Court File and Parties

COURT FILE NO.: CV-17-585828 DATE: May 4, 2023

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Carolyn Liddy v. James C. Morton, Morton Karrass LLP and Morton Barristers LLP;

BEFORE: ASSOCIATE JUSTICE C. WIEBE

COUNSEL: Solomon R. Fischoff for Carolyn Liddy; Jeffrey Streisfield for himself; Christopher Junior for the defendants;

HEARD: April 27, 2023.

Endorsement

[1] This motion was originally returnable March 29, 2022 and sought a timetable order and Rule 30.10 production from the third party lawyer, Mr. Streisfield. Associate Justice Brown granted a consent timetable order and adjourned the Rule 30.10 motion to allow Mr. Streisfield to cross-examine Ms. Liddy on affidavits she swore in this motion. That cross-examination took place.

[2] The Rule 30.10 motion was returned on December 15, 2022. Due to technical issues, it was adjourned by Associate Justice Abrams to April 27, 2023.

Background

[3] Ms. Liddy’s motion material contains two affidavits she swore, and one sworn by Robert Karrass, Mr. Morton’s former partner. Mr. Streisfield filed no affidavits. He filed the transcripts of the cross-examinations he conducted of Ms. Libby and Mr. Karrass; but he made minimal reference to these documents.

[4] Here are the key background facts as evident from the motion material. Ms. Libby was represented by lawyer James Morton in an action she brought against the City of Vaughan and others, action numbered CV-09-383329. Mr. Morton resigned from that case in mid-2016 amidst concerns about his conduct in another matter. Through LawPro counsel, he sent some 7 boxes of documents to Ms. Liddy shortly thereafter. Ms. Libby hired Mr. Streisfield in December, 2016. Mr. Streisfield reviewed the Morton files in Ms. Liddy’s possession and noted serious deficiencies. In one email, he reported to Ms. Libby that he found the file to be “a mess” and “of no value.” He tried unsuccessfully to get further documents from the Morton firm.

[5] Using lawyer, Glenroy Bastien, Ms. Libby commenced this action on November 3, 2017. The core of this action is the allegation that Mr. Morton was negligent in failing to prepare the Vaughan action thereby causing Ms. Liddy damages, including legal costs to “repair” the work done by Mr. Morton. The defendants defended on December 27, 2017.

[6] Mr. Streisfield worked to prepare the Vaughan case for trial. He obtained trial adjournments to allow him to do so. The trial proceeded before Justice Sanfilippo in January, 2018. However, on February 20, 2018 a mistrial was declared because of the discovery of a relationship between a Vaughan witness and a Toronto judge. His Honour ruled that all the trial evidence be transcribed and the exhibits and rulings in the trial be preserved and used at the resumption of the trial.

[7] The trial was moved to Brampton. Documents were uploaded to a drop-box account controlled by the Vaughan lawyers. Ms. Liddy and Mr. Karrass swear they have no access to this drop-box account.

[8] Ms. Libby paid Mr. Streisfield some $250,000 for his work. However, Ms. Libby and Mr. Streisfield parted ways. She hired Mr. Bastien to conduct the trial. Mr. Streisfield said that he was owed between $79,000 and $100,000 and asserted a lien on the documents in his possession. Justice Tzimas ordered the transfer of documents from Mr. Streisfield to Mr. Bastien and gave Mr. Streisfield’s a charge on the proceeds of the action. Mr. Karrass swore that Mr. Bastien advised him that he, Mr. Bastien, did not receive the documents from Mr. Streisfield.

[9] In October, 2018 Ms. Liddy initiated two assessments of Mr. Streisfield’s accounts, one concerning Mr. Streisfield’s 2017 bills that were paid, and the other concerning a March 18, 2018 bill for $79,301.73 that was not. Mr. Karrass acted for Ms. Liddy on the assessments. Mr. Streisfield was ordered to deliver invoices and documents. Ms. Liddy states that he did not do so. Mr. Karrass in cross-examination confirmed that he received the invoices. On June 10, 2021 an assessment officer adjourned the assessments sine die to allow for a motion by either Ms. Liddy or Mr. Streisfield to a judge to determine the jurisdiction of the assessment officer to assess the 2017 accounts. Neither Ms. Liddy nor Mr. Streisfield brought this motion.

[10] The trial in the Vaughan case resumed in Brampton before Justice Tzimas on November 19, 2018. On January 24, 2020, Ms. Libby’s action was dismissed in its entirety. On July 16, 2020 Ms. Libby was ordered to pay $585,000 in costs. The Streisfield charge expired with this result.

[11] In the meantime, in this action, the parties exchanged affidavits of documents. The defendants allege that Ms. Libby’s productions are deficient as they do not contain all the documents she will be relying on, namely the Morton and Streifield files. They refuse to have discoveries until this is corrected.

Analysis

[12] Rule 30.10(1) authorizes the court to order production from a non-party where the court is satisfied of two things: (a) that the documents sought are relevant to a material issue; and (b) it would be unfair to require the moving party to proceed to trial without the documents. Concerning the second part of the test, Justice Perrel said this in Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2014 ONSC 3513 at paragraph 127:

In deciding whether to order production of documentation from a non-party, the court should consider the following: (a) the importance of the documents in the litigation; (b) whether production at the discovery stage of the process as opposed to production at trial is necessary to avoid unfairness; (c) whether the discovery with respect to the issues to which the documents are relevant was adequate and if not, whether responsibility for that inadequacy rested with the examining party; (d) the position of the non-parties with respect to production; (e) the availability of the documents or their informational equivalent from some other source; and (f) the relationship of the non-parties from whom production was sought to the litigation and the parties to the litigation.

[13] Ms. Liddy seeks the following documents from Mr. Streisfield: copies of the documents he received from the Morton firm; copies of the documents Mr. Streisfield generated to advance the Vaughan action such as motion records, expert reports, etc.; copies of Mr. Streisfield’s own internal work product concerning strategy and thinking, such as memoranda, emails, letters, notes, drafts of documents, etc.; and the invoices Mr. Streisfield rendered to Ms. Liddy. Ms. Liddy is prepared to pay the reasonable of getting these documents whether by paper or digital format.

[14] Concerning relevance, I have little trouble finding that these are relevant documents. This action concerns primarily the legal costs Ms. Libby says she paid to Mr. Streisfield to have him repair, supplement or improve on what Mr. Morton did in relation to the Vaughan action. Therefore, it is central to this case as to what Mr. Streisfield did and charged concerning the Vaughan action.

[15] I will, therefore, turn to the second part of Rule 30.10(1) test and apply the factors Justice Perrel outlined above to this motion:

a) Importance of the documents: Again, I have little trouble finding that these documents are important to this case. They will document what work Mr. Streisfield did and charged for after Mr. Morton resigned from the Vaughan case. b) Discovery stage production: This action has not gone through discovery. The defendants need to examine these documents. Therefore, if production is ordered, the defendants will have an opportunity to examine them at discovery, and understand the case against them. c) Inadequacy of the existing discovery: The necessity for this production is accepted by both sides in this action. The real question is whether Ms. Liddy is responsible for this inadequacy. Mr. Streisfield asserts in argument that Ms. Liddy is responsible, as she has not demonstrated a sufficient search by her for the documents from other sources. The evidence in this motion supports Ms. Liddy’s position that she is not responsible. The evidence indicates that Ms. Liddy does not have the entire Morton file that was delivered to Mr. Streisfield, that Ms. Liddy and her lawyers do not have access to the drop-box account that apparently contains the records Mr. Streisfield filed with the court, that Mr. Bastien did not receive documents from Mr. Streisfield, and that Mr. Streisfield did not deliver the documents (other than the invoices) he was ordered to deliver in the assessment proceedings. Mr. Streisfield’s assertion he supported only with an excerpt from the transcript of the Karrass cross-examination in which Mr. Karrass confirmed that he has the Streisfield invoices. d) Position of Mr. Streisfield: In (c) above, I disposed of one of the two positions taken by Mr. Streisfield in this motion, namely the position that Ms. Liddy is responsible for the lack of adequate discovery. The other position is more troubling. Mr. Streisfield asserts a lawyer’s lien on the subject documents on account of the unpaid Streisfield account of March 18, 2018. A lawyer’s lien is a possessory right that exists at common law whereby a lawyer can retain possession of the documents in his or her possession to secure unpaid accounts; see Thomas Gold Pettinghill LLP v. Ani-Wall Concrete Forming Inc., 2012 ONSC 2182 at paragraph 82. This lien covers both documents that would otherwise belong to the client and those that would otherwise belong to the lawyer. In this case, that would mean all of the documents in question. I will discuss this issue further below. e) Availability from other sources: I reiterate what I said in (c) above. Ms. Liddy has established that she cannot get these documents (other than the invoices) from other sources. That is particularly the case with Mr. Streisfield’s internal work product. f) Relationship with Mr. Streisfield: This factor concerns the same issue as in (d) above. Mr. Streisfield is Ms. Liddy’s former lawyer and has asserted a lien on the subject documents to secure his unpaid account. That needs to be dealt with.

[16] Concerning the issue of Mr. Streisfield’s lien, Ms. Liddy did not address this issue in her material. She also did not bring a motion under Rule 15.03(4). This is the rule that allows a party to bring a motion to determine whether and to what extent a former lawyer has a lien. A lawyer’s lien is subject to the discretion of the court; see Thomas Gold Pettinghill LLP, op. cit., at paragraph 82.

[17] It would appear that one of the factors the court may bring to bear in exercising its discretion concerning a lawyer’s lien is whether there is evidence that the client is unable or unwilling to pay the account; see Thomas Gold Pettinghill LLP, op. cit., at paragraph 88. If the lawyer establishes this proposition, the lien may be upheld. In this case, it is undisputed that the March 18, 2018 invoice for $79,301.73 was not and has not been paid. Ms. Liddy triggered an assessment of that account. The assessment per se is evidence that Ms. Liddy is willing to pay the outstanding invoice once it is assessed.

[18] But that assessment was adjourned on account of Ms. Liddy’s other assessment of the paid 2017 accounts, an assessment that requires a determination by a judge as to jurisdiction. There has been no motion by Ms. Liddy to a judge to determine this jurisdiction issue, and no explanation from her as to why she has not brought this motion. A reasonable inference to be drawn from these facts is that Ms. Liddy is in fact simply unwilling to pay the March 18, 2018 account. This may very well justify the Streisfield lien. Ms. Liddy’s only apparent explanation for her conduct in the motion material is that she has paid enough to Mr. Streisfield already. But that will be determined in the adjourned assessment.

[19] In her motion material, Ms. Liddy did not address the issue of the Streisfield lien. In oral argument, Mr. Fischoff referred me to rule 3.7 of the Law Society’s Rules of Professional Conduct and argued that this rule dealt with the assertion of a lawyer’s lien in the face of a motion for production of a lawyer’s file such as this. He did not make this point or produce this rule in his factum. I have looked for and found this rule. It does not assist the court, as it indicates that a lawyer may indeed assert a lawyer’s lien when withdrawing services. What is needed is a motion under Rule 15.03(4) to determine the existence and extent of the Streisfield lien and the terms under which it should be discharged.

[20] I, therefore, find that Ms. Liddy has failed to establish the second part of the test under Rule 30.10(1), namely the requirement to prove that it would be unfair to require that Ms. Liddy proceed to trial without the discovery of the subject documents. If her inability to obtain the requested documents is due to her own unwillingness to pay her former lawyer’s account, Ms. Liddy has no reason to complain. Presumably, whatever she pays Mr. Streisfield will be added to the other amounts she is claiming from the defendants in this action. Not paying, therefore, suggests that these documents are not as important to her as she claims. At minimum, there needs to be a motion under Rule 15.03(4). I dismiss the motion.

[21] Concerning the costs of the Rule 30.10 motion that I determined, Mr. Fischoff uploaded a costs outline that shows $7,367.81 in partial indemnity costs and $10,891.15 in full indemnity costs. Mr. Streisfield uploaded a costs outline that shows $8,269.92 in partial indemnity costs and $10,247.42 in actual costs.

[22] I believe I have enough to make a ruling on costs. Ms. Libby did not succeed in her motion and, therefore, is not entitled to costs. I also find that Mr. Streisfield is also not entitled to all the costs he claims. He contributed to the issue that undermined this motion, the lien issue, by himself failing to bring the jurisdiction motion and advance the assessment. He also filed no evidence, which means that his costs should not be as large as Ms. Libby’s. The cross-examination transcripts he obtained were not used to a great degree in the argument. I found his oral and written submissions disjointed, hard to follow and not very helpful. Given the plaintiff’s partial indemnity costs claim, I find that Mr. Streisfield should be paid partial indemnity costs of $2,500 in thirty days from today. This amount is 33% of the Liddy partial indemnity claim, and is an amount that Ms. Liddy could reasonably expect to pay in the event of a loss, given the evidence. That is what I order.

[23] Either party can challenge this ruling on costs by serving and uploading written submissions on costs of no more than one page on or before 12 noon on Tuesday, May 9, 2023. If that is not done, my costs order will be confirmed. If either party challenges my costs order in time, the order will be set aside. In that event, the responding party will have up to and including May 12, 2023 to deliver and upload written submissions on costs of no more than one page. Reply written costs submissions of no more than half a page can then be delivered and uploaded up to an including May 16, 2023. Bear in mind, that my final order as to costs could go in either direction and will include the costs of the written submissions on costs.

DATE: May 4, 2023

ASSOCIATE JUSTICE C. WIEBE