Court File and Parties

COURT FILE NO.: CV-13-486211-0000 DATE: 20170111 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Peter Verbeek, Plaintiff AND: Rene Liebs-Benke, Defendant

BEFORE: Pollak J.

COUNSEL: Patrick Di Monte, for the Plaintiff Sean Dewart, for the Defendant

HEARD: October 13, 2016

Endorsement

[1] This is a motion for summary judgment dismissing the Plaintiff's claim against the Defendant.

[2] The Plaintiff Peter Verbeek is a lawyer. He had powers of attorney for property and personal care of a client. In 2007, the client's relatives brought an application seeking to set aside the Plaintiff’s power of attorney and to compel him to formally pass his accounts. The Plaintiff retained the Defendant Rene Liebs-Benke to respond and appear on the Application.

[3] In 2008, the court found that Mr. Verbeek had neglected his duties and ordered his removal as attorney. Mr. Verbeek was also ordered to pass his accounts. In 2009, the court ordered him to pay $64,429.62 in costs.

[4] On August 2, 2013, Mr. Verbeek issued his claim against the Defendant, Rene Liebs-Benke, for solicitor's negligence. The Statement of Claim alleges that Mr. Verbeek was removed as attorney and ordered to pay costs to his former clients because Mr. Liebs-Benke failed to respond in a timely and complete manner to the inquiries made by opposing counsel on their Application in the powers of attorney action.

[5] The Plaintiff claims damages for the costs Order, the fees paid to new counsel to complete the passing of accounts ($7,713.51), the compensation he would have earned if he remained as attorney for property ($245,563.67), and the reimbursement of fees he paid to the Defendant ($52,930.14).

[6] The Defendant argues that the Plaintiff's claim is statute-barred because the Plaintiff was aware of all of the material facts required to issue his claim as early as October 2008, and no later than July 20, 2009. The Defendant submits that the Plaintiff has not provided this Court with evidence to establish that there is a genuine issue requiring a trial. Summary judgment should therefore be granted in favour of the Defendant.

[7] The Plaintiff, however, alleges that he “discovered” the Defendant's negligence on August 29, 2011, when he was able to consult another lawyer and determine that the Defendant’s conduct was negligent.

[8] The Plaintiff’s only evidence on this motion (which the Defendant objected to because it was not filed in accordance with the timetable agreed to between the parties) is as follows:

“Shortly after the subject email, there was a meeting between myself and Rene Liebs-Benke to discuss the nature of the file and I distinctly recall the Defendant advising me that I had misunderstood and that I could be reimbursed my fees and expenses and costs from the estate.

I therefore left that meeting with the distinct impression that I could be reimbursed. Thereafter, when I sought the advice of Romeo D’Ambrosio, who assisted me in matters relating to this file, Mr. D’Ambrosio told me that the Defendant’s advice was incorrect and that there was “no way” that the estate would reimburse me.”

[9] The email he refers to was dated July 20, 2009. This email from the Plaintiff to the Defendant stated:

“I had understood from you at the beginning of this matter that I was entitled to any legal fees that I spend as power of attorney to defend any challenges to my appointment. Yesterday you advised that is not so, and I will not be able to recover these expenses.”

[10] The Defendant denies that he met the Plaintiff shortly after July 20, 2009. His evidence is that his last meeting with the Plaintiff was on October 7, 2008 when that he told the Plaintiff that he would not be able recover his fees, expenses and costs from the estate.

[11] The Defendant argues that at the Plaintiff’s examination for discovery, he admitted that he was aware of the Defendant's alleged negligence and the resulting damages at the time he wrote the email, referred to above, to the Defendant on July 20, 2009. The Defendant relies on the following question and answer at the Plaintiff’s Examination for Discovery:

“Q. 328 Just wait for your counsel. So you see…I only have a question about your e-mail of July 20, 2009. The last paragraph you write:

“…Now you are telling me that I am personally liable for costs that cannot be recovered, and I will not be able to recover any monies paid to you, so I am out of pocket about $120,000…”

Is that true?

A. Well, that’s what I wrote him, so that would have been my understanding of a conversation I had with him. I thought it might have been in response to his e-mail of July 18, but obviously somewhere along the line I must have had some communication from somebody, and likely Rene, and what I would have done is I would have gone in and had a discussion with him again at that point…”

[12] The Defendant submits that in a solicitor's negligence action, the foundation for the action is a mistake by a lawyer and its consequential damage. When a limitation period defence is raised, the onus is on the Plaintiff to show that his claim is not statute-barred, and that he behaved as a reasonable person in the same or similar circumstances using reasonable diligence in discovering the facts relating to the limitation issue. It is argued that it does not matter if the claimant appreciates the legal significance of those facts, because "discovery applies to the facts, not the law". The limitation period begins as soon as the Plaintiff is (or ought reasonably to be) aware of the material facts constituting the elements of the cause of action.

[13] In this case, the Defendant argues that the Plaintiff discovered his Claim by October 7, 2008 when he met the Plaintiff and told him that he would not be reimbursed for fees, expenses and costs from the estate. The Plaintiff sent the Defendant an email the following day, October 8, 2008, as follows:

“I had understood from you at the beginning of this matter that I was entitled to any legal fees that I spend as power of attorney to defend any challenges to my appointment. Yesterday you advised that is not so, and I will not be able to recover these expenses.”

[14] The Defendant submits that this shows that the Plaintiff was aware of all of the material facts required to bring his claim as of October 2008.

[15] The only issue on this motion is whether there is a genuine issue requiring a trial.

[16] The Defendant relies on s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, that states that no action can be started after two years have passed from the day on which the claim was discovered. A claim is presumed to be discovered on the day on which “the act or omission on which the claim is based took place”, unless the contrary is proved.

[17] Section 5 of the Act provides that a claim is discovered on the date when a person knows (or ought to have known) that he or she has sustained injury, loss or damage, that the damage was caused by the Defendant's act or omission and that a proceeding would be an appropriate means to seek to remedy the damages.

[18] The onus is on the Plaintiff to show that his claim is not statute-barred, and that he behaved as a reasonable person in the same or similar circumstances “using reasonable diligence in discovering the facts relating to the limitation issue.”

The test for summary judgment

[19] The parties agree that the roadmap established by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 must be followed by this court on this motion for summary judgment.

[20] In Hryniak, the Supreme Court of Canada stated at paragraph 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…

[21] Further, the court stated in paragraph 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.

[22] These principles were applied by the Ontario Court of Appeal in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438, where the court held at paragraphs 33-35 that the motion judge is obliged to assess the advisability of a staged summary judgment process in the context of the “litigation as a whole.” Failure to do so is a material error in principle by the motions judge.

[23] In the case of Shukster v. Young et al., 2012 ONSC 4807 at para. 19, the court summarized the law with respect to the burden of proof on summary judgment motions on limitations issues as follows:

• “Subsection 5(1)(a) contains a subjective test that focuses on the Plaintiff’s actual knowledge of the types of facts enumerated under that provision. Evidence that the Plaintiff had actual knowledge of such matters will trigger operation of the limitation period. However, a lack of such evidence and/or a denial of such actual knowledge will not suffice to prevent a finding that operation of the limitation period was triggered, if other provisions of section 5 indicate that such a finding is appropriate.
• In particular, subsection 5(1)(b) contains a second test that is objective, and requires the Plaintiff’s knowledge to be assessed in relation to a standard asking when a reasonable person, with the Plaintiff’s abilities and in the Plaintiff’s circumstances, ought to have had knowledge of the matters enumerated in subsection 5(1)(b). This in turn usually leads to a consideration of the steps such a person would have taken to acquire such knowledge. In effect, the question becomes one of determining when the Plaintiff, in the particular circumstances of the case, ought to have learned of such matters. One must ask why the Plaintiff and his/her solicitor were unaware of such matters until some later point. The applicable standard is that of a “reasonably prudent person in pursuing the facts”.
• Moreover, subsection 5(2) goes further, and establishes a rebuttable presumption that the Plaintiff did know of such matters on the day the underlying act or omission took place. The burden is on the Plaintiff to rebut that presumption. In other words, once a Defendant has pleaded a limitations defence, the evidentiary burden is on the Plaintiff to prove that the claim was issued within the limitation period.
• Pursuant to Rule 20, a party moving for summary judgment retains the overall burden of showing that there is no genuine issue requiring trial. However, where a Defendant moves for summary judgment in relation to a statutory limitation period, the evidentiary burden as to the discoverability issue and under Rule 20 effectively shifts to the responding party under section 5(2). In particular, the Plaintiff must adduce evidence sufficient to demonstrate that there is a genuine issue, requiring trial, concerning operation of the limitation period pursuant to subsections 5(1) and 5(2). In particular, a Plaintiff seeking to defeat operation of the limitation period on such a motion has the onus to rebut the presumption in s.5(2), or at least demonstrate that there is a genuine issue requiring trial as to whether that presumption is rebutted.
• Such determinations are fact driven, and must be decided based on the particular circumstances of each case. [Emphasis added.]”

[24] In the case of Sabourin v. Proulx, 2011 ONSC 4099, 17 C.L.R. (4th) 178 at para. 22 the test to determine the limitation issue was summarized as follows:

1. What facts did the Plaintiffs know and when did they know them?
2. What facts existed that the Plaintiffs were unaware of and when did they acquire knowledge of them?
3. Is this a case where an expert’s report is required to institute a claim?
4. Did the Plaintiffs act with reasonable diligence?

[25] Applying the principles discussed above, I must ask: just on the basis of the evidentiary record alone, are there genuine issues that require a trial? I must also ask: does the evidentiary record before me provide me with the evidence I need to "fairly and justly adjudicate the dispute" in the context of litigation as a whole?

[26] The burden of proof to rebut the presumption set out in the legislation is on the Plaintiff. His evidence is that another lawyer told him on August 29, 2011 that his costs would not be reimbursed. When I apply the Hryniak roadmap I have referred to above, I am of the view that I can make a fair and just determination on the basis of the evidentiary record before me. I find that the Plaintiff has not been able to provide the Court with the necessary evidence to show that there is a genuine issue requiring a trial with respect to the limitation defense. He has not met his burden of rebutting the presumption that the limitation period has run out, barring his action. I find that the evidence shows that he was aware of the Defendant’s alleged negligence by July, 2009 at the latest, on the day he sent the Defendant the email I have referred to above. At that time, he knew that he would not be able to recover his fees incurred to defend the proceedings against him. He also knew all the material facts which would establish his cause of action. In my view, he did not conduct himself as a reasonable person in similar circumstances to “using reasonable diligence in discovering the facts relating to the limitation issue.” The Plaintiff’s evidence is not, in my view, sufficient evidence to establish that there is a genuine issue requiring a trial on the defence of “discoverability”.

[27] I therefore find that the Plaintiff has not been able to satisfy his burden of proving that the limitation period in this action has not expired. The Defendant’s motion to have this action dismissed on the grounds that it is statute barred is therefore granted.

Costs

[28] If the parties are unable to agree on costs, they may make brief written submissions to me no longer than three pages in length. The Defendants’ submissions are to be delivered by 12:00 p.m. on January 20, 2017, and the Plaintiff’s submissions are to be delivered by 12:00 p.m. on January 30, 2017. Any reply submissions are to be delivered by 12:00 p.m. on February 9, 2017.

Pollak J. Date: January 11, 2017