COURT FILE NO.: CV-21-00659877-0000

DATE: 2022-10-17

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: OZ OPTICS LTD., Plaintiff

AND:

DIANE LESLEY EVANS and SAMUEL EDGAR SCHWISBERG, Defendants

BEFORE: VERMETTE J.

COUNSEL: Michael B. Lesage, for the Plaintiff

William E. Pepall and Spencer Jones, for the Defendant Diane Lesley Evans

Michael R. Kestenberg, for the Defendant Samuel Edgar Schwisberg

HEARD: March 15, 2022

ENDORSEMENT

[1] The Defendants move for summary judgment against the Plaintiff and ask that the action be dismissed.

[2] I find that the Defendants have discharged their burden to show that there is no genuine issue requiring a trial with respect to the Plaintiff’s claims, and the Plaintiff has failed to prove that its claims have a real chance of success. Therefore, the Defendants’ motions for summary judgment are granted.

A. FACTUAL BACKGROUND

1. The parties

[3] The Plaintiff is a federal corporation carrying on an international fiber optics business with its head office in Ottawa. The Plaintiff’s founder, President and Chief Executive Officer is Ömür Sezerman. The Plaintiff’s Vice-President Human Resources is Mr. Sezerman’s wife, Zahide Sezerman.

[4] The Defendant Diane Lesley Evans is a lawyer. She was employed by the Plaintiff as General Counsel from July 4, 2018 until her termination on March 8, 2021. However, she did not perform any work for the Plaintiff after September 6, 2018 as she suffered a stroke on that day and was subsequently on a medical leave. She received long-term disability benefits from January 4, 2019 to June 30, 2020.

[5] The Defendant Samuel Edgar Schwisberg is also a lawyer. He was employed by the Plaintiff as General Counsel on a part-time basis from June 12, 2018 to July 3, 2018, and then on a full-time basis until his resignation on September 11, 2018.

[6] At the time of Ms. Evans’ and Mr. Schwisberg’s employment, the Plaintiff’s legal department consisted of four people: Ms. Evans, Mr. Schwisberg, a junior counsel, Evgeny Kozlov, and a paralegal. All of them reported directly to Mr. Sezerman.

2. The Employment Agreement

[7] Ms. Evans’ Employment Agreement with the Plaintiff is dated June 4, 2018. It reads, in part:

1. Position and Duties:

(a) The Employee will be responsible for carrying out the duties of General Counsel such responsibilities as are commensurate with such position and such other duties as OZ OPTICS or any affiliated, controlling or subsidiary companies may direct. Such duties include, but are not limited to, conducting litigation, legal research, contract review/drafting and providing executives with general legal advice. The employee will manage and be responsible for the legal affairs of the company and the legal department and its employees. Diane [i.e. Ms. Evans] will be reporting to the President of OZ Optics Ltd.

Whereas the Company [defined term for the Plaintiff, OZ Optics Ltd.] and Diane acknowledge that time is of the essence with respect to certain outstanding litigation files, and that a further change of counsel of record may damage the Company’s legal interests, both parties agree that:

• Diane will be assigned as the counsel of record on the outstanding litigation files.

• In the event that the Company terminates Diane’s employment, the Company will release Diane from the records at court.

• In the event that Diane resigns, Diane agrees to remain as the counsel of record on the outstanding litigation files even after this employment agreement ends, and to continue to represent the Company at the Company’s premises on a fee for services basis. Diane’s services will be rendered at an hourly rate of NINETY ($ 90.00) CDN per hour. Diane may request a retainer not exceeding FIVE THOUSAND CANADIAN DOLLARS ($5,000.00 CDN). This situation will remain in place until such time as the Company can find a suitable replacement. The Company is under no obligation to find a replacement where, in the Company’s sole determination, its legal interests would be prejudiced by a change of counsel at such time. [“Post-Resignation Clause”]

The Employee acknowledges that a purpose of establishing this position is to ensure continuity of counsel and to reduce the Company’s overall legal expenses. The Company acknowledges that it may be necessary on occasion to retain external legal counsel to assist the Employee in developing solutions to complex legal problems.

3. Salary & Ancillary Benefits

(l) Legal Rules and obligations

OZ Optics undertakes to keep all the rules and to comply with the Law Society of Ontario (LSO) requirements with regards to legal counsel, legal services, and the legal profession as required and as instructed by the regulations or laws and as advised by the Employee.

[8] Mr. Schwisberg’s Employment Agreement was executed on June 12, 2018, but was made as of June 1, 2018. The provisions of Ms. Evans’s Employment Agreement reproduced above are identical to the equivalent provisions in Mr. Schwisberg’s Employment Agreement.

3. Soccer Action

[9] When Ms. Evans and Mr. Schwisberg started their employment with the Plaintiff, a sister company of the Plaintiff, OZ Merchandising Inc. (“OZ Merchandising”),[^1] was a plaintiff in an action commenced in 2004 against several defendants (“Soccer Action”), including the Canadian Professional Soccer League Inc. (“CPSL”), the Canadian Soccer Association (“CSA”), The Ontario Soccer Association (“OSA”), and the Eastern Ontario District Soccer Association (“EODSA”).

[10] The Soccer Action was scheduled to proceed to a jury trial in April 2019. The trial had been previously adjourned due to health issues of counsel for OZ Merchandising.

[11] The factual context of the claims advanced by OZ Merchandising in the Soccer Action was described as follows by Justice Ryan Bell who was the trial judge who eventually heard the matter (OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2019 ONSC 5017 at para. 1):

The Ottawa Wizards were a soccer club in the Canadian Professional Soccer League (“CPSL”) from 2001 to 2003. Their home stadium was the OZ Optics Stadium in Carp, Ontario. In the fall 2003, three events occurred. First, in September, the Ottawa Wizards applied to the Ontario Soccer Association (“OSA”) to host the OZ Optics Invitational Tournament; the application was not approved, and the proposed tournament was not held. Second, in November, the Canadian Soccer Association (“CSA”) issued International Transfer Certificates (“ITCs”) for two Ottawa Wizards players, Peter Mponda and Macdonald Yobe, which resulted in Mr. Mponda and Mr. Yobe returning to Malawi. Third, in December, the Eastern Ontario District Soccer Association (“EODSA”) publicized that OZ Dome Sports Club had not applied to operate an indoor league during the 2003-2004 season and described the potential consequences of participating in “unsanctioned competition” at the OZ Dome facilities.

[12] OZ Merchandising’s claims were for negligence and intentional interference with its economic interests (or unlawful means tort).

[13] After commencing work on the Soccer Action, Ms. Evans and Mr. Schwisberg soon found themselves in regular conflict with Mr. Sezerman over the litigation strategy to be employed. Ms. Evans states the following in her affidavit on this point:

While I was employed by Oz Optics, as a lawyer and member of the Law Society of Ontario and officer of the Court of Ontario, I was subject to the rules, duties, and privileges applicable to all lawyers practicing in Ontario. As such, I was not prepared to accept and follow the dictates of Sezerman on issues of litigation strategy or professional ethics without question. I strongly believed that certain directions I was receiving from Sezerman ran contrary to my professional duties and sometimes ran contrary to black letter law.

[14] In early September 2018, the legal team submitted a memorandum to Mr. Sezerman that addressed issues related to the strategy and conduct of the Soccer Action. On September 5, 2018, a conference call was held with Mr. Sezerman with the legal team and others to discuss the Soccer Action and the memorandum, among other things (“September 5, 2018 Conference Call”). Mr. Sezerman was in China at the time. According to Ms. Evans and Mr. Schwisberg, Mr. Sezerman belittled and insulted them over the concerns they raised, and aggressively disagreed with the recommendations and advice contained in the memorandum. The exchange was heated and some of the participants raised their voices. A significant part of the discussion related to an expert report obtained by OZ Merchandising.

[15] Mr. Sezerman ultimately issued instructions that were contrary to the advice and recommendations given by Ms. Evans and Mr. Schwisberg and, in their view, contrary to the best interests of OZ Merchandising. Among other things, Mr. Sezerman instructed his legal team to bring a motion for recusal of the entire Ottawa bench.

[16] The evidence of both Ms. Evans and Mr. Schwisberg was that, after the September 5, 2018 Conference Call, they believed that the solicitor-client relationship between them and the Plaintiff, OZ Merchandising and Mr. Sezerman had broken down.

4. Ms. Evans’ stroke

[17] On September 6, 2018, the day after the September 5, 2018 Conference Call, Ms. Evans attended Ottawa Civil Hospital because she was experiencing symptoms such as a very painful headache and numbness in her left limbs. She was admitted as a patient and diagnosed with a hemorrhagic stroke.

[18] Early on September 7, 2018, Ms. Evans advised Ms. Sezerman that she had been admitted to hospital the previous night and that she would not be at work on that day.

[19] Ms. Evans was discharged on September 8, 2018. Her doctor advised her that she was not to work for an indefinite period as work demands and stress could exacerbate her condition. She was subsequently seen by a number of physicians and underwent rehabilitation therapy. After her stroke, Ms. Evans experienced a number of symptoms and issues, including memory difficulty and issues with aphasia.

[20] On September 11, 2018, Mr. Sezerman sent an e-mail to Ms. Evans instructing her not to read or reply to any OZ Optics Ltd. e-mails until she got full clearance from her doctors and/or until the Plaintiff got instructions from its employment lawyers.

[21] On September 20, 2018, Ms. Evans received a letter from the Plaintiff confirming the following, among other things:

a. Ms. Evans had been absent from work since September 7, 2018.

b. On September 10, 2018, Ms. Evans advised that she had suffered a stroke.

c. In accordance with her Employment Agreement, Ms. Evans was not entitled to any paid sick leave in the first 12 months of her employment, so her leave of absence would be unpaid.

d. The most recent medical certificate provided by Ms. Evans indicated that her return date was currently unknown and that she would be evaluated in the future based on her recovery.

5. Mr. Schwisberg’s resignation

[22] On September 11, 2018, Mr. Schwisberg sent a long e-mail to Mr. Sezerman with the subject line “Resignation”. His e-mail read, in part:

Dear Omur:

Let me begin by saying that I respect how you built a successful business from scratch as well as your creative scientific mind which has produced such useful technology.

But you are not a lawyer, so I must respond to your recent and very loud declarations, on two occasions, that because you say some lawyers have given you bad advice in the past, you will not follow the counsel of your lawyers in the conduct of litigation. This is inconsistent with your position when we first met that you know just enough law to be dangerous.

[A lengthy discussion of issues related to OZ Merchandising’s expert report follows.]

When we try to explain the case law to you, you respond “F-ck the case law”. When we try to explain to you how opposing counsel may respond, to plan ahead, you respond, “I don't give a f-ck what the other side says”. You insist on advancing very weak motions and appeals and then complaining of bias when things do not go your way. The worst idea, which you will not drop, is bringing a motion to find all Ottawa judges biased against you. I cannot bring such a motion before the court since it would unfairly bring the administration of justice into disrepute. I have a professional duty not to do that.

You attempt to bully lawyers into taking positions against their better judgment with temper tantrums and the leveraging of your position as their employer to apply maximum pressure to conform. Often they succumb, then whither [sic] away, and abandon the sinking legal ship. You make it impossible for lawyers in this litigation to advise you with the honesty and candour required of them by the Rules of Professional Conduct. At this stage we should be working collaboratively in a relatively stress free environment. I cannot imagine how impossibly stressful this would all become during an actual trial.

I think you ae [sic] a decent guy at heart, but you have out of control anger management issues that are worsened by the adversarial nature of litigation. You are too emotionally invested in the soccer litigation to be objective. Frankly, I am not sure you are mentally competent to instruct counsel in this litigation.

The bottom line is that you are a risk to my health. My blood pressure is through the roof. It was 157/89 when I last checked yesterday. It was 124/82 when I started this job two months ago. I will not risk my health any further. You can use my draft letter to Mr. Justice Hackland for the case management conference next week. I would refuse to change it if I still worked for you, which I do not, since this constitutes my resignation effective immediately. I will not take calls or read emails from you in order to keep my blood pressure as low as possible. Two people out of four in this department have gone to hospital this week for stress related illness. I do not intend to be the third.

I do not expect to be paid for my attendance at work during September. I am sorry it has come to this, but my health is my number 1 priority. No hard feelings.

[23] Mr. Sezerman responded to Mr. Schwisberg on the same day. He stated the following:

I accept your resignation mainly because you still have no idea how to value soccer players and how to come up with loss of income on follow up years wizards did not exist. I never went against the law even if I don’t like or agree with it. my [sic] respect for law is very well known. your [sic] claim ABOUT LAW is TOTALLY FALSE. […]

If you don’t want any hard feelings, you must show you are acting in good faith you must follow your contract which is very clear even though you resigned I expect you to stay on the case especially two issues we have sept 13 kerr, sept 19 hackland, sept 12 letter we will send to judge hackland. failure [sic] to do is breach of your contract. your [sic] immediate departure will also send already biased judge hackland the wrong message. You must [not] file a motion to remove yourself from the case if you do we will object.

Frankly, both you and diane caused lots of stress on me and Zahide and harming oz’ on going lawsuits especially csa et al. moving [sic] forward we can agree to disagree and wait until your replacement on board and trained. Please take my advice.

[24] Mr. Schwisberg sent the following response:

I have hardly been involved in the Kerr matter and Evgeny can easily handle that on the 13th. Diane was supporting that one. Not me. Really, I cannot add anything.

As for the 19th, OK. Send me the letter I drafted on OZ letterhead and I will sign it and I will send it to the Judge along with the revised draft claim. The other parties have to be copied. I will do that too. I will participate in the call on the 19th. I can deal with Evgeny regarding the logistics.

Maybe I can help in the background and help support the new lawyer. I will not be the trial lawyer because Omur and I fundamentally disagree on how to present the evidence. The most stressful part for me would be doing a trial or arguing motions in ways with which I fundamentally disagree. So I would be off the record but help with drafting, witness preparation, research, etc. I do not wish to hurt your case. I can help in the background if you wish until such time as this is not needed. The basis of payment would be per the agreement.

[25] Mr. Sezerman and Mr. Schwisberg continued to exchange e-mails discussing whether and how Mr. Schwisberg would continue to be involved in the litigation despite his resignation. The exchange was at times acrimonious. On September 19, 2018, Mr. Schwisberg attended the Plaintiff’s premises to participate in a telephone case conference with the court in the Soccer Action. Messrs. Sezerman and Schwisberg also had a meeting on that day, following which Mr. Schwisberg sent the following e-mail:

Further to our meeting today, I can give you 2 days weekly on site, and partly on weekends or from my own office (half day), for half time (2.5 days weekly). As this gets closer to trial, I can increase this somewhat (early 2019). The trial, of course, I will find a way to make my self [sic] completely available for the trial.

So your choice .. you can pay me half my current salary moving forward, which we may adjust in 2019, and for the trial, or we go with the $90 per hour/$5,000 retainer route.

Thanks Omur. I feel better that we can work something out. I have to tell you --- there ain’t many lawyers with my experience who would do this after our little blow out, and I could get off the record, but you believe so passionately in this, it somehow inspires me to help you against my better and lawyerly judgment. But I am not your typical lawyer, I suppose.

September so far is on the house including today ... we resume the week of September 24!

[26] On September 20, 2018, Mr. Sezerman sent an e-mail to Mr. Schwisberg refusing his offer and asking him to reconsider his position and work full-time until a replacement was found, as per his Employment Agreement. On September 25, 2018, Mr. Schwisberg sent an e-mail to Mr. Sezerman in which he expressed the view that his Employment Agreement did not include any obligation to provide services on a full-time basis after his resignation. Mr. Schwisberg also wrote the following:

I offered you sufficient part time services on your premises to prepare for the soccer case. You underestimate the speed with which I could my [sic] prepare. I have read all the documents and I only had the transcripts left to complete. I also completed and summarised your examination for discovery to help you prepare for the trial, as well as the cross examination of Mr. Avery. I was already summarising the documentary evidence and was ready to begin preparing some of the examinations in chief. But you have rejected my offer, hence our contract is at an end.

As for any moral or ethical obligations, I checked with the Law Society as previously promised, and my ethical obligation as a lawyer practicing law in Ontario is not to be a mouthpiece for the client but to filter instructions through my professional lens and discourage vexatious and frivolous steps in any litigation. I am also required to give you my opinion on litigation with honesty and candour. Your conduct does not permit me to satisfy my professional obligations. You are quick to judge the ethics and morality of others, but I suggest you reflect upon the ethics of failing to recognize and address your anger management issues which create a toxic work environment and which may be harmful to those over whom you exercise authority.

I have retained counsel to file a motion to remove me as the solicitor of record.

[27] On September 26, 2018, Mr. Sezerman responded to Mr. Schwisberg’s e-mail and asked him again to work full-time for the Plaintiff until his replacement was hired and trained. Mr. Sezerman stated that he disagreed with Mr. Schwisberg’s interpretation of his Employment Agreement. He also stated that Mr. Schwisberg would not be doing the trial.

[28] On September 27, 2018, Mr. Sezerman sent the following e-mail to Mr. Schwisberg:

Sam,

I am withdrawing my offer. i [sic] have found very disturbing documents that is 100 percent proof you have conspired against me and interests of oz and instegated [sic] mutiny. i [sic] have proof. you [sic] are in big trouble. anyone [sic] who joins your so called mutiny will be equally in trouble.

I have seen you and diane calling me bastard, beast, taming the beast, putting my feet into fire with zahide you calling me stupid, all of this before sept 5 meeting. You also intentionally not represented in front of hackland. you [sic] have commited [sic] so many disbarable offenses. you [sic] kept info away from me against lawyer code. […] You are two face LIAR. i [sic] will prove in writing and by tape recordings and video your true face. how [sic] dare you insult me, kara [i.e. the expert], zahide, oz ? You wont [sic] get away with your behaviour i will take legal action to protect oz interests.

Anyone who joins you will end up like you.

You are in BIG TROUBLE MY STUPID MAN. I CANT [sic] EVEN CALL YOU LAWYER , YOU ARE SO STUPID TO BE LAWYER.

I gave you way out and peace you chose peace by refusing it as a result you force me to investigate and i [sic] uncovered all bunch illegal, unetchical [sic] and immoral activities initiated by you and etc i [sic] keep the rest to myself for now. [Emphasis added.]

[29] Mr. Schwisberg responded as follows on September 27, 2018:

It seems I am not the one doing the blackmailing and threatening; that seems to be your game.

This is all really rather silly. You have time to find other counsel. I’m not interested in conspiring against you or doing any damage. You’re just too stressful a person to deal with for me.

There has been a total breakdown in the relationship. Because of that, I want to get off the record. It’s a [sic] simple as that.

I wish you the best of luck. I really have no hard feelings. It’s just better for the two of us if we go our separate ways.

Thanks

6. Motion to be removed as lawyers of record

[30] In late September 2018, Ms. Evans and Mr. Schwisberg retained David Contant at Nelligan O’Brien Payne LLP to bring a motion to remove them as lawyers of record (“Removal Motion”).

[31] On September 28, 2018, David Contant’s assistant contacted the Trial Coordinator at the Superior Court of Justice in Ottawa to schedule the Removal Motion. No representatives of OZ Merchandising were copied on this communication. The Trial Coordinator provided available dates on October 10, 2018. A copy of the chain of e-mails with the Trial Coordinator was forwarded to Mr. Sezerman on October 11, 2018.

[32] On October 11, 2018, Ms. Evans sent an e-mail to Mr. Sezerman and Ms. Sezerman attaching an updated medical report. She also stated the following in her e-mail:

As you can see, it is expected that I will be off work for some time. As I do not know yet when I can expect to return to work, I am concerned about the soccer case and my ability to try the case when the time comes. As a result, I beliee [sic] that it would be best if my name was removed as solicitor of record as soon as possible. Please let me know when this has been done and provide me with a copy of whatever documents you file with the Court.

[33] Ms. Evans sent follow-up e-mails to Mr. Sezerman later on October 11, 2018 and on October 12, 2018, but she did not receive a response.

[34] On October 16, 2018, employment counsel for the Plaintiff sent a letter to David Contant in relation to the Removal Motion. The following offer was contained in the letter:

To avoid the need for your motion, we are writing to make the following proposal. OZ Optics is in the process of recruiting two additional legal counsel to take over carriage of the soccer litigation. We confirm that our client will consent to remove Ms. Evans and Mr. Schwisberg from the record once they have retained legal counsel. Our client will serve and file a Notice of Change of Lawyer at that time, and no later than January 31, 2019. Until that time, your clients will remain on the record and will not disclose any of OZ Optics’ confidential information. OZ Optics will not require either Ms. Evans or Mr. Schwisberg to work on the soccer litigation in the interim. This can reasonably be done to facilitate the transfer of this matter to the successors. [Emphasis in the original.]

[35] This offer was not accepted.

[36] The Defendants’ motion record for the Removal Motion is dated October 16, 2018. It contains a Notice of Motion and affidavits of Mr. Schwisberg and Ms. Evans, both sworn October 16, 2018.

[37] In his affidavit, Mr. Schwisberg provides the following information:

a. His relationship with Mr. Sezerman began to deteriorate within approximately one month of his part-time hire on June 12, 2018.

b. There were several motions returnable before Justice Hackland on November 5, 2018, including one related to proposed amendments to the Statement of Claim.

c. Issues arose between Mr. Sezerman and Mr. Schwisberg regarding these motions and trial strategy. Mr. Schwisberg states the following in his affidavit: “Although the details of these disagreements are subject to lawyer-client privilege I am prepared to provide further details to the Court under seal if necessary.”

[38] He also states the following:

Among other things, prior to resigning, I provided Mr. Sezerman and Oz with advice regarding the proposed amendments to the Statement of Claim. I can advise the Court that once Mr. Sezerman received this advice, I began to question whether there had been an irreparable breakdown in the lawyer-client relationship.

On September 11, 2018 at 3:20 PM Mr. Sezerman wrote to me accepting my resignation. It is clear from the tone and contents of Mr. Sezerman’s email that our relationship has broken down. I have not included a copy of the email in these motion materials. A copy has been provided to counsel for Oz and is available to be filed under seal on October 26th, 2018 if required. At a high level, the email confirms that Mr. Sezerman has no confidence in my ability assess [sic] the law or advance the case.

On September 11, 2018 at 5:17 PM, Mr. Sezerman wrote me a further email. A copy has been provided to counsel for Oz and is available to be filed under seal on October 26th, 2018 if required. In the email, Mr. Sezerman questions my training as a lawyer, and my ability to effectively question witnesses at Trial.

Since leaving Oz, I have secured a part time retainer with an Ottawa corporation where I work three (3) days each week. I now engage in private practice part time the other two days.

After resigning, I offered to continue with this action part time as external counsel. On September 19th, 2018, in an effort to maintain continuity, I participated in a telephone case conference with Justice Hackland on a pro bono basis.

On September 20, 2018 Mr. Sezerman rejected my offer to work part time.

Mr. Kozlov continues to be employed fulltime as in-house counsel for Oz.

On September 27, 2018 at 12:57 p.m. and again at 18:42 p.m., Mr. Sezerman wrote to me via email. Copies have been provided to counsel for Oz and are available to be filed under seal on October 26th, 2018 if required.

Based on the contents of the emails, which question, among other things, question [sic] my competence and ethics, I believe there has been an irreparable breakdown in the lawyer-client relationship and I cannot continue to act for Oz in any capacity.

[39] In her affidavit sworn October 16, 2018, Ms. Evans states the following with respect to the stroke she suffered on September 6, 2018:

The stroke came immediately upon the heels of an unusually stressful call with Mr. Omur Sezerman, the principal of Oz. I believe that the stroke was caused or contributed to by this telephone call, which was characterized by screaming on his part.

[40] She also notes that she did not receive a response from Mr. Sezerman regarding her request to be removed from the record. She states that she does not have a date for her return to work and that without the ability to begin trial preparation in the coming months, she will not be able to effectively represent OZ Merchandising at the upcoming trial.

[41] In response to a request of OZ Merchandising, Mr. Contant indicated that his clients were prepared to consent to a sealing order with respect to the motion record for the Removal Motion, if such an order was sought by OZ Merchandising. It is pleaded in the Statement of Claim that an order to seal the Defendants’ motion record for the Removal Motion was obtained on consent in late November 2018.

[42] While OZ Merchandising initially opposed Ms. Evans and Mr. Schwisberg’s Removal Motion, it ultimately delivered a Notice of Change of Lawyers on October 22, 2018. As a result, the Removal Motion did not proceed.

[43] Mr. Sezerman gives the following evidence in his affidavit regarding the alleged impact of the Removal Motion:

The Defendants did not reply to OZ’s request to not file the motion and wait until after the November’s motion to be removed from the record. Instead, they filed the motion with a motion record that included affidavits from both of them. I was very afraid that this motion and the information presented by them will give the wrong signal to Justice Hackland and other Judges in Ottawa; and I was right again, even though OZ requested a sealing order for the motion record, it was too late since the judges already knew about the motion, and I believe that this created animosity in Justice Hackland concerning the case. In November, Justice Hackland disregarded his July decision and dismissed OZ’s motion to amend, and with vague language, he reversed the $30M amendment approved by him in July 2018, and since July 2018, to the best of my memory, OZ never won any motion before any Judge or Master in Ottawa where costs were awarded to OZ. I expect that this lawsuit, which will be decided by a Jury, will prove how badly Evans and Shwisberg [sic] acted and the damages they caused to OZ and my reputation with the legal community, including the Judges will be cleared. Attached as Exhibit “X” are copies of Justice Hackland’s decisions from July and November 2018; and Justice Ryan Bell’s decision from April 2019; all related to the amendments of OZ Merchandising statement of claim.

7. Motion for leave to amend the Statement of Claim in the Soccer Action

[44] On July 11, 2018, a case conference was held before Justice Hackland. Mr. Schwisberg, Ms. Evans and Mr. Kozlov appeared for OZ Merchandising. Justice Hackland’s Case Management Endorsement read, in part:

Following argument of the appeal of the Master’s order of September 27, 2017, a case conference was conducted with counsel and myself as the case management judge. I ask counsel to note the following observations and directions on my part, which I believe are reflective of discussions at the case conference:

• All parties agree that the priority is to see that this case proceeds to trial on the currently scheduled trial dates commencing April 15, 2019.

• In view of the 9 month period before the commencement of trial, and considering Rule 26.01, the plaintiff will be permitted to amend its current Statement of Claim to reference match-fixing, provided the amendment is objectively understandable and (assuming the facts to be alleged are true) would be capable of giving rise to damages for which the defendants CSA or OSA could in law be held responsible.

• These re-drafted pleadings are to be discussed with the court at a further case conference (to be held via teleconference) at a date in September to be arranged by counsel through our trial co-ordination office. At that time I will hopefully be able to allow the new pleadings to be issued and to identify and set times for any needed further production or discovery referable to the amendments.

• The plaintiff will be permitted to amend the damages claimed in para. 77(e) to $30 million on the understanding that this reflects the claim set forth in the plaintiff's expert’s report (the player transfer issue). […] [Emphasis added.]

[45] The passages in bold and underlined above indicate that OZ Merchandising was not given carte blanche to make any amendments.

[46] A formal motion to amend the Statement of Claim had to be brought because the amendments were opposed by CSA. The motion was heard by Justice Hackland on November 5, 2018 (“November 5, 2018 Motion”) and the following lawyers appeared for OZ Merchandising: Nicholas Karnis, who subsequently acted as OZ Merchandising’s lead counsel at trial, Evgeny Kozloff and J. McQuaid.

[47] On December 12, 2018, Justice Hackland dismissed the November 5, 2018 Motion (2018 ONSC 7468). His reasons read, in part:

[7] The trial in this matter did not proceed as scheduled due to illness of plaintiff’s counsel. As noted, a new date was set for April 15, 2019. I was then assigned to case manage this proceeding. Discussions took place with counsel to determine whether the current Statement of Claim could be amended on consent to obtain some clarification of portions of the pleading and to accommodate the plaintiff’s desire to have its pleading reflect the quantification of damages in their expert reports and to raise an issue of possible match fixing/gambling in the CPSL. It was understood that in the absence of agreement to any amendments the issue(s) would need to be addressed in a contested motion and this is that motion.

[8] As noted, the plaintiff seeks to introduce 2 amendments, which they assert are clarifications and/or monetary updates of matters already pleaded in the current Statement of Claim. Furthermore the plaintiff claims these amendments involve no new facts (except for updates of monetary claims already pleaded) and would not require further discovery.

Proposed amendment 1 (vicarious liability of CSA/OSA for the acts of the CPSL)

[9] The plaintiff seeks to amend the current Statement of Claim to allege that, arising from the role of the CSA/OSA as the governing body of soccer in Canada, there exists an agency relationship between those bodies and the CPSL so that the CSA/OSA are vicariously liable for the various legal wrongs alleged against the CPSL in the current pleading. This oversight liability is based on alleged implied contractual and tort duty of care obligations.

[11] The CSA objects to these proposed amendments on the basis that they would be irreparably prejudiced because now, for the first time in the 14 year history of this proceeding, they will need to defend against all of the long list of complaints alleged against the now defunct CPSL. They were never significantly involved in these disputes and the CPSL is no longer in operation and the events in issue occurred 14 to 17 years ago (2001-2004). I accept this submission. Common sense would dictate the CSA could not possibly in effect step into the shoes of a long defunct corporate entity and explain or justify the CPSL actions.

[13] Quite apart from the irreparable prejudice the proposed amendments would create for the CSA and OSA there are several other reasons these amendments should not be allowed.

[14] Firstly, claims against the CSA/OSA for alleged failure to carry out their governance responsibilities in the 2001-2004 time frame are long since statute barred both by the 2 year limitation and for certain of the claims, by the ultimate 15 year limitation (see sections 4 and 15 of the Limitations Act, 2002, S.O. 2002, C. 24, Sched. B. [ ).]

[15] Secondly, the alleged duty of care against the CSA and OSA is undoubtedly a novel duty of care. As such the "Anns test" as explained by the Supreme Court of Canada in Cooper v. Hobart 2001 SCC 79 is engaged. The facts supporting foreseeability and proximity are in no way reflected in the proposed pleading. Moreover, this alleged legal duty arising out of the CSA’s oversight functions opens up a potentially broad based exposure for the CSA, extending well beyond the disputes contained in the current Statement of Claim.

[16] Thirdly, the inclusion of a pleading about match fixing and gambling at this stage of the proceeding is untenable and would side track this jury trial into irrelevant and time consuming collateral issues. It is unknown whether criminal third parties attempted to fix matches for gambling purposes and if so how the CSA was to know about this or how resultant losses were experienced by the plaintiff. The police investigations into this issue began in 2009 some 5 years after the Ottawa Wizards left the CPSL. The current formulation of this issue is similar to amendments rejected by Master Fortier and by Master Beaudoin, (as he then was) in Oz Merchandising Inc. et al v. Canadian Professional Soccer League Inc. (July 20, 2006, unreported).

Proposed amendment 2 (to increase the claim for transfer fees in para 77(b) from $100,000 to $42 million[)]

[17] The current pleading (para 77(b)) claims against the CPSL as well as the CSA and OSA contain [sic] alleged financial losses arising from the departure of two players Mponda and Yobe. […]

[20] I take the issue here to be whether the plaintiff should be allowed to claim alleged lost transfer compensation fees of not merely $100,000 for 2 players (Mponda and Yobe), but now $42,000,000 for lost transfer fees for a large number of unnamed players.

[22] The plaintiff has tendered a total of 3 letters from a Mr. Kara who was employed by the plaintiff as the technical director of the Ottawa Wizards in the first year of the team’s operation (2001). These letters are tendered as Rule 53 expert reports, the admissibility of which will need to be ruled upon by the trial judge. Mr. Kara, who coaches soccer in Turkey opines that in theory some of the best players on the Ottawa Wizards in 2001 could have earned transfer fees, or some kind of compensation for the Wizards if a lower or mid-range Turkish professional team signed them. However no such fees were ever earned by the Wizards at any time. The Wizard’s [sic] franchise was revoked in 2003. The reports do not explain on what conceivable basis a transfer fee loss could accrue to the trial date, 15 years after the team ceased to exist and in regard to unnamed players and unspecified foreign soccer teams.

[23] It is also clear that claims for lost fees for players (other than Mponda and Yobe) are long since statute barred. Further, in the event such an amendment was allowed wide ranging discoveries would need to be pursued in respect to currently unnamed players with the inevitable loss of the present trial dates, something the plaintiff claims to wish to avoid.

8. Trial of the Soccer Action

[48] OZ Merchandising’s claims against EODSA, OSA and CSA (but not against CPSL) proceeded to trial before a jury from April 15, 2019 to June 11, 2019. There is no evidence that OZ Merchandising sought an adjournment of the trial. The trial decision indicates that OZ Merchandising was represented by three lawyers, including Nicholas Karnis and Evgeny Kozlov.

[49] After approximately seven weeks of evidence, and at the conclusion of OZ Merchandising’s closing address, EODSA, OSA, and CSA moved to strike the jury.

[50] On June 11, 2019, Justice Ryan Bell ordered that the jury be discharged (2019 ONSC 3882). She found that the cumulative effect of all the misstatements in OZ Merchandising’s closing rendered correction by an appropriate charge impossible. She concluded that, given the serious nature and extent of the transgressions, the fairness of the trial process and justice to the parties required that the matter not be left in the hands of the jury. She stated the following in her written reasons:

[13] Throughout the trial, the plaintiff persisted in attempting to elicit evidence that was irrelevant and contrary to my previous evidentiary rulings, for example, matters leading up to the 2001 consent order of Rutherford J. and what I describe as the “1998 Turkish player issue.” I ruled, repeatedly, that these matters were irrelevant to the questions the jury would have to determine in relation to the claims against these defendants. The frequency with which I was compelled to rule on the same issues compels only one conclusion: my rulings were deliberately ignored by the plaintiff.

[14] Numerous mid-trial instructions to the jury were required. They included:

[among others, four instructions to disregard certain statements made by Mr. Sezerman]

[17] On May 7, 2019, the plaintiff moved for reconsideration of a number of rulings, including my ruling that the claim based on the group enterprise theory of liability was not one that would go before the jury because it was not tenable at law. The plaintiff also moved for leave to amend the statement of claim. The proposed amendments included a plea of agency, a plea that the EODSA, OSA, and CSA are vicariously liable to the plaintiff, and in breach of contractual obligations and “duty of care, good faith and fair dealing” to the plaintiff. It is of note that the proposed amendments were substantially the same as those that were considered and refused by Hackland J. in December 2018 (OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2018 ONSC 7468). I concluded that the plaintiff’s repeated attempts to re-litigate issues already determined were abusive of the process of the court and dismissed the motion.

[18] Outside the presence of the jury, Mr. Sezerman repeatedly spoke over counsel for the defendants during their submissions. At least twice, he referenced his intention to appeal.

[19] EODSA and OSA submitted that the plaintiff’s conduct throughout the trial was consistent with an effort on the plaintiff’s part to provoke a mistrial. CSA described the plaintiff’s conduct throughout as a strategy to ensure that the case would never get to the jury. Given the factual context, it is difficult to avoid this conclusion. Within the framework of my prior rulings on motions, the evidentiary rulings throughout the trial, and the mid-trial instructions to the jury, it is impossible to see the vast majority of the misstatements in the plaintiff’s closing address as anything other than blatant transgressions.

[51] On August 27, 2019, Justice Ryan Bell released her decision on the merits dismissing OZ Merchandising’s action as against EODSA, OSA and CSA: 2019 ONSC 5017. With respect to the claims in negligence, she found that there was no duty of care between OZ Merchandising Inc. and any of the defendants or, if a duty of care existed, that the defendants did not breach their duty of care. With respect to the claims based on the unlawful means tort, she found that there was no evidence that any of the defendants intended to cause economic harm to OZ Merchandising Inc. or that any of the defendants committed an unlawful act against a third party. Finally, Justice Ryan Bell found that OZ Merchandising had failed to prove that it had suffered any damages as a result of the defendants’ alleged conduct. Justice Ryan Bell’s reasons indicate that following a voir dire, she ruled that Rasim Kara, OZ Merchandising’s expert, would not be permitted to offer expert opinion as his proposed evidence was not logically relevant to the matters before the court.

[52] On January 9, 2020, Justice Ryan Bell ruled on the issue of costs: 2020 ONSC 119. She ordered OZ Merchandising to pay costs to EODSA, OSA and CSA, in part on a substantial indemnity basis. She also ordered that Mr. Sezerman was jointly and severally liable with OZ Merchandising for the trial costs. Among other things, she stated the following with respect to Mr. Sezerman’s conduct:

[54] Mr. Sezerman’s conduct throughout the course of the trial can fairly be described as conduct which “undermines the fair administration of justice.” His conduct served to inflate the litigation costs for all parties. Mr. Sezerman bears direct responsibility for instructing counsel to give a closing address to the jury that was so improper it resulted in the jury being discharged. I have little doubt that the plaintiff’s closing address was crafted in large part by Mr. Sezerman given counsel’s request that Mr. Sezerman be permitted to give OZ Merchandising’s closing address to the jury himself, contrary to r. 52.07(4). And, in response to a query from the court, it was Mr. Sezerman who advised counsel as to the anticipated length of the plaintiff’s closing address.

[55] Mr. Sezerman was granted leave to sit at counsel table. He then proceeded to abuse that privilege. In the absence of the jury, Mr. Sezerman repeatedly spoke over counsel for the defendants during their submissions. He also spoke over the court. At least twice, he referenced his intention to appeal. He drafted questions for counsel during the course of the trial. During the voir dire on one expert’s qualifications, Mr. Sezerman audibly instructed counsel to “just ask the question” and stated, “we will ask them, every one of them,” in blatant disregard for my rulings that the questions were irrelevant to the issue of the expert’s qualifications.

[56] During his evidence, Mr. Sezerman made statements regarding the relationship between EODSA, OSA, and CSA. He was on notice that these comments ought not to be made. He also made statements about a “cover-up.” He provided his own opinion about what was “legally right or wrong” and what was “morally right or wrong.” Each such statement resulted in a mid-trial instruction to the jury. Mr. Sezerman made it clear on cross-examination that he would follow his own conscience and ignore directions from the court.

[57] The plaintiff now attempts to excuse Mr. Sezerman’s behaviour as an effort to “assist his counsel who had very little knowledge of the case as he came on at the eve of trial.” I reject this submission. Mr. Sezerman’s conduct at trial cannot be fairly described as merely assisting counsel. He controlled counsel to the point where the jury had to be discharged.

[59] EODSA and OSA describe Mr. Sezerman as the “puppet master” for the plaintiff’s counsel throughout the trial. I agree with this characterization. As such, Mr. Sezerman bears responsibility for the plaintiff’s litigation conduct at trial - conduct I have determined to be egregious and worthy of the court’s sanction.

9. Appeal from the trial judge’s decision in the Soccer Action

[53] On July 19, 2021, the Court of Appeal dismissed OZ Merchandising’s appeal from the dismissal of the Soccer Action (2021 ONCA 520). While the Court of Appeal granted OZ Merchandising leave to appeal from Justice Ryan Bell’s costs order, it dismissed the appeal from that order as well.

[54] One of the grounds raised by OZ Merchandising on appeal was ineffective assistance of counsel. The Court of Appeal rejected this ground and stated the following, among other things:

[45] Even if the appellant could advance the incompetence of its counsel as a reason to set aside the judgment below, there is no merit to the ineffective assistance claim advanced by the appellant. The only evidence in support of the claim comes from Mr. Sezerman’s affidavit. Although one section of Mr. Sezerman’s affidavit is headed “Ineffective Assistance of Counsel”, many of the complaints in that section are directed primarily at the trial judge. As with most of the rest of Mr. Sezerman’s affidavit, these paragraphs reiterate arguments made and lost, often more than once, at trial. Mr. Sezerman’s recollection and characterization of the events at trial do not constitute “fresh evidence” on appeal and are inadmissible.

[46] Many of the allegations of ineffective assistance made by Mr. Sezerman come in the form of bald statements with no reference to the actual trial record. Other allegations appear to criticize trial counsel for abiding by the trial judge’s rulings, rather than following Mr. Sezerman’s instructions to the contrary. Abiding by a trial judge’s rulings, even when the client is convinced they are wrong, is hardly ineffective assistance.

[47] Most importantly, although Mr. Sezerman asserts that his lawyer’s conduct “fell below the standard of reasonable professional judgment”, Mr. Sezerman offers no admissible evidence in support of that opinion. Mr. Sezerman is not a lawyer and is not qualified to opine as to whether counsel’s conduct fell below the accepted standard. Mr. Sezerman’s opinion is inadmissible.

[48] Finally, even if Mr. Sezerman were competent to offer an opinion on the reasonableness of trial counsel’s conduct, his opinion is wrong. For example, Mr. Sezerman repeatedly argues trial counsel was negligent in making certain admissions on the pre-trial motion concerning the default judgment proceedings and the scope of the trial. The admissions made by counsel were reasonable and consistent with the applicable procedural and evidentiary law. The trial judge would inevitably have ruled as she did regardless of what admissions may or may not have been made by counsel. As explained above, we are satisfied the trial judge’s rulings were correct.

[55] The Court of Appeal also held that the trial judge’s finding that Mr. Sezerman was in full control of the litigation, “even to the point of directing counsel as to what submissions should be made in closing and what questions should be put to witnesses,” was supported on the record.

[56] The Court of Appeal also rejected OZ Merchandising’s allegations of bias based on: (a) the conduct of the trial judge; (b) institutional bias against Mr. Sezerman among the local judiciary; and (c) ethnic background. In particular, it held that the allegations of institutional bias against Mr. Sezerman were baseless and that there was no objective basis for Mr. Sezerman’s concerns.

[57] The Court of Appeal stated the following with respect to the dismissal of the appeal from the costs order:

[91] The appellant has not demonstrated any error in the trial judge’s description of the conduct at the litigation, her determination that Mr. Sezerman was personally responsible for that conduct, or her ultimate conclusion that the conduct merited a significant costs sanction against Mr. Sezerman personally. We agree with the trial judge that Mr. Sezerman assumed personal control over the conduct of the litigation. His attempts to excuse or even justify his conduct based on his temperament and the inexperience of his counsel should carry no weight when deciding whether Mr. Sezerman should be personally responsible for some part of the costs. Mr. Sezerman is a mature, intelligent person and a successful businessman. He must bear personal responsibility for his personal misconduct during the trial: Costs Decision, at paras. 57-59. We also see no error in the trial judge’s quantification of the extent of Mr. Sezerman’s personal responsibility.

[58] OZ Merchandising’s application for leave to appeal from the Court of Appeal’s decision was dismissed by the Supreme Court of Canada on March 10, 2022: 2022 CanLII 16723 (S.C.C.).

10. Termination of Ms. Evans’ employment

[59] On March 8, 2021, the Plaintiff sent a termination letter to Ms. Evans which read, in part:

This letter serves as notice of the termination of your employment with cause, effective immediately. This is a result of your actions, which were in direct violation of your employment contract with OZ Optics Limited (“OZ”), signed on June 4, 2018.

[60] Before her termination on March 8, 2021, Ms. Evans had not worked at the Plaintiff since September 6, 2018. Her evidence is that, to this day, she still has symptoms of her stroke and continues to have episodes of aphasia, memory loss and an inability to concentrate.

[61] As stated above, Ms. Evans received long-term disability benefits from January 4, 2019 until June 30, 2020. Her benefits ended more than one year after the start date of the trial in the Soccer Action.

11. The action and the motion for summary judgment

[62] This action was commenced on April 6, 2021. The Plaintiff claims the following:

a. damages in the amount of $100,000 for breach of contract from each of Ms. Evans and Mr. Schwisberg;

b. damages in the amount of $100,000 for breach of fiduciary duty from each of Ms. Evans and Mr. Schwisberg;

c. damages in the amount of $10 million for conspiracy with intent to injure from the Defendants jointly and severally or, in the alternative, for negligent performance of a service;

d. in the alternative, damages in the amount of $250,000 for negligence from the Defendants jointly and severally.

[63] Ms. Evans served her Statement of Defence on April 26, 2021, and Mr. Schwisberg served his Statement of Defence on May 8, 2021.

[64] On June 29, 2021, the Defendants’ motions for summary judgment were scheduled to be heard on January 17, 2022, and a timetable was established for the steps leading to the hearing.

[65] The Defendants were cross-examined on November 17, 2021. Mr. Sezerman, the Plaintiff’s affiant, was not cross-examined.

[66] On December 20, 2021, counsel for the Plaintiff delivered a Supplementary Motion Record. Counsel for the Defendants objected. On December 22, 2021, the parties attended Civil Practice Court and a case conference was scheduled for January 5, 2022 to discuss the issue of the Plaintiff’s Supplementary Motion Record. On January 4, 2022, the Plaintiff delivered two additional affidavits. At the case conference on January 5, 2022, Justice Akbarali directed that the Plaintiff’s request for leave to file the Supplementary Motion Record and additional affidavits be heard at the outset of the hearing of the motion for summary judgment. She refused the Plaintiff’s request to adjourn the motion.

[67] On January 11, 2022, the Plaintiff served a revised supplementary affidavit. On January 13, 2022, the Plaintiff served a further supplementary affidavit of Mr. Sezerman.

[68] Unfortunately, the motion could not proceed on January 17, 2022 and was rescheduled to March 15, 2022. I heard the motion on that day and dealt with a number of preliminary issues, as set out below, including the Plaintiff’s request for leave to file its additional affidavit evidence.

12. The evidence on the motion

[69] Both Ms. Evans and Mr. Schwisberg provided affidavit evidence. They were also cross-examined.

[70] The Plaintiff’s Responding Motion Record contains one affidavit, i.e. an affidavit of Mr. Sezerman. As stated above, the Plaintiff subsequently served additional affidavits, the admissibility of which is in dispute. These affidavits are the following:

a. Affidavit of Elizabeth Ramirez sworn January 4, 2022. Ms. Ramirez works as a paralegal in the Plaintiff’s legal department. The affidavit attaches: (1) some e-mails regarding recordings of legal meetings and a proposed recusal motion in the Soccer Action; and (2) the motion record that was filed with respect to the Removal Motion. Ms. Ramirez also gives evidence about discussions between the Defendants and Mr. Sezerman in July 2018 regarding matters heard by Justice Hackland.

b. Affidavit of Rebecca King sworn December 20, 2021. Ms. King is the Plaintiff’s human resources and payroll manager. Her affidavit relates to Ms. Evans’ appeal in relation to her Workers Compensation Claim.

c. Supplemental Affidavit of Mr. Sezerman sworn January 4, 2022. This affidavit attaches a recording of a meeting with the Defendants held on July 16, 2018. According to Mr. Sezerman, the testimony of the Defendants during their cross-examinations is at odds with representations they made at the July 16, 2018 meeting.

d. Affidavit of Mr. Sezerman sworn January 12, 2022. This affidavit is longer (14 pages) than Mr. Sezerman’s initial affidavit included in the Plaintiff’s Responding Motion Record (11 pages). This affidavit largely repeats and adds to the evidence already provided by Mr. Sezerman in his first affidavit, and contains argument.

B. POSITIONS OF THE PARTIES

1. Position of Ms. Evans

[71] Ms. Evans submits that she has met her onus under Rule 20 of the Rules of Civil Procedure, and that the Plaintiff has not demonstrated that there was an issue requiring a trial or that its claim had a real chance of success. She states that the Plaintiff has failed to provide any evidence to support its claim and argues that:

a. there is no evidence disputing the fact that Ms. Evans suffered a stroke that rendered her incapable of continuing to act as a lawyer;

b. there is no evidence that Ms. Evans breached any duties owed to the Plaintiff, whether rooted in contract, fiduciary or negligence;

c. there is no evidence that, in the two-month period during which she worked on the Soccer Action, Ms. Evans’ conduct prejudiced OZ Merchandising’s ability to proceed to trial, or in any way influenced the trial decision;

d. there is no evidence of a conspiracy between the Defendants to harm the Plaintiff; and

e. there is no evidence that the Plaintiff has suffered any damages.

[72] Ms. Evans’ position is that she did not breach the Employment Agreement. She states that her stroke and its subsequent effects on her ability to practice frustrated the Employment Agreement. She relies on Rule 3.7-7(c) of the Rules of Professional Conduct which provides that mandatory withdrawal is required where a lawyer is not competent to continue to handle the matter. She submits that at the time she removed herself from the record, she was not in a condition to return to work within a reasonable amount of time, and her stroke rendered performance of the Employment Agreement impossible.

[73] Ms. Evans submits that what she may have written in e-mails to her colleagues cannot be the foundation for any cause of action. She argues that a breach of the Rules of Professional Conduct cannot be the basis for a civil cause of action, and that the Plaintiff cannot use alleged breaches of the Rules of Professional Conduct to support its claim as such allegations are properly addressed by the Law Society. She also points out that the Plaintiff has failed to provide any standard of care evidence against the Defendants and that no expert evidence has been delivered.

[74] According to Ms. Evans, if the Plaintiff intended to argue that the removal of the Defendants prejudiced its position with respect to the trial, the proper forum for such an argument would have been at the hearing of the Removal Motion. She argues that by delivering a Notice of Change of Lawyers in October 2018, the Plaintiff confirmed that the Defendants would no longer be acting for it. She points out that OZ Merchandising did not take any steps to seek an adjournment due to the change of lawyers, it proceeded to trial with three selected counsel of record and it had the opportunity to make its case at trial.

[75] Ms. Evans’ position is that the Plaintiff has failed to provide any evidence that prior to her stroke, her conduct in the Soccer Action breached any duties owed to the Plaintiff. She submits that while she and Mr. Sezerman may have disagreed on the best way to conduct the litigation, this does not give rise to a breach of any duty owed to the Plaintiff.

[76] Ms. Evans states that there is no evidence supporting a conspiracy, and that the fact that the Defendants sought to get off the record at the same time does not give rise to a conspiracy with intent to injure.

[77] Ms. Evans argues that the Plaintiff has not tendered any evidence that it has suffered any damages as a result of her actions. She points out that the Plaintiff was not a party to the Soccer Action and that OZ Merchandising is not a party to this action.

[78] Ms. Evans submits that there is no support for the Plaintiff’s allegation that by filing a motion record for the Removal Motion, the Defendants prejudiced the Plaintiff with any of the judges in Ottawa with respect to the Soccer Action. She states that Justice Ryan Bell’s decision and the subsequent Court of Appeal’s decision were based on the merits of OZ Merchandising’s case. According to Ms. Evans, there is no support for the allegation that the Defendants’ actions in any way harmed the conduct of the Soccer Action or were contributing factors in the trial or appeal decisions that went against OZ Merchandising.

2. Position of Mr. Schwisberg

[79] Mr. Schwisberg submits that the Plaintiff has no claim against him in law for breach of contract, breach of duty or for improperly removing himself from the record. Mr. Schwisberg’s position is that he was entitled to move for an order removing him as lawyer of record under Rule 15.04 of the Rules of Civil Procedure and that an employment contract does not supersede counsel’s ability to get off the record where there has been a fundamental breakdown in the relationship. Mr. Schwisberg notes that a client’s refusal to accept the lawyer’s advice on an important trial issue can be grounds for a court recognizing that a breakdown in the solicitor-client relationship has occurred. He states that the e-mails contained in the record confirm that his relationship with OZ Merchandising/Mr. Sezerman had broken down. Mr. Schwisberg points out that there was a fundamental disagreement between them as to the conduct of the litigation and that enmity had devolved into name calling and demeaning comments by the client to the lawyer.

[80] According to Mr. Schwisberg, there is no evidence of impropriety. He submits that the Defendants found themselves in a toxic work environment and spoke to each other as to what they should and were going to do, and this does not constitute breach of contract or breach of fiduciary duty.

[81] Mr. Schwisberg argues that by filing a Notice of Change of Lawyers, OZ Merchandising: (a) fulfilled the condition in the Employment Agreement that provided that Mr. Schwisberg was only to remain counsel of record until a suitable replacement was found; and (b) released Mr. Schwisberg from any contractual obligation to remain as counsel, which obligation he denies. Mr. Schwisberg also argues that because of the use of the defined term “Company” in the Post-Resignation Clause, the obligation in his Employment Agreement to remain as counsel of record after his resignation only applied to his representation of the Plaintiff, not in relation to an affiliated company like OZ Merchandising.

[82] Mr. Schwisberg submits that this action is an abuse of process. He argues that it is an abuse of process for OZ Merchandising to have appointed new counsel, thereby permitting Mr. Schwisberg’s withdrawal as counsel of record, and then argue (through the Plaintiff) that the change of lawyer subsequently prejudiced its position. He notes that OZ Mechandising would have had the opportunity at the return of the Removal Motion to argue against removal based on the alleged serious prejudice it would suffer from Mr. Schwisberg’s removal as counsel of record (which loss/prejudice it now claims in this action).

[83] Mr. Schwisberg also argues that the Plaintiff’s claim makes no logical sense, is manifestly futile, frivolous, an abuse of the Court’s process, and discloses no genuine issue requiring a trial. He points out that OZ Merchandising is not a party to this action.

[84] Mr. Schwisberg states that the Plaintiff was not a party to the Soccer Action and was not his client. As a result, according to Mr. Schwisberg, the Plaintiff is unable to prove that it has suffered any damages arising from the removal of Mr. Schwisberg as lawyer of record in the Soccer Action or with respect to advice provided in relation to the Soccer Action. Mr. Schwisberg submits that even if the Plaintiff could claim that it had suffered compensable damages caused by Mr. Schwisberg’s alleged misconduct, the Plaintiff has tendered no credible evidence of any such damage.

[85] Finally, Mr. Schwisberg points out that the Plaintiff has adduced no expert evidence that he breached any duty to the Plaintiff in its conduct of the Soccer Action or in seeking to be removed from the record in October 2018.

3. Position of the Plaintiff

[86] The Plaintiff’s position is that this is not an appropriate case for summary judgment, that significant credibility issues exist, and that rendering summary judgment would not result in a fair process or just adjudication in the circumstances.

[87] The Plaintiff submits that the Defendants owed the Plaintiff a number of duties pursuant to the Rules of Professional Conduct, as well as a fiduciary duty, including a duty of loyalty. It argues that the Defendants were negligent and breached their fiduciary and other duties as a result of the following conduct:

a. belittling/disparaging their employer (Mr. Sezerman);

b. referring to the work environment as “a dump”;

c. pushing back (and encouraging others to) against following lawful client directions;

d. withdrawing at an inopportune time (and contrary to the terms of the written Employment Agreement, when at the determination of the employer it would be prejudicial);

e. coordinating their withdrawal from employment to leave, or effectively leave, at the same time;

f. encouraging the legal department to present a united front to “tame the beast”, “put his feet to the fire”, and have him cede control of the litigation (including strategy) to the lawyers;

g. questioning the character of their employer (Mr. Sezerman) and his retained expert; and

h. Ms. Evans representing to others (the courts, Workplace Safety and Insurance Board) that Mr. Sezerman caused her to suffer a stroke.

[88] The Plaintiff’s position is that the Defendants have failed to meet their evidentiary burden to show that no genuine issue requiring a trial exists as they have not adduced expert evidence with respect to the duty of care in the circumstances.

[89] The Plaintiff submits that to the extent that the improper conduct is disputed, a number of credibility issues exist regarding the actions and testimony of Ms. Evans and, to a lesser extent, Mr. Schwisberg. According to the Plaintiff, the Defendants acted in bad faith and against the interest of their employer and engaged in a mutiny, as reflected in the legal department’s internal e-mails and the fact that they exchanged cell phone numbers.

[90] The Plaintiff argues that the Defendants failed to honour the term of their Employment Agreements with respect to continuing to represent the Plaintiff after leaving employment. In particular, the Plaintiff criticizes the Defendants for refusing to stay on the record through the hearing before Justice Hackland on November 5, 2018, despite being offered to be absolved of any responsibilities for same. It is the Plaintiff’s position that had the Defendants stayed on the record for the November 5, 2018 Motion, Justice Hackland’s decision on the motion would have been different.

[91] The Plaintiff also argues that the Defendants’ conduct during and after their employment amounted to a fundamental breach of contract. It states the following in its Factum:

In addition to publishing to the court that Mr. Sezerman had caused Defendant Evans’ stroke (to which Defendant Schwisberg went along, given he was represented by the same counsel on the motion), they had while employed by Plaintiff, questioned the integrity of its principal, the expert witness and referred to certain of Mr. Sezerman’s ideas as ‘beyond stupid,’ in addition to questioning whether he was fit to instruct counsel. This conduct, outlined more fully above, was contrary to one or more of the Rules of Professional Conduct to which Defendants were bound, along with other duties to their employer (i.e. loyalty) and which formed an implied term of the contract of employment.

[92] The Plaintiff states that the Defendants’ actions left it unable to retain counsel with suitable experience for the Soccer Action and, as a result, OZ Merchandising lost at trial. According to the Plaintiff, an adjournment of the trial would not have been permitted as there had already been one before.

[93] The Plaintiff submits that it does not have to prove damages as the court can award nominal damages for breach of contract. The Plaintiff also submits that this action is the appropriate forum for the Plaintiff to pursue its claims against the Defendants. It states that while the singular issue of withdrawal could have been addressed between these parties in the Soccer Action, the pursuit of an award of damages could not.

C. DISCUSSION

[94] Before turning to the merits of the motions for summary judgment, I provide brief reasons for three rulings that I made at the hearing of the motion.

1. Sealing order

[95] On the day of the hearing, at the request of the Plaintiff, which was unopposed, I granted an order that the audio recording filed as an exhibit to the Supplementary Affidavit of Mr. Sezerman sworn January 4, 2022 be sealed and removed from the public record. The basis for this order was that the recording contained discussions between lawyers and their client that were protected by solicitor-client privilege. In my view, the test set out by the Supreme Court of Canada in Sherman Estate v. Donovan, 2021 SCC 25 at para. 38 is met with respect to the recording in the circumstances of this case.

2. Admissibility of the Plaintiff’s additional affidavits

[96] At the hearing, I granted leave to the Plaintiff under Rule 39.02(2) of the Rules of Civil Procedure to file the following evidence on this motion even though it was served after the Plaintiff had cross-examined on affidavits delivered by the Defendants:

a. Paragraph 6 and Exhibit “C” to the Affidavit of Elizabeth Ramirez sworn February 4, 2022 (i.e. motion record delivered for the Removal Motion); and

b. Affidavit of Mr. Sezerman sworn January 4, 2022 and the first two minutes and twenty seconds of the recording attached as Exhibit “Y” to that affidavit.

[97] I denied leave with respect to the balance of the additional affidavit evidence that the Plaintiff served after the cross-examinations.

[98] Rule 39.02(2) provides that a party who has cross-examined on an affidavit delivered by an adverse party shall not subsequently deliver an affidavit for use at the hearing without leave or consent. The court shall grant leave, on such terms as are just, where it is satisfied that the party ought to be permitted to respond to any matter raised on the cross-examination with evidence in the form of an affidavit.

[99] The following four factors are to be considered on a motion for leave under Rule 39.02(2) (see Johnson v. North American Palladium Ltd., 2018 ONSC 4496at para. 19 (“Johnson”)):

a. Is the evidence relevant?

b. Does the evidence respond to a matter raised on the cross-examination, not necessarily for the first time?

c. Would granting leave to file the evidence result in non-compensable prejudice that could not be addressed by imposing costs, term or an adjournment?

d. Did the moving party provide a reasonable or adequate explanation for why the evidence was not included at the outset?

[100] A flexible, contextual approach is to be taken in assessing the criteria relevant to granting leave under Rule 39.02(2), having regard to the overriding principle outlined in Rule 1.04 of the Rules of Civil Procedure that the rules are to be interpreted liberally to ensure a just, timely resolution of the dispute: see Johnson at paras. 18-19.

[101] While the fact that this motion is a motion for summary judgment may be a relevant consideration while applying the criteria in a flexible manner, the same criteria apply. I agree with the following comments of Justice Stinson in Brock Home Improvement Products Inc. v. Corcoran, 2002 CanLII 49425 at para. 8 (Ont. S.C.J.):

Rule 39.02(1) and (2) are an important and integral part of the procedural code governing the conduct of motions and applications. These rules are designed to place finite limits on the evidentiary element of those proceedings, an element that is all too frequently time-consuming, expensive and drawn- out. These rules oblige the parties to consider the issues and to put all relevant evidence forward before embarking upon cross-examination of the opposite party’s witnesses. This is the approach mandated by the rules to achieve the “just, most expeditious and least expensive determination” of motions and applications. Consistent with that approach, it is only in exceptional cases that resort should be had to rule 39.02(2).

[102] These considerations equally apply to motions for summary judgment, especially in light of the parties’ obligations to put their best foot forward.

[103] Turning now to the affidavit evidence in issue, I find that Ms. King’s affidavit regarding Ms. Evans’ appeal in relation to her Workers Compensation Claim is irrelevant and deals with a collateral issue. I agree with Ms. Evans’ position that if a witness is cross-examined on collateral issues for the purpose of testing the witness’ credibility, the witness’ answers are final, and any further evidence is not admissible if it is presented solely to contradict the witness’ answers on collateral issues: see Pyne v. Footman, [2007] O.J. No. 5745 at paras. 9 and 15 (S.C.J.) and Canmar Foods Ltd. v. TA Foods Ltd., 2019 FC 1229 at para. 21.

[104] The issue of whether Ms. Evans received audio recordings of legal meetings, as discussed in Ms. Ramirez’s affidavit, is also irrelevant and collateral.

[105] Ms. Ramirez’s affidavit attaches an e-mail that deals with the issue of a recusal motion. The Plaintiff has failed to explain the relevance of this e-mail, how it responds to a matter raised on the cross-examination and why the evidence was not included at the outset. This evidence does not meet the criteria under Rule 39.02(2).

[106] Neither does the Affidavit of Mr. Sezerman sworn January 12, 2022, even when applying the criteria in a flexible manner. As stated above, this affidavit is longer (14 pages) than Mr. Sezerman’s main affidavit included in the Plaintiff’s Responding Motion Record, and it largely repeats and adds to the evidence already provided by Mr. Sezerman in his first affidavit. In addition, it contains argument. This affidavit is not focused on responding to a matter raised on cross-examination and there is no reasonable explanation as to why it was not included at the outset.

[107] However, I find that leave should be granted with respect to the evidence that relates to the motion record filed in support of the Removal Motion. This evidence is clearly relevant and responds to a matter raised on the cross-examinations. Further, while there is no direct evidence on this point, it is my view that the only reasonable explanation as to why it was not included at the outset is inadvertence. Given that the motion record was filed on behalf of the Defendants and contains their affidavits, the Defendants were aware of this evidence and cannot be surprised by it. Adopting a flexible and contextual approach to the criteria under Rule 39.02(2), and having regard to the overriding principle outlined in Rule 1.04 that the rules are to be interpreted liberally to ensure a just, timely resolution of the dispute, I conclude that the motion record and the associated paragraph in Ms. Ramirez’s affidavit should be admitted in evidence.

[108] Similarly, I find that leave should be granted with respect to the Affidavit of Mr. Sezerman sworn January 4, 2022 and the first two minutes and twenty seconds of the recording attached as Exhibit “Y” to that affidavit (which is the only exhibit to that affidavit). The first two minutes and twenty seconds of the recording relate to a discussion regarding the attendance of the Defendants before Justice Hackland in the Soccer Action on July 11, 2018. The relevance of the balance of the recording has not been established. Although not central to the issues before me, what was reported to Mr. Sezerman by the Defendants regarding this attendance is relevant and responds to a matter raised on the cross-examinations. Given that the Defendants are participants in the discussion in the recording, the Defendants were aware of this evidence and cannot be surprised by it. While, strictly speaking, there is no evidence as to why the recording was not included at the outset, I note that Mr. Sezerman refers to the conversation in issue in his initial affidavit and it may not have been expected that the Defendants would dispute his account of the discussion. Again, adopting a flexible and contextual approach to the criteria under Rule 39.02(2), and having regard to the overriding principle outlined in Rule 1.04 that the rules are to be interpreted liberally to ensure a just, timely resolution of the dispute, I conclude that the identified portion of the recording and the associated affidavit of Mr. Sezerman should be admitted in evidence. Given that I am granting leave to admit the direct and objective evidence of the recording with respect to the discussion that took place, it is unnecessary to admit the evidence of Ms. Ramirez in her affidavit regarding the same and related discussions.

[109] After I ruled that some of the late affidavit evidence filed by the Plaintiff would be allowed, I gave counsel for the Defendants the opportunity to make further submissions on the merits of the motion for summary judgment in light of the newly admitted evidence. None of them had anything to add to the submissions that they had previously made. This confirms, in my view, that the admission of this evidence is not prejudicial to the Defendants.

[110] While I have refused to grant leave to allow the delivery of some of the late affidavit evidence put forward by the Plaintiff, I note that I would have reached the same conclusion on this motion even if all the affidavit evidence had been admitted.

3. Plaintiff’s motion at the hearing to add OZ Merchandising as a party

[111] In the middle of the hearing, after the Defendants’ counsel had completed their oral submissions, counsel for the Plaintiff requested leave to amend the Statement of Claim. However, the request was not only to amend the Statement of Claim under Rule 26.01. Rather, it was also a motion to add a plaintiff (OZ Merchandising) under Rule 5.04. The Plaintiff had neither a draft pleading reflecting the proposed amendments, nor the consent required by Rule 5.04(3). It argued that leave should be granted as the arguments made by the Defendants about the fact that OZ Merchandising was not a party to this action were technical arguments only. The Plaintiff also argued that the naming of OZ Optics Ltd. as the Plaintiff was a misnomer.

[112] The Defendants argued that granting the relief sought would be highly prejudicial. They argued that there was a significant issue regarding the limitation period and relied on section 21(1) of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. They submitted that whether the Plaintiff was the entity that had suffered damages was not a technicality and there was no basis upon which the relief sought could be granted.

[113] After hearing the parties’ submissions, I refused to grant leave to the Plaintiff to add OZ Merchandising as a plaintiff and to make related amendments to the Statement of Claim.

[114] Rule 5.04(2) provides that, at any stage of a proceeding, the court may by order add a party on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[115] Under both Rule 26.01 and Rule 5.04(2), an amendment to a pleading is not to be made if non-compensable prejudice would result. In contrast to Rule 26.01, however, the language of Rule 5.04(2) imports a discretionary power rather than a mandatory direction. Thus, in motions under Rule 5.04(2), the courts retain a discretion to deny an amendment in a proper case, even in the absence of non-compensable prejudice, when it is sought to change the parties to a proceeding. Generally speaking, the discretion is to ensure procedural fairness. See Mazzuca v. Silvercreek Pharmacy Ltd., 2001 CanLII 8620 at paras. 25-30 (Ont. C.A.).

[116] In my view, it was inappropriate and unfair for the Plaintiff to make a request to add a new plaintiff in the middle of the motions for summary judgment, especially in light of the fact that the issue of OZ Merchandising not being a plaintiff in this action was raised many months before the hearing of the motions. There was no proper motion before me, the requirement of a filed consent set out in Rule 5.04(3) was not met, and this was not a case of misnomer. Further, the extent of the amendments that would be required if OZ Merchandising were added as a party was uncertain and I was not prepared to grant leave to amend “at large”, without seeing the Plaintiff’s proposed amendments. In addition, the Defendants were not given the opportunity to respond to the motion and to adduce evidence of potential prejudice, and the limitation period issue that they raised had an air of reality. Therefore, as stated above, I dismissed the Plaintiff’s oral motion.

[117] I now turn to the motions for summary judgment.

4. Whether this is an appropriate case for summary judgment

[118] On a motion for summary judgment, the court must first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers set out in Rules 20.04(2.1) and (2.2) of the Rules of Civil Procedure. There will be no genuine issue requiring a trial if the summary judgment process provides the court with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure. See Hryniak v. Mauldin, 2014 SCC 7 at para. 66.

[119] A party moving for summary judgment has the evidentiary burden of showing that there is no genuine issue requiring a trial with respect to a claim or defence: Rule 20.04(2)(a). The burden shifts to the responding party to prove that its claim or defence has a real chance of success only after the moving party has discharged its evidentiary burden of establishing that there is no genuine issue requiring trial. See Sanzone v. Schechter, 2016 ONCA 566 at para. 30 and Kinectrics Inc. v. FCL Fisker Customs & Logistics Inc., 2020 ONSC 6748 at para. 35.

[120] Each party must put its best foot forward to establish whether or not there is a genuine issue requiring a trial. The court is entitled to assume that the record contains all the evidence that the parties would present at trial: see Toronto-Dominion Bank v. Hylton, 2012 ONCA 614 at para. 5. Thus, if the moving party meets the evidentiary burden of producing evidence on which the court could conclude that there is no genuine issue of material fact requiring a trial, the responding party must either refute or counter the moving party’s evidence or risk a summary judgment: see Soliman v. Bordman, 2021 ONSC 7023 at para. 133. A responding party cannot rely on allegations or denials in the pleadings, but must present evidence demonstrating that there is a genuine issue for trial: Sylvite v. Parkes, 2020 ONSC 5569 at para. 16.

[121] In my view, this is an appropriate case for summary judgment. There is no meaningful dispute and no credibility issues with respect to material facts. The documentary evidence, including the e-mails exchanged by the parties and the decisions of the court, is reliable and establishes what happened. I conclude that there is sufficient evidence before the court to fairly and justly adjudicate the dispute between the parties, and that it is appropriate to make dispositive findings on this motion. Providing a timely, affordable and proportionate procedure to the parties is also an important consideration in this case.

5. No breach of duties

[122] In my view, the evidence does not disclose any breach of contract, fiduciary duty or duty of care on the part of the Defendants. I address the main allegations below.

a. Post-Resignation Clause and Removal Motion

[123] I find that neither Ms. Evans nor Mr. Schwisberg breached their contractual obligation under the Post-Resignation Clause in their respective Employment Agreements. While Mr. Schwisberg argues that the Post-Resignation Clause only relates to the Plaintiff and not to OZ Merchandising (because of the use of the defined word “Company” in the Post-Resignation Clause), I will assume for the purpose of this analysis that the Post-Resignation Clause applies to OZ Merchandising and the Soccer Action.

[124] The Post-Resignation Clause was never triggered in relation to Ms. Evans as she did not resign. Therefore, Ms. Evans did not breach her obligations under this clause.

[125] I also find that Ms. Evans’ decision to withdraw from the Soccer Litigation did not breach any of her contractual obligations. In the Employment Agreement, the Plaintiff undertook to comply with the Law Society of Ontario’s “requirements with regards to legal counsel, legal services and the legal profession.” Rule 3.7-7 of the Rules of Professional Conduct provides that a lawyer shall withdraw when the lawyer is not competent to continue to handle the matter. Given her stroke and ensuing disability during the relevant period, which are established based on the evidence before me, Ms. Evans was not competent to continue to act for OZ Merchandising in the Soccer Action and was required to withdraw. Under the Employment Agreement, the Plaintiff was obligated to comply with this requirement.

[126] While the Post-Resignation Clause was triggered in relation to Mr. Schwisberg at the time of his resignation, I conclude that he did not breach it, for a number of reasons. First, I note that the Post-Resignation Clause is unclear as to the terms pursuant to which services were to be rendered post-resignation. In particular, the Post-Resignation Clause does not refer to part-time or full-time services. It is hardly surprising, then, that the parties could not agree right away and had to have discussions regarding the terms applicable to the work that would be done post-resignation. In my view, the services that were required were those necessary for an adequate representation of the client in the litigation until a suitable replacement was found. Thus, the number of hours required could be different from one week to the next. Mr. Sezerman’s insistence that Mr. Schwisberg work full-time is not supported by the wording of the Post-Resignation Clause.

[127] In any event, I find that the Plaintiff cannot argue breach of contract on the part of Mr. Schwisberg with respect to the Post-Resignation Clause because:

a. on September 27, 2018, Mr. Sezerman expressly withdrew his offer to have Mr. Schwisberg continue working for the Plaintiff until his replacement was hired and trained (and then proceeded to call him “stupid” in capital letters); and

b. OZ Merchandising served a Notice of Change of Lawyers in the Soccer Action which, in my view, confirmed that a “suitable replacement” had been found for the purpose of the Post-Resignation Clause.

[128] I also find that the Defendants did not breach any duty by not accepting the Plaintiff’s offer made on October 16, 2018, i.e. that the Defendants would remain counsel of record in the Soccer Action, but not do any work on it, until the Plaintiff had retained legal counsel and, in any event, no later than January 31, 2019. This offer could not be accepted as it was inconsistent with the duties of a lawyer of record under the Rules of Civil Procedure and the common law. As stated by Ferguson J. in Duca Community Credit Union Ltd. v. Tay (1995), 26 O.R. (3d) 172, 1995 CanLII 7136 (Gen. Div.), with reference to Rule 15.05 of the Rules of Civil Procedure:

The crucial wording [of Rule 15.05] for present purposes is that once becoming the solicitor of record, a solicitor “shall act as . . . the solicitor of record”. The solicitor of record cannot elect, or accept instructions of a client, not to attend when the proceeding is before the court. This is not a new concept. […]

I would add to these comments that it is also not satisfactory for a solicitor to be absent on the ground that his client has instructed him not to attend. The rule and his duty as an officer of the court require the solicitor to attend even though he or she may attend only to ask to be removed from the record or to advise the court that the client has instructed him or her not to participate and to request that he or she be excused.

Conclusion

In my view the duty of a solicitor of record is clear both at common law and under rule 15.05. Once a solicitor becomes the solicitor of record for a party, the solicitor must “act as . . . the solicitor of record” which duty includes the obligation to attend in court each time the proceeding is before the court whether it be for a motion or a pre-trial or a trial. There are exceptions, of course, for proceedings where no one would expect all parties to attend such as for ex parte motions, assignment courts where the court has advised that parties need not attend unless there is a problem, and where the matter has been settled and the court advised in a proper manner.

[129] Thus, the Defendants could not agree to remain lawyers of record in name only.

[130] Given that:

a. Ms. Evans had the obligation to withdraw,

b. Mr. Schwisberg’s resignation had been accepted, the Plaintiff/OZ Merchandising had advised him that they no longer wanted him to do work on the Soccer Action, and he was no longer in a position to fulfil his obligations as lawyer of record, and

c. there was a clear and material breakdown in the lawyer-client relationship,

I conclude that the bringing of the Removal Motion did not breach any obligations owed by the Defendants in the circumstances of this case. This conclusion is based on my finding that the evidence of the Defendants establishes that there is no genuine issue requiring a trial on this issue. While neither the Defendants nor the Plaintiff filed expert evidence on the issue of the Removal Motion, I am of the view that the Defendants did not have to do so in the particular factual circumstances of this case in order to discharge their evidentiary burden under Rule 20 on this particular issue. I come to this conclusion even though the motions for summary judgment were brought at an early stage of the action. I am satisfied that the evidence before me is sufficient to allow me to develop a full appreciation of the facts on this particular issue. See McPeake v. Cadesky & Associates, 2018 ONCA 554 at paras. 13-15 and Formosa v. Persaud, 2020 ONCA 368 at para. 10.

b. Internal e-mails

[131] In my view, the e-mails exchanged by the Defendants and the other members of the legal department, including the language they used, did not violate any civil duties owed.[^2] I note that the e-mails were exchanged among colleagues, who were all employees of the Plaintiff working on the Soccer Action. Therefore, no issue of breach of confidentiality is raised.

[132] I find that the e-mails do not constitute a breach of fiduciary duty or a breach of the duty of loyalty. It is important to keep in mind that the Defendants owed duties to the Plaintiff and OZ Merchandising (who is not a party), and not to Mr. Sezerman personally. Therefore, they had the obligation to ensure that the interests of their clients were served and protected: see Rule 3.2-3 of the Rules of Professional Conduct and the Commentary under it. The Defendants were of the professional view that the directions and instructions that were given or being considered by Mr. Sezerman were not in the best interests of OZ Merchandising. They were discussing among themselves and with their colleagues about how they could solve this problem and obtain directions and instructions that would be in the best interests of OZ Merchandising. Instead of being evidence of a breach of duty, the e-mails show that the Defendants were trying to act in the best interests of OZ Merchandising. The evidence/e-mails also demonstrate that the Defendants shared their concerns with Mr. Sezerman with respect to the Soccer Action, thereby complying with their duty of candour. While the evidence shows disagreements between the Defendants and Mr. Sezerman with respect to a number of issues, there is no evidence that the Defendants failed to abide by any firm instructions received from OZ Merchandising during the short two-month period of their employment.

[133] In addition, no authority was provided to the court supporting the existence of a free-standing duty not to complain about one’s boss or one’s work environment in private exchanges with one’s colleagues. Similarly, I find that the duty of care owed by a lawyer to their client does not encompass within its scope an obligation on the part of the lawyer not to say anything negative about the client to the lawyer’s colleagues in private exchanges (again, in circumstances where there is no breach of the obligation of confidentiality).[^3] Such discussions among colleagues are unrelated to the services that a lawyer undertakes to provide to a client. As pointed out by the Supreme Court of Canada in Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63 at para. 31, rights and duties are not limitless. It is important to consider the scope of any applicable duty of care.[^4]

6. Conspiracy to injure

[134] The Plaintiff pleads the tort of conspiracy to injure in its Statement of Claim. To establish a conspiracy to injure, the following elements must be proven: (1) the defendants acted in combination; (2) the defendants intended to harm the plaintiff; and (3) the defendants’ conduct caused harm to the plaintiff. The plaintiff must establish that the defendant’s predominant purpose was to harm the plaintiff, as opposed to advancing legitimate self-interest. See Edgeworth v. Shapira, 2019 ONSC 5792 at paras. 30, 32.

[135] None of these elements are supported based on the evidence before the court. There is no evidence supporting the Plaintiff’s position that the Defendants coordinated their withdrawal from employment to leave, or effectively leave, at the same time. This is expressly denied by Ms. Evans in her affidavit. In any event, this suggestion is preposterous in light of Ms. Evans’ stroke, which could not be predicted and, as I found above, prevented her from continuing to act in the Soccer Action. Mr. Schwisberg outlined his reasons for resigning in his e-mail dated September 11, 2018 and in his affidavit, and these reasons are self-standing.

[136] Further, the evidence supports the conclusion that, during the relevant period, the Defendants were trying to act in the best interests of OZ Merchandising and/or to advance legitimate self-interest (such as health reasons, coping with a difficult work situation, complying with professional obligations). There is no evidence supporting an inference or a conclusion that the Defendants’ predominant purpose was to harm the Plaintiff or OZ Merchandising. The fact that the lawyers in the legal department exchanged cell phone numbers is not evidence of anything. I also disagree with the Plaintiff’s characterization of the Defendants’ actions as a “mutiny”.

[137] Finally, as discussed further below, there is no evidence that the Defendants’ conduct caused harm to the Plaintiff.

7. Causation and damages

[138] A cause of action for breach of contract does not require proof of loss, and nominal damages may be awarded where a breach of contract has been established but damages flowing from that breach have not (see Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19 at para. 105). However, other causes of action pleaded by the Plaintiff in this action, such as negligence and conspiracy to injure, require proof of loss.

[139] Given that I have concluded that the evidence does not disclose any breach of duties on the part of the Defendants and no conspiracy to injure, this is sufficient to dispose of this motion. Nevertheless, I will address briefly the issues of causation and damages.

[140] The damages claimed all relate to the Soccer Action. As pointed out by the Defendants, the plaintiff in the Soccer Action, OZ Merchandising, is not a party to this action. The Plaintiff is a separate corporate entity and cannot establish that it suffered damages in relation to the Soccer Action, to which it was not a party.

[141] Further, and in any event, the Plaintiff’s arguments that the outcome of the November 5, 2018 Motion or the trial would have been different had the Defendants remained on the record have no air of reality and are pure speculation in light of the reasons delivered by Justice Hackland and Justice Ryan Bell. For instance, with respect to the November 5, 2018 Motion, the Plaintiff does not explain how the Defendants would have been able to overcome all of the issues identified by Justice Hackland in his reasons for refusing to grant leave to amend the Statement of Claim, including statute-barred claims and irreparable prejudice to CSA. The same can be said about the outcome of the trial. In addition, it is difficult to see how the departure of the Defendants, who were employed by the Plaintiff for approximately two months only, could have had a significant impact on the outcome of a 14-year-old action, especially in circumstances where Mr. Sezerman insisted on making decisions on litigation strategy (as reflected in his own e-mails and in the reasons of Justice Ryan Bell and the Court of Appeal).

[142] I also find that there is no merit to the Plaintiff’s suggestion that it was somehow prejudiced by the filing of the motion record for the Removal Motion. There is no evidence whatsoever that anyone accessed the motion record,[^5] which was sealed after a few weeks. In particular, there is no evidence that the motion record was reviewed by Justice Hackland or Justice Ryan Bell. Further, even if one or more judges had reviewed the motion record, this would be insufficient to show damages and to overcome the strong presumption of judicial impartiality which reflects the long and strong history of judicial independence and integrity in Canada. See Peart v. Peel Regional Police Services, 2006 CanLII 37566 at para. 39 (Ont. C.A.). I note that the Court of Appeal rejected OZ Merchandising’s allegations of institutional bias against Mr. Sezerman.

[143] Finally, there is no evidence supporting the Plaintiff’s allegation that it was unable to retain counsel with suitable experience for the Soccer Action after the Defendants’ withdrawal. The Plaintiff has failed to adduce any evidence regarding: (a) the experience of the lawyers who represented OZ Merchandising at trial; and (b) the efforts that were made to retain outside counsel and/or hire new in-house counsel. Further, the Court of Appeal found that there was no merit to the claim of ineffective assistance of counsel advanced by OZ Merchandising on appeal: see 2021 ONCA 520 at paras. 45-49. It is noteworthy that Mr. Karnis, who was OZ Merchandising’s lead lawyer at trial, continued to act for OZ Merchandising after the trial and was co-counsel on the appeal.[^6] Mr. Karnis’ name also appears on the Statement of Claim in this action, although he did not appear on this motion as he has apparently left the employment of the Plaintiff.[^7] If Mr. Karnis was so unsuitable, the Plaintiff would presumably have retained new counsel to commence this action.

[144] Thus, I conclude that the Plaintiff has failed to demonstrate that it suffered any damages as a result of the Defendants’ conduct.

D. CONCLUSION

[145] The Defendants’ motions for summary judgment are granted and the action is dismissed.

[146] If costs cannot be agreed upon, the Defendants shall deliver submissions of not more than three pages (double-spaced), excluding the costs outline, by October 31, 2022. The Plaintiff shall deliver its responding submissions (with the same page limit) by November 14, 2022. The submissions of all parties shall also be sent to my assistant by e-mail and uploaded onto CaseLines.

Vermette J.

Date: October 17, 2022

[^1]: Mr. Sezerman’s evidence is that OZ Merchandising is 100% owned by Sezer Holdings Limited, which also owns the majority of shares in the Plaintiff.

[^2]: I express no views as to whether the language used in the e-mails constitutes a breach of the Rules of Professional Conduct. As stated by the Supreme Court of Canada in Galambos v. Perez, 2009 SCC 48 at para. 29, breaching the rules of professional conduct is not necessarily negligence. The rules of professional conduct are not binding on the courts and do not necessarily describe the applicable duty.

[^3]: As I find that there is no duty of care in this regard, there is no need for expert evidence on the standard of care.

[^4]: In my view, it is doubtful that the Defendants owed a duty of care to the Plaintiff (as opposed to OZ Merchandising) with respect to communications or actions related to the Soccer Action. However, I do not need to decide this issue on this motion given the conclusions that I have reached.

[^5]: The only exception may be Justice Beaudoin who apparently signed the sealing order, according to the Statement of Claim. However, no specific evidence was adduced on this point.

[^6]: The Court of Appeal stated the following at para. 43: “Remarkably, the appellant makes the submission [of ineffective assistance of counsel] although counsel, who the appellant says was incompetent at trial, appears as co-counsel for the appellant on the appeal.”

[^7]: This information was provided to Justice Akbarali during the January 5, 2022 case conference and is included in her endorsement of the same date.