COURT FILE NO.: CV-19-604882
DATE: 20221221
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Yue Gu, Bo Shao and 2438866 Ontario Inc. Plaintiffs
– and –
Rebecca Huang a.k.a. Yunfeng Huang and Fogler, Rubinoff LLP Defendants
COUNSEL: Ran He, for the Plaintiffs Michael Kestenberg and Beverly Jusko, for the Defendants
HEARD: December 12-14, 2022
REASONS FOR JUDGMENT
Overview:
1On December 14, 2022, I gave oral judgment, dismissing this action. These are the written reasons plus my decision on costs ordering the Plaintiffs to pay $80,000 in costs within 30 days of today’s date.
2The Plaintiffs sue Rebecca Huang and Fogler, Rubinoff LLP for negligence, breach of fiduciary duty and breach of contract. They also seek a declaration that Ms. Huang acted negligently in delivering legal services. The Plaintiffs retained Ms. Huang to defend a $6.5 million lawsuit launched against them by two Chinese companies who had noted them in default and obtained a certificate of pending litigation (“CPL”) against a property owned by Gu and Shao. The Chinese companies also wanted to freeze their assets. Gu and Shao not only wanted to defend the action but also sought security for costs. Ultimately, Justice Pollak removed the CPL and denied a second request to register a CPL on a different property, set aside the noting in default and denied the motion to freeze their assets. Master Jolley granted security for costs up until trial preparation without prejudice to apply again for trial costs. Justice Cavanaugh dismissed the companies’ action for failing to pay security for costs.
3I dismiss the action and award $80,000 as all-inclusive costs to the Defendants. This action is a fee dispute cloaked as a negligence action. The Plaintiffs’ primary complaint is about a security for costs motion brought against the Chinese companies. The Plaintiffs allege that Ms. Huang counselled them to reject the $100,000 offer for security for costs on the promise that she could obtain $200,000 from the court. According to the Plaintiffs, Huang failed to file the proper materials to obtain such an order and only received a fraction of the security for costs requested. This deprived the Plaintiffs of the opportunity to accept the $100,000 or obtain a higher amount for security or costs that they could now use to offset Ms. Huang’s legal bill.
4Ms. Huang’s legal bill is now under review and the Plaintiffs seek findings in this court to lower the bill at the assessment. The Plaintiffs did not tender an expert to establish the standard of care. Absent that, the Plaintiffs must demonstrate a clear error or actions that are so egregious that her conduct would fall below the standard of care without knowing the precise parameters of the standard. There is no error let alone a clear one. Professionals are not held to a standard of perfection. Ms. Huang competently delivered the services that the Plaintiffs bargained for.
Facts:
5The parties filed an agreed statement of facts which sets out the relevant chronology of events:
a. Rebecca Huang aka Yunfeng Huang (“Huang”) is a lawyer who was practicing law with Fogler, Rubinoff LLP (collectively hereinafter referred to as the “Firm”) in 2016/2017.
b. Huang met the Plaintiff Yue Gu also referred to as Anber James (“Gu”) on December 8, 2016.
c. Gu and Bo Shao are husband and wife.
d. Bo Shao is the sole owner and director of 2438866 Ontario Inc. (“243”).
e. 243 owns the property municipally known as 146 Bannatyne Drive, Toronto (the “Bannatyne Property”).
f. Amy Gu is the daughter of Gu and Bo Shao.
g. Bo Shao authorized Gu to provide Huang with instructions on behalf of herself and 243.
h. In May 2016, 243 entered into an Agreement of Purchase and Sale (“APS”) to sell the Bannatyne Property with a closing date of September 28, 2016.
i. On July 27, 2016, Gu discovered that a CPL had been registered on title to the Bannatyne Property and that he, Bo Shao and 243 had been noted in default in an action brought by Jianxing Economic Co-operation Co. Ltd. and Jianxing Shunxing Textile Chemicals Co Ltd. (the “Jianxing Plaintiffs”) for, amongst other relief, $6.5 million, and an injunction preventing the Defendants from selling the Bannatyne Property and restraining them from dealing with their assets (the “Jianxing Action”).
j. In August 2016, the Plaintiffs retained Ari Gaertner of Gaertner Baron LLP (the “Gaertner Firm”) to bring a motion to set aside the noting in default and discharge the CPL.
k. The Gaertner Firm did not set aside the CPL and the noting in default.
l. On or about December 15, 2016, the Plaintiffs retained Huang and the Firm to represent them in the Jianxing Action.
a. On or about December 15, 2016, the Plaintiffs signed the Firm’s retainer letter which was in both English and Chinese.
m. Attached to the retainer letter dated December 15, 2016, was a document that stated, “Estimate Only” and listed Huang’s fees as follows:
Motion to set aside default notice total $11,760
Motion to set aside CPL total $34,160
Preparation of defence total $4,480
n. By email dated January 11, 2017, Huang confirmed to Gu that, during the holidays, the Plaintiffs delivered a box of motion records for their motions to freeze all of Gu’s assets including the property municipally known as 960 Lawson Road, Tiny, Ontario (the “Tiny Property”), scheduled for March 1, 2017 (“Mareva motion”).
o. On January 16, 2017, Huang attended before Justice Firestone who scheduled the Mareva motion for March 1, 2017.
p. On January 17, 2017, Huang attended before Justice Mullins with respect to the motions to set aside the noting in default and lift the CPL on the Bannatyne Property (the “Justice Mullins Attendance”).
q. At the Justice Mullins Attendance, Colin Holland, the lawyer for the Jianxing Plaintiffs requested an adjournment of the motions to set aside the noting in default and lift the CPL.
r. Justice Mullins confirmed in her Reasons for Ruling dated January 17, 2017, that the Factum delivered by the Defendants was conceded to be delivered somewhat late and that the Jianxing Plaintiffs did not file any Factum.
s. Justice Mullins granted the Jianxing Plaintiffs’ adjournment request.
t. By e-mail dated January 20, 2017, Holland advised that he would be requesting that the March 1, 2017 Mareva motion be adjourned.
u. By e-mail dated January 23, 2017, Huang advised Holland that she would be opposing his third attempt to adjourn the motion to set aside the noting in default and lift the CPL on the Bannatyne Property.
v. On January 27, 2017, Huang attended at Civil Practice Court before Justice McEwen who ordered that the motions to set aside the noting in default and lift the CPL be heard by a Master to be scheduled and that the Mareva motion be adjourned to May 23, 2017.
w. The motions to set aside the noting in default and lift the CPL were scheduled for May 4, 2017.
x. On May 4, 2017, Huang attended before Master Jolley and obtained an Order on consent setting aside the noting in default.
y. On or about May 9, 2017, Huang served the Statement of Defence to the Jianxing Action.
z. On May 9, 2017, Huang also attended before Justice Lederer, and he ordered that all motions be heard on May 23, 2017.
aa. On May 23, 2017, Huang attended before Justice Pollak and argued the three motions that had been ordered to be heard together, the Mareva motion, the motion to lift the CPL on the Bannatyne Property and the motion to register a second CPL on the Tiny property.
bb. On May 24, 2017, Huang served a motion for security for costs requesting that the Jianxing Plaintiffs post $196,845 with the Court.
cc. On or about June 29, 2017, the Jianxing Plaintiffs offered to settle the motion for security for costs by posting $100,000 in instalments before each major step or $24,000 in two instalments before the next two major steps, which Gu rejected.
dd. Huang’s attendance before Master Jolley on July 11, 2017, to argue the motion for security for costs, was her last attendance on behalf of the Plaintiffs.
ee. By email dated July 13, 2017, Huang advised Gu that she would be terminating her retainer given that there had been a breakdown in the solicitor/client relationship.
ff. On July 14, 2017, Master Jolley released her decision and ordered that the Jianxing Plaintiffs post security for costs in the sum of $19,255, by August 25, 2017, and the sum of $12,780 prior to mediation, without prejudice to the Plaintiffs’ right to re-attend and seek further security for costs for preparation and attendance at trial.
gg. On July 27, 2017, Justice Pollak released her decision. Huang was successful on all three motions and obtained a cost award in the sum of $74,180.68, on a partial indemnity basis.
hh. The Firm brought a motion to remove itself as lawyer of record returnable August 18, 2017.
ii. The Firm rendered invoices to the Plaintiffs totalling the sum of $240,291.55.
jj. The Plaintiffs paid the Firm’s invoices and subsequently brought an Assessment of the Firm’s fees which was scheduled for two weeks to commence August 19, 2019.
kk. The Assessment was stayed pending this action.
ll. The Jianxing Plaintiffs brought a motion to stay execution of Justice Pollak’s Judgment for costs which was dismissed by Justice Kitely on September 20, 2017.
mm. Leave to appeal Justice Pollak’s decision was dismissed on December 1, 2017.
nn. The Jianxing Plaintiffs failed to pay cost Orders totalling $85,554.26.
oo. The Jianxing Action was dismissed on August 3, 2018.
The Allegations in the Amended Statement of Claim largely challenge Huang’s fees
6The Plaintiffs originally claimed $3million for negligence, breach of contract and breach of fiduciary duty, a declaration that Huang acted negligently, and aggravated and punitive damages, thereby triggering a robust response by LawPro on behalf of Huang. By the time the parties arrived at summary trial, the Claim was reduced to the difference between what security for costs motions the Plaintiffs might have received and the actual security for costs order they received.
7Notwithstanding resiling from the inflated claim, the Amended Statement of Claim drives the litigation. Its allegations give the court insight into what this case was really about when the Plaintiffs decided to commence the action. In a nutshell, it is about fees. The Plaintiffs allege that Huang assured them that she could set aside the noting in default and discharge the CPL, defend the Mareva injunction, seek security for costs, and that the Jianxing Plaintiffs would abandon their claim if they had to pay security. There is no dispute that Haung accomplished all of these goals. She delivered what she was retained to do. All alleged breaches of her duty to report to the client and take timely steps relate to either incurring unnecessary fees or failing to obtain adequate costs awards and security for costs that would offset the fees. I set out some of the relevant paragraphs below that specifically refer to the fees issue:
a. Paragraph 16 – Huang omitted to present a costs estimate for the motion for security for costs and for responding to the Mareva injunction but later said that her original estimate covered those motions.
b. Paragraph 22 – Huang requested payment of $6000 to retain a Chinese law expert – the Plaintiffs paid but no expert was retained.
c. Paragraph 28 – As of February 1, 2017, Fogler had rendered accounts to the Plaintiffs in the sum of $77,842.10. This greatly exceeded the written budget.
d. Paragraph 29 – relying on Huang’s assurances (about recovering fees through security for costs), the Plaintiffs paid their account in full.
e. Paragraph 32 - As of May 1, 2017 Fogler’s bill was at $176,208.48, which the Plaintiffs promptly paid relying on the assurance that they would recover all of these costs.
f. Paragraph 40 – Huang failed to explain why her fees were five times higher than the initial quotation.
g. Paragraph 51 – Because of Huang’s failure to protect the Plaintiffs, they suffered damages in the form of security for damages and additional security for costs that would have been awarded and obtained by the Plaintiffs and they incurred additional legal fees.
Huang was not negligent in her handling of the CPL and Mareva injunction motions
An expert is not required to set the standard for court processes
8I accept Mr. He’s able submission that the Plaintiffs do not need an expert to establish the standard of care for non-technical matters, for matters which an ordinary person may be expected to have knowledge, and where the impugned actions of the lawyer are so egregious that it is manifestly obvious that the conduct falls short of the standard expected of a reasonably competent lawyer.1 I accept Mr. He’s decision to save his client the disbursement of engaging an expert to opine on straightforward matters of court process. I consider them to be non-technical or matters that are well within the courts’ knowledge as to what a reasonably competent lawyer ought to do in scheduling motions, filing materials and making submissions to the court. I turn now to the processes Gu complains of.
9Huang was retained in December of 2016. By that time previous counsel had scheduled the motion to set aside the noting in default and the CPL to January 17, 2017. Logically Huang had little time to get up to speed on the file and in fact sifted through four volumes of responding materials over the Christmas holidays to prepare. Gu suggests that Justice Mullins adjourned the January 17, 2017 hearing date because Huang delivered her factum late. The lateness of Huang’s factum was a side observation that had little or nothing to do with granting the Jianxing Plaintiffs’ request for an adjournment. The Jianxing Plaintiffs requested the adjournment and Justice Mullins concluded that time should be permitted for cross-examinations. Justice Mullins mentioned Huang’s late service of the factum but it did not drive her decision to adjourn. Rather, the decision was grounded in the need for cross-examinations and the efficiency of trying to deal with the five motions in an orderly fashion. In that context Justice Mullins wondered if there was enough time on March 1, 2017, which had been scheduled only for the Mareva and CPL motions, to add Gu’s motion to set aside default judgment and the existing CPL. These are normal procedural hiccups in litigation – especially when there are multiple motions between the parties. Huang’s conduct did not fall below the standard of a reasonably competent lawyer.
10Justice Mullins went on to direct that the motions be scheduled in the order she felt was appropriate: first, Gu’s motion to set aside the noting in default; second, Gu’s motion to set aside the CPL; third, the Jianxing Plaintiffs’ motion for a CPL; fourth, the Mareva injunction motion; and fifth, Gu’s motion for security for costs if such a motion were served. In other words, Justice Mullins put the security for costs motion last. She also confirmed that the March 1, 2017 date could be used for Gu’s first two motions. Her Honour’s decision had nothing to do with Huang’s competence.
11Huang and Holland then attended Civil Practice Court on January 27, 2017 to obtain a new date for the Mareva injunction and CPL motion. It appears that the other motions were also discussed with Justice McEwan. Justice McEwan vacated the March 1, 2017 date because he likely felt it more efficient to send matters within the jurisdiction of a master, to a master. I have no evidence in that regard. What is clear is that Justice McEwan sent the motion to set aside the noting in default and the CPL to a master despite Justice Mullins’ previous direction. That happens, and has nothing to do with Huang. Justice McEwan also adjourned the Mareva injunction to May 23, 2017.
12I reject Gu’s assertion that Huang scheduled these motions in the wrong court. All motions can be brought before a judge. It is at the judge’s discretion whether he or she wants to send the matter to a master. While rule 37.04 of the Rules of Civil Procedure2 directs that all motions be brought before the “court”, which means before a master unless a matter is in the exclusive jurisdiction of a judge, the rule is inconsistently enforced such that it was not improper or incorrect for Huang to continue to proceed before a judge. Further, the hearing had already been scheduled by previous counsel before a judge. That decision was therefore not even Huang’s to make. Huang was also led to believe by Justice Mullins that it was appropriate to continue before a judge. Justice McEwan’s decision to vary that order has nothing to do with Huang’s competence. Huang did not fall below the standard of care of a reasonably competent solicitor in dealing with these motions. In fact Huang did what she was retained to do including persuading Holland to consent to set aside the noting in default rather than arguing the motion. This saved Gu the cost of arguing the full motion. This is entirely appropriate and common practice amongst lawyers because the test to set aside a noting in default is quite low. Ultimately Huang secured Holland’s consent and Master Jolley signed the order. Further, the CPL matters were heard by Justice Pollak by order of Justice Lederer. Huang’s competence has nothing to do with the different approaches taken by different judges on how the matters were to proceed.
Huang did not fall below the standard of care in obtaining the $74,180.68 in costs from Justice Pollak
13On May 23, 2017, Justice Pollak heard the two CPL motions and the Mareva injunction. Huang was successful on all three issues. As is customary in practice and in law, Huang sought “partial indemnity” costs from the Jianxing Plaintiffs. Partial indemnity costs are routinely awarded when a party succeeds and is usually calculated as 60% of a party’s actual costs. To obtain more than 60% is rare. Gu has not tendered any evidence, expert or otherwise, to suggest that this was an instance when Huang should have requested more than 60% of Gu’s actual legal cost to bring and respond to these motions.
14Huang requested $39,209.50 for the motion to set aside the noting in default and vacate the CPL and $34,971.18 to resist the Mareva injunction and new CPL. The Jianxing Plaintiffs requested roughly $46,000 for both motions. Justice Pollak found that the amounts that Huang presented were reasonable even though they almost doubled what the Jianxing Plaintiffs suggested. In considering how much a successful party can recover from the unsuccessful party, the court applies the factors in Rule 57.01 and has broad discretion to award costs. One of the factors the court considers is the reasonable expectation of the losing party. Despite the low figures suggested by the Jianxing Plaintiffs, Huang secured an amount well in excess of what the court could have awarded. Suggesting an even higher amount than Huang already put forward would not likely have yielded a larger costs award and certainly there is nothing in Justice Pollak’s decision that would suggest so. There is no conduct remotely close to negligence here.
Huang was not negligent in handling the security for costs motion
15At trial the Plaintiffs largely resiled from the theory of the case raised in the Claim and advanced a late breaking theory that, because of delay in setting aside the noting in default which in turn delayed the security for costs motion, they were in a weaker position in relation to the Jianxing Plaintiffs. They suggest that the Jianxing Plaintiffs would have offered more for security for costs or approached the litigation differently if these steps were not delayed. I have found that the litigation process when multiple motions need to be scheduled creates litigation hiccups that cannot often be avoided. In this case, I found no delay attributable to Huang that had any material impact on when the security for costs motion could be heard. Much of the ordering of the motions was done by the court with Justice Mullins putting the security for costs motion last and Justice McEwen ordering it to proceed before a master. In any event Master Jolley heard the motion soon after Justice McEwan directed it.
16Even if I am incorrect in this finding and it was Huang who caused the delay, I wholly reject the submission that the delay impacted the Jianxing Plaintiffs’ behaviour in the litigation. It is purely speculative and cannot possibly form the basis of the Plaintiffs’ damages claim. There is no evidence on what the Jianxing companies might have done in different circumstances, and the inference Gu is asking me to draw is unreasonable.
An expert is required to set the standard related to advice on the substance of the $100,000 security for costs offer
17To the extent that the negligence claim is based on the allegation that Huang failed to properly advise on the security for costs offer, that is a standard that ought to have been set by an expert. It is a technical matter, or not one within the knowledge of an ordinary person and outside the day to day knowledge of the court. No expert is needed if the error is clear or conduct is egregious. The evidence falls short of this threshold. Even on a common sense standard Gu’s position lacks merit and evidence.
18On June 29, 2017 the Jianxing Plaintiffs offered to pay $100,000 in installments before each of the major litigation steps or pay $24,000 in two instalments for the next two major steps. At this point Gu had not yet defended the action but the court had set aside the noting in default. There is no evidence on what the installments would be or what anyone considered the major litigation steps were. In the normal course they would be closing pleadings, delivering an affidavit of documents, discovery, mediation, pre-trial and trial. If broken down into equal installments, the offer amounted to six tranches of $16,666 to the end of trial. But that is only a guess and not evidence. There was also no evidence of the proposed breakdown of the two instalments amounting to $24,000 for the next two major steps. Generally speaking, the next steps in this case would have been to defend the action and deliver an affidavit of documents. If paid in equal instalments, that might be $12,000 payable immediately to allow Gu to defend and another $12,000 shortly after that to prepare an affidavit of documents. These are more guesses. None of this evidence was before me. I disagree with Mr. He that it was incumbent on Huang to provide this evidence. Rather, it is the Plaintiffs’ case to prove on a balance of probabilities including by tendering the necessary evidence to prove their case. For example, the Plaintiffs could have called Mr. Holland who was the Jianxing Plaintiffs’ lawyer who made the offer. We are left then with the sole evidence of the offer.
19Gu alleges that Huang failed to properly advise them on the implications of the offer including reviewing real numbers. The evidence was not clear on the extent to which Huang drilled down about the offer. However, assuming that she did not advise in real numbers what the offer meant and advised instead that she could receive the better result of $200,000 to the end of trial, I do not find any such failure or advice so egregious and clearly wrong that no expert was needed. Advising on what a court might do is an art, not a science. The fact that Gu and the Plaintiffs only received a fraction of what Huang asked for does not in and of itself persuade me that Huang’s advice was clearly wrong.
The failure to provide an affidavit in support of the motion for security for costs is not clearly wrong or egregious conduct
20The materials counsel should submit to court and their impact on outcome is also an issue that requires expert evidence. In its absence, Gu must persuade me that Huang’s conduct was so egregious or clearly wrong that no expert is needed to set the standard of care. He has not done so. Huang put extensive materials before Master Jolley to support the request for $196,845 as security for costs. Master Jolley commented that there was little information as to how Huang arrived at the assumptions built into the supporting bill of costs that she submitted, especially at the trial preparation and trial stage [my emphasis]. Master Jolley’s primary concern was that she could not tell how much time trial prep would require. To address this, her order permitted Huang to seek further security for trial preparation, at a later date. She also noted that she could not tell whose trial estimates were more likely correct even where Mr. Holland had submitted an affidavit. In other words, even having an affidavit did not assist Master Jolley in better estimating trial costs.
21In any event, the failure to obtain a payment allocated to trial had no effect on Gu or his ability to now use security for costs to offset Huang’s legal fees. Even if Huang had obtained an amount for trial preparation from Master Jolley, that would not have been paid by the time Justice Cavanaugh dismissed the action.
22Master Jolley also commented that a short affidavit to explain the number of documents that required Chinese translation would have been helpful. This comment did not have any particular impact on Master Jolley’s ultimate conclusion on the estimate for the cost of discovery. Rather, her decision was based on the respective number of hours it might have taken counsel to prepare. Huang proposed 60 hours and Mr. Holland proposed 45 hours. Master Jolley accepted the lower number as she is entitled to do in exercising her discretion. Huang cannot control Master Jolley’s decision. Similarly, Huang proposed 30 hours for mediation and pre-trial and Mr. Holland proposed 17. Master Jolley decided to allocate 20 hours. Again, this is not something Huang could control. There is no evidence that there is anything more Huang could have submitted to alter Master Jolley’s decision. In fact, Master Jolley alluded to the extensive materials filed in support of the motion. Gu has not persuaded me on a balance of probabilities that Huang fell below her duty of care in seeking security for costs.
Violations of the Rules of Professional Conduct do not lead to a breach of contract or negligence
23While clients can be disappointed with a lawyer’s efforts or interactions with them, this does not lead to a finding of negligence or a breach of the retainer agreement. If Gu and the Plaintiffs believe Huang violated any rules of professional conduct by failing to communicate adequately with the Plaintiffs of important events, demanding $50,000 as a condition of attending court to address the Mareva injunction and a CPL on a second property (a claim that I do not accept), and seeking removal on the same day that a litigation step was occurring, the Law Society of Ontario addresses those complaints and I defer to them. For my purposes, none of the professional conduct complained of materially affected Huang’s delivery of the services to the Plaintiffs or caused them any damages in negligence or breach of contract.
No basis for punitive or nominal damages
24I do not find any negligence nor breach of the retainer agreement by Huang. There is no basis for punitive or nominal damages. I dismiss the action.
Costs:
25Huang and/or her insurer is entitled to recover some of the costs of defending this action. Both parties submitted bills of costs. Huang seeks substantial indemnity of the $129,589 plus HST charged by counsel. The bill includes time for two partner-level lawyers, albeit at LawPro’s fixed rate of $350/hour regardless of their seniority. She argues that the action was ill-conceived from the outset and she gave the Plaintiffs an out, early in the proceedings. Counsel sent a letter dated October 1, 2018, offering a without costs dismissal.
26Mr. He’s bill of costs reveals an actual cost to the Plaintiffs of $57,121.50. He argues that this was not a complex case, did not need two counsel and is not one of the rare instances that warrants a substantial indemnity scale of costs.
27The court’s discretion to award costs arises from section 131(1) of the Courts of Justice Act3 and is to be exercised by considering the factors in Rule 57.01(1) of the Rules of Civil Procedure. The factors include the principle of indemnification, the reasonable expectation of the parties (and I would add, proportionality), the complexity and importance of the proceedings, and the conduct of the parties during litigation. As noted by Justice Perell, modern costs rules are designed to advance five purposes in the administration of justice: (1) to indemnify successful litigants for the costs of litigation; (2) to facilitate access to justice; (3) to discourage frivolous claims and defences; (4) to discourage and sanction inappropriate behaviour by litigants in conducting the proceedings; and (5) to encourage settlements.4 The general default in fixing costs is to award the successful party 60-65% of their actual costs (referred to as “partial indemnity costs”). The higher scale of costs – referred to as “substantial indemnity costs”— awards a litigant approximately 80-90% of their actual costs when a court finds reprehensible conduct in the circumstances giving rise to the litigation or conduct in the litigation.
28In this case, I find some conduct worthy of sanction to warrant an elevated scale of costs. Merely having an unmeritorious, or low-merit action is not enough. Here, the Plaintiffs have cloaked their fee dispute with a negligence and breach of contract action, knowing that professionals rely on their reputations to pursue their livelihood. It is clear from email exchanges between Gu and Huang between June 24 and 26, 2017 that Gu was acutely aware of the importance of Huang’s professional reputation and that he was primarily unhappy with fees charged compared to results obtained. I infer that a significant motivation for this largely unmeritorious litigation was to apply pressure on Huang with respect to reducing fees or to obtain findings that would bolster his position at assessment. My view that this is a fee dispute at its core is reinforced by Gu’s evidence, the threadbare allegations in the Amended Statement of Claim and a late breaking hail Mary theory of the case reducing an unmeritorious $3million claim to a slightly more meritorious $80,000 one.
29Having said that, I agree with Mr. He that having two counsel on this file is overkill as is the time spent on the file. This is not a complex matter for any counsel, let alone one for lawyers of Mr. Kestenberg and Ms. Jusko’s experience. The inflated damages amount does not add to the complexity of the claim; only to its frivolousness. I do not accept Mr. Kestenberg’s argument that the case warranted two counsel through out nor the amount of time spent. Mr. He spent 130 hours for the entire case including trial. Mr. Kestenberg and Ms. Jusko spent almost twice that on trial preparation alone. This is an unacceptable burden for the Plaintiffs to bear on any scale.
30Mr. Kestenberg also notes that the LawPro rate is well below what his usual rate of $700/hour. I agree. However, one could also argue that someone with a rate of $700/hour would not need as much time as someone with a rate of $270/hour to work the file and so the fewer hours needed would offset the higher rate.
31In balancing the expectations and interests of the parties, the improper or at least ill-conceived motive of the Plaintiffs, the excess time spent by Huang’s lead counsel, and the unnecessary cost of Ms. Jusko’s expertise, I order the Plaintiffs to pay $80,000 in all-inclusive costs to the Defendants within 30 days of today’s date.
Justice P. Tamara Sugunasiri
Released: December 21, 2022
Footnotes
- King Lofts Toronto I Ltd. v. Emmons, 2013 ONSC 6113 at paras. 58, 75 and 76 aff’d 2014 ONCA 215 at para. 12.
- R.R.O. 1990, Reg. 194.
- R.S.O. 1990, c. C.43.
- Mundell v. White, 2022 ONSC 6615 at para.7.
