2018 ONSC 3611

COURT FILE NO.: CV-16-553613

DATE: 20180611

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TOWNSON & ALEXANDER CONSULTING SERVICES INC. (Plaintiff)

AND:

602613 ONTARIO INC. carrying on business as PHARMACIE LISE ST-DENIS PHARMACY (Defendant)

A N D B E T W E E N :

602613 ONTARIO INC. carrying on business as PHARMACIE LISE ST-DENIS PHARMACY (Plaintiff by counterclaim)

AND:

TOWNSON & ALEXANDER CONSULTING SERVICES INC. (Defendant by Counterclaim)

AND:

ALBERT SAMSON FRANK carrying on business as ALBERT S. FRANK & ASSOCIATES (Defendants to the counterclaim)

BEFORE: Justice Janet Wilson

COUNSEL: No one appearing for the Plaintiff, Adam Ezer on behalf of the Defendant, Albert Frank, representing himself.

HEARD: June 1, 2018

ENDORSEMENT

The Motion

[1] There are two aspects to this motion for summary judgment brought by the Defendant, 602613 Ontario Inc. carrying on business as Pharmacie Lise St-Denis Pharmacy.

[2] First, the Defendant seeks that the action brought by the Plaintiff, Townson &Alexander Consulting Services Inc. (the Consultants) be dismissed with prejudice. The parties had entered into an agreement for a business venture that did not come to fruition due to the untimely and unexpected death of Lise St-Denis, the principal of the Defendant.

[3] Second, the Defendant, as Plaintiff by Counterclaim seeks the return of funds paid to counsel for a block fee and to the Consultants. The Defendant and its principal faced serious allegations in a disciplinary proceeding brought by the Ontario College of Pharmacists in 2015. The Defendant retained Albert Sampson Frank and the Consultants to assist in the defence. The disciplinary hearing did not take place due to the death of Lise St-Denis.

[4] The Defendant has claimed as Plaintiff by Counterclaim against the Consultants for the return of funds provided in the amount of $99,373.70. These funds were paid pursuant to an agreement entered into between the Plaintiff and Lise St-Denis to implement business procedures in the Defendant Pharmacy in order to defend the allegations of the College, and to avoid problems in the future. It is the position of the counsel for the estate of Lise St-Denis acting for the Defendant, that the Plaintiff did not comply with the terms of the agreement, and that no value was provided for any services rendered.

[5] The Defendant has also claimed against Albert Samson Frank, the Defendant’s counsel in the disciplinary proceeding. The parties had agreed to a block fee of $45,000.00 for the retainer. Lise St-Denis died after the first day of the hearing, and the anticipated three week hearing did not take place. The estate seeks repayment of $40,000.00 of the fees. Counsel for the Defendant is very critical of the work of Frank, asserting that he provided no value for services rendered.

Disposition

Dismissal of Plaintiff’s Claim

[6] Master Abrams granted an order December 15, 2017 allowing counsel for the Plaintiff to be removed as solicitor of record. She ordered that unless the Plaintiff retain new counsel or take steps to obtain leave to be able to proceed without a legal representative for the corporate plaintiff, that in future proceedings the Court “may dismiss the proceeding, or strike the defence.”

[7] The Plaintiff did not take any steps to retain counsel or seek leave. The Plaintiff is well aware of this motion. It filed its exhibits attached in a supplementary affidavit filed by Frank. It did not attend and did not participate in the motion to dismiss the Plaintiff’s claim, or in the motion seeking the return of fees paid.

[8] In this action, the Plaintiff purports to claim damages in the amount of $500,000.00. It is interesting to note that the Plaintiff offered the estate representative the sum of $4000.00 for Lise St-Denis’ 50% interest in the business. In subsequent discussions between the estate representative and the Plaintiff the amount offered by the Plaintiff was reduced to $2500.00 or $1500.00. The quantum of the Plaintiff’s claim advanced is nonsense.

[9] The Plaintiff’s claim in this action is dismissed, regardless of the argument about quantum claimed. Although the Plaintiff and Lise St-Denis entered into an agreement reflecting their intention to pursue a business opportunity, on terms, that contract and the parties’ intentions were frustrated by the untimely death of Lise St-Denis. No damages are payable in this unfortunate situation.

Requirement that Plaintiff repay the funds of $99,373.70

[10] In September 2015 in a written agreement, the Defendant retained the Plaintiff to provide advice and services to defend the allegations of the College. The Plaintiff’s role was to implement improvements to the Defendant’s business systems and provide active future management in order to respond to the College allegations and to avoid problems in the future. The contract also refers to “strategic collaboration” with Frank.

[11] The Plaintiff’s principals, Harry Alexander and Bob Coffey, failed to comply with the agreement. They provided no added value to the defence of the College allegations. To the contrary, the Plaintiff’s principals suggested a defence using political pressure and the media, instead of dealing with the merits of the allegations of the College. The Plaintiff’s principals prepared an outrageous two-page draft report to counsel for the Defendant prior to the hearing, suggesting that the College was using Nazi-like tactics with the Defendant.

[12] It is clear from the materials that there were serious problems in the Defendant’s record keeping requiring redress and rectification. The approach of the Plaintiff, working with Black, did not respond to the allegations of the College. Their approach provided no value to the Defendant.

[13] The Plaintiff is therefore required to pay the Defendant, or estate of Lise St-Denis, as directed, the sum of $99,373.70.

Requirement that Frank repay $30,000.00

[14] Frank had no experience with disciplinary proceedings. He was introduced to Lise St-Denis through his client, the Plaintiff. She discharged her first counsel and retained Frank in mid-2015.

[15] The Defendant and Frank agreed to a block fee of $45,000.00 to conduct the disciplinary hearing, plus disbursements. The Defendant is not seeking repayment of the disbursements, but is seeking repayment of $40,000.00 from the block fee.

[16] I conclude that Frank should repay the sum of $30,000.00 to the estate of Lise St-Denis, or to the Defendant as directed. I could have ordered an assessment of Frank’s account, with directions to the assessment officer, with the appropriate fee to be determined not based upon time but on value to the client. Clearly there are special circumstances in this case warranting a referral for assessment.

[17] It is more practical for me to fix the allowed fees payable to Frank as I have reviewed in detail the lengthy materials filed and heard the submissions for the Defendant and Frank in person. There is a relatively modest amount in dispute and a complex history. The Defendant and Frank in this proceeding had a three-day motion before the Master to determine issues of amendment to the pleadings and costs of that motion. If a motion to amend took this length of time to argue, who knows how long an assessment of Frank’s account would last? The assessment of Frank’s account would result in significant fees being incurred, disproportionate to the amount in dispute. Therefore I exercise my jurisdiction pursuant to the s. 19 of the Solicitors Act, R.S.O. 1990, c S.15 to fix the fees payable to Frank, with an order that the balance be returned to the client.

[18] There is no doubt that Frank spent considerable time on the file. His dockets show time of 163 hours, translating to a fee of $57,000.00, based upon his hourly rate. Notwithstanding considerable time being spent on the file, I conclude that the services rendered by Frank added little value to the defence of the allegations of professional misconduct.

[19] I reach this conclusion for the following reasons:

• He has no experience dealing with professional disciplinary proceedings.

• It appears clear from a review of the record that the defence of the Defendant in the disciplinary proceeding was in shambles, with no real preparation or plan for a defence on the merits.

• When Lise St-Denis died, the matter was supposed to be proceeding to a hearing. This was not the first allegation of misconduct against the Defendant. The allegations raised are serious. Witnesses had not been prepared. There was no analysis and response to the detailed allegations of the College.

• Frank was directing the defence. The tactics of the Plaintiff to use political pressure and the media were totally inappropriate and misinformed. Such a tactic would only entrench the College in their position.

• Frank brought one motion in the disciplinary proceeding seeking an order that Coffey and Alexander attend the pre-hearing conferences. This request was inappropriate and not surprising was denied. This step provided no value to the client.

• Frank was in a conflict of interest, as he was also counsel acting for the Plaintiff, who had received close to $100,000.00 for services that were not provided.

• Frank acted as counsel for the Plaintiff and initiated this claim against the Defendant. He filed an affidavit in this proceeding attaching the exhibits from the materials of the Plaintiff.

[20] Frank did obtain an interim order that the Defendant would retain its accreditation pending the proceedings. After the death of Lise St-Denis, the College did not pursue the Defendant. This resolution was due to the death of Lise St-Denis, not through any advocacy or effort by Frank. At the time the College made this order, Frank was suing the Defendant acting on behalf of the Plaintiff.

[21] There was some modest value for the work performed by Frank, but nowhere near the value of his docketed time. The major work for preparing a defence and attending the hearing lay ahead. In all these circumstances I fix the fee to which Frank is entitled to in the amount of $15,000.00 inclusive of HST. He is therefore required to return to the Defendant, or to the estate of Lise St-Denis, as directed, the sum of $30,000.00 from the block fee that was paid.

Costs

[22] The Defendant seeks costs against the Plaintiff and Frank on this summary judgment motion, as well as costs of this action.

[23] Counsel has produced a Bill of Costs for the Motion in the amount of $36,774.60 inclusive of HST on a partial indemnity basis, and for the Action in the amount of $22,605.00 inclusive of HST.

[24] Both the Plaintiff and Frank have been unsuccessful in this motion. Counsel for the Defendant suggests that the costs of the summary judgment motion and the action be divided between the Plaintiff and Frank on a 50:50 basis. Although the amount in dispute with Frank was much less that the amount in dispute with the Plaintiff, it is Frank and his stance that has resulted in the costs in this proceeding and in this motion escalating.

[25] I agree with the submissions of counsel for the Defendant. The requested costs of the Defendant for both the action and this motion, which are on their face are reasonable, shall be paid equally by the Plaintiff and Frank.

J. Wilson J.

Date: June 11, 2018