Court File and Parties

COURT FILE NO.: CV-19-630009

DATE: 20211008

ONTARIO SUPERIOR COURT OF JUSTICE

RE: Surinder Sharma, Ajay Sharma, Wen-Sha Hotels Inc., 2070067 Ontario Inc., 2033454 Ontario Inc. and, 2057034 Ontario Inc.

Plaintiffs

-and-

Marvin Talsky, Talsky Law and Brostal Holdings (1999) Ltd.

Defendants

BEFORE: F.L. Myers J.

COUNSEL: William A. Chalmers, for the plaintiffs Sean N Zeitz, James Quigley, and Laura Culleton for the defendants

HEARD: October 6, 2021

CASE CONFERENCE ENDORSEMENT

[1] In this action, the plaintiff seeks primarily a refund of fees paid to a lawyer in respect of borrowing transactions that occurred some time ago.

[2] The defendant Marvin Talsky is a practising lawyer. But he was also the principal of the lender corporation. The plaintiff alleges that the Mr. Talsky acted for both sides on the loan transaction in which he was, in effect, the lender client as well as the lawyer.

[3] The protagonists are both elderly. They used to be friends. They both want this matter resolved as soon as possible. This is a civil case. Nothing stops the parties from settling any time the economic and emotional cost of proceeding exceeds the subjectively determined benefit of continuing the litigation.

[4] The statement of claim includes claims for solicitor’s negligence and breach of fiduciary duty. The plaintiffs claim that they are entitled to damages for paying excess cost for the loan(s) that an independent lawyer would have advised them to avoid. These claims are not drafted as the centrepiece of the claim. But they are pleaded and they are existing claims. Moreover, they are not the kind of claims that are viewed lightly. If Mr. Talsky acted for both sides including acting for himself, in effect, I would expect him to be facing a serious burden of proof at trial to show both that the transaction was completely righteous and that as counsel he crossed every single “T” and dotted every single “i”. Perhaps he can do so.

[5] The defendants say that among other things, the loans at issue are very old. The limitation period(s) expired long ago. In addition, the defendants intend to argue that the lawsuit is frivolous and vexatious. They say it is simply an attempt to get around the limitation period preventing the plaintiffs from assessing Mr. Talsky’s accounts. As such, they argue that the claim is an abuse of process.

[6] There is apparently very little paper produced by the parties. Mr. Talsky does not have a retainer letter setting out the professional arrangement or advising Mr. Sharma that he was acting in conflict of interest. However, shortly before cross-exanimations, Mr. Talsky produced a form of acknowledgement document that was apparently signed by Mr. Sharma. There may also be another similar one that was produced earlier.

[7] In early 2020 the plaintiffs were proposing a motion to implement a discovery plan. After some discussions and a trip to Civil Practice Court on March 9, 2020, the parties seemed to be agreed on the desirability of an early, expedited trial to have this matter resolved efficiently and affordably especially given the parties’ respective ages.

[8] Counsel re-connected after the worst of the pandemic and were apparently still leaning toward an expedited trial.

[9] I am not sure what happened but, on June 2, 2021, the defendants’ counsel appeared in Civil Practice Court and scheduled a summary judgment motion for November 16, 2021. A timetable was subsequently agreed upon by both counsel. Mr. Chalmers asked for an extension of time to deliver his clients’ material which was granted by Mr. Quigley.

[10] After one day of cross-examination of Mr. Talsky, Mr. Chalmers told Mr. Quigley and Mr. Zeitz that he needs an expert witness.

[11] Mr. Chalmers therefore asks for an adjournment of the motion for summary judgment. He argues that because there were no documents, he only obtained evidence of what Mr. Talsky did as lawyer on cross-examination.

[12] Mr. Chalmers has retained Ms. Gavin Mackenzie to give expert evidence on the issue of whether Mr. Talsky met the prevailing standard of care for a lawyer at the relevant time.

[13] In addition, Mr. Chalmers says that he is retaining another expert to discuss a lawyers’ duty when in conflict of interest and to opine about the cost of the loan(s) to the plaintiffs.

[14] Mr. Chalmers knows that he needs leave to adduce further evidence after cross-examining Mr. Talksy. He says that he had no other way to get the evidence he needed to form the basis of the experts’ opinions. He also argues that in Sanzone v. Schechter, 2016 ONCA 566, the Court of Appeal requires his client to obtain an expert opinion for professional negligence.

[15] I do not read Sanzone in the way Mr. Chalmers submits. In that case the Court prevented a professional from moving for summary judgment to dismiss a claim for negligence based on the plaintiff’s failure to produce an exert report before the defendant had given evidence on the merits of the claim. The case was about ensuring that a self-represented plaintiff had a fair opportunity to hear the evidence of the defendant professional and to face him or her in cross-examination. It prevented a misuse of the summary judgment rule to deprive a self-represented party of having at least one fair shot at the defendant on the merits.

[16] Having said that, Mr. Chalmers is quite correct that if his clients are proceeding with a solicitor’s negligence claim, they likely do need an expert report at some point. In light of the requirement to put one’s best foot forward on summary judgment, if the plaintiffs are proceeding in negligence, they should have a report for the motion.

[17] Counsel appeared before me in Civil Practice Court on September 28, 2021. Mr. Chalmers sought to adjourn the motion. Not knowing that I would be blessed with hearing this case conference, I wrote an endorsement explaining the reason I felt a case conference was required and might assist the parties:

The defendant's motion for summary judgment is scheduled for a full day in November. Although the defendant relies principally upon a limitation period defence, he is also moving on the basis that the action is frivolous and vexatious and a collateral attack in relation to another proceeding.

The plaintiff says that as a result of cross-examinations, the motion is no longer fit for summary resolution. All of the issues in the action are raised. Moreover, Mr Chalmers says that [it] was only on cross-examination that he was able to obtain documents needed for him to seek an expert opinion. He therefore needs leave now to deliver the expert opinion on the merits.

Mr Quigley was offered the opportunity to limit the motion strictly to the limitation period to keep it narrow and discrete. He was not able to do so. I do not see how the motion based on the merits being frivolous and vexatious can amount to anything other than the proverbial “trial in a box”.

I also have some sympathy with Mr Chalmers document quandary. If production was not forthcoming voluntarily in advance of cross-examination, he may have had no alternative but to cross-examine in order to obtain documents needed for an expert opinion on the standard of care of the defendant lawyer. There is no question that an expert opinion is required if the merits are in issue on the motion. A motion under Rule 39.02 may well be necessary as I do not expect the parties to agree on much procedurally.

The Supreme Court of Canada in Hryniak left open the possibility that a judge could grant directions before or during the lead-up to a motion for summary judgment. I did not think I have quite enough information to do so yet. However, I agree with Mr. Chalmers that a case conference should be held for a judge to assess whether a summary trial, mini trial, or some other process will be more efficient and affordable to get this matter resolved. Both parties are aged. Delay benefits no one. Summary resolution is fine if it is available realistically. It seems to me that both sides need to consider more carefully a plan to have the matter resolved on its merits as soon as reasonably possible. Each case needs only as much procedure as the facts and law dictate. Counsel can be creative and design a customized process.

Mr. Chalmers is directed to convene a case conference under section C.1.4 of the Notice to Profession –Toronto; Toronto Expansion Protocol for Court Hearings During COVID-19 Pandemic. Counsel should speak in advance and try to agree upon that timetable for a resolution of all of the issues for discussion and implementation with the judge of the case conference.

I do not adjourn the motion as yet. However, that makes the case conference time-sensitive. I request the trial coordinator schedule the case conference as soon as possible after Mr Chalmers applies.

[18] In my view, this case is not well-suited for a summary judgment motion. Although Messrs. Zeitz and Quigley say that the limitation period and the ”frivolous and vexatious” points will rule the day to prevent re-opening of Mr. Talsky’s fees, they cannot ignore the claims for negligence and breach of fiduciary duty. It might be that limitation periods will catch them too. Or not. But, in any event, the full merits are in issue because the defendants will not limit their motion strictly to the limitation period.

[19] I am also not prepared to resolve summarily the question of whether the plaintiffs should have leave to deliver expert reports after cross-examination. I understand the argument that in the absence of documents, oral examination of Mr. Talsky was required to provide the fact base on which an expert opinion can be sought. I am not as sure that examination was necessary to challenge the cost of the loan(s). There may also be need for a handwriting expert to look at the recently-produced acknowledgement document(s).

[20] I asked Mr. Zeitz if the defendants were prepared to consent to the delivery of the proposed late evidence to protect the motion date and he indicated that they would not consent. In my view the plaintiffs should be entitled to have that question determined.

[21] I understand that motion dates before an Associate Justice in Toronto may be available for the summer of 2022. Therefore, the summary judgment motion booked for November 16, 2021 must be adjourned. It can be rescheduled in CPC after the resolution of a motion by the plaintiffs to deliver expert evidence despite having cross-examined. The plaintiffs shall serve their motion material within 30 days.

[22] The court can hear short summary trials early next year. Depending on the proposed trial length (and whether, for example, examination-in-chief can be adduced in writing) it may be that a trial could be completed before the summary judgment motion is heard.

[23] I am tempted to simply end the summary judgment motion under Rule 50.13(6). In Hryniak v Maudin, 2014 SCC 7, the Supreme Court of Canada discussed this very possibility:

[72] I agree with the Court of Appeal (at paras. 58 and 258) that a motion for directions also provides the responding party with the opportunity to seek an order to stay or dismiss a premature or improper motion for summary judgment. This may be appropriate to challenge lengthy, complex motions, particularly on the basis that they would not sufficiently advance the litigation, or serve the principles of proportionality, timeliness and affordability.

[73] A motion for summary judgment will not always be the most proportionate way to dispose of an action. For example, an early date may be available for a short trial, or the parties may be prepared to proceed with a summary trial. Counsel should always be mindful of the most proportionate procedure for their client and the case.

[24] I note that when Hryniak was released, Rule 50.13 was not yet in place. It was implemented in response to Hryniak’s call for greater flexibility to provide for proportional processes. If anything, the breadth of the rule bolsters the availability of the relief contemplated:

[25] In my view however, I should refrain from wading-in in the case. I am not comfortable that I have enough understanding of the facts or the parties’ positions to force a process on them yet. It is preferable in this case to leave it to counsel to try to devise appropriate processes to meet their clients’ respective needs and goals.

[26] Counsel understand that summary judgment works best when a narrow, gating issue can be identified that can resolve the whole case on relatively uncontroversial facts and without requiring assessment of most issues on their merits. They know that, for better or for worse, motions for summary judgment that resolve less than all of the issues for all of the parties will not likely be heard or granted. They know that the court will not be very amenable to hearing a trial in a box - a week long trial masquerading as a motion.

[27] The Rules of Civil Procedure in their fullest application provide a slow and expensive process that is available as a backstop if the parties cannot bring themselves to find a way to agree on a more efficient, affordable process that fits their needs. I have little doubt that counsel are up to the task of leading their clients to agree on a more proportional process. But, if not, the Rules will carry them through to a resolution in due course.

[28] Mr. Zeitz asks for costs thrown away if I grant an adjournment. He says that the motion is nearly ready to go and Mr. Chalmers first raised the need for an adjournment for expert evidence only at the end of August.

[29] The difficulty that I have is that I cannot tell if waiting until Mr. Chalmers heard Mr. Talksy’s evidence was reasonable or not. It sounds like he might have had no choice given the absence of documents. Moreover, if a court should find one day that Mr. Talsky’s conduct fell below the standard of care or was in conflict of interest, then the lack of documentation in a lawyer’s file may actually be found to have been wrongful. Furthermore, a party who wants to go fast, is well advised to consider waiving some procedural rights. The defendants do not have to consent to the late filing of material by the plaintiffs. But they have less basis to complain about delay when they insist that the plaintiffs bring a motion which may well turn out to be well-founded.

[30] In my view, the best outcome is to reserve the costs thrown away to the judge who hears the summary judgment motion or, in default of that, the trial. Those judges will be best positioned to understand the dynamics that are in play right now once they know the evidence on the merits.

F.L. Myers J.

Date: October 8, 2021