CITATION: 4381840 Canada Inc. v. Charron, Langlois LLP et al., 2017 ONSC 5043
COURT FILE NO.: 16-71040
DATE: 2017/08/24
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
4381840 Canada Inc.
Plaintiff
– and –
Charron Langlois LLP/S.R.L., Société Professionnelle Langlois Professional Corporation, Stéphane Langlois (alias Joseph Stéphane Langlois, alias Stéphane Joseph Langlois), Pierre Charron (alias Joseph Pierre Charron, alias Pierre Joseph Charron), and Charron Pilon Sauvé LLP/S.R.L.
Defendants
COUNSEL:
Yannik S. Guilbault, Stéphane Hutt, Counsel for the plaintiff/respondent
Craig Bater, Counsel for the plaintiff/respondent in Court File No. 17-72697
Stephen Cavanagh, Counsel for the defendants/moving parties Langlois
Colin Dubeau, Counsel for the defendants/moving parties Charron and Pilon
Martin Z. Black, Counsel for the defendant 2158390 Ontario Inc. cob Boston Pizza in Court File No. 17-72697
Mathieu Demilly, Counsel for Denise Scaglione in Court File No. 16-71054
David B. Debenham, Counsel for Richard and Nancy Charette in Court File No. 16-71015
Jason Shelley, Counsel for Patrice Houle in Court File No. 16-71203
2030616 ONTARIO INC.
Marie-Josée Gauthier
Brad Phillips, Counsel for LawPro
HEARD: August 18, 2017
ENDORSEMENT
Justice P.E. ROGER
Are the circumstances sufficient to make an order consolidating 48 actions started by the same plaintiff?
Introduction
[1] The plaintiff, 4381840 Canada Inc., recently commenced 48 court actions. Thirty-eight of those actions are before the Ottawa Superior Court of Justice and 10 are before the L’Orignal Small Claims Court branch of the Superior Court of Justice. All of these actions involve allegations relating to a loan that is specific to each court action started by the plaintiff, to defaults under the applicable loan, and to various causes of action including breach of contract, negligence, breach of fiduciary duty, and vicarious liability. The causes of action are primarily directed against the plaintiff’s former lawyers who were allegedly involved in each of these transactions.
[2] The plaintiff is the same in all actions. The lawyers allegedly involved in these many transactions are, with some variations, named as defendants in all actions. In addition, as some of the many loans made by the plaintiff were allegedly made to other parties, these other parties are also named as defendants in the court action relating to their specific loan.
[3] The plaintiff is represented by the same law firm in 47 of these 48 actions. Because of a conflict of interest with a defendant in one action, the plaintiff is represented by another lawyer in action number 17-72697.
[4] The lawyer who it is alleged was primarily involved in all of these transactions with the plaintiff is named as a defendant in all actions. This defendant is represented by the same lawyer in all 48 actions. The alleged partners of the lawyer primarily involved in these transactions with the plaintiff are represented by another lawyer and this lawyer is also the same in all 48 actions. The other parties to whom some of the loans were allegedly made, who have been named as defendants in some of the 48 actions, are at this stage not all identified; some are only identified by a pseudonym. To date some of these other defendants have appointed a lawyer and some have not.
[5] The 47 actions in which the plaintiff is represented by the same law firm were all started in December 2016. The 47 statements of claim issued for these actions are all written in French. The one action in which the plaintiff is represented by another law firm was started in May 2017 and the statement of claim for that action is written in English. All actions are still at the pleading stage; a notice of intent to defend has been filed in one of the 47 actions and a defence and crossclaim has been filed by a defendant other than the defendants lawyers in the action having court file number 17-72697.
[6] The two groups of lawyers primarily involved as defendants (the lawyer allegedly involved in all transactions and his alleged partners) bring a motion arguing that: (1) the 38 actions before the Ottawa Superior Court should be consolidated into one action, and (2) the 10 actions before the L’Orignal Small Claims Court should also be consolidated with the 38 Ottawa Superior Court actions.
[7] The plaintiff opposes consolidation of the first 37 Ottawa Superior Court actions; it opposes consolidation of the 38th Ottawa Superior Court action (the action having court file number 17-72697) with the other 37 Ottawa Superior Court actions; and it opposes consolidation of the 10 Small Claims Court actions together and with the Superior Court actions. The other parties named as defendants who appeared at the motion also oppose consolidation. The plaintiff and the other defendants who appeared at the motion argue that such a request is premature because defences have not yet been provided by the primary defendants (the defendants lawyers) in any of the 48 actions. Alternatively, the plaintiff argues that an order that the first 37 Superior Court actions be heard at the same time or one immediately after the other would be sufficient to address the concerns raised by the lawyer defendants. In addition, the plaintiff asks for an order that the first 37 Superior Court actions be case managed and that appropriate timelines and directives be provided.
[8] The plaintiff, in its notice of motion, also asked the court for an order under rule 21 of the Rules of Civil Procedure confirming that the claims made by the plaintiff in each of these actions are distinct from each other. However, at the hearing of these motions the plaintiff indicated that this request was not proceeding. Consequently no order is made relating to that request, which is adjourned on a without prejudice basis.
Should the 38 Superior Court actions be case managed?
[9] The request for case management was not opposed at the hearing of the motion.
[10] A need for case management is established considering the complexity of some of the issues of fact and law, the number and type of parties, the number of proceedings, the time likely required for discovery, and the number of interventions likely required by the court.
[11] However, some of the 38 actions were brought under the simplified procedure rule and these actions are specifically excepted from case management (see rule 77.02 (2) (g) of the Rules of Civil Procedure). Nonetheless, considering again the complexity of some of the issues of fact and law, the number and type of parties, the number of proceedings, the time likely required for discovery, and the number of interventions likely required by the court, the court may in these circumstances exercise its discretion and order that all 38 actions before the Ottawa Superior Court, including the simplified procedure actions, be case managed (see rule 2.03 which allows the court where and as necessary in the interest of justice to dispense with compliance with any rule). It would be impractical not to case manage all of these 38 Superior Court actions.
[12] Consequently, with the permission of the acting Regional Senior Judge and with the permission of the judge to be assigned to case manage these matters, whose permissions have been provided, an order will be made that all 38 actions before the Ottawa Superior Court (1) are case managed, and (2) are case managed by Justice Robert Beaudoin (see rules 77.05 (1) and 77.06 (1)).
[13] The issues left to be decided are whether it is premature or appropriate in these circumstances to order consolidation of the 38 actions identified above into one action or appropriate to order that these actions be heard at the same time or one immediately after the other.
Is it premature at this point to consider an order consolidating the actions or ordering them to be tried together because a statement of defence has not yet been provided in 47 of the actions and the issues raised by these actions are therefore not yet fully identified?
[14] In the circumstances of these actions it is not premature to consider such a request. The issues are sufficiently identified by the statements of claim to consider this request, considering particularly how tightly connected the main issues of fact and law are in all of these actions.
[15] There is no question that each action involves a separate loan with related distinct facts and issues and that many actions involve another distinct defendant to whom the loan was allegedly advanced. However, it is apparent that even at this early stage these distinct details are in most instances background facts and not the real or the major issues. A reading of all 48 statements of claim reveals that the essential issues common to all actions are the role and resulting legal responsibility of the lawyers named as defendants in all of these actions.
Should the actions be consolidated into one action or heard at the same time or one immediately after the other?
[16] An order to consolidate actions or an order that actions be tried together or at the same time is a discretionary order involving the court assessing relevant factors including expediency, convenience and prejudice to the parties (see Pershad v. Lachan, 2015 ONSC 5290 at para. 94). The onus is on the moving party to establish that such an order is available under rule 6.01 and, in that event, to establish as well that it is in the interest of justice to make such an order.
[17] As indicated above, what is common to all actions is that in each of the 48 actions the plaintiff alleges that its lawyers were involved in each of these many loan transactions, were negligent, and breached their fiduciary obligations towards the plaintiff. While each transaction and each loan is separate from the other, raising discrete questions of fact and law specific to each action, there is clearly a significant degree of overlap between the actions relating to the role of the defendants lawyers sufficient to bring these actions within the scope of rule 6.01 (a). This is quite similar to the circumstances in Pershad v. Lachan, 2015 ONSC 5290 at para. 96 and in Lorch v. McHale, 2008 35685 (ON SC), 2008 O.J. 2807 at para. 13. In addition:
• the order sought will create a saving in pretrial procedures, reduding their number and making each more effective;
• there will obviously be a reduction in the number of trial days required;
• the moving parties would otherwise be seriously inconvenienced by multiple filings, repetitive procedures, and increased disbursements; and
• the actions are essentially at the same stage.
[18] I do not accept the arguments raised by the plaintiff and by the other defendants that a consolidation order will seriously inconvenience parties with only a marginal interest, because this order and case management will accommodate the reasonable concerns of such parties and will allow such parties, in appropriate circumstances, to proceed as otherwise may be required. Moreover, a discovery plan is required and this will address many of the issues raised by the plaintiff and by the other defendants.
[19] For example, parties with only a marginal interest will only produce their relevant documents and will only have to attend examination for discovery that pertains to their interests. This must be addressed in the discovery plan. Similarly, if one or more of the loans happen to be legitimate with no negligence or breach of contract by any of the defendant lawyers then this will be raised and dealt with by the case management judge who might then order any such loan to proceed independent to trial. The same is applicable for any required motion for summary judgment. Furthermore, any issue arising from a consolidation order on the deemed undertaking rule or on any waiver of solicitor-client privilege may be addressed by the parties in the required discovery plan or if required as directed by the case management judge.
[20] On the other hand, allowing 48 separate actions to proceed would result in prejudice that is more difficult to address. Forty-eight separate court files would be required which would mean that 48 separate versions of everything would have to be filed with 48 associated filing fees. The plaintiff would be required to set down for trial 38 Superior Court actions which would cause significant filing fees. If 38 separate Superior Court actions were to be case managed at the same time this would require filing in all 38 separate actions. This would occasion difficulties and added costs for the parties and for court staff. If 38 statements of defence were to be prepared by the lawyers defendants and filed in each of the 38 Superior Court actions this would result in significant repetition and filing fees.
[21] Section 138 of the Courts of Justice Act requires that as far as possible multiplicity of legal proceedings shall be avoided (R.S.O. 1990, c. C.43).
[22] Similarly, the underlying policy of rule 6.01 is to avoid a multiplicity of proceedings, to promote expeditious and inexpensive determination of disputes, and to avoid inconsistent judicial findings (see Grist v. Meaford (Municipality), 2015 ONSC 6051 at paras. 23 and 24). The same focus on justice and expediency is explicitly provided at rule 1.04 of the Rules.
[23] Consolidation of the 37 Ottawa Superior Court actions where the plaintiff is represented by the same lawyer into one action will promote the convenient administration of justice at all stages of the proceeding, including reduced time, cost and duplication for the parties and the court.
[24] However, for the following reasons, I arrive at a different result for the 38th Superior Court action (the action with court file no 17-72697).
[25] The plaintiff assigned that action to separate counsel because of a conflict of interest between its current lawyer in the other 37 actions and one of the defendants in the 38th action. The statement of claim in the 38th action is written in English and the lead counsel for the plaintiff as well as the lawyers for the defendants in the 38th action are not bilingual. Consolidating this action with the other 37 actions would occasion prejudice to the plaintiff resulting from the conflict of interest and would result in added costs. Ordering this 38th action into case management with the other 37 actions is not opposed by the plaintiff and is, at this time, sufficient to avoid issues with the convenient administration of justice. As a result, a consolidation order or an order that this matter be tried together with or at the same time as the other 37 actions is not made at this time. This determination is made on a without prejudice basis to the issue of whether this 38th action should be heard at the same time or immediately after the other 37 actions, an issue that may be revisited in the future at the request of any party and as directed by the case management judge.
Should the 10 Small Claims Court actions be consolidated with the 37 Superior Court actions?
[26] The moving parties asked this Court for an order that the 10 Small Claims Court actions before the L’Orignal Small Claims Court be consolidated with the 37 Ottawa Superior Court actions.
[27] A judge of this court is a judge of the Small Claims Court (see section 22 (3) of the Courts of Justice Act). Section 107 of the Courts of Justice Act allows similar proceedings to be transferred to another court. In the context of a consolidation order, section 107 does not allow an action in the Small Claims Court branch to be transferred to the Superior Court of Justice without the consent of the plaintiff in the Small Claims Court action. Here the plaintiff does not consent. However, section 107 does not preclude an order that a Small Claims Court action be tried together with a Superior Court action. Both the Superior Court action and the Small Claims Court action would then be tried by a Superior Court judge. This would not offend section 107 (2) because the Small Claims Court action is not transferred to the Superior Court. Rather, it remains a Small Claims Court action (if still within the jurisdiction of that Court) that will be tried by the same Superior Court judge together with a related Superior Court action as may be directed by the trial judge. This is contemplated by a combination of sections 22(3), 24(1) and 107(d) of the Courts of Justice Act.
[28] The Small Claims Court actions are quite similar to the Superior Court actions and the same analysis as above, supporting consolidation of the Superior Court actions, is applicable to the Small Claims Court actions.
[29] Consequently and for the same reasons as those stated above in the consolidation analysis, I make an order consolidating the 10 Small Claims Court actions into one Small Claims Court action. In addition, with the permission of Local Administrative Judge Hackland (who oversees the Small Claims Court in this East region), whose permission has been provided, I order that this consolidated Small Claims Court action be transferred from the L’Orignal Small Claims Court to the Ottawa Small Claims Court. Moreover, I make an order that the consolidated Small Claims Court action transferred to Ottawa be tried together with or immediately after the consolidated Superior Court action (subject to the discretion of the Superior Court trial judge who will preside over these matters). Notice of these orders is to be provided to Local Administrative Deputy Judge Stauffer by counsel for the moving parties writing to Mr. Stauffer and providing a copy of my endorsement.
[30] In closing, I wish to emphasize that parties, lawyers, and judges must all aim towards and make efforts to proceed with court actions as fairly, as expeditiously, and in the least expensive way possible. This order is a step in that direction.
Orders made
[31] For the reasons stated above, the following is ordered:
(1) The following actions are consolidated into one action having the court file number and style of cause outlined below at paragraph 2:
16 – 71014
16 – 71015
16 – 71016
16 – 71017
16 – 71018
16 – 71019
16 – 71020
16 – 71021
16 – 71022
16 – 71023
16 – 71025
16 – 71026
16 – 71027
16 – 71029
16 – 71030
16 – 71031
16 – 71033
16 – 71034
16 – 71035
16 – 71036
16 – 71037
16 – 71038
16 – 71040
16 – 71041
16 – 71042
16 – 71043
16 – 71044
16 – 71045
16 – 71046
16 – 71047
16 – 71048
16 – 71052
16 – 71053
16 – 71054
16 – 71056
16 – 71057
16 – 71058
(2) The 37 actions outlined above that are consolidated into one action are consolidated into Court File No. 16-71040 and this consolidated action is to have the following style of cause:
No. du dossier de la cour: 16-71040
4381840 Canada Inc. Demanderesse
et
Charron Langlois LLP/S.R.L., Société Professionnelle Langlois Professional Corporation, Stéphane Langlois (alias Joseph Stéphane Langlois, alias Stéphane Joseph Langlois), Pierre Charron (alias Joseph Pierre Charron, alias Pierre Joseph Charron), Charron Pilon Sauvé LLP/S.R.L. (à titre de cabinet juridique successeur à Charron Langlois s.r.l.), Christian Pilon (alias Joseph Christian Pilon, alias Christian Joseph Pilon), 2030616 Ontario Inc., Marie-Josée Gauthier, Richard Charette, Nancy Charette, André Langlois, Rachel Langlois, M. Untel Pilon, M. Untel Dubé, M. Untel Bourgeois, M. Untel Beaulieu, Sophie-Anne Charron (alias Marie Sophie-Anne Charron, alias Sophie-Anne Marie Charron), M. Untel Dufresne, Patrice Houle, M. Untel Houle, M. Untel Bergeron, M. Untel St-Louis, Roch St-Louis, M. Untel Lafrenière, M. Untel Sarazin, M. Untel Johnson, Mme Unetelle Campeau, M. Untel Lalonde, Mme Unetelle Crispin, M. Untel Lapensé, M. Untel Cuerrier, M. Untel Morin, M. Untel White, M. Untel Campeau, M. Untel Leroux, M. Untel Laplante, M. Untel Saumure et Denise Scaglione
Défendeurs
(3) The action having Court File No. 17-72697 is not ordered to be consolidated with the other consolidated action. On a without prejudice basis, action 17-72697 is also not at this time ordered to be heard at the same time or immediately after the other actions and this may be raised later by any party before the case management judge as may be directed by him.
(4) The plaintiff does not have to file an amended consolidated statement of claim in the consolidated action and instead the consolidated action will proceed on the existing 37 statements of claim. The plaintiff shall within the next 30 days file with this court in Court File No. 16-71040 one or two briefs, as may be required, containing sequentially from the lowest number to the highest number and separated by tabs all of the 37 statements of claim for each of the actions consolidated by this order. The plaintiff is not required to serve this or those briefs on any of the parties already served with the relevant statement(s) of claim. Similarly, any party not already served need not be served with these briefs but rather with the relevant statement(s) of claim and with a copy of this endorsement.
(5) Similarly, any defendant who has to date delivered any pleading or motion materials is not required to re-serve and re-file any of these materials with the new style of cause and may proceed with the materials as filed. However, such party(ies) must attend at court and direct court staff to transfer these materials into Court File No. 16-71040 and from now on any additional materials for the consolidated action are to be filed in Court File No. 16-71040 and have that style of cause.
(6) From now on the active court file in which all filings are to be made for the consolidated action is Court File No. 16-71040. Any materials previously filed in any of the consolidated actions are to be transferred from those court files to the new and ongoing Court File No. 16-71040. This does not apply to action 17-72697, which is not consolidated and which continues with Court File No. 17-72697.
(7) For the consolidated action, the statements of defence to be served and filed from now on shall use the new court file number and new style of cause and shall as required within their respective bodies make specific reference to the previous action(s) to which they plead.
(8) All defendants that have been served with any of the Superior Court actions that have been consolidated by this order or with the action having Court File No. 17-72697 shall deliver their respective statement of defence by no later than October 1, 2017.
(9) The parties to the consolidated Superior Court action shall work on a discovery plan to address the consolidated action and shall, within that plan, address issues arising from the consolidation, including how to address any impact on the deemed undertaking rule or on any possible waiver of solicitor-client privilege. Resulting issues are to be addressed with the case management judge as may be directed by him.
(10) Similarly the parties shall work on a discovery plan to address action 17-72697 and any resulting issues are to be addressed with the case management judge as may be directed by him.
(11) This order consolidating the 37 Superior Court actions into one is made without prejudice to any party seeking, in a case conference and as may be directed by the case management judge, any appropriate relief to address any particular issue resulting from a specific loan transaction. Specifically this consolidation order is made without prejudice to the case management judge deciding as may be required how any specific loan or transaction is to be tried or decided by this Court.
(12) The consolidated action having Court File No. 16-71040 and the action having Court File No. 17-72697 are (a) to be case managed and (b) to be case managed by Justice Robert Beaudoin as he may direct.
(13) Some of the parties have previously written to Justice Beaudoin requesting the case management of additional Superior Court actions and this is left to be dealt with by Justice Beaudoin.
(14) The request for a ruling under rule 21 that these actions are distinct one from the other is adjourned on a without prejudice basis.
(15) The 10 Small Claims Court actions started by the plaintiff in December 2016 before the L’Orignal Small Claims Court and having court file numbers 292 – 2016, 293 – 2016, 294 – 2016, 295 – 2016, 296 – 2016, 297 – 2016, 298 – 2016, 299 – 2016, 300 – 2016, and 301 – 2016 are consolidated into one action and are transferred from the L’Orignal Small Claims Court to the Ottawa Small Claims Court where this consolidated action will be provided a new court file number by the Ottawa Small Claims Court and have the following style of cause:
No. du dossier de la Cour : Nouveau numéro à être asssigné
4381840 Canada Inc.
Demanderesse
Stéphane Joseph Langlois, Société Professionnelle Langlois, Charron Langlois s.r.l., Pierre Charron, Christian Pilon, Charron Pilon Sauvé s.r.l., Dale Hill, M. Untel Verdon, M. Untel Prévost, M. Untel Charrette, Dominic Rheal Lavoie (aussi connu sous le nom de Dominic Lavoie), Kristy Marlene Macklem (aussi connu sous le nom de Krissy Macklem), M. Untel Napert, M. Untel St-Louis, Mme Unetelle Crispin et M. Untel Saumure
Défendeurs
(16) In addition, the consolidated Small Claims Court action transferred to the Ottawa Small Claims Court, as ordered at paragraph 15 above, shall be tried together with or immediately after the consolidated Superior Court action by the Superior Court judge who tried the other actions (subject to the discretion of both the Superior Court case management judge and the judge who will preside over these matters).
(17) Notice of these orders relating to the Small Claims Court is to be provided to Local Administrative Deputy Judge Stauffer by counsel for the moving parties writing to Mr. Stauffer and providing a copy of my endorsement.
(18) As was ordered for the Superior Court actions, the plaintiff does not have to file an amended consolidated statement of claim and instead the consolidated Small Claims Court action will proceed on the existing 10 statements of claim. The plaintiff shall, within the next 30 days or as soon as possible given the transfer to Ottawa, file with the Ottawa Small Claims Court in the new file number to be provided one brief containing sequentially from the lowest number to the highest number and separated by tabs all of the 10 statements of claim consolidated by this order. The plaintiff is not required to serve this brief on any of the parties already served with the relevant statement(s) of claim. Similarly, any party not already served need not be served with this brief but rather with the relevant statement(s) of claim and with a copy of this endorsement.
(19) As was ordered for the Superior Court actions, any defendant who has to date delivered any pleading or materials in any of the Small Claims Court actions that are consolidated is not required to re-serve any of these with the new style of cause and may proceed with the materials as filed.
(20) However, such party(ies) must ensure that court staff transfer these materials into the new Ottawa Small Claims Court action and that from now on any additional materials for the consolidated Small Claims Court action are filed in the new Ottawa Small Claims Court action. Any materials previously filed in any of the consolidated actions are to be transferred from those court file(s) to the new Ottawa Small Claims Court file.
(21) For the consolidated Small Claims Court action, the statements of defence to be served and filed from now on shall use the new court file number and new style of cause and shall as required within their respective bodies make specific reference to the previous action(s) to which they plead but, as indicated, defences or pleadings already served and filed do not have to be re-served or re-filed and are simply to be transferred into the new and ongoing Ottawa Small Claims Court file.
(22) Any issue arising from the consolidation of the Small Claims Court actions, including how to address any impact on the deemed undertaking rule or on any possible waiver of solicitor-client privilege, shall be addressed in the ordinary way by the Ottawa Small Claims Court.
(23) This order is made without prejudice to any issue relating to the monetary jurisdiction of the Small Claims Court as this may need to be addressed by that court as a result of this order. Moreover, this order is made without prejudice to the ongoing issue of whether the consolidated Small Claims Court action is to be transferred to the Ottawa Superior Court on consent of the plaintiff under section 107(2) of the Courts of Justice Act.
(24) This order and any finding made herein is made without prejudice to any issue of insurance coverage relating to any of the parties.
(25) Without prejudice to this issue being raised on any subsequent motion, the endorsement of Master Champagne dated July 11, 2017 is amended to remove any obligation to provide any coverage analysis and instead to read and provide that the defendants lawyers will seek and promptly advise all parties of any relevant insurer’s position on coverage that is communicated to them by any of their respective insurer(s).
(26) My endorsement on costs will follow.
Justice Pierre E. Roger
Released: 2017/08/24
CITATION: 4381840 Canada Inc. v. Charron, Langlois LLP et al., 2017 ONSC 5043
COURT FILE NO.: 16-71040
DATE: 2017/08/24
BETWEEN:
4381840 Canada Inc.
Plaintiff
– and –
Charron Langlois LLP/S.R.L., Société Professionnelle Langlois Professional Corporation, Stéphane Langlois (alias Joseph Stéphane Langlois, alias Stéphane Joseph Langlois), Pierre Charron (alias Joseph Pierre Charron, alias Pierre Joseph Charron), and Charron Pilon Sauvé LLP/S.R.L.
Defendants
ENDORSEMENT
Justice Pierre E. Roger.
Released: 2017/08/24