CITATION: Viele v. Gargan, 2017 ONSC 6685
COURT FILE NO.: 2675/09
DATE: 2017 11 14
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Frances M. Viele
B. Teplitsky, Counsel for the Solictor
Solicitor
- and -
Gargan Investments Limited
M. Roefe, Counsel for the Client
Client(s)
HEARD: March 26th, 2016 and February 27th, 2017. Written argument completed April 3rd, 2017.
REASONS FOR DECISION- MOTION TO STAY
LEMAY J
[1] This action started life as a simple assessment of accounts under the Solicitors Act by the client, Gargan Investments Limited. The company was seeking to assess an account rendered by the former solicitor, Frances Viele. The assessment was originally brought in April of 2009.
[2] Since that time, there has been considerable litigation over production obligations, computers, and expert reports. All of this litigation has led to the proceeding before me, which is a motion by the clients to permanently stay the assessment on the basis of the solicitor’s conduct.
[3] For the reasons that follow, the permanent stay sought by the clients is denied at this point. In essence, there are credibility issues in this case that require a more complete adjudication to resolve. However, the issues raised by the clients on this motion and their request for a stay may be raised again during the adjudication of this matter as I am not prepared to resolve them on this motion.
[4] Normally at this point I would direct the assessment to proceed before an assessment officer. However, given the complexity of this proceeding, the issues that have been raised and the length of time the case has been being litigated, I am directing that any steps required to prepare this case for final adjudication will be managed by me as the case supervision judge. The matter will then be placed before a judge of this court for determination.
The Issues
[5] Although this case has a complicated procedural and factual history, there are only two issues to determine in this motion, as follows:
a) Whether the assessment proceeding should be permanently stayed as a result of the alleged conduct of the solicitor, Ms. Viele, during the litigation of the assessment?
b) If a stay is not granted, how should this case be managed to a final resolution?
[6] In the sections that follow, I will set out the background facts, the positions of the parties, and the resolution of each of these issues.
[7] I had originally set out three issues that I would address with counsel, all relating to the conduct of the solicitor. Given my determination that I cannot resolve that issue on this motion, I have reduced the questions I must answer to the ones above.
Background Facts
a) The Parties and their Relationship
[8] The principal client in this case is Gargan Investments Limited. As a result of a number of Orders made by the Court since 2009, other clients have been added to the proceeding. Those clients are:
a) Katherine Gargarella-Capobianco
b) Rose M. Gargarella
c) The Estate of Rose Gargarella
d) A.S. Gargarella Investments Limited
[9] A claim for repayment of approximately $95,000.00 in legal fees is being made by the clients in this matter. The basis for this claim, other than the clients’ concerns with the solicitor’s conduct during the assessment, has not been precisely articulated in the materials on this motion.
[10] The primary work performed in this case was an application under the oppression remedy provisions of the Ontario Business Corporations Act. An account of $329,863.82, inclusive of HST and disbursements, was rendered for this work in March of 2009. In addition, tax work was performed for the other clients over the period from 2003 to 2008.
[11] Ms. Viele is an Ottawa based solicitor who works primarily in the area of business law. The account that she rendered in March of 2009 appears to indicate that she has a CA and an M(Tax), as well as being a barrister and a solicitor.
[12] At this point, I know very little about the work that was performed during the course of the solicitor-client relationship. Most of the litigation at this stage has been over the issues relating to the preservation and production of documents, including the preservation and alleged deletion of a significant number of documents from Ms. Viele’s computer.
[13] I note that most, if not all, of the documents that were in the solicitor’s possession have been produced in the affidavit of Keiko Kashio, which was sworn May 25th, 2015. However, the contents of those documents, and the adequacy of the services provided by the solicitor were not the subject of argument before me.
b) Breakdown of the Solicitor-Client Relationship
[14] The solicitor-client relationship broke down in early 2009. The precise reasons why the relationship broke down were also not the subject of argument before me. The account for $329,863.62, less $30,000.00 that had already been paid, was rendered on March 23rd, 2009. The client sought an assessment of this account and, on April 7th, 2009, an order for an assessment before an assessment officer was issued.
[15] In addition, there are amounts that have already been paid by the clients to the solicitor. The accounts involved, which date back to 2003, were added to this assessment proceeding by way of the Order of Murray J. on December 20th, 2011.
[16] An unusual feature of this motion is the fact that, although the client started the assessment, it is seeking a permanent stay of that assessment. However, if a stay is granted, then the account can never be assessed or collected on by the solicitor. This is the client’s goal. The clients are also, in this motion, seeking the return of the $95,000.00 that has already been paid to the solicitor over a number of years prior to 2009.
c) The Proceedings in Superior Court
[17] After the assessment proceeding was commenced, a motion was brought before Murray J. for preservation and production of various records. On June 11th, 2009, Murray J. issued a production and preservation order. Paragraphs 1 and 3 of this Order read as follows:
THIS COURT ORDERS that the Solicitor shall produce for inspection at her Office to the lawyer for the Client the documents sought in paragraph (a) and (b) of the Notice of Motion, that being all documents of every nature and kind pertaining to the services reported to have been provided in the account of the Solicitor dated March 23, 2009, and all documents referred to or created in the court of the preparation of the said account including without limiting, all time dockets, all communications, all pleadings, all financial records, opinions, notes, all transcripts and any electronic documents, or a true, accurate and legible copy of such documents, and all documents of every nature and kind pertaining to the services reported to have been provided in the account of the Solicitor to Rose Gargarella dated July 26, 2007, to Katharina Gargarella-Capobianco dated September 22, 2007, to Katharine Gargarella Capobianco dated July 30, 2008, to Gargan Investments Limited dated Janury 23, 2008(sic), and December 10 2008 To Gargan Investments Limited, and all documents referred to or created in the course of the preparation of each of these account, including without limiting, all time dockets, all communications, all pleadings, all financial records, opinions, notes, all transcripts and any electronic documents or a true, accurate and legible copy of such documents.
THIS COURT ORDERS that the Solicitor shall preserve all records sought in paragraph (d) of the Notice of motion, that being all records and documents relating to the services of the Solicitor provided to the Client and any associated and related person and in particular, without limiting, those records and documents pertaining to the account of the Solicitor to the Client dated March 23, 2009.
[18] During the course of the summer of 2009, there was correspondence from the clients’ counsel, Mr. Roefe, to the solicitor, seeking production of various documents. The client came to the conclusion that the solicitor was not going to cooperate with these disclosure requests, and brought a motion to find the solicitor in breach of Murray J.’s June 11th, 2009 Order.
[19] This motion was originally returnable on November 16th, 2009 before Murray J. At that hearing, the parties agreed to stay the assessment which had been scheduled for February of 2010, and to adjourn the contempt motion. The solicitor was to serve responding materials for the contempt motion by December 7th, 2009.
[20] A motion was then brought by the clients, returnable on February 24th, 2010, for the production and imaging of the solicitor’s computer. The solicitor brought a cross-motion to have the client’s contempt motion dismissed for delay. The parties reached a resolution to these motions at the hearing on February 24th, 2010.
[21] However, there were some considerable discussions, as well as some further proceedings, between the parties in an effort to effect the terms of the resolution. A further endorsement of Murray J. was issued on August 5th, 2010, providing the parties with further directions in order to attempt to resolve the matter.
[22] The parties engaged in further activities after the August 5th, 2010 endorsement. Ultimately, the parties appeared before Murray J. again on March 8th, 2011. Based on that appearance, a consent order was reached and issued on December 20th, 2011. In that order, Murray J. directed that Alan Lenczner, Q.C. be appointed as a neutral third party to image the solicitor’s laptop, identify and copy documents that were covered by the production order, and provide a report to the Court.
[23] An interim report was provided by Mr. Lenczner on March 29th, 2012. That report was inconclusive because Mr. Lenczner did not have the passwords necessary to access the entire computer. Mr. Lenczner requested the passwords from the solicitor and, on consent, retained a forensic accounting firm to examine the state of the computer.
[24] Mr. Lenczner provided his final report on September 27th, 2012. In that report, he noted that approximately 287,000 records had been recovered from the Solicitor’s laptop, and that approximately 1,800 documents, some of which could be duplicates, were relevant to this litigation. Mr. Lenczner did not provide particulars about when, or how, these files had been deleted.
[25] Some, but not all, of these documents were produced by the solicitor prior to the computer records being obtained. The Affidavit of Keiko Kashio, sworn May 25th, 2015, provides a comparison of which documents found on the computer were (and were not) produced by the solicitor.
[26] As a result of this report, the clients sought information about when the files that Mr. Lenczner had recovered were deleted. After several attempts to bring the matter before the Courts between 2013 and 2015, the parties agreed on an Order appointing a forensic data analyst to examine the computer, and provide a report on a number of issues, including when the files that Mr. Lenczner had found were deleted. This Order was issued by Skarica J. on April 16th, 2015.
[27] H & A E-discovery Inc. was originally retained back in 2012 by Mr. Lenczner to assist in the recovery of files. On April 2nd, 2015, H&A was retained by Mr. Roefe, counsel for the clients, to conduct a forensic examination on the solicitor’s laptop. A report was prepared by Harold Burt-Gerrans, and dated May 15th, 2015.
[28] Ultimately, in May of 2015, I was scheduled to hear the motion for a stay. The materials were not yet complete. In addition, Murray J. had been informally managing this case until his resignation in December of 2014. As a result, I recommended case management and Daley R.S.J. appointed me the case supervision judge for this file.
d) The Case Management Proceedings
[29] Since my appointment as case supervision judge in 2015, we have been trying to have the stay motion heard. After the hearing date in May of 2015 was adjourned, a further date was booked for December 17th, 2015. In the time between May and December of 2015, an issue arose with respect to whether the Affidavit of Ms. Viele dated September 23rd, 2015 was properly sworn or not. Specifically, there was a concern on the part of the client that Ms. Viele had not properly sworn this Affidavit, as it was commissioned by Mr. Teplitsky in Toronto and Ms. Viele was in Ottawa. In addition, the page where Ms. Viele signed her name was separate from any of the paragraphs of the actual affidavit.
[30] As a result of this issue, counsel for the clients asked that the original Affidavit be filed with the Court. After some delay on the part of the solicitor and her counsel, we were advised that the Affidavit had been lost.
[31] After some additional discussion through a series of lengthy e-mails, it was determined that this issue would not be addressed at the motion to stay. However, as I will review below, this issue has arisen again as both parties have returned to it in their materials.
[32] We went on to deal with the motion to stay on its merits. It was originally booked for one day. Ultimately, this matter was argued before me over two days. The first day was in March of 2016. At that hearing, the clients’ counsel used the bulk of the day for his argument, and a second day was necessary. It was originally booked later in 2016, but had to be moved to February of 2017 as a result of the unavailability of the solicitor’s counsel.
[33] On the second day, Mr. Roefe was too ill to provide reply submissions, although he was able to be in Court. As a result, I permitted him to file a written reply, but did not place any limitations on the length of that reply. On April 3rd, 2017, I received a written reply of thirty-seven (37) pages, plus a copy of the transcript of Mr. Teplitsky’s submissions, and several charts. Mr. Teplitsky has objected to the length of the submissions. In the circumstances, I am prepared to consider them all as I did not put any limitations on the length of the argument.
Issue #1- Should the Assessment be Stayed?
a) The Applicable Legal Principles
[34] There are a number of legal principles that are applicable in deciding whether to grant a stay. First, the Rules provide for a stay. Specifically, Rule 60.12 provides that, where a party fails to comply with an interlocutory order, the Court may, inter alia, order a stay.
[35] The policy reason for this rule is clear. Court Orders are made for a purpose, and are meant to be followed. Orders are often made for the purpose of moving litigation forward to a resolution, and the failure of a party to comply with an Order frustrates the legal process.
[36] However, the Court must also ensure that, where possible, disputes are resolved on their merits. As Turnbull J. noted in Earls v. Earls (2012 ONSC 4214):
In the case of Bell ExpressVu Ltd. Partnership v. Torroni, 2009 ONCA 85 (Ont. C.A.), the Court of Appeal noted that striking out is a severe remedy and ought not to be one of first resort without at least providing the defendant an opportunity to cure the default. However, our courts have held that where plaintiffs consistently refuse or neglect to comply with court orders in relation to the processing of a claim and where a litigant is unwilling to or unable to comply with court orders, the right to continue an action may be dismissed. However, an action should only be dismissed where the breach is intentional, contumelious or without reasonable excuse or otherwise constitute an abuse of the court’s process. Provato v. Burgantin (2003), 33 C.P.C. (5th) 385 (Ont. Master).
[37] In this case, I must be satisfied that the breach is intentional, contumelious and without reasonable explanation.
[38] In addition, this proceeding concerns the assessment of a solicitor’s account by a client. In these types of cases the Courts will intervene where necessary to protect the client’s interest in a fair procedure for the assessment. Solicitors, similarly, are expected to facilitate the assessment process rather than frustrating it. On this point, see Price v. Sonsini (2002) 2002 CanLII 41996 (ON CA), 60 O.R. (3d) 257.
[39] The test for this motion has features that are similar to the principles that would be applied in a summary judgment motion. As a result, I am of the view that it is helpful to consider those principles in deciding this case.
[40] Although neither party directly referenced Hryniak v. Mauldin (2014 SCC 7), counsel for the client pointed to some of the summary judgment principles that would be applicable in this case. First, I need to assess whether the matter can be resolved in a fair and just manner on a summary judgment motion, without hearing viva voce evidence. Second, if there are genuine issues for trial, can the powers given to the Court under Hryniak be used to resolve those issues short of a full trial.
[41] In assessing whether this matter can be determined on a motion, the facts as I can ascertain them must be assessed against these principles.
b) Factual Issues
[42] In support of the application for a permanent stay, the clients point to various aspects of the solicitor’s conduct, as set out at paragraph 7 of their factum:
a. [the solicitor] failed to comply with the Order of the Honourable Justice Murray of June 11, 2009 which required the Solicitor to preserve records relevant to the accounts identified in the order and to produce those records to the Client;
b. misled the Court regarding the existence of such records;
c. intentionally deleted, or was grossly negligent in permitting the deletion of, relevant records maintained on her notebook computer, subsequent to the said preservation and production order, and
d. failed to comply with the Order of Justice Murray of December 20, 2011 by failing to be available for the ordered inspection of her notebook computer, failing to provide a password requested by the court-appointed Examiner, Alan Lenczner, and by failing to produce a flash drive as requested to do so by Mr. Lenczner.
[43] In reviewing the submissions, it is clear that most of these complaints are related to the deletion of documents from the solicitor’s laptop. I will consider that issue, along with the issues of whether the solicitor failed to cooperate with Mr. Lenczner and/or made misleading statements.
Failure to Cooperate with Mr. Lenczner
[44] The client’s claim that the solicitor failed to cooperate with Mr. Lenczner focuses on the claim that the solicitor did not participate in a conference call and was not available when Mr. Lenczner originally attempted to inspect the computer that had been provided to him.
[45] I do not view this as being a significant issue, as the solicitor did provide the passwords for her computer shortly after the scheduled conference call with Mr. Lenczner. Mr. Lenczner was able to prepare his report without undue delay, and was able to retain the expert he needed to complete that report.
[46] Given the lengthy delays in this case, some of which were the responsibility of the clients, I cannot see how a failure to attend at a meeting (even a deliberate failure) can be grounds to stay the action, particularly when it is clear that no prejudice whatsoever flowed from that failure, and that the failure did not create significant delay.
Misleading Statements
[47] The client alleges that the solicitor misled the court with respect to both the possession and the production of documents. These allegations are set out at paragraphs 36 and 37 of the clients’ factum, and read as follows:
- In particular, with respect to possession of records, the Solicitor has deposed as follows:
a. That she did not have electronic accounting records or other electronic records pertaining to her legal services: [Ref: Affidavit of Viele June 8, 2009 para 30]
b. That her laptop was not owned by her legal business, was not used by her in her legal practice and contained no electronic files: [Ref: Affidavit of Viele December 5, 2009 para 46, 58, 59, 60]. However, this evidence is contradicted by the Client’s Affidavit which stated the Solicitor possessed and use for laptop for business purposes when meeting with the Client in Toronto in 2008: [Ref: Affid. Katharine Gargarella-Capobianco, October 16, 2009, para 11, 12,18: January 29, 2010 para 3-8; Affiad. R. Niejadlik January 28, 2010, para 2-7]
c. That Ms. Gargarella-Capobianco’s affidavit alleging that the Solicitor used a laptop when she was in Toronto was not true: [Ref: Affid. Viele, Dec 5, 2009 para 58
d. That she did not use a laptop computer to provide services to the Client in the presence of the Client, to send or receive e-mail or provide services to other Clients: [Ref: Affid. Viele. Dec 5, 2009 para 59]
e. That she used a desktop computer to provide services, which malfunctioned in early 2009 resulting in the loss of the electronic files: [Ref. Affid. Viele, Dec 5, 2009 para 60]
f. That on the rare occasions when she provided services at the Client’s premises, which required her to use a computer, she used the Client’s computer (this is contrary to what Mr. Niejadlik and Ms. Gargarella-Capobianco clamied to have observed): Ref: Affid of Viele March 4, 2001para 18]
- With respect to the production of records, the Solicitor deposed that:
a. She had produced all of the records required to be produced pursuant to the June 11, 2009 Order: [ Ref: Affid of Viele March 4, 2011, par 7, 18, 19, 20, 24, 25. (See also Affid Viele, Feb 18, 2011, para. 8]
b. All documents had been produced and there are no documents in her computer that were relevant in this respect [para 7]
c. The time dockets and accounting records have been produced [Para 19]
d. She has nothing more to produce [para 20]
[48] It is clear to me that some of these allegations relate to the laptop, which I will address in the next section. The remaining allegations relate to credibility or production.
[49] In terms of the credibility issues, I note that there is a dispute between the solicitor and the clients about whether the solicitor used her laptop for business purposes, particularly at a meeting in 2008. This is the type of allegation that, if it is material, relates directly to the credibility of the witnesses, and should be tested by way of viva voce evidence. Similarly, the other allegations where the solicitor and various other affiants disagree about the solicitor’s use of a laptop are credibility matters.
[50] In terms of the production records, it is clear that the solicitor did not produce all of the documents in a timely way. I appreciate that the client might have concerns about the delays in this case.
[51] However, I am of the view that the failure to produce documentation in a timely way is different from either the failure to produce documentation at all, or an active attempt to destroy documentation and records. The first could be remedied by a production order and a warning; the second and third may require more serious sanction if proven.
[52] Specifically in this case, with a full review of the record, it is clear to me that some of the delays arise from the manner in which both sides have prosecuted this case. I am not prepared to accept delay, standing on its own, as a basis for staying this action. A stay is a draconian remedy, and should not be utilized as a first resort.
[53] I should also deal briefly with the “misleading statement” relating to the Solicitor’s September 23rd, 2015 Affidavit. As described above, this became an issue in 2015. I had thought it was resolved. However, it has appeared in the factums from both parties. Further, this incident is related to an occasion in 2008 where one of the clients alleges that the solicitor improperly commissioned one of her Affidavits.
[54] The 2008 Affidavit was commissioned in early March, and it is clear from the materials that have been filed that there are conflicting stories about how that Affidavit came to be commissioned. There are problems with each version of events. I do not need to resolve those problems on this motion. Suffice it to say that this is another credibility issue between the parties.
The Deletion of Files
[55] The deletion of the files is the key issue on this motion. The factual question I have to answer is whether the clients have demonstrated that the solicitor either knowingly deleted these files or negligently permitted them to be deleted after Murray J. issued his June 11th, 2009 preservation Order.
[56] The expert report from Mr. Burt-Gerrans concludes that relevant files for this litigation were deleted en masse from the computer at the same time that approximately 265,000 other files were also deleted. Mr. Burt-Gerrans concludes that these files were most likely deleted by someone with access to the computer. Finally, while the computer shows that these files were deleted on April 3rd, 2009, Mr. Burt-Gerrans reviewed the system clock, and determined that the clock was changed. Based on his estimates, the files were actually deleted on November 23rd, 2009.
[57] The difference between the date of deletion shown on the computer and what Mr. Burt-Gerrans calculates is the actual date of deletion is significant. April 3rd, 2009 is before the clients sought to have the solicitor’s account assessed, while November 23rd, 2009 is after the assessment was sought, after Murray J. had issued a production and preservation Order on June 11th, 2009, and after the client had brought a contempt motion against the solicitor.
[58] The clients argue that I should accept Mr. Burt-Gerrans’ report, and should conclude that the solicitor knowingly breached the Court order. In the client’s view, accepting these conclusions leads inescapably to the conclusion that the solicitor has engaged in spoliation at a level sufficient to justify the termination of the assessment and the return of the monies the clients have already paid.
[59] The solicitor challenges both the legal and factual conclusions that the client is asking me to reach. In support of her position, the solicitor raises a number of issues, including the following:
a) Mr. Burt-Gerrans provides conclusions on the changes of date, but does not explain the method by which he reconciled the dates and times, and does not provide the calculations or files on which he bases the calculations.
b) Mr. Burt-Gerrans did not consider the fact that there was a mass transfer of files onto the laptop, containing a similar number of files to the ones that were deleted, and does not consider the date that those files were added.
c) Mr. Burt-Gerrans stated that the files were wiped from the computer using software on December 10th, 2009. Counsel for the solicitor argues that this is a conclusory statement without any support in the report, and that Mr. Burt-Gerrans cannot confirm when this software was installed.
[60] I do not necessarily accept that the solicitor’s allegations with respect to this report are borne out. I also acknowledge that the expert was cross-examined on this report, and there was an opportunity to pursue at least some of these issues in that cross-examination.
[61] However, I accept that this report may be subject to some challenge on cross-examination, and that a trier of fact, with a complete record, will be in a better position to assess any issues that may exist with this report. I am certainly not in a position to finally determine whether this report should be accepted or rejected as a matter of fact.
[62] As an illustration of why I am not able to finally determine whether this report should be accepted, I note Mr. Roefe’s reply. In that document (at page 33) he lists one of the reasons that I should accept Mr. Burt-Gerran’s evidence is that it was “given freely and with candour.” While the assessment of credibility should not depend too much on the demeanour of a witness, I cannot assess whether the evidence was given freely without having actually having seen Mr. Burt-Gerrans testify.
[63] I should also note that the solicitor’s counsel provided me with a number of cases on the duty of experts. I make no comment either way on whether that duty has been met by Mr. Burt-Gerrans. I would remind the parties, however, that neither of them addressed the Supreme Court’s decision in White Burgess Langille Inman v. Abbott and Haliburton Co. (2015 SCC 23, [2015] 2 S.C.R. 182). This is a decision that will have to be addressed in the submissions at trial.
[64] When I weigh the record before me, it is not clear and obvious that the solicitor intentionally deleted these documents in the face of a Court order. Something else may have happened to them. There may be some other explanation that, with a review of the full record, a trier of fact could accept. Given that a stay is only to be granted in the clearest of cases, I am not persuaded that I should grant a stay without permitting a full trial of the issues.
[65] It is worth noting two additional facts. First, the documents have been found as a result of the imaging done by Mr. Lenczner and the work done by Mr. Burt-Gerrans. Indeed, the documents were part of the motion record before me. The case before me is not like Kohlsmith v. Sterling Mutuals Inc. (2014 ONSC 4696) where the Defendants’ failure to produce documents resulted in a USB key becoming lost, resulting in significant actual prejudice to the Plaintiffs. Indeed, when I review Mr. Roefe’s factum, I do not see any mention of any actual prejudice to his clients.
[66] Second, when required to produce the laptop, the solicitor did so. There may have been reluctance to produce the laptop, and significant unreasonable delays in complying with the Court’s orders, but those are not sufficient to justify a stay without giving the solicitor an opportunity to provide her explanation as part of a full adjudicative process.
c) Conclusions on Issue #1
[67] When I step back and consider the client’s allegations as a whole, I am of the view that this matter should be adjudicated by way of a full hearing. I reach that conclusion for a number of reasons.
[68] First, many of the concerns raised by the client on this motion relate to issues of credibility. In particular, the disputes over whether Ms. Viele used a laptop in the performance of her work are a clear example of credibility issues. Similarly, Ms. Viele’s explanations for why certain documents were not on her laptop also relate to her credibility.
[69] While I accept the principle that the Court can, in some circumstances, stay an action for breaches of procedural Orders, the breaches must be clear and intentional, and there must not be an alternate explanation for the breach that engages a clear credibility contest.
[70] As an example, in Broniek-Harren v. Osborne, supra, the Court was faced with a clear failure on the part of the Plaintiff to comply with undertakings on numerous occasions, in spite of two separate court Orders to do so, and innumerable letters from Defendant’s counsel. Eventually, Gray J. determined that the action should not proceed. However, that decision was reached because, on the facts before Gray J., the Plaintiff had failed to comply with two separate orders and, when faced with a motion for dismissal of the action, only provided “vague assurances” that the undertakings would be fulfilled
[71] In this case, we have an alleged failure to produce documents in response to an Order of Murray J. dated June 11th, 2009. However, in this case, the solicitor asserts that she thought she had provided everything, and that the documents on her computer were not deleted intentionally by her. There appear to be some visible flaws in this explanation, but it is still the explanation that is tendered and it is not untenable. In addition, the solicitor was participating in the production motions, and was prepared to resolve many of them on consent. On the record before me, I cannot, without hearing viva voce evidence, make a finding that the solicitor has engaged in intentional and contumelious conduct without any reasonable explanation.
[72] Second, as counsel for the client acknowledged in his oral argument, one of the remedies available to the Court is to determine that the solicitor has misconducted herself, but that the misconduct is not sufficient to obviate the solicitor’s right to collect on her account. For the Court to accept this as a possible remedy would require a more complete record than the one before me. The Court would need to be able to reach conclusions about what work was performed, what documents were deleted and by whom they were deleted, and how important those documents were to assessing the account. None of these facts can be determined on the record before me.
[73] Finally, the remedy that the client is seeking here is a serious one, with significant ramifications. The remedy that the clients seek is the non-payment of $300,000.00 in fees and the refund of nearly $100,000.00 more in fees. The allegations of non-cooperation with Mr. Lenczner are not sufficient to grant a stay, and the claims that the solicitor is lying and the clients are telling the truth over when the laptop was used are clear credibility issues that require a trial to resolve. Therefore, to grant a stay would require the Court to accept that Ms. Viele had willfully breached the Order of Murray J. in 2009, and had deleted documents from her laptop.
[74] This finding would have a significant effect on Ms. Viele’s reputation as a lawyer. As the Court noted in Hill v. Church of Scientology of Toronto (1995 CanLII 59 (SCC), [1995]2 S.C.R. 1130 at 1178):
In the present case, consideration must be given to the particular significance reputation has for a lawyer. The reputation of a lawyer is of paramount importance to clients, to other members of the profession, and to the judiciary. A lawyer’s practice is founded and maintained upon the basis of a good reputation for professional integrity and trustworthiness. It is the cornerstone of a lawyer’s professional life. Even if endowed with outstanding talent and indefatigable diligence, a lawyer cannot survive without a good reputation. In his essay entitled “The Lawyer’s Duty to Himself and the Code of Profession Conduct” (1993), 27 L. Soc. Gaz. 119, David Hawreluk described the importance of a reputation for integrity. At p. 121, he quoted Lord Birkett on the subject:
The advocate has a duty to his client, a duty to the Court, and a duty to the State: but he has above all a duty to himself and he shall be, as far as lies in his power, a man of integrity. No profession calls for higher standards of honour and uprightness, and no profession, perhaps, offers greater temptations to forsake them: but whatever gifts an advocate may possess, be they never so dazzling, without the supreme qualification of an inner integrity he will fall short of the highest…
[75] In his reply submissions (at page 22), Mr. Roefe argues that there is no evidence before the Court of serious consequences for the solicitor of a finding that she had intentionally breached a court order. I reject that submission. An intentional breach of a Court Order by an officer of the Court is always a serious matter and such a finding would clearly have an effect on Ms. Viele’s reputation as a lawyer. This fact does not change the test of a balance of probabilities, which is a single standard.
[76] In addition to having an effect on her reputation as a lawyer, the solicitor could face disciplinary proceedings as a result of a finding that she had wilfully breached Murray J.’s June 11th, 2009 Order. She denies willfully breaching this Order. I also note that there is evidence that the clients have already complained to the law society about the solicitor’s conduct. In the circumstances, the Court should be reluctant to find a breach of the Order of Murray J. where there are gaps in the evidentiary record.
[77] As a result, a full hearing is required in this case. Normally, the assessment of accounts is done before an assessment officer. However, I am of the view that this assessment should proceed before a Judge of this court for the following reasons:
a) The judges of this court have inherent jurisdiction to conduct the assessment of a solicitor’s account. That jurisdiction should only be exercised in rare circumstances, which could include serious allegations of negligence or misconduct on the part of the solicitor (see Woods v. Chamberland (1991) 1991 CanLII 7186 (ON SC), 5 C.P.C. (3d) 217) and Chiasson v. Richard [2005] O.J. No. 5477 (C.A.), rev’g [2005] O.J. No. 1104 (S.C.J.)). In my view, the allegations in this case are sufficiently serious that a judge should conduct the hearing.
b) Given the litigious history of this matter, it is likely that additional motions will be brought by the parties. In addition, my continued involvement as the case supervision judge (discussed in Issue #2, below) will help the matter move forward. It would be incongruous to have the file case managed by a judge, and then tried by an assessment officer.
c) In any event, an order for a stay of proceedings is normally an Order that only the Superior Court can issue. As I will discuss next, I am leaving that remedy open to the client to seek at trial.
[78] However, my decision that this matter should proceed to a full hearing before a Superior Court judge does not prevent the clients from raising their allegations of misconduct on the part of the solicitor. For clarity, these allegations can be raised to support three arguments:
a) That, by failing to provide relevant documents, the solicitor has failed to prove her claim for fees.
b) The solicitor should precluded from recovering some (or all) of her fees as a result of her alleged misconduct.
c) The alleged misconduct should be used to support an award of solicitor-client fees
[79] I make no comment on how those questions should be answered by the judge hearing the merits of the case.
Issue #2- How Should This Case be Managed to a Final Resolution?
[80] The materials in this case have become voluminous, and we are at a point where the litigation is probably more complex than the actual work performed by the solicitor for the client. In my respectful view, we have arrived here because there has been a great deal of focus on the issue of how production has (or has not) taken place, rather than focusing on the merits of the case. I hasten to add, however, that this focus is understandable given the legitimate concerns that the client has raised about the solicitor’s conduct.
[81] Indeed, both counsel acknowledged at the end of oral argument that it would be best, if the matter was to continue, for the Court to provide directions to the parties in terms of the management of the litigation.
[82] As a result, I am going to provide the parties with some directions to move this matter forward, as follows:
a) On the spoliation and documentation production issues, it appears to me that no party will be seeking to rely on any other expert reports at the trial of this matter. If a party is planning on relying on an additional report in this case, they must advise me within thirty (30) days of the release of these reasons, and we can address whether that report will be permitted.
b) The clients have sought the assessment. They are, therefore, to provide particulars as to the basis for their position on the assessment within thirty (30) days of the release of these reasons.
c) The solicitor will have forty (40) days to provide a response to the particulars from the clients. I have granted an additional ten (10) days, as the period when the solicitor is going to have to respond covers the Christmas holidays.
d) In the particulars, each party is to identify the witnesses that they intend to call and the topics that those witnesses will address. They are not to be a summary of the witnesses evidence at this stage.
e) The particulars are not to exceed ten (10) single spaced pages.
f) Once the particulars have been exchanged, the parties will have twenty-one (21) days to outline any further production and/or particulars that they are seeking from the other side. Those submissions are to be no more than three (3) single spaced pages.
g) Copies of all submissions are to be provided to my judicial assistant.
h) Once this material is received, a further case conference will be held before me in Brampton on either February 22nd or 23rd, 2018 at 9:00 am for one hour. The purpose of this case conference is to review the particulars and requests and determine what is to be done next. It is to be done in person. The parties are to agree on the date and advise me as to their choice within seven (7) days of the release of these reasons. If the parties cannot agree on one of these two dates, I will choose one.
[83] Given the lengthy history of this matter, I have provided what I believe are reasonable time limits. There will be no extensions of time, even on consent, without my leave. It is unlikely that I will provide such leave.
[84] Two final comments. First, the page limitations in my directions are firm. There will be consequences for failing to follow them. The materials in this case have often been prolix, which has led to a very voluminous record. The page limits on the particulars are designed to ensure that this matter remains focused on the issues.
[85] Second, there will be no substantive communications with myself or my judicial assistant in writing without my invitation. If there is an issue, the parties are to identify what the issue is, and arrange for an in-court attendance to address it. There is to be no argument provided when the issue is identified. Those attendances will either be in-person or by conference call, but they will all be in court and on the record.
Conclusions and Costs
[86] Based on the foregoing, I am making the following Orders:
a) The clients’ motions to have a permanent stay of the assessment issued, and to have approximately $95,000.00 in fees paid back by the solicitor are dismissed without prejudice to the clients’ right to renew these motions at the hearing of the merits.
b) The hearing of the merits will proceed before a judge of this Court, rather than an assessment officer.
c) On the spoliation issues, it appears to me that no party will be seeking to rely on any other expert reports at the trial of this matter. If a party is planning on relying on an additional report in this case, they must advise me within thirty (30) days of the release of these reasons, and we can address whether that report will be permitted.
d) The clients have sought the assessment. They are, therefore, to provide particulars as to the basis for their position on the assessment within thirty (30) days of the release of these reasons.
e) The solicitor will have forty (40) days to provide a response to the particulars from the clients. I have granted an additional ten (10) days, as the period when the solicitor is going to have to respond covers the Christmas holidays.
f) In the particulars, each party is to identify the witnesses that they intend to call and the topics that those witnesses will address.
g) The particulars are not to exceed seven (7) single spaced pages.
h) Once the particulars have been exchanged, the parties will have twenty-one (21) days to outline any further production and/or particulars that they are seeking from the other side. Those submissions are to be no more than three (3) single spaced pages.
i) Once this material is received, a further case conference will be held before me in Brampton on either February 22nd or 23rd, 2018 at 9:00 am for one hour. The purpose of this case conference is to review the particulars and requests and determine what is to be done next. It is to be done in person. The parties are to agree on the date and advise me as to their choice within seven (7) days of the release of these reasons. If the parties cannot agree on one of these two dates, I will choose one.
j) There are to be no extensions to time limits, even on consent, without my leave.
[87] As noted, I will remain the case management judge, and all motions relating to materials are to be placed before me.
[88] Normally, costs of this motion would be awarded to the successful party, Ms. Viele. However, I am of the view that the costs of this motion should be reserved to the Trial judge. I take that view for two reasons. First, on the materials before me, the allegations raised by the client are not without merit. Second, this proceeding has become so complex that it will be impossible to determine either who should pay for the costs of various steps or how much should be paid without knowing what the result of the process is.
LEMAY J
Released: November 14, 2017
CITATION: Viele v. Gargan, 2017 ONSC 6685
COURT FILE NO.: 2675/09
DATE: 2017 11 14
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Frances M. Viele
Solicitor
- and -
Gargan Investments Limited
Client
REASONS FOR JUDGMENT
LEMAY J
Released: November 14, 2017