Court File and Parties

COURT FILE NO.: CV-21-00659943-0000 DATE: 20241112 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ALEXANDER SHAULOV, Plaintiff (Moving Party) AND: LAW SOCIETY OF ONTARIO, PERFORMANCE ASSESSMENT GROUP INC., JOHN BRAHAM and MICHAEL WILLIAMS, Defendants (Responding Parties)

BEFORE: L. Brownstone J.

COUNSEL: Alexander Shaulov, self-represented Stephen Aylward, for the Defendants/Responding parties

HEARD: November 5, 2024

Endorsement

Introduction

[1] The plaintiff applied for a license to practise law in October 2017. He successfully passed the solicitor examination on his third attempt, but failed the barrister examination four times. As a result, in accordance with its bylaws, on October 1, 2020, the defendant Law Society of Ontario advised Mr. Shaulov that his application for a license was deemed abandoned.

[2] Mr. Shaulov commenced proceedings against the LSO and three other defendants, Performance Assessment Group, John Braham and Michael Williams (the non-LSO defendants). The non-LSO defendants are consultants who were involved with the design of the LSO’s licensing examinations.

[3] The claims against the non-LSO defendants were struck as disclosing no reasonable cause of action. After an extensive procedural history which I shall review in relevant part below, Mr. Shaulov brought this motion under rules 5.03, 5.04(2) and 26.02 of the Rules of Civil Procedure to amend his statement of claim to re-add the non-LSO defendants. The responding parties oppose the motion.

[4] For the reasons that follow, the motion is dismissed.

Procedural history

[5] Mr. Shaulov commenced judicial review proceedings against the LSO. At his request, the Divisional Court ordered the matter to be transferred to the Superior Court to proceed by way of action. On April 6, 2021, Mr. Shaulov issued a statement of claim against the LSO and the non-LSO defendants.

[6] I will not review the entire history of the proceedings, but will limit myself to a focused review of steps that are relevant to this motion.

[7] In Shaulov v. Law Society of Ontario, 2022 ONSC 2732, Vermette J., the former case management judge, struck out the claim against the non-LSO defendants without leave to amend on three bases. First, she found that the human rights allegations against the non-LSO defendants disclosed no cause of action because there was no separate actionable wrong alleged, apart from the human rights complaint. The proposed action therefore ran afoul of s. 46.1(2) of the Human Rights Code, RSO 1990, c. H.19, which provides that a person may not commence an action based solely on an infringement of a right under Part 1 of the Code. Second, any Charter claims Mr. Shaulov wished to make against the non-LSO defendants would be precluded by virtue of s. 32 of the Charter and the fact that the non-LSO defendants are private actors not performing governmental activities. Third, she rejected Mr. Shaulov’s arguments based on rule 5 that the non-LSO defendants were necessary parties to enable the court to adjudicate effectively and completely on the claims that may be validly alleged against the LSO. Relevant evidence could be obtained from them without making them parties.

[8] Mr. Shaulov appealed that decision. On February 10, 2023, the Court of Appeal released its decision upholding Vermette J.’s order striking the claim against the non-LSO defendants without leave to amend. At the same time, the Court of Appeal allowed Mr. Shaulov’s appeal in part in respect of Vermette J.’s orders striking some of the claims against the LSO: Shaulov v. Law Society of Ontario, 2023 ONCA 95. In its reasons in relation to the non-LSO defendants, the Court of Appeal referred specifically only to the Human Rights Code portion of Vermette J.’s reasoning. Nonetheless, it upheld the striking of the claim against the non-LSO defendants without leave to amend.

[9] Following the release of the Court of Appeal decision, the Plaintiff served an amended statement of claim that still included the non-LSO defendants. While the amended statement of claim did not seek any relief against the non-LSO defendants, Mr. Shaulov took the position that he could keep the non-LSO defendants as parties pursuant to subrules 5.03(1) and (4) of the Rules of Civil Procedure. Justice Vermette fixed a timetable for written submissions on this issue (and an unrelated issue). After the defendant delivered written submissions, the plaintiff served a “re-amended statement of claim” seeking a declaration that the non-LSO defendants “were negligent and misrepresented the nature of the Examinations and thus negligently and intentionally mislead [sic] the Plaintiff.” That pleading also claimed damages against the non-LSO defendants “for their negligent misconduct, intentional bad faith misrepresentation and misleading the plaintiff.”

[10] Justice Vermette found the two amended claims did not comply with her order regarding the non-LSO defendants, as upheld by the Court of Appeal. In Shaulov v. Law Society of Ontario, 2023 ONSC 5242 she stated in part as follows:

[43] I find that the Non-LSO Defendants are no longer parties to this action. In the Motion Decision [2022 ONSC 2732 described in para. 7 above], I struck all the claims against the Non-LSO Defendants without leave to amend. This was upheld by the Court of Appeal. I also expressly rejected the Plaintiff’s argument that it was necessary for the Non-LSO Defendants to be joined as parties to enable the Court to adjudicate effectively and completely on the claims that may be validly alleged against the LSO in this proceeding: see Motion Decision at para. 117.

[44] I reject the Plaintiff’s argument that the Court of Appeal “did not maintain the Motion Judge’s obiter with respect to the necessary party”. The Court of Appeal’s reasons do not discuss this point. The Court of Appeal held that the Plaintiff’s claims against the Non-LSO Defendants “were properly dismissed without leave to amend”: see Shaulov CA at para. 21. Had the Court of Appeal’s view been that the Non-LSO Defendants were necessary or proper parties, it would have addressed the issue.

[45] While I have already held that the Non-LSO Defendants are not necessary parties to the action, I have considered the Plaintiff’s arguments and I am satisfied that based on both the original Statement of Claim and the Amended Statement of Claim, the Non-LSO Defendants are not necessary parties to the action. The Plaintiff pleads that the Non-LSO Defendants were retained by the LSO to prepare a report and make recommendations with respect to licensing examinations. It is clear from the Statement of Claim (and the statutory framework) that the LSO was the decision-maker. Based on the pleading, the resolution of the dispute between the Plaintiff and the LSO will not directly affect the Non-LSO Defendants financially or with respect to their legal rights. Further, the Non-LSO Defendants do not need to be bound by the result of the action. See York Region Condominium Corporation No. 890 v. Market Village Markham Inc., 2020 ONSC 3993 at paras. 374-378.

[46] The Plaintiff stated in his oral argument that the Non-LSO Defendants are manufacturing examinations for other clients and regulatory bodies (other than the LSO) and that he wants to stop them from preparing discriminatory examinations. What the Non-LSO Defendants may be doing for other regulatory bodies is irrelevant to the Plaintiff’s claims in this action. Moreover, it is difficult to see how the Plaintiff could have a personal and direct interest and, therefore, standing with respect to examinations that he has not taken and he is not planning to take.

[47] Since all claims as against the Non-LSO Defendants have been struck without leave to amend and it has been determined that they are not necessary parties, the Non-LSO Defendants are no longer parties to the action. If the Plaintiff wishes to plead a totally new cause of action and seek relief against them, he requires the consent of the LSO and the Non-LSO Defendants or leave of the Court: Rule 26.02 of the Rules of Civil Procedure. Neither consent nor leave has been obtained. I cannot summarily determine whether leave should be granted to the Plaintiff to file the Re-Amended Statement of Claim based on the record before me. If the Plaintiff would like to bring a motion to obtain leave, this can be discussed at the next case conference. However, some of the points raised by the Defendants regarding the Plaintiff’s proposed amendments have, at a minimum, an air of reality and should be seriously considered by the Plaintiff, including the issues of abuse of process and duty of care.

[11] Justice Vermette ordered that the plaintiff serve, within 30 days, an amended statement of claim that does not include any claims against the non-LSO defendants and that strikes out their names in the title of proceedings.

[12] Mr. Shaulov sought to appeal that decision to the Court of Appeal: Shaulov v. Law Society of Ontario, 2024 ONCA 263. The Court of Appeal quashed the appeal, stating in relevant part as follows:

[2] A case management judge, Vermette J. of the Superior Court, struck out the claims against the non-LSO parties. That order was affirmed on appeal. In a subsequent case management meeting, the case management judge said: Since all claims as against the Non-LSO Defendants have been struck without leave to amend and it has been determined that they are not necessary parties, the Non‑LSO Defendants are no longer parties to the action. If the Plaintiff wishes to plead a totally new cause of action and seek relief against them, he requires the consent of the LSO and the Non-LSO Defendants or leave of the Court: Rule 26.02 of the Rules of Civil Procedure. Neither consent nor leave has been obtained.

[3] The appellant seeks to appeal this decision. The respondents say that the appellant is in the wrong court; the case management judge’s decision is interlocutory in nature and an appeal must be taken to that court, with leave of that court.

[4] The respondents are correct. This court lacks jurisdiction to hear the appeal. The order from which the appellant appeals is interlocutory.

[5] The motion judge did not determine that the appellant could not bring the claims that he is seeking to restore against the Non-LSO respondents. All she held was that the appellant had taken the wrong procedure in making those claims. If he wanted to make the new claims under the auspices of his original action, he needed to seek either consent or leave. Indeed, the case management judge invited him to seek leave: “If the Plaintiff would like to bring a motion to obtain leave, this can be discussed at the next case conference.”

[13] Mr. Shaulov then sought an extension of time to seek leave to appeal the decision of Vermette J. to the Divisional Court. On October 18, 2024, the Divisional Court granted an extension of time to seek leave to appeal the decision but denied the motion for leave, with costs to the respondents.

[14] Mr. Shaulov then brought this motion seeking leave to amend his statement of claim to allege negligence against the non-LSO participants.

Position of the Parties

[15] Mr. Shaulov argues that he should be entitled to add the non-LSO defendants and plead negligence against them as set out in the “Re-Amended statement of claim”. In that pleading, Mr. Shaulov proposes to:

• seek a declaration that the non-LSO defendants were negligent and misrepresented the nature of the examination and thus negligently and intentionally misled the plaintiff;
• seek an order that all defendants pay compensation for “lost of chance including punitive and compensatory damages in the amount equal to $1,000,000 for their negligent misconduct, intentional bad faith misrepresentation and misleading the plaintiff”;
• add a paragraph identifying Mr. Brahan, and a paragraph that the Performance Assessment Group and the LSO insisted that there would be no alternative examination;
• add a paragraph in the portion of the claim referring to Charter breaches that both the LSO and the Performance Assessment Group should have differently focused on a particular target group;
• add a paragraph stating that the defendants were negligent in designing, structuring, scoring, using and implementing the impugned examination, and in their legal duty to ensure the examination meets the requirements of the Law Society Act; and
• plead the LSO has unlawfully delegated its authority to the non-LSO defendants, and the non-LSO defendants are unqualified to perform the actions they carried out in respect of the examination.

[16] Mr. Shaulov’s theory is that the non-LSO defendants misrepresented themselves as experts in testing. He argues that “the PAG Defendants are the mastermind, directing mind, designers, developers and the manufacturer of the impugned Examination whereas the LSO Defendant is only the user”, and that, as mastermind, they are necessary parties. He relies on Schembri v. Way, 2012 ONCA 620 for this proposition.

[17] Mr. Shaulov claims he has only recently discovered facts about the non-LSO defendants that support his negligence cause of action. He relies on IAP Claimant H-15019 v. Wallbridge, 2023 ONSC 3945; Abrahamovitz v. Berens, 2018 ONCA 1000 to argue that parties may be added as necessary parties even when no cause of action is pleaded against them. Mr. Shaulov contends that the non-LSO defendants are necessary parties because their rights will be affected by the litigation. Further, he does not wish for their discriminatory practices to be visited on other bodies for which they prepare examinations.

[18] Mr. Shaulov argues that because the amended pleading “arise[s] out of the same facts or factual matrix that was pleaded in the original statement of claim and can reasonably be seen as falling within the four corners of the existing claim, they should be permitted unless they will inflict non-compensable prejudice: Farmers Oil and Gas Inc. v. Ontario (Natural Resources), 2016 ONSC 6359 at paras. 22 and 31. The claim should be read generously and need only propose a cause of action in relation to which success is not clearly impossible. There is no prejudice to the defendants. The refusal to amend should be exercised rarely.

[19] The responding parties argue that the proposed amendments are an abuse of process. The issue of whether Mr. Shaulov is able to plead a reasonable cause of action against the non-LSO defendants and the issue of whether they are necessary and proper parties are issues that have already been decided. Indeed, the latter issue has been decided twice.

[20] The responding parties argue that had Mr. Shaulov wished to raise a claim of negligence, he could and should have done so at the time of the motion to strike. He should not be permitted to circumvent the decision that struck his claim without leave to amend by pleading a new cause of action. In any event, the claim for negligence against the non-LSO defendants is statute-barred. Further, the proposed amendments do not disclose a reasonable cause of action against the non-LSO defendants, and they are not necessary and proper parties.

[21] Mr. Shaulov responds to the responding parties’ argument that the claim is statute-barred, with two arguments. First, he only recently discovered the facts that would give rise to a negligence claim; the limitation period did not start to run until he discovered these facts. In the alternative, the facts supporting negligence were properly pled in his initial claim; he is merely adding a cause of action based on these facts, which is permitted.

Discussion

[22] The issue of whether the non-LSO defendants should be added as necessary parties under Rule 5 has been twice decided by the court. Vermette J. addressed this argument and dismissed it in her initial decision of May 6, 2022 (2022 ONSC 2732). This decision was upheld by the Court of Appeal. I do not accept Mr. Shaulov’s argument that because the Court of Appeal did not specifically refer to Rule 5, it did not uphold Vermette J.’s dismissal on this basis. The Court of Appeal clearly upheld Vermette J.’s decision that the action against the non-LSO defendants was dismissed without leave to amend. Vermette J.’s decision that was the subject of the appeal clearly found that the non-LSO defendants were not necessary parties under Rule 5. The appeal from that decision was dismissed.

[23] Then, at Mr. Shaulov’s request, Vermette J. addressed the issue a second time in her endorsement of September 18, 2023, (2023 ONSC 5242) at paragraphs 45 and 46, reproduced at paragraph 10 above.

[24] The court has an inherent jurisdiction to prevent an abuse of its process, including a misuse of its procedure. This includes precluding relitigation where allowing the litigation to proceed would “violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice”: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 SCR 77 at para. 37. The doctrine can apply not only to matters that have been raised, but that could have been raised: Wright v. Urbanek, 2019 ONCA 823 at paras 8-9.

[25] Mr. Shaulov raises the same arguments under Rule 5 that he made twice to Vermette J. and once to the Court of Appeal. I agree with the responding parties that this issue has been finally determined, and it is an abuse of process to raise it again.

[26] I turn now to the negligence claim against the non-LSO defendants and whether it is statute-barred. Mr. Shaulov argues that he had neither actual nor constructive knowledge of the material facts upon which a plausible inference of liability in negligence against the non-LSO defendants could be drawn until recently, and that as soon as he knew those facts he sought to amend his pleading: Grant Thornton LLP v. New Brunswick, 2021 SCC 31 at para. 42.

[27] I do not accept Mr. Shaulov’s discoverability argument. His complaint about the non-LSO defendants has been, from the outset, that they manufacture discriminatory examinations, and that they are not qualified to prepare proper examinations. I note that on December 3, 2020, less than three months after he received notice from the LSO that his application for a license was deemed abandoned, and several months before his first statement of claim was issued against all the parties, Mr. Shaulov wrote to the LSO as follows:

I would like also to inform you as well that I just discovered that LSO was using, a private provider, Performance Assessment Group Inc. that was incorporated in the year 2000 without having any background or expertise in developing law related competencies examination. However, in the Guide to Examination, LSO alleges to engage experts in that field.

[28] This was one of the reasons Mr. Shaulov sought the LSO’s consent to convert the application into an action. When the claim was issued, the non-LSO defendants were named as defendants. He knew that the non-LSO defendants were engaged in preparing the examination. Mr. Shaulov states that he received confirmation after the release of Mirza et al. v. Law Society of Ontario, 2023 ONSC 6727 that the LSO was a user, not the manufacturer, of the examination. Confirmation does not equate to discovery, however. It is clear he discovered this fact by December 2020, before his initial claim was issued. He knew the identity of the party that the LSO retained for the examination. A description of the non-LSO parties is included in his April 2021 claim against them. A corporate profile report of the corporate defendant is referred to. Although he wrongly identified Mr. Braham, he pled that neither Mr. Braham nor Mr. Williams was a registered psychologist, a position he maintains. He alleged that the parties relied on incorrect or inapplicable standards in creating the examination and that they failed to follow safeguards, the same arguments he seeks to put forward now.

[29] Mr. Shaulov claims that as time went on, he learned more and more facts that support a claim in negligence, including that the non-LSO personal defendants are not registered psychologists. However, it is clear that the material facts on which he wishes to put forth his claim in negligence were known to him prior to the issuance of his first claim.

[30] I do not accept that he did not have the facts until recently that would have permitted him to plead negligence. I therefore do not give effect to his argument that the discoverability principle extends the limitation period in this case.

[31] In the alternative, Mr. Shaulov argues that all the facts supporting his negligence claims were previously pled. As he is merely attaching a new cause of action to those facts, the limitation period does not bar the new case of action from being added. Reading the statement of claim generously and with some allowance for drafting deficiencies, the new cause of action was supported by the original facts: Di Filippo v. Bank of Nova Scotia, 2024 ONCA 33 at paras 38, 40-42; Klassen v. Beausoleil, 2019 ONCA 407 at paras. 28-30.

[32] The difficulty with this argument is that Mr. Shaulov does not have an existing claim against the non-LSO defendants. That claim has been struck. There is no live claim against the non-LSO defendants that can be amended to assert a new cause of action based on existing facts pled against them. Therefore, s. 21 of the Limitations Act 2002, SO 2002, c 24, Sch B applies: “21 (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding”: Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469, (2008), 90 O.R. (3d) 401. Even using the date of June 16, 2023, the date on which Mr. Shaulov first served the proposed amended statement of claim, as the date of commencement of the claim (and not the date on which Mr. Shaulov filed his motion for leave to amend, in June 2024), Mr. Shaulov was well past the limitation period set out in s. 4 of the Limitations Act when he sought to commence the negligence claim against the non-LSO defendants.

[33] Mr. Shaulov further argues he wishes to obtain discovery against the non-LSO defendants, and they are therefore a necessary party. He relies on Sataur v. Starbucks Coffee Canada Inc., 2017 ONCA 1017 in support of this proportion. That case does not assist him. There, the Court of Appeal stated:

[7] The motion judge also held that the pleading against the individual defendants was an abuse of process because they were named parties solely to obtain discovery. Even accepting that the two defendants were named solely to examine them for discovery, doing so in this case does not amount to an abuse of process. Quite the contrary. It is not an abuse of process to bring a lawsuit against individual defendants for the purpose of obtaining discovery from them, if the plaintiff has pleaded a proper cause of action against those individual defendants, as we have found that the plaintiff has in this case. (emphasis added)

[34] The opposite is true here. There is no proper cause of action pleaded against the non-LSO defendants.

[35] Neither does Schembri assist the plaintiff. There, the Court of Appeal considered when personal liability might attach to a corporation’s director, as the corporation’s directing mind. The present case is about whether there is a reasonable, non-statute barred, cause of action against any of the non-LSO defendants, including the corporate defendant.

[36] Therefore, on the bases of the of the abuse of process in relitigating the issue and the limitation period in respect of the proposed negligence claim, I conclude that no amendment to the pleading to add the non-LSO defendants back to the pleading shall be permitted. Mr. Shaulov’s motion to amend the pleading to add the non-LSO defendants is dismissed.

Costs

[37] The responding parties seek costs in the amount of $5,906.76 on a substantial indemnity scale. Mr. Shaulov argues against the responding parties being awarded costs because the costs orders are being used to discourage him from litigating. In the alternative, Mr. Shaulov asks that costs not be immediately payable. He further argues that the costs sought are excessive. Regarding the last argument, I note that Mr. Shaulov, were he successful, sought compensation for costs on what he described as a partial indemnity scale of $6,528.60, calculated at an hourly rate of $162 hourly.

[38] I see no reason to depart form the usual practice of awarding costs to the successful party and ordering that they be paid immediately following the step in which they are ordered. The responding parties’ costs are reasonable and proportionate to the complexity of the matter. Given Mr. Shaulov’s own costs outline, the amount sought by the responding parties should have been in his contemplation to pay should he be unsuccessful.

[39] The respondents argue that the motion was frivolous and unnecessary, and costs should be awarded on an elevated scale. Had the arguments been limited to, or largely focused on, the rule 5 issue I would have agreed. Given that a significant focus of the motion was negligence and discoverability, I exercise my discretion to order costs on a partial indemnity scale in the amount of $4,430.39, to be paid within 30 days.

Disposition

[40] The motion to amend the pleading to add the non-LSO defendants is dismissed. Mr. Shaulov shall pay costs of $4,430.39 to the responding parties on a partial indemnity scale within 30 days.

L. Brownstone J. Date: November 12, 2024