Court File and Parties
COURT FILE NO.: 2012-17 DATE: 20200601 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
1781807 ONTARIO LIMITED and 1781808 ONTARIO LIMITED Plaintiffs – and – COHEN HIGHLEY LLP, ANGELO D’ASCANIO, FRANK HIGHLEY, GORDON CARMICHAEL, BENJAMIN BLAY, CHINNECK LAW PROFESSIONAL CORPORATION and JED CHINNECK Defendants
Counsel: Timothy Hill and Vedran Simkic, for the Plaintiffs/Responding Parties Michael R. Kestenberg and Aaron Hershtal for the Defendants/Moving Parties Cohen Highley LLP, Angelo D’Ascanio, Frank Highley, Gordon Carmichael and Benjamin Blay Alexandra Lev-Farrell for the Defendants/Moving Parties Chinneck Law Professional and Jed Chinneck
HEARD: February 26, 2020
TRANQUILLI J.
Endorsement
[1] The defendant law firms and solicitors bring two summary judgment motions seeking dismissal of the professional negligence claims brought against each of them.
Events Giving Rise to Claims
[2] The plaintiffs 1781807 Ontario Limited (“807”) and 1781808 Ontario Limited (“808”) are related corporations operated by the two same principals at the material time; Wajde Darwish and Hassan Halbouni.
[3] 807 operated a Gold’s Gym franchise in London, Ontario between 2009 and 2010 pursuant to franchise and sublease agreements with the franchisor and a franchisor-related corporation.
[4] 808 held a general security agreement over 807’s assets and equipment in exchange for substantial loans to the 807-franchise (“808 GSA”). Mr. Darwish negotiated the initial acquisition with the franchisor/sublessor and established the corporate structures to operate and fund the gym franchise.
[5] 807 incurred substantial losses from the outset of its franchise operations in 2009 and continued to do so into 2010. In or about May 2010 the plaintiffs’ principal Mr. Darwish conceived of a rescue plan to enforce 808’s security against 807 to recover the secured assets, for 808 to then “flip” the 807 assets to a new corporate entity registered by Mr. Darwish, 1822055 Ontario Limited (“055”), which would carry on the gym franchise and sublease agreement, thereby eliminating 807’s unsecured debt. The franchisor/sublessor allegedly agreed to this reorganization and represented it was prepared to execute new agreements with the successor corporation, 055.
[6] In May 2010, Mr. Darwish and Mr. Halbouni met with defendant Mr. D’Ascanio, an insolvency lawyer and then a partner with defendant Cohen Highley LLP (“Cohen Highley defendants”). The parties dispute the nature and scope of the unwritten retainer with the Cohen Highley defendants. However, the undisputed result of their involvement is that Mr. D’Ascanio assisted the plaintiffs in moving ahead with Mr. Darwish’s original plan, with enforcement of the 808 GSA over 807’s assets and later in November 2010, the preparation of a new 808 general security agreement for the assets transferred from 807 to 055.
[7] In November 2010, just when the plaintiff principals were finalizing the continuation of the gym franchise through the new company 055, the franchisor/sublessor’s gave 807 notice of termination of the lease due to failure to pay rent and terminated the franchise agreement. The franchisor also seized assets and equipment that were subject to the 808 GSA. This surprised the plaintiffs given the franchisor/sublessor’s previous assurances of cooperation in the reorganization.
[8] Two lawsuits ensued regarding these events. The plaintiffs and 055 immediately consulted with the Cohen Highley defendants for advice on the termination and asset seizure. Mr. D’Ascanio commenced an action on behalf of 808 against 807 and the franchisor seeking priority over the seized assets subject to the 808 GSA (with 807’s consent). The franchisor commenced an action against a number of defendants including 807 and its principal Mr. Darwish concerning unpaid fees, rent arrears and alleged breaches of the franchise agreement.
[9] Mr. D’Ascanio left Cohen Highley in 2011. 808 retained new counsel, who in turn referred 807 to the defendants Jed Chinneck and Chinneck Law Professional Corporation (“the Chinneck defendants) to defend 807 in the franchisor litigation. Pursuant to written retainer agreements, the Chinneck defendants defended 807, Mr. Darwish and 055 in the franchisor action and defended 807 in the 808 GSA action. Mr. Chinneck obtained an order removing himself from the record in 2013.
[10] In or about April 2015, 807 returned to Cohen Highley, where the defendants Frank Highley, Gordon Carmichael and Benjamin Blay briefly advised 807 until November 2015, when the Cohen Highley defendants obtained an order removing themselves from the record.
[11] The 808 GSA litigation was dismissed on consent in 2017. The franchisor action remains in litigation; however, 807 does not have counsel.
The Arthur Wishart Act (Franchise Disclosure)
[12] The crux of this claim concerns franchisee rights under the Arthur Wishart Act (Franchise Disclosure) 2000, S.O. 2000, c. 3 (the “AWA”). The AWA imposes a duty of fair dealing on each party to a franchise agreement and sets out specific remedies and consequences for franchisor misrepresentation. The AWA also requires the franchisor to provide a disclosure document to the franchisee. Failure to provide the disclosure document entitles the franchisee to rescind the franchise agreement without penalty or obligation no more than two years after entering into the franchise agreement.
[13] In this case, the franchisor purported to terminate 807’s franchise agreement and seize 807’s assets just two days after the AWA rescission period expired in November 2010, and just when the plaintiff principals were ready to continue the franchise operation under the new corporate structure.
[14] The plaintiffs contend they would not have pursued the restructuring plan in May 2010 as a method of managing the franchisee distress had they known of the extraordinary AWA rescission remedy. Instead, 807 would have exercised its AWA rescission right, recovered its investment losses from the franchisor under that legislation and 807 would have been able to repay its loans to 808.
The Action
[15] In that context, the plaintiffs claim each defendant was negligent while acting consecutively for one or both of the plaintiff corporations as it related to the franchise venture. The plaintiffs’ allegations of negligence against the defendants are:
- In 2010, Mr. D’Ascanio and Cohen Highley LLP were negligent in failing to advise 807 of its rescission remedy under the AWA before the expiration of the two-year limitation period in November 2010;
- Between 2011 and 2013, the Chinneck defendants were negligent in failing to consider the impact of the AWA on 807’s position in the franchisor action and to advise 807 of its rescission rights and therefore a potential solicitor’s negligence claim against Mr. D’Ascanio; and
- In 2015, Frank Highley, Gordon Carmichael, Benjamin Blay and Cohen Highley LLP (“Cohen Highley defendants) were negligent in failing to advise 807 of its rights and remedies under the AWA due to franchisor misrepresentation and also of a potential negligence claim against Mr. D’Ascanio and Cohen Highley LLP.
[16] The Cohen Highley defendants deny that 807 retained Mr. D’Ascanio and that the nature of the retainer was to provide general legal advice 807 and 808 on options to remedy the franchisee distress. They contend 808 retained Mr. D’Ascanio on a limited scope retainer for the sole purpose of executing a sophisticated, preconceived plan devised by the plaintiff principals. In any event, even if Mr. D’Ascanio had advised them of the AWA remedy, the evidence demonstrates the plaintiffs would still have pursued their corporate restructuring plan as they wanted to continue to operate the franchise without the previous debt burden.
[17] The Chinneck defendants deny liability and contend the written retainers with 807 were limited to defending 807’s and Mr. Darwish’s interests in the franchisor action and as a nominee counsel to 807 in the 808 GSA action. 807 never provided information or instructions to investigate or review a potential claim against Mr. D’Ascanio.
[18] The Cohen Highley defendants deny liability in connection with the 2015 retainer. The two-year AWA rescission period had long since expired and since 807 did not retain Mr. D’Ascanio in 2010 for general legal advice, there was no duty in 2015 to have advised 807 on its previous AWA rescission rights and an ostensible claim against Mr. D’Ascanio.
Record before the Court
[19] The record on this motion consisted of affidavits from the plaintiff principals Mr. Darwish and Mr. Halbouni, the defendant Mr. D’Ascanio and the defendant Mr. Chinneck. All were cross-examined on their affidavits and the transcripts were available at the motion.
[20] Affidavits by the plaintiff principals Mr. Darwish and Mr. Halbouni in collateral litigation related to the termination of the 807-franchise were also in evidence, as well as decisions or transcripts of proceedings from other judicial or quasi-judicial matters relating to Mr. Darwish and Mr. Halbouni.
[21] Finally, the plaintiffs filed the expert opinion of bankruptcy and insolvency expert Kevin McElcheran, who is of the view that Mr. D’Ascanio failed to appropriately evaluate the plaintiffs’ action plan and to advise the related corporations as to their common interests arising from their respective secured creditor and debtor rights. The plaintiff expert was not cross-examined on his affidavit. None of the defendants filed an expert report in support of their positions.
Positions on Motion
[22] The defendants submit the court has all the evidence it needs to determine the scope of Mr. D’Ascanio’s retainer. The court can also conclude that in any event, the plaintiffs would not have acted differently had they known of the possible rescission remedy in May 2010. They submit that expert opinion is not necessary and that the plaintiff expert’s opinion is otherwise not of assistance as he did not have all of the evidence and did not address the plaintiff principals’ significant credibility issues.
[23] The defendants urge this is an appropriate case where the court can use the range of fact-finding powers under r. 20.04(2.1) “somewhat more or less aggressively”, as was done in Canadian National Railway Company v. Crosslink Bridge Corp, 2018 ONSC 5475, aff’d 2019 ONCA 349. They submit this record supports the necessary credibility determinations, fact-finding and inferences to be made so as to conclude that only the plaintiff 808 retained Mr. D’Ascanio on a limited basis to carry out a preconceived and sophisticated plan. As neither 807 nor both plaintiffs retained him to provide general advice, this means the claims against the remaining defendants also fail as those defendants would not have a duty to advise of a potential solicitor’s negligence claim against Mr. D’Ascanio.
[24] Although there is conflicting evidence as to the scope of the unwritten retainer with Mr. D’Ascanio, the defendants say the court can make a credibility determination in favour of the defendants on this record, guided by the principles outlined in Faryna v. Chorny, by testing the credibility of an interested witness by an examination of the consistency of his evidence with the probabilities that surround the currently existing conditions. Additional factors to take into account include the presence or absence of evidence contradicting a witness’ statements and corroborative evidence: Singer v. LZW LLP, 2014 ONSC 4521 at para. 83.
[25] The defendants note Mr. Darwish is a sophisticated businessman and a disgraced former chartered accountant. His reorganization plan was similar to the scheme he devised to initially acquire the franchise from another distressed franchisee. Mr. Darwish completed similar key steps in establishing the plan before he and Mr. Halbouni met with Mr. D’Ascanio, including registering the new corporation (055), a new business name and a draft agreement of purchase and sale.
[26] Mr. D’Ascanio’s contemporaneous memos and emails indicate he was retained to advise 808 on acting on its security interest and then transferring those assets to 055, in accordance with Mr. Darwish’s plan.
[27] Mr. Darwish and Mr. Halbouni’s affidavit evidence in the collateral franchisor and 808 GSA actions contradicts their evidence in this proceeding. Those affidavits paint a picture that the plaintiffs’ principals and the franchisor worked together to plan the new corporate entity 055 which would allow Mr. Darwish and Mr. Halbouni to carry on the franchise as a “turn-key” business without 807’s unsecured debt. They suggested the reorganization failed because of the franchisor/sublessor’s misrepresentations.
[28] On cross-examinations on their affidavits in this proceeding, both principals arguably resiled from their earlier evidence. Mr. Darwish claimed the corporate reorganization was one of a number of plans he and Mr. Halbouni considered as a means of managing 807’s insolvency but that they went to Mr. D’Ascanio to confirm “what is the best approach or find out what approach he could offer us.” Mr. Halbouni claimed he did not recall that there was any specific plan for corporate organization that Mr. Darwish made with the franchisor or that he participated in any such conversations with either Mr. Darwish or the franchisor/sublessor before they retained Mr. D’Ascanio.
[29] The defendants argue neither witness provides a reasonable explanation for these inconsistencies and that their evidence in this action is otherwise self-serving and contradictory with their contemporaneous actions.
[30] The plaintiffs contend there are genuine issues requiring trial regarding the scope of the retainers and that expert evidence is necessary to assist in determining the standard of care. The uncontradicted opinion of plaintiff insolvency expert Mr. McElcheran is that 807 and 808’s interests were aligned. Therefore Mr. D’Ascanio ought to have acted for both parties and used the remedies available to each party to pursue their mutual commercial interests. Even if Mr. D’Ascanio was only retained by 808, a reasonably competent insolvency practitioner would at minimum obtain and review copies of critical contracts of the related entity that were subject to the security. This would include the franchise agreement and AWA disclosure document. Accepting the defendants’ position that there was only a limited retainer with 808, the expert still contends Mr. D’Ascanio had a duty to advise 808 on 807’s rights under the franchise agreement and to also consider relevant legislation, such as the AWA.
[31] The plaintiffs also point to aspects of the defendants’ contemporaneous conduct that is at odds with their argument there was a limited scope retainer. For example, Mr. D’Ascanio raised court-appointed receivership as an alternative course in a letter to the plaintiff principals. Why did he not also address the potential AWA rescission remedy? Mr. D’Ascanio also clearly communicated to third parties after termination of the franchise agreement that he acted on behalf of both plaintiffs and 055. The evidence also suggests that Mr. Chinneck was involved in considerable review and consideration of strategies to protect 807 in the franchise action, yet never referred to the AWA. Finally, there are documents from the course of the 2015 Cohen Highley retainer which indicate those defendants turned their minds to the AWA as part of defending 807; however, did not raise that legislation and its remedies with 807.
Analysis
[32] The fundamental issue to address is whether there is a genuine issue requiring trial. That question involves determination of the duty owed by the defendants to plaintiffs, the scope of the defendants’ retainers and whether expert opinion is necessary to inform that analysis.
[33] The law on summary judgment is well-established and understood. There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result: Hyrniak v. Mauldin, 2014 SCC 7 at para. 49.
[34] The judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure. If there appears to be a genuine issue requiring trial, the judge should determine if the need for a trial can be avoided by using the new powers under r. 20.04(2.1) and (2.2). The judge may exercise discretion to 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: Hyrniak, supra at para. 66.
[35] The parties acknowledge Meehan v. Good, 2017 ONCA 103 articulates the test for determination of a lawyer’s duty of care to a client or non-client; although they differ on its application to this analysis: The court must examine all of the surrounding circumstances that define the relationship between the lawyer and the person to whom the duty of care may be owed. Defining the scope of the lawyer’s retainer is an essential element of this analysis. The court must meticulously examine all of the relevant surrounding circumstances, including but not limited to, the form and nature of the client’s instructions and the sophistication of the client to determine whether a duty is owed beyond the four corners of the retainer (at para. 5).
[36] After considering the parties’ submissions and the record filed on the motion, I conclude I am unable to reach a fair and just determination of these issues on the merits. The record does not provide me with the necessary confidence to find either that the defendants did not owe a duty to the plaintiffs to advise them on the AWA rescission right or that, in any event, the plaintiffs would not have acted on such advice.
[37] As there is no written retainer between Mr. D’Ascanio and the plaintiff(s), the court must look at the objective evidence to determine the nature and scope of the retainer: Larizza v. The Royal Bank of Canada, 2017 ONSC 6140 at para. 98. Even with a written retainer, as noted in Meehan, supra, there can be scenarios where a duty is owed beyond the four corners of the retainer.
[38] Although the parties are expected to put their best foot forward on a summary judgment motion, in my view, this is not a record analogous to the circumstances in Crosslink, supra, where the court could appropriately engage in “aggressive” fact-finding pursuant to r. 20.04 (2.1) and dismiss the claims.
[39] In Crosslink, supra, the defendants claimed the third-party solicitors were negligent in failing to warn them of the existence and ramifications of an Environmental Protection Act order registered on title to contaminated railway lands before the defendants executed an agreement of purchase and sale. The third-party solicitors successfully moved for summary judgment dismissal. The motion judge’s reasons demonstrate there were key facts from which credibility findings and reasonable inferences could be made to support a conclusion there was no genuine issue requiring a trial. Although the defendants argued they had not been advised by the third parties of the impact of the Environmental Protection Act order, there was already a previous judicial finding in another proceeding, upheld on appeal, that the defendants had, in fact, received a copy of the order prior to closing the deal. Draft documentation indicated the third-party lawyers flagged contamination issues during the course of negotiations. A defendant witness conceded in cross-examination that the environmental contamination was not an important factor during the purchase negotiations as the primary concern was to lock up the property and deter other potential purchasers.
[40] In contrast, the evidence of the surrounding circumstances of Mr. D’Ascanio’s retainer is in significant dispute. There are credibility issues regarding the plaintiff principals’ evidence on the nature of the retainer and whether they would, in fact, have pursued franchise rescission instead of the corporate reorganization. This includes whether, in fact, the remedy would have produced the full indemnity now argued by the plaintiffs.
[41] The plaintiffs admit that they had a plan to restructure the franchise; however, Mr. Darwish and Mr. Halbouni also contend they looked to Mr. D’Ascanio for general advice on their options and not to merely execute their plan. The evidence shows Mr. Darwish asked Mr. D’Ascanio about “Chapter 11” as an option during their initial meeting and Mr. D’Ascanio also later raised court-appointed receivership as an alternative. Mr. D’Ascanio was also aware of the AWA and the existence of a franchise agreement, and although the principals did not bring the franchise documents to the meeting, he also did not ask for them or recommend that he review them.
[42] This record does not give the court ample opportunity to complete the meticulous examination of the surrounding circumstances required to reconcile the conflicting evidence in order to define the scope of the retainer and the duty owed to the plaintiffs. There are similar concerns with determining causation, which turns on a number of credibility findings. These issues require a trial where the credibility of the witnesses can be assessed from viva voce testimony. It is not in the interest of justice to evaluate credibility, weigh the evidence or to attempt to draw a reasonable inference from the evidence on this motion.
[43] Even if I were persuaded that I could fairly and justly weigh the conflicting evidence and determine the credibility of the witnesses on this record, I conclude the plaintiff expert opinion raises a genuine issue for trial regarding the standard of care of an insolvency lawyer in this context and that the responding party has met its burden to “lead trump or risk losing”: Byfield v. Toronto-Dominion Bank, 2012 ONCA 624 at para. 10.
[44] The defendants did not cross-examine Mr. McElcheran on his affidavit or serve a responding report. The defendants again rely on Crosslink, supra to argue the opinion can be disregarded as it is flawed and unnecessary such that the court can make its own determination. They argue this case falls into one of the two exceptions to the requirement for expert evidence to prove professional negligence, as the court is faced with “non-technical matters or those of which an ordinary person may be expected to have knowledge”; Larizza, supra, at para. 103.
[45] Again, I find Crosslink, supra is distinguished from this record and does not support the defendants’ position on the necessity of an expert opinion. That expert was cross-examined on his affidavit. He acknowledged his expertise did not extend to environmental law and he had never acted on a transaction involving contaminated land. He also did not have all of the relevant facts and documents. Although the moving parties argued the defence expert opinion fell into the non-technical exception, the motion judge did not reject the expert opinion on that basis. In particular, the Court of Appeal found the motion judge considered the expert evidence and concluded it was not probative of the proper determination of the nature of the duty of care owed by the lawyers to the defendants in those circumstances; Crosslinks, supra 2019 ONCA 349 at para. 12.
[46] I also cannot conclude at this stage and on this record that this case does not need an expert opinion on the basis of the “non-technical” exception to the requirement for an expert opinion. The case law informs me that it is a rare exception where no opinion is required in a professional negligence claim.
[47] This case is distinguishable from Larizza, supra, which considered a plaintiff’s claim for solicitor negligence as her lawyers failed to investigate the background of her future spouse in the course of a retainer to advise on a marriage contract, estate planning and a trust fund. Her future spouse unfortunately proved to be a fraudster. In dismissing her action on summary judgment, the motion judge acknowledged that generally, the standard of care to which a professional will be held requires expert evidence. However, the court concluded an expert opinion was unnecessary as it would defy common sense to expect that a lawyer would be required to investigate the background of a future spouse as a matter of course: Larizza, supra at paras. 101-104. The court relied upon Krawchuk v. Scherbak, 2011 ONCA 352, as recognizing the two exceptions to the requirement for expert evidence for professional negligence claims.
[48] In Krawchuk, supra, the Court of Appeal recognized that in general, it is inappropriate for a trial court to determine the standard of care in a professional negligence case in the absence of expert evidence. Expert evidence of the usual or customary standard is likely required, subject to the two exceptions of non-technical matters or conduct so egregious it is obvious the defendant’s conduct has fallen short of the standard of care. The appellate court cited Zink v. Adrian, 2005 BCCA 93, [2005] B.C.J. No. 295 (C.A.) in support of this proposition. Zink, supra emphasized the court can only rarely make a professional negligence finding in the absence of expert evidence. An expert witness can be cross-examined with a view to showing he knows not whereof he speaks. But the parties have no means of discrediting a judge’s implicit assertion that she knows the proper way to conduct a certain kind of legal business: Zink, supra at paras. 43–44.
[49] In that context, I am not satisfied that this record can fairly and justly support the conclusion that this is one of those rare circumstances where an expert opinion is unnecessary in the determination of professional negligence as the issues are “non-technical”.
[50] It is also premature to conclude on this record that the plaintiff opinion can be discounted due to flawed or incomplete assumptions. The plaintiff expert was not cross-examined. There are facts the expert apparently did not consider, such as Mr. Halbouni’s and Mr. Darwish’s sworn evidence in the other actions, Mr. Darwish’s steps in establishing the new company and his preparation of the draft agreement of purchase and sale. This evidence speaks to Mr. Darwish’s sophistication and the principals’ intention to pursue the restructuring plan.
[51] However, the absence of cross-examination or a responding opinion leaves the question as to whether missing information or different assumptions reflecting the plaintiffs’ credibility issues would affect either the necessity of the expert’s opinion or the weight to be given to it. Further, even in the context of conflicting and/or missing evidence, the plaintiff expert opinion assumes Mr. D’Ascanio’s position that he was retained solely to advise 808 on a “ready-made” solution.
[52] I conclude that the scope of the retainer, Mr. D’Ascanio’s duty to the plaintiff(s) and whether any alleged breach of the standard of care caused the plaintiffs losses are genuine issues requiring a trial.
[53] My conclusion that there are genuine issues requiring trial in respect of the claims against the Cohen Highley defendants accordingly does not dispose of the Chinneck defendants’ motion. I therefore consider the Chinneck defendants’ alternative argument that this is an appropriate case for partial summary judgment in favour of the Chinneck defendants.
[54] The Chinneck defendants submit it is appropriate for the court to award partial summary judgment dismissing the plaintiffs’ claim against them it is temporally and factually removed from the 2010 Cohen Highley retainer. 807 retained Mr. Chinneck well after the expiration of the AWA rescission period. It was not within the standard of care for Mr. Chinneck to go beyond the narrow terms of the written retainers with 807 to advise on a potential solicitor’s negligence claim against Mr. D’Ascanio and Cohen Highley.
[55] I acknowledge the claim against the Chinneck defendants does not appear to attract as much focus as the Cohen Highley claim; however, this does not give me the confidence to conclude the record demonstrates there is no genuine issue requiring a trial. There are credibility issues and conflicting evidence as it relates to the scope of Mr. Chinneck’s retainers with 807 and whether he was more than “nominee counsel”. As previously noted in Meehan, supra, a duty of care can arise beyond the four corners of a written retainer.
[56] The Chinneck defendants also argue the plaintiffs failed to put their best foot forward as the plaintiff expert opinion does not address Mr. Chinneck’s involvement. This argument seems to be at odds with their support for the defendants’ initial position that the expert opinion is unnecessary or flawed. In any event, notwithstanding the absence of an expert opinion at this juncture, the facts that lead to the determination of the scope of the retainer remain as a genuine issue requiring trial.
[57] In addition, partial summary judgment ought only to be granted in the clearest of cases where the issue on which judgment is sought is clearly severable from the balance of the case. If this principle is not followed, there is a very real possibility of a trial result that is inconsistent with the resulting summary motion result. In addition to the danger of duplicative or inconsistent findings, partial summary judgment raises further problems, such as delayed resolution, expense, efficiency and the risk of an incomplete record. Partial summary judgment should be reserved for an issue or issues that are readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost-effective manner: Butera v. Chown, Cairns LLP, 2017 ONCA 783 at paras. 26-35.
[58] The Chinneck claims cannot be readily bifurcated from the action. There are common issues as it relates to the implications of the AWA and the rescission remedy. There are concerns of inconsistent findings as it relates to those issues, as this record is not likely to be as expansive as the record at trial. Granting partial summary judgment would also provide minimal, if any, efficiency as the action is proceeding on the other claims of professional negligence and the claims involve a series of retainers.
[59] In conducting this analysis, I questioned whether the claims against the Chinneck defendants and Cohen Highley defendants regarding the 2015 retainer were moot, as the plaintiffs have, in fact, commenced a solicitor negligence action against Mr. D’Ascanio and Cohen Highley. However, this question was not raised or argued by the parties on the motion. I also note examinations for discovery have not taken place and the statements of defence plead the Limitations Act, 2002, S.O. 2002, c. 24 Sched. B., so I make no finding on this issue.
[60] I considered whether use of the additional fact-finding powers under r. 20.04 (2.2), through hearing oral evidence would enable the court to evaluate credibility, weigh evidence and draw reasonable inferences on the issues of the scope of the retainers, duties to the plaintiffs and causation. However, there are numerous witnesses and the events in issue are factually complex such that an oral hearing in this motion would not be timely, affordable or proportionate.
Disposition
[61] The defendants’ motions for summary judgment dismissing the plaintiffs’ claim are therefore dismissed.
Directions for Trial
[62] Due to the exigencies of scheduling and judicial resources, particularly as it relates to the suspension of regular court operations due to the COVID-19 pandemic, I am not seized of this matter and will not establish a timetable to complete the remaining steps. However, these summary judgment motions produced a volume of evidence which are relevant to the determination of the issues at trial. I therefore make the following directions pursuant to r. 20.05(2):
a. The affidavits filed on this motion should form part of the evidence-in-chief of those witnesses at trial; b. The transcripts of the witness cross-examinations should be treated as transcripts of their examinations for discovery and as part of their cross-examinations at trial; c. The parties must include a copy of these reasons in the Trial Record and in the materials placed before the pre-trial conference judge; d. All remaining pre-trial steps shall be completed, including examinations for discovery; however, as the affidavit evidence and cross-examinations to date are part of the record, the parties should strive for efficiency and focus examination for discovery on issues either unaddressed thus far or that need to be updated or clarified; and e. Any further directions, if required, shall be obtained from the pre-trial judge or on motion to the court, whichever occurs first.
Costs
[63] I encourage the parties to come to an agreement on costs. If the parties are unable to come to an agreement on costs, they may each serve and file a cost outline and submissions, the latter not to exceed three (3) pages within 35 days of the date of the release of this decision. The submissions shall be electronically submitted by email to the attention of the judicial secretary. No reply submissions on costs may be filed without leave. If no submissions are received within 35 days of the date of the release of this decision, costs are deemed settled.