COURT FILE NO.: CV-13-473884
DATE: 20220909
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Arsenio Parlanis and Kevin Thatcher & Associates Ltd. Licensed Insolvency Trustee, Trustee for the Estate of Arsenio Parlanis
Plaintiffs
– and –
Todd Reybroek, Robert Romero and
Reybroek Barristers Professional Corporation
Defendants
G. Joseph Falconeri and Bryan D. Rumble, for the Plaintiff, Arsenio Parlanis
Kenneth Page, for the Plaintiff, Kevin Thatcher & Associates Ltd. Licensed
Insolvency Trustee, Trustee for the Estate of Arsenio Parlanis
Jillian Van Allen, for the Defendants, Todd Reybroek and Reybroek Barristers
Professional Corporation
HEARD: December 6, 7, 8, 9, 10, 13, 16, 17, 20, 21 and 22, 2020 and January 6 and 26, 2022
STEWART J.
Nature of the Action
[1] Arsenio Parlanis (“Parlanis”) has brought this action against the Defendants Todd Reybroek and Reybroek Barristers Professional Corporation (“Reybroek”) claiming damages for alleged negligence in the provision to him of legal advice and representation in connection with his claims for statutory no-fault accident benefits resulting from injuries and losses suffered by him in motor vehicle accidents which occurred in Toronto, Ontario in 2003 and 2004.
[2] Parlanis has discontinued his claim as against the Defendant Robert Romero, a paralegal assistant in Reybroek’s office who assisted him.
[3] When the accidents occurred, Parlanis was a fairly young man of 35 years who had been employed in a variety of modestly-paid manual labour jobs in construction, auto repair, food service delivery and industrial laundries. He had been married briefly but had separated from his wife and child and was residing with his mother and sister in Toronto.
[4] In the motor vehicle accidents in which he was involved, Parlanis sustained injuries to his head, shoulders, knees, chest and upper back. Parlanis was a high school graduate of apparent reasonable intelligence at the time of the accidents. Although he claimed in his evidence to have suffered cognitive damage and memory loss as well as mood disorders as a result of the accidents, these did not render him incompetent, unable to drive or otherwise so severely impaired as to be unable to deal with his own affairs.
[5] Parlanis did not sustain any broken bones in either accident nor any damage to or rupture of any major organs. He did not require immediate post-accident hospitalization for treatment or a lengthy hospital stay. No surgery was required or carried out other than for the repair of a meniscal tear in his left knee in 2005.
[6] Reybroek denies all allegations of negligence made against him in the action and asserts that the advice and representation provided by him was carried out in accordance with the expected standard of care of a reasonably competent lawyer in all the circumstances. Further, Reybroek maintains that Parlanis has not shown on a balance of probabilities the existence of a causal link between any negligence on his part, if so found, and any alleged shortfall in the ultimate recovery achieved by him in the proceedings in which he was represented by Reybroek.
[7] A final account submitted by Reybroek for professional services provided to Parlanis remains unsatisfied such that Reybroek commenced proceedings against Parlanis. On May 16, 2014 default judgment was signed against him. Reybroek asks that the amount of the judgment and the costs associated with its attempted enforcement be set off as against any damages he may be ordered to pay should Parlanis be successful in this action.
[8] Parlanis made an assignment into bankruptcy while this present action was under way. A consent Order to Continue the action has been obtained to add Parlanis’ Trustee in Bankruptcy as a party to the proceedings and to assume responsibility for their carriage. The Order to Continue contains a provision that it is made without prejudice to Reybroek’s claim for setoff.
Background Facts
[9] Parlanis’ claims in this action are based upon the assertion that Reybroek was negligent in his handling of, and with respect to advice given concerning, the settlement of his accident benefits claim with Aviva Canada Inc. (“Aviva”), his insurer. No allegations in this action assert a claim for damages arising from any fault with Reybroek’s advice or representation in the tort actions pursued by Parlanis in tandem with his accident benefits claims or seek damages as a result.
[10] There is little dispute as to much of the basic chronology that gives rise to these proceedings. It is uncontested by Reybroek that he was retained by Parlanis as legal counsel in connection with pursuing his claims for compensation for injuries sustained in the two motor vehicle accidents in which Parlanis was involved, both in tort as against the other drivers and for no-fault accident benefits from Aviva.
[11] As instructed by Parlanis, Reybroek commenced actions on behalf of Parlanis against the drivers of the other vehicles involved in the two accidents referred to above. He also sought no-fault accident benefits for Parlanis from Aviva.
[12] Over the several years following the accidents, Reybroek pursued the civil ligation on Parlanis’ behalf and dealt with Aviva to obtain accident benefits for his client. On at least two occasions Aviva sought to decline payment of further benefits but Reybroek was successful in obtaining re-instatement of those benefits.
[13] In furtherance of his retainer, Reybroek had received many medical reports and related reports with respect to Parlanis’ injuries, including a number of reports that Reybroek had requested and received from Parlanis’ family doctor and treating physicians (several of whom testified at trial and were expectedly supportive of Parlanis’ claims concerning his injuries) and from independent expert medical assessors. Other reports Reybroek received had been obtained by Aviva in the course of their handling of Parlanis’ statutory accident benefits claims or by counsel for the defendants in Parlanis’ tort actions.
[14] The medical reports obtained included details of the attendances by Parlanis upon his own physicians as well as upon other physicians to whom he had been referred by Reybroek, Aviva and counsel for the defendants in the tort actions. These reports reflect a spectrum of opinion and opposing views on the nature, extent and causes of Parlanis’ injuries. Reybroek was required to review this information in order to assess the risks that his client would face with respect to maintaining entitlement to accident benefits as well as to obtaining any significant recovery in the tort actions.
[15] Among the volumes of medical records and reports generated during the 2003 to 2011 time frame I have not been referred to any report containing any suggestion from a physician or therapist of any suspicion that Parlanis might have suffered injuries in the accidents that would have caused him to suffer major crippling disability or any urging or suggestion by the medical personnel who saw him that Parlanis should be assessed for a possible catastrophic impairment.
[16] In issue and in dispute in this array of medical records and reports were the nature and extent of Parlanis’ injuries, whether they were such that he was or would be unable to return to any gainful employment, and what kind of rehabilitation and other services he would or would not require. Although Parlanis attended appointments with his physicians, such treatment as he pursued mainly consisted of undergoing nerve blocks and obtaining renewals of prescription medication for his complaints of pain with comparatively little therapeutic intervention. As may be seen from his medical records, despite his complaints of pain, interference with his mobility, depression and inability to return to work, Parlanis’ motivation to engage in any demanding or time-consuming rehabilitation therapy or work retraining appears to have remained low.
[17] This observation is not made to disparage Parlanis, but only to flag certain features of his history that might have some bearing on his chances of any major recovery before a civil jury or before a tribunal adjudicating upon his claims for damages or entitlement to benefits.
[18] Reybroek had also been made aware of surveillance evidence of Parlanis that had been commissioned by counsel for the defendants in the tort actions. Prior to his attendance at a mediation of the tort claims, Reybroek had been provided with and had reviewed a summary of this surveillance which was reported as follows:
The surveillance took place on October 4 and 7, 2010 (i.e. the same days as the assessments by Drs. West, Smith and Keeling). The investigators observed Mr. Parlanis driving to and from his appointments. As he left the appointment at Regain Health (i.e. Dr. Keeling) he was observed initially using a cane in a normal fashion but then gradually began carrying his cane as he approached his vehicle. He then sat in vehicle for approximately 15 minutes making phone calls, smoking and reading documents. As he exited from his vehicle he was observed bending fully at his waist to adjust his shoe and exhibited an inconsistent limp. He visited a Tim Horton's for approximately 20 minutes. On his way back to his parked car he again exhibited an inconsistent limp before returning to the rehab centre. Mr. Parlanis then exited the rehab centre after approximately 1 1/2. hours. When Mr. Parlanis arrived at his home at approximately 5:30 p.m. he was observed walking in a normal fashion without the use of his cane, which he left in his car.
On October 7, 2010 Mr. Parlanis was observed again attending at a professional building (presumably the assessment by Dr. West). When he exited his vehicle to attend the assessment he was again observed suddenly bending at his waist to make adjustments to a shoe. He did not display any apparent signs of a limp. When he returned home later that evening, he again exited his vehicle without the use of a cane and walked normally to his front porch and entered his residence. Approximately one minute later, Mr. Parlanis was observed exiting his residence. For the next 19 minutes Mr. Parlanis performed lawn care activities which included vigorously raking his front and side lawn, as well as gathering, piling and bending to pick up piles of leaves without displaying any limitations.
[19] Such surveillance evidence would be expected to be used at any trial of Parlanis’ tort claims to contrast his presentation and the complaints made to the medical specialists seen at the time with how he appeared to the investigator who conducted the surveillance. Although Parlanis may have been able to provide a good explanation for any discrepancies, such evidence could have had a damaging effect on his credibility and on his chances of any sizeable recovery from a civil jury.
[20] On February 9, 2011 Reybroek, Parlanis and Parlanis’ sister attended a global mediation with respect to Parlanis’ tort claims.
[21] One of the tort defendants was insured by Aviva and represented by counsel appointed by it. Aviva reportedly had set up an internal privacy wall to keep its information and decision-making deliberations between Parlanis’ accident benefits claims and his tort claims completely separate and confidential. There was no evidence led at trial to suggest that the internal privacy wall had ever been breached by Aviva.
[22] At the mediation, the tort defendants maintained the position that Parlanis’ claims of injuries were grossly inflated and remained unwilling to settle the actions for an amount even close to what was advocated to them by Reybroek as a reasonable settlement amount.
[23] Marisa Chiu, the Aviva accident benefits claims analyst dealing with the Parlanis file, had asked to attend the global mediation. Although Reybroek declined her request to attend the tort claims’ mediation itself, he agreed to meet with her on that same day to discuss the status and possible global resolution of Parlanis’ accident benefits claims.
[24] After the tort mediation had failed, Reybroek met with Chiu. At that meeting Parlanis’ accident benefits claims were settled as reflected in Reybroek’s evidence and in the notes and in the routine notes and records in the Aviva file made by Chiu which were identified as such by the Aviva representative who gave evidence at this trial.
[25] According to Reybroek’s evidence, his negotiation stance was basically that Aviva’s medical examination reports were not conclusive, that Parlanis had been off work for seven to eight years, and that there was some risk of a CAT issue and possible finding of same if a satisfactory settlement was not achieved.
[26] From Reybroek’s perspective, the spectrum of medical opinion was such that Parlanis’ claims for injury and the amounts claimed for future loss of income and required by him for rehabilitation were open to attack. Reybroek had concerns about Parlanis’ credibility and reliability which might affect how a trier of fact would assess his entitlement to compensation. Among these concerns, based upon his knowledge of Parlanis and the history of his dealings with his office, was the worry that Parlanis would start working surreptitiously while collecting accident benefits and be discovered to be doing so. Such conduct would destroy his credibility and severely weaken his claim.
[27] Reybroek was also made aware that Aviva planned to terminate Parlanis’ benefits on the basis of the medical opinion it had received supportive of its position and had sent a letter to that effect. Reinstatement of any such benefits, although not entirely unattainable, might have to be obtained only following an administrative appeal process that would be lengthy and costly.
[28] Chiu’s notes of the negotiation meeting also specifically refer to the possibility that a CAT designation might be pursued. Although Reybroek testified that at that time he did not have much faith in the likelihood that Parlanis would be so designated, the records tend to show that it was one of the many considerations that entered into the negotiations and the final resolution achieved.
[29] The amount that was ultimately agreed to for settlement was an all-inclusive payment to Parlanis of $200,000.00. The settlement breakdown was $180,000.00 for future income replacement benefits and $20,000.00 for future medical and rehabilitation benefits.
[30] The $200,000.00 settlement amount agreed to be paid by Aviva was in addition to the benefits that it had already paid. Those benefits received by Parlanis as of February 3, 2011 totalled approximately $210,000 and were as follows:
MVA of August 17, 2003
Income replacement benefits - $ 155,606.17
Medical and rehabilitation benefits - $ 32,279.34
Attendant care benefits - $ 1,853.43
Housekeeping expenses - $ 3,149.33
MVA of April 23, 2004
Medical benefits $ 14,994.01
Attendant care benefits - $ 4,067.53
[31] As can be seen from the accident benefits paid to Parlanis from 2003 to 2011, the most significant amount of these was for income as he had not returned to work. The amounts attributed to attendant care and housekeeping were comparatively minimal. Benefits for medical treatment and rehabilitation were also fairly modest and relate primarily to physician assessments and surgical treatment following the accidents. Similarly, and based upon the history over the years since the accident, the amount of the settlement attributed to future medical and rehabilitation benefits was modest. If the accident benefits claims had not been settled, Aviva would have been obligated to pay for only such rehabilitation expenses that had actually been incurred.
[32] Parlanis testified that Reybroek sent him away before his discussions with Chiu and did not give him any advice or direction with respect to the negotiations or concerning the amount of the settlement achieved.
[33] Although Parlanis said he received no advice from Reybroek with respect to settling his claim for future accident benefits, he nevertheless executed a form clearly entitled “Authorization to Settle my Accident Benefits Case” on the same date that the accident benefits settlement was reached.
[34] Parlanis was also provided with a Settlement Disclosure Notice by Aviva, a standard form document that statutory accident benefits insurers are required to provide to their insureds when settling their statutory accident benefits claims pursuant to the Insurance Act. Among other things, the Settlement Disclosure Notice advises an insured person of the benefits and rights that they are giving up and that they have two business days to rescind the settlement. Essentially, it is a “cooling off” provision that entitles an individual insured to back out of any settlement agreed to within that time frame imposed by statute.
[35] When he attended at Reybroek’s office and met with a paralegal to finalize the settlement, Parlanis did not indicate to Reybroek or anyone else at his counsel’s office that he had changed his mind. Rather, he signed the documents placed before him without objection and received the settlement funds.
[36] Parlanis also signed the required Aviva Final Release and Notice six days later, on February 15, 2011, without question or expression of reservation.
[37] Parlanis received $125,000.00 from the $200,000.00 settlement amount after an agreed deduction by Reybroek of $75,000.00 for fees, taxes and disbursements. From the fees of $75,000.00 Reybroek paid $5,270.15 to Regain Health and to Friendly Rehab for treatment incurred by Parlanis, as well as the cost of carrying out his assessment.
[38] When Parlanis received $125,000.00 from the settlement with Aviva of his accident benefits claims, he did not use the funds for physical rehabilitation, psychological counselling, attendant care or housekeeping assistance. He did not invest the funds to produce a steady income stream to replace his loss of future income. Instead, he gave all of the funds received by him to his mother who, according to Parlanis, needed the funds to pay down the mortgage on her home. This is in keeping with Reybroek’s recollection that Parlanis had indicated to him a pressing need for money in hand quickly.
[39] Although Parlanis testified at trial that he had come to the conclusion on February 9, 2011 when he signed the Authorization to Settle that the amount he received in his accident benefits settlement was inadequate and he was dissatisfied with the result, he continued to retain Reybroek to represent him for the next two years with respect to his tort claims arising from the same accidents.
[40] Reybroek continued to work up the tort claims file for Parlanis and move it toward trial. On January 23, 2013 Reybroek attended before Wilkins, J. for a pre-trial settlement conference in the tort actions. Parlanis was also in attendance, along with his sister.
[41] The matters discussed at the pre-trial settlement conference are set out in Reybroek’s file memorandum and an associate’s e-mail of that same date. In addition to the trial management matters covered, some serious discussions took place concerning possible settlement of the tort claims. Counsel for all parties were more willing at that time to countenance the possibility of a compromise.
[42] Wilkins J. noted that the trial in the tort actions had been booked for 19 days but expressed the view that the trial could run for 30 days. The trial was listed as a “conditional go-ahead” but Wilkins, J. indicated that the trial might very well be adjourned to 2015 because of its anticipated length. In addition to being a consideration for lining up witnesses and the likely expense associated with a looming trial, this possibility raised a further consideration that might operate in favour of a mutually satisfactory negotiated settlement of the actions.
[43] On January 29, 2013 Reybroek met with Parlanis and his sister to discuss the January 23, 2013 pre-trial conference, the settlement prospects and the risks of going to trial.
[44] Parlanis was resistant to agree to settlement on the basis that Reybroek recommended to him. He wanted to hold out to get $300,000.00 net of all fees, expenses, a loan he had incurred and any ODSP/Welfare subrogation amounts. Maintaining this position would essentially guarantee a trial.
[45] On February 6, 2013 Reybroek again met with Parlanis and his sister. On February 7, 2013 Reybroek wrote to Parlanis to confirm the details of this meeting, the settlement offers that had been exchanged and to set out his advice with respect to settlement.
[46] Reybroek also set out the numerous telephone messages that Parlanis had left for members of his firm in which Parlanis had in strong language expressed his distrust of and loss of confidence in Reybroek. In the letter, Reybroek advised Parlanis that he “must either accept the defendants’ combined offer or you must fire this law firm immediately.” In the post script to his letter Reybroek states:
P.S. Since drafting this letter, Elena Ginzburg advised that you left her a telephone message stating that I am working together with Alan Rachlin and that the truth will come out. I am left with no choice but to ask the court to remove my firm as your lawyers. I am, however, enclosing copies of the two formal offers that were served by the defence, since you claimed in your telephone message that we refused to provide a copy. They are enclosed. The Aviva offer amounts to $125,000.00. The Intact offer amounts to $200,000.00 although as I advised, Mr. Carlesi advised by telephone that his client would pay an additional $20,000.00 if the offer was accepted by 9:00 a.m. today.
[47] Alan Rachlin was the lawyer representing one of the defendants in the tort actions. Reybroek interpreted Parlanis’ statement referred to in the post script to his letter as having suggested that he and opposing counsel were colluding against Parlanis.
[48] On February 8, 2013 Parlanis faxed a letter to Reybroek terminating his retainer. The letter stated:
Given what has occured in the last few days, I do not feel confident in you representing me.
Please advise defense council that you are no longer my lawyer and that I am seeking a new lawyer.
Could you please let the defence council know that I require an adjurment of the trial.
[49] Parlanis states that he faxed this letter from a printing store on University Avenue just up the street from the Court House. That same day, the Notice of Action in these proceedings was issued naming Reybroek and Robert Romero, a paralegal formerly in Reybroek’s office, as defendants.
[50] The Notice of Action was formatted in accordance with that prescribed by the Rules of Civil Procedure. The document is 20 paragraphs long and appears to have been prepared with legal assistance although Parlanis initially insisted that he had prepared and issued it on his own because he was aware of a looming limitation period that would apply to his claims.
[51] Parlanis again stated at trial that he prepared the Notice of Action himself with the help of his sister and free legal advice from an office on University Avenue near the Court House. Parlanis stated that a gentleman at that office helped him prepare it while his sister took notes. A computer in that office was reportedly used to prepare the document.
[52] On February 12, 2013, Reybroek wrote to the Trial Co-ordinator to advise that he and the lawyers for the defendants in the tort actions had agreed that they should be struck from the trial list because Parlanis had discharged him as counsel and had started an action against him.
[53] On February 21, 2013 Parlanis served Reybroek with a Notice of Intention to Act in Person in the tort actions. The covering letter enclosed with it and the Notice of Intention itself was formatted in accordance with Form 15C. This suggests that Parlanis was receiving or had received some legal assistance with its preparation but the identity or source of such assistance remains unconfirmed.
[54] Parlanis also served the Notice of Intention upon Alan Rachlin and Loris Carlesi, counsel for the defendants in the tort actions. In his covering letter, Parlanis indicated his acceptance of the latest offer to settle advanced by Rachlin on January 25, 2013 as well as the offer purportedly made by Carlesi on January 28, 2013 but with an additional $20,000.00 “sweetener” which he believed that Carlesi had been willing to include.
[55] After Parlanis had discharged Reybroek but before he settled his tort claims, he had consulted the law firm which now represents him in this action. Parlanis did not ask his new counsel to request an adjournment of the trial and maintains that they provided him with no assistance in settling his tort claims. Again, and somewhat surprisingly, there is no evidence that new counsel for Parlanis in this action took steps to contact counsel for the tort defendants to pursue completion of the settlement or to discuss how and whether Reybroek’s legal fees would be paid out of any settlement funds.
[56] Carlesi refused to add the $20,000.00 to his original offer and gave evidence at trial that such extra “sweetener” was subject to obtaining instructions from his client. However, the original offer he had made remained outstanding open for acceptance by Parlanis. Parlanis accepted Rachlin and Carlesi’s respective offers to settle without any further negotiation.
[57] The breakdown of the amount of $196,982.28 to settle the action against Carlesi’s client was $127, 500.00 for damages, pre-judgment interest of $12,100.00, plus costs of $26,696.25 and disbursements of $30,686.03.
[58] The breakdown of Rachlin’s offer to settle of $120,686.03 was $75,000.00 for damages and the remaining amount of $45,686.03 was for 50% of his anticipated partial indemnity fees and disbursements.
[59] On March 13, 2013 Parlanis attended at Rachlin’s office where he executed releases of the defendants in the tort actions in exchange for payment to him of the agreed amounts of $120,686.03 and $196,982.28, for a total of $317, 668.31. Thus, by avoiding paying any costs to Reybroek out of these amounts, Parlanis succeeded in obtaining a figure close to that which he had hoped to have “in his pocket” from these settlements.
[60] Although portions of the settlements Parlanis received had been calculated and earmarked for partial payment of Parlanis’ legal fees and disbursements, no portion of the settlement funds was paid to Reybroek. By ignoring his financial obligation to Reybroek, Parlanis was able to obtain and pocket an amount that was approximately that which he had said he needed to settle all his claims. Presumably neither the defendants in the tort actions nor their counsel considered it their duty to alert Reybroek to these proposed arrangements before they were completed.
[61] Parlanis turned over the full amounts received by him for settlement of his tort claims to his mother just as had been done with the amounts received for settlement of his accident benefits claims. In my view, this peculiar conduct permits an inference to be drawn that this arrangement was designed to make it difficult for anyone such as Reybroek to obtain payment from Parlanis for debts owing.
[62] Over the 9 years between the settlement of his tort actions and the commencement of this trial, Parlanis did not spend any appreciable portion of the hundreds of thousands of dollars received by him from the settlement on rehabilitation therapy or housekeeping services or assistance devices.
[63] Parlanis has continued to reside with his mother and his sister. He reportedly has not returned to work but continues to see friends and family, drive his car and go on occasional holidays to sun destinations outside Canada.
[64] On March 6, 2013 Reybroek provided notice to Parlanis – too late - that he would be seeking a charging order by motion that would attach any settlement or judgment obtained by him in the tort actions to satisfy his account for legal services.
[65] On March 22, 2013 Reybroek issued a Statement of Claim against Parlanis seeking payment of his legal fees.
[66] On February 3, 2014 Parlanis obtained an order granting leave to file the Statement of Claim in this action and extending the deadline for service of it. It is evident on its face that the Statement of Claim filed by his current counsel is essentially identical to the Notice of Action that Parlanis purportedly prepared on his own in 2013 and contains the same language and claims.
[67] On May 16, 2014, default judgment was signed in favour of Reybroek against Parlanis for $75,000.00 for fees, plus $9,750.00 in HST, $22,320.00 for disbursements and $5,000.00 for costs of the action.
[68] The default judgment and subsequent costs orders remain unsatisfied. Reybroek has sought recovery of them in Parlanis’ bankruptcy proceedings and also claims payment of them in full by way of setoff in this action should Parlanis recover any damages as a result. In addition to the amounts in the default judgment, these additional amounts owing are as follows:
(a) Substantial indemnity costs in the amount of $4,500.00 pursuant to the Endorsement of Justice Goldstein dated July 6, 2016;
(b) Substantial indemnity costs in the amount of $2,500.00 pursuant to the Endorsement of Justice Dow dated September 6, 2016;
(c) Costs in the amount of $1,500.00 pursuant to the Endorsement of Justice Dow dated May 11, 2017;
(d) Costs in the amount of $500.00 pursuant to the Order of Master Abrams dated November 19, 2018; and
(e) Substantial indemnity costs in the amount of $1,500.00 pursuant to the Order of Master Glustein dated August 6, 2019.
[69] On August 16, 2016 Parlanis made an assignment into bankruptcy. As referred to above, he remains an undischarged bankrupt. The Trustee is pursuing this action with an arrangement with him to which the court has not been made privy but which apparently provides that counsel who commenced the action on behalf of Parlanis may continue as counsel for the Trustee.
Issue A. Was Reybroek negligent in the provision of professional advice to and representation of Parlanis?
[70] Parlanis bears the onus of establishing on the balance of probabilities that Reybroek fell below the standard of care expected of a reasonably competent lawyer and that he suffered damages as a result.
[71] It has long been determined that phrases like “egregious error” and “clearest of cases” have no necessary application to describing the circumstances in which a negligence allegation will succeed against a lawyer acting for a client in advising with respect to and advancing a client’s claim. Rather, the reasonably competent lawyer standard applies (see: Folland et al v. Reardon, 2005 1403 (ONCA)).
[72] The Court of Appeal for Ontario in its decision in Folland, supra, at paras 44 and 61 provides further guidance, as follows:
[44] In accepting the reasonably competent lawyer standard, I do not detract from the often repeated caution against characterizing errors in judgment as negligence. Lawyers make many decisions in the course of a lawsuit. Those decisions require the exercise of judgment. Inevitably, some of those decisions, when viewed with the benefit of hindsight, will be seen as unwise. The reasonable lawyer standard does not call for an assessment of the sagacity of the decision made by the lawyer. The standard demands that the lawyer bring to the exercise of his or her judgment the effort, knowledge and insight of the reasonably competent lawyer. If the lawyer has met that standard, his or her duty to the client is discharged, even if the decision proves to be disastrous.
[61] "But for" factual causation has been employed in solicitor's negligence cases, particularly those where the plaintiff contends that he received negligent advice and would have acted differently had he received appropriate advice. In those cases, the plaintiff must show on the balance of probabilities that if properly advised, he would have proceeded in a manner that avoided the damages suffered or obtained the benefit lost as a result of the negligent advice: Polischuk v. Hagarty (1984), 1984 2076 (ON CA), 49 O.R. (2d) 71, 14 D.L.R. (4th) 446 (C.A.), revd (1983), 1983 3067 (ON SC), 42 O.R. (2d) 417, 149 D.L.R. (3d) 65 (H.C.J.); Haag v. Marshall, 1989 236 (BC CA), [1989] B.C.J. No. 1576, 39 B.C.L.R. (2d) 205 (C.A.); Major v. Buchanan, supra, at p. 514 O.R.; Sykes v. Midland Bank Executor and Trustee Co., [1971] 1 Q.B. 113, [1970] 2 All E.R. 471 (C.A.); Grant, Rothstein, Lawyers Professional Liability, 2nd ed. (Toronto: Butterworths, 1998), at pp. 174-75….
[73] The determination of the issue of negligence therefore requires both an assessment of what standard of care would be expected of a reasonably competent lawyer in these circumstances and determination of whether the client has proven on a balance of probabilities that he would have acted differently but for the alleged negligence.
[74] Both Parlanis and Reybroek tendered expert evidence from lawyers to provide opinions as to the threshold question as to whether Reybroek had fallen below the standard of care to be expected of a reasonably competent lawyer in these circumstances. This expert evidence was generally directed to the central allegation made by Parlanis that his accident benefits claim should not have been settled for the amount he received and acceptance of it should not have been recommended to him by Reybroek. This allegation has been expanded relatively late in the proceedings to include an assertion that Reybroek did not consider the possibility of catastrophic impairment when he ought to have done and sent Parlanis for that specific assessment prior to 2011 and before his accident.
[75] In the context of this case, Reybroek submits that the standard of a reasonably competent lawyer requires consideration of whether he assessed all benefits to which Parlanis may have been entitled at the time of the settlement (income replacement, attendant care, housekeeping and home maintenance, medical and rehabilitation) and obtained the relevant records and expert opinions to enable him to assess to a reasonable degree Parlanis’ entitlement to same. Reybroek maintains that he did just that to an acceptable and standard degree.
[76] Counsel for Parlanis agrees basically with the framing of those considerations, but takes the position that the possibility of a catastrophic impairment ought to have been recognized by Reybroek and an assessment conducted prior to any settlement. Failure to do so made the resolutions of Parlanis’ claims negligent.
[77] To obtain support for this position, counsel for Parlanis retained Omega Medical Assessors (“Omega”) to provide a preliminary opinion as to whether Parlanis would have met the catastrophic impairment threshold as of February 2011. Dr. Harold Becker (“Dr. Harold”) of Omega prepared a report dated January 5, 2017 in which he stated that: “at the outset, it is not clear that any defensible conclusion will be forthcoming as it would depend on the comprehensiveness of those earlier records.”
[78] On March 2, 2018 counsel for Parlanis’ requested Omega to conduct a multidisciplinary assessment of Parlanis and asked that the Omega team address a series of questions relating to diagnosis, prognosis, causation, the threshold question, employment and employability, housekeeping and home maintenance activities, treatment recommendations, and diagnostic investigations.
[79] The assessment was not carried out until close to two years later by a team composed of Dr. Christian Fortin (physiatrist), Dr. Dory Becker (psychologist), and Dr. Talia Dick (occupational therapist).
[80] After submitting a first draft report, Omega was requested to provide supplementary opinions to address the question of catastrophic impairment status.
[81] On February 20, 2020 Omega provided comprehensive Medical-Legal Evaluations and Multidisciplinary Catastrophic Impairment reports.
[82] In those reports, all of the Omega assessors limited their opinions and findings to the dates of their respective assessments. In particular, no assessor would provide any opinion that their assessment would have been the same if done at or near the timing of the settlement of Parlanis’ accident benefits claims in 2011. The Omega assessors took this same position while giving their evidence at trial and declined to offer an opinion with respect to circumstances prevailing nearly 10 years before they saw Parlanis.
[83] Counsel for Parlanis tendered the evidence of Gary Will, a lawyer with considerable experience primarily acting for plaintiffs in personal injury and insurance claims. Will was critical of several aspects of Reybroek’s management and settlement of the accident benefits claims. The most significant criticisms postulated by Will, as contained in his reports tendered into evidence and his testimony, are summarized by counsel for Parlanis as follows:
a. It is the lawyer’s responsibility to initiate any determination of catastrophic impairment, a determination which is not subject to any limitation period for purposes of accident benefits. In reviewing Reybroek’s file and his evidence on examination for discovery, there appeared to be no analysis of whether Parlanis was catastrophically impaired;
b. There were close to 40-50 injuries and medical complications listed in Reybroek’s mediation memorandum on the date of the accident benefits settlement. These would indicate that the matter would be a good claim for a catastrophic assessment. There were injuries to multiple parts of the body as well as substantial evidence of psychological trauma, all of which would contribute to a cumulative whole person impairment score and probably a catastrophic determination. A prudent lawyer given the circumstances would have to assess the catastrophic determination based on all of this medical information and ask the question of whether Arsenios may be catastrophically impaired. He further testified that this was especially incumbent on the lawyer given that Arsenios’ condition was chronic, permanent and had not improved. Had Reybroek met the standard of care he would have considered investigating the catastrophic impairment issue at this point in time;
c. Will stated that there was no evidence that Reybroek communicated to Parlanis what benefits he would be giving up as well as what benefits he would have to pay out of pocket going forward by settling his accident benefits file. He did not have a discussion with Parlanis about how his injuries may be determined as catastrophic either now or in the future and he would be giving up his chance to pursue catastrophic benefit limits by executing the final settlement;
d. Will viewed the settlement document itself as misleading as it referenced a trial which would not occur in a hearing of a dispute over accident benefits by an administrative tribunal. He also considered it misleading to say that if you don’t take the net amount of $125,000.00 you may receive nothing as there was no indication that the insurer would terminate Arsenios’ income replacement benefits in the future;
e. Will stated that Parlanis ought to have explained the Settlement Disclosure Notice to Parlanis to make sure that he understood it, but his signature does not appear on the document;
f. Will expressed the opinion that Parlanis did not have the opportunity to consider everything that needed to be considered and that the settlement was inadequate. Will considered that there was too much being given up in exchange for the settlement and that when that was not explained to Parlanis. Reybroek thus fell below the expected standard of care;
g. Will went on to say that the medical evidence in 2011 was largely identical to the findings of the Omega medical professionals;
h. Will offered an interpretation of Chiu’s internal note as being reflective only of her concern about a finding of catastrophic impairment. He went on the express the opinion that even if Reybroek had considered the possibility of a potential catastrophic impairment finding he would have still failed Arsenios as he did not achieve a satisfactory settlement.
[84] Will’s critical opinion rests in large part on his acceptance of the credibility of what Parlanis said and how he presented himself to the Omega assessors and upon the complete accuracy of their determination of a catastrophic injury at a point in time some 9 years after his accident benefits claim was settled, as well as his belief that had such an assessment been performed in 2010 or 2011 it would have produced the same results and would not have been refuted by Aviva who had in hand at the time medical opinion that supported in its view the termination of all accident benefits then being received by Parlanis. Inferentially, this opinion is also predicated upon an assumption that no assessment organized by Aviva would produce contradictory results and that any tribunal or court tasked with deciding the issue in dispute would fully support Parlanis’ claims.
[85] Counsel for Parlanis suggests that the result of a catastrophic assessment like that carried out by Omega, if carried out in 2011, would at least have been used to obtain a higher recovery by way of settlement for Parlanis in the negotiations with Aviva.
[86] Evidence was called on behalf of Reybroek from Cary Schneider, a personal injury lawyer whose practice includes the handling of motor vehicle tort and accident benefits claims, provided the court with his opinion as to the standard of care issues. Although Schneider’s current experience is primarily from a defence perspective, he has handled many plaintiffs’ claims and displayed in his evidence good overall general practical experience and knowledge of how such claims are assessed and managed and, most importantly, what factors go into assigning a value upon a claim for settlement purposes.
[87] After Reybroek’s lawyers received the Omega Report, Schneider was asked to provide an updated opinion. Schneider’s findings and conclusions are set out in his report dated January 5, 2021.
[88] Schneider provided his opinion evidence in essential conformity with those expressed in reports prepared by him in November of 2017 and January of 2021. Schneider’s opinions with respect to the standard of care issue as set out in his report dated November 28, 2017 are as follows:
a. Parlanis received a satisfactory to good settlement of his accident benefits case;
b. Reybroek did not fall below the standard of care with respect to his settlement of this case;
c. There was no substantial medical evidence to support that Parlanis should have been investigated with respect to whether he had suffered a catastrophic injury. None of Parlanis’ doctors suggested that this should be considered;
d. A finding of catastrophic injury is simply a classification that results in the potential entitlement to an increased level of benefits. However, an insured person is still obligated to prove an entitlement to the benefit and will not receive it unless what it is to cover has been carried out;
e. The settlement in the amount of $200,000.00 all-inclusive was satisfactory to good in the circumstances.
[89] Schneider’s supplementary opinions with respect to the standard of care issue as set out in his report of January 5, 2021 are as follows:
a. The Omega assessment reports confirm his earlier-stated opinion that the settlement of Parlanis’ claim was good to satisfactory and Reybroek met the acceptable standard of care;
b. Reybroek conducted the appropriate due diligence to obtain comprehensive medial assessments to evaluate Parlanis’ case before entering into any settlement negotiations;
c. As set out in the preliminary catastrophic paper review conducted by Dr. Harold Becker, he was unable to provide any supportive opinion on the question of catastrophic determination as of 2011;
d. None of the Omega Assessors were able to provide an opinion as to whether Parlanis met the test for catastrophic impairment in 2011;
e. The opinion of the Omega assessors is that Parlanis only met the definition of catastrophic impairment on the basis of criterion 7 by a very slight margin. Legitimate issues could be raised as to whether the ratings provided by Dr. Fortin, the physiatrist, are accurate and whether the psychological rating assigned to Parlanis is accurate and credibility issues properly identified. Questions are also raised by the report as to whether the range of ratings would attract contrary opinion or cross-examination that would push the overall impairment rating below the CAT threshold.
[90] In this case, the applicable standard of care involves the assessment of the conduct of a lawyer providing advice and representation to a client during the course of negotiation of a settlement of his accident benefits claims against his insurer within a no-fault legislative scheme, where amounts paid by an insurer will likely reduce the amounts potentially available to the client in pursuing compensation from tortfeasors in civil actions commenced by him arising out of the same accidents. This undertaking of providing advice and representation necessarily involves a considerable exercise of professional judgment.
[91] In Lauesen v. Silverman, 2016 ONCA 327 at paragraphs 15 to 17, the Court of Appeal states:
When a person settles an action, it is most often for an amount that is less than the full amount of the claim. It is based on a compromise reached by both sides in order to finalize the litigation without incurring the additional cost, time and risk of an uncertain result in proceeding to trial. Many factors go into the decision to settle an action rather than have a trial. They include the perceived strength of the case, the availability of necessary evidence, the credibility and reliability of that evidence, and the delay until a trial date, to name but some of the factors. The fact that a person accepts a settlement that is less than the full amount of the claim does not mean the person has suffered an actionable loss. The person has made a calculated assessment of all of the relevant factors and decided to accept an amount that reflects that assessment and is acceptable on that basis. It would be anomalous indeed if every settlement of an action for less than the amount of the claim were viewed as an injury, loss or damage based on breach of contract, negligence or breach of fiduciary duty by the lawyer acting for the settling party.
[92] An omission to convey information by a lawyer to a client may give rise to a cause of action for negligence. However, the omission, must be shown to be material in the sense that it would have been likely to have influenced the client’s conduct or operated on the client’s judgment (see: Pilotte v. Gilbert, 2016 ONSC 494).
[93] Although Parlanis maintained at trial that Reybroek forced him to settle his accident benefits claim and told him nothing about what the considerations were that applied to such a decision, I do not accept his evidence on that subject. Parlanis had plenty of time to change his mind, to ask questions and to seek other advice if he was unhappy with the degree of information provided to him by Reybroek, and did not. The circumstances of the settlement, the abundance and contents of the settlement documentation executed by Parlanis, the expiry of the “cooling-off” period and his continued retainer of Reybroek cause me to conclude that Parlanis had been reasonably informed of the pros and cons of settlement and was quite happy to proceed with it and to take the significant amount of money that was offered to him by his insurer.
[94] This conclusion is supported by the adverse inference I draw from Parlanis’ failure to call his sister to give evidence at trial on this important aspect of his claim. I can, and do, infer from that failure that her evidence on this and perhaps other central features of his evidence would not have been of assistance to him.
[95] Despite this conclusion, a central question still remains to be addressed in this proceeding which was the subject of conflicting expert opinion: would a reasonably competent lawyer have recommended the settlement of Parlanis’ accident benefits claim for the amount offered by Aviva?
[96] Before settling Parlanis’ statutory accident benefits claim, Reybroek considered the benefits that had been paid to Parlanis up to February 3, 2011. Reybroek also considered Parlanis’ entitlement to each benefit including IRBs, housekeeping and home maintenance expenses, attendant care benefits and medical and rehabilitation benefits and in particular considered the following:
a. IRBs: Going into the 2011 mediation, Parlanis had been receiving IRBs for more than 7 years subject to some cut-offs. Chiu showed him a copy of Aviva’s letter to Parlanis dated February 5, 2011 terminating his IRBs. Chiu also showed him and he reviewed the insurer’s examinations (“IEs”) that Aviva had obtained in support of the termination of Parlanis’ IRB. Reybroek told Chiu that the IE reports were not that conclusive and that he would mediate the denial and roll it into the tort. Chiu’s response was, “Sure, but is your client prepared to wait”. Parlanis was “adamant” that he did not want to lose his only source of income, which at the time was IRBs. Parlanis told Reybroek that he needed money. Mediating the denial through the Financial Services Commission of Ontario (“FSCO’) would take months and months notwithstanding the 60 day rule. A FSCO mediation had to be completed before a Statement of Claim could be issued or Statement of Claim in the Tort Action amended to include the accident benefits claim. In the meantime, Parlanis would not be receiving any money and Reybroek feared that he would return to work “for survival” or worse, that he would go to work under the table and been caught which would have caused everything to fall apart;
b. Housekeeping and Home Maintenance Expenses: As a result of his conversation with Parlanis, Reybroek did not believe that Parlanis was paying any one to provide housekeeping and home maintenance assistance. Parlanis’ mother did a lot of the housekeeping both pre and post-accident. Neither she nor Parlanis wanted strangers in their home. Reybroek and Chiu discussed the housekeeping benefit in broad strokes. Every head of benefits was a way to advance the numbers and to help accumulate money. But at the end of the day it came down to Parlanis not wanting to be without money;
c. Attendant Care Benefits – There were reports that said he either did not require or was independent with personal care activities;
d. Medical and Rehabilitation Benefits: Although Parlanis had been receiving pain injections, covered by OHIP, he had stopped attending treatment and had told Reybroek many times that he did not want to attend for treatment. Chui’s initial argument was the amount for med/rehab should be zero because he was not attending treatment. Although Reybroek had obtained a Future Care Cost report dated April 24, 2007, Chiu’s position was that “that’s a nice document” but did not accord with the reality, which was that he wasn’t incurring treatment and there had not been a lot of treatment plan denials.
[97] Before negotiating settlement of Parlanis’ statutory accident benefits claim, I accept Reybroek’s evidence that he had given some consideration to having Parlanis assessed with respect to a CAT determination but had judged that as being inadvisable on balance. The following considerations caused Reybroek not to proceed to suggest that Parlanis be assessed for a CAT designation:
a. Aviva had terminated Parlanis’ IRBs a couple of times but they had been reinstated;
b. Although Parlanis was receiving pain injections covered through OHIP, he was not attending for treatment/therapy and told Reybroek many times that he did not want to attend for treatment;
c. Reybroek considered how much Parlanis had used of the available med/rehab amount and that he had used less than half of the non-CAT limits ($32,276.36 for August 17, 2003 accident and $13,462.51 for April 23, 2004 accident);
d. Parlanis was “less than a stellar historian” and “had trouble telling the same story twice” and that “there was no guarantee he wouldn’t say things that contradicted what was already known”;
e. Reybroek did not want to “run Parlanis up the flagpole for CAT” and risk having his doctors determine that he was not CAT;
f. Reybroek “thought the risk to return ratio was off”.
[98] Reybroek also considered that if Parlanis was declared CAT, this did not automatically mean that “a fat cheque would get written to him”. Aviva could have, as it often did, medically managed Parlanis. This would mean that Aviva would agree to pay only whatever treatment he actually received. Given Parlanis’ history of poor motivation to obtain dedicated treatment other than pain relief or to engage in strenuous rehabilitation efforts, this would not necessarily have been to his advantage.
[99] Reybroek was also worried that an open CAT claim would change the mindset of the tort defendants, who, he feared, “would mentally keep trying to take credit for $1 million dollars that may never exist, and in Arsenio’s case would never have existed because his [medical and rehabilitation benefits] burn rate was nil”.
[100] Reybroek’s evidence, as confirmed by both his handwritten note and the handwritten note of Chiu, is that he told Chui that he had medical reports to support ongoing eligibility to IRBs and that he was “was looking for lifetime IRB + $50,000 med/rehab on both accidents ie. $320,000 + $50,000 = $370,000.00 with the understanding that [Aviva’s] IE’s are not that conclusive and that client has been off work for 7-8 yrs & there’s a risk of CAT finding”.
[101] These notes further confirm Reybroek’s evidence that settlement was negotiated on the basis that if Parlanis applied for CPP Disability Benefits (“CPPD”) he would have qualified for such benefits. In arriving at an amount for settlement, both Reybroek and Chiu assumed CPPD entitlement at $500.00 per month or $6,000.00 per year. Based on this, they quantified the present value of Parlanis’ lifetime IRB at either $225,000.00 (as per Chiu’s note) or $228,000.00 (as per Reybroek’s note). Reybroek agreed with a contingency discount of 20% and the settlement amount for IRBs was $180,000.00. For the final settlement figure, $200,000.00 was agreed upon, with $20,000.00 allocated for future medical and rehabilitation expenses.
[102] The payment summary provided by Aviva confirms that the settlement amount of $20,000.00 for medical and rehabilitation benefits was divided equally between the two accidents.
[103] Reybroek stated that if he could have settled Parlanis’ tort claims at the mediation that he had just attended he might have advised Parlanis to leave the accident benefits claim open.
[104] Reybroek described the mediation as a balancing act between the tort actions and the accident benefits claims with “many moving parts or spinning plates”. Reybroek knew that Aviva had denied continued income replacement benefits and had the results of a recent independent examination to support that move. Whether he agreed that the independent examination results were valid or not was not the main issue. Any termination of benefits would have required Parlanis to engage in the statutory dispute resolution process. Reybroek knew that if he could not settle Parlanis’ tort claims, Parlanis would be without money throughout the duration of the dispute resolution process for the accident benefits. This would have included mediating at FSCO and thereafter either issuing a separate Statement of Claim in Superior Court or amending the tort claim to include the accident benefits claim to avoid splitting jurisdiction. Taking into account all of the conflicting medical evidence, the conflicting histories that Parlanis had given, the settlement offer that had been made, and the fact that Parlanis did not want to be and could not be without money for the 2 or so years it would take to get to a trial, Reybroek recommended the settlement.
[105] With the number of “moving parts” involved in this judgment process, I consider that Schneider’s opinions on both the standard of care and reasonability of the settlement are more solid, realistic and practical. I prefer his expert opinion to that of Will who, in my estimation, does not fully weigh the difficulties Parlanis may have in convincing a trier of fact of his entitlement or the downside risks involved in refusing Aviva’s offer.
[106] Although both experts tendered on the standard of care issue are well-qualified to provide opinions, I am of the view that Schneider’s opinion reflects a more considered appreciation of the factors at play in negotiating a settlement on as favourable terms as may be available to achieve the client’s desired outcome. Ironically, although he was cross-examined on his defence experience as though that were a defect, I consider that Schneider displayed a deeper understanding of the resources and defence tactics that any insurer might deploy to undermine Parlanis’ claims of serious or catastrophic injury. In my view, this makes his opinion more reasonable than the somewhat overly optimistic and, perhaps, ultimately too-risky approach advocated by Will.
[107] As a result, I am of the view that Reybroek’s handling both of the investigation leading up to and the negotiations that led to the settlement of Parlanis’ claims for accident benefits met an acceptable standard of care in all of the circumstances. I also am of the opinion that the settlement of Parlanis’ accident benefits claims was for a reasonable amount in all of the various circumstances, and that Reybroek’s recommendation to him that he accept the settlement was sound and likewise reasonable.
B. If the answer to Issue A is “yes”, did such negligence cause Parlanis to sustain any damages, as alleged?
[108] Since the answer I have given to Issue A is “no”, there is no need to address the causation question. However, if I am wrong in my answer to Issue A, I would nevertheless find that Parlanis has failed to draw a causal link between the negligence and the damages he says he has sustained.
[109] It is perhaps illustrative to review the allegations in the pleadings filed on Parlanis’ behalf and their metamorphosis over the years between commencement of the action and trial.
[110] The Statement of Claim delivered on behalf of Parlanis in this action does not include any specific allegation of negligence against Reybroek for failing to ensure that a CAT assessment was done before advising Parlanis to settle his accident benefits claims.
[111] On October 21, 2021 Parlanis amended his Statement of Claim. In his Amended Statement of Claim, Parlanis pleads that Reybroek recommended that he accept full and final settlement of his statutory accident benefits claims against Aviva for a lump sum in the amount of $200,000.00 all-inclusive, that he accepted Reybroek’s recommendation and thereby settled his accident benefits claims on a full and final basis for that amount which he alleges was significantly lower than its actual value.
[112] Again, Parlanis made no specific allegation in the Amended Statement of Claim that Reybroek was negligent in failing to properly consider or investigate whether Parlanis had sustained catastrophic injuries prior to recommending the accident benefits settlement. No allegation in the Amended Statement of Claim is made that Reybroek was negligent in recommending settlement of the statutory accident benefits claims at that time on the basis that he should instead have recommended that Parlanis undergo assessment for a CAT determination.
[113] This gradual development of the theory of Parlanis’ claims in terms of specific allegations of negligence merely accords with the observation that evidently neither he nor his counsel quickly seized upon any alleged failure of Reybroek to require a CAT assessment to be carried out prior to settling the accident benefits claims as an obvious or major component of the claim.
[114] Certain aspects of the evidence that I have accepted as fact – the tort mediation failed, Parlanis needed money, he was not likely to comply with any requirement for dedicated or lengthy rehabilitation, and Aviva was about to terminate his income replacement benefits in 2011 – cause me to conclude that he has not demonstrated on any balance of probabilities that, had he been advised by Reybroek to undergo a CAT assessment, he would have chosen not to accept the amount offered by Aviva and instead would have taken his chances in pursing his accident benefits claims through the process set up for doing so, and that he would have been successful in achieving a much better recovery with no corresponding reduction in what he would have received from the tort defendants either by way of settlement or at trial.
[115] As a result, I find that Parlanis has not proven that the alleged negligence of Reybroek actually caused him to sustain any damages.
C. If the answer to Issue B is also “yes”, what is the quantification of such damages?
[116] There was no specific evidence from Aviva as to what it might have actually paid Parlanis or offered to settle his accident claims in the scenario Parlanis asserts ought to have occurred. Such an amount would have been determined on different evidence, at a different time, and in different circumstances. Hence, the quantification of damages, were I to have made findings of liability and causation against Reybroek, is a highly speculative exercise.
[117] However, just because the exercise may be speculative I am not relieved from having to decide the value of damages that Parlanis would have recovered had he been successful in proving negligence, and proving that such negligence caused him to suffer monetary damages.
[118] In this case, had I been of the view that Reybroek ought to have arranged for a CAT assessment in or before 2011 and that such assessment would have reflected essentially the same results and opinions as the OMEGA assessors’ reports prepared many years later, I find that this probably would have been used to persuade Aviva that a higher amount for settlement was only fair. I also consider that Aviva would have arranged for its own assessment to be done and that the results of such assessment likely would not have supported a CAT finding, particularly since at the time of the 2011 negotiations Aviva had decided on medical opinion to terminate Parlanis’ income replacement benefits. This would have resulted in the prospect of pursuing the lengthy process under the no-fault system available for disputing such termination. One must also consider what negative impact receipt of a higher settlement would have on the final figure negotiated for settlement of the tort actions.
[119] In all of the circumstances, given the uncertainties and contingencies and risks that Parlanis would be facing, I would calculate this potential financial loss resulting from the reduction of the settlement value of his accident benefit claims as being no more than $50,000.00.
D. Is Reybroek entitled to set off the amount of the default judgment he obtained against any damages he may be ordered to pay?
[120] As Parlanis has not made any recovery against Reybroek in this action, it is unnecessary to address the argument raised by Reybroek that he is entitled to setoff the amount of the unfulfilled default judgment he obtained against Parlanis for legal fees and disbursement as well as costs pursuant to s. 111(3) of the Courts of Justice Act, R.S.O. 1990, c.C.43. However, if I am found to be wrong in arriving at the conclusions outlined above, I will deal with the setoff position advanced by Reybroek.
[121] It appears that Parlanis made an assignment into bankruptcy after the judgment was obtained and before Reybroek took steps to execute upon it. Reybroek then filed a Proof of Claim in the bankruptcy proceedings to obtain such proportionate recovery from the Trustee as may be available to him.
[122] In my opinion, the preponderance of the applicable law on this issue would prohibit Reybroek from asserting a setoff on the separate matter of his judgment for legal fees owing by Parlanis against Parlanis’ claim for damages as asserted in this action (see: Pierce v. Canada Trustco Mortgage Co., 2005 15706 (ON CA), 2005 CarswellOnt 1876). Although the nature of his claim to setoff may have qualified for an equitable setoff if Parlanis had been successful in his action, had recovered damages, and had not gone bankrupt, the fact of his insolvency and the existence of other creditors, in my view, present an impediment to recovery by Reybroek of the full amount of his claim in this proceeding by way of setoff. In my opinion, to grant the recovery of his fees or the full value of his judgment by way of setoff would be to countenance an unfair and impermissible preference for satisfaction of debts owing to him over those owing by Parlanis to his several other creditors (see: King Insurance Finance (Wines) Inc. v. 1557359 Ontario Inc., 2012 ONSC 4236; Canada Trustco Mortgage Co. v. Sugarman, 1999 9288 (ON CA), 1999 CarswellOnt 3270).
[123] Therefore, had it been necessary to decide the issue I would not have awarded any setoff as requested.
Conclusion
[124] For these reasons, the action is dismissed.
Costs
[125] If the subject of costs cannot be resolved by the parties, which I would encourage them to try to do, written submissions may be delivered on behalf of Reybroek within 30 days of the date of this decision, and on behalf of Parlanis/the Trustee within 30 days thereafter.
Released: September 9, 2022
COURT FILE NO.: CV-13-473884
DATE: 20220909
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Arsenio Parlanis and Kevin Thatcher & Associates Ltd. Licensed Insolvency Trustee, Trustee for the Estate of Arsenio Parlanis
Plaintiffs
– and –
Todd Reybroek, Robert Romero and
Reybroek Barristers Professional Corporation
Defendants
REASONS FOR DECISION
Stewart J.
Released: September 9, 2022