COURT FILE NO.: CV-18-00594729-0000
DATE: 20220713
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Teplitsky, Colson LLP, Plaintiff
-and-
BSA Diagnostics Imaging Inc., 1388020 Ontario Corp., and Dr. Birinder Ahluwalia, Defendants
BEFORE: Robert Centa J.
COUNSEL: Christine Allen, for the plaintiff
Yan David Payne, for the corporate defendants
Dr. Ahluwalia, self-represented
HEARD: June 28, 2022
ENDORSEMENT
[1] The plaintiff law firm, Teplitsky, Colson LLP, commenced a claim against its former clients Dr. Birinder Ahluwalia, BSA Diagnostics Imaging Inc. (“BSA”), and 1388020 Ontario Corp. (“138” and, collectively, the “defendants”) under the simplified procedure provided in Rule 76 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The law firm now brings this motion for summary judgment.
[2] The law firm claims that it entered into an agreement with its clients in which the clients promised to pay legal fees owing to the firm. In exchange, the law firm agreed to release the clients’ files to their new lawyers. As part of that agreement, the clients provided one current cheque and three post-dated cheques to pay the amount required under the agreement. Subsequently, the clients stopped payment on the three post-dated cheques. The law firm sued its former clients on the basis that the law firm was a holder in due course under the Bills of Exchange Act, R.S.C. 1985, c. B-4, or, in the alternative, for breach of contract.
[3] The defendant corporations submit that the court should dismiss the plaintiff’s motion, grant their motion for summary judgment to dismiss the underlying claim, and direct an assessment of the plaintiff’s accounts. Dr. Ahluwalia, representing himself, supports the submissions of the defendant corporations.
[4] I dismiss each of the motions. There are important credibility disputes on key issues that will not be fairly adjudicated on a paper record and require a trial. In addition, the important legal question of whether a law firm can use the provisions of the Bills of Exchange Act to sue a former client that provided post-dated cheques to pay legal fees and thereby avoid the assessment process under the Solicitors Act, R.S.O. 1990, c S.15 should be decided on a more complete factual record than the one placed before me. Finally, I find it would not be appropriate to use the enhanced powers given to a judge on a motion for summary judgment. To do so in this case would be against the public interest and will not serve the interest of civil justice system, which was commenced under the simplified procedure of Rule 76.
Facts
[5] The facts of this case are highly contested, which is itself a strong indicator that a motion for summary judgment will not do justice among the parties and that there are genuine issues that require a trial. I will provide an outline of the most important facts and attempt to indicate areas of agreement and disagreement.
[6] In early 2016, the law firm started acting for Dr. Ahluwalia and BSA in a shareholders’ dispute with the other shareholder of 138 (the “Main Action”). Jonathan Kulathungam, a partner at the law firm, was the primary lawyer responsible for this matter. Subsequently, Dr. Ahluwalia retained the law firm to represent all the defendants in a related action for maintenance arrears that 138 owed to a condominium corporation (the “Condo Action”), and a separate action against an individual in negligence (the “Negligence Action”). The law firm maintains that they ultimately acted for some or all of the defendants on a total of eight matters. The defendants disagree and maintain that the firm only acted for them on the Main Action, the Condo Action, and the Negligence Action.
[7] On August 8, 2017, Ferguson J. heard a motion for summary judgment in the Condo Action. That motion was argued by Filip Boskovic, who is described by Mr. Kulathungam as a “lawyer at our offices at the time.” Justice Ferguson found that 138 owed $114,794.10 in principal and over $30,000 interest to the condominium corporation: Metropolitan Toronto Condominium Corporation 1067 v. 1388020 Ontario Corp., 2017 ONSC 4793. Justice Ferguson also ordered 138 to pay $30,000 in costs.
[8] The defendants allege that the law firm was negligent in the handling of the Condo Action, and that they terminated their retainer with the law firm “for cause.” Among other complaints, the defendants assert that the law firm failed to follow the client’s express instructions to cross-examine a witness. They also assert that the law firm failed to provide detailed, itemized accounts for services rendered including the individuals doing the work, their hourly rates and the time spent on specific tasks. The law firm denies that they were negligent in the handling of the file.
[9] The defendants terminated their retainers with the law firm on or about August 18, 2017. Dr. Ahluwalia met with Mr. Boskovic on August 18 to discuss the situation. The defendants have provided evidence that the law firm refused to release the files unless they agreed to pay the fees that the firm said were outstanding. On this motion, the law firm did not file an affidavit from Mr. Boskovic, who is no longer with the law firm.
[10] The defendants’ new counsel on the Main Action served a notice of change of solicitors on August 22, 2017.
[11] On August 23, 2017, Mr. Boskovic emailed a letter to Dr. Ahluwalia in response to his request to transfer the files in the Main Action, the Condo Action, and the Negligence Action to new counsel. Mr. Boskovic stated that, with respect to those files, “the following amounts are outstanding” and, therefore, “our offices are owed a total of $95,730.97 in legal fees.” The letter continued:
Given the cross-examinations and other urgent steps set to take place in early September, it is prudent to deal with the outstanding amounts by way of an agreement so that we may release the file as soon as possible.
Ordinarily we would not release our files without obtaining payment in full. As discussed on Friday, August 18, 2017, as per your request our offices will release files number 1 & 2 to [new counsel] on the following terms:
You will provide our offices with a cheque for $23,932.74 immediately;
With respect to the remaining amounts, you will provide our offices with 3 post-dated cheques payable on the 30th of September, October, and November 2017 for $23,932.74 to retire the outstanding balance; and
You will execute an acknowledgement in the form attached hereto as Schedule A.
We believe that this proposal is fair and reasonable in light of the substantial work undertaken by our offices with respect to the above files. Upon receipt of the cheque and post-dated cheques and the signed acknowledgement, our offices will begin immediate preparations to transfer the files.
We have received a phone call from your new counsel. Upon acceptance of terms contained within this letter, we will be more than happy to coordinate with same.
[12] The acknowledgment referenced in the letter required the defendants to agree that “the fees and disbursements charged to them by the law firm are fair and reasonable;” and that “the undersigned have obtained independent legal advice or have chosen not to do so”. The defendants signed the acknowledgment and delivered the cheques on August 24, 2017.
[13] The defendants’ evidence is that they requested copies of the invoices and accounts before they signed the agreement. The law firm denies that the defendants made any such request.
[14] The defendants’ evidence is that they did not obtain legal advice before signing the agreement and that they had “no reasonable choice” in signing the agreement due to the urgent need for the files. As noted, the law firm did not provide an affidavit from Mr. Boskovic, who met with Dr. Ahluwalia on August 18, 2017, and wrote the letter dated August 23, 2017.
[15] The defendants submit that as of August 23, 2017, the law firm had not delivered final accounts, or breakdowns of the fees and disbursements for much of the amount allegedly owing. The defendants maintain that over $24,000 of the amount described by the firm as “outstanding” had not even been billed as of this date. There is a factual dispute over when the law firm created the final bills dated August 22, 2017, and August 31, 2017. Mr. Kulathungam was not sure who created the final bills or when they were rendered.
[16] There is also a factual dispute over when some or all of the law firm’s accounts were delivered. The law firm says that it delivered most of the bills at the end of the month in question and that all the accounts were delivered no later than May 2018. Dr. Ahluwalia denies both that he received the bills on a monthly basis and that he received them in an accessible form in May 2018.
[17] The defendants’ evidence is that on August 25, 2017, Dr. Ahluwalia hand-delivered a letter to the reception desk at the law firm and mailed copies of the letter to Mr. Kulathungam and Mr. Boskovic. The defendants’ evidence is that no one at the law firm responded to this letter. Given the centrality of the letter to the issues raised on this motion for summary judgment, I will reproduce the letter in full, without changing its original spacing:
Dear Jonathan
Kindly note I signed the schedule A on your demand that I do so if I want the files to be released by you and your law firm to my new counsel. You know important legal matters are coming up regarding those files and you advised I had no option but to sign the schedule A right away for you to release the files.
I discussed with you before signing the schedule A that you have not provided me with any details on the accounting or given me any bills or accounting statements to show that you did the legal work for me and my corporations that you are claiming monies to be paid for.
I don't want to go into blame game. You have still not provided me with the reasons as to why you didn't cross examine the land lord on his affidavit ? Your actions have costed me (and the companies) tens of thousands of dollars - this issue also has to be discussed, looked at and settled among us before you cash any checks I have provided pursuant to schedule A that you demanded of me to sign. Is it legal what you are doing ?, you haven't even given me any bills. As I also told you I didn't consult a lawyer regarding the schedule A you gave me. You told me it didn't matter to you whether I consult a lawyer or not, this is unacceptable. [New counsel] only came on Board on late August 22, 2017 and is simply engaged in getting files from you. You know I am under lot of pressure due to your actions. If there is an alternative course please let me know.
Please forward all files to [new counsel] and we need to settle all outstanding issues among us 1) Please provide details of the accounts you are seeking in the schedule A, I also need details of all accounts from you for past work done - I need these details ASAP, before you cash any checks I am forwarding pursuant to schedule A that you have drafted. 2) we need to settle the losses I suffered because you didn't cross examine the landlord to expose his accounting lies/ false claims 3) I need to know what is the role of Filip Boskovic ?.
I have discussed with you ( almost a week before I signed the acknowledgement/schedule A) many of the above matters, especially, regarding providing bills/accounts/details of accounts and reconciliation of monies paid by me/corporations to you to handle (rather now clearly mishandling) various legal affairs of mine/corporations. I need a quick response. I have every right to get all your accounts assessed by the courts in a timely fashion.
Note: I didn't email you this letter as my email account is on and off working, playing games. I don't know if it is hacked ?
[18] In his affidavit, Mr. Kulathungam denies having received the letter and adds “[t]o be clear, I do not believe that this letter was ever sent…I verily believe that the letter…was created after the fact to support his position on this motion.”
[19] The first cheque provided by the defendants cleared. With some minor issues, the law firm delivered the files to new counsel for the defendants.
[20] On September 28, 2017, Dr. Ahluwalia wrote to Mr. Kulathungam to ask him not to cash the cheque dated September 30, and to provide dates for a meeting with Dr. Ahluwalia and his new lawyer to “discuss all issues between us.” There were a series of emails exchanged between the parties during the fall of 2017. There is a factual dispute about what those emails meant. The meaning of these emails might depend on whether or not Dr. Ahluwalia’s August 25 letter was delivered and received.
[21] Ultimately, the defendants stopped payment on the three post-dated cheques that they had provided to the law firm. The defendants did not issue replacement cheques.
[22] On March 7, 2018, Mr. Kulathungam wrote to Dr. Ahluwalia. He discussed a compromise of the amounts owing but stated that, if the firm commenced legal proceedings, the firm “will be merely suing on the cheques that were provided and the Agreement (pursuant to the Bills of Exchange Act, R.S.O. 1990 [sic]).” On March 22, 2018, Dr. Ahluwalia responded and asked for a meeting among the lawyers to try and resolve the issue. He expressed the hope that the case could be resolved without a lawsuit. He also sent an email to the law firm that explicitly asked for “all accounts/Bills that [Mr. Kulathungam] or [the firm] billed me for services.”
[23] On March 26, 2018, Dr. Ahluwalia sent another email asking for the accounts. He wrote: “As I attempt to settle issues, I have requested all accounts/bills submitted by [Mr. Kulathungam or the firm] be forwarded to me…Please provide this info ASAP so that we can move this issue forward.” Mr. Kulathungam responded to say that he would call Dr. Ahluwalia’s new lawyer to discuss matters.
[24] That same day, Dr. Ahluwalia sent four more emails asking for the accounts, indicating that the request was time sensitive. Later that evening, Mr. Kulathungam sent an email to Dr. Ahluwalia that read, in part,
I have no issue getting you the accounts (again), but it will be as soon as Kathy has time to get the accounts together.
Doc, I take it that you want all the accounts because you now intend to assess the accounts? That would be disappointing given your word and your assurances, but if that is how you wish to proceed, that is fine.
I will get you the accounts soon.
[25] The very next day, March 27, 2018, the law firm issued the statement of claim in this action. On the law firm’s version of events, they did not deliver the accounts in response to Dr. Ahluwalia’s requests until May 11, 2018, which is over a month after Dr. Ahluwalia made his first explicit request. There is a factual dispute about this point. Dr. Ahluwalia’s evidence is that he did not receive the accounts in an accessible form until some time in 2022.
[26] The defendants served a statement of defence on July 31, 2018. That statement of defence was never filed. In the defence, the defendants raised the alleged negligence of the firm and the firm’s refusal to release the funds until the outstanding accounts were paid.
[27] It appears that the plaintiffs took no steps to advance this action for over 18 months. On February 14, 2020, counsel for the defendants advised the law firm that the earlier statement of defence had not been filed. He served and filed a new statement of defence that was similar to the first defence.
[28] The plaintiffs then brought the motion for summary judgment. On April 30, 2021, Sharma J. scheduled the motion for summary judgment to be heard on October 7, 2021. The motion was adjourned several times at the request of the defendants or their counsel.
[29] On March 29, 2022, pursuant to the order of Myers J., BSA and 138 delivered an amended statement of defence. On February 11, 2022, the plaintiffs issued delivered a reply to the amended statement of defence.
Plaintiff's position
[30] The law firm submits that this an appropriate case for summary judgment. The firm asserts that it is a holder in due course of the three dishonoured cheques and, therefore, it is entitled under the Bills of Exchange Act to judgment in the amount of the post-dated cheques, $71,798.22.
[31] The law firm submits that it is entitled to payment unless it obtained the cheques by way of “fraud, duress or force and fear, or other unlawful means, or for an illegal consideration or when he negotiates it in bad faith, or under such circumstances as amount to fraud” as set out in s. 55(2) of the Bills of Exchange Act. The law firm submits there is “no legitimate evidence” of any such circumstances. The law firm dismisses much of Dr. Ahluwalia’s evidence as incapable of belief. The law firm asserts the Dr. Ahluwalia’s letter, which they define in the firm’s factum as the “Alleged August Letter” was “fabricated for the purpose of this motion.”
[32] They assert that the defendants have no right to equitable or legal set-off and that the defendants breached the agreement and are entitled to damages and to a significant costs award.
Defendants' position
[33] The defendants submit that this action is barred by the provisions of the Solicitors Act, which provides that no action can be brought until one month after a bill has been delivered. They submit that the law firm commenced this action before it issued the final accounts.
[34] The defendants further submit that the law firm seeks to avoid the requirements of the Solicitors Act and the Law Society of Ontario’s Rules of Professional Conduct by purporting to sue on the post-dated cheques under the Bills of Exchange Act. The defendants submit that the law firm is seeking to avoid the scrutiny of the agreement it compelled the defendants to sign and to evade the assessment of the fairness and reasonableness of the accounts.
[35] The defendants submit that they were under duress at the time they signed the agreement. Dr. Ahluwalia states that he protested at the time the agreement was proposed, as confirmed in his letter dated August 25, 2017. The defendants submit that the pressure placed on them by the law firm was illegitimate because the firm was not entitled to assert a solicitor’s lien over any of the files because they had not yet delivered a final account and because the firm knew that a lien would cause prejudice to the defendants’ legal interests given the urgency of the situation.
[36] The defendants submit that they are entitled to an assessment of the law firm’s accounts. They ask that the court dismiss the plaintiff’s motion for summary judgment, grant their motion for summary judgment and dismiss the action, and direct an assessment of the law firm’s accounts.
Summary judgment
[37] Summary judgment is an important tool for enhancing access to justice where it provides a fair process that results in a just adjudication of disputes: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 7. Used properly, it can achieve proportionate, timely, and cost-effective adjudication. However, it is not an appropriate vehicle in every case: Trotter Estate, 2014 ONCA 841, 122 O.R. (3d) 625, at para. 49. In some cases, like this one, summary judgment motions can become an expensive and slow process that delivers neither timely nor affordable justice.
[38] The test for summary judgment in an action brought under the simplified procedure provided in Rule 76 is governed by Rule 20: Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1, at para. 253 (“Combined Air”).
[39] The Court of Appeal for Ontario described the correct approach on a motion for summary judgment in Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98, 154 OR (3d) 561, at para. 24. I am to:
a. determine if there is a genuine issue requiring a trial based only on the evidence before me, without using the enhanced fact-finding powers under rule 20.04(2.1);
b. if there appears to be a genuine issue requiring a trial, determine if the need for a trial could be avoided by using the enhanced powers under
i. rule 20.04(2.1), which allow me to weigh evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence; and
ii. under rule 20.04(2.2), which allows me to order that oral evidence be presented by one or more parties.
[40] In para. 66 of Hryniak, the Supreme Court emphasized that I must focus on whether the evidence before me permits a fair and just adjudication of the dispute and cautioned that judges should not use the enhanced powers where their use would be against the interests of justice:
On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
Step One – Considering the record alone
[41] The first step is to consider whether there is a genuine issue requiring a trial based on the record alone.
[42] On its motion for summary judgment, among other material, the plaintiff filed: affidavits from Mr. Kulathungam dated June 17, 2021, December 23, 2021, January 5, 2022, and February 25, 2022; a “Correspondence Brief” of correspondence exchanged between the parties from October 8 to December 23, 2021; a “Supplementary Correspondence Brief” of correspondence exchanged on January 4 and 5, 2022; and a “Second Supplementary Correspondence Brief” of correspondence between January 6, 2022 and June 15, 2022. The “Correspondence Briefs” did not contain affidavits.
[43] The defendants filed, among other material: Written Submissions dated October 6, 2021, additional written submissions dated October 6, 2021; affidavits of Dr. Ahluwalia dated December 20, 2021, January 4, 2022, and February 17, 2022; several draft pleadings that appear never to have been filed; and loose correspondence between the parties that were not attached to affidavits.
[44] The parties also filed the transcripts of the cross-examinations of Mr. Kulathungam (conducted on April 12, 2022) and Dr. Ahluwalia (conducted on April 12 and 14, 2022).
[45] Considering the record before me, I find there are genuine issues requiring a trial with respect to the claim and the defence. I find that this is not an appropriate case to be resolved by affidavit evidence. Credibility disputes lie at the heart of this case. As the Court of Appeal noted, “the more important credibility disputes are to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record”: Cook v. Joyce, 2017 ONCA 49, at para. 92.
[46] In this case, I find that decontextualized affidavit and transcript evidence raise the very real risk of substantive unfairness that would be absent in a full trial: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438, at para. 44.
[47] I will first consider the law firm’s motion for summary judgment. Even if I accept the law firm’s theory that the Bills of Exchange Act is the only thing that matters (a submission that requires me to ignore completely that this dispute arose in the context of a dispute between lawyers and their clients over fees), the factual record before me does not permit the fair adjudication of those issues. Section 57 of the Bills of Exchange Act states:
57(1) Every party whose signature appears on a bill is, in the absence of evidence to the contrary, deemed to have become a party thereto for value.
(2) Every holder of a bill is, in the absence of evidence to the contrary, deemed to be a holder in due course, but if, in an action on a bill, it is admitted or proved that the acceptance, issue or subsequent negotiation of the bill is affected with fraud, duress or force and fear, or illegality, the burden of proof that he is the holder in due course is on him, unless and until he proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill by some other holder in due course.
[48] Whether or not the defendants can make out a defence of fraud, duress, force and fear, or illegality turn on several questions, none of which can be resolved justly on the record before me:
a. What did Mr. Boskovic and Dr. Ahluwalia say to each other during their meeting on August 18, 2017?
b. Did Mr. Boskovic and Dr. Ahluwalia have any other discussions between approximately August 16 and 27, 2017, and did Dr. Ahluwalia raise any concerns about the provision of accounts or the pressure he felt?
c. Did Dr. Ahluwalia hand-deliver the August 25, 2017, letter to the firm? Did it arrive by mail? Who, if anyone, saw that letter? Did Dr. Ahluwalia otherwise express those views to Mr. Boskovic or others at the firm?
[49] All of these issues are genuine issues requiring a trial to assess the credibility of the witnesses and to do justice between the parties.
[50] The law firm submits not only that they did not receive Dr. Ahluwalia’s letter, but that the letter tendered by its former client was “fabricated for the purpose of this motion.” The law firm submits that I should disregard this letter entirely because it is not authentic. The law firm may be proven right, but I cannot make that finding on the record before me. Determining the authenticity of the letter requires trial to avoid the risk of substantive injustice.
[51] The genuine issues for trial described above are equally inherent in the law firm’s theory that it can sue for breach of the agreement. Depending on the findings at trial, the agreement itself may be unenforceable on the grounds that it was entered into under economic duress: Kawartha Capital Corp. v. 1723766 Ontario Limited, 2020 ONCA 763, 454 D.L.R. (4th) 553 at para 11.
[52] For these reasons, considering only the record before me, I am not satisfied that there is no genuine issue requiring a trial with respect to the law firm’s claim.
[53] Second, I am not willing to grant summary judgment to the defendants based on the record alone. The issues raised by the defendants also raise credibility issues that require a trial. There is a serious dispute regarding the authenticity and receipt of Dr. Ahluwalia’s letter dated August 25, 2017. There are also disputes regarding whether or not Dr. Ahluwalia requested the delivery of accounts before or around the time that he signed the agreement to pay the firm in exchange for release of the files, including what was said in the meeting between Mr. Boskovic and Dr. Ahluwalia.
[54] Finally, there is an overarching issue that relates to each of the motions for summary judgment. I find that the legal issue of how the Bills of Exchange Act interacts with the provisions of the Solicitors Act should only be decided on the basis of a full evidentiary record.
[55] The plaintiff submits that I should apply the provisions of the Bills of Exchange Act essentially without regard to the fact that the dishonoured cheques were delivered pursuant to an agreement between a lawyer and his client to resolve a dispute about a solicitor’s lien arising out of a dispute over unpaid legal fees. The defendants, in contrast, submit that the provisions of the Solicitors Act prohibit the law firm from suing on the dishonoured cheques regardless of the provisions of the Bills of Exchange Act. The parties did not provide me with authorities considering how these two statutes interact.
[56] Even post-Hryniak courts are reluctant to determine novel issues of law on a motion for summary judgment where the factual record is incomplete, disputed, replete with issues of credibility, or are otherwise unsatisfactory for that purpose: 2462192 Ontario Ltd. v. Paramount Franchise Group Inc., 2019 ONSC 2962, at paras. 37 to 40; Cullaton v. MDG Newmarket Inc., 2019 ONSC 6432, at paras. 243 to 246; Apotex Inc. v. Eli Lilly Canada Inc., 2021 ONSC 1588, at para. 48; and see generally, Romano v. D’Onofrio, (2005), 2005 CanLII 43288 (ON CA), 77 O.R. (3d) 583 (C.A.) and Aronowicz v. Emtwo Properties Inc., 2010 ONCA 96, 98 O.R. (3d) 641, at para. 71.
[57] For these reasons, based on the record alone, I am not satisfied that there is no genuine issue requiring a trial based on the record with respect to the claim or defence.
Step Two – Considering the enhanced fact-finding powers
[58] Because I have found that there is a genuine issue for trial based on the record before me, I must now consider if the need for a trial can be avoided if I exercise my powers under rules 20.04(2.1) and 20.04(2.2). These enhanced tools include the ability to hold a "mini-trial" on discrete issues within the action, including where oral evidence is required to make findings of credibility. I may use these powers provided doing so is not against the interest of justice. Using these powers will not be against the interest of justice if they will lead to a fair and just result and serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole: Hryniak, at para. 66.
[59] In my view, the key credibility issues described above cannot be resolved by the documentary evidence or by the limited scope of evidence under a mini-trial. The assessment of evidence in this trial requires live witnesses in a full trial context: Bernard v. Re/Max Realtron Realty Inc., 2019 ONSC 1000, at paras. 35 to 40. (“Bernard”); Zurba v. Lakeridge Health Corp., 2010 ONSC 318, 99 O.R. (3d) 596, at para. 53.
[60] One of the factors I have considered in exercising my discretion is the fact that this action was commenced under Rule 76, which is for simplified procedure cases. In Combined Air, the Court of Appeal emphasized that, generally speaking, in simplified procedure cases, courts should favour a summary trial under s. 76.12 over a "mini-trial" under r. 20.04(2.1). Although the language of “full appreciation” is no longer used, the principles underpinning these observations remain sound:
[255] When a judge is faced with a contested motion for summary judgment in a simplified procedure action that requires exercising the powers in rule 20.04(2.1), the judge will not only have to apply the full appreciation test, but will also need to assess whether entertaining the motion is consistent with the efficiency rationale reflected in the simplified procedures under Rule 76. We make two general observations that will inform this assessment.
[256] First, summary judgment motions in simplified procedure actions should be discouraged where there is competing evidence from multiple witnesses, the evaluation of which would benefit from cross-examination, or where oral evidence is clearly needed to decide certain issues. Given that Rule 76 limits discoveries and prohibits cross-examination on affidavits and examinations of witnesses on motions, the test for granting summary judgment will generally not be met where there is significant conflicting evidence on issues confronting the motion judge. While the motion judge could order the hearing of limited oral evidence on the summary judgment motion under rule 20.04(2.2), in most cases where oral evidence is needed, the efficiency rationale reflected in the rule will indicate that the better course is to simply proceed to a speedy trial, whether an ordinary trial or a summary one: see rules 76.10(6) and 76.12.
[257] Second, we are not saying that a motion for summary judgment should never be brought in a simplified procedure action. There will be cases where such a motion is appropriate and where the claim can be resolved by using the powers set out in rule 20.04 in a way that also serves the efficiency rationale in Rule 76. For example, in a document-driven case, or in a case where there is limited contested evidence, both the full appreciation test and the efficiency rationale may be served by granting summary judgment in a simplified procedure action.
[61] In my view, there will be competing evidence from multiple witnesses required to resolve this case. This case fits withing the discussion in Combined Air and the approach of Sossin J. (as he then was) in Bernard. This is not a case in which it is in the interests of justice for me to exercise the powers under rule 20.04 to conduct a mini-trial within the context of a motion for summary judgment in an action under the simplified rules.
[62] I, therefore, dismiss all requests for summary judgment and direct that this matter proceed to trial as set out in Rule 76. If the parties have not yet complied with rule 76.03, they should do so.
The defendants' request to direct an assessment of the accounts
[63] In their factum, the defendant corporations ask the court to order the assessment of the law firm’s accounts to the defendants pursuant to s. 24 of the Solicitors Act, which states:
Upon any such application, if it appears to the court that the agreement is in all respects fair and reasonable between the parties, it may be enforced by the court by order in such manner and subject to such conditions as to the costs of the application as the court thinks fit, but, if the terms of the agreement are deemed by the court not to be fair and reasonable, the agreement may be declared void, and the court may order it to be cancelled and may direct the costs, fees, charges and disbursements incurred or chargeable in respect of the matters included therein to be assessed in the ordinary manner.
[64] I decline to order an assessment of the accounts for three reasons.
[65] First, the corporate defendants did not seek this relief in their notice of motion dated February 17, 2022.
[66] Second, even if they had sought such relief in the notice of motion, s. 13 of the Solicitors Act requires that this relief be brought by way of application styled In the matter of (the solicitor). It is not clear that I would have the authority to grant such relief ancillary to the defendants’ motion for summary judgment.
[67] Third, and more importantly, on the record before me, I am not able to deem the terms of the agreement not to be fair and reasonable or to determine that the agreement should be declared void. For all the reasons I am not prepared to grant summary judgment on the claim or the defence, I am not prepared to cancel the agreement and direct the fees for assessment.
[68] The defendants have been suggesting for many years that the wish to have the accounts assessed. Based on the record before me, it appears that they have not yet attempted to do so. They did not provide me with any evidence that they face any statutory impediment to having the accounts assessed. If they wish to have the accounts assessed, they should attempt to do so or await the trial of this matter. The law firm is reminded of their obligation to facilitate, not frustrate, the assessment of solicitor accounts: Ilic v. Ducharme Fox LLP (Ducharme Weber LLP), 2022 ONCA 463.
Costs
[69] I am inclined to leave the costs of this motion to the trial judge but will hear submissions of the parties if necessary.
[70] If the parties are not able to resolve costs, the defendants may make a single costs submission of no more than three double-spaced pages to be emailed to my assistant on or before July 20, 2022. The plaintiff may file responding submissions of no more than three double-spaced pages on or before July 27, 2022. The defendants may file a single reply submission of no more than two single spaced pages on or before August 2, 2022.
Robert Centa J.
Date: July 13, 2022