Court File and Parties
COURT FILE NO.: CV-21-00672064-0000 DATE: 2024-10-01 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Vikram Dua, Plaintiff -and- Pradeep Chand and Chand Snider LLP, Defendants
BEFORE: Jane Dietrich J.
COUNSEL: Gregory Sidlofsky, for the Plaintiff Thomas Slahta, for the Defendants
HEARD at Toronto: September 25, 2024, by video-conference
ENDORSEMENT
Introduction
1Pradeep Chand and Chand Snider LLP, the defendants, bring a motion for summary judgment pursuant to rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194 (the “Rules”). The defendants seek an order dismissing the claim by Vikram Dua, the plaintiff, against them.
Background
2In the underlying action, Mr. Dua alleges the defendants, who are a lawyer and a law firm, breached common law, contractual and fiduciary duties owed to Mr. Dua by their conduct in representing him in an arbitration proceeding. In essence, the underlying claim is a solicitor’s negligence claim.
3Mr. Dua and Vishal Grover, both accountants, together with a third party founded BGD LLP (the “Partnership”). The Partnership grew over time and on November 2, 2015, an amended and restated partnership agreement was entered into. Under the terms of that partnership agreement, disputes related to the Partnership were to be determined by arbitration.
4Eventually, Mr. Grover and Mr. Dua had a falling out. In August of 2019, BGD LLP and Mr. Grover as claimants commenced the arbitration against Mr. Dua seeking a declaration that Mr. Dua was no longer a partner and seeking payment of certain amounts, including a payment equal to the net equity in Mr. Dua’s capital account in BGD LLP.
5Mr. Dua initially retained Pradeep Chan of Chan Snider LLP to represent him in the arbitration.
6In brief, Mr. Dua alleges that the defendants breached their duty in representing him in the arbitration by:
a. admitting at the outset of the arbitration that BGD LLP had the right to commence the arbitration against Mr. Dua rather than challenging BGD LLP’s standing to do so under the partnership agreement and common law;
b. not seeking a dissolution of the partnership at the outset of the arbitration;
c. not naming additional related entities in a counter-claim; and
d. making inadequate arguments regarding financial disclosure, including related to production to be provided by various related entities.
7Mr. Dua replaced the defendants with replacement counsel prior to the hearing of the arbitration. Mr. Dua alleges that replacement counsel attempted to rectify the errors of the defendants but was not successful in doing so.
8In particular, replacement counsel attempted to amend Mr. Dua’s pleading to argue that BGD LLP had no standing to commence the arbitration and to seek a dissolution of the partnership, but the arbitrator initially denied the amendment on the basis that it would substantially reframe the issues in dispute and contradicted the original pleading filed by the defendants. The arbitrator found that the arbitration had proceeded on the basis that there were no challenges to standing and it would be unfair to permit that basic premise to be changed on the eve of the hearing.
9A similar argument was raised again by Mr. Dua’s replacement counsel during the arbitration hearing. The arbitrator at that time, along with noting the argument had previously been raised and dismissed, also held that the relevant provision of the partnership agreement was very broad and gave the partnership (or any partner) the right to submit to arbitration any dispute between the partners or between the partnership and a partner. The arbitrator also found that it could not be right that the partnership was unable to arbitrate claims against a partner without dissolving the partnership. Accordingly, the arbitrator held, on the merits, that the partnership was entitled to maintain its claim against Mr. Dua in the arbitration. The arbitrator also found that Mr. Dua could have sought a dissolution of the partnership in the arbitration if it had been properly brought on a timely basis and supported by proper grounds. The arbitrator did not address the claim for dissolution on the merits.
10The arbitrator further found that Mr. Dua was a defaulting partner under the partnership agreement, that Mr. Dua had withdrawn from the partnership by his conduct and that Mr. Dua had a negative capital account of $144,208.54. In conclusion, the arbitrator ordered Mr. Dua to pay BGD LLP $289,406.47 as well as the claimants’ costs of $336,144.72.
11Mr. Dua brought an application to the court to set aside the arbitral award and costs order. That application was dismissed. Mr. Dua was unable to pay the award in full and agreed to surrender his interests in the BGD companies as part of a negotiated resolution with the claimants in the arbitration.
12Mr. Dua then commenced the underlying action in this matter against the defendants.
Issue
13Rule 20.04(2)(a) provides: “The court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence”.
14The issue on this motion is whether or not the claim by Mr. Dua raises a genuine issue requiring a trial.
Analysis
15The defendants characterize Mr. Dua’s primary complaint against them as a failure by the defendants to plead that at common law, a partnership could not sue an individual partner except as part of a dissolution of the partnership and/or advance a counterclaim to the arbitration seeking an order dissolving the partnership (the “Dissolution Argument”). They also acknowledge that Mr. Dua also complains that certain production matters were not handled appropriately.
16The defendants argue that no tactical benefit was lost by Mr. Dua because Mr. Ward, as counsel to Mr. Grover and BGD LLP, provided answers to Rule 39.03 written questions to the effect that the claimants in the arbitration would have continued to pursue the arbitration even if such a defence had been raised. It should be noted that Mr. Dua objects to these statements as evidence claiming that they are hearsay after the fact suppositions of what instructions he may have been given.
17The defendants now seek an order dismissing the action because they claim the plaintiff has not established that either (i) their failure to advance the Dissolution Argument in response to the Arbitration; or (ii) their handling of the production motion caused the plaintiff to lose the chance to secure a benefit or avoid a loss. They say because causation has not been established, no damages can flow and therefore there is no genuine issue for trial.
18There is no genuine issue requiring a trial when the court is able to reach a fair and just determination on the merits of the motion. This will be the case where the process (1) allows the court to make necessary findings of fact, (2) allows the court to apply the law to the facts, and (3) is a proportionate, more expeditious, and less expensive means to achieve a just result: Hyrniak v Mauldin, 2014 SCC 7 [2014], 1 S.C.R. 87 at para. 49; Moffitt v. TD Canada Trust, 2023 ONCA 349, 483 D.L.R. (4th) 432, at para. 39.
19The defendants also allege that the partnership agreement was clear that all the matters determined by the arbitrator were properly the subject of arbitration pursuant to the partnership agreement and therefore no proper challenge could have been made to the arbitration proceeding. To support this argument, the defendants’ claim that the dissolution Argument was addressed on the merits by the arbitrator and found to be untenable. Accordingly, they say, the failure of the defendants to plead the Dissolution Argument did not cause Mr. Dua any loss and therefore there is no triable issue.
20In framing the issue in this way, the defendants overlook the treatment of a substantive portion of the claim made by Mr. Dua. Specifically, Mr. Dua’s claims, among other things, that the defendants should have sought a dissolution of the partnership at the pleading stage of the arbitration. He argues that if the defendants had sought a dissolution from the outset, a complete accounting of all related entities would have been required and the leverage within the arbitration would have been altered in his favour. The arbitrator’s dismissal of replacement counsel’s attempt to seek a dissolution of the partnership within the arbitration was rejected, on its face, because the position was taken too late – on the eve of hearing.
21Unlike replacement counsel’s claim that the partnership was not a proper claimant in the arbitration (which claim was addressed on the merits by the arbitrator), replacement counsel’s attempt to seek a dissolution of the partnership within the arbitration was denied by the arbitrator because it was not brought in a timely way.
22Counsel to the defendants point to the provisions of the partnership agreement which address termination of the partnership, but there is insufficient evidence before me of how the arbitration would have unfolded if the request for dissolution had been raised at the outset. Accordingly, I do not accept the defendant’s argument that it is clear that nothing the defendants did or failed to do in the arbitration proceeding caused the defendant to suffer a loss of chance to avoid the outcome of the arbitration.
23The defendants also take the position that Mr. Dua’s claim against them is a collateral attack on the arbitrator’s decision. Given the arbitrator did not decide the merits of a claim by Mr. Dua seeking a dissolution of the partnership, I do not agree with the defendants on this point.
24I am mindful that partial summary judgment should only be granted in the clearest of cases where there are issues that can be readily bifurcated, and which do not give rise to risks of delay, expense, inefficiency, and inconsistent findings: Truscott v. Co-Operators General Insurance Company, 2023 ONCA 267, 482 D.L.R. (4th) 113, at para. 54. and Malik v. Attia, 2020 ONCA 787 at para 62. Given that the factual matrix for the various claims by Mr. Dua are interrelated, I find that it is not appropriate in this case to bifurcate any of the remaining issues.
Disposition
25For the reasons set out above, I dismiss the defendant’s motion for summary judgment.
26At the hearing, the parties both provided cost outlines to the Court. The amounts claimed by both parties on a partial indemnity basis were very similar.
27Fixing costs is a discretionary decision under s. 131 of the Courts of Justice Act, R.S.O. 1990, c C.43. In exercising my discretion, I may consider the result in the proceeding, any offer to settle or to contribute made in writing, and the factors listed in Rule 57.01. These factors include but are not limited to: (i) the result in the proceeding; (ii) the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer; (iii) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed; (iv) the amount claimed and the amount recovered in the proceeding; (v) the complexity of the proceeding; (vi) the importance of the issues; and (vii) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding. Rule 57.01(1)(f) provides that the court may also consider “any other matter relevant to the question of costs.”
28In exercising my discretion to fix costs, I must consider what is fair and reasonable for the unsuccessful party to pay in this proceeding and balance the compensation of the successful party with the goal of fostering access to justice: Boucher v Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at paras. 26 and 37.
29For these reasons, I fix the costs of the motion at $35,000, inclusive of disbursements and Harmonized Sales Tax, and order the defendants to pay that amount to the plaintiff within 30 days of the date of this order.
Jane Dietrich J.
Date: October 1, 2024