Court File and Parties

COURT FILE NO.: CV-18-593524 DATE: 2019/07/23 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Rosemary Cremer, Plaintiff

• and - THE LAW SOCIETY OF ONTARIO, Defendant

COUNSEL: Mark A. Russell and Seta Boyadjian for the Plaintiff Ian S. Epstein and Sheldon Inkol for the Defendant

HEARD: In writing

PERELL, J.

Reasons for Decision - Costs

[1] The Plaintiff Rosemary Cremer sues The Law Society of Ontario for breach of fiduciary duty, breach of trust, negligence, misfeasance in public office, and infliction of mental injury and/or emotional distress.

[2] The Law Society moved for a summary judgment. It submitted that Ms. Cremer’s claim is statute-barred under the Limitations Act, 2002. It submitted that the Law Society enjoys statutory immunity from negligence claims. It submitted that absolute privilege applies to any claim based on the allegation that the Law Society’s agent swore a false affidavit. It submitted that Ms. Cremer’s claim for interest, investment income, or costs is an abuse of process because it should be dealt with by the judge seized of a court appointed trusteeship.

[3] Thus, the Law Society submitted that Ms. Cremer’s action should be dismissed, or, in the alternative, portions of her Statement of Claim should be struck as an abuse of process and for advancing no tenable cause of action. At the hearing of the summary judgment motion, the Law Society abandoned its argument that Ms. Cremer is estopped from bringing her action because she signed an acknowledgment and final release before receiving the funds that were held by the Law Society.

[4] I dismissed the Law Society’s summary judgment motion. Cremer v. The Law Society of Ontario, 2019 ONSC 3478.

[5] On the summary judgment motion, I agreed with Ms. Cremer’s argument that her claim was not statute-barred because it was not appropriate for her to commence legal proceedings against the Law Society until after an order was made by Justice McEwan.

[6] On the summary judgment motion, I agreed with Ms. Cremer’s argument that her claim in negligence should not be struck out on the basis that the Law Society enjoys statutory immunity under s. 9 of the Law Society Act. Statutory immunity, however, does not apply to shield the Law Society from claims in negligence if malice or a lack of bona fides is established, Conway v. Law Society of Upper Canada, 2016 ONCA 72; Calvert v. Law Society of Upper Canada, and I concluded that there is a genuine issue requiring a trial about whether s. 9 is available as a defence for the Law Society. The merits of this defence remain to be determined.

[7] On the summary judgment motion, the Law Society submitted that Ms. Cremer has pled a cause of action based on the allegation that Ms. Philips swore a false affidavit. It submitted that any claim arising from this allegation cannot succeed, as the affidavit is subject to the protection of the doctrine of absolute privilege and it is settled law that statements published on occasion of absolute privilege are not actionable. Salasel v. Cuthbertson, 2015 ONCA 115; Admassu v. Macri, 2010 ONCA 99; Sauve v. Merovitz [2006] O.J. No. 4266 (S.C.J.), aff’d 2008 ONCA 70, leave to appeal to the S.C.C. ref’d [2008] S.C.C.A. No. 138; Big Pond Communications 2000 Inc. v. Kennedy.

[8] However, since it was not clear to me that there is any cause of action actually being based on Ms. Philip’s affidavit, and since the allegation may be relevant to the matter of bad faith, and since the Law Society’s attack on the pleading came after it has taken the fresh step of delivering its Statement of Defence, I decided not strike out this pleading, and rather, once again, I left this matter for the trial judge to deal with it as he or she may be advised.

[9] On the summary judgment motion, it was the Law Society’s position that portions Ms. Cremer’s claim should be struck as an abuse of process as re-litigation.

[10] However, I saw no abuse of process or any need to strike any portion of the pleadings. Once again, the attack on the pleadings came late after the Law Society has delivered its Statement of Defence.

[11] Further, some of the impugned allegations are part of the narrative more than they are re-litigation and appear to be relevant to Ms. Cremer’s allegations that the Law Society acted in bad faith, and if there is some double counting in the amount of damage claimed or if it is the case that Ms. Cremer is estopped from making certain claims, these are more matters that can be addressed by the trial judge. Further still, no court has dealt with Ms. Cremer’s claim for damages for lost income and interest and it is not clear whether the court in the Trusteeship proceeding can resolve those claims given that Ms. Cremer is not a party to those proceedings. Therefore, I decided not to strike any portions of Ms. Cremer’s Statement of Claim.

[12] Ms. Cremer’s Bill of Costs indicates that she incurred partial indemnity costs of $55,778.43, all inclusive. However, she seeks costs on a substantial indemnity basis, in the amount of $81,420.39, which includes disbursements of $4,494.51.

[13] The Law Society does not dispute Ms. Cremer’s entitlement to costs, but it submits that the costs should be awarded on a partial indemnity basis. It submits that an appropriate award would be what it would have claimed had it been successful on the summary judgment motion. For the motion, the Law Society had prepared a Bill of Costs seeking $35,290.07 on a partial indemnity basis, including disbursements of $1,146.95.

[14] I agree with the Law Society’s submissions that there was nothing in its conduct that would warrant a punitive costs award. Although it was unsuccessful, it was not unreasonable for it to bring a summary judgment motion, and it remains to be determined what will be the outcome of its various defences which raised genuine issues requiring a trial.

[15] As noted, Ms. Cremer’s partial indemnity claim is $55,778.43, all inclusive, but the Law Society submits that this claim is excessive and not proportionate. As noted, it submits that the appropriate award would be approximately $35,000.

[16] In my opinion, Ms. Cremer’s claim is excessive, and it is beyond the reasonable expectations of the unsuccessful party on a motion of this nature, which is to say a focused motion that could have been dispositive of the whole action.

[17] It would appear that Ms. Cremer’s response to the motion, however, was not just focused on the issues, largely legal issues, raised by the Law Society. Thus, Ms. Cremer’s counsel, on the respondent’s side of a motion expended 248.3 hours of time in contrast to the 160 hours expended by the moving party. This expenditure of time may prove tactically useful for the trial on the merits but it is not recoverable on the summary judgment motion.

[18] In my opinion having regard to all the circumstances of the immediate case and the various criteria that guide the court’s discretion with respect to costs, the appropriate award in the immediate case is costs on a partial indemnity basis of $46,000, all inclusive, for the summary judgment motion.

[19] Order accordingly.

Perell, J. Released: July 23, 2019