacLeod
COUNSEL: John Cardill, for the Plaintiff/Responding Party
J. Alden Christian, for the Defendant/Moving Party
COSTS ENDORSEMENT
Mr. Justice C. MacLeod
Released: December 30, 2016
[^1]: Alan Clausi PC v. Bullock, 2016 ONSC 3033 (Master) [^2]: Alan Clausi PC v. Bullock, supra. As noted in that decision, Mr. Clausi is a member of the law firm, Clermont Clausi Gardiner & Associates, associates-at-law and the plaintiff is Alan Clausi Professional Corporation. [^3]: Supra, in particular paras. 34- 37 and 40-43. [^4]: Law Society of Upper Canada, Rules of Professional Conduct, Chapter 7, Section 7.1-2 and commentaries. Available online at: https://www.lsuc.on.ca/lawyer-conduct-rules/ [^5]: Supra, Section 7.1-2, commentary 2. [^6]: 2015 ONCA 55, 124 O.R. (3d) 321. [^7]: Rules of Professional Conduct, supra. See also the Advocates Society Principles of Professionalism and Principles of Civility available online at: http://www.advocates.ca/assets/files/pdf/publications/principles-of-civility.pdf. [^8]: For example, Murano v. Bank of Montreal (1995), 41 C.P.C. (3d) 143 (Ont. Gen. Div.). [^9]: Paras. 12 and 13, Reasons for Summary Judgment. [^10]: In fact it is now apparent that even that loss may not have been sustained. Following the assessment it was disclosed that Mr. Clausi had been reimbursed 50% of Mr. Bullock’s invoice by Manulife – see report attached. [^11]: I note that Rule 49 is not engaged because the Rule 49 offer was for $3,000.00 plus PJI and costs. [^12]: Kavanagh v. Feihl (Estate of), 2016 ONSC 7886. [^13]: Rules 57.01 (1) (o.b) and 57.01 (1) (c).