COURT FILE NO.: CV-16-2685 DATE: 20190624
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
CORRECT GROUP INC. and CORRECT BUILDING CORPORATION Plaintiffs
John Finnigan and James P.E. Hardy, for the Plaintiffs
- and -
GEORGE CAMERON and HGR GRAHAM PARTNERS LLP Defendants
Michael R. Kestenberg and Aaron Hershtal, for the Defendants
HEARD: December 5, 2018 (Followed by Written Submissions)
DALEY RSJ.
REASONS FOR DECISION
Introduction:
[1] The defendant lawyer, George Cameron and his law firm, HGR Graham Partners LLP brought a summary judgment motion seeking the dismissal of this action.
[2] For the reasons set out below, the defendants’ motion is dismissed.
[3] There are two related actions, namely Correct Group Inc. v. The Corporation of the City of Barrie file no. 384/11 (Orangeville) and Correct Building Corporation et al. v. Lehman et al. file no. CV – 13 – 5678 (Brampton).
[4] I appointed myself as the case management judge in respect of the within action and the two actions referenced above, which for ease of reference I have been referring to respectively as the Barrie Action and the Barrie Defendants’ Action during the course of case management.
[5] With the consent of all counsel in these actions, I directed that an early pre-trial conference be conducted to explore the possibility of settlement and to streamline the process of this litigation. The pre-trial conference was held before me on June 29, 2018, however no meaningful settlement discussions took place.
[6] That pretrial was conducted in all three actions and counsel on behalf of all parties fully participated. Documentary disclosure, oral examinations and a variety of motions remained outstanding in both the Barrie Action and the Barrie Defendants’ Action at the time.
[7] The within action was at a very early stage at the time of the pretrial and apart from the exchange of pleadings, documentary disclosure and examinations for discovery have not been conducted.
[8] At the pre-trial conference counsel for the defendant Cameron and his law firm advised that he would be bringing a summary judgment motion in this action.
[9] Much of the factual background that underlies all of these actions is not controversial.
[10] However, in order to place my decision, as outlined below, in proper context it is necessary to review the historical background.
[11] The three actions all relate to real property referred to as the Allandale Station Lands, which are located within the City of Barrie (“Barrie”). This property is made up of approximately nine acres and contains an historic railway station, which had previously been used by the Canadian National Railway Company. Barrie, through an entity associated with it, The Allandale Community Development Corporation, acquired title to the lands referred to as the Station Lands.
[12] In 2008 Barrie issued a Request for Expressions of Interest for the purpose of soliciting bids for the proposed redevelopment of the Station Lands. The YMCA of Simcoe/Muskoka (the “Y”) submitted a joint development bid with the plaintiffs. This proposal included the construction of a new YMCA facility as well as residential/commercial development to be built by the plaintiffs.
[13] Barrie was authorized by its City Council to negotiate exclusively with the plaintiffs and the Y for the development of the property. In March 2009 the parties agreed to the terms of a “preliminary agreement”, which was approved by Barrie in April 2009. This agreement was executed by Barrie, the Y and Correct Group Inc. in May 2009. This preliminary agreement provided that the parties to the agreement would negotiate, among other agreements, an Agreement of Purchase and Sale (“APS”) with respect to the property.
[14] It is Cameron’s evidence that during the summer months of 2009 he exchanged various drafts of the APS with Barrie and in turn he sent copies of proposed drafts delivered by Barrie with his recommended amendments to Alan Furbacher (“Furbacher”), the plaintiff’s representative, to the Y’s representative and to the plaintiffs’ consultant William Moore, specifically with respect to warrantees as to the environmental condition of the lands.
[15] Ultimately Barrie deleted all representations, warranties and indemnities from the draft APS regarding the environmental and archaeological condition of the lands.
[16] It is the evidence of Cameron on this motion that he delivered six historical environmental and archaeological reports, that were provided to him by Barrie, with respect to the property, by Purolator Courier along with a cover letter dated September 15, 2009, both to the Y as well as to Furbacher. In his evidence on this motion Furbacher denied ever receiving the letter and the environmental and archaeological reports.
[17] In October 2009, the Y suspended negotiations with respect to the proposed purchase and development of the lands. Ultimately, in early 2010 the Y withdrew from the negotiations entirely.
[18] The litigation that is being advanced in both the Barrie Action and the Barrie Defendants’ Action, as well as in this action, is based on the plaintiffs’ assertion that they suffered damages for negligent misrepresentation in the sum of $30,000,000 as a result of the plaintiffs having relied upon negligent misrepresentations and the failure of all defendants to disclose the presence of contamination on the subject lands and the possible presence of an Indigenous burial site, all of which impeded the development of the lands. The plaintiffs claim to have expended substantial monies and resources on the proposed land development that otherwise would not have been incurred were it not for the negligence and misrepresentations of the defendants in all three actions.
[19] On the summary judgment motion the defendants assert that the defendant Cameron and his law firm were retained only to represent the interests of the Y and that at no time had they been retained as solicitors to represent the plaintiffs in any of the contemplated transactions.
[20] On July 7, 2009, Cameron sent a draft APS to the president of the Y and to Furbacher for their review and comments. Furbacher replied to Cameron on July 17, 2009, offering some comments on the APS but also advising that his lawyer had not reviewed the agreement yet and his email in response was copied to Stephanie Campanaro, a lawyer with the law firm Borden Ladner Gervais LLP. Cameron states that he believed Ms. Campanaro was the solicitor retained by the plaintiffs and that she would be advising them with respect to the proposed transactions. It is the position of the plaintiffs that Ms. Campanaro was not retained by them to provide legal services and advice with respect to the proposed land development.
[21] In the Barrie Action, Barrie brought a motion seeking an order to remove a certificate of pending litigation (“CPL”) registered on the property by the plaintiffs. In the CPL motion, Furbacher swore an affidavit dated April 30, 2012, wherein he deposed that Cameron was not the plaintiffs’ lawyer.
[22] In his affidavit filed in response to this summary judgment motion, Furbacher states that the plaintiffs had “not formally retained Mr. Cameron” but also in cross-examination conceded that he would not have sworn a false affidavit, and also acknowledged that Cameron was not retained by the plaintiffs.
[23] In the detailed reasons for decision issued by Healey J. on June 28, 2013, following the motion to discharge the CPL, the court concluded that Cameron was in fact the solicitor acting for two clients in relation to the transactions in question, namely the Y and the plaintiff Correct Group Inc.: see Correct Group Inc. v. City of Barrie, 2013 ONSC 4477, at para 73.
[24] The defendants’ motion for summary judgment, as set out in the Notice of Motion filed, calls for the dismissal of this action on the sole articulated ground that the action is statute barred.
[25] However, in the factum filed by counsel for the defendants it was further submitted that summary judgment should be granted on the alternative basis that the plaintiffs failed to adduce expert evidence as to the alleged professional negligence of the defendant Cameron and his law firm and further on the basis that the plaintiffs had failed to adduce any evidence as to damages.
Legal Framework for Summary Judgment Motion:
[26] As the parties to this action disagree as to whether or not this is an appropriate case to be determined by a summary judgment motion the matter must be determined through r. 20.04 (2) (a), which directs that the court, “shall grant summary judgment if … the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.”
[27] Rule 20.04 (2) (a) must be read in combination with r. 20.04 (2.1) which provides:
In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determinations being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interests of justice for such powers to be exercised only at trial:
- Weighing the evidence.
- Evaluating the credibility of a deponent.
- Drawing any reasonable inference from the evidence.
[28] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, Karakastanis J. considered the interrelationship between r. 20.04 (2) (a) and r. 20.04 (2.1) and made the following comments at para. 66:
On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure under rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole. [Emphasis original.]
[29] As to the applicable standard of fairness on summary judgment motions, the question is not whether the procedure on the motion would be as exhaustive as a trial, but rather whether the evidentiary record and the process give the judge confidence to find the necessary facts and apply the relevant legal principles so as to resolve the dispute: Hryniak at para. 50.
[30] When considering a motion for summary judgment such as this, the statements made by Nordheimer J.A. in Mason v. Perras Mongenais, 2018 ONCA 978, at para. 44 must be kept in mind:
With respect, the culture shift referenced in Hryniak is not as dramatic or as radical as the motion judge would have it. The shift recommended by Hryniak was away from the very restrictive use of summary judgment, that had developed, to a more expansive application of the summary judgment procedure. However, nothing in Hryniak detracts from the overriding principle that summary judgment is only appropriate where it leads to “a fair process and just adjudication”: Hryniak at para. 33. Certainly there is nothing in Hryniak that suggests that trials are now to be viewed as the resolution option of last resort. Put simply, summary judgment remains the exception, not the rule.
ANALYSIS:
[31] In considering this motion I must consider the pleadings and the evidentiary record to determine whether there are any genuine issues requiring a trial. The onus rests with the moving party to establish that there is no genuine issue requiring a trial with respect to a claim or defence. Where the moving party prima facie establishes that there is no genuine issue requiring a trial, at law the moving party is then entitled to summary judgment. To preclude the granting of summary judgment the responding party then assumes the evidentiary burden to present evidence that is capable of supporting the positions advanced by that party in its pleading: Lang v. Kligerman, [1998] O.J. No. 3708 (C.A.), at para. 9; Central Sun Mining Inc. v. Vector Engineering Inc., 2011 ONSC 1439, at para. 24.
[32] The moving defendants seek to have this action summarily dismissed on the basis that the action was instituted out of time. Although not expressly stated in the notice of motion, it was also argued that the plaintiffs have failed to make out a case demonstrating that the defendants were in a solicitor and client relationship with respect to the transactions in question.
[33] Further, the defendants also submitted that the plaintiffs failed to adduce expert evidence with respect to the defendant lawyers’ alleged negligence and as well as a result of the absence of evidence on the plaintiffs’ damages, the action should be dismissed.
[34] I will consider the defendants’ positions as advanced on this motion in order.
A- Were the Plaintiffs and the Defendant Cameron and His Law Firm in a Solicitor and Client Relationship in 2009 during the Negotiations between Barrie, the Y and the Plaintiffs?
[35] The moving defendants submit that they were retained solely by the Y and at no time were they in a solicitor and client relationship with the plaintiffs.
[36] The defendants’ evidence prima facie tends to favour the conclusion that no such solicitor and client relationship existed between the plaintiffs and the defendant Cameron.
[37] As already noted the plaintiffs’ authorized representative Furbacher gave evidence under oath in the CPL motion that the defendant Cameron was not the plaintiffs’ lawyer at the material time.
[38] On the other hand, Healey J., in her very detailed decision on the CPL motion, concluded that Cameron was in fact the lawyer representing both the plaintiffs and the Y with respect to the proposed land development.
[39] Although Cameron was not a party to that proceeding or the CPL motion, and he did not participate directly in the arguments and evidence submitted to the court, the conclusion reached by the court is certainly a factor that must be weighed by this court in determining whether or not there is a genuine issue requiring a trial as to the relationship between Cameron and the plaintiffs. Healey J.’s decision standing on its own is not determinative of the outcome of this motion, nor is it res judicata as between the parties in the present action.
[40] Other factors favouring the defendants’ prima facie summary judgment position regarding the alleged solicitor and client relationship between the plaintiffs and Cameron include: (1) Furbacher represented to Cameron that other legal counsel representing the plaintiffs and would be reviewing draft documents; (2) Cameron testified that his use of the word “clients” was a typographical error when he was only representing the Y; (3) Cameron directed his the account directly to the Y; and (4) the plaintiffs did not pay Cameron for legal services.
[41] As to evidence tending to favour the plaintiffs’ position following Cameron’s first meeting with Furbacher on June 24, 2009, he sent an email to Furbacher and others wherein he stated in part “I’m looking forward to working through this exciting project with Correct Group and YMCA.”
[42] Other evidence adduced on behalf of the plaintiffs as to the nature of their relationship with Cameron included: (1) Cameron prepared draft agreements for both the plaintiffs and the Y; (2) Cameron had meetings with Furbacher and corresponded with him and was provided instructions by Furbacher with respect to the proposed land development; (3) Cameron prepared revised drafts of documents based on instructions given to him by Furbacher; (4) Cameron represented to Barrie’s in-house counsel that he was speaking on behalf of his “clients”, namely the co-venture purchasers, the plaintiffs and the Y; (5) his dockets recorded Cameron’s time spent with respect to legal work done for his “clients”; and (6) Cameron delivered his fee account addressed to the Y and the plaintiff Correct Group Inc. expecting it to pay one half of that account.
[43] Cameron’s docket entry for July 28, 2009, recorded a meeting “to review [the] purchase agreement with Tom [Coon on behalf of the Y] and Alan [Furbacher] and Bill [Moore]; revised purchase agreement, review city’s draft purchase agreement.” The following day Cameron sent an email to the city’s legal counsel advising that he had reviewed the proposed purchase agreements with “my clients”.
[44] Furthermore, contrary to Cameron’s affidavit evidence where he deposed that he had never advised Furbacher with respect to the legal implications of the Preliminary Agreement, in an email of August 24, 2009, sent by Cameron to the plaintiffs’ financial advisor Moore with copies to Coon and Furbacher he stated: “the binding nature of the Preliminary Agreement should foreclose the city’s ability to introduce contradictory provisions into the Purchase Agreement.”
[45] As to his account for services rendered, Cameron sent an account dated September 30, 2009, addressed to “YMCA of Simcoe Muskoka/Correct Group Inc.” and following the delivery of that account, Cameron sent an email to Mr. Coon dated October 29, 2009, in reference to his account in which he stated, “to my understanding the cost of that work will be shared equally.”
[46] Accepting for the moment that Cameron was in a solicitor and client relationship with the plaintiffs, the plaintiffs assert in this action that he breached his duty of care owed to the plaintiff clients by failing to have provided to them the environmental and archaeological reports that were provided to Cameron by Barrie. It is the defendants’ evidence that these reports were sent to the plaintiffs’ care of Furbacher along with a letter from Cameron dated September 15, 2009. Furbacher denies ever receiving the letter and the environmental and archaeological reports. The defendants have produced a Purolator bill of lading, unsigned by the consignee representative of the plaintiffs, as confirmation of delivery of the letter and reports to the plaintiffs.
[47] Previous counsel representing the plaintiffs, on receiving Barrie’s affidavit of documents in the other action noted that the environmental and archaeological reports were included in Barrie’s productions and he wrote to Cameron on March 26, 2015, indicating to him that the plaintiffs had no record of having received the letter of September 15, 2009, or the six environmental and archaeological reports.
[48] In cross-examination on his affidavit, Cameron acknowledged that he had no discussions with Furbacher about the content or the importance of the reports, however at the same time he sent an email to Mr. Coon of the Y on September 15, 2009, stating the following: “… First, the AC/DC lands were not studied (I guess that becomes CGI’s problem) and the significant archaeological findings and enviro hotspots were found directly on top of the most recently proposed YMCA facility.” In spite of the concerning information contained in the environmental and archaeological reports, Cameron continued to negotiate terms with Barrie as to the proposed land purchase and development.
[49] The Law Society of Ontario’s Rules of Professional Conduct define a “client” as a person who: “(a) consults a lawyer and on whose behalf the lawyer renders or agrees to render legal services; or (b) having consulted a lawyer, reasonably concludes that the lawyer has agreed to render legal services on their behalf.”
[50] A special professional duty of care arises in a solicitor and client relationship.
[51] There are several signs or indicia that would establish the presence of a solicitor and client relationship and not all need to be present. Some of the signs include: (i) meetings between the lawyer and the parties; (ii) correspondence between the lawyer and the parties; (iii) a bill rendered by the lawyer to the party; (iv) instructions given by the party to the lawyer; (v) the lawyer acting on the instructions given; (vi) statements made by the lawyer to the effect the lawyer is acting for the party; (vii) legal advice given by the lawyer to the party; and (viii) legal documents created by the lawyer for the party: Jeffers v. Calico Compression Systems, 2002 ABQB 72, at para. 8.
[52] Absent a finding of a solicitor-client relationship, a lawyer may owe a professional duty of care to a non-client where there is “sufficient proximity” in the relationship within the meaning of Hedley v. Byrne: Hedley Byrne & Co Ltd v. Heller & Partners Ltd, [1964] AC 465, and the cases following it.
[53] It has been held that a solicitor, as a person possessing special skills, may owe a duty of care to a party even in the absence of a contractual solicitor-client relationship. Where a solicitor was the only solicitor involved in respect of two parties, he was found to have breached a duty of care owed arising from the relationship of proximity. Arguably this analysis may apply in the present circumstances in that Cameron was the only lawyer involved with the plaintiffs and the Y in regard to the co-venture and land development proposal. As a result of the close proximity between Cameron and the plaintiffs it is arguable that it would have been reasonably foreseeable that his failure to disclose developmental impediments in the environmental and archaeological reports would cause harm to the plaintiffs: Tracy and Morin v. Atkins, [1979] 105 D.L.R. (3d) 632 (B.C.C.A.), at para. 17.
[54] The complete evidentiary record gives rise to credibility issues raised on important questions of fact, notably including the discussions between Cameron and Furbacher as to the nature of the relationship between Cameron and the plaintiff corporations. Similarly at issue is whether the September 15, 2019, letter from Cameron and the archaeological and environmental reports were delivered and received by Furbacher.
[55] While considering the evidentiary record available on a summary judgment motion within the context of the parties’ pleadings, the court may, if it is in the interests of justice, weigh evidence, evaluate the credibility of a witness and draw reasonable inferences from the evidence.
[56] As to determining the nature of the true relationship between the plaintiffs and Cameron and his law firm, on consideration of the whole of the evidentiary record, including the decision of Healey J., there are significant factual questions in dispute, some of which must involve credibility assessments that simply cannot be fairly and properly determined on a paper record: see 2212886 Ontario Inc. v. Obsidian Group Inc., 2018 ONCA 670, at para. 40. In the result, there remains a genuine issue requiring trial, namely the nature of the relationship between Cameron and the plaintiffs in 2009 and whether such a relationship was a de facto solicitor-client relationship or a relationship sufficiently proximate such that Cameron owed duties of care to the plaintiffs.
[57] Similarly, there is a genuine issue requiring a trial to determine whether or not Cameron breached a duty of care owed to the plaintiffs by failing to inform and advise them of the archaeological and environmental issues connected with the subject property. I have further concluded that this is not a proper case, nor is it in the interests of justice, to use the enhanced powers set out in rr. 20.04 (2.1) and (2.2).
B- Is the Plaintiffs’ Action against the Defendants Statute Barred?
[58] Section 4 of the Limitations Act, 2002, S.O. 2002, c. 24 establishes a basic limitation period of two years to commence an action running from the day the claim is discovered.
[59] Section 5 (1) of the Limitations Act provides that a claim is discovered on the earlier of:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
[60] Section 5 (2) reads as follows:
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
[61] The plaintiffs’ Response to Demand for Particulars detail Cameron’s alleged acts of negligence and breaches. These include several breaches connected with his alleged failure to discover and advise the plaintiffs of the existence of environmental contamination reports and architectural reports disclosing the possible existence of Indigenous artifacts and burial sites on the proposed development lands.
[62] The defendants assert that the plaintiffs’ claims are statute barred as they knew or ought to have known of the environmental issues as early as November 2009 when Furbacher received Cameron’s account. The defendants submit that the plaintiffs knew or ought to have known at the very latest by December 2013, because as of that date the plaintiffs knew of all of the material facts necessary to commence an action against Cameron.
[63] The plaintiffs submit that they did not know Cameron was in possession of the environmental and archaeological reports until Furbacher received the affidavit of documents in the related action from Barrie in November 2014. They argue that they first became aware of environmental issues on the property in early 2012 and that they only became aware of the existence of the archaeological concerns in 2014. It is the plaintiffs’ position that they continued investing money and resources in the land development proposal over a period of time when, unknown to the plaintiffs, Cameron was in possession of the environmental and archaeological reports. As a result, they argue his failure to disclose the reports and to advise as to their effect on the viability of the development plans caused financial loss from the plaintiffs’ continued ongoing investment.
[64] The presumption in s. 5 (2) of the Limitations Act, 2002, is a rebuttable one and a plaintiff has the onus of showing that the rule of discoverability in s. 5 (1) (a) applies: Galota v. Festival Hall Developments Ltd., 2016 ONCA 585, at para. 15. Through s. 5 (1) (b), a plaintiff can rebut the presumption in s. 5 (2) by claiming that he did not know, nor could he have reasonably been expected to have known of the factors listed in s. 5 (1) (a) of the Limitations Act, 2002, until some later date: Fennell v. Doel, 2016 ONCA 249, at paras. 18, 24.
[65] The treatment of limitation defences on summary judgment motions was considered in the Court of Appeal decision of Collins v. Cortez et al., 2014 ONCA 685 where van Rensburg J.A. stated at para. 11:
The proper course for a summary judgment court in determining a motion based on a limitations defense is set out in Huang, following the approach mandated by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7. The court must consider the evidence in the motion record to determine whether there is a genuine issue requiring a trial, and, if so, determine whether it is in the interest of justice to use the enhanced powers under rules 20.04(2.1) and (2.2) to determine the issue without a trial.”
[66] The court further stated at para 13 as follows:
The respondent asserts that, even if the evidence on the motion were considered, it is insufficient to meet the requirements of s. 5(1) of the Limitations Act, 2002. However, at this stage the question is whether there is a genuine issue respecting discoverability requiring a trial, and not whether the limitations defence is sure to fail. In my view, the evidence of the appellant, which was not contradicted, reveals such an issue. Indeed, the motion judge observed that the date when the appellant’s claim was discovered was “less than clear”.
[67] In this case it is similarly “less than clear” when the plaintiffs claim was discovered within the context of s. 5 and as such on this record I cannot determine with any reasonable degree of confidence when the plaintiffs discovered the claim. Furthermore, I have concluded that it is not in the interests of justice, to use the enhanced powers under rr. 20.04 (2.1) and (2.2) to determine this issue without a trial.
C- Absence of Expert Evidence on Cameron’s Liability & Comprehensive Evidence on Damages
[68] The defendants also urge that summary judgment should be granted dismissing the plaintiffs’ action on the basis that on this motion the plaintiffs have failed to tender expert evidence on Cameron’s duty of care to the plaintiffs and his liability for the breach of that duty. Further, the defendants submit that the plaintiffs have failed to tender evidence regarding their damages suffered as a result of the defendants’ alleged breach of duty.
[69] It is the defendants’ position that standing alone, in the absence of this kind of evidence, summary judgment should be granted dismissing the action.
[70] With respect to evidence of damages, prior to the argument of the summary judgment motion, counsel for the plaintiffs brought a cross-motion under rule 39.02 (2) seeking leave to adduce additional affidavit evidence responding to evidence concerning the relationship between the plaintiffs and the defendant Cameron and to introduce evidence with respect to the plaintiffs’ damages.
[71] The defendants opposed the plaintiffs’ motion and limited their submissions to the scope of r. 39.02 (2) without making any submissions as to how expert evidence or evidence on damages must be introduced in response to a summary judgment motion.
[72] In my Reasons for Decision of October 16, 2018, I granted leave to the plaintiffs to introduce the supplementary affidavit of Alan Furbacher sworn September 7, 2018: Correct Group Inc. v. Cameron, 2018 ONSC 6164.
[73] The supplementary Furbacher affidavit had attached to it as Exhibit “B” a report entitled Quantification of Damages in respect of Correct Group Inc. and The Corporation of the City of Barrie and Correct Building Corporation and Correct Group Inc. and Jeffrey Lehman et al. This report was prepared by Julien Lévesque of MNP LLP, dated April 6, 2017, to which was attached an Acknowledgment of Expert’s Duty pursuant to r. 53.03 of the Rules of Civil Procedure.
[74] On the return of the summary judgment motion for argument, counsel for the defendants submitted that this expert report on damages was not admissible on the summary judgment motion as the report was simply appended as an exhibit to the Furbacher affidavit and as such the expert was not exposed to cross-examination.
[75] Having had the benefit of fulsome argument from counsel regarding the admissibility of the expert report on damages during submissions on the summary judgment motion, I have concluded that the report is not admissible in evidence for the purpose of responding to the summary judgment motion. Strathy J., as he then was, explained that: It is well-established that a party intending to rely on the opinion of an expert on a summary judgment motion must put the evidence forward in a manner that will permit cross-examination of the expert: Suwary v. Women’s College Hospital et al, [2008] O.J. No. 883 (Sup. Ct.), at para. 26.
[76] The damages report, although not admissible for the purpose of the summary judgment motion, was served on all counsel in the actions under case management, including counsel for the defendants in this action and was considered by all parties during the pretrial conference. The fact that the damages report has been in the hands of all counsel, however not in the evidentiary record on this summary judgment motion, is certainly not determinative of the summary judgment motion.
[77] As to the plaintiffs’ evidence on damages, Furbacher in his main responding affidavit of July 23, 2018, stated as follows at paras. 71-72:
Had I known of these reports on September 15, 2009, I would have spared myself significant time and expense in attempting to negotiate the sale and development of the Lands with Barrie until late 2011. From September 15, 2009 to December 2011 I devoted most of CGI’s resources to negotiating the development of the Project with the City. As a result, I was not pursuing other opportunities that were available at that time.
On March 26, 2015, former litigation counsel for CGI, Ron Birken, wrote to Cameron to inquire about how he had received the reports enclosed with the September 2009 letter. Mr. Birken advised that these reports would have been devastating to CGI. Birken also inquired as to why Cameron had forwarded this letter to the City in circumstances where he formally represented CGI. Attached as Exhibit “JJ” is a copy of Birken’s letter to Cameron dated March 26, 2015.
[78] In his supplementary affidavit of September 7, 2018, attaching the damage report, Furbacher deposes at para. 14 that he did not elaborate on the damages outlined in his initial affidavit as he had no notice that the defendants were advancing their motion on the grounds of insufficient evidence of damages. He further states that had such notice been given in the defendants’ notice of motion he would have addressed damages at that time in his first responding affidavit.
[79] The defendants notice of motion calls for summary judgment dismissing the plaintiffs’ action as against the defendants and in outlining the grounds for the motion, the following grounds are set forth:
a) There is no genuine issue requiring a trial with respect to the claim of the plaintiffs;
b) The plaintiffs’ claim against the defendants is statute-barred;
c) The defendants are therefore entitled to summary judgment dismissing the action pursuant to Rule 20.04 of the Rules of Civil Procedure;
d) Section 4 and 5 of the Limitations Act, 2002 as amended;
e) Rule 20 of the Rules of Civil Procedure.
[80] Rule 37.06 requires that every notice of motion shall:
a) state the precise relief sought;
b) state the grounds to be argued, including reference to any statutory provision or rule to be relied on; and
c) list the documentary evidence to be used at the hearing of the motion.
[81] Furbacher’s un-contradicted evidence is that the expert report on damages was delivered to all counsel including counsel for the defendants in this action.
[82] The position that damages evidence must be adduced in response to summary judgment motion has been considered in several decisions and courts have granted summary judgment motions dismissing actions because of the lack of such evidence: Coast-to-Coast Industrial Development Co. v. 1570706 Ontario Inc., [2005] O.J. No. 2089 (Sup. Ct.), at paras. 32-33; Mahoney v. Sokoloff, 2015 ONCA 390.
[83] In both Coast–to–Coast and Mahoney the courts concluded that summary judgment should be granted dismissing the actions as a result of the absence of any evidence regarding the plaintiff’s damages, in spite of the fact that the moving defendants did not expressly challenge the viability of the plaintiff’s action based on this ground.
[84] In Mahoney the court stated in part at para. 5:
… the appellants were obliged in responding to the summary judgment motion to put their best foot forward in respect of all their claims and to lead some evidence of the foundation for the … claimed losses …. They did not do so. As a result, on the record, the motion judge did not err in concluding that no genuine issue for trial arose regarding these claims.
[85] In the case at hand, there is no dispute that the plaintiffs had delivered an expert report on damages prior to the return of the summary judgment motion, although that report was not properly adduced in evidence on the motion.
[86] Although the evidence introduced by Furbacher in his affidavits may be somewhat sparse as to damages, I have concluded that it constitutes “some evidence of the foundation” for the plaintiffs’ damages. I have considered this particular issue within the context of the overriding principle that summary judgment is only appropriate where it leads to a “fair process and just adjudication”: Hryniak, at para. 33; Mason, at para. 44. I reject the defendants’ argument that summary judgment should be granted dismissing the action solely for lack of evidence on damages.
[87] Two decisions of the Court of Appeal for Ontario consider the evidentiary burdens on a summary judgment motion, namely Sanzone v. Schechter, 2016 ONCA 566, leave to appeal to Supreme Court of Canada denied, February 23, 2017, No. 37245, and McPeake v. Cadesky & Associates, 2018 ONCA 554.
[88] The defendants’ counsel on this motion cited and relied upon the McPeake decision. I brought the Sanzone decision to the attention of both counsel during their submissions, as neither had referred to it.
[89] Counsel for the defendants made the very troubling admission that he was aware of the Sanzone decision, however he submitted that he did not bring it to the court’s attention as it was distinguishable from the more recent decision in McPeake, which he submitted was binding on this court in this case.
[90] Following the argument of the summary judgment motion, I requested that counsel file supplementary written submissions regarding these two decisions and how they should be considered by this court.
[91] Although the McPeake decision is the more recent decision from the Court of Appeal, the court in that case did not refer to the decision of Brown J.A. for the court in Sanzone. I have concluded that while the cases appear to be inconsistent in the analysis as to when a summary judgment motion requires expert evidence in a professional negligence case, the decisions can be reconciled. Further, for the reasons expressed below, I have concluded that the Sanzone decision is more appropriately applicable to the facts and evidence in this case.
[92] In its per curiam decision in McPeake, the Court of Appeal considered an appeal from the dismissal of the plaintiff’s action involving professional negligence claims against the defendant accounting firm and lawyer. The action was dismissed on the basis that the plaintiff had not adduced expert opinion evidence as to the standard of care applicable to the defendants. In dismissing the appeal from the motions court judge the court made the following statements at paras. 11-14:
The motion judge noted that neither the appellant nor the respondent filed expert evidence regarding the standard of care of an accountant in the circumstances. The motion judge found there was no genuine issue for trial by applying the well-established rule that a plaintiff is required to lead expert evidence establishing a breach of the standard of care to support a claim of professional negligence. She declined to find that the case fell within the exception to the general rule requiring expert evidence for professional negligence: where it is obvious that the professional’s conduct fell short of the standard of care.
On appeal, the appellant advances three arguments as to why the motion judge erred. First, he submits a plaintiff need not file expert evidence to support a professional negligence claim when defending a summary judgment motion, particularly when the moving party has filed no such expert evidence. Second, he submits that this is a case where it is obvious that the professional’s conduct fell short of the standard of care. Third, he asserts that he had filed adequate expert evidence. We address each argument in turn, below.
The appellant relies on the decision of Connerty v. Coles, 2012 ONSC 5218 to support his position that a plaintiff need not file expert evidence to support a professional negligence claim when defending a summary judgment motion. In Connerty, in refusing to grant leave to appeal the dismissal of a summary judgment motion, C.T. Hackland R.S.J. noted there were conflicting decisions and opined that decisions dealing with the need for expert opinions in summary judgment motions should be understood to be a product of the particular factual circumstances in each case. He noted that the case before him was brought at an early stage, before the defendants had even filed their statement of defence. He added that sometimes the lack of a supporting expert opinion would result in a dismissal of the claim, though this would not always be the result.
The summary judgment motion in this case was not brought at an early stage of the proceedings. As noted, the motion judge had before her extensive evidence and was able to develop a full appreciation of the facts. The motion judge also considered Connerty. We are not persuaded she erred.
[93] It is notable that the summary judgment motion in McPeake was not brought at an early stage in the proceedings and that there was an extensive evidentiary record available to the court on the summary judgment motion.
[94] In my view consideration of the necessary evidentiary record either with respect to the moving party or a respondent in a summary judgment must be done within the context and the status of the particular court action.
[95] Brown J.A., for the Court, in Sanzone considered an appeal from a summary judgment order dismissing an action brought by a self-represented plaintiff seeking damages for dental malpractice. While the fact that the plaintiff was self-represented was a significant factor, the Court fully considered the generally applicable evidentiary requirements on summary judgment motions. Although summary judgment motions in medical malpractice actions give rise to unique considerations given the medical issues involved, the Court’s review of the principles applicable on summary judgment motions as to the burden and evidentiary requirements is most apt to this case.
[96] Unlike the facts in McPeake, the summary judgment motion in Sanzone was brought at a very early stage in the action, as is the case in this matter.
[97] Brown J.A. reviewed the evidentiary record required from a defendant moving for summary judgment in paras. 24-32:
Rule 20.01(3) requires a defendant to “move with supporting affidavit material or other evidence” on a summary judgment motion. The respondent dentists, as the moving parties, bore the burden of persuading the court, through evidence, that no genuine issue requiring a trial existed: Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 111 O.A.C. 201 (C.A.), at para. 16; Connerty v. Coles, 2012 ONSC 5218, [2012] O.J. No. 4313, at para. 9. They were not entitled to rely merely on the allegations in their statement of defence; the respondents were required to put their best evidentiary foot forward.
They did not do so. Instead, they submitted to the motion judge that the decision of this court in Kurdina v. Dief, 2010 ONCA 288, [2010] O.J. No. 1551, required the dismissal of the appellant’s action because the absence of any expert evidence in support of her claim demonstrated that no genuine issue requiring trial existed. The motion judge accepted that argument. In my respectful view, he erred in so doing in the circumstances of this case.
Kurdina involved a negligence claim against two psychiatrists. They moved for summary judgment, which was granted. In dismissing the plaintiff’s appeal, this court observed, at para. 3:
The respondents provided the evidence of Dr. Sugar, a qualified expert witness who swore that the respondents had not fallen below the standard of care in their treatment of the appellant. To avoid summary judgment, the appellant was required to adduce some expert opinion evidence from a qualified psychiatrist supporting her claim that the care she received fell below the applicable standard of care.
In contrast to the evidence on the merits put forward by the moving party psychiatrists in the Kurdina case, in the present case the moving party dentists did not file any evidence going to the merits of their defence. They did not file their own affidavits explaining the treatment they gave the appellant, nor did they file an affidavit or report from a qualified expert on the issue of the standard of care. Instead, they filed affidavits from two associates in their counsel’s office: one recounting the procedural history of the action; the other providing information about Dr. Shafer’s qualifications.
The respondents submit two cases support their position that simply filing a lawyer’s affidavit was sufficient in the circumstances. In Claus v. Wolfman (1999), 52 O.R. (3d) 673 (S.C.), aff’d Claus v. Wolfman (2000), 52 O.R. (3d) 680 (C.A.), defendant physicians and a hospital moved for summary judgment in a medical malpractice action arguing the plaintiff had failed to produce a supporting expert report. In the course of his reasons granting summary judgment, the motion judge commented that “it would therefore be open to a court to grant summary judgment dismissing a claim of this nature even without the expert opinion of the defendants”: at para. 12. That comment was obiter because, in fact, the moving party physicians had filed a report of their own expert on the motion. In dismissing the appeal, this court relied on that expert evidence, noting the defendant physicians “have demonstrated that there is no evidence that such force as was applied [during the delivery] fell below an acceptable standard of care.” The Claus case therefore does not support the respondents’ submission.
The second case is Cassibo v. Bacso, 2010 ONSC 6435, [2010] O.J. No. 5150, in which a defendant dentist obtained summary judgment dismissing a professional negligence claim. The plaintiff, who was represented by counsel, had not delivered an expert report by the time discoveries had concluded and the motion was brought. The motion judge observed, at paras. 15 and 17, that some courts have held that in a limited class of cases a plaintiff’s expert report is not necessary where an inference of a breach of care or causation can be made without the necessity of expert evidence. However, the motion judge rejected the plaintiff’s submission that the moving party defendant was not entitled to summary judgment because he had not filed an expert report. The motion judge stated, at para. 20:
Such an argument if accepted would effectively reverse the evidentiary burden. It would also as a practical matter lead to a difficult situation for defendants who would be forced to obtain costly expert opinions to respond to a case which has not been fully articulated by the plaintiff.
I would respectfully disagree with that conclusion. First, the evidentiary burden on a moving party defendant on a motion for summary judgment is that set out in rule 20.01(3) – “a defendant may… move with supporting affidavit material or other evidence.” As explained in Connerty, at para. 9, only after the moving party defendant has discharged its evidentiary burden of proving there is no genuine issue requiring a trial for its resolution does the burden shift to the responding party to prove that its claim has a real chance of success.
Second, the decision in Cassibo stands outside the overwhelming weight of the case law that when medical practitioners move for summary judgment to dismiss a malpractice action, they file evidence on the merits of their defence, including expert reports. [1] That general practice is consistent with the evidentiary obligation borne by moving parties on summary judgment motions.
In the present case, given the absence of evidence from the moving party dentists in support of their defence, the motion judge should have addressed the threshold question of whether the respondents had discharged their evidentiary obligation as moving parties under rule 20 to put their best foot forward by adducing evidence on the merits. In my respectful view, the motion judge erred in failing to address that question.
[98] Having considered the Court of Appeal’s decisions in McPeake and Sanzone, and even if the decisions cannot be reconciled, in my view the underlying facts and principles set out in Sanzone are more apt to this case. The Court in McPeake did not consider the onus and evidentiary burden of each party in the summary judgment motion process, nor did the Court consider when and how the onus and evidentiary burden of proof shifts from the moving party to the respondent.
[99] Alternatively, I have also concluded that the Sanzone decision should be followed in this case even when considering stare decisis and apparently conflicting decisions from the Court of Appeal.
[100] It has been stated that where a decision discusses a previously conflicting decision, the latter decision prevails, but where the decision is silent on the previous decision it cannot necessarily be presumed that it overrules the previous decision: J. R. Midgley, Stare Decisis and Conflicting Full-Bench Decisions, 104 S. African L.J. 35 (1987) at p. 37.
[101] This principle has also been adopted by the Ontario Court of Appeal in Regina v. McKibbon (1982), 35 OR (2d) 124 (C.A.) where the Court found that when a court issues a decision that appears to conflict with a previous decision, but does not mention it, it is safe to conclude that the court did not find the decision to be in conflict.
[102] It is also been held that where a previous decision of the Court of Appeal is inconsistent with or attenuated by the court’s more recent decision the more recent decision may be followed, however the degree of attenuation considered contextually must also be examined. Again, the McPeake decision makes no mention of the court’s decision in Sanzone and there is no indication that the weight and value of the decision in Sanzone has been reduced or attenuated. For these further reasons, I am also of the view that Sanzone must be followed in this case.
[103] The moving defendants have simply denied that Cameron and his law firm represented the plaintiffs and they have not adduced any expert evidence as to the nature of the alleged relationship nor with respect to any duty or standard of care that may apply to him within the context of the evidence.
[104] Thus, I have concluded that the defendants have failed to meet the threshold evidentiary burden to adduce evidence going to the merits of their defence. On that basis their motion fails with respect to the argument as to the absence of expert evidence on the duty and standard of care.
[105] Furthermore, and alternatively, given that at this stage in the action there has been no documentary disclosure by the defendants, nor any oral discoveries, it would be entirely unfair to accelerate the delivery of expert reports by truncating the timelines established in r. 53.03 (1).
[106] While the defendants’ may have considered their early summary judgment motion strategically advantageous, the overarching principles in Hryniak calling for a “fair and just adjudication” require me to reject summary judgment.
Conclusion:
[107] Genuine issues requiring a trial exist with respect to the following:
(a) the relationship between the defendant Cameron, and his law firm, and the plaintiffs in 2009, including whether he was in a de facto solicitor-client relationship with the plaintiffs or in a relationship of sufficient proximity such that he owed a duty of care to the plaintiffs;
(b) whether Cameron breached his duty of care to the plaintiffs by failing to inform and advise them of the archaeological and environmental issues that he was actually aware of with respect to the property; and
(c) when the plaintiffs discovered the claims against Cameron within the meaning of s. 5 of the Limitations Act.
[108] For the reasons above, the defendants’ motion for summary judgment is dismissed.
[109] In keeping with the directions of Brown J.A. in Sanzone at paras. 35-37, in my capacity as the case management judge under r. 37.15 counsel for the parties are ordered to attend a case management conference with respect to this action at which time a Discovery Plan will be established including a timeline for the delivery of affidavits of documents and documentary disclosure. As I have recently withdrawn as the case management judge and Justice Ricchetti will continue in that role, the case management conference will be scheduled by Justice Ricchetti’s administrative assistant and counsel for the plaintiffs shall coordinate with counsel for the defendants the scheduling of that attendance.
[110] As to costs, if the parties are unable to agree, counsel for the plaintiffs shall file submissions no longer than three pages, with a costs outline within 20 days from the release of these reasons. Counsel for the defendants shall deliver submissions no longer than three pages, within 20 days thereafter. No reply submissions are to be filed.
[111] An order shall issue accordingly.
Dated: June 24, 2019
Daley RSJ.