Court File and Parties

Court File No.: CV-19/633 Date: 2022-08-04 Superior Court of Justice - Ontario

Re: Filomena Papovic And: Jeffrey W. Nanson and Mousseau DeLuca McPherson Prince LLP

Before: Justice A. K. Mitchell Counsel: Z. Matthew Kaslik and Gayatri Nava, for the plaintiff M. Khami and D. Williams, for the defendants

Heard: June 27, 2022 via video conference

Endorsement

Overview

[1] In this action, the plaintiff, Filomena Papovic, alleges professional negligence in the defendants’ handling of a civil action on her behalf.

[2] Pursuant to r. 20 of the Rules of Civil Procedure (the “Rules”), on this motion the plaintiff seeks summary judgment against the defendants, Jeffrey Nanson and Mousseau DeLuca McPherson Prince LLP.

[3] The defendants oppose the plaintiff’s motion and ask that it be dismissed. By cross-motion brought pursuant to rules 20 and 21 of the Rules, the defendants seek an order dismissing the plaintiff’s claim as disclosing no genuine issue for trial or, alternatively, an order striking the statement of claim on the basis this action constitutes an abuse of process.

[4] At the outset of the hearing of the motions and for brief reasons provided orally and reiterated below, I dismissed the plaintiff’s motion for summary judgment and the defendant’s cross-motion seeking the same relief.

[5] The hearing proceeded only with respect to the defendants’ motion to strike the claim on the basis it is an abuse of process. The defendants argue that the plaintiff’s claim constitutes an improper and/or unlawful attack on the underlying proceedings, and/or decisions in the underlying proceedings.

Background

[6] In October 2011, the plaintiff retained the defendants, and specifically Mr. Nanson, to commence a lawsuit against Re/Max Realty Corp. and its employee, Terry Cook, with respect to an alleged misrepresentation made by Mr. Cook relating to the number of parking spaces associated with a commercial property purchased by the plaintiff (the “original action”). With respect to the original action, the parties executed a written retainer agreement on October 13, 2011.

[7] The original action went to trial. By reasons released October 2, 2016, Verbeem J. dismissed the plaintiff’s claim.

[8] Shortly after the release of the reasons for judgment, Mr. Nanson met with the plaintiff. At that meeting the reasons were discussed as well as the issue of Mr. Nanson’s outstanding account. Soon after this meeting, the plaintiff served notice of change of solicitors and retained its current solicitors.

[9] The plaintiff did not pay the defendants’ account and Mr. Nanson proceeded to an assessment of the outstanding account. Pending the return of the assessment hearing, plaintiff’s new counsel filed a notice of appeal of the judgment in the original action. Incompetence of counsel was not provided as a ground of appeal. The appeal was ultimately abandoned by the plaintiff.

[10] The assessment hearing before Assessment Officer Robert Stevens was held on May 26, 2017. The hearing proceeded on a contested basis. Mr. Nanson gave evidence at the hearing and was cross-examined on issues relating to the advice and services he provided to the plaintiff. Immediately following the hearing, Assessment Officer Stevens released his decision on the assessment hearing and assessed costs against the plaintiff.

[11] The defendants’ costs were assessed in the amount of $18,974.33. The plaintiff did not appeal the assessment order with respect to either entitlement or quantum.

[12] The plaintiff commenced this action on June 30, 2017. The plaintiff claims against the defendants alleging professional malpractice, gross negligence, negligence and breach of fiduciary duties. Specifically, the plaintiff claims, among other claims, that Mr. Nanson:

(a) in breach of his duties, obligations and the trust reposed by the plaintiff, failed to take the appropriate steps with respect to both liability and damages during his carriage of the action on a timely basis or it all and instead embarked on a consistent pattern of negligent and prejudicial conduct throughout his retainer which diminished the probabilities of the plaintiff’s ultimate chance of success at trial;

(b) as a direct result of the negligence and gross negligence, prevented the plaintiff from presenting her best case before the trial judge leading to adverse findings and the dismissal of the action;

(c) failed to devise an appropriate litigation strategy given the facts and allegations in the circumstances of which he was aware;

(d) failed to plead and omitted to add the listing agent as a party defendant to the action; and

(e) restricted the cause of action to misrepresentation and failed to plead breach of contractual and common law duties of care and negligence.

[13] The defendants object to this characterization of the advice and conduct of Nanson. They point specifically to the limited scope and nature of the retainer. The plaintiff counter-argues that the scope and nature of the retainer were not in any way limited.

Analysis

(i) Summary Judgment

[14] Rule 20.01 permits a party to move for summary judgment after delivering their pleading. The decision of the Supreme Court of Canada in Hyrniak v. Mauldin[^1] provides the governing law. Recognizing that affordable and timely access to the civil justice system is paramount, the Supreme Court of Canada has interpreted r. 20.03 to require motions judges to utilize their enhanced powers under r. 20 to weigh evidence, evaluate credibility and draw reasonable inferences where appropriate, in order to expand the cases capable of being disposed of summarily without the need for costly and protracted litigation.

[15] I find that credibility issues abound in this professional negligence action making summary judgment unsuitable as a means of determining the issues. By way of example, the parties disagree on the scope and nature of the retainer and whether it was limited. The evidence of the plaintiff, on the one hand, and Mr. Nanson, on the other, is at complete odds. Credibility is a significant issue in this matter which cannot be resolved on the written record before me.

[16] Moreover, expert evidence with respect to whether the defendants, or either of them, breached the standard of care of a lawyer retained to sue for damages relating to the advice, representations and services provided by a realtor, is necessary to determine the liability, if any, of the defendants in this case. Such expert evidence is not before the court and, to the best of my knowledge, no expert has yet been retained.

[17] I find that the issue of whether the defendants breached the standard of care requires both expert evidence as to the standard of care, as well as an assessment of the credibility of the plaintiff and Mr. Nanson with respect to the factual issues relating to the defendants’ retainer. Therefore, I find that the issue as to whether the defendants breached the standard of care requires a trial for its determination.

[18] Consequently, this action is not suited for summary judgment. Regrettably, unless resolved by agreement at an early stage, I fear the issues in this action will require costly and protracted litigation for their determination.

(ii) Striking the Claim – Abuse of Process

[19] Subrule 21.01(3)(c) provides that a defendant may move before a judge to have an action stayed or dismissed on the ground that the action is frivolous or vexatious or is otherwise an abuse of the process of the court. Similarly, r. 25.11 permits the court to strike out or expunge all or part of the pleading, with or without leave to amend, on the ground that the pleading is an abuse of the process of the court.

[20] On this motion, the focus is on whether or not the action constitutes an abuse of process having regard to the nature of the allegations considered in the context of the abandoned appeal and the findings made in connection with the assessment order. In considering this issue, the Court need only consider the pleadings and the history of the proceedings to determine whether this action constitutes an abuse of process. Having dismissed both motions for summary judgment, it is not necessary to consider the substantive aspects of the claim and the merits of the allegations of negligence.

[21] The defendants argue that this action is a collateral attack on the findings of Assessment Officer Stevens who found no negligence or other misconduct disentitling Mr. Nanson to his fees. The defendants submit that at the core of the dispute between the parties on the assessment was the skill and competence of the defendants with respect to their handling of the original action. The skill and competence of Mr. Nanson was one of the factors considered by Assessment Officer Stevens but ultimately this factor did not result in a reduction of the defendants’ account.

[22] On the issue of the defendants’ skill and competence, Assessment Officer Stevens wrote:

At the end of the day I am not – well the onus certainly is on the solicitor, I am not satisfied that there is any negligence.

[23] The defendants submit that this action is a collateral attack on this finding. The defendants referred me to the decision in Susin v. Baker[^2] where the Ontario Court of Appeal found that the solicitor’s negligence was an issue squarely before the assessment officer. The subject of the appeal in Susin was an order dismissing an action brought contemporaneous with the assessment hearing in which the appellant alleged the respondent solicitors were negligent with respect to their handling of an outstanding action. The latter action was on the trial list and remained to be decided. The court held that the action in negligence was frivolous and vexatious because the assessment officer had previously conclusively dealt with the issue of the solicitor’s negligence.

[24] First as a matter of stare decisis, I am not bound by the decision of Assessment Officer Stevens in so far as he provided his views on the defendants’ negligence/lack of skill and competence as proper objections to the defendants’ account. Assessment Officer Stevens states in his reasons:

…now, of course I am an assessment officer, not a judge. My jurisdiction is limited to determining whether a bill or bills between a lawyer and client are fair and reasonable. To do that, the authorities have outlined a number of factors that I am obliged to consider the evidence that is given in the course of this hearing, in the context of these factors.

[25] Assessment Officer Stevens then goes on to consider the time spent and the increase in hourly rate within the context of the retainer agreement executed by the parties. In the end, he reduced the fees on the basis that the increase in hourly rate was not properly communicated to the client (the plaintiff). While he also considered the skill and competence of counsel and the trial result, he quite rightly, in my view, points out that allegations of negligence of the solicitor are more properly brought by way of an action before a judge, rather than before the assessment officer. Distinguishable from Susin, Assessment Officer Stevens declined to conclusively address issues of the defendants’ alleged negligence. This is a far different approach than the one taken by the assessment officer in Susin.

[26] The alleged negligence in this case relates to the handling of the original action which had been concluded by the time of the assessment hearing. The plaintiff’s lack of success following trial forms the basis for her negligence claim against the defendants. In Susin, the Court of Appeal in dismissing the appeal, held that the alleged solicitor’s negligence addressed on the assessment was of little or no consequence since the Windsor action (as described in the decision and akin to the original action in this case) had been restored to the trial list. Unlike the outcome of the original action in this case, the success of the Windsor Action remained unknown at the time of the appeal in Susin.

[27] An assessment hearing does not permit an aggrieved party to claim damages rather only permits the client to object to the fees claimed by their former solicitors. That is, a plaintiff’s allegations of negligence on an assessment hearing act as a “shield”, not a “sword”. I note that the damages claimed by the plaintiff against the defendants far exceed the costs ordered on the assessment. Surely, the plaintiff cannot be precluded from advancing a negligence claim merely because she objected to the fees claimed by her former solicitors at an assessment hearing. The plaintiff was entitled to and did object to the defendants’ fees (albeit unsuccessfully), on the basis the defendants lacked skill and competence. If I was to accept the defendants’ argument, it would lead to the untenable situation that as a precondition to advancing a solicitor’s negligence claim against their former solicitors, a client must pay all outstanding fees without objection. That proposition is non-sensical and unjust.

[28] The defendants further argue that this action is an attempt to relitigate the claims decided by Verbeem J. in respect of which an appeal was taken and ultimately abandoned. The defendants point out that on appeal, the plaintiff did not raise issues of her solicitor’s competence/negligence. The defendants submit that the time and place to have advanced a claim of negligence was on the appeal. Having failed to raise the competence of the defendants as a grounds of appeal and then subsequently having abandoned the appeal, the plaintiff is now precluded from advancing a claim of negligence against these defendants.

[29] The defendants rely on the decision in Harris v. Levine[^3] for this proposition. In Harris the court struck the plaintiff’s claim on the basis it was an abuse of process. The plaintiff had appealed his convictions for criminal harassment and assault. In his notice of appeal, the plaintiff alleged that the defendant was negligent in his representation and furthermore that the plaintiff received ineffective assistance from his trial counsel. This ground of appeal was abandoned prior to the hearing of the appeal and the appeal was ultimately dismissed. The plaintiff then brought a civil action against his former lawyer in negligence and breach of contract for damages claiming he was innocent of the charges of which he was convicted.

[30] The plaintiff argues that Harris involved the appeal of criminal convictions and not a civil judgment as is the case here and, therefore, the principle in Harris has no application. I agree.

[31] In a civil proceeding a trial verdict renders a monetary judgment rendered within the boundaries of and restricted by the pleadings. A criminal appeal based on the incompetence of counsel is restricted to the competence of counsel at trial and not generally with respect to the strategy taken at the commencement of and during the proceedings. Criminal proceedings do not include “pleadings” per se. In this action, the plaintiff takes issue not only with the competence of counsel during the trial but also with the strategy taken at the commencement of proceedings, including the drafting of pleadings. If the plaintiff had successfully raised competence and effectiveness of counsel as a ground of appeal, success would have been a hollow victory because an appeal court does not have had the power to re-draft the statement of claim to plead additional causes of action as the plaintiff alleges should have been done by the defendants in this case.

[32] I adopt the comments of Catzman J.A. in D.W. v. White[^4] at para. 51 where he states:

The absence of any case in Ontario that has set aside, on the basis of alleged ineffective assistance of counsel, a judgment rendered following a trial is hardly surprising. There are other remedies in place that a losing litigant may invoke to recover the loss claimed at trial if ineffective assistance can be established. Foremost among these is a party’s right to bring action against the counsel whose conduct he impugns…

[33] Therefore, abandoning the appeal of the judgment in the original action does not preclude the plaintiff from bringing this action.

[34] I find that neither the plaintiff’s failure to appeal the trial judgment on grounds of incompetence of or ineffective assistance by counsel, nor the findings of the assessment officer on the assessment hearing render this action an abuse of process.

Disposition

[35] The motions are dismissed.

Costs of the Motions

[36] Each of the parties was unsuccessful on their respective motion. Therefore, my preliminary view is that the parties should bear their own costs of the motions. If the parties disagree with this preliminary assessment, they may file written submissions on the issues of entitlement to and quantum of costs as follows:

(a) within 15 days, the parties shall serve and file their respective submissions not to exceed 5 pages in length (exclusive of a Costs Outline, time dockets and caselaw); and

(b) responding submissions, if any, not to exceed 3 pages in length, shall be served and filed within 7 days thereafter.

“Justice A.K. Mitchell”

Justice A.K. Mitchell

Released: August 4, 2022

[^1]: 2014 SCC 7, 2014 CarswellOnt 640 (SCC). [^2]: 1997 CarswellOnt 685 (C.A.) (“Susin”). [^3]: 2014 ONSC 1300 (“Harris”). [^4]: 2004 CanLII 22543 (ON CA) at para. 51.