Court File and Parties

Court File No.: 18-781255 Date: 2019/02/14 Superior Court of Justice – Ontario

In the matter of the Solicitors Act, R.S.O. 1990 C. S. 15 And in the matter of Conway Baxter Wilson LLP.

Between: Conway, Baxter, Wilson LLP, Applicant And 1179 Hunt Club Road, Respondent

Before: Justice R. Laliberte

Counsel: Thomas G. Conway and Kevin Caron, Counsel for the Applicant Elliot Birnboim, Counsel for the Respondent

Heard: January 31, 2019

Ruling on Motion and Cross-Motion

[1] The Applicant Conway Baxter Wilson LLP (“CBW”) is an Ottawa law firm retained by the Respondent 1179 Hunt Club Inc. (“1179”) in regards to a dispute over the purchase of real property in Ottawa. The issues before the Court in this Motion and Cross-motion revolve around four outstanding accounts totalling $90,401.84.

[2] On October 9, 2016, counsel for 1179 obtained a praecipe order for the assessment of the said accounts in Toronto under s. 3 of the Solicitors Act, R.S.O. 1990, c. S.15. A similar order was subsequently obtained by CBW in Ottawa on October 17, 2018.

[3] This aspect of the motion and cross-motion raises a number of factual and legal issues as to if and when a final account was delivered to 1179 so as to trigger the one month limitation period prescribed under s. 3(b) of the said Act. Ultimately, the question is whether the Toronto praecipe was obtained within 30 days of the delivery of a final account. If it was, the Ottawa praecipe order could not properly be issued by the local Registrar. Both parties have filed competing affidavits on this question. The principal players in this litigation were cross-examined on their affidavits and transcripts were filed in these motions.

[4] The other significant issue to be decided by this Court stems from the action commenced by 1179 against CBW. The Statement of Claim issued on December 17, 2018, alleges gross overcharging and negligence against CBW. The Court is asked to rule on whether the s. 3 assessments should be stayed in light of this action.

[5] The Court will deal first with the issue of the stay.

[6] 1179’s position, as articulated in its Factum and during oral submissions, can be summarized as follows:

• a stay is required in order to avoid a multiplicity of proceedings and findings by different judicial officers;
• s. 138 of the Courts of Justice Act, R.S.O. 1990, C. C.43 (“CJA”) provides that multiplicity of legal proceedings shall be avoided as far as possible;
• the action is the more effective procedure in this matter since it has a wider scope than the proposed assessments;
• the issues on the assessments are entirely subsumed in the negligence action;
• the damages sought in the action are substantial;
• the traditional litigation process is better suited to address the serious issues raised;
• it relies on the following cases:
  • Lansens v. Onbelay Automotive Coatings Corp., [2006] O.J. no. 5470;
  • Argiris v. A. & T. Food Holdings Ltd. [1985] O.J. no 1678;
  • Karrys v. Manes [2010] O.J. no 97;
  • Chenier v. Menzies & Coulson [2010] O.J. no 1423.

[7] CBW’s position as presented in its Factum and oral submissions is as follows:

• it resists the stay and seeks an order requiring the assessment in Ottawa to proceed forthwith;
• while reported decisions have indicated that it may be appropriate to stay assessment proceedings when a client makes serious allegations of negligence or misconduct, the present circumstances are such that a stay is not appropriate:
  • the allegations of negligence do not lead to the conclusion that 1179 received no value for CBW’s services; the only issue is the quantum of the remuneration for the services provided;
  • there is no credible/serious allegation of negligence or misconduct made against CBW; in fact, 1179 has appealed Justice Ryan Bell’s unfavourable ruling;
  • the only issue is the quantum of the remuneration, which is squarely within the jurisdiction of the assessment officer to decide.
• it relies on the following cases:
  • Calin A. Lawrynovicz Barrister and Solicitor v. Marino Estate 2016 ONSC 2065, [2016] O.J. no 1513;
  • Woods v. Chamberland, [1991] O.J. no 2156;
  • Stanleigh v. Olan [1998] O.J. no 25;
  • Pica v. Kazman & Associates [2000] O.J. no 474.

[8] In deciding this issue, the Court is guided by the following principles:

• S. 106 of the Courts of Justice Act:
  106. A Court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the Court on such terms as are considered just;
• the power to order a stay is discretionary and the party seeking the stay bears the burden to show that special circumstances exist to justify the stay; the Court should consider:
  • whether there is substantive overlap of the issues in the two proceedings;
  • whether the two cases share the same factual background;
  • whether the stay will present unnecessary and costly duplication of judicial and legal resources;
  • whether the stay will result in an injustice for the party resisting the stay;
• see: Hathro Management Partnership v. Adler [2018] O.J. no 1475.
• S. 138 of the Courts of Justice Act: 138: As far as possible, multiplicity of legal proceedings shall be avoided
• S. 138 of the Courts of Justice Act is grounded in the public policy concerns that many proceedings in respect of the same issue may lead to inefficiency, waste and conflicting findings;
• see: Lansens v. Onbely Automotive Coatings Corp., op. cit.
• the Court’s discretion to move assessments of accounts to the Courts should be used guardedly and only in compelling circumstances; serious allegations of negligence and/or misconduct on behalf of the solicitor, is an important factor in exercising such discretion;
• see: Woods v. Chamberland, op. cit
• Chenier v. Menzies op. cit.
• the Court should also consider whether the allegations of billing impropriety and negligence are inextricably connected;
• see: Chenier v. Menzies op. cit.
• consideration should be given to whether the allegation of negligence is one that will necessarily determine the outcome of the assessment;
• see: Pica v. Kazman & Associates op. cit.

[9] Having considered all the circumstances and the relevant principles, the Court finds that 1179 has shown that a stay of the assessment orders is appropriate in this matter. The Court is of the view that the circumstances in support of such finding are compelling and call for the Court to exercise its discretion to stay the assessment orders pending the completion of the negligence action against CBW. This conclusion is based on the following considerations:

• having read the Statement of Claim issued on December 7, 2018 and Justice Ryan Bell’s ruling of October 17, 2018, the action raises serious allegations of negligence on behalf of CBW which are said to have resulted in significant losses, namely a $250,000 deposit and the termination of the contract;
• the amount of $3.5 million claimed as damages far exceeds the $90,401.84 account;
• one of the relief sought in the action is the rescinding of CBW’s outstanding accounts;
• the outcome of the action will likely determine the outcome of any possible assessment under the Solicitor’s Act;
• the factual issues as to CBW’s professional conduct are the same in both proceedings so that:
  • there is a risk of contradictory findings;
  • there is a risk of wasting judicial and legal resources.
• the issue of remuneration for the legal work performed by CBW go beyond quantum and possible reduction of the accounts for want of skill and competence; while the Court is certainly not expressing any opinion as to the merit of the claim, the serious nature of the allegations, if found to be established in the action, could result in a finding that 1179 received little value, if any, from the work performed;
• while delay may prove to be unfair to CBW if the action is dismissed, the Court was advised that 1179 has indicated that it would retain several units and lease them to third parties, which would generate income available to CBW to satisfy an order for costs.

[10] The end result is that the Court orders that the following Orders for Assessment be stayed pending the completion of action number CV-1800611005-0000:

• Order for Assessment issued by the Registrar in Toronto on October 9, 2018;
• Notice of Appointment for Assessment issued in Ottawa by the Assessment Officer on October 17, 2018.

[11] In light of the Court’s decision in regards to the stay of the said assessment orders, the Court will not address the other issues raised in these motions.

[12] The parties are asked to make reasonable efforts to resolve the question of costs for these motions. If they are unable to do so, the parties should exchange and file with the Court brief written submissions (not to be more than 3 pages) and a bill of costs on or before March 15, 2019.

Justice R. Laliberte Date: 2019/02/14

Released: 2019/02/14 Justice R. Laliberte