Court File and Parties

COURT FILE NO.: CV-19-615347-0000 DATE: 20230825 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Audrey Serravalle, a minor, by her Litigation Guardian, Frank Serravalle, Frank Serravalle personally, and Vanessa Serravalle, Plaintiffs AND: Thomas William Duggan, Timberline Landscape Contractors Inc., Donald Thomas Weasner and Halton Recycling Ltd., Defendants

BEFORE: Justice A.P. Ramsay

COUNSEL: Heidi R. Brown and Richard M. Bogoroch, for the Plaintiffs Darren M. Delaney, for the Defendants Donald Thomas Weasner and Halton Recycling Ltd. D’Arcy McGoey, for the Defendants Thomas William Duggan and Timberline Landscape Contractors Inc. Jonathan Lisus and Zain Naqi, as agents for Counsel for the Plaintiffs

HEARD: May 26, 2023

Endorsement

[1] The plaintiffs bring a motion asking the court to reconsider its Endorsement and a number of the findings made in Serravalle v. Duggan, 2023 ONSC 933. That Endorsement involved a motion by the Litigation Guardian, Frank Serravalle, on behalf of a minor plaintiff, Audrey Serravalle, to approve a settlement in a tort action arising from a motor vehicle accident which occurred on May 17, 2018.

[2] The basis of the plaintiff’s motion is that the court is not functus officio and it is open to the Court to make amendments to its Endorsement and give directions with respect to its final Order. The plaintiffs rely on Rules 1.05, 37.14(4) and 59.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and sections 2.1-1 and 2.1-2 of the Law Society of Ontario’s Rules of Professional Conduct.

[3] The Notice of Motion seeks the following:

(a) directions with respect to the settlement of the court’s order in connection with its Endorsement dated March 7, 2023;

(b) directions with respect to the reconsideration of, and amendments to, the Endorsement, including, among other things, clarifying and/or correcting:

i. the accidental slip in paragraph 25 with respect to the quantum of the settlement amount, namely, the use of the plus instead of the word “inclusive”;

ii. Paragraph 61-63 on the use of structured settlements for minors and persons under disability and the placing of a structure prior to court approval of the settlement;

iii. paragraphs 17 and 81-83 on the enforceability of the contingency fee agreement (“CFA”) dated June 27, 2018;

iv. paragraphs 20 and 64 on the enforceability of the Referral Fee Agreement (“RFA”) executed in March 2022;

v. paragraphs 87(iv) and (vii) relating to the Court’s disposition (further to any amendments to paragraphs 17, 20, 61-64 and 81-83, as set out above);

(c) an Order that the Endorsement be withdrawn from pending issuance of an amended endorsement;

(d) in the alternative to paragraph (b) above, an Order under rule 37.14 to amend the accidental slip in paragraph 25 of the Endorsement, as set out above;

(e) in the alternative to paragraph (b) above, an Order under rule 59.06 to set aside and/or vary the Order of the Court dated March 7, 2023, as reflected in paragraphs 87(iv) and (vii) of the Endorsement,

(i) ordering that the CFA is enforceable and approved;

(ii) ordering that the RFA is enforceable and approved

[4] I need not deal with the motion on the merits, save for reconsideration with respect to the accidental slip, which did not require a formal motion.

[5] The decision by a unanimous Court of Appeal in El-Khodr v. Lackie, 2018 ONCA 66, 140 O.R. (3d) 557 is dispositive of the motion. The motion is dismissed save for the relief sought in paragraph (b)(i) to correct an accidental slip, which is contemplated by r. 59.06 of the Rules of Civil Procedure.

[6] The plaintiffs rely on the doctrine of functus officio and the Ontario Court of Appeal decision of Montague v. Bank of Nova Scotia (2004), 69 O.R. (3d) 87 (C.A.), leave to appeal refused, [2004] S.C.C.A. No. 79 to support their position that this court has authority to reconsider the decision rendered before formal entry of the judgment.

[7] In Chandler v. Assn. of Architects (Alberta), [1989] 2 S.C.R. 848, the court stated that functus officio is the general rule that a court cannot reopen its decision after its “formal judgment had been drawn up, issued and entered”, at para. 75. The court loses jurisdiction and is thus said to be functus officio once the formal judgment has been entered: R. v. Adams, [1995] 4 S.C.R. 707, at para. 30; R. v. Smithen‑Davis, 2020 ONCA 759, at paras. 33‑34. There are, of course, two exceptions: (1) a court can correct “a slip in drawing up” the decision, and (2) a court can correct errors “in expressing the manifest intention of the court”: Chandler, at para. 75.

[8] In the recent case of McGrath v. Joy, 2023 ONCA 46, released after the motion was argued, the Court of Appeal reiterated the test to be met for reconsideration. In doing so, the Court of Appeal noted that the court has no jurisdiction under rr. 37.14(6) and 59.06(2) of the Rules of Civil Procedure to reconsider its decision before formal orders are issued. McGrath is consistent with the body of jurisprudence and did not warrant further submissions from counsel. It does have some applicability to the accidental slip, which is the only amendment to be made, and does not really constitute a reconsideration or a re-hearing. The error is obvious and can be corrected.

[9] Rule 37.14 of the Rules of Civil Procedure allows a party or other person who is affected by an order obtained on a motion without notice or a motion of a registrar, or who fails to appear by accident, mistake, or insufficient notice, to “set aside or vary the order, by a notice of motion”. This rule has no applicability.

[10] Rule 59.06 of the Rules of Civil Procedure allows a party to move to amend “[a]n order that contains an error arising from an accidental slip or omission”. To do so, a party must make a motion in the proceeding for the relief claimed. Rule 59.06(2)(a) permits a party to seek to have an order set aside or varied on the ground of fraud or of facts arising or discovered after it is made. Technically, this rule has no application as the plaintiffs have not submitted a draft judgement for issuance which has been taken out, but in any event, the error with respect to the use of the word “plus” instead of “inclusive” is an error that is amenable to being corrected and did not require a motion.

[11] Notwithstanding the fact that rr. 37.14 and 59.06 of the Rules of Civil Procedure do not apply, the jurisprudence establishes that until an order is formally entered in the court record, the court has a broad discretion to vary or withdraw it, but only if it is in the interests of justice to do so: Montague; Pastore v. Aviva Canada Inc., 2012 ONCA 887, at para. 9; Mujagic v. Kamps, 2015 ONCA 360, 125 O.R. (3d) 715, at para. 5, leave to appeal refused, [2015] S.C.C.A. No. 330; Meridian Credit Union Limited v. Baig, 2016 ONCA 942, at para. 7; and First Elgin Mills Developments Inc. v. Romandale Farms Limited, 2015 ONCA 54, 381 D.L.R. (4th) 114, at para. 7.

[12] The discretion to re-open a matter is one that should be resorted to “sparingly and with the greatest care”: 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, at para. 61; Clayton v. British American Securities Ltd., [1935] 1 D.L.R. 432 (B.C.C.A.) at p. 440.

[13] The party seeking to re-open a hearing after a decision has been rendered faces a “high hurdle”: McGrath v. Joy, 2023 ONCA 46, 166 O.R. (3d) 302, at para. 15; Meridian, at para. 7. The court will re-open an appeal prior to the entering of the order only in the rare circumstance where it is in the interests of justice to withdraw the reasons of the court and re-hear the case on the merits: First Elgin Mills, at para. 7; Pastore, at para. 9.

[14] The plaintiffs rely on the following passage from Montague in support of their argument that this court has jurisdiction to reconsider and withdraw its reasons:

“There can be no doubt that until a judgment is formally entered in the court record, the judge has a very broad discretion to change it.”

[15] As for the merits of the motion, the Ontario Court of Appeal has in fact articulated that the right to reconsideration and withdrawal of a court’s reasons is a narrow one. In the result, I adopt the reasons of the unanimous Court of Appeal in El-Khodr, at para. 11, as follows:

Although we have addressed this motion on its merits, that fact should not be taken as any indication that this was a proper motion to be brought. It was not. The issues raised here, in their essence, were that the moving party was treated unfairly because the court decided matters that were not raised by the parties and without notice to them. Such issues are properly the subject for a further appeal, and not a motion for reconsideration. The right to reconsideration and/or withdrawal of the court’s reasons is a narrow one. It is only in rare circumstances and where it is in the interests of justice that a court, having decided a matter, will reconsider: First Elgin Mills Development Inc. v. Romandale Farms Ltd., 2015 ONCA 54, 381 D.L.R. (4th) 114, at paras. 7 and 8.

[16] What are some of the rare circumstances in which reconsideration is justified? The court may reconsider its reasons where it is in the interest of justice to do so. In Schmuck v. Reynolds-Schmuck (2000), 46 O.R. (3d) 702 (S.C.), Himel J. referred to the restrictions on the jurisdiction to reopen a case as follows, at para. 25:

It is my view that a party who wishes a reconsideration alone would have to establish that the integrity of the litigation process is at risk unless it occurs, or that there is some principle of justice at stake that would override the value of finality in litigation, or that some miscarriage of justice would occur if such a reconsideration did not take place.

[17] The jurisprudence indicates that these rare circumstances include where a mathematical error is made, where a judge has failed to advert to a key statutory provision, or where there is an obvious error and correcting the error would change the outcome of the decision.

[18] In Scott, Pichelli & Easter Ltd et. al. v. Dupont Developments Ltd et. al., 2019 ONSC 6789, Sossin J. (as he then was), in considering this issue, stated at para. 11:

What are the rare circumstances in which a reconsideration is justified? It has long been accepted that mathematical errors or errors of inadvertence can be dealt with by a judge without the need and expense of an appeal. As Granger J. stated in Rickett v. Rickett, 71 D.L.R. (4th) 734 (Ont. H.C.), at p. 725], “If it is obvious that an error or omission has been made, counsel should always feel free to approach the trial judge and request that he or she reconsider his or her judgment in order to avoid the necessity of an appeal. On the other hand, counsel should not attempt to reargue their case prior to the formal judgment being issued and entered.”

[19] In Gore Mutual Insurance Co. v. 1443249 Ontario Ltd. (2004), 70 O.R. (3d) 404 (S.C.), Karakatsanis J. (as she then was) granted a motion for reconsideration where counsel failed to bring to her attention a relevant provision in the Insurance Act.

[20] In Brown v. The Municipal Property Assessment Corp., 2014 ONSC 7137, Nordheimer J. (as he then was), speaking on behalf of the Divisional Court, explained the limitations on the power of a motion judge, regardless of whether or not an order had been taken out. At paragraphs 19 and 20, he underlined the principle of finality which undergirds the doctrine of functus officio. In addition, he explained that a judge has a broad power to change an order before it has been signed and entered, there are limitations; the change must either be a technical one or must be necessary to avoid a miscarriage of justice:

In my view, the mere fact that the technical requirements for the finality of the earlier order are missing, because the order was not signed and entered, does not permit a judge to vary that order in whatever manner s/he happens to consider to be appropriate at a later date. The principle of finality, that underlies the functus officio principle, weighs against that scope of authority and that type of alteration. Parties have a right to expect that once a matter is determined by a judge, it is over. Our rules of procedure do not envisage that parties will be allowed to reargue matters, except in very narrow circumstances: Brown, at para. 19.

[21] Mr. Lisus argued that this court’s reasons for decision with respect to the CFA, RFA, and conflict of interest of the litigation guardian were tantamount to sanctioning the lawyers for the plaintiff. The court will not revisit the reasons but would add two things. First, the new information that counsel seeks to put before the court would not have changed the outcome as to whether the CFA or RFA were enforceable, or modified this court’s comments about the potential conflict of the litigation guardian. As this court has repeatedly made clear, on a motion to approve a settlement on behalf of a person under disability, the court must exercise its parens patriae jurisdiction.

[22] Second, the basis for Mr. Lisus’ argument that counsel for the plaintiff has been inappropriately sanctioned is unclear. In Blake v. Blake, 2021 ONSC 7189, the court noted at para. 57:

Lawyers are professionals whose conduct is governed by the Rules of Professional Conduct. While the Law Society regulates the legal profession, our courts may in appropriate circumstances sanction the conduct of a lawyer.

[23] The Supreme Court of Canada has discussed these dichotomous roles in Quebec (Director of Criminal and Penal Prosecutions) v. Jodoin, 2017 SCC 26, [2017] 1 S.C.R. 478, quoting R. v. Cunningham, 2010 SCC 10, [2010] 1 S.C.R. 331, at para. 35. The Court stated, at para. 22:

The court's authority is preventative - to protect the administration of justice and ensure trial fairness. The disciplinary role of the law society is reactive. Both roles are necessary to ensure effective regulation of the profession and protect the process of the court.

[24] The Supreme Court clarifies further in Jodoin, at para. 23, that courts do not have to rely on law societies to oversee and sanction conduct they may witness. In my view, nothing in my reasons for decision amounts to a sanction of the lawyers. Sanctions are commonly referred to in costs awards, contempt orders, and professional regulation proceedings. What exactly a “sanction” is seems to differ based on the corresponding or preceding actions by the lawyer. Further, “sanction” has been defined in Black's Law Dictionary, Bryan A. Garner ed, 7th ed. (St. Paul: West Group, 1999) to include "a penalty or coercive measure that results from failure to comply with a law, rule, or order."

Disposition

[25] In my view, although this court is not functus officio as no judgement has been signed and entered, this is not a rare circumstance where the interests of justice would require the court to withdraw its reasons and rehear the case on the merits: see Pastore, at para. 9; and McGrath, at para. 15.: "The motion is dismissed save for the relief sought in paragraph (b)(i) to correct an accidental slip, which is contemplated by r. 59.06 of the Rules of Civil Procedure."

A.P. Ramsay J. Date: August 25, 2023