COURT FILE NO.: 2675/09
DATE: 2019 04 03
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FRANCES M. VIELE
R. Lepore, Counsel for the Solicitor
Solicitor
- and -
GARGAN INVESTMENTS LIMITED
M. Roefe, Counsel for the Client(s)
Client(s)
HEARD: In Writing
REASONS FOR DECISION
LEMAY J
[1] This is an assessment of the account of Frances Viele (“the Solicitor”) brought by Gargan Investments Ltd (“the Client”). The assessment was started by way of an action in March of 2009, ten years ago.
[2] I have been case-managing this action since 2015. This history of this action is set out in reasons I released on November 14th, 2017 (2017 ONSC 6685). The matter is now scheduled to proceed to trial before a Judge of the Superior Court in the October blitz in Milton. I am now at the point where I am addressing requests for particulars and production from the parties.
[3] The parties were provided with directions at a case conference on December 19th, 2018. Those directions were designed to create a request for production and particulars from each party, responses to those requests from the opposing party and replies from the party making the requests. This should have produced six (6) documents. These requests were to be made in separate, new documents to avoid confusion. Unfortunately, the instructions I provided to counsel were not completely adhered to. I will return to my concerns in this regard in my reasons, below.
[4] As a result, on February 25th, 2019, I provided the parties with further directions. Specifically, I required the parties to each provide separate charts setting out the outstanding particulars and production requests from each party. I received those charts and have used them to complete my reasons.
[5] For clarity, I should note that the Client provided two charts for each issue. One of the charts for each of the production and particulars requests included a description of the Solicitor’s position. As I will explain below, I have not relied on the Client’s charts with the Solicitor’s position included in them.
[6] Each party is seeking additional production and particulars from the other party. Each party has explanations as to why they are unwilling to provide the additional particulars and production from the other party. In addition, the Client alleges that the Solicitor should be estopped from obtaining any additional particulars at this point.
[7] In the sections that follow, I will set out some background facts. Then, I will address the estoppel argument. Finally, I will deal with the particulars and production issues raised by each side.
Background Facts
a) The Parties
[8] The Solicitor, Ms. Frances Viele, is a member of the law society and has been for quite a number of years. She practices in Ottawa.
[9] The principal client in this case is Gargan Investments Limited. A number of other clients have been added to these proceedings over the course of the litigation as follows:
a) Katherine Gargarella-Capobianco;
b) Rose Gargarella;
c) The Estate of Rose Gargarella; and
d) A.S. Gargarella Investments Limited.
[10] I will refer to all of these clients as “the Client” in these reasons. The Solicitor performed work for the Client for a number of years prior to 2009. In 2009, when the Solicitor tendered her last account, the Client challenged this account, and this action began.
b) The Work Performed by the Solicitor
[11] The question of what work was performed by the Solicitor when and under whose direction are all issues that will have to be addressed in the course of the trial. As a result, I only intend to address those matters to the extent necessary to explain my decision on the merits of this motion. Further, my factual outline should not be taken as resolving, in any way, any of the issues to be placed before the judge conducting the assessment.
[12] From the materials, the primary work that was performed in this case was an application under the oppression remedy provisions of the Ontario Business Corporations Act R.S.O 1990 c.B.16. The Solicitor was originally brought into this file at the instance of a Mr. Ray Niejadlik, who was originally a member of the Ontario Bar.
[13] This application involved numerous Court appearances, including one before Mesbur J., and one before Pepall J. (as she then was). The litigation, which involved corporate assets, issues of taxation, and the purchase of shares in an investment company was both complex and protracted. The opposing party was Richard Gargarella, who is the cousin of Rose Gargarella. There are allegations that a very litigious approach was adopted by either Mr. Niejadlik or the Solicitor.
[14] As I understand it from the materials that were filed, the Solicitor conducted litigation as well as providing strategic advice about the litigation. In addition, the Solicitor was allegedly involved in the preparation and completion of tax returns for one or more of the clients.
[15] There are disputes over how the litigation was prosecuted by the Solicitor, whether she had proper instructions to take the steps that she took and whether the Solicitor tried to alienate the Client from the opposing side in the litigation. To that end, there is a dispute over whether the Solicitor missed an opportunity to resolve the litigation in the proceedings before Mesbur J. and Pepall J. and/or conducted herself improperly in those proceedings.
[16] There is also a dispute over whether the Solicitor performed accounting work, and whether the Solicitor was qualified as a Chartered Accountant or held herself out to be qualified as a Chartered Accountant. There also appear to be disputes over the valuation of the business and the steps that were taken to obtain that valuation.
[17] In early 2009, the Solicitor presented her bill to the Client. It was for approximately $300,000.00, once amounts that had already been paid were accounted for. The Client refused to pay this bill, and sought to assess the Solicitor’s account. In addition, the Client seeks the repayment of approximately $95,000.00 in costs that had previously been paid. In other words, the total value of this action is approximately $400,000.00.
c) The Commencement of This Litigation and Its Progress
[18] This litigation started in April 2009, when the client sought to have the Solicitor’s bill assessed. Various production and preservation Orders have been made by the Court between 2009 and the present time. Those have included motions for production and imaging of the Solicitor’s computer, as well as other documentation. A detailed history of the litigation is set out at paragraphs 17 to 28 of my November 14th, 2017 reasons.
[19] Since that decision was rendered, I have been endeavouring to move this matter to trial through a series of endorsements and case management conferences. However, we remain at the production and pleadings stage. This motion will resolve the pleadings and production issues, and no further production or particulars will be required.
[20] A brief explanation as to why I am case-managing this action, and why it is proceeding to a hearing before a Superior Court judge should be set out, as that explanation will help to explain the Orders that are made in these reasons. Normally, costs assessments are sent to an assessment officer by way of a Reference under Rules 54 and 55 of the Rules of Civil Procedure R.R.O 1990, Reg 194. This costs assessment is different, in that it is going to proceed before a judge of the Superior Court.
[21] In Moore v. John A. Annen Barrister Professional Corporation (2017 ONSC 7720), MacLeod J. sets out both the structure of the costs assessment process, and some of the problems with that process. One of the problems with the process is that it is not well defined. Given the length of this litigation, I formed the view that this case continued to need case management: that the assessment needed to take place before a Judge of the Superior Court to ensure that there was not wasted time; and that the Judge had jurisdiction to deal with all of the procedural and substantive issues necessary to ensure that this matter was properly and efficiently dealt with.
[22] This goal of ensuring that the matter was properly and efficiently dealt with is a key part of the Orders I have been making and the Orders that I will make in these reasons.
[23] We have been at the pleadings and production stage for more than a year, and this assessment must move forward. The materials that were prepared by the parties, and particularly the Client on this motion, raise concerns with the Court.
[24] As I have noted above, the Client provided charts that purport to outline the Solicitor’s position. However, the Client’s descriptions of the Solicitor’s position are both incomplete and unreliable. One example of this problem will suffice. Item #7 on the Client’s list includes the following description of the Solicitor’s position:
Client states that instructions she provided to the Solicitor were as a result of and reliance upon the advice, counsel, guidance and suggestions of the Solictior. Therefor, the particulars requested are within the knowledge of the Client (January 21, 2019 and January 28, 2019). The Solicitor denies she failed to advise the Court the share option to purchase the minority shares had been exercised by the Client. Before commencement of the hearing on or about November 25, 2008 the Solicitor made the Court aware of this. The Solicitor denies that she caused the Client to pursue the oppression application with the opposing parties. The decision to pursue the oppression application was that of the Client and the Client alone, costs incurred by the Client are entirely a result of her conduct. (November 21, 2018) The solicitor had no authority from the Client to disclose any information to Justice Pepall, before, during or after the trial. (January 26, 2018)
[25] The problem with this position is that it is incomplete. The Solicitor’s argument also states as follows:
The Solicitor does not refer to advice that she provided. Therefore, request for particulars of that advice is not appropriate.
Further, the particulars of the advice, counsel, guidance, and suggestions of the Solicitor are already within the knowledge of the Client. Particulars will not be ordered if they are within the knowledge of the party demanding them.
[26] As can be seen, the Solicitor’s argument is actually twofold. First, that the Solicitor has not referenced any advice in her particulars or her response to the Client’s particulars. Second, the advice (if any was given) is in the knowledge of the client. As will be seen, the second argument is weaker than the first argument. The first argument was not included by the Client in its summary of the Solicitor’s position.
[27] As a result, the Client’s summary of the Solicitor’s response is unhelpful to the Court in determining these issues. Indeed, as will be seen, if I only relied on the Client’s position on these points, I would have come to a different conclusion than the one I actually reached.
[28] This summary of the parties’ positions on one issue illustrates another problem with this litigation. The proceeding and the materials that have been provided by the parties have become so complex that it is difficult to be clear what either side is seeking. Although my illustration focuses on the Client’s position, the Solicitor’s position also suffers from this problem, although to a lesser extent.
[29] The search for particulars must end. As a result, I am ordering that no further particulars or production may be sought beyond what has already been provided and what has been ordered by these reasons.
Issues
[30] I have reviewed the written submissions of the parties, and a number of issues present themselves for resolution:
a) Should the Solicitor be estopped from seeking production because of the delay?
b) What production should be ordered?
c) What particulars should be provided?
[31] I will deal with each of these large categories in turn. The second and third categories raise sub-issues that I have addressed in these reasons. I have used the reasons that I have set out below to provide decisions on the items in the charts submitted by the parties. Where necessary, the charts also contain further reasons.
Issue #1- Estoppel
[32] The Client argues that the solicitor should be estopped from seeking additional production and particulars at this point. This argument is based on two separate, but related, points, as follows:
a) The Solicitor has delayed for nearly ten years in making these requests for documentary production. As a result, the Client has been prejudiced by these late requests and the documents may have been lost through either inadvertence or the regular purging of business records.
b) The Client suffered significant water damage and loss of records as a result of a hot water tank leak in Ms. Garagrella-Capobianco’s basement, and the files that were lost cannot be identified.
[33] I start with the delay in the requests. In essence, the Client is seeking to have the Solicitor’s requests for documents dismissed on the basis that the Solicitor delayed in making those requests. This request was originally framed as a matter of estoppel, but is also based on laches. Counsel for the Client argues that the concepts of estoppel and laches are synonymous. I disagree.
[34] The law generally recognizes two types of estoppel, issue estoppel and promissory estoppel. Issue estoppel is clearly not applicable here, as it requires a juridical determination to apply. Promissory estoppel arises when a party, by its words or conduct, makes a promise or assurance that was intended to affect the legal relationship with another party, and which is acted upon by that party to their detriment (see Tudale Explorations Ltd. v. Bruce (1978) 1978 1471 (ON SC), 20 O.R. (2d) 593 (Div.Ct.)).
[35] In this case, counsel for the Client has not pointed to any conduct, other than delay in making the formal request for documents, which would amount to promissory estoppel. In addition, counsel for the Client does not show how the Client would have detrimentally relied on this delay, other than through the general purging of corporate records, an issue that I will return to below.
[36] This brings me to the issue of delay, or laches. Generally, laches is a doctrine that is used to prevent parties from delaying in bringing causes of action forward after a long period of time, or to dismiss proceedings in toto in cases where the Plaintiff has inordinately delayed in pursuing an asserted cause of action. This doctrine does not generally apply to procedural issues in an action.
[37] Counsel for the Client was directed to provide any case-law that he was relying on to support his argument that the delay in making a request for documentary production is grounds for a Court rejecting that request. In response, counsel directed my attention to M(K) v. M(H) (1992 31 (SCC), [1992] 3 S.C.R. 6), Gottselig Estate v. Gottselig Estate (2014 SKQB 20) and Hurst v. Socit Nationale de L’Amiante (2008 ONCA 573).
[38] I have reviewed all of these cases. None of them are applicable to the facts before me. I will review each of these decisions in order to illustrate the reasons for my conclusion.
[39] First, in M(K), the Supreme Court considered a daughter’s claim for damages for incest against her father, which was brought more than a decade after the last assault had taken place. The Court found that the cause of action was not statute barred or barred by the doctrine of laches. However, the Court also noted (at para. 24), that parties should not sleep on their rights. There is nothing in this case that appears to directly apply to the facts before me. Further, for reasons which I will come to, I am of the view that the doctrine of laches does not apply to production requests made in an action that was started on a timely basis.
[40] In Gottselig Estate, the Court was dealing with the administration of an estate. Specifically, the Court was faced with a case where a house had been transferred from an Estate Trustee in her capacity as Trustee to her in her personal capacity. Over twenty (20) years later, the wife of the Estate Trustee’s brother challenged the house transfer. The Court dismissed the challenge on the basis of the limitations period and the doctrine of laches. Unlike in Gottselig, in the case before me, the action has been ongoing, and was commenced within weeks of the final account being rendered. Therefore, the decision in Gottselig Estate is clearly distinguishable from the facts before me.
[41] Finally, in Hurst, the Court considered the dismissal of an action for delay. In Hurst, an action for an oppression remedy had been commenced in 1987, but had not been pursued for sixteen years. The Court found that the action was justifiably dismissed for delay after this length of time without any action being taken.
[42] As I have indicated, all three of these cases are distinguishable on two grounds. First, I see nothing in these decisions that would permit the doctrine of laches to be applied to production issues in an action that is continuing to be prosecuted. Indeed, I am not aware of any case that makes this linkage.
[43] Second, there is a more fundamental problem with the Client’s argument. When litigation is commenced, both parties have obligations to preserve documents and to produce relevant documents. Therefore, the Client’s argument that they may have lost documents through generally purging old corporate records ignores the principles of discovery.
[44] While I acknowledge that some corporate records may only need to be kept for seven years, the commencement of this assessment changed the circumstances. Once this assessment was commenced, it was reasonably foreseeable that both sides would need to produce documents to justify their positions and all of the relevant documents should have been preserved.
[45] The production obligations in a costs assessment have similar features to the production obligations under the Rules of Civil Procedure. As a result, both sides had a positive obligation to preserve and produce relevant documents. This obligation is ongoing. The fact that the Solicitor did not act to enforce the Client’s obligations does not mean that those obligations are extinguished.
[46] In any event, the conduct of the litigation also defeats the Client’s argument from a factual perspective. For the first few years of the action, the Client engaged in significant efforts to obtain documentation and other records from the Solicitor. Then, starting in 2015, the Client pursued a motion to stay the assessment, and block the Solicitor from collecting any fees at all.
[47] It was only once this motion was dismissed in the fall of 2017 that production and particulars issues came to the fore. Therefore, although it would have been helpful for the Solicitor to raise her production requests earlier, both the course and the slow pace of this litigation (for which both parties bear some responsibility) means that the Solicitor’s conduct in not raising the production issues until the full scope of the questions to be litigated were defined was not unreasonable. Simply put, if I had granted a stay then the Solicitor’s production requests would have been moot.
[48] Accordingly, for these reasons, the Client’s estoppel argument is dismissed, and the documentary production requests will be considered on their merits.
[49] I should make one final comment about the Client’s assertions that the documents may have been lost as a result of a leaky water heater and that the client should not have any adverse inferences drawn against it for a failure to produce documents because of the significant passage of time. The questions of whether an adverse inference should be drawn or whether the Client’s explanations for any missing documents are sufficient are a matter for the trial judge’s determination. The explanations for missing documents, however, must be provided at this stage in the proceedings.
Issue #2- Production Requests
[50] Each party has made production requests of the other party. There are some themes that appear in the production requests that should be addressed generally, as follows:
a) Do the documents sought continue to exist?
b) Who has the obligation to produce certain documents?
[51] I will address those thematic questions in the following sections. If there are any specific production requests that require further explanation, I will set out those explanations in the charts that are appended to these reasons.
[52] Before addressing those thematic questions, however, I should provide some brief observations on the rules of production in a costs assessment and the principle of proportionality.
[53] As MacLeod J. notes in Moore, supra, there is no clear route to a determination of a costs assessment. The procedure that is used in costs assessments is based on Rules 54 and 55 of the Rules of Civil Procedure, and the power to order assessments of lawyers’ accounts is a power that is part of the inherent jurisdiction of the Courts of Ontario.
[54] Rule 55(1) provides an Assessment Officer with the ability to choose the simplest, least expensive and most expeditious procedure. This may include the adoption of specific procedures appropriate to the nature of the dispute (see Moore, supra at paragraph 11(g)).
[55] In addition, I am the case management judge for this matter. As a result, I have a broad discretion to fashion a procedure that protects the interests of the parties and ensures that this matter is dealt with expeditiously.
[56] This brings me to proportionality, which is a principle that has developed in the law in Ontario over the last twenty years, and is now enshrined in Rule 29.2. It is designed to ensure that the burdens of discovery do not dwarf the issues in the litigation.
[57] Applying the principle of proportionality usually, but not always, results in a downsizing of the production obligations. In conducting the analysis the Court starts, but does not finish, with the concept of arguable relevance. In ensuring access to justice, the Court must ensure that the parties are not unduly burdened by their production obligations, but that they are able to prepare their cases and respond to the other party’s cases. For a fuller discussion of this issue, see Ontario v. Rothmans Inc. (2011 ONSC 2504).
[58] In this case, there is an obvious concern that the entire proceeding has not been proportional to the amounts and issues in dispute because of the fact that it has been going on for ten years and because of the fact that there have been significant proceedings over procedural issues. It must be remembered that this is an assessment of a solicitor’s account that, in total, is worth just less than $400,000.00. Given the length of the proceeding and the volume of the materials that have been generated, I am concerned that the amount spent by the parties is approaching the value of the case.
[59] Even if it appears that applying the proportionality principle in this case is akin to closing the barn door after the horse has left, I still intend to impose it, and it still governs the orders that I am going to make in this case. Failing to apply the principle of proportionality, even at this late date, could result in the further expansion of issues and the further expenditure of resources in the pursuit of more irrelevant, or barely relevant, details.
[60] With those thoughts in mind, I will now deal with the specific issues relating to production.
a) Do the Documents Sought Continue to Exist?
[61] For a number of documents, the Client has stated that the documents may have been purged from their records, or lost in a flood that took place in the basement of Ms. Gargarella-Capobianco’s home a year or two ago.
[62] Similarly, the Solicitor has stated that she does not have the originals of some of the Affidavits that have been filed in this matter. The Solicitor may also not have originals of various documents.
[63] For the purposes of this motion, I do not intend to make any findings regarding the reasons for which either party has not produced documents or is not able to produce documents. In other words, any issues or arguments about spoliation are to be made before the judge hearing the assessment.
[64] At this point, if a party cannot produce a relevant document, they are to provide their explanation as to why they cannot produce the document. That explanation will be binding on them at trial and can be the subject of cross-examination at trial. It is, therefore, to be included in the Affidavits being prepared for trial.
b) Who Has the Obligation to Produce Certain Documents?
[65] The Client has limited its willingness to produce certain documents to those that are in its possession. For example, the Solicitor seeks copies of all notices of assessments and re-assessments from the Canada Revenue Agency (“CRA”). In our system, the obligation to produce a document extends to any documents in a party’s “possession, control or power”.
[66] Therefore, the Client is obligated to make efforts to obtain copies of any documents that are in its control or power, as well as producing those in its possession. The Client is, therefore, directed to make prompt and reasonable efforts to obtain those documents as noted in the chart attached to these reasons.
[67] As a more general observation, I would note that if each side has the same document in their possession, they are both obligated to produce it. There are at least two reasons for reaching this conclusion. First, the fact that a party has received a document, or has that document in their possession can be, in and of itself, relevant evidence. Second, a party may have made notations on their copy of a document that are also relevant.
[68] Finally, the Client has asserted a claim of privilege over certain documents. To the extent that the Client claims privilege, redacted documents are to be provided. If the Client asserts privilege over the entirety of a document, then the date of that document and sufficient other identifying information is required to be produced. For clarity, this information is the information that would appear in an Affidavit of Documents under the Rules of Civil Procedure.
[69] With these general principles in mind, I have provided specific directions in Schedules “A” and “B”, which set out the documentary requests of the Client and the Solicitor respectively.
Issue #3- Requests for Particulars
[70] The same principles relating to procedure and proportionality that I set out in the production section apply equally in considering particulars. In determining what particulars are provided, the starting point is the purpose of the particulars that I have ordered. In this case, they serve three purposes.
[71] First, there are no pleadings in this case. The particulars that I have ordered are designed to replace pleadings. Therefore, as pleadings are described in the Rules, these particulars should be concise statements of the material facts that each party is relying on. Standard pleadings are not generally supposed to contain evidence (See Rule 26.06, Rules of Civil Procedure), but the particulars in this case must provide at least this much information.
[72] Second, as the Ontario Court of Appeal noted in Antonacci v. Great A & P Company of Canada Limited ((2000) 181 D.LR. (4th) 334 at para. 34), particulars are to ensure that each party knows the case that they have to meet.
[73] Third, the provision of particulars in this case is an element of the discovery process. As a result, the “particulars” that each party has to provide in this case will necessarily be somewhat broader than the particulars that would normally be ordered in a standard civil proceeding.
[74] The materials that the parties have filed raise a number of specific issues respecting particulars, as follows:
a) Can the Client refuse to provide particulars, because the burden of proof remains on the Solicitor in this assessment?
b) Is the Solicitor able to argue that she does not have to provide particulars because the information sought is in the Client’s knowledge?
c) For a number of items, the Client has stated that the “Solicitor’s response will be treated as her fulsome response”. What is the effect of this statement, if any?
[75] I will deal with each of these issues in turn.
a) The Burden of Proof
[76] The Client asserts that the Solicitor has the burden of proving her account. In my view, that is a correct statement of the law (see, for example, MacLeod v. Van Duinen (N.S. Sup. Ct.) (1994) 1994 4333 (NS SC), 30 C.P.C. (3d) 191 and Schwisberg v. Kennedy 2004 CarswellOnt 3445 (S.C.J)) In support of that assertion, the Client has responded to a number of particulars requests by stating that the information is in the knowledge of the Solicitor.
[77] Normally, if a fact is in the knowledge of the side requesting particulars, the Court will not order the other side to provide particulars. However, in this case there is no discovery process. As a result, the particulars that the parties in this case were required to provide are standing in the place of an opportunity to conduct an examination for discovery. Therefore, the obligation to provide particulars and respond to requests for particulars is broader in this case because of the nature of the process that I have adopted.
[78] It is quite possible that certain facts are in the knowledge of both parties. However, in this case that does not excuse one side from refusing to provide the particulars of the facts in their knowledge because the other side has the burden of proof, either on a particular fact or on the case as a whole.
[79] Two examples will serve to illustrate the problem with the Client’s argument in this respect. First, consider the general discovery process. In that process, parties are entitled to ask the other side questions about relevant facts that are in dispute. Even if the burden of proof lies on one side, the other side is still generally required to respond to relevant questions, and provide the information in their knowledge.
[80] In this case, there is no discovery process. As a result, as I have noted above, the particulars I have ordered in this case serve the same function as discovery. Given the purpose of particulars, it is clear that the Clients should be obligated to provide the facts in their knowledge even if the Solicitor bears the burden on the case as a whole. To order otherwise would require the Solicitor to proceed to trial without knowing what the Client’s evidence would be.
[81] Second, consider an example from this case. In the final particulars requests, counsel for the Solicitor seeks particulars about the “counsel and advice of Solicitor to Katherine Gargarella-Capobianco that led to acrimony and litigation.” The Client may recall specific counsel and advice. To say that this is in the Solicitor’s knowledge would either lead to a trial by ambush or would waste the Court’s time. I will deal with each possible outcome.
[82] If the Solicitor and the Client remember the counsel and advice given by the Solicitor in the same way, then there is no factual dispute and no need for the Court to make findings of fact on what happened. The Court could move directly to consider the legal or factual effect of that advice. Requiring both sides to lead their evidence on a point where they are in agreement would be a waste of the Court’s time. An agreed fact can be set out in an agreed statement of facts.
[83] If the Solicitor remembered the advice differently than the Client, the Client can then cross-examine the Solicitor (who proceeds first) on her version of events, without giving the Solicitor any advance notice of that version of events. This is trial by ambush. The discovery process generally removes a party’s ability to ambush another party on cross-examination.
[84] Indeed, the case-law supports my approach. In Starkman Barristers v. Cardillo (2017 ONSC 5530), Boswell J. was considering a claim by the clients that the Assessment Officer had shifted the burden of proof by requiring them to disclose significant documentation. After quoting a passage from the transcript where the Assessment Officer discussed the burden of proof, and the client’s obligation to provide disclosure, Boswell J. stated (at paragraphs 48 and 49):
[48] It seems to me that this exchange reveals a number of things. First, the Assessment Officer explicitly acknowledged that the onus was on the lawyer to prove his accounts. Second, the Assessment Officer correctly observed that, regardless of where the ultimate burden of persuasion falls, the party asserting a particular fact or state of affairs, has an evidentiary burden to establish what is asserted. And third. The Assessment Officer expressed some dissatisfaction with counsel’s cavalier attitude towards the content of the endorsement. Whether it was a court order, or a barrister’s undertaking to the court, compliance was expected.
[49] The clients are, in my view, especially asserting that the orders requiring them to disclose any specific objections to the accounts – and concerns raised about their failure to comply with those orders – constitute a shifting of the burden of proof. They are wrong. The pre-trial endorsements were proper trial management.
[85] In my view, pre-trial requirements to direct particulars and production are proper case management, and do not shift the burden of proof.
[86] I reject the Client’s approach to particulars on this matter. If there is an issue in dispute, then the parties are both entitled to know the case that they have to meet.
b) Information in the Client’s Knowledge
[87] The Solicitor argues that some of the particulars sought by the Client are in its knowledge, and the Solicitor should not be required to provide those particulars. I reject this position for the same reasons I set out in the previous section. Put simply, the parties are both entitled to know the case that they have to meet.
[88] However, in some of the cases where the Solicitor has advanced this argument, she has also advanced another point. Specifically, the Solicitor argues that on a number of occasions, the Client has sought additional particulars of advice that the Solicitor has not referenced in her reply to the Client’s original particulars.
[89] I am sympathetic to the Solicitor’s concern that these additional requests of the Client are designed to frustrate the process of exchanging requests for particulars. I am also concerned that these additional requests made by the Client are for information that is in the Client’s knowledge.
[90] However, I am also mindful that this proceeding has taken ten years to bring to trial, and that the parties have been locked in litigation over who should do what and who should produce what for most of that time period. In my view, if I do not address these issues at this stage, they will only be raised again by the client at the actual assessment, which will almost inevitably delay the proceedings.
[91] As a result, I am providing the following general directions:
a) The Client is not permitted to raise any issue of advice that she has not already raised in its various responses to the Solicitor’s particulars without my leave or the leave of the judge hearing the assessment.
b) Where the Client has raised additional concerns about the Solicitor’s advice in response to one of the Solicitor’s particulars, the Client is obligated to provide its own understanding of who the advice was provided to, where it was provided, how it was provided and when it was provided.
c) The Solicitor is expected to provide the same information, as to her understanding, in response to all of the points raised in paragraph b.
c) The “Fulsome Response” Issue
[92] In reply to approximately ten (10) of the Solicitor’s responses for particulars, the Client’s counsel stated words to the effect that the Solicitor’s response would be treated as her fulsome response. I presume that, by this phrase, the Client’s counsel means her complete response. Although the Solicitor is no longer seeking any response with respect to these statements, I am of the view that I should provide my comments on this issue so that the parties are clear on my expectations.
[93] In my view, it is not open to the Client to say that the Solicitor’s response is deemed to be complete. The Solicitor has provided particulars and is going to be required to provide more particulars as a result of these reasons. It is my expectation that the process of providing particulars will allow each party to understand the case that they have to meet.
[94] However, if a party did not provide complete particulars, or remembers something in addition to what they provided in this process, the admissibility of that evidence will be a question for the trial judge. In addition, at trial each party is providing Affidavits that will cover the examinations in chief of their witnesses. As a result, there should be very few surprises at trial.
[95] The expectations I have set out above will govern the parties, subject to any further rulings from the judge hearing the assessment. Therefore, the comments in the Solicitor’s materials about the Client’s fulsome response are, in my view, superfluous.
d) Privilege
[96] I acknowledge that there may be issues of privilege that attach to certain documents and advice. Privilege is a harder issue with respect to particulars and discovery than it is with respect to documents. However, the same general approach that I have set out above should be adopted here as well.
[97] Specifically, if a party is claiming privilege over portions of discussions, there should be some more specific identification made of the claim of privilege so that it can be litigated, if necessary.
d) Conclusion on Particulars
[98] Based on the foregoing, I have recorded my directions in the particulars chart for each party. The particulars that are sought should be sufficiently detailed to provide the other party with enough information to know the case that they have to meet. To that end, the particulars should provide details about the who, what and when of each fact. However, the particulars do not need to address every conceivable issue or provide every small detail.
Conclusion and Costs
[99] The production and particulars that I have ordered in Schedules “A” and “C” are to be produced by the Solicitor within thirty (30) days of today’s date. The production and particulars that I have ordered in Schedule “B” and “D” are to be produced by the Client within thirty (30) days of today’s date.
[100] The one exception to this time limit is in cases where particulars are required from both sides. As an example of this problem, the second item on the Client’s chart of particulars (Appendix “C”) is an item where the Solicitor has to provide more information. However, the Solicitor will likely not be able to provide these particulars until the Client provides the particulars for item #1 on Schedule “D”.
[101] The parties are expected to work together to resolve any of these types of issues. If they are unable to resolve those issues, then we will address it at our next appearance. I am scheduling our next appearance for May 13th, 2019 in Brampton at 10:30 am, unless the parties have strong objections to that date.
[102] Any party who takes the position that the particulars provided by the other side are insufficient or that the particulars provided do not comply with my order has seven (7) calendar days from the receipt of the answers to outline what additional information they are seeking, and why they are of the view that the information is required. I will then review those submissions and determine whether any reply is required.
[103] In terms of costs, each party is to provide their costs submissions within fourteen (14) days of today’s date. Those costs submissions are to be no more than two (2) single-spaced pages, exclusive of bills of cost, offers to settle and case-law. The bills of cost are not to include any additional argument on costs. In particular, the bills of cost are not to include additional argument on the factors under Rule 57.01.
[104] Each party may submit a reply submission of no more than one (1) single-spaced page, exclusive of case-law within seven (7) days thereafter.
[105] The font on the costs submissions is to be no smaller than eleven (11) point font.
[106] If I do not receive any submissions in accordance with this timetable, there shall be no costs for this motion.
[107] Finally, if a party fails to scrupulously follow the instructions on the length and content of the costs submissions, I will not consider that party’s costs submissions. Instead, that party will be deemed to accept the position on costs advanced by the other party. The costs submissions are to be filed both with the Court Office in Milton and electronically with my judicial assistant.
LEMAY J
Released: April 3, 2019
Court File no. 2675/09
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE SOLICITORS ACT
AND IN THE MATTER OF
FRANCES M. VIELE
Solicitor
AND
GARGAN INVESTMENTS LIMITED
Client(s)
Schedule “A” to Reasons of April 3, 2019
CLIENT’S CHART OF DOCUMENTS REQUESTED FROM SOLICITOR
1
Original Affidavit sworn by Katherine Gargarella-Capobianco sworn March 5, 2008. (Not in Court file)
NO
YES
Addressed in reasons. Briefly, parties are required to produce originals if they have them in their possession and, if not, to provide an explanation as to where those originals have gone. The answer provided by the solicitor is sufficient.
2
Original of Exhibit B of the Affidavit of Frances Viele sworn January 6, 2016, that being the alleged faxes received by Ms. Viele transmitted by Ms. Gargarella -Capobianco. (Not in Court file – lost)
NO
YES
Addressed in reasons. Briefly, parties are required to produce originals if they have them in their possession and, if not, to provide an explanation as to where those originals have gone. The answer provided by the solicitor is sufficient. I am also not convinced that the original of this document is actually relevant to the underlying questions. It appears to me that the Client may be continuing to litigate issues that were determined by my May 11th, 2018 decision. If that is the sole reason for the request, then the request is denied on the basis of irrelevance.
3
Production of the generic listing of solicitor’s receipts for disbursements, solicitor’s telephone records and solicitor’s dockets not produced per solicitor’s advice of November 21, 2018 as sought December 3, 2018.
Yes
Yes
As I have noted in my reasons, the positions that the parties take on this motion will be binding at trial. Nothing further is required on this point.
Court File no. 2675/09
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE SOLICITORS ACT
AND IN THE MATTER OF
FRANCES M. VIELE
Solicitor
- and -
GARGAN INVESTMENTS LIMITED
Client(s)
Schedule “B” to the Reasons of April 3, 2019
Solicitors Chart of Documents Requested from Client
Production Requested
Answer Provided
Still being Sought
Court
copies of all notices of assessments and reassessments from the Canada Revenue Agency in respect of the tax returns filed for Rose Gargarella and the Client during the relevant period.
Yes*
Yes
As per reasons. The Client is required to make prompt, reasonable efforts to obtain these documents from the CRA
In respect of the tax returns prepared by the Solicitor, copies of all correspondence from the Canada Revenue Agency and responses from the Client
Yes*
Yes
As per reasons. The Client is required to make prompt, reasonable efforts to obtain these documents from the CRA
copies of Client accounts in respect of amounts that were incurred, and copies of all calculations, to attempt to justify and support the fair market valuation of the shares.
Yes**
Yes
As per reasons, efforts must be made to obtain these documents from third parties. Redacted copies are to be provided and I retain jurisdiction to address any issues relating to privilege.
copies of the accounts issued by Mr. R. Niejadlik to the Client for the period relevant period.
Yes**
Yes
As per reasons, efforts must be made to obtain these documents from third parties. Redacted copies are to be provided and I retain jurisdiction to address any issues relating to privilege.
copies of any and all records of Mr. R. Niejadlik’s disciplinary proceedings before the Law Society of Ontario, including but not limited to records in relation his resignation from the Bar.
No
No
No longer relevant.
copies of invoices in respect of additional expenses incurred by the Client as a consequence of any incomplete or improper services provided by the Solicitor and copies of the calculations or other work completed in respect of which these invoices were paid
Yes**
Yes
As per reasons, efforts must be made to obtain these documents from third parties. Redacted copies are to be provided and I retain jurisdiction to address any issues relating to privilege.
The Solicitor requests copies of the business, personal and cellular telephone records of the Client for the relevant period.
No
Yes
To be produced to the extent that they are in the Client's possession, control or power. Given the number of meetings that these parties had telephonically, these records will potentially be of assistance to both sides
- Qualified (to the extent they are in the possession of the client)
** Qualified (to the extent they are in possession of client, don’t contain privileged or irrelevant information)
Court File no. 2675/09
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE SOLICITORS ACT
AND IN THE MATTER OF
FRANCES M. VIELE
Solicitor
AND
GARGAN INVESTMENTS LIMITED
Client(s)
Schedule “C” to the Reasons of April 3, 2019
Particulars / Production Sought from Solicitor
Satisfactory answer received?
particulars or Item still being sought?
LeMay J. Decision Re: Production
1
Names of Solicitor’s Witnesses, and the issues to be addressed by the witnesses
No
Yes
To be produced.
2
The Client requires particulars of the dates and communications of the Solicitor with the Client, its agent and authorized representative and the specific instructions of the Client referenced by the Solicitor and the particular documents relied upon by the Solicitor to corroborate such communications and instructions from the documents produced by the Solicitor and forming part of the court record (December 3, 2018, Paragraph 1)
No
Yes
Addressed in the reasons. Further information is required as set out in the reasons to address the following:
Any documents supporting the Solicitor’s position.
Any specifics that the Solicitor remembers respecting who the advice was communicated to, when it was communicated, etc.
However, the Client is, as per my reasons also obligated to provide particulars on her understanding of this advice.
3
The particulars of the programs used by the Solicitor to prepare the Client’s tax returns are required (December 3, 2018, Paragraph 12)
No
Yes
Nothing further required. If the Solicitor does not recall the particulars of the programs used to prepare the returns, then the Court can’t order anything further.
In addition, it is not clear to the Court how this information is relevant.
4
The Client requires particulars of the opinion or other comments communicated to the Client by the Solicitor regarding the remittances to Mathilde Genova; the opinion or other comments communicated to the Client by the Solicitor regarding the issuance of a T-4 on account of such remittances, and the opinion or other comments communicated by the Solicitor regarding the implication of such remittances or T-4, and the particulars of the communications of the Solicitor to the Client and/or the Client’s agent, whereby the Solicitor’s alleged opinions and statements were provided to the Client and the Client’s response to same. (December 3, 2018, Paragraph 18)
No
Yes
This request for particulars appears to be generally answered, but more details may be required in terms of when and where this advice was provided, and whether there are any additional documents that memorialize this advice being given.
5
The Client requires particulars of the Solicitor’s advice communicated to the Client regarding the cross application for oppression and repayment of the monies paid to Mathilde Genova and to deny Richard Gargarella access to the premises, and if such advice changed from time to time, the particulars of such changes, and particulars of instructions to the Solicitor communicated from the Client (December 3, 2018, Paragraph 19)
No
Yes
As per my written reasons on Issue #3.
6
The Client requires particulars of the Solicitor’s advice communicated to the Client, and if such advice changed from time to time, the particulars of such changes, and the particulars of instructions to the Solicitor communicated from the Client (December 3, 2018, Paragraph 19 and 20)
No.
Yes
As per my written reasons on Issue #3.
7
The Client requires particulars of such advice and cautions, if any, communicated to the Client by the Solicitor regarding the disclosure or non-disclosure of the Client’s exercising of the share option provisions of the unanimous shareholder agreement to the Court at or before the trial of the oppression application before Justice Pepall and the instructions, if any communicated by the Client to the Solicitor. (December 3, 2018, Paragraph 21)
No
Yes
As per my written reasons on Issue #3. I note, however, that the Solicitor’s response on this point is more complete than in other cases and, as a result, some of what is required may already be provided.
The fact that the Solicitor has provided some information does not relieve the Client of its obligation to provide its understanding of the advice that was provided.
8
The Client requires particulars of the Solicitor’s advice communicated to the Client regarding the cross application in the oppression application, and if such advice changed from time to time, the particulars of such changes, and particulars of instructions to the Solicitor communicated from the Client (December 3, 2018, Paragraph 22)
No
Yes
As per my written reasons on Issue #3.
9
The Client requires particulars of the Solicitor’s advice communicated to the Client regarding the alleged litigation strategy to harass Richard Gargarella developed by Ray Niejadlik, and if such advice changed from time to time, the particulars of such changes, and particulars of instructions to the Solicitor communicated from the Client (December 3, 2018, Paragraph 23, 24 and 25)
No
Yes
As per my written reasons on Issue #3. Again, however, the Solicitor appears to have provided much of this information even though she asserts that the particulars are in the knowledge of the client. As a result, much of what is required may already have been provided.
The fact that the Solicitor has provided some information does not relieve the Client of its obligation to provide its understanding of the advice that was provided.
10
The Client requires particulars of the instructions the Solicitor claims were communicated by the Client regarding Client preparation for discoveries and for trial, and the information and advice or cautions, if any, communicated by the Solicitor upon which such Client instructions were provided. The Client further requires particulars of dates the Solicitor sought to prepare the Client, the communications to the Client seeking to schedule the preparation and the responses of the Client (December 3, 2018, Paragraph 26)
No
Yes
The answer appears to be sufficient- in that the Solicitor has no further information on this point. Nothing further is required, if the assumption that the Solicitor has no independent recollection of any of the dates on which preparation meetings took place is correct.
11
The Client requires particulars of how the payments to Ms. Genova (by Gargan Investments Ltd. which non-payment was a material factor in the oppression application against the Client) were described by the Solicitor and communicated to the Client. (December 3, 2018, paragraph 27)
No
yes
As per my written reasons on Issue #3. However, once again the Solicitor appears to have provided particulars in response to this request even though the Solicitor has asserted that this information is in the knowledge of the Client. As a result, much of what has been asked for may already have been provided.
The fact that the Solicitor has provided some information does not relieve the Client of its obligation to provide its understanding of the advice that was provided.
12
The Client requires particulars of the instructions regarding the preparation and non-filing of the bill of costs prepared by the Solicitor in the oppression application (December 14, 2017, February 13, 2018, December 3, 2018, Paragraph 28)
No
No
No longer relevant.
13
The Client requires particulars of the Solicitor’s understanding of how the proceedings by the Alderwood Café came to the Client’s attention, and the particulars of the communications between the Solicitor and Client whereby such understanding was derived; and the particulars of the communications of the Solicitor to the Client regarding the proceedings of the Alderwood Cafe against the Client including without limiting, service, filing of a notice of intent to defend, statement of defence or other response, the requests for instructions from the Solicitor to the Client and the instructions received from the Client. (December 3, 2018, Paragraph 32)
No.
Yes
The Solicitor’s answer on how the Alderwood proceedings came to her attention is sufficient, and nothing more is required on that point.
However, if the Solicitor is aware of any communications between herself and the client respecting the Alderwood litigation that are not covered by the notes already produced, then the Solicitor is obligated to provide that information.
For clarity, I am NOT ordering that documents in the Court file be produced by either side. Those documents, if relevant, can be obtained by a party from the Court office. If, however, a party obtains those documents from the Court office, they must share them with the other side.
14
The Client requires particulars of the relevant issues and the advice communicated by the Solicitor regarding the dispute with Alderwood Café, and responses received to such advice. (December 03, 2018, Paragraph 32)
No
Yes
The answer to this request for particulars is covered by my directions on the previous question.
15
The Client requires particulars of the communication of the termination of the Solicitor’s retainer, and if documentary, reference to the termination as part of the documentary productions forming part of the court record. The Client also requires particulars of the communications of the Solicitor whereby she provided her costs submissions to the Client, the costs submissions of the opposing party and any other documents relevant to the costs submissions to be made to the Court. (December 3, 2018, Paragraph 33)
No
Yes
This is dealt with by my reasons on Issue #3.
16
The Client requires particulars of the “larger strategy” as referenced by the Solicitor, and the means and manner in which the “larger strategy” was developed, including dates and the individuals with whom the Solicitor engaged to develop the “larger strategy”. (December 3, 2018, Paragraph 35)
No
Yes
This request for particulars appears to overlap considerably with the next request (#17). In terms of both of them, the Client is entitled to know what the Solicitor will say about her involvement in the development of the “larger strategy”, as it appears that this “larger strategy” is a significant part of what went on in this case. To that end, the Solicitor is directed to provide particulars of the following:
Her knowledge on the larger strategy
Whether she was involved in developing that larger strategy.
Whether she consulted or discussed the larger strategy with anyone.
17
The Client requires particulars of the Solicitor’s advice communicated to the Client regarding the “larger strategy”, and if such advice changed from time to time, the particulars of such changes, and particulars of instructions to the Solicitor communicated from the Client. (December 3, 2018, Paragraph 35)
No
Yes
Addressed in the answers to the previous question.
18
The Client requires particulars of the correction to the buy sell. (December 3, 2018, Paragraph 36)
No
Yes
As per my written reasons on Issue #3.
Court File no. 2675/09
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE SOLICITORS ACT
AND IN THE MATTER OF
FRANCES M. VIELE
Solicitor
- and -
GARGAN INVESTMENTS LIMITED
Client(s)
Schedule “D” to the Reasons of April 3, 2019
SOLICITOR'S CHART OF CLIENTS' OUTSTANDING PARTICULARS
SUMMARY OF OUTSTANDING PARTICULARS
Particulars Requested
Answer Provided
Still being Sought
Court
retainers that the Client disputes
No
Yes
The Client is to provide these particulars, and any associated documents. This is one of the particulars covered by my reasons on the burden of proof.
hourly rates for services of the Solicitor that the Client disputes
No
No
NO LONGER REQUESTED
time for which the Solicitor charged that was not incurred by her
No
Yes
To the extent that the Client can specifically identify time that was charged by the Solicitor but not actually incurred by her, the client is to do so. This is one of the particulars covered by my reasons on the burden of proof. I note that some information has been provided already.
amounts charged by Solicitor that are excessive
No
Yes
To the extent that the Client can identify specific amounts charged by the solicitor that the Client says are excessive, the Client is to do so. This is one of the particulars covered by my reasons on the burden of proof.
time charged by Solicitor that is excessive
No
Yes
Answering the previous two requests for particulars should resolve this one as well. To the extent that additional information is required to show what time the Client claims is excessive, that information is also to be provided. This is one of the particulars covered by my reasons on the burden of proof.
expenses incurred by Solicitor that the Client disputes
No
Yes
To the extent that the Client can identify specific expenses that they dispute, then those are to be identified, and the basis of the dispute is to be provided. This is one of the particulars covered by my reasons on the burden of proof.
additional costs incurred by the Client, the identity of the person to whom these costs were paid and the calculations performed in respect of the Client attempt to justify and support the fair market valuation
Yes*
Yes
This is governed by my reasons on privilege. Additional evidence may be required.
processes and programs that Solicitor used that were not proper and current and their impact upon the tax returns
Yes
No
NO LONGER REQUESTED
Solicitor's interruptions and objections in the oppression application that unduly lengthened proceedings and particulars of the increase in client costs as a result thereof
No
No
NO LONGER REQUESTED
conduct of the Solicitor in the oppression application before Justice Mesbur that resulted in loss of trial then scheduled (Client answer did not seem to be complete)
No
Yes
Having reviewed the answer that was provided at point 10 of the Client's January 17th, 2019 response, it appears that a sentence (or at least part of a sentence) is missing. The Client is to complete the answer.
other acts and omissions recommended by the Solicitor
Yes
No
NO LONGER REQUESTED
counsel and advice of Solicitor to Katharine GargarellaCapobianco that led to acrimony and litigation
Yes
No
NO LONGER REQUESTED
the Solicitor's failure to properly prepare the Client for examinations and trial
No
Yes
The Client is to identify the basis for the claim that the Solicitor failed to properly prepare for examinations and trial. This is one of the particulars covered by my reasons on the burden of proof.
evidence of which the Client did not understand or appreciate that the Solicitor attempted to cause the Client to give
No
Yes
The description of this is unclear in the chart, and it is difficult to track this matter back to the original materials. However, having reviewed the original source materials, it appears that the Client (at paragraph 27 of its December 3rd, 2018 submissions) is alleging that the Client relied on the Solicitor's advice, guidance and urging in explaining her theory of the case. The specifics of this advice are required to be produced. This is governed by my reasons on the burden of proof (Issue #3)
incompetent legal work Solicitor provided while acting as the representative for Ms. Gargarella-Capobianco and the Corporation
No
Yes
The Client is to identify which work was incompetently performed and the basis for that assertion. This is one of the particulars covered by my reasons on the burden of proof.
incompetent tax work that Solicitor provided while acting as the representative for Ms. Gargarella, particulars of the incompetent tax work that she provided while acting as the representative for Ms. Gargarella and particulars of the tax work that she provided in respect of which she was unqualified
Yes
No
NO LONGER REQUESTED
status of the costs submissions that the Solicitor failed to disclose to the Client, particulars of the cost submissions that were not completed by the Solicitor, additional costs and efforts expended by the Client to provide reply submissions and a copy of these reply submissions
Yes
No
NO LONGER REQUESTED
the amount that the Client is seeking by way of setoff for additional expenses incurred by the Client as a consequence of any incomplete or improper services provided by the Solicitor
Yes
No
NO LONGER REQUESTED
particulars of the costs associated with the recovery of the deleted files
Yes
No
NO LONGER REQUESTED
particulars of the insufficiency of the programs for their intended purpose and the impact of this insufficiency on the preparation and filing of the Client's tax returns
Yes
No
NO LONGER REQUESTED
particulars of the conduct that demonstrated to the Court her lack of understanding and professionalism and how this conduct adversely impacted the Client's case
Yes
No
NO LONGER REQUESTED
relief in the proceedings that could have been obtained by the Client (Solicitor's request did not correspond to the referenced paragraph)
No
Yes
clarification and particulars of the manner in which her response will be treated as her fulsome and complete response to the position of the Client
No
No
NO LONGER REQUESTED
*qualified (to the extent that they are reasonably available and don't contain privileged information)
COURT FILE NO.: 2675/09
DATE: 2019 04 03
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FRANCES M. VIELE
Solicitor
- and -
GARGAN INVESTMENTS LIMITED
Client(s)
REASONS FOR JUDGMENT
LEMAY J
Released: April 3, 2019