Court File and Parties
COURT FILE NO.: CV-14-501733 MOTION HEARD: 20200225 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 138 All Food Delight Group Inc. and Min-Hoi Yau, Plaintiffs AND: Canada Law Centre LLP, Ping Lee and Michael E. Freeman, Defendants
BEFORE: Master Jolley
COUNSEL: Metz Ngan, Counsel for the Moving Party Plaintiffs J. Nehmetallah, Counsel for the Responding Party Defendants Canada Law Centre LLP and Michael E. Freeman Ping Lee, self-represented
HEARD: 25 February 2020, In Chambers
Revised Reasons for Decision on Costs
[1] On 12 July 2018 I dismissed this action with costs as a result of the plaintiffs’ breach of an earlier court order. The dismissal order was the culmination of failures by the plaintiffs’ then counsel, Mr. Chang, to attend in court to respond to the defendants’ motions, including their motion to have the action dismissed. On 19 December 2019, I heard the plaintiffs’ motion to set aside that order and granted the relief requested in reasons dated 23 December 2019.
[2] The plaintiffs seek both their costs of that motion and the costs awarded against them along the way from their former lawyer, Mr. Chang and the firm of Bougadis, Chang LLP. Mr. Chang and his firm were put on notice that the plaintiffs intended to seek costs from them by email sent 9 January 2020 and by delivery of their written costs submissions on 30 January 2020. Mr. Chang has not responded nor has anyone from Bougadis Chang LLP.
[3] The defendants Mr. Freeman and Canada Law Centre LLP are not seeking costs from Mr. Chang. The defendant Mr. Lee is seeking costs from Mr. Chang.
[4] On the motion to set aside the dismissal order, the plaintiffs successfully argued that, through the fault of Mr. Chang, they were unaware that the defendants had brought a motion to dismiss their action and unaware that Mr. Chang had failed to respond or attend on that motion in July 2018 or on the motions that had preceded it in April and June 2018. They were unaware of any timetable orders or requests for mediation. The record was replete with attempts by the plaintiffs to reach Mr. Chang, all without success. The plaintiffs last heard from Mr. Chang in June 2017. It was not only his clients whom Mr. Chang ignored. Defence counsel also did not hear from him after March 2017, despite their many follow ups. There was ample evidence of Mr. Chang’s failure to advise his clients of the defendants’ motions and also of his failure to attend in court to represent his clients, even when those motions had the potential to and, ultimately did, cause them serious jeopardy.
[5] Mr. Chang failed to appear on the motions before Master Sugunasiri and Master Wiebe. In addition, he failed to comply with the order of Master Sugunasiri and the order I made on 18 September 2019 requiring him to deliver his complete file to plaintiffs’ new counsel within 20 days.
[6] The plaintiffs seek costs of the motion on a partial indemnity basis in the amount of $41,760.81. They also seek reimbursements of the two costs orders made against them.
[7] I shall first deal with whether costs should be payable by Mr. Chang and Bougadis Chang LLP and then deal with quantum.
Should Mr. Chang and Bougadis Chang LLP Pay the Costs Sought?
[8] As set out in my 23 December 2019 decision, this action was proceeding on track until 2017 when defence counsel attempted to fix a mediation date, without response from Mr. Chang. It was this failure to respond to defence counsel’s requests for mediation dates made in November 2017 that snowballed, eventually causing the defendants to bring their various motions to dismiss the action and ultimately requiring the plaintiffs to bring their motion to set aside the dismissal.
[9] The record was replete with pleas for help from Mr. Yau to Mr. Chang, all of which went unanswered. The costs ordered by Master Sugunasiri and by me were as a result of Mr. Chang’s failure to attend or to protect his clients’ interests in any way. In the face of a motion to dismiss his clients’ action, he neglected to respond to them or even advise them of the motion, refused to respond to defence counsel and did not attend in court. He failed to respond to court orders requiring him to file an affidavit confirming that he had sent his clients the court’s endorsements and failed to turn over his file when ordered, causing a wasted court attendance on 17 October 2019 and an adjournment to 19 December 2019.
[10] Awards against solicitors under Rule 57.07(1) of the Rules of Civil Procedure are to be made sparingly and only in clear cases. This, unfortunately, is one of those cases. I reiterate a few specific examples of Mr. Chang’s conduct. First, the defendants brought a motion before Master Sugunasiri on 4 April 2018 seeking to dismiss this action. Despite the seriousness of the consequences, Mr. Chang did not appear. As noted by Master Sugunasiri:
“Despite being properly served and being advised of this motion, plaintiffs’ counsel has not responded nor has bothered to show up today. This is unacceptable given the serious repercussions that success on this motion would have on the plaintiffs.”
[11] Master Sugunasiri then imposed a timetable, which defence counsel served on Mr. Chang. She also ordered Mr. Chang to send the timetable endorsement to the plaintiffs and file proof of service with the court. Mr. Chang did not comply with that order and the plaintiffs were left unaware of the motion and the resulting timetable.
[12] Mr. Chang did not attend before me on 12 July 2018. He did not file any responding materials or even contact defence counsel. His failures directly resulted in the dismissal order being granted.
[13] The plaintiffs learned of the dismissal order in December 2018. They called and emailed Mr. Chang requesting a meeting with him. He never replied. Ultimately they gave up hope of ever hearing from Mr. Chang and in March 2019 retained new counsel to bring their motion to set aside the dismissal order. The motion was adjourned a number of times due to Mr. Chang’s failure to deliver documents to plaintiffs’ new counsel.
[14] When the Chang file was finally delivered after a court order was required to do so, there was no evidence in the file that Mr. Chang had advised his clients of the defendants’ motions or of the defendants’ attempts to schedule a mediation or of the timetable order. The file had no content from January 2018 to April 2019, not even the emails from Mr. Yau to Mr. Chang.
[15] In considering Rule 57.07(1), I find that the inaction and complete lack of response by Mr. Chang caused the plaintiffs, unreasonably, to incur the costs ordered against them related to Mr. Chang’s failure to respond to the April 2018 and July 2018 motions and to incur the costs to bring this motion. It is appropriate that the costs award be paid by Mr. Chang and Bougadis Chang LLP.
[16] This is not a case where one party is seeking to punish the lawyer on the other side for advancing his or her client’s interests in a manner it considers objectionable or unprofessional. The principle of freedom to fearlessly represent one’s client is not at issue here. What is at issue is the abject failure of counsel to represent his clients, to their detriment. These clients have incurred costs as a result of their lawyer’s failure to advance their interests at all, let alone protect them and they seek reimbursement.
Quantum of Costs
[17] The plaintiffs seek costs on a partial indemnity basis in the amount of $41,760.81, comprised as follows:
(a) $12,859.40 – fees, inclusive of HST, of their counsel to prepare the original motion materials, attend with their agent Mr. Donald on the plaintiffs’ cross-examination and prepare answers to undertakings given by Mr. Yau; (b) $25,153.80 – fees, inclusive of HST, of their agent Mr. Donald to prepare supplementary motion materials, cross-examine Mr. Lee, attend at the cross-examination of Mr. Yau, deal with undertakings along with the plaintiffs’ counsel, attend in court throughout the fall of 2019 on various adjournments and ultimately argue the motion on 19 December 2019; (c) $3,747.61 – disbursements incurred by plaintiffs’ counsel and their agent.
[18] In addition, the plaintiffs have delivered a discharge statement in the amount of $24,910.79 owing to LawPro, which was required to lift a writ of seizure and sale filed as a result of the plaintiffs’ failure to pay both the costs award of Master Sugunasiri in the amount of $6,500 and my costs award in the amount of $14,000 which I ordered on the dismissal motion I heard on 12 July 2018.
[19] I fix the costs of the motion and the earlier motions payable by Mr. Chang and Bougadis Chang LLP at $55,658.40, comprised as follows:
(a) $24,910.79 - costs of earlier motions and associated costs to discharge the writs. The quantum of costs was already set by the court and were required to be paid by the plaintiffs and the writ discharge fees sought are reasonable. (b) $27,000 – all inclusive costs of the motion to set aside the dismissal. While the fees are significant, they are the result, in part, of numerous court attendances and adjournments, attributable to Mr. Chang’s failure to respond. In addition, both the plaintiff and Mr. Lee were cross-examined and undertakings were given and answered. I have reduced the costs of the motion fairly significantly to account for the duplication of work between plaintiffs’ counsel and their agent. The plaintiffs were within their rights to have both their lawyer and their agent attend on Mr. Yau’s cross examination, for example, but it would not appropriate to pass on those duplicate costs to Mr. Chang. I have fixed their counsel’s costs at $7,000 and the costs of their agent at $20,000 both inclusive of HST. (c) $3,747.61 - disbursements.
Ping Lee’s costs
[20] Mr. Lee expressed his frustration in having this action reinstated, given his many failed attempts since 2017 to get Mr. Chang’s attention to move the matter to a resolution. He also noted that his small claims action against the plaintiffs for payment of the firm’s legal fees is again stayed as a result of the resurrection of this action and the accounts remain unpaid.
[21] In his email to Mr. Chang of 30 December 2019, Mr. Lee offered to settle the costs upon payment of $3,000. If the offer was not accepted by 10 January 2020, the offer would be void and Mr. Lee would submit a formal bill of costs. Unfortunately, Mr. Lee did not then provide a bill of costs. He has written to the court asking me to fix costs in my discretion.
[22] I have no information about the time spent by Mr. Lee or his hourly rate. I do know that he appeared before me at least twice on these various motion. He also filed an affidavit and was cross-examined on it. Based on this work and these attendances, I am prepared to fix Mr. Lee’s costs at $3,000 and, for the reasons set out above, make them payable by Mr. Chang and Bougadis Chang LLP.