COURT FILE NOS.: CV-20-1538 and CV-20-1402 DATE: 2022-02-28
COURT FILE NO.: CV-20-1538
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
STRYPE BARRISTERS LLP and STRYPE INJURY LAWYERS, for the Applicants – and – SLAVICA PAVLOVIC, for the Respondent
Counsel: Jeffrey Strype, for the Applicants Jacqueline Cole, for the Respondent
COURT FILE NO.: CV-20-1402
ONTARIO SUPERIOR COURT OF JUSTICE
In the Matter of the Solicitor’s Act, R.S.O. 1990
B E T W E E N:
SLAVICA PAVLOVIC, for the Applicant – and – STRYPE BARRISTERS LLP, STRYPE INJURY LAWYERS and JEFFREY WM. STRYPE, for the Respondents
Counsel: Jacqueline Cole, for the Applicant Jeffrey Strype, for the Respondents
HEARD: February 11, 2022 and written submissions
CORRECTED DECISION: The Reasons On Motion And Costs Of Application released on February 28, 2022 paragraph 36(1) has been corrected to read: “Pursuant to Rule 6.01(1)(e)(ii), the Strype Barristers’ application under Court File No. CV-20-1538 shall be asserted by way of counterclaim in the Pavlovic action in Court File No. CV-21-1113. The application and action shall be consolidated, with the application being asserted by way of counterclaim to the action.”
The Honourable Justice Catrina D. Braid
REASONS ON MOTION AND COSTS OF APPLICATION
I. OVERVIEW
[1] Strype Barristers LLP brought an application seeking approval of the fees charged to its client, Slavica Pavlovic. Ms. Pavlovic then commenced an action against Strype Barristers for professional negligence and breach of contract, asking the court to rescind or reduce the fees. Ms. Pavlovic now moves for an order staying Strype Barristers’ application until after her action has been completed.
[2] To further complicate the issues, Ms. Pavlovic originally brought an application alleging that the fees, disbursements, and interest on disbursements charged by Strype Barristers were unreasonable. That application was stayed on consent after Ms. Pavlovic commenced the action.
[3] The sole issue on this motion is whether the Strype Barristers’ application should be stayed until after the Pavlovic action is heard. In addition, I must address costs of the Pavlovic application.
[4] For the reasons set out below, I find that the Strype Barristers’ application should be asserted by way of a counterclaim in the Pavlovic action, which will effectively consolidate the proceedings. In addition, Ms. Pavlovic shall pay $30,000 in costs to the respondents in the stayed Pavlovic application.
II. BACKGROUND OF COURT PROCEEDINGS
[5] In 2012, Ms. Pavlovic retained Strype Barristers LLP to represent her on a personal injury action and an accident benefits claim. She entered into a contingency fee agreement. Both matters settled at mediation on December 19, 2019.
[6] On October 29, 2020, Ms. Pavlovic commenced an application against Strype Barristers LLP, Strype Injury Lawyers and Jeffrey Wm. Strype (collectively, “Strype Barristers”), alleging that the fees, disbursements, and interest on disbursements were unreasonable (“the Pavlovic application”). She requested that the court fix the contingency fee percentages, thereby reducing the lawyers’ fees arising out of the settlement.
[7] On November 19, 2020, Strype Barristers brought its own application seeking an order approving the fees and disbursements for both the action and the accident benefits claim (“the Strype Barristers’ application”).
[8] I was appointed under Rule 37.15 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to hear these applications. On January 29, 2021, the parties attended before me and agreed on a timetable for the applications. The court issued a consent order requiring the parties to comply with the timetable, which included a schedule for cross-examinations. On May 7, 2021, Ms. Pavlovic attended at an examiner’s office, but the examination could not proceed due to technical difficulties, so it was adjourned to May 11, 2021.
[9] On May 10, 2021, counsel Mr. Robert Plate wrote to Mr. Strype to advise that he was not going to produce Ms. Pavlovic for cross-examination because she had decided to commence an action against Strype Barristers for professional negligence and incompetence in the settlement of her matters. Mr. Strype wrote back to Mr. Plate, and alleged that he manipulated the technology at the cross-examination of Ms. Pavlovic on May 7, 2021, in order to ensure that it would not proceed. Mr. Strype stated that the alleged claim was spurious and defamatory, and that he would seek legal advice as to a claim against Mr. Plate personally.
[10] On May 11, 2021, Mr. Strype wrote to the court to advise that he will be bringing a motion to strike out the affidavit of Ms. Pavlovic and to dismiss her application. The court directed that this motion proceed on September 3, 2021.
[11] On August 23, 2021, Ms. Pavlovic issued a Statement of Claim against Strype Barristers alleging professional negligence and breach of contract (“the Pavlovic action”). The claim seeks damages of one million dollars and an order to rescind or fix the fees, disbursements and interest billed to the client.
[12] Strype Barristers brought a motion seeking to strike Ms. Pavlovic’s affidavit and application, and to remove Mr. Plate as her lawyer for counselling her to breach a court order, abuse of process and contempt of court.
[13] Ms. Pavlovic brought her own motion seeking to stay both applications because she had commenced an action.
[14] On September 22, 2021, the parties attended before me. On consent, the Pavlovic application was stayed, subject to the issue of costs of that application. Strype Barristers withdrew its request to remove Mr. Plate as Ms. Pavlovic’s lawyer. The motion to stay the Strype Barristers’ application was adjourned, together with the costs issue. These reasons address those two matters.
III. ANALYSIS
A. Should the Court Stay the Strype Barristers’ application?
[15] Where two or more proceedings have a question of fact in common and/or the relief claimed in them arises out of the same transaction or series of transactions, the court may order that:
the proceedings be consolidated or heard at the same time or one immediately after the other;
any of the proceedings be stayed until after the determination of any other of them; or
any of the proceedings be asserted by way of counterclaim in any other of them: see Rule 6.01(1) of the Rules of Civil Procedure.
[16] The term “proceeding” is defined under Rule 1.03(1) as meaning “an action or application.” As such, the Pavlovic and Strype Barristers’ applications both fall within the ambit of Rule 6.01.
[17] Ms. Pavlovic has sued Strype Barristers for negligence and breach of contract. She challenges the validity of the contingency fee agreement, which is the agreement that Strype Barristers seeks to uphold in its application. There are at least two critical factual disputes between the parties that can only be resolved by the court hearing viva voce evidence:
i. whether Ms. Pavlovic instructed Mr. Strype to resolve the personal injury action even though he advised her not to, whether Mr. Strype pressured her into taking the settlement, and whether the settlement was improvident; and
ii. whether Strype Barristers breached the contract with Ms. Pavlovic and/or whether it acted negligently in the representation of Ms. Pavlovic.
[18] In this case, I have considered the following factors:
i. The Strype Barristers’ application will be heard well in advance of the trial on the Pavlovic action if it is allowed to proceed.
ii. If these matters are heard at different times, issues will be determined at the first hearing that will result in res judicata and issue estoppel being raised in the second proceeding.
iii. There are factual disputes that will require credibility findings. If the Strype Barristers’ application proceeds first, Ms. Pavlovic can raise her allegations of negligence, which will require viva voce evidence to resolve, and which will likely require the court to convert the application to an action.
iv. The action will permit a more fulsome analysis of the issues in dispute because it will address a wider range of issues. The outcome of the action would likely determine the outcome of the application.
v. There is substantial overlap in the factual and legal issues in the proceedings, and it would be a waste of judicial resources for the matters to proceed separately.
vi. There is a possibility of inconsistent results if the matters proceed separately.
[19] Even if the Strype Barristers’ application proceeded first, there is a strong likelihood that it would have to be converted to an action. I anticipate that Ms. Pavlovic would raise issues of negligence and breach of contract, which issues can only be dealt with through viva voce evidence. Now that an action has been commenced arising out of Strype Barristers’ representation of Ms. Pavlovic, there is good reason to combine the Strype Barristers’ application with the action. The parties agree that there is overlap between the two proceedings. The action will permit the trier of fact to hear viva voce evidence and make credibility determinations on these issues.
[20] Proceeding this fashion will also prevent issue estoppel foreclosing the raising of issues at the second proceeding that had already been decided in the first proceeding. By combining the two proceedings, the court will achieve greater efficiency and prevent inconsistent results or duplication. While the claims advanced in the Strype Barristers’ application would not ordinarily be the subject of an action, the facts underlying that application were in dispute which would have required the matter to be converted to an action in any event.
[21] Neither party has specifically asked for an order to consolidate the two proceedings or to convert the Strype Barristers’ application into a counterclaim. However, in Pavlovic’s factum, she states that “the reasonableness of the fees, disbursements and interest billed by [Strype Barristers] ought to be determined within the context of the solicitor’s negligence action.” Further, in her submissions, she acknowledged that Strype Barristers could counterclaim for the fees in the context of the action.
[22] Rule 1.04(1) states that the rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. Once the matters are consolidated, the claims advanced in the application will be adjudicated in the action. The just, most expeditious and least expensive determination of these proceedings will occur if they are heard together in a manner that I have proposed.
[23] In Wood v. Farr Ford Ltd., 2008 ONSC 53848, a similar series of proceedings occurred. The plaintiff commenced an action against his employer in St. Catharines and his employer commenced an action against the plaintiff in Welland. Both claims were based on the employment relationship between the parties. Counsel for the plaintiff asserted that the two actions ought to be consolidated as the Welland action was effectively a counterclaim to the St. Catharines action.
[24] Quinn J. ordered that the two actions be consolidated, specifically ordering that the Welland action be asserted by way of a counterclaim to the St. Catharines action. He ordered that the defendant employers (who brought the Welland action) amend their statement of defence to the St. Catharines action to include a counterclaim that mirrored their Welland action and to deliver a notice of discontinuance of their Welland action.
[25] I agree with and adopt Quinn J.’s description of the purpose of Rule 6 which is to avoid multiplicity of proceedings, thereby preventing inconsistent dispositions, protecting the scarce resources of the court and saving expense to the parties. It also safeguards against a tactical decision to subject a party or parties to more than one action and, therefore, it promotes fairness: see Wood at para. 23.
[26] Pursuant to Rule 6.01(1)(e)(ii), the Strype Barristers’ application shall be asserted by way of counterclaim in the Pavlovic action. I further direct that Strype Barristers shall deliver a notice of discontinuance of the Strype Barristers’ application.
B. Costs of the Pavlovic Application
[27] Strype Barristers seeks full indemnity costs of $75,529.48 for the costs thrown away of the Pavlovic application. Mr. Strype acknowledged that the Bill of Costs sets out fees for both applications, including the application that will now continue as a counterclaim. Ms. Pavlovic’s counsel submits that the costs claimed are excessive, and states that her counsel’s fees thus far are $38,657.30 for the Strype Barristers’ application. In addition, she argues that it is not appropriate to award full or substantial indemnity costs in this case.
[28] Ms. Pavlovic had counsel at the time the application was issued. I have not been provided with any evidence to explain why this matter was advanced as an application and then later as an action. Strype Barristers has incurred costs thrown away as a result of Ms. Pavlovic commencing the application and then abandoning it in favour of an action. Strype Barristers is entitled to costs of the Pavlovic application.
[29] The time spent by Strype Barristers for work on the Pavlovic application is not completely wasted as the action deals with the same issues. However, I agree that Ms. Pavlovic’s actions have caused Strype Barristers to incur costs thrown away.
[30] Strype Barristers submits that Pavlovic’s request to stay her application was a tactical step to avoid cross-examination of Pavlovic, to frustrate the litigation process and to delay the assessment. I do not accept these submissions. There is no evidence to support these allegations.
[31] In determining quantum, the court is to consider the factors set out in Rule 57.01 of the Rules of Civil Procedure, as well as s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Those factors include the principle of indemnity, the reasonable expectations of the parties, the complexity of the proceeding, the importance of the proceeding, and the conduct of the parties in litigation. I have considered these factors.
[32] I have also considered the principles in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 ONCA 145779, 71 O.R. (3d) 291 (C.A.), particularly at para. 24. The fixing of costs should reflect what the court views as a fair and reasonable amount to be paid, rather than any exact measure of the actual costs to the successful litigant.
[33] With respect to the Pavlovic application, Strype Barristers received a notice of application and supporting affidavit, and prepared its response. The parties attended before me on three occasions to address the case management of the applications. Strype Barristers prepared for cross-examinations that did not proceed. The two most important factors are the principle of indemnity and the amount of costs that the unsuccessful party could reasonably have expected to pay in the event they were unsuccessful.
[34] I find that a fair and reasonable award of costs to Strype Barristers for the costs thrown away on the Pavlovic application is $30,000.
IV. COSTS OF THE MOTION
[35] There have been mixed results on Pavlovic’s motion for a stay of the Strype Barristers’ application. Neither party succeeded in getting what they asked for. I find that it is appropriate that each party should bear their own costs, and therefore make an order for no costs of the motion.
V. CONCLUSION
[36] For all these reasons, the court makes the following orders:
Pursuant to Rule 6.01(1)(e)(ii), the Strype Barristers’ application under Court File No. CV-20-1538 shall be asserted by way of counterclaim in the Pavlovic action in Court File No. CV-21-1113. The application and action shall be consolidated, with the application being asserted by way of counterclaim to the action.
Strype Barristers LLP and Strype Injury Lawyers have filed a Notice of Intent to Defend but have not filed a Statement of Defence to the Pavlovic action. When they file their Statement of Defence, they shall include a counterclaim that mirrors the application in Court File No. CV-20-1538.
Strype Barristers LLP and Strype Injury Lawyers shall deliver a notice of discontinuance of the Strype Barristers’ application in Court File No. CV-20-1538.
Except as set out herein, the balance of the motion is hereby dismissed without costs.
Slavica Pavlovic shall pay costs of the Pavlovic Application in Court File No. CV-20-1402 to Strype Barristers LLP, Strype Injury Lawyers and Jeffrey Wm. Strype in the amount of $30,000 inclusive of HST and disbursements. Those costs shall be paid by June 30, 2022.
My appointment under Rule 37.15 to hear motions will continue in the Pavlovic action.
Braid, J.
