COURT FILE NO.: CV-20-640474
DATE: 20220921
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Basant Mulchan (by his litigation guardian Indera Persaud), Plaintiff
-and-
Todd Evans, Heather M. Lamorie, Guildwood Leasing, Lorne Alex Farovitch and Capp Shupak Personal Injury Lawyers, Defendants
-and-
Indera Persaud, Third Party
BEFORE: Robert Centa J.
COUNSEL: Roy Tofilovski, for the plaintiff
Joseph Y. Obagi and Wayne Fryer, for the defendants and moving parties, Lorne Alex Farovitch and Capp Shupak Personal Injury Lawyers
Pino J. Cianfarani, for the defendants and responding parties, Todd Evans, Heather M. Lamorie, Guildwood Leasing
No one appearing for third party Indera Persaud
HEARD: August 30, 2022
ENDORSEMENT
Introduction
[1] In 2012, Indera Persaud retained Lorne Farovitch and Capp Shupak Personal Injury Lawyers (the “lawyer defendants”) to commence an action against Todd Evans, Heather M. Lamorie, and Guildwood Leasing (the “automobile defendants”) regarding a motor vehicle accident. The action did not advance any claims on behalf of Ms. Persaud’s adult and severely disabled son, Basant Mulchan. In 2015, Ms. Persaud settled the action on a no-liability basis in exchange for a payment of $67,500. She signed a release in favour of the automobile defendants that contained a provision indemnifying them against any future claims asserted by any person entitled to claim under the Family Law Act, R.S.O. 1990, c. F.3.
[2] In 2020, Mr. Mulchan (through Ms. Persaud, his litigation at that time) commenced this action against the automobile defendants claiming $500,000 in damages pursuant to ss. 61(1) and 61(2) of the Family Law Act. Mr. Mulchan asserts that the automobile defendants negligently injured Ms. Persaud, which caused Mr. Mulchan to lose her guidance, care, and companionship. In particular, he claims to have lost the around the clock personalized care his mother provided to him before the accident.
[3] Mr. Mulchan pleaded that he was an incapable person without a litigation guardian and that the limitation period on his claim against the automobile defendants had not passed because of s. 7 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.[^1]
[4] Mr. Mulchan, however, also sued the lawyer defendants, strictly in the alternative. He pleaded that the lawyer defendants negligently failed to add him as a plaintiff to assert his Family Law Act claims in the original proceeding and failed to advise his mother that she should do so. If his claim against the automobile defendants was now statute barred, Mr. Mulchan looked to recover his damages from the lawyer defendants.
[5] In response to Mr. Mulchan’s claim, the automobile defendants took three steps. First, they delivered a statement of defence that denied all liability to Mr. Mulchan. They did not, however, assert that his claim was statute-barred. Second, they delivered a crossclaim seeking contribution and indemnity from the lawyer defendants for any amounts they have to pay to Mr. Mulchan. Finally, they issued a third party claim against Ms. Persaud seeking contribution or full indemnification pursuant to the terms of the release she signed in 2015.
[6] On August 30, 2022, I heard two motions.
[7] First, counsel for Mr. Mulchan sought to discontinue the action against the lawyer defendants.
[8] Second, the lawyer defendants moved pursuant to rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to strike out the automobile defendants’ crossclaim as disclosing no reasonable cause of action. The automobile defendants opposed the motion to strike and requested leave pursuant to rule 23.03(1.1) to continue the crossclaim against the lawyer defendants.
[9] For the reasons that follow, I grant the motions brought by Mr. Mulchan and the lawyer defendants.
Plaintiff’s motion to discontinue
[10] Haymant Persaud has now replaced Ms. Persaud as Mr. Mulchan’s litigation guardian in this proceeding. Mr. Mulchan brought a motion for leave to serve and file a notice of discontinuance against the lawyer defendants.
[11] Counsel submits that Mr. Mulchan commenced the claim against the lawyer defendants strictly in the alternative in order to preserve his rights if the automobile defendants pleaded a limitations defence, which they did not do. The claim, therefore, is no longer viable or necessary.
[12] Counsel for the lawyer defendants consented to the motion and counsel for the automobile defendants took no position on the motion.
[13] I find that there is no longer any reason for Mr. Mulchan to maintain claim against the lawyer defendants, and I grant leave to serve and file a notice of discontinuance. I award no costs of this motion.
Lawyer defendants’ motion to strike the crossclaim
[14] The lawyer defendants move under rule 21.01(1)(b) to strike the automobile defendants’ crossclaim as disclosing no reasonable cause of action. The test to be applied is: assuming the facts pleaded are provable and true, is it plain and obvious that the claim cannot succeed? The defendant must meet the high standard of establishing that the claim as pleaded has no reasonable prospect of success: The Catalyst Capital Group Inc. v. Dundee Kilmer Developments Limited Partnership, 2020 ONCA 272, 150 O.R. (3d) 449, at para. 47; Bowman v. Ontario, 2022 ONCA 477, 83 C.C.L.T. (4th) 235, at para. 25.
[15] In this case, because the motion to strike is brought against a crossclaim, I must take those facts as provable and true. As the crossclaim is derived from the allegations in the statement of claim, I am also entitled to examine the statement of claim to determine whether it can properly give rise to a claim by the automobile defendants for contribution and indemnity from the lawyer defendants.
[16] The automobile defendants emphasize that the pleading must be read generously and that unique or novel cases that involve matters of law that are unsettled, or that require a detailed analysis of the evidence should not be dismissed on a rule 21.01(1)(b) motion: Transamerica Life Canada Inc. v. ING Canada Inc. (2003), 2003 CanLII 9923 (ON CA), 68 O.R. (3d) 457 (C.A.), at paras. 38, 57-59; PDC 3 Limited Partnership v. Bregman + Hamann Architects (2001), 2001 CanLII 38745 (ON CA), 52 O.R. (3d) 533.
[17] I think it is helpful to first describe Mr. Mulchan’s statement of claim and then to describe the automobile defendants’ crossclaim against the lawyer defendants.
Mulchan claim
[18] Mr. Mulchan claims $500,000 in damages jointly and severally against the automobile defendants. He seeks those damages pursuant to ss. 61(1) and 61(2) of the Family Law Act, the relevant portions of which provide as follows:
61(1) If a person is injured…by the fault or neglect of another under circumstances where the person is entitled to recover damages…the … children of the person are entitled to recover their pecuniary loss resulting from the injury…from the person from whom the person injured…is entitled to recover…and to maintain an action for the purpose in a court of competent jurisdiction.
(2) The damages recoverable in a claim under subsection (1) may include…
(e) an amount to compensate for the loss of guidance, care and companionship that the claimant might reasonably have expected to receive from the person if the injury… had not occurred.
(3) In an action under subsection (1), the right to damages is subject to any apportionment of damages due to contributory fault or neglect of the person who was injured….
[19] Mr. Mulchan pleads the following facts in his claim against the automobile defendants. On March 24, 2012, Ms. Lamorie was driving a car that Mr. Evans leased from Guildwood. Ms. Lamorie negligently rear-ended the car in which Ms. Persaud was a passenger. Ms. Persaud suffered permanent and serious physical harm, which directly resulted in Mr. Mulchan suffering a loss of guidance, care, and companionship from her. Specifically, Mr. Mulchan lost the around the clock care that Ms. Persaud provided to him, including the daily exercise he received from going for walks with her. This, in turn, led to muscle atrophy and Mr. Mulchan’s permanent loss of the ability to walk, diminished health, and enjoyment of life. Through their own negligence, and the operation of ss. 192(2) and 192(3) of the Highway Traffic Act, R.S.O. 1990, c. H.8, Mr. Evans and Mr. Guildwood are jointly and severally liable with Ms. Lamorie for the damages suffered by Ms. Persaud and Mr. Mulchan. Finally, Mr. Mulchan pleaded that he was an incapable person without a litigation guardian and that the limitation period on his claim had not run out: Limitations Act s. 7.
[20] In the alternative, Mr. Mulchan claimed $500,000 in general damages from the lawyer defendants. He pleads the following facts in his alternative claim against the lawyer defendants. Ms. Persaud retained the lawyer defendants to bring a claim for accident benefits (which was settled in 2013) and a tort claim against the automobile defendants (which was settled in 2015). The lawyer defendants owed a duty of care to Mr. Mulchan “as the son of Indera Persaud (with knowledge of his unique circumstances).” They failed to meet the standard of care by not adding him as a Family Law Act plaintiff to the tort action, or even discussing that possibility, despite knowing that Ms. Persaud had suffered a severe and permanent injury and had previously provided around the clock care to Mr. Mulchan. Mulchan. As a result of the negligence of the lawyer defendants, Mr. Mulchan lost the opportunity to advance his Family Law Act claim either to a successful mediation or trial.
Automobile defendants’ amended statement of defence and crossclaim
[21] The automobile defendants delivered an amended statement of defence, which included a crossclaim against the lawyer defendants. They plead the following facts in the statement of defence. The collision was not due to their negligence. They settled Ms. Persaud’s tort action without an admission of liability and in exchange for a release that contained an indemnification and save harmless agreement from Ms. Persaud in the event of a future claim under the Family Law Act. Mr. Mulchan is not entitled to any relief under the Family Law Act and assert that any damages he suffered were caused by the negligence of Ms. Persaud. Mr. Mulchan has failed to mitigate his damages, if any, and his damages are subject to the non-pecuniary loss deductible in s. 267.5 of the Insurance Act, R.S.O. 1990, c. I.8.
[22] In the crossclaim against the lawyer defendants, the automobile defendants claim contribution and indemnity for any sums that they are required to pay to Mr. Mulchan in the main action. They plead the following facts in the crossclaim. If Mr. Mulchan suffered damages, they were caused or contributed to by the negligence of the lawyer defendants. But for the negligence of the lawyer defendants, Mr. Mulchan would not have suffered his decline in function and that the negligence of the lawyer defendants materially contributed to those losses. The lawyer defendants owed Mr. Mulchan a duty of care that they breached by failing to include him in Ms. Persaud’s tort claim, despite advising of their intention to do so in correspondence to the automobile defendants. The lawyer defendants failed to advise Ms. Persaud regarding the effect of the release she signed, including the indemnity and save harmless provisions of the release. The lawyer defendants falsely and negligently represented to the automobile defendants that Ms. Persaud received legal advice about the release and that they would not have signed the release without those representations. The automobile defendants plead and rely on the Negligence Act, R.S.O. 1990, c. N.1, and assert that they are entitled to contribution and indemnity from the lawyer defendants.
The law of contribution and indemnity
[23] In Sale v. O’Grady’s Restaurant, 2011 ONSC 2437, Strathy J. (as he then was) reviewed the principles related to the right of contribution and indemnity among joint and several tortfeasors. Justice Strathy drew on the classic text by Glanville Williams, Joint Torts and Contributory Negligence (London: Stevens & Sons Limited, 1951), to describe three categories of tortfeasors:
a. Joint tortfeasors who act in a concerted fashion toward a common end to cause the same damage (for example, master and servant, or principal and agent);
b. Several tortfeasors whose acts combine to cause the same damage; and
c. Several tortfeasors whose acts combine to cause different damage.
[24] Joint tortfeasors (category (a) cases) and several tortfeasors combining to cause the same damage (category (b) cases) are both known as concurrent tortfeasors because their torts run together, or concur, to produce the same damage: Sale, at para. 24; David Cheifetz, Apportionment of Fault in Tort (Aurora, Ont: Canada Law Book, 1981).
[25] At common law, joint tortfeasors were jointly and severally liable to a person injured by their tort and several concurrent tortfeasors were severally liable to the person injured for the full extent of the damage. Importantly, there was no right of contribution between several tortfeasors: Sale, at para. 25; Cheifetz, at p. 7.
[26] The common law was radically changed by the introduction of what is now the Negligence Act. For the purposes of this case, there were three important changes. First, all concurrent tortfeasors (category (a) and (b) cases) are now jointly and severally liable to the injured person. Second, there was now a statutory right of contribution and indemnity between concurrent tortfeasors: Martin v. Listowel Memorial Hospital (2000), 2000 CanLII 16947 (ON CA), 51 O.R. (3d) 384 (C.A.), at para. 34. Section 1 of the Negligence Act provides:
Where damages have been caused or contributed to by the fault or neglect of two or more persons, the court shall determine the degree in which each of such persons is at fault or negligent, and, where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.
[27] It is important to note that the Negligence Act did not alter the common law with respect to several tortfeasors whose acts combine to cause different damage (category (c) cases). There remains no right of contribution at common law or under the Negligence Act among several tortfeasors whose acts caused different damages. Several tortfeasors, those whose actions produce different damage in the same person, were and still are only liable for the damage they each caused: Sale, at para. 30; Cheifetz at p. 7.
[28] Third, if a plaintiff failed to mitigate damages, then the court shall apportion the damages to the degree of fault or negligence found against the parties respectively: Negligence Act, s. 3.
[29] The automobile defendants have framed their crossclaim against the lawyer defendants as one for contribution and indemnity. Unless the automobile defendants and the lawyer defendants caused the same damages to Mr. Mulchan, there is no right of contribution among them, and the claim must be struck out as disclosing no reasonable cause of action.
[30] I find that the crossclaim should be struck out without leave to amend on the basis of the decision of the Court of Appeal for Ontario in Davy Estate v. Egan, 2009 ONCA 763, 97 O.R. (3d) 401. In Davy Estate, the plaintiff was the estate trustee for her father. She sued CIBC World Markets Inc. alleging that the defendant, despite knowing of the deceased’s mental incapacity, allowed him to transfer shares into a joint account with his wife, who then transferred the shares into an account solely in her name. In their statement of defence, the defendants pleaded that they did not commit a wrong and, in any event, the plaintiff failed to mitigate the estate’s losses by moving for a court order to freeze the account.
[31] On examination for discovery, the estate trustee explained that she did not move to freeze the account because she relied on advice of her lawyer. The defendants then commenced a third party claim against the lawyer for contribution and indemnity alleging that the lawyer breached his fiduciary duties to the estate trustee by failing to advise her to move for an order to freeze the accounts and preserve the shares.
[32] The motion judge struck out the third party claim as disclosing no reasonable cause of action. The Court of Appeal dismissed the appeal and held that a third party claim will not lie against another person with respect to an obligation belonging to the plaintiff, which the defendant can raise directly against the plaintiff: Davy Estate, at para. 16; Adams v. Thompson, Berwick, Pratt & Partners (1987), 1987 CanLII 2590 (BC CA), 15 B.C.L.R. (2d) 51 (C.A.), at p. 318.
[33] Justice Sharpe contrasted the situation of several tortfeasors who contributed to the same damages (and who are each liable to the plaintiff for the full amount of the loss) with a plea of failure to mitigate that arises after the loss has been suffered and relates to events or conduct unrelated to the initial loss. Justice Sharpe concluded that the defendants had no claim in law against the lawyer for the advice to the estate trustee as to how to mitigate the loss to the estate that was caused by the defendants’ own wrong.
[34] Justice Sharpe noted that the estate trustee’s lawyers owed the defendants no common law duty of care and that the defendants’ claim against the estate trustee’s lawyer could only arise under the Negligence Act. In such circumstances, the defendants had no claim under the Negligence Act because the lawyer’s conduct did not cause the damages, the defendants did. At para. 20, Sharpe J.A. explained as follows:
Even if the plaintiff relied upon advice from a solicitor that was negligent or given in breach of the solicitor's fiduciary duty, I fail to see how the solicitor's fault with respect to mitigating the loss can trigger a claim on the part of the defendant under the Negligence Act for having jointly caused the loss. The damages have not been "caused or contributed to by the fault or neglect of two or more persons". The damages were caused solely by the defendant. The defendant's complaint is that the plaintiff failed to take post-loss steps to reduce the loss. As the fault of the proposed third party related to the reduction of the impact of the loss after it was suffered, and not to causing or failing to avoid the loss when it did occur, the proposed third party is not, in the words of s. 1 of the Negligence Act, "jointly and severally liable to the person suffering loss or damage" and not "liable to make contribution and indemnify" the defendant.
[35] Davy Estate is binding on me and, in my view, compels me to strike out the automobile defendants’ crossclaim as disclosing no reasonable cause of action.
[36] Mr. Mulchan’s claim against the automobile defendants is for loss of care, guidance, and companionship under s. 61 of the Family Law Act. His claim is a derivative claim arising from his mother’s physical injuries. The Court of Appeal for Ontario described the nature of this type of claim in To v. Toronto Board of Education (2001), 2001 CanLII 11304 (ON CA), 55 O.R. (3d) 641 (C.A.), at para. 36:
Companionship, as it was defined in Mason v. Peters in a fatal accident context, consists of the deprivation of the society, comfort and protection which might reasonably be expected had the child lived. Robins J.A. described it as "the loss of the rewards of association which flow from the family relationship". Care was referred to by Linden J. in Thornborrow v. MacKinnon as including "feeding, clothing, cleaning, transporting, helping and protecting another person". Thornborrow was cited with approval by Robins J.A. in Mason v. Peters. See also Huggins v. Ramtej. In Thornborrow, Linden J. described guidance as including such things as education, training, discipline and moral teaching. (internal citations omitted)
[37] In paragraph 21 of the statement of defence, the automobile defendants specifically plead that Mr. Mulchan failed to mitigate his damages. As in Davy Estate, I find that any fault by the lawyer defendants with respect to Mr. Mulchan mitigating his loss can not support the automobile defendants crossclaim against the lawyer defendants. The lawyer defendants did not cause damages claimed by Mr. Mulchan. Those damages, if proved, were caused solely by the automobile defendants. The automobile defendants complain that Mr. Mulchan did not take post-loss steps to reduce his damages. The alleged fault by the lawyer defendants related to the reduction of the impact of the loss after Mr. Mulchan suffered it, not to causing it. The lawyer defendants are not, in the words of the Negligence Act, “jointly and severally liable to the person suffering loss or damage” and not “liable to make contribution and indemnify” the automobile defendants.
[38] The automobile defendants rely on Veffer v. Feldman (2007), 2002 CanLII 41072 (ON CA), 59 O.R. (3d) 384 (S.C.), to resist the motion to strike. In that case, the plaintiff was involved in two separate motor vehicle accidents six months apart and commenced an action with respect to both accidents. The action against the first defendant was dismissed on consent. The first defendant then moved to dismiss the crossclaim of the second defendant on the ground that the claim for contribution and indemnity was extinguished. The court dismissed the motion because, in that case, it was alleged that each driver’s negligence contributed to the plaintiff’s alleged permanent physical, mental, and psychological impairment and the court was not able to determine from the pleading whether the injuries sustained by the plaintiff are divisible or indivisible by nature.
[39] I do not think that this case presents the same issue as Veffer. Here it is plain and obvious that the lawyer defendants did not contribute to Mr. Mulchan’s loss of his mother’s care, guidance, and companionship. If proved, those damages were caused solely by the automobile defendants. This is not a case like Veffer or Sale where the tortfeasors were concurrent tortfeasors whose torts ran together to produce the same damage such that there is a right of contribution and indemnity under the Negligence Act. On the pleadings, this is a case of several tortfeasors whose acts caused different damage (a category (c) case) for which there is no common law or statutory right of contribution and indemnity.
[40] The automobile defendants submit that the claim should not be struck because Mr. Mulchan has pleaded that the lawyer defendants owed him a duty of care and that such a claim should not be struck out on a pleadings motion: Meehan v. Good, 2017 ONCA 103, at para. 5; Bhaskar v. Poltavets, 2020 ONSC 4764, at para. 26. In my view, this issue is irrelevant. Even assuming that the automobile defendants were Mr. Mulchan’s lawyers and owed him the full panoply of fiduciary duties and duties of care that accompany that relationship, the claim should be struck out for the reasons in Davy Estate. I see no reason why the lawyer defendants, who were not Mr. Mulchan’s lawyers, could be more vulnerable to a claim for contribution and indemnity in this case, on these pleadings, than were the estate trustee’s lawyers in Davy Estate.
[41] If Mr. Mulchan has failed to mitigate his damages by not suing before now, as the automobile defendants have pleaded, then the court shall apportion the damages to the degree of fault or negligence found against the parties respectively: Negligence Act, s. 3. The automobile defendants have a direct claim against Mr. Mulchan for failing to mitigate his damages and the crossclaim against the lawyer defendants should be struck.
[42] The automobile defendants also submit that their claim for contribution and indemnity in respect of Mr. Mulchan’s losses should be allowed to proceed because they plead that the lawyer defendants failed to advise Ms. Persaud about the terms of the release she signed. I disagree. If the lawyer defendants breached any duties owed to Ms. Persaud related to the terms of the release, that fault is entirely unrelated to Mr. Mulchan’s claim for loss of care, guidance, and companionship caused by the accident that harmed Ms. Persaud.
[43] There is, therefore, no need to assess whether or not the automobile defendants can maintain a claim for negligent misrepresentation against the lawyer defendants. No claim for contribution and indemnity for Mr. Mulchan’s claim for loss of care, guidance, and companionship can arise against the lawyer defendants in respect of what advice they did or did not provide to Ms. Persaud before she signed the release containing the indemnification provision in favour of the automobile defendants. There is no connection between the damage claimed by Mr. Mulchan and the automobile defendants’ pleadings about the release.
Conclusion
[44] For these reasons, I strike out the automobile defendants’ crossclaim without leave to amend.
[45] If the parties are not able to resolve costs, the lawyer defendants may deliver a costs submission of no more than three double-spaced pages to be emailed to my judicial assistant on or before September 28, 2022. The automobile defendants may file responding submissions of no more than three double-spaced pages on or before October 5, 2022. No reply submissions are to be filed without leave.
Robert Centa J.
Date: September 21, 2022
[^1]: 7 (1) The limitation period established by section 4 does not run during any time in which the person with the claim, (a) is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition; and (b) is not represented by a litigation guardian in relation to the claim.