COURT FILE NO.: CV-12-00448363

DATE: 20210614

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MARMER PENNER INC.

Plaintiff

– and –

FELICIA PURCARU (a.k.a. FELICIA VACARU), LEGGE & LEGGE and JOHN LEGGE

Defendants

M. Girard, for the Plaintiff

M. Cohen, for the Defendant, Felicia Vacaru and F. Vacaru, Self-Represented

T. Pagliaroli, for the Defendants, Legge & Legge and John Legge

HEARD: March 3-17, 2020; October 26-November 3, 2020; and February 17, 2021

In person and by videoconference

CHALMERS, J.

AMENDED AMENDED REASONS FOR JUDGMENT

OVERVIEW

[1] Felicia Vacaru was involved in a bitter and acrimonious divorce with Dan Purcaru. There were multiple proceedings and numerous court attendances. In the period after 2008, Ms. Vacaru was required to attend court on 227 separate occasions. There is no disagreement by the parties that this was a lengthy and expensive dispute for all involved. Ultimately, Ms. Vacaru obtained judgment against Mr. Purcaru. Mr. Purcaru opposed all efforts to enforce the judgment. Due to multiple breaches of court orders, he was found in contempt. He refused to purge the contempt and was sentenced to four months in jail. Ms. Vacaru was able to recover the sum of approximately $1,200,000 of her award against Mr. Purcaru. Unfortunately, she was required to incur significant legal and accounting expenses to do so. At the end of the day, she was left with very little. I acknowledge that the various legal proceedings have taken a toll on Ms. Vacaru.

[2] The trial dealt with two separate actions, both involving professionals retained by Ms. Vacaru. Marmer Penner Inc. was retained to prepare a forensic accounting report and to provide assistance and expert evidence at trial. Ms. Vacaru did not pay a portion of its fee. It is her position that Marmer Penner agreed that its fee up to trial would be limited to $40,000. Marmer Penner brought an action against Ms. Vacaru and her lawyer, John Legge, for payment of the outstanding balance. In the Marmer Penner action, Ms. Vacaru brought a crossclaim against Mr. Legge in solicitor’s negligence. She alleges that Mr. Legge failed to take appropriate action to protect her interests after he learned that Mr. Purcaru was in discussions with CIBC to obtain a mortgage.

[3] For the reasons set out below, I allow the action of Marmer Penner and award damages payable by Ms. Vacaru and Mr. Legge in the amount of $68,557, plus interest at the rate of 1.5% per month. I dismiss the crossclaim brought by Ms. Vacaru against Mr. Legge.

[4] The trial of this matter started on March 3, 2020. It was adjourned on March 17, 2020 as a result of the closure of the courts due to the COVID-19 pandemic. The trial resumed on October 26, 2020. At that time, Ms. Vacaru was no longer represented by her counsel, Mr. Cohen; she was self-represented for the remainder of the trial. The evidence was completed on November 3, 2020. Written submissions were filed by the parties and oral argument took place by remote videoconference on February 12, 2021. All parties are to be commended on the manner in which they adapted to the challenges brought about by the pandemic.

THE ISSUES

[5] Marmer Penner brings this action seeking payment of the outstanding amount of its professional fees. Ms. Vacaru brought a counterclaim in which she alleged professional negligence. At the commencement of trial, I was advised that Ms. Vacaru had abandoned her allegations of professional negligence against Marmer Penner. The remaining issue is:

i) Did Marmer Penner agree to limit its account up to or including the trial to $40,000?

[6] Ms. Vacaru brings a crossclaim against Mr. Legge in solicitor’s negligence. The crossclaim involves a consideration of the following issues:

i) Did Mr. Legge breach the standard of care of a reasonable lawyer after he learned on June 2, 2008 that Mr. Purcaru was in discussions with CIBC regarding a mortgage?

ii) Is the crossclaim against Mr. Legge barred by operation of the limitation period set out in the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s.4?

THE EVIDENCE

1. The Witnesses

a. Marmer Penner’s Witness

[7] Anna Barrett provided testimony on behalf of Marmer Penner. At the relevant time, she was an associate accountant at the firm. She was involved in the preparation of the production letters and reports. I found that Ms. Barrett had a good recollection of the events in issue. Her evidence, particularly with respect to the circumstances of her meeting with Mr. Purcaru on June 2, 2008, was clear and not seriously challenged on cross-examination. I found Ms. Barrett to be a credible and reliable witness.

b. Ms. Vacaru’s Witnesses

[8] Ms. Vacaru provided evidence on her own behalf over eight days. I found Ms. Vacaru to be a very impressive individual. She has two master’s degrees – one in artificial intelligence and the other a global executive MBA. She acted on her own behalf when the trial resumed in October 2020 and did an admirable job of presenting her case. She had excellent recall of even relatively minor details of her various proceedings involving Mr. Purcaru. She is intelligent and driven.

[9] Ms. Vacaru is very much invested in this case. Perhaps because of that, she was, at times, a difficult witness. She was clearly angry and frustrated by the court process. When testifying, she was occasionally argumentative and had to be reminded to answer the questions asked. Although she had an excellent recall of the proceedings against Mr. Purcaru, she professed to not recall details of matters and that did not assist her case against Mr. Legge or Marmer Penner. Her single-minded focus and belief in the correctness of her position made me, at times, question her reliability as a witness.

[10] Ms. Vacaru called Harold Niman as an expert witness with respect to the standard of care of a reasonable solicitor. There is no dispute as to his credentials. Mr. Niman is an experienced family law lawyer and has specialized knowledge. I found Mr. Niman to be a reasonable and fair witness. However, in dealing with the standard of care of a lawyer in 2008, he relied on cases that were decided several years later. He did not appear to be aware that there had been an amendment to the Family Law Rules, O. Reg. 114/99, after the events in issue that allowed the settlement conference judge to make orders with respect to contested matters.

c. Mr. Legge’s Witnesses

[11] Mr. Legge provided evidence on his own behalf. Mr. Legge was called to the bar in 1984. Since then, he has practiced at his parent’s firm, Legge & Legge. He is a general practitioner in family and civil litigation. I found Mr. Legge to have a good recollection of the events in issue and he was fairly straightforward in his evidence. With respect to the issue of whether Marmer Penner agreed to limit its fees, I found Mr. Legge’s evidence to be problematic. Although he testified at trial that Marmer Penner expressly agreed to limit its fees, this evidence is contrary to the contemporaneous documentation, as well as the material Mr. Legge filed with the court. He did not provide a satisfactory explanation to the court to clarify the inconsistency.

[12] Mr. Legge called Thomas Dart as an expert on the issue of the standard of care. Mr. Dart has 44 years of experience in family law. There is no issue as to his qualifications. He clearly has extensive experience in the area of family litigation. Mr. Dart was a reasonable witness and he did not exaggerate or overreach. I found his evidence was provided in a direct and straightforward manner. He was a credible and reliable witness.

d. Reply Witness

[13] Finally, Marmer Penner called Jim DeBresser in reply. Mr. DeBresser was a partner at Marmer Penner at the relevant time and was directly involved in Ms. Vacaru’s case. He was also directly involved in the issue involving the payment of the accounts. Mr. DeBresser was called to respond to the evidence of Mr. Legge that Marmer Penner had agreed to limit its fees to $40,000 to the conclusion of trial. I reserved on the issue of whether his evidence was proper reply.

[14] As a general rule, reply evidence is permitted to respond to a matter raised for the first time after the party has completed its evidence. As noted by Perell, J. in Johnson v. North American Palladium Ltd., 2018 ONSC 4496, at para. 13:

The rule against case-splitting that applies at hearings and trials restricts reply evidence and reply submissions to matters raised by the defendant or responding party and does not permit the plaintiff or applicant to deliver new evidence. The rationale is that the defendant or respondent is entitled to know and to respond to the case being made against him or her, and, therefore, the plaintiff or applicant should not split his or her case and take the opponent by surprise and without an opportunity to respond. It is intrinsically unfair for a plaintiff, applicant, or moving party to add new evidence or new argument after the defendant, respondent, or responding party has completed his or her evidence and argument. Reply evidence is admissible only when defendant, respondent, or responding party has raised a new matter that could not be reasonably anticipated by the plaintiff, applicant, or moving party or where the reply evidence is in response to an issue enlarged by the opponent in a manner that could not have been reasonably foreseen.

[15] Counsel for Marmer Penner states that there was a pre-trial agreement with counsel for Mr. Legge that Mr. Legge would not provide any evidence with respect to the alleged oral agreement that Marmer Penner’s fees were limited to $40,000 up to the completion of the trial. In his examination in-chief, Mr. Legge did not provide any evidence with respect to the alleged agreement by Marmer Penner to limit its fees. He was not asked questions about the issue in cross-examination. It was only in answering questions from the Bench did he provide any evidence with respect to the agreement.

[16] At para. 13 of his Statement of Defence, Mr. Legge alleges that Ms. Vacaru and Marmer Penner expressly agreed that its fees would not exceed $40,000. At para. 14, Mr. Legge alleges that Ms. Vacaru and Marmer Penner expressly agreed to limited and specific extensions of the $40,000 from time to time. At trial, I asked Mr. Legge about the allegations in his Statement of Defence. Mr. Legge testified that Marmer Penner agreed to limit its account to $40,000 to the completion of trial. Counsel argues that this evidence was unanticipated because of the pre-trial agreement with counsel for Mr. Legge and therefore Marmer Penner ought to be entitled to call reply evidence.

[17] I do not agree that the evidence of Mr. Legge was unanticipated. The allegation that there was an agreement that the Marmer Penner account would not exceed $40,000 is set out in Mr. Legge’s Statement of Defence. His evidence on this point could not have been unanticipated even if there was an agreement between counsel for Marmer Penner and Mr. Legge. It was reasonable to expect that his evidence on this point would come out at trial, either through a question in cross-examination or from the Bench. I expect that if Ms. Vacaru was represented by counsel at the time of the cross-examination, this question would have been put to Mr. Legge.

[18] Marmer Penner knew from the pleadings that the alleged oral agreement to limit its fees was an important issue in the trial. If the Plaintiff required Mr. DeBresser’s testimony on this issue, he ought to have been called as a witness as part of the Plaintiff’s case. In the circumstances, I decline to exercise my discretion to allow Mr. DeBresser to provide evidence in reply. I have not considered his evidence in coming to my decision.

2. Chronology

a. Ms. Vacaru Retains Mr. Legge

[19] Ms. Vacaru filed her divorce application against Mr. Purcaru on September 14, 2004. At that time, she was represented by Joseph Lo Greco. By May 2006, she had retained new counsel, Stephen Codas of Epstein Cole LLP. In early 2008, Ms. Vacaru became concerned about Mr. Codas’s representation. At that time, she was working for Bill Cavanaugh and told him about her concerns. Mr. Cavanaugh knew Mr. Legge when they were both in the Canadian military. He referred Ms. Vacaru to Mr. Legge for a second opinion.

[20] Mr. Legge met with Ms. Vacaru on February 7, 2008. Ms. Vacaru takes the position that at the time of the first meeting, Mr. Legge was aware that Mr. Purcaru was a “bad actor that could not be trusted.” Mr. Legge suspected that Mr. Purcaru was not reporting all of his income and this was a Cash Unreported Income (“CURI”) case.

[21] Mr. Legge wrote to Kenneth Cole, the managing partner of Epstein Cole, and provided his initial impressions. On February 8, 2008, Mr. Legge wrote to Mr. DeBresser at Marmer Penner to carry out a conflict search. He recognized Marmer Penner as an accounting firm with particular expertise in unreported income. On the same day, Mr. DeBresser sent a fee letter, which confirmed that his firm had been retained by Mr. Legge to provide advice in connection with Ms. Vacaru’s case. The letter set out the Marmer Penner hourly rates. No estimate of fees was provided at that time.

[22] Although Mr. Legge did not intend to become more involved in the case, Ms. Vacaru wanted to retain him. She appealed to his managing partner. On February 27, 2008, Mr. Legge agreed to represent Ms. Vacaru.

[23] On March 4, 2008, Mr. Legge met with Ms. Vacaru. She advised that she believed Mr. Purcaru had substantial assets he had not disclosed. On March 6, 2008, Mr. Legge received her complete file. Upon his review of the file, he learned that there had been three previous orders made in the action. Jarvis, J. made a preservation order on October 17, 2006. On October 24, 2006, Greer, J. made a preservation order against Mr. Purcaru and his girlfriend, Marina Seliverstova. Greer, J.’s order superseded Jarvis, J.’s. The third order was made by Herman, J. on January 16, 2007. On consent of the parties, the previous order of Greer, J. was rescinded. Herman, J.’s order provides that Mr. Purcaru shall not deplete his assets until further order of the court or written agreement and that Mr. Purcaru shall give reasonable notice to Ms. Vacaru if he plans to dispose of either 30 or 37 Gloucester Street, Toronto. Mr. Purcaru owned the Gloucester Street properties with Ms. Seliverstova.

[24] The trial was scheduled to commence on June 2, 2008. It was peremptory against Ms. Vacaru. She had previously sought two adjournments of the trial. She had also failed to provide certain financial disclosure. Her previous lawyer recommended that she accept Mr. Purcaru’s settlement offer. The case conference judge suggested to Ms. Vacaru that her case was not worth more than $300,000. Ms. Vacaru disagreed. She maintained her position that Mr. Purcaru had underreported his income and she was not prepared to accept his settlement offer.

b. Marmer Penner is Retained

[25] Mr. Legge was required to prepare for trial. His strategy was to pursue the argument that Mr. Purcaru had underreported his income. Mr. Legge prepared a motion for an adjournment of the trial and for further production of financial documentation. The motion was also for interim payment of disbursements. On March 19, 2008, Mr. Legge wrote to Mr. DeBresser and asked that he provide a list of further information necessary to prepare a report on net family property and Mr. Purcaru’s income since separation. He also asked that Mr. DeBresser provide “[his] estimated approximate fees and disbursements for conducting a review and providing [his] opinion”. Mr. Legge provided his personal undertaking to honour their fees.

[26] On March 28, 2008, Mr. Legge advised Ms. Vacaru that he would bring a motion for a preservation order and to “freeze and seize” anything they could find.

[27] Ms. Vacaru met with Mr. DeBresser on March 29, 2008. By that date, Marmer Penner had received the complete file. Ms. Vacaru takes the position that there was an oral agreement reached between her and Marmer Penner at the time of the meeting on March 29, 2008 that the fees up to trial would be limited to $40,000. Marmer Penner denies there was an agreement to limit its fees.

[28] On April 21, 2008, Marmer Penner wrote to Mr. Legge and provided its preliminary minimum fee estimate and initial production request letter. A copy of the letter was sent to Ms. Vacaru by e-mail. With respect to the minimum fee estimate, Marmer Penner stated:

Our preliminary minimum fee estimate to complete our analysis and prepare preliminary reports is in the range of approximately $125,000 to $200,000 including GST (see Appendix A). This preliminary fee estimate includes our current statement of account, which currently stands at $16,127, including GST. We confirm that we have accepted post-dated cheques for $16,000 which are dated over the next several months. These cheques will be applied against our current statement of account, which is enclosed.

This preliminary fee estimate is restricted to completing our review of Purcaru’s NFP and income for Guidelines purposes from 2003 to date and preparing preliminary reports on our findings. At this stage, we cannot estimate the costs required for trial-ready reports because of the significant forensic accounting that is required, the findings of which may impact on the time required to complete reports that are trial ready.

Significant additional review is required before we can provide our opinion as to Purcaru’s NFP and income. Our review has been limited so far due to our client’s budget. In any forensic accounting assignment, it is impossible to predict with accuracy what fees will be required. We have estimated the work and procedures that we believe are necessary based on our review to date and an estimated breakdown of our costs (see Appendix A). To the extent that there are other undisclosed assets, our actual costs may be higher than the estimate provided herein.

We have quoted the fees required for preliminary reports only. At this time, we are estimating costs for two reports; one related to Purcaru’s income and one related to his NFP (which will include the values of his business interests). The fees quoted herein do not include fees for attendances at settlement meetings, pre-trial case conferences, trial preparation and trial attendance. Additional fees for these items will be charged at our standard rates as shown on our enclosed fee letter.

Our preliminary fee estimate is just that – an estimate only, and our actual fees will be based on time spent and disbursements incurred. The financial affairs of Purcaru will be complicated due to co-mingling of corporate and personal funds, and a requirement for significant forensic accounting procedures. In addition, we enclose a copy of a corporate organizational chart of Purcaru’s business interests at date of separation (see Appendix E). Total fees will also depend on the level of cooperation we receive in responding to our requests.

[29] There was no response to the letter from Mr. Legge or Ms. Vacaru to the effect that the letter did not reflect a prior oral agreement that the fees would be limited to $40,000.

c. Motion Before Conway, J. on May 20, 2008

[30] Mr. Legge prepared a motion for an adjournment of the trial. He also sought an order that Mr. Purcaru pay interim disbursements in the amount of $125,000 forthwith. This was based on the estimate of fees set out in Mr. DeBresser’s letter dated April 21, 2009. Mr. Legge drafted an affidavit, which was sworn by Ms. Vacaru. In the affidavit, she deposes that the letter of Mr. DeBresser dated April 21, 2008 is true and fair to the best of her knowledge, information, and belief. The affidavit and report were filed with the court.

[31] At trial, Ms. Vacaru suggested that the estimate prepared by Mr. DeBresser was exaggerated or inflated to maximize the amount sought from Mr. Purcaru on the motion for payment of interim disbursements. At trial, I asked Mr. Legge if the amount in the estimate was exaggerated by Marmer Penner to support the request that Mr. Purcaru pay the interim disbursements. Mr. Legge testified that, if anything, the estimate understated the fees that would normally be required for a forensic report for unreported income. He stated that he would not file materials with a court or make representations that were not true or exaggerated.

[32] Mr. Legge’s motion for an adjournment and other relief was heard by Conway, J. on May 20, 2008. The motion was opposed by Mr. Purcaru. At the time, Mr. Purcaru was represented by James Edney. Conway, J. denied the motion for the adjournment. She also dismissed the motion for interim relief and costs. In her endorsement, she notes that Herman, J. had made a non-dissipation order dated January 16, 2007, which remained in place. Conway, J. referred the issue of the additional relief, including the request for a registerable restraining order, to the trial judge.

d. Marmer Penner’s First Report

[33] On May 23, 2008, Marmer Penner forwarded the engagement letter to Mr. Legge. With respect to Marmer Penner’s fees, the letter provides that the accounts are based on the hourly rates set out in the fee letter dated February 8, 2008. The letter also provides that the accounts are due when received and interest will be charged on overdue accounts in the amount of 1.5% per month. On May 23, 2008, Marmer Penner also forwarded an interim account to Ms. Vacaru in the amount of $41,613. The account included an additional retainer of $20,000.

[34] Ms. Vacaru, in her written submissions, takes the position that she did not receive the account dated May 23, 2008. The account was made an exhibit at trial. It was emailed to her on May 23, 2008. The last page of the document has a confirmation acknowledged by Ms. Vacaru. I am satisfied that Ms. Vacaru received the account on May 23, 2008.

[35] Mr. Legge testified at trial that he reviewed the engagement letter with Ms. Vacaru. The letter does not provide that Marmer Penner’s fees were limited to $40,000 up to the trial. There is no correspondence from Mr. Legge or Ms. Vacaru in response to the engagement letter that refers to an earlier oral agreement to limit the fees to $40,000. On May 28, 2008, Ms. Vacaru signed the formal engagement letter. She stated that at that time she believed the account was within the $40,000 limit. Mr. Legge also signed the engagement letter.

[36] On May 27, 2008, Mr. DeBresser sent an e-mail to Ms. Vacaru (with a copy to Mr. Legge) advising that the retainer of $20,000 with respect to the invoice dated May 23, 2008 had been exhausted. Mr. DeBresser asked for a new retainer in the amount of $15,000 to finish off the preliminarily report. He also asked that Ms. Vacaru execute an irrevocable direction providing that Marmer Penner’s fees were a first charge on funds received in trust by Legge & Legge. Later that evening, Mr. DeBresser sent an e-mail to Ms. Vacaru and Mr. Legge attaching an invoice for an additional retainer in the amount of $15,000. This brought the total fees to $57,613. Ms. Vacaru provided post-dated cheques to Marmer Penner to cover the outstanding balance.

[37] On May 27, 2008, Ms. Vacaru signed the irrevocable direction. She testified that at the time she signed the direction, she believed the account was “well within” the $40,000 agreed limit.

[38] On May 30, 2008, Marmer Penner delivered its forensic accounting report. The report was served on Mr. Edney. This was the first report to provide the opinion that Mr. Purcaru was underreporting his income.

e. Trial and Settlement Conference – June 2-10, 2008

[39] The matter was called for trial on June 2, 2008 before Belobaba, J. Mr. Edney requested an adjournment on the basis that Mr. Purcaru did not have sufficient funds to pay his lawyers. The adjournment was also requested to provide time to respond to the Marmer Penner report. The adjournment was granted. Mr. Legge sought terms of the adjournment, including a restraining order that could be registered on Mr. Purcaru’s properties. The motion for the restraining order was opposed. Belobaba, J. reserved his decision with respect to the restraining order.

[40] Belobaba, J. ordered the parties to attend a further settlement conference with Goodman, J. She was available to meet with them on June 2, 2008. Further meetings took place with Goodman, J. on June 3, 6, and 9, 2008. At the settlement conference on June 2, 2008, Goodman, J. directed that Mr. DeBresser have without prejudice discussions with Mr. Purcaru to obtain further information about his assets and liabilities. Mr. DeBresser and Ms. Barrett of his office met with Mr. Purcaru. Counsel were not present during the without prejudice discussions. Ms. Vacaru was aware of the meeting but was also not in attendance.

[41] At the meeting, Mr. Purcaru provided further information with respect to his finances and business. He disclosed that he had been in discussions with CIBC to borrow $500,000 against his house to pay off a shareholder loan from his company. He stated that he already had mortgages, and this was “only one mortgage”. The details of that conversation are set out in a 12-page memorandum prepared by Ms. Barrett. The memorandum was not provided to Mr. Legge or Ms. Vacaru at the time.

[42] Following the without prejudice discussions, the parties returned to court and updated Goodman, J. Mr. DeBresser relayed the information provided by Mr. Purcaru at the settlement meeting. Mr. Legge and Mr. Edney were present at the meeting with Goodman, J. Mr. Legge testified that Goodman, J. asked Mr. Edney about Mr. Purcaru’s discussions with CIBC to borrow $500,000. Mr. Legge expressed his concern to Goodman, J. that there was nothing stopping Mr. Purcaru from mortgaging everything and moving his money elsewhere. Mr. Legge asked if he could return before Belobaba, J. with respect to his request for a restraining order, which continued to be under reserve. Mr. Legge testified that Goodman, J. stated that she would see what she could do, but no arrangements were made to bring the matter back before Belobaba, J.

[43] After Mr. DeBresser relayed this information to Goodman, J., Mr. DeBresser, Ms. Barrett, Mr. Legge, and Ms. Vacaru had lunch at the Pegasus restaurant. Mr. DeBresser and Ms. Barrett reported on their discussions with Mr. Purcaru. No notes were taken of the lunch meeting. At trial, Ms. Vacaru denied being present at the lunch. In cross-examination, she was referred to her discovery evidence, at which time she testified that she did not know if she was present. Mr. Legge and Ms. Barrett both testified at trial that Ms. Vacaru was present for the debrief. Ms. Barrett also testified that the $500,000 mortgage with CIBC was discussed at the lunch meeting.

[44] I am satisfied that Ms. Vacaru was at the lunch meeting at the Pegasus restaurant on June 2, 2008. She was present in court that day and was very involved in her case. There is no reason she would not have attended the lunch to learn what had happened during the settlement meeting and discuss the strategy for going forward.

[45] After the meeting, Mr. Legge asked Mr. DeBresser to prepare a further production request based on the discussions with Mr. Purcaru. On June 3 and 4, 2008, Ms. Vacaru sent several emails to Mr. Legge which related to Mr. DeBresser’s discussions with Mr. Purcaru. In the e-mails, she provides information with respect to Mr. Purcaru’s CIBC accounts.

[46] In the course of the settlement conference with Goodman, J., Ms. Vacaru was required to provide further financial information. Mr. Legge prepared a Form 13.1 Financial Statement. Ms. Vacaru swore the Financial Statement on June 5, 2008. The sworn Financial Statement provides that the amount owing to Marmer Penner at that time was $91,717.

[47] Ms. Vacaru testified that between June 2 and 10, 2008 she was not aware that the fees had exceeded $40,000. She stated that she first became aware of the amount of the fees on June 11, 2008. She said that she voiced her objections to Mr. Legge, who convinced her to go ahead with Marmer Penner. She did not have any discussions with Marmer Penner about the fact that the amount exceeded what she believed was the agreed amount of fees to the commencement of trial. On June 11, 2008, Ms. Vacaru provided post-dated cheques to Marmer Penner totalling $91,717 for payment of the outstanding invoices.

[48] On June 10, 2008, the parties appeared before Belobaba, J. He granted the relief requested by Mr. Legge and ordered that Mr. Purcaru be restrained from encumbering, assigning, or conveying assets in his companies or his co-operative apartments at 30 and 37 Gloucester Street, Toronto, without the prior written consent of Ms. Vacaru. On the same day, Mr. Legge forwarded a draft order to Mr. Edney for approval as to form and content. He did not receive a response and followed up on Thursday, June 12, 2008. Mr. Edney stated he would look at the draft at the “start of next week.” Mr. Legge responded and said that he required a response to allow the order to be registered. Mr. Edney provided his approval on Monday, June 16, 2008. On June 20, 2008, the order was issued and entered at court. Mr. Legge arranged to have the order registered on title of Mr. Purcaru’s properties on July 4, 2008.

[49] On June 18, 2008, Mr. Purcaru attempted to commit suicide by slitting his throat and severing his carotid artery. He was in intensive care. He was released from the hospital on June 24, 2008.

f. Disclosure Letter from Marmer Penner dated June 19, 2008

[50] On June 19, 2008, Marmer Penner prepared its further disclosure letter based on the without prejudice discussions with Mr. Purcaru that took place on June 2, 2008. The letter was described as an addendum to the April 21, 2008 request letter. Item 77 in the addendum report is as follows:

77. We understand that Dan has had recent discussions with the CIBC to borrow $500,000. We require the name of the contact he was dealing with, and the authority to call this person. We also require copies of the application that was filled out to apply for the loan.

[51] According to Mr. Legge, a copy of the Marmer Penner letter dated June 19, 2008 was sent to Ms. Vacaru in accordance with his usual practice. At trial, Ms. Vacaru admitted that she received and “skimmed” the document in June 2008. There was no response to the letter from Mr. Purcaru.

[52] I find Ms. Vacaru’s evidence that she skimmed the report to lack credibility. Throughout the course of her testimony, it was clear that Ms. Vacaru was fully involved in the conduct of her case. I find it difficult to accept that she would not have read all documentation about her case in detail when it was sent to her by her lawyer.

[53] After Mr. Purcaru’s suicide attempt, Ms. Vacaru asked Mr. Legge to obtain a physical restraining order. Mr. Legge filed materials in support of the restraining order on June 26, 2008. The order was granted by Goodman, J. on June 30, 2008.

[54] The trial was scheduled to commence on October 23, 2008. Czutrin, J. adjourned the trial to May 5, 2009 at the request of Mr. Purcaru for medical reasons. At Mr. Legge’s request, Czutrin, J. granted another restraining order as a condition of the adjournment.

g. Payment of the Marmer Penner Account

[55] On December 23, 2008, Ms. Vacaru provided replacement cheques to Marmer Penner. It was her position that the existing payment plan was too onerous. Marmer Penner accepted the revised plan and post-dated cheques. Although she requested a change in the payment plan, she did not dispute the total amount owing or make reference an oral agreement to limit the fees.

[56] On March 16, 2009, Mr. DeBresser sent an e-mail to Mr. Legge with a copy to Ms. Vacaru and Mr. Cavanaugh. In the e-mail, he stated that Ms. Vacaru’s statement of account was $81,974 and, in order to assist her with payment, Marmer Penner had agreed to accept payment of $3,000 a month, which Ms. Vacaru has paid. Mr. DeBresser also confirmed that Ms. Vacaru had provided post-dated cheques to cover the entire account. Marmer Penner agreed to waive interest charges as long as Ms. Vacaru continued to service the account. Mr. DeBresser requested a further retainer of $10,000 to complete the additional work necessary for the trial scheduled for May 5, 2009. In the e-mail, he stated that he had had a discussion with Ms. Vacaru on March 16, 2009, during which she said she did not want Marmer Penner to proceed with the new work until she had discussed it with Mr. Legge. She wanted a cost-benefit analysis. Mr. DeBresser stated that he would not proceed with the new work until he received further instructions from Mr. Legge.

[57] On April 17, 2009, there was a meeting between Mr. DeBresser, Mr. Legge, and Ms. Vacaru. Following the meeting at 4:48 p.m., Mr. DeBresser sent an e-mail to Mr. Legge in which he stated that the account at that time was $107,786, including GST. Ms. Vacaru had paid $34,500. He asked for an interim payment of $19,393, which was one-half of the current amount outstanding less the amount that had been paid by Ms. Vacaru. He also requested payment of an additional retainer of $20,000 to prepare for and attend trial. He requested payment of $39,393 on or before April 23, 2009.

[58] On April 17, 2009 at 5:48 p.m., Ms. Vacaru sent an e-mail to Mr. Legge and Mr. Cavanaugh. She took the position that she could not pay any additional amounts to Marmer Penner. She stated:

When Mr. DeBresser started his work I was give a rough estimate of $30-40,000. … As of today, it stands at $127,000.

When I told Mr. DeBresser few weeks ago that I couldn’t pay a $10,000 retainer, I was talking in good faith.

When I told Mr. DeBresser today that I will look into ways of paying a retainer for new work, I was also talking in good faith. But I was expecting something reasonable, more like few thousand dollars.

There is no way I can not come up with $40,000 on or before April 23, 2009.

[59] On April 19, 2009 at 10:21 p.m., Mr. Legge sent an e-mail to Mr. DeBresser with a copy to Ms. Vacaru stating that Ms. Vacaru did not have money to pay anything further at this time. Mr. Legge made reference to an initial estimate of Marmer Penner:

On the issue of professional accounts, I know that your initial estimate of not more than $35,000 was blown up by Dan’s refusal to hire an accountant or to answer your questions – and your need to do a Trail Ready Report without much if any real disclosure. You appreciate that a total now well north of $100,000 is a bit of a shock to Felicia [Vacaru]. I have lined up far to the back of the line for legal fees – as have Epstein Cole – but we have to prepare for trial.

[60] Later that evening, at 11:03 p.m., Mr. DeBresser sent an e-mail to Mr. Legge asking that he call him the next day to discuss the matter.

[61] On April 27, 2009, Marmer Penner wrote to Mr. Legge with a copy to Ms. Vacaru and Mr. Cavanaugh setting out the additional work required to prepare for trial and stating that they required a suitable arrangement to deal with their account. A further direction was prepared. The direction was signed by Ms. Vacaru on April 30, 2009. Mr. Legge also signed the direction.

h. Trial before Paisley, J. May 5, 2009

[62] On May 2, 2009, Mr. Purcaru provided new financial information. Marmer Penner reviewed the material and provided a further report. On the eve of trial, Mr. Purcaru served a forensic accounting report. Marmer Penner reviewed the report in preparation for trial.

[63] On May 5, 2009, Mr. Purcaru served an updated financial statement. The statement revealed that Mr. Purcaru obtained a mortgage from CIBC in April or May 2008 against his property at 37 Gloucester Street in the amount of $500,000. The mortgage was approved on May 31, 2008. It was later learned that on June 2 and 3, 2008, Mr. Purcaru left the settlement conference with Goodman, J. to sign mortgage insurance documents. He was given access to a line of credit secured against the property at 37 Gloucester on June 3, 2008. CIBC registered its charge on the property at 37 Gloucester on June 19, 2008.

[64] By the time the parties learned of the line of credit on May 5, 2009, it had been completely depleted by Mr. Purcaru.

[65] After learning of the depletion of the line of credit, Mr. Legge moved before the trial judge, Paisley, J., for an order that Mr. Purcaru was in contempt of court for breaching the order of Belobaba, J. Mr. Legge also sought an order striking Mr. Purcaru’s pleading. Paisley, J. granted the motion to strike the pleading. He adjourned the contempt hearing to be heard by another judge. The trial proceeded on an undefended basis. Paisley, J. granted judgment in favour of Ms. Vacaru in the amount of $1,064,827, with ongoing child and spousal support payments.

[66] Mr. Legge prepared written costs submissions. These included the account summary of Marmer Penner, which was filed as an exhibit. The account summary provides that Ms. Vacaru had paid $85,500 to the credit of the account. The written submissions state that Ms. Vacaru intends to pay the account in full. In the written submissions, Mr. Legge states that the fees charged by Marmer Penner were fair and reasonable. Paisley J. ordered Mr. Purcaru to pay the expert fees.

i. Appeal and subsequent proceedings against Mr. Purcaru

[67] Mr. Purcaru appealed Paisley, J.’s order. On the appeal, Mr. Purcaru attempted to file new accounting evidence. He also took the position that Mr. DeBresser’s evidence at trial was false and misleading. Marmer Penner was required to review Mr. Purcaru’s material and assisted in preparing a response. The Court of Appeal released its decision on February 2, 2010 dismissing the appeal.

[68] Mr. Purcaru refused to pay the judgment. Mr. Legge proceeded with an action to set aside the transactions involving Mr. Purcaru’s girlfriend, Ms. Seliverstova. He also proceeded with the civil contempt trial against Mr. Purcaru. Marmer Penner was required to assist with the ongoing actions and prepared a new expert report dated July 21, 2010.

[69] In the Seliverstova fraudulent preferences action, as well as on the appeal, Mr. Purcaru challenged Exhibit 6 from the Vacaru trial. A separate action was brought against Marmer Penner with respect to this issue. The action was dismissed on a motion without evidence. Marmer Penner did not submit any fees with respect to the action brought against it.

[70] Mr. Purcaru’s contempt hearing was heard by McWatt, J. (as she then was) starting July 27, 2010. Ms. Barrett testified at the hearing. McWatt, J. released her decision on May 4, 2011, finding Mr. Purcaru in contempt. On July 14, 2011, she sentenced Mr. Purcaru to two months in jail if he purged his contempt and if not, a further two months in jail. Mr. Purcaru did not purge the contempt and spent four months in jail. McWatt, J. approved Marmer Penner’s account and awarded those costs to Ms. Vacaru.

j. Outstanding Marmer Penner Accounts

[71] On August 5, 2010, Mr. Cavanaugh sent an e-mail to Mr. Legge. He said he had discussed the overall financials with Ms. Vacaru. He stated he was surprised at how much she had been charged by Marmer Penner when, in the initial interview, Mr. Legge mentioned that the fees would be around $30-35,000. The fees were now over $170,000 and Ms. Vacaru had paid over half of that amount. On October 22, 2010, Ms. Vacaru sent an e-mail to Mr. Legge stating that he had told her that Mr. DeBresser’s fees would be $30-40,000.

[72] On February 3, 2011, after getting a new job, Ms. Vacaru delivered new post-dated cheques for the full amount of Marmer Penner’s account. In response to her request that the payment plan was too onerous, Marmer Penner agreed on February 4, 2011 to reduce the monthly post-dated cheques to $250.

[73] On July 11, 2011 there was a telephone discussion between Ms. Vacaru and Mr. DeBresser with respect to the outstanding Marmer Penner account. Mr. DeBresser sent an e mail to Mr. Legge on July 11, 2011 at 2:50 p.m. in which he states that Ms. Vacaru hung up on him during their conversation. At 5:49 p.m., Ms. Vacaru sent an e-mail to Mr. Legge in which she states that Mr. DeBresser asked that she start making substantial monthly payments until the outstanding amount was paid off completely. She reported to Mr. Legge that she asked Mr. DeBresser “if he sees it ok to pay a 200K bill to him while I am left with huge debts for the years to come.… While when he got involved, I was told to expect a 30-40K bill at most….”

[74] On September 19, 2011, Ms. Vacaru took the position that Marmer Penner had agreed to waive the balance of her account. Mr. DeBresser responded the same day and denied there was an agreement to waive the balance. He stated that “we are expecting full payment of our account, and no one has ever discussed anything different.” Marmer Penner had post-dated cheques for the payment of the account. Ms. Vacaru continued to honour the post-dated cheques. On December 10, 2011, Ms. Vacaru sent an e-mail to Mr. Legge in which she states that he had said she should expect a bill for about $30-40,000 from Marmer Penner. In January 2012, Ms. Vacaru advised Marmer Penner that she would not honour the post-dated cheques. The balance outstanding was $68,557.

[75] In an e-mail to Mr. Legge sent February 5, 2012, Ms. Vacaru set out her position with respect to the Marmer Penner account. She stated as follows:

Around March 2008, even though I had a good and capable forensic accountant, Ms. Paula White, Mr. Legge strongly recommended that I hire Marmer Penner.

Mr. Legge told me how great and good Mr. Jack Marmer was. And, based on what I later learnt, he, Jack Marmer was an amazing professional, an excellent forensic accountant.

Unfortunately, I got to retain Mr. Jim DeBresser, a much lower caliber accountant, An accountant who later on made plenty accounting mistakes errors, which cost me a great deal.

But, to start from the beginning: on March 2008 I was told that the new accountant will not cost me more than 30K … 40K tops. Under any circumstances, And I agree, the actual work (#hours time the huge hourly rate) bring the total around this 30-40 K level.

[76] Following the contempt hearing, Mr. Legge proceeded with the fraudulent conveyance application against Mr. Purcaru, his companies, and Ms. Seliverstova. Before the matter was heard, there was a breakdown in the solicitor-client relationship between Mr. Legge and Ms. Vacaru. On May 16, 2012, Penny, J. granted Mr. Legge’s request and ordered that he be removed from the record. The fraudulent conveyance application was heard by Myers, J. on October 5-9 and 12-15, 2015. He released his decision on October 29, 2015. He found that the line of credit on 37 Gloucester Street was a fraudulent conveyance and ordered that title in the property be transferred to Ms. Vacaru.

ANALYSIS

1. Marmer Penner’s Claim for Unpaid Fees

a. Was there an oral agreement by Marmer Penner to limit its fees to $40,000 to the commencement of trial?

[77] Ms. Vacaru confirms that Marmer Penner was retained to provide accounting services in her family law dispute with Mr. Purcaru. She takes the position that some time shortly after Marmer Penner was engaged in March 2008, it orally agreed to limit the fees to $40,000 up to the trial. Marmer Penner rendered accounts with respect to Ms. Vacaru’s family law dispute that totalled $193,217. Ms. Vacaru paid approximately $125,000 of the total account. The amount in issue is $68,557.

[78] At trial, Ms. Vacaru did not take the position that the fees charged by Marmer Penner were excessive. In her written submissions, she states that the only amounts in issue are the fees charged by Marmer Penner before the commencement of trial on June 2, 2008, which Ms. Vacaru argues were subject to the oral agreement that Marmer Penner would limit its fees to $40,000. She paid Marmer Penner for all work completed after the initial trial date. Marmer Penner argues that the documentation and the parties’ conduct are consistent with a finding that there was no agreement to fix or limit its fees to the trial.

[79] To determine if there was an oral agreement that Marmer Penner would limit its fees to $40,000 up to trial, it is necessary to consider all the circumstances surrounding the alleged agreement: see Brownlee v. Kashin, 2015 ONSC 1035, at paras. 47 and 49. The circumstances include the words, conduct, and representations made by the parties. The court is to apply the “reasonable bystander” test to determine if, on an objective basis and in light of all the material facts, the parties intended the essential terms of the agreement: see Picavet v. Clute, 2012 ONSC 2221, at para. 10.

[80] Marmer Penner was first contacted by Mr. Legge in February 2008. Mr. Legge suspected that Mr. Purcaru may have been underreporting his income and he required a CURI report. Both Ms. Vacaru and Mr. Legge testified at trial that sometime after Marmer Penner was retained, it agreed that its fees up to trial would not exceed $40,000. Ms. Vacaru testified that at a meeting to discuss retaining Marmer Penner, she was promised by Mr. Legge that Marmer Penner’s fees to the completion of trial would not be more than $30-35,000, with a maximum of $40,000 if the trial took longer than expected. She states that she agreed to retain Marmer Penner based on this understanding.

[81] Mr. Legge testified that Marmer Penner orally agreed to limit its fees to $40,000 to the completion of trial. He was asked about the allegations in his Statement of Defence in which he pleads that Ms. Vacaru and Marmer Penner expressly agreed that the Plaintiff’s fees were not to exceed $40,000. He provided the following testimony:

THE COURT: In your pleadings, you don’t say it was an estimate or an expected amount. You said an express agreement, the fees were not to exceed $40,000. Was there an express agreement on a fixed fee at any point in time?

A: It was verbal, but it was agreed.

THE COURT: For what period of time?

A: To and including that initial fixed peremptory trial.

THE COURT: Commencement of trial or completion of trial?

A: I would say completion …

THE COURT: And was the, when you said the oral agreement on the fixed fee, was that reached before of after the preliminary minimum fee estimate letter, April 21, 2008?

A: Before.

THE COURT: Was it after Marmer Penner had had a chance to review the file?

A: Indeed, they had not competed it, a detailed review.

[82] Mr. Legge and Ms. Vacaru’s position that Marmer Penner expressly agreed to limit its fee is inconsistent with the documentary evidence and the conduct of the parties:

a) Marmer Penner’s minimum fee estimate is set out in its letter dated April 21, 2008. The estimate to complete the analysis and prepare the preliminary report is $125,000-200,000, including GST. There is nothing in the minimum fee estimate about limiting the fees to the commencement or completion of trial. There is no record of a letter or e-mail from Ms. Vacaru or Mr. Legge to Marmer Penner stating that the minimum fee estimate was inaccurate because it did not make reference to the prior oral agreement to limit the fees.

b) In support of the motion before Conway, J. on May 20, 2008, Ms. Vacaru swore an affidavit on May 6, 2008 to which she attached the preliminary fee estimate. In that affidavit, she states that the reports are true and fair to the best of her knowledge, information, and belief. The motion material was prepared by Mr. Legge. If in fact there was an agreement that the fees were limited to $40,000, the affidavit sworn by Ms. Vacaru and prepared by Mr. Legge was false. Ms. Vacaru testified that she believed that the amount of fees was exaggerated for the purpose of obtaining an order compelling Mr. Purcaru to pay the disbursement. Mr. Legge specifically denied that the amount set out in the fee estimate was exaggerated. Mr. Legge testified at trial that he would not file false evidence with the court.

c) On May 23, 2008, Ms. Vacaru received an engagement letter from Marmer Penner. The letter provides that the accounts are based on the hourly rates set out in its fee letter dated February 8, 2008. There is no reference in the letter to an agreement to limit the fees. The retainer agreement was signed by both Ms. Vacaru and Mr. Legge on May 28, 2008. There is no letter or e-mail from Mr. Legge or Ms. Vacaru stating that the retainer agreement was subject to the oral agreement to limit the fees.

d) On May 23, 2008, Marmer Penner delivered a statement of account showing invoices totalling $42,613 with an amount due of $41,613. This included an additional retainer of $20,000. This account was mailed to Ms. Vacaru with an e mail confirmation on May 23, 2008. I am satisfied that Ms. Vacaru received this invoice. On May 27, 2008, Marmer Penner advised that the additional retainer of $20,000 had been exhausted. There was a request for a further retainer in the amount of $15,000. This brought the balance before the commencement of trial to $57,613. The invoice was sent to Ms. Vacaru by e-mail. There was an e-mail confirmation dated May 27, 2008. Although this amount was in excess of $40,000, there is no record of Mr. Legge or Ms. Vacaru sending a letter or e-mail to Marmer Penner stating that the account was in excess of the agreement to limit fees.

e) On June 8, 2008, Ms. Vacaru filed a Form 13.1 Financial Statement in which she states that she owes Marmer Penner $91,717. There is nothing in the Financial Statement that says the amount owing to Marmer Penner was subject to an oral agreement to limit the fees. If in fact there was an agreement that the fees to trial were not to exceed $40,000, the Financial Statement sworn by Ms. Vacaru and filed by Mr. Legge was false.

f) On December 23, 2008, Ms. Vacaru provided replacement post-dated cheques to cover Marmer Penner’s outstanding account. She did not take the position that there was an agreement to limit fees to $40,000.

g) On March 16, 2009, Marmer Penner reported to Mr. Legge on the additional work required to prepare for trial and requested a further $10,000 retainer. There was no response from Ms. Vacaru or Mr. Legge with respect to the oral agreement to limit fees.

h) On April 17, 2009, Marmer Penner wrote to Mr. Legge with a copy to Ms. Vacaru stating that the fees to date were $107,786. Mr. Legge did not state that the fees were subject to the oral agreement. On April 17, 2009, Ms. Vacaru wrote to Mr. Legge and stated that she was given a “rough estimate” of $30-40,000. She did not write to Marmer Penner. Mr. Legge wrote to Mr. DeBresser on April 19, 2009 referring to an “initial estimate”. He did not state that there was an express oral agreement.

i) Following the trial on May 22, 2009, Mr. Legge made cost submissions to Paisley, J. Ms. Vacaru claimed the full amount of the fees charged by Marmer Penner. In his endorsement, Paisley, J. notes that Ms. Vacaru has paid $85,000 and intends to pay the account in full.

j) On September 19, 2011, Ms. Vacaru stated that there had been an agreement with Marmer Penner to waive the balance of the amount outstanding. This was immediately denied by Mr. DeBresser. Ms. Vacaru did not state at that time that there was a prior oral agreement to limit the fees.

k) Following the contempt trial, Ms. Vacaru made further costs submissions. Marmer Penner’s additional fees in the amount of $49,082 were included in the bill of costs. The court held that the fees were reasonable and allowed them in full.

[83] It is difficult to reconcile the documentation set out above with Mr. Legge’s testimony that there was an express oral agreement by Marmer Penner to limit its fees to trial in the amount of $40,000. There is no e-mail, memoranda, or letter from Mr. Legge to Marmer Penner referencing an agreement to limit its fees. Even after receiving fee estimates and invoices from Marmer Penner in excess of the fixed fee amount, Mr. Legge did not send any correspondence to Marmer Penner with respect to the oral agreement. Most troubling is the fact that Mr. Legge filed several documents with the court that provide that Ms. Vacaru was responsible for the full amount of the Marmer Penner invoices. If there was an oral agreement to limit the fees to $40,000, Mr. Legge filed false or misleading records with the court. The first statement from Mr. Legge that there was an oral agreement is in his Statement of Defence delivered on April 14, 2014.

[84] Mr. Legge states that the oral agreement to fix the fees was made before Marmer Penner completed its review of the file. The file consisted of four to five banker’s boxes, which were delivered to Marmer Penner in March-April 2008. In his e-mail to Mr. DeBresser sent on April 19, 2009, Mr. Legge made reference to an “initial estimate” of Mr. DeBresser. He did not refer to an express oral agreement. He stated that the initial estimate of “not more than $35,000 was blown up by Dan’s refusal to hire an accountant or to answer your questions”. This e-mail, which refers to an initial estimate, is inconsistent with Mr. Legge’s testimony at trial that there was an express oral agreement.

[85] Counsel for Marmer Penner suggests that if Mr. Legge understood the fees were limited as a result of an oral agreement in March 2008, he no longer had that understanding in May 2008, when he filed material on the motion before Conway, J. The material included Marmer Penner’s minimum fee estimate in the range of $125,000-200,000. If he continued to believe there was an agreement to limit the fees, Mr. Legge prepared false evidence for Ms. Vacaru and filed false and misleading evidence with the court. Mr. Legge testified that he would not file false evidence with the court.

[86] I conclude that there is simply no credible evidence to support the position of Mr. Legge and Ms. Vacaru that Marmer Penner agreed to limit its fees to the commencement or completion of trial. I do not accept Mr. Legge’s testimony at trial that there was an “express oral agreement”. The words, conduct, and representations of the parties are inconsistent with an oral agreement by Marmer Penner to limit its fees. I am satisfied that on an objective basis, and in light of all the material facts, Marmer Penner did not at any time agree to limit its fees. Ms. Vacaru is liable for the amount claimed by Marmer Penner.

[87] Marmer Penner argues that Ms. Vacaru made submissions to the court with respect to the accounting fees and obtained costs orders for the full amount, and is thereby estopped from advancing the theory in this case that the full amount of the fees is not payable. The Plaintiff relies on the doctrine of approbation and reprobation: see Angelini v. Angelini (2008), 2008 CanLII 151 (ON SC), 47 R.F.L. (6th) 368 (Ont. S.C.). Given my finding that Marmer Penner did not agree to limit its fees, it is not necessary for me to determine whether the doctrine of approbation and reprobation applies in the circumstances of this case and I decline to do so.

[88] Mr. Legge retained Marmer Penner on behalf of Ms. Vacaru. Mr. Legge provided his personal undertaking to honour the fees. Both Ms. Vacaru and Mr. Legge executed the engagement letter on May 28, 2008, which set out the terms of the retainer. In April 2009, Marmer Penner was required to prepare for the trial before Paisley, J. Marmer Penner was not prepared to continue to act unless Mr. Legge provided assurance that the account would be paid in full. Mr. Legge signed the direction on April 30, 2009. Mr. Legge agreed to be responsible for payment of the Marmer Penner account. He did not lead any evidence with respect to the issues in the main action and did not take the position that the amounts charged by Marmer Penner were unreasonable. I find that Mr. Legge is liable to Marmer Penner for the amount claimed.

[89] The retainer agreement signed by Ms. Vacaru and Mr. Legge provides for interest on overdue accounts at 1.5% per month. There was no argument raised at trial that the interest rate was unreasonable or unenforceable. I am satisfied that Marmer Penner is entitled to judgment against both Mr. Legge and Ms. Vacaru jointly and severally in the amount of $68,557. Marmer Penner is entitled to interest at the rate of 1.5% per month.

2. The Crossclaim brought by Ms. Vacaru against Mr. Legge

a) Solicitor’s Negligence

i) Standard of Care

[90] Ms. Vacaru alleges that Mr. Legge was negligent in the manner in which he acted on her behalf. Her claim is focused on a single day: June 2, 2008. Her position is that Mr. Legge did not take the appropriate steps to protect her interests after he learned that Mr. Purcaru was in discussions with CIBC with respect to a mortgage. She states that Mr. Legge ought to have immediately obtained a restraining/non-depletion order on June 2, 2008 after he learned that Mr. Purcaru had been in discussions with CIBC. She also states that he ought to have sent Herman, J.’s order to CIBC. In her written submissions, Ms. Vacaru argues that Mr. Legge ought to have obtained a consent order from Goodman, J. restraining CIBC from dealing with Mr. Purcaru.

[91] Ms. Vacaru has the onus to establish that Mr. Legge breached the standard of care. Per Marcus v. Cochrane, 2012 ONSC 146, at paras. 68-70, in determining whether there is a breach of the standard of care, two uncontroversial principles apply:

a) A lawyer is required to bring reasonable skill and knowledge to the performance of the professional services he or she has undertaken to perform

b) The reasonableness of the lawyer’s conduct is to be assessed in light of the time available to complete the work, the nature of the client’s instructions, and the client’s experience and sophistication.

[92] The lawyer is not held to a standard of perfection. The standard requires the lawyer to exercise the effort, knowledge, and insight of a reasonably competent lawyer. The lawyer’s conduct is not to be judged with the benefit of hindsight: see Folland v. Reardon (2005), 2005 CanLII 1403 (ON CA), 74 O.R. (3d) 688 (Ont. C.A.), at para. 44.

• Herman, J.’s Order

[93] Ms. Vacaru argues that Mr. Legge ought to have registered the order of Herman, J. on title. This argument may be quickly dismissed. Herman, J.’s order was not a registerable order because it did not apply to a specific property. It was a general non-dissipation order that could not be registered on title. Ms. Vacaru’s expert, Mr. Niman, did not provide an opinion at trial that the Herman, J. order could be registered on title or that Mr. Legge breached the standard of care for failing to register the order. There is no allegation and no evidence that relates to the registration of Herman, J.’s order.

[94] At the conclusion of her evidence, Ms. Vacaru brought a motion for leave to amend the crossclaim to allege that Mr. Legge ought to have sent Herman, J.’s order to CIBC after he learned that Mr. Purcaru had been in discussions with the CIBC about the mortgage. By endorsement dated March 10, 2020, I granted leave to amend the crossclaim.

[95] Mr. Niman provided his opinion that Mr. Legge ought to have notified CIBC about Herman J.’s order. He suggested that a letter and the order could have been sent to the CIBC legal department. Mr. Niman did not provide an opinion as to what CIBC would have done if the order had been sent to it. Mr. Dart testified that in his experience, CIBC would not have done anything because Herman, J.’s order was not directed to the bank. The order did not prohibit Mr. Purcaru from using his bank accounts and did not prohibit him from opening a line of credit. He could mortgage his assets as long as he provided notice to Ms. Vacaru.

[96] Before the date of the settlement conference on June 2, 2008, Mr. Purcaru revoked his consent for Ms. Vacaru or her counsel to contact CIBC about his accounts. Therefore, it would have been necessary to obtain consent from Mr. Purcaru to contact CIBC in the absence of a court order. I find that it is unlikely Mr. Purcaru would have provided his consent.

[97] Mr. Legge was specifically asked whether he considered sending a letter to CIBC after he learned that Mr. Purcaru was in discussion with CIBC about a mortgage. He testified as follows:

THE COURT: Okay. And I want to ask you about June 2nd, 2008. After receiving information or the debrief from Jim DeBresser and Anna Barrett, did you consider writing a letter to the legal department of CIBC and providing a copy of Herman’s, Justice Herman’s order?

A. No, I did not, Your Honour.

THE COURT: And why is that?

A. I only had those two accounts on his financial statement and I did not have evidence that would entitle me, at that point, to interfere with Mr. Purcaru’s business arrangements, and I think I would have been, in fact I know I would have been in terrible trouble if I had tried it. The rule of thumb is, that if you’re going to write to a bank, you’d better have said so and you would want to have the protection of a judge’s order saying the plaintiff may provide this letter to, or this order, or whatever it is, to the CIBC. You, writing to banks is a very, is a fraught business.

THE COURT: Did you consider asking Justice Goodman for that kind of order so that you could write to the CIBC legal department?

A. I did not. What I, because I didn’t have any evidence, and Her Honour, in fact, directly questioned Mr. Edney about it. Is there anything to this? Do we have to be worried about it?

THE COURT: Okay. You heard Mr. Niman say that he believed the standard of care required a lawyer to write to the legal department of a bank, even if you didn’t know the, the account numbers. Would you disagree with that?

A. I do disagree with that, and it’s the opposite of my experience. I have written to banks. I can only think of three times when I have done so, and all three times, I can’t remember the case names, but all three times I had at least a judicial endorsement that I could do so and I was to provide a copy of the letter to the husband’s lawyer…

[98] At the time Mr. Legge learned that Mr. Purcaru had been in discussions with CIBC, he did not know the branch, department, or individual whom Mr. Purcaru was dealing with. Marmer Penner, in its production letter dated June 19, 2008, asks Mr. Purcaru to provide this information. Mr. Niman testified that the order of Herman, J. could have been sent to the CIBC general legal department. Mr. Dart testified that in 2008, banks required very specific orders and would expect specific account numbers and identification about Mr. Purcaru in the order. Mr. Dart testified that in his opinion, a lawyer would not have served orders like Herman, J. or Belobaba, J.’s on a bank. The orders did not set out specific bank accounts or provide that the bank was restrained from dealing with its customer. Mr. Dart provided the opinion that it was not a breach of the standard of care for Mr. Legge to not have notified CIBC about Herman, J.’s order. He testified that in his 44 years of practice, he has not served a non-specific order on a bank.

[99] Mr. Niman, in his testimony, appears to have been suggesting that Mr. Legge ought to have obtained an ex parte Mareva injunction against the bank. To obtain such an order, Mr. Legge would have been required to show that Ms. Vacaru would sustain irreparable damage if the order was not granted. Based on the evidence available at the time, it is uncertain as to whether such an urgent motion would have been granted. At that time, Mr. Purcaru had not been in breach of any court orders. Mr. Niman did not provide the opinion that Mr. Legge breached the standard of care in not seeking a Mareva injunction against the bank. Mr. Dart testified that he was not aware of the type of order Mr. Niman was suggesting could have been obtained in the circumstances. Mr. Dart testified as follows:

No. I, I don’t know how you would make an order against a bank that wasn’t a party to the proceeding, and I don’t know how you would make the bank a party to the proceeding. So I’m, I’m, I just don’t understand what Mr. Niman was, was trying to tell us there.

• Obtaining a Registerable Order on June 2, 2008

[100] Ms. Vacaru alleges that Mr. Legge ought to have obtained an order on June 2, 2008 that could be registered on title.

[101] Ms. Vacaru argues that it was well known that Mr. Purcaru was a “bad man” and therefore Mr. Legge ought to have been on “high alert”. Ms. Vacaru argues that Mr. Legge was suspicious of Mr. Purcaru from the outset. He believed that Mr. Purcaru was not reporting his full income and it was for that reason he recommended she retain Marmer Penner. On May 20, 2008, Mr. Legge brought a motion before Conway, J. seeking a non-dissipation order because of his concerns about Mr. Purcaru.

[102] The evidence does not support the conclusion that on June 2, 2008 it was known that there was a high risk that Mr. Purcaru would dissipate his assets. Although there was an issue with respect to unreported income, Mr. Purcaru had not breached any previous court orders as of June 2, 2008. No court had found that Mr. Purcaru had dissipated his assets. At the time of the settlement meeting on June 2, 2008, the order of Herman, J. continued to be in effect. That order provided that Mr. Purcaru was not to dissipate his assets without providing prior notice to Ms. Vacaru. Mr. Purcaru voluntarily disclosed the fact that he had been in discussions with CIBC during the meeting with Mr. DeBresser and Ms. Barrett. Goodman, J. specifically asked Mr. Edney about this and was assured that there was no risk that assets would be dissipated.

[103] Although there was no evidence at that time that Mr. Purcaru had a history of breaching court orders, and despite assurances by Mr. Edney, Mr. Legge sought additional protections. On the morning of June 2, 2008, before the meeting between Marmer Penner and Mr. Purcaru, Mr. Legge brought a motion for a restraining order. The motion was opposed. Belobaba, J. reserved his decision and referred the parties to Goodman, J. for a settlement conference. Mr. Legge testified that after he learned of Mr. Purcaru’s discussions with CIBC, he asked Goodman, J. if she could obtain the restraining order that Belobaba, J. had under reserve or, alternatively, if he could get back in front of Belobaba, J. She stated that she would see what she could do. The order of Belobaba, J. was provided on June 10, 2008.

[104] Mr. Dart provided his opinion that it was surprising that Mr. Legge was able to obtain such an order from Belobaba, J. The order restrained Mr. Purcaru from disposing of his property at 37 Gloucester Street, which he owned with Ms. Seliverstova. The property did not form part of the net family property and therefore Ms. Vacaru did not have a proprietary interest. Also, Herman, J.’s order was still in place, which was a general preservation order.

[105] Ms. Vacaru argues that Mr. Legge ought to have obtained an order from Goodman, J. on June 2, 2008 rather than wait for Belobaba, J.’s decision. Mr. Niman provided his opinion at trial that Mr. Legge could have obtained an order at the settlement conference. Mr. Niman relied on two cases to support his opinion that such an order could be obtained from the settlement conference judge: Burke v. Poitras, 2018 ONCA 1025, and Desai v. Desai, 2019 ONSC 5848.

[106] Both cases referred to by Mr. Niman were decided more than ten years after the relevant time period. Mr. Dart testified that the Family Law Rules changed after 2008. One of the changes was to r. 17(8)(b.1), which provides that if notice is given, a settlement conference judge may make a final order or temporary order restraining assets. Before this rule came into effect, settlement conference judges were restricted to making orders on consent or procedural orders. Mr. Dart testified that at the time of the settlement conference with Goodman, J. on June 2, 2008, contested restraining orders were not available and in his practice he never asked a settlement conference judge to adjudicate a contested restraining order. In cross-examination, Mr. Niman was not prepared to concede that contested orders were not available on a settlement conference in 2008. He agreed, however, that it would be “unusual at best” for a settlement conference judge in 2008 to issue a restraining order. He stated that it depends on the circumstances.

[107] After Mr. Dart provided his opinion that a settlement conference judge could not make orders with respect to contested matters, Ms. Vacaru argued that Mr. Legge ought to have obtained an order from Goodman, J. on consent. She states that counsel for Mr. Purcaru assured Goodman, J. that his client would not dissipate assets. Ms. Vacaru argues that given this statement, Mr. Purcaru would have consented to an order. I note that Mr. Purcaru opposed the motion for a restraining order that Mr. Legge brought earlier that day. There is no evidence before me to support Ms. Vacaru’s argument that Mr. Purcaru would have consented to the same or similar order before Goodman, J. Given his conduct throughout, I find it unlikely he would have consented to anything.

[108] In her written submissions, Ms. Vacaru argues that Mr. Legge ought to have returned before Belobaba, J. to provide him with the information that Mr. Purcaru had been in discussions with CIBC. Mr. Niman testified that it was within Mr. Legge’s power to return in front of Belobaba, J. but did not provide any specifics on what Mr. Legge could have done. Mr. Legge asked Goodman, J. if he could get Belobaba, J.’s order, which was under reserve, or if he could return before him. Goodman, J. was aware of Mr. Purcaru’s discussions with CIBC. She stated that she would see what she could do about obtaining Belobaba, J.’s order. Belobaba, J. granted the order on June 10, 2008.

• Summary - Standard of Care

[109] I conclude that Mr. Legge did not breach the standard of care of a reasonably competent lawyer in 2008. With respect to the specific allegations made by Ms. Vacaru, I make the following findings:

a) Mr. Legge did not breach the standard of care by not registering the order of Herman, J. on title. This was a non-specific order that could not be registered on title.

b) With respect to the argument that Mr. Legge ought to have sent Herman, J.’s order to CIBC, I accept Mr. Dart’s evidence that in 2008, banks required specific orders and would expect account numbers and identification in the order. I also accept Mr. Dart’s evidence that the order did not direct the bank to do anything because it did not prohibit Mr. Purcaru from using his bank accounts and did not prohibit him from opening a line of credit. He could mortgage his assets as long as he provided notice to Ms. Vacaru.

c) With respect to the argument that Mr. Legge failed to obtain a contested order from Goodman, J., I accept Mr. Dart’s evidence that the Family Law Rules at the time did not permit settlement conference judges to make contested orders. In any event, Belobaba, J. was already reserving on the request for the restraining order. I am also satisfied that a consent order could not have been obtained from Goodman, J. Mr. Purcaru had opposed the motion for a restraining order when it was brought a few hours earlier before Belobaba, J.

ii) Causation

[110] Ms. Vacaru has the onus to prove that “but for” Mr. Legge’s negligence, the loss would not have occurred. She must establish a causal link between the breach of the standard of care and the damage: see Marcus, at paras. 71-72. As stated in Shiokawa v. Tohyama et al., 2004 BCSC 175, at para 33, citing Graybriar Industries Ltd. v. Davis & Company (1990), 1990 CanLII 1572 (BC SC), 46 B.C.LR. (2d) 164, and Plattig v. Hart, 2002 BCSC 1549:

A plaintiff who proves duty, breach of the standard of care and damage will still be unsuccessful in the action unless it is proved that there is a causal link between the breach of the standard of care and the damage. The causal link is tested in two ways: the defendant’s conduct must be both the actual cause, or cause in fact and the legal cause or proximate cause of the loss.

[111] Ms. Vacaru did not lead evidence with respect to the issue of causation. There was no evidence from CIBC as to what its policies were in 2008 or what it would do when it received a letter from a lawyer or a copy of a non-dissipation order. Mr. Niman did not provide an opinion as to what CIBC would likely have done if served with Herman, J.’s order. Mr. Niman conceded that Herman, J.’s order was not legally binding on the bank. Mr. Dart provided the opinion that the bank would not have done anything if it received Herman, J.’s order. The information provided by Mr. Purcaru on June 2, 2008 was that he was obtaining a mortgage so he could pay down a shareholder loan. Mr. Dart testified that this action would not necessarily be in breach of the order. The use of the mortgage to pay down a shareholder loan could minimize tax liability and would therefore be consistent with the preservation of his assets.

[112] Mr. Dart’s opinion was the only evidence at trial as to what the bank would have been expected to do if Mr. Legge had sent a letter. It is my view that Ms. Vacaru’s failure to call a representative of the bank is fatal to her argument that if Mr. Legge sent an order to the bank, she would not have suffered the loss. There is no evidence in support of this position. I am unable to take judicial notice that the bank would have taken steps to restrain Mr. Purcaru if it had received the letter. Judicial notice can only be taken of facts that are clearly uncontroversial or beyond reasonable dispute: see R. v. Find, 2001 SCC 32, at para. 48.

[113] Even if Mr. Legge had been able to obtain an order from Goodman, J. or Belobaba, J. on June 2, 2008, I am not satisfied that the order would have prevented Mr. Purcaru from dissipating assets. The uncontroverted evidence at trial was that Mr. Purcaru took extreme measures to defeat Ms. Vacaru’s claims. He breached the order of Herman, J. to not dissipate the assets. There is no reason to expect he would not have breached any other order which restrained his conduct. In fact, he was prepared to spend an additional two months in jail rather than purge his contempt. Even if an order had been obtained restraining CIBC, Mr. Purcaru could have obtained financing from another financial institution. With respect to 37 Gloucester Street, Ms. Seliverstova was a co-owner of the property. The orders of Herman, J. and Belobaba, J. did not bind Ms. Seliverstova. There was nothing that would have prevented her from mortgaging the property.

[114] The line of credit was approved by CIBC on May 31, 2008. This was two days before Mr. Legge learned of Mr. Purcaru’s discussions with CIBC. By the time Mr. Legge learned of those discussions, it was too late to prevent the bank from issuing the line of credit.

• Summary - Causation

[115] There is simply no evidence upon which I can rely to find that even if there had been a breach in the standard of care, the breach caused Ms. Vacaru’s damages. Mr. Niman testified that Herman, J.’s. and Belobaba, J.’s orders were not binding on the bank. Mr. Dart testified that the bank would not have done anything with a letter from Mr. Legge that enclosed Herman, J.’s order. If Mr. Legge had served CIBC with Herman, J.’s order or obtained a restraining order against CIBC, Mr. Purcaru could have gone to a different bank, or Ms. Seliverstova could have mortgaged the property at 37 Gloucester Street. In any event, by the time Mr. Legge learned of the line of credit, Mr. Purcaru had already been approved for the line.

iii) Damages

[116] The general principle of tort damages is that the party who suffers a loss should be put in the position he or she would have been in absent the tortfeasor’s negligence. Ms. Vacaru claims direct and consequential damages in the amount of $2,300,000. She takes the position that Mr. Legge’s negligence allowed Mr. Purcaru to withdraw $500,000 from the line of credit. She argues that if she could have recovered this amount, she would not have had to incur additional legal and accounting fees.

[117] Ms. Vacaru’s claim for damages includes the following:

a) Payments to her lawyers, Joseph Lo Greco and Stephen Codas, and to her accountant, Paula White, in the amount of $294,000. These accounts relate to services rendered before Mr. Legge’s involvement in the case;

b) Reimbursement of the amount of Mr. Legge’s legal fees in the amount of $166,000; and

c) Payments to Mr. Crombie, Morris Cooper, and Gary Joseph Pipe in the amount of $398,500. These accounts relate to services rendered after Mr. Legge’s involvement.

[118] The fees paid to her former lawyers and accountants are not appropriate damages in this action. Those costs were incurred before Mr. Legge’s involvement. He is not responsible for costs incurred before the alleged negligence took place.

[119] I am also of the view that Ms. Vacaru is not entitled to reimbursement of the amount of Mr. Legge’s legal fees. Mr. Legge was successful in obtaining a judgment for Ms. Vacaru in excess of $1,000,000. She was able to recover $1,227,000. There were no allegations raised at trial that the amounts charged by Mr. Legge were excessive.

[120] Ms. Vacaru claims $398,500 for the cost of legal and accounting services incurred after Mr. Legge’s involvement. Ms. Vacaru failed to lead evidence to quantify these expenses. She argues that if she had been able to recover the amount of the CIBC line of credit, she would not have had to continue the legal actions against Mr. Purcaru. I do not accept this argument. Ms. Vacaru’s claim as determined by Paisley, J. was in excess of $1,000,000. Even if she had been able to recover the $500,000 from the line of credit, there would have continued to be a significant shortfall. I am satisfied that she would have continued to pursue Mr. Purcaru for the balance and would have incurred additional legal and accounting fees.

[121] Ms. Vacaru’s damages claim includes a debt she owed to the Canada Revenue Agency in the amount of $79,000. That debt was not proved at trial. It became due in 2004, before Mr. Legge’s involvement in this matter. Ms. Vacaru also claims the cost to repair and sell the properties she took over from Mr. Purcaru in the amount of $64,000. Again, these expenses were not proven at trial.

[122] Ms. Vacaru brought a motion at the conclusion of her evidence to amend her crossclaim to advance a claim for lost opportunity of wages and punitive damages. By endorsement dated March 10, 2021, I did not allow the amendment on the basis that the damages were not originally pleaded and there had been no discovery on those issues. In any event, Ms. Vacaru did not provide any evidence at trial to prove these damages.

[123] It is my view that Ms. Vacaru’s damages are limited to what she could have recovered of the $500,000 line of credit. Ms. Vacaru argues that Mr. Legge ought to have taken steps on June 2, 2008 to prevent Mr. Purcaru from withdrawing any amounts from the line of credit. Mr. Purcaru began drawing on the line of credit on June 4, 2008. Had I found Mr. Legge negligent for failing to take action on June 2, 2008, the entire amount of the line of credit could have been preserved.

[124] I conclude that Ms. Vacaru’s damages are in the amount of $500,000.

b. Limitation Period

[125] Ms. Vacaru argues that Mr. Legge was negligent with respect to his acts and omissions after learning on June 2, 2008 of Mr. Purcaru’s negotiations with CIBC. On November 27, 2017, Ms. Vacaru served her motion record to amend her defence to include a crossclaim against Mr. Legge. Mr. Legge takes the position that this claim was brought more than two years after Ms. Vacaru knew of the facts that would have lead her to believe she had a meritorious claim against him, and therefore her claim is statute-barred pursuant to s. 4 of the Limitations Act: see Eastside Apartments Limited v. Loizos, 2013 ONSC 602, at para. 25.

[126] Ms. Vacaru testified at trial that she first learned of Mr. Legge’s negligence on November 14, 2017, when she received Marmer Penner’s Fresh Amended Reply and Defence to Counterclaim. At para. 35 of the pleading, Marmer Penner alleges that on June 2, 2008, Mr. DeBresser and Ms. Barrett met with Mr. Purcaru and in that meeting, Mr. Purcaru advised that he was in discussions with CIBC to borrow $500,000 against his house. At para. 36, Marmer Penner alleges that following the meeting, Mr. DeBresser and Ms. Barrett met with Mr. Legge and provided him with the information obtained from Mr. Purcaru. Ms. Vacaru states that this was when she first learned that Mr. Legge was aware on June 2, 2008 of Mr. Purcaru’s threats to deplete family assets. She brought her motion to amend the defence to add the crossclaim against Mr. Legge within two weeks of receiving Marmer Penner’s amended pleading.

[127] There is a presumption that Ms. Vacaru knew about her claim on the day the events occurred. She has the onus to prove that she “discovered” the claim within two years of when she moved to bring the crossclaim against Mr. Legge: Limitations Act, 2002, s. 5(2). I find that Ms. Vacaru failed to satisfy her onus. I am satisfied that she knew or ought to have known of the facts that give rise to the cause of action against Mr. Legge before November 27, 2015.

[128] After Mr. DeBresser and Ms. Barrett met with Mr. Purcaru, they returned to court and reported on their conversation to Goodman, J. There was then a “debrief” at the Pegasus restaurant. Ms. Vacaru testified at trial that she was not at the meeting. Her evidence on this point was impeached on cross-examination. On her discovery, she had testified that she could not recall whether she was present or not. Ms. Barrett and Mr. Legge both testified that Ms. Vacaru was present at the lunch meeting. They also testified that Mr. Purcaru’s talks with CIBC were discussed at the lunch meeting. Ms. Vacaru was present in court that day and was very involved in her action against Mr. Purcaru. There is no reason why she would not have attended the debrief. I accept Ms. Barrett and Mr. Legge’s testimony on this point.

[129] On June 3 and 4, 2008, Ms. Vacaru sent numerous e-mails to Mr. Legge that reference Mr. Purcaru’s involvement with CIBC. On June 3, 2008, she forwarded to Mr. Legge an e-mail she had received from Mr. Codas on January 16, 2008, in which he advised that he had discussed the CIBC information with Mr. Edney. On June 3, 2008, she also forwarded to Mr. Legge an e-mail she had sent to Sandra Djak at Epstein Cole on December 4, 2007 asking if there had been any response from Mr. Edney about a CIBC mortgage on Mr. Purcaru’s property at 37 Gloucester Street. The e-mails are consistent with Ms. Vacaru being advised on June 2, 2008 that Mr. Purcaru had been in discussions with CIBC about obtaining a mortgage.

[130] On June 19, 2008, Marmer Penner prepared its further production letter based on the without prejudice discussions with Mr. Purcaru that took place on June 2, 2008. Item 77 refers to the fact that Mr. Purcaru had recent discussions with CIBC to borrow $500,000. The letter was sent to Mr. Legge. Mr. Legge testified that in accordance with his usual practice, he forwarded a copy of the letter to Ms. Vacaru. Ms. Vacaru did not deny that she received the letter but testified that she only skimmed it. I do not accept Ms. Vacaru’s evidence that she skimmed the letter. As evidenced by the numerous e-mails sent on June 3 and 4, 2008, Ms. Vacaru was aware of the issue and was very involved in providing information to Mr. Legge about Mr. Purcaru’s dealings with CIBC. I do not accept that only skimmed such an important document. The production letter is referenced in Goodman, J.’s order dated June 30, 2008. Ms. Vacaru was present when Goodman, J. made her order. I am satisfied that Ms. Vacaru reviewed the production letter, which referred to Mr. Purcaru’s discussions with CIBC soon after it was prepared on June 19, 2008. She would have known that the production letter had been sent to Mr. Legge.

[131] In January 2015, Ms. Vacaru received Ms. Barrett’s handwritten notes that were prepared during the meeting with Mr. Purcaru on June 2, 2008. In her e-mail to Marmer Penner’s former lawyer, Clarence Lui (with a copy to Mr. Legge), dated January 26, 2015, Ms. Vacaru references the set of handwritten notes prepared by Ms. Barrett on June 2, 2008. In the handwritten notes, there is reference to “CIBC discussions to borrow $500,000 against house.” I am satisfied that by January 26, 2015, Ms. Vacaru was aware of these notes.

[132] Ms. Vacaru argues that Mr. Legge did not prepare any notes from this period. She states that Mr. Legge failed to present any note or correspondence that confirms that he told her about the meeting between Mr. DeBresser, Ms. Barrett, and Mr. Purcaru on June 2, 2008. Mr. Dart testified that it was good and prudent practice for lawyers to keep notes of important information and keep those notes in the file. Mr. Legge argues that he did not keep any notes because he was involved in settlement discussions. He also takes the position that he asked Ms. Barrett to keep notes of the meetings and to prepare a memorandum of the discussions.

[133] On October 6, 2015, Ms. Vacaru was cross-examined on her affidavit filed in the fraudulent conveyance application. Counsel for Ms. Seliverstova asked questions related to the registration of Belobaba, J.’s order dated June 10, 2008. Ms. Vacaru was specifically asked whether she had initiated any claims against Mr. Legge based on his failure to immediately register the order. She answered no. On November 9, 2015, Ms. Vacaru sent an e-mail to Mr. Legge in which she referenced the cross-examination. In the e-mail, she states that if he had registered the order of Belobaba, J. right away, many of the court costs would have been avoided. On November 11, 2015, she sent another e-mail to Mr. Legge and stated that Mr. Purcaru and Ms. Seliverstova were able to remove $500,000. She specifically referenced the CIBC line of credit, which was registered on title on June 19, 2008. At the time of the cross-examination in 2015 and the subsequent e-mails, Ms. Vacaru was represented by counsel.

[134] In her crossclaim against Mr. Legge, Ms. Vacaru pleads that Mr. Legge obtained the restraining/non-depletion order on June 10, 2008 but failed to register this in a timely manner. This allegation was put to Ms. Vacaru during her cross-examination on the fraudulent conveyance action. It had been brought to her attention on October 6, 2015 and was brought up by her in her e-mail to Mr. Legge on November 9, 2015. I find that as of November 9, 2015, Ms. Vacaru knew of the cause of action against Mr. Legge with respect to the registration of Belobaba, J.’s order. This was more than two years before she moved to amend her pleading to add the crossclaim against Mr. Legge and therefore this claim is statute-barred. At trial, Ms. Vacaru testified that she was abandoning this argument and that her claim against Mr. Legge was limited to his failure to take the necessary steps to obtain and register an order on title after he learned on June 2, 2008 that Mr. Purcaru was in discussions with CIBC. I am of the view that Ms. Vacaru abandoned the claim with respect to the registration of Belobaba, J.’s order because she was clearly aware of this more than two years before she moved to amend her crossclaim.

[135] Although Ms. Vacaru focused her argument at trial that her claim against Mr. Legge was limited to his failure to take action in response to the information he received from Marmer Penner on June 2, 2008, it is my view that this does not assist her. I am satisfied that in June 2008 she knew that on June 2, 2008, Mr. Legge had been advised by Mr. DeBresser and Ms. Barrett that Mr. Purcaru had had discussions with CIBC with respect to the mortgage in the amount of $500,000. In her e-mail to Mr. Legge on November 11, 2015, she stated that Mr. Legge and Ms. Seliverstova were able to remove $500,000 and made reference to the CIBC line of credit. Therefore, Ms. Vacaru knew by November 11, 2015, at the latest, of all the material facts that give rise to the cause of action against Mr. Legge. The crossclaim was initiated more than two years later, on November 27, 2017.

• Summary – Limitation Period

[136] Ms. Vacaru takes the position that she did not discover the claim against Mr. Legge until she received Marmer Penner’s Fresh Amended Reply and Defence to Counterclaim on November 14, 2017. The evidence at trial does not support this position. Mr. Legge and Ms. Barrett testified that Ms. Vacaru was present in court and later at the Pegasus restaurant on June 2, 2008, when Mr. DeBresser and Ms. Barrett reported to both Mr. Legge and Ms. Vacaru on their meeting with Mr. Purcaru. I do not accept Ms. Vacaru’s evidence that she was not present when the issue was discussed. Ms. Vacaru sent e-mails to Mr. Legge on June 3 and 4, 2008 in which she provides information about CIBC and 37 Gloucester Street. This supports the finding that she was aware of Mr. Purcaru’s negotiations with CIBC. On June 19, 2008, Ms. Barrett prepared the addendum production letter. The production letter had been sent to Mr. Legge before he forwarded it to Ms. Vacaru. The production letter, at item 77, references Mr. Purcaru’s discussions with the CIBC about the $500,000 mortgage. At the latest, Ms. Vacaru was aware of all the relevant facts to support her claim against Mr. Legge on November 11, 2015. On that date, she sent an e-mail to Mr. Legge in which she stated, “[B]ecause of your mistake … Dan Purcaru and Marina Seliverstova were able to take out $500,000. CIBC registered the lien only on June 19, 2008.”

[137] Ms. Vacaru failed to discharge her onus to prove that she did not discover the facts which give rise to the claim against Mr. Legge until November 27, 2015. I conclude that her crossclaim against Mr. Legge is statute-barred.

DISPOSITION

[138] I make the following order:

1. I grant judgment in favour of Marmer Penner against Mr. Legge and Ms. Vacaru jointly and severally in the amount of $68,557, plus interest at the rate of 1.5% per month.

2. I dismiss the crossclaim brought by Ms. Vacaru against Mr. Legge.

[139] If the parties are unable to reach an agreement with respect to the calculation of the interest on the judgment, Marmer Penner may deliver written submissions of no more than three pages in length, not including caselaw, within 20 days of the date of these reasons. Mr. Legge and Ms. Vacaru may deliver responding written submissions with respect to the issue of interest within 20 days of receiving the submissions of Marmer Penner.

[140] Marmer Penner was successful at trial and is presumptively entitled to its costs of the main action from Mr. Legge and Ms. Vacaru. Mr. Legge was successful with respect to the crossclaim and is presumptively entitled to his costs from Ms. Vacaru. I encourage the parties to meet in an attempt to come to an agreement with respect to the issue of costs. If there is no agreement, Marmer Penner in the main action and/or Mr. Legge in the crossclaim, may file written cost submissions of no more than five pages in length, excluding case law and bills of costs, within 20 days of the date of these reasons. Mr. Legge may deliver his responding submissions with respect to the costs of Marmer Penner and Ms. Vacaru may deliver her responding submissions with respect to the costs of Marmer Penner and Mr. Legge within 20 days of receiving the submissions of the successful parties.

DATE: June 14, 2021