Court File and Parties
Court File No.: CV-15-68-SR Date: 2024/03/04 Ontario Superior Court of Justice
Between: SOCIÉTÉ PROFESSIONNELLE CHARRON, Plaintiff And: MARIO AND CHANTAL BRISSON, Defendants
Counsel: S. Sviergula, for the Plaintiff P. Lermusieaux, for the Defendants
Heard: December 1 and 4, 2023, at L’Orignal, Ontario
Before: The Honourable Justice P. E. Roger
Reasons for Judgment
[1]
Introduction
The Brisson defendants bring this motion seeking relief or answers to the following questions:
i. The parties agreed to add or to reinstate Christian Pilon as a defendant to the counterclaim, and the defendants Brisson also seek to add or to reinstate Charron Langlois S.R.L. as a defendant to their counterclaim. ii. Whether costs thrown away should be ordered and, if so, in what amount for the amendments to the defence or relating to the amendments to the defence and counterclaim. iii. Whether certain documents should be ordered produced by the defendants to counterclaim and whether portions of these documents should be redacted.
[2]
Background
Briefly, regarding the facts, Chantal Brisson retained Christian Pilon as her lawyer in a family application. Mr. Pilon was her lawyer from July 2012 until July 2015. Ms. Brisson and her former husband were the owners of a farming operation and farming properties. During their relationship, the farming business was transferred to them by the parents of Ms. Brisson’s spouse, and the lawyer who acted on these earlier transactions coincidently was practicing with Mr. Pilon’s firm during parts or all the retainer of Ms. Brisson with Mr. Pilon.
3This led to allegations of conflicts of interest by the former husband of Ms. Brisson and led to a motion in the family application on this topic.
4Overall, Ms. Brisson was billed more than $254,000 for the legal services of Mr. Pilon in the family application up to when she terminated his services in July 2015.
5The statement of claim at issue, which was issued in September of 2015 by Charron Langlois S.R.L., claims an additional $38,000 from the defendants Brisson for the legal services of Mr. Pilon. The defendants Brisson defended this statement of claim and counterclaimed later in September of 2015. Thereafter, the file stayed in abeyance for almost five years.
6A letter was sent in November of 2015 on behalf of the plaintiff and defendants to counterclaim asking for time for them to consult their insurers. Nothing else occurred until Ms. Brisson wrote to LAWPRO to inquire sometime in September of 2019. Subsequently, in May or June of 2020, a reply and defence to the existing defence and counterclaim was delivered by Charron Langlois S.R.L. and Christian Pilon.
7In September of 2020 a motion was brought on behalf of the plaintiff and defendants to counterclaim to change the style of cause to reflect the alleged status of the partnership. The defendants were self-represented up until recently and at this motion the style of cause was changed to replace Charron Langlois S.R.L. as the plaintiff and defendants to counterclaim with the current Société Professionelle Charron Professional Corporation.
[8]
Reinstatement of Parties
The defendants Brisson, with this motion, seek to reinstate Charron Langlois S.R.L. and Christian Pilon as defendants to the counterclaim. The defendants to the counterclaim consent to the addition or reinstatement of Mr. Pilon, but not to the addition or reinstatement of Charron Langlois S.R.L. claiming that this firm is no longer a legal partnership and should not be added as this will create procedural difficulties.
9For the following reasons, I find that Charron Langlois S.R.L. should be reinstated as a defendant to the counterclaim. Charron Langlois S.R.L. started this action and they were made a defendant to the counterclaim in September 2015. There is therefore no prejudice to Charron Langlois as they have been a party from the outset, and as their partners were aware or had knowledge of this action and counterclaim going back to 2015. Since 2015, Charron Langlois continued to take steps in this action and in June 2020, it sent a reply and defence to counterclaim to the defendants Brisson.
10As well, the order of September 2020 did not or should not have removed Charron Langlois as a defendant to the counterclaim as this was not before the Court and as this was a fairly different issue from that of the plaintiff seeking the enforcement of its fees versus the defendants counterclaiming and making allegations at the time of negligence, breach of contract and breach of fiduciary duty.
11Further, the defendants to counterclaim have not established, for the purpose of this motion, that Charron Langlois S.R.L. ceased to exist or that it may not defend itself in this action for what occurred back in 2012 to 2015 when they, Charron Langlois, were the lawyers to the defendants Brisson, surely of Ms. Brisson and they alleged at the time to Mario as well.
12The Business Corporations Act and the Law Society Act do not appear to have the effect argued, i.e. it does not appear that the partnership ceased to exist because conditions precedent no longer existed, and the onus was on the defendants to counterclaim to prove this allegation.
13From a procedural perspective, it will be possible to serve Charron Langlois S.R.L. and if they do not defend, it will be possible to note them in default. The action will then continue, as it should, and all necessary findings about the partnership, about its legal status, about its partners at various times will be made at a later date and with a better record than what is before me today on this procedural motion. Therefore, I make no finding about the legal status of Charron Langlois at this time. I do not find that it is necessary for this Court to do so for the purposes of this motion.
[14]
Costs Thrown Away
On the topic of costs thrown away, this is a discretionary matter for the Court and in my view, this is not an appropriate case for such an order. The facts pleaded in the draft proposed amended statement of defence and counterclaim are fairly similar to the original defence and counterclaim with the exception that the pleading of negligence is removed but the pre-existing pleadings of breach of contract or breach of fiduciary duties remain, and the facts are not that dissimilar in the two pleadings.
15The trial judge will be in a much better position than I am today to decide what is fair and reasonable on the topic of costs and dealing with costs thrown away today is not necessary. Consequently, I will not make an order for costs thrown away.
[16]
Disclosure
On the topic of disclosure, the documents sought by the moving parties are relevant and they shall, with the exception only for the banking records, be disclosed fully, with no redaction. If Mr. Pilon’s 2015 T4 is not available, then his 2015 income tax return and 2015 notice of assessment shall be disclosed instead of the missing T4, again in an un-redacted format.
17The documents sought are relevant to the allegations made in the defence and counterclaim of the defendants Brisson, as well, are relevant to the allegations made in the reply and defence to counterclaim previously filed by Charron Langlois S.R.L.
18The partnership agreements in force between July 2012 and July 2015 will indicate who had what managerial authority within the partnership at different times and this is directly relevant to the allegations of breach of fiduciary duty, breach of contract and, as well, the allegations made by the firm at the time in its defence to counterclaim and by Mr. Pilon, as well. It is not just who was a partner at various times that is relevant, but more so who at the firm managed the firm and to what extent – how was the firm managed – were there partners who manage the firm with or without the authority of the other partner. Therefore, these and all existing partnership agreements between those dates must be produced in an un-redacted format. There is nothing confidential in this action about the content of partnership agreements, particularly when the partnership no longer exists if you accept the allegations of the defendants to counterclaim.
19The share transfer agreement is directly relevant to Mr. Pilon’s allegation that he was not a partner as of January 1, 2015. Without that document being produced in full in an un-redacted format that assertion by Mr. Pilon cannot be fully understood and certainly cannot be tested.
20Similarly, Mr. Pilon’s T4 or, if not available, his income tax return and notice of assessment for 2015 will shed light on whether he was a partner in 2015 and how or what partnership income he received. This relates not only to credibility but to the issues raised relating to breach of contract and breach of fiduciary duty.
21The banking records will shed light on whether various funds were deposited in a trust account and, if they were, as to when they were withdrawn, and this is relevant to the breach of trust allegation and inappropriate management of the trust account raised by the defendants Brisson. However, these banking records will have to be redacted and be limited to what relates to the defendants Brisson.
22If the applicable Caisse Populaire, or the Law Society or the trustee do not have or do not disclose requested documentation, then the defendants Brisson will have to consider bringing a motion seeking production from the appropriate third or non parties.
[23]
Order
Consequently, the following is ordered:
- Leave is granted to the defendants Brisson to amend their defence and counterclaim as per the final draft of that document attached to their motion record.
- The style of cause of this action will henceforth be as follows: Société Professionnelle Charron/Professional Corporation v. Chantal Brisson et Mario Brisson v. Christian Pilon et Charron Langlois S.R.L.
- The defendants to counterclaim shall deliver any amended reply and defence to the counterclaim within 30 days of service, and the defendants Brisson may deliver any required reply within 10 days of service.
- Within the next 30 days, the defendants to counterclaim, that is Christian Pilon and Charron Langlois L.L.P., shall serve on the defendants Brisson an un-redacted copy of the following documents:
i) any and all partnership agreement relating to Charron Langlois during the period from July 2012 to July 2015;
ii) the share purchase agreement of January 1, 2015 and;
iii) any documents related to whether Christian Pilon was a partner or an employee of Charron Langlois in January 2015, including a copy of his un-redacted 2015 T4, and if that document is not available, an un-redacted copy of his 2015 income tax return and an un-redacted copy of his 2015 notice of assessment.
iv) The defendants to counterclaim, again that is Christian Pilon and Charron Langlois S.R.L., shall exert their best efforts to obtain, within the next 90 days, a copy of the banking records for Charron Langlois S.R.L. for the following periods of times:
i. March, April and May 2013;
ii. October, November and December 2013;
iii. April, May and June 2014;
iv. August, September and October 2014;
v. November and December 2014; and
vi. February, March and April 2015.
These documents shall be produced with required and appropriate redaction for what does not relate to the defendants Brisson.
v) The defendants to counterclaim, again that is Christian Pilon and Charron Langlois S.R.L., shall exert their best efforts to obtain within the next 90 days, the signed electronic trust transfer requisitions for payments to the trust account for these defendants on or about the following dates. Here I am referring to the draft order paragraph 6(a), prepared by the defendants, Brisson. The dates of payment in trust as per the document général, I believe of the partnership are:
- April 30, 2013 in the amount of $1,500.00;
- November 19, 2013 in the amount of $31,500.00;
- May 26, 2014 in the amount of $750.00;
- September 26, 2014 in the amount of $9,000.00;
- November 27, 2014 in the amount of $15,000.00; and
- March 19, 2015 in the amount of $15,076.25. I repeat that it is not clearly known whether these dates are the exact dates, but it is around those dates for these amounts that the electronic trust was at least signed or the signed copy of the electronic trust transfer requisition on these dates is required. vi) Best efforts to be exercised by the defendants to the counterclaim shall, at a minimum, include writing and contacting as necessary the relevant financial institution, the Law Society and the trustee who managed the property. I am not sure if the trustee is in the sellers , I think it was somebody else and the trustee who managed the property of Charron Langlois. vii) Copies of all correspondence or e-mails sent to these entities and copy of all documents, correspondence received shall be disclosed to the defendants Brisson (except for what needs to be redacted as ordered above).
24I should add that in addition to what I have decided, the parties had also agreed to an order on consent.
[25]
Costs of the Motion
On the topic of costs, I do not find the conduct of Mr. Pilon or that of his insurer to be deserving of substantial indemnity costs. No offer is relevant to warrant such an increased scale of costs and the conduct of obtaining the 2020 order and its consequences do not quite rise to what might be egregious or a reprehensible conduct, at least not on the evidence now available to me.
26Costs on a substantial indemnity basis are rarely awarded and are limited to cases where an offer is relevant to triggering the application of the rules or when the conduct of a party is egregious or reprehensible.
27The moving parties were entirely successful, and they should be entitled to their costs of this motion on a partial indemnity basis. What is a reasonable, proportionate, and fair amount of costs to order in the circumstances in this motion is a rather difficult question.
28This was a procedural motion, and it was not a complicated motion. The responding parties consented to the amended statement of defence and counterclaim and consented to the addition or reinstatement of Mr. Pilon as a defendant to the counterclaim. This left the issue of whether the firm, Charron Langlois, should also be reinstated as a party and initially the responding party took no position on this issue. The other issues of costs thrown away and of whether certain documents should be produced in an un-redacted format are similarly not complicated.
29Despite this, a full day was booked for this motion and a very substantial number of documents was delivered by the moving party. It was not necessary to file a record of about 1,000 pages for this motion. A much shorter or more precise motion record would have been amply sufficient to provide to the Court the evidence required to deal with this matter fairly and fully. Similarly, it is not clear that the cross-examination of Mr. Pilon was required.
30The moving parties have incurred over $38,000.00 in fees and disbursements related to this motion. This is not a proportionate amount to what the motion required. Six hours was spent preparing and attending the cross-examination of Mr. Pilon which, was not necessary for this motion to be decided. Similarly, the transcript was not necessary.
31I am mindful of Rule 39.02(4)(b) of the Rules of Civil Procedure, but will simply set off costs of about six hours related to the cross-examination. By opposition to the approximate 120 hours spent by the moving parties, the responding parties spent about 52 hours, with their total costs totalling approximately $21,000.00. However, the costs of the responding parties were driven upward by the too voluminous materials delivered by the moving parties and by the unnecessary cross-examination of Mr. Pilon. The responding parties’ costs would likely otherwise have been in the range of about $15,000.00.
32As well, it would likely have been necessary in any event for the moving party to bring a motion to amend their pleading as they wished to plead in French, remove a cause of action, and to outline their allegations more particularly once they had legal representation. Therefore, some of the motion would have been required in any event, although, the 2020 error caused by the responding parties made the amendments unnecessarily more complicated, which complicates my analysis.
33There is no question that without looking at the conduct and whether it was egregious or not, the 2020 order correcting the style of cause and removing parties inappropriately from the style of cause was caused by the plaintiff and by the defendants to counterclaim. As well, the documents sought were relevant to the allegations in the agreed upon amended pleadings and this part of the motion should not have been necessary.
34Considering everything, a reasonable and proportionate amount of costs for the fees of a motion of this complexity and importance to the parties should have been in a range not exceeding about $20,000.00, net of any cross-examination costs awarded to the respondent. On a partial indemnity basis, this would be $12,000.00 plus HST plus disbursements of about $339.00 for the motion, nothing is allowed for the transcript as this was not necessary. This is fair and within the reasonable expectations of the losing parties.
35Consequently, costs of $14,000.00 all inclusive are ordered payable by the defendants to counterclaim within the next 30 days.
Released: March 4, 2024 The Honourable Justice P. E. Roger