Legal Professional (Standard of Care)

Goetz v. Kay, 2020 ONSC 924 (CanLII)

[8] The decision of the Deputy Judge is dated January 23, 2018. She released a Corrigendum and costs Decision dated June 15, 2018. She also released an Addendum dated July 6, 2018 in which she made an order amending the style of cause in both the judgment and the corrigendum and costs decision to include “Isabel Goetz and Jacqueline Goetz as defendants by Defendant’s Claim”.

[9] The Deputy Judge considered the evidence of the Appellant, the Respondent and of the lawyer who had acted for the condominium corporation and the documentation filed as exhibits and she made these findings:

67. . .. . I am unable to find on a balance of probabilities that the defendant had conducted himself in accordance with the standard of care of a reasonably prudent solicitor. In particular, I find as follows:

(a) The defendant failed to adequately advise the plaintiff of his legal options and associated risks;

(b) The defendant failed to carry out the plaintiff’s instructions to cross-examine the witnesses and file responding materials even after having obtained a revised timetable as hereinbefore set out. There is no clear documentary evidence to support that the plaintiff abandoned these instructions;

(c) The defendant failed to provide the plaintiff with a breakdown of how his retainer fees were being applied to work being performed by him;

(d) Further, as hereinbefore set out, the defendant failed to obtain from the plaintiff informed instructions to argue the application solely on the basis of jurisdiction. As hereinbefore set out, I accept the plaintiff’s evidence of his understanding that at some point during the hearing process he would be permitted to give his side of what events had transpired between the parties;

(e) It is undisputed by the defendant that apart from making submissions to the court with regard to it’s lack of jurisdiction to deal with the application based on the Residential Tenancies Act, he did not provide any case authorities in support of his interpretation of the various sections of the Act and simply relied on his plain reading of the Act. Based on the evidence before me as a whole, on a balance of probabilities, I find that a reasonably prudent solicitor would have researched relevant case law and provided the court with at least a citation of the authorities relied upon in support of his client’s position or interpretation of the particular section of the statute being relied upon, particularly in light of the Applicant’s factum.

[10] In paragraphs 68 and 69, the Deputy Judge held that the Appellant’s conduct fell below the standard of care expected of a reasonably prudent solicitor and, but for his negligence, the Respondent would not have incurred the damages in costs set out in the order by Myers J. In paragraphs 70 to 72, the Deputy Judge ordered the Appellant to return $3500 of the $5500 retainer paid by the Respondent. She also granted judgment against the Appellant in the amount of $10,000 plus pre-judgment and post-judgment interest in accordance with the Courts of Justice Act. She dismissed the Defendant’s Claim. In the subsequent decision, she corrected the amount of the judgment from $10000 to $16000 and she ordered the Appellant to pay costs of the trial in the amount of $4300 inclusive of HST.

Bazar v. Chisholm, 2020 ONSC 593 (CanLII)

[46] The parties agree that cases of Jarbeau v. McLean 2017 ONCA 115, 410 D.L.R. (4th) 246 and Folland v. Reardon (2005), 2005 CanLII 1403 (ON CA), 74 O.R. (3d) 688, [2005] O.J. No. 216, govern the law of solicitor’s negligence. The 'but for' test is the appropriate standard for causation in negligence in all but rare cases: Clements v. Clements, 2012 SCC 32, [2012] 2 S.C.R. 181, at para. 8.

[47] In a lawyer's negligence case, the authorities discuss the concept of a “trial within a trial” in order to determine what would have happened but for the solicitor’s negligence in relation to what damages arise, if any. In Jarbeau, Pardu J.A. explains at para. 26:

In Folland this court discussed the elements of a cause of action for breach of contract based on solicitor's negligence. I extract the following principles from that decision, using the language used by Doherty J.A., at paras. 72-76:

1. In most cases of solicitor's negligence, liability rests on both a tort and contractual basis.

2. The imposition of liability grounded in the loss of a chance of avoiding a harm or gaining a benefit is controversial in tort law, particularly where the harm alleged is not purely economic.

3. Whatever the scope of the lost chance analysis in fixing liability for torts claims based on personal injuries, lost chance is well recognized as a basis for assessing damages in contract. In contract, proof of damage is not part of the liability inquiry. If a defendant breaches his contract with the plaintiff and as a result the plaintiff loses the opportunity to gain a benefit or avoid harm, that lost opportunity may be compensable.

4. The plaintiff must establish on a balance of probabilities that but for the defendant's wrongful conduct, the plaintiff had a chance to obtain a benefit or avoid a loss.

5. The plaintiff must show that the chance lost was sufficiently real and significant to rise above mere speculation; The plaintiff must demonstrate that the outcome, that is, whether the plaintiff would have avoided the loss or made the gain, depended on someone or something other than the plaintiff himself or herself; and the plaintiff must show that the lost chance had some practical value.

[48] At paras. 27 to 32, Pardu J.A. goes on to state:

Where a plaintiff in a tort action arising out of solicitor's negligence can establish on the balance of probabilities that but for the negligence he or she would have avoided the loss, he or she should be fully compensated for that loss.

Where a plaintiff can only establish that but for the solicitor's negligence he or she lost a chance to avoid a loss, a claim for breach of contract may permit recovery for the value of that chance.

The case law is clear that a plaintiff in a solicitor's negligence case can fully recover her loss in appropriate circumstances. The British Columbia Court of Appeal expressed it this way, in Nichols v. Warner, Scarborough, Herman & Harvey, 2009 BCCA 277, 95 B.C.L.R. (4th) 133, leave to appeal refused, [2009] S.C.C.A. No. 355, at para. 26:

In Folland, this court rejected the appellant's alternative loss of chance claim for several reasons, including that public policy would not countenance a damage award based on a lost chance in a criminal case. If Mr. Folland could only establish a less-than-50% chance of acquittal, by implication the trier of fact would have found that it was more likely than not that he had been properly convicted: at para. 92.

Where a plaintiff advances a tort claim for damages founded on the "but for" causation test, Folland does not support Mr. McLean's argument that some degree of probability between 50% and 100% should reduce a defendant's liability. In short, none of the cases cited to us involved a defendant attempting to reframe a plaintiff's case as a loss of chance, where the loss the plaintiff claims is the opportunity successfully litigate or settle a claim in full and the "trial within a trial" approach allows the plaintiff to test that claim. In such circumstances the plaintiff is entitled to advance the trial within a trial on the balance of probabilities standard, and to fully recover if that standard is met.

Elliot v. Chiarelli, 2006 CanLII 34426 (ON SC)

[33] To date there is little case law discussing the standard of care applicable to a paralegal. In [page234] West v. Eisner, [1999] O.J. No. 4705, 41 C.P.C. (4th) 378 (S.C.J.), Stinson J. assessed damages for malpractice against a paralegal. Although liability was admitted in that case, Stinson J. set out the basis for his finding that the paralegal had breached his duty of care. He noted that in a professional malpractice case, typically the standard of care is proved by expert testimony from another professional, but that in a malpractice claim against a paralegal, a plaintiff could not be expected to adduce expert evidence as to the standards of the "profession", as none exist. He suggested that instead it made sense to apply a standard based on common sense and ordinary understanding, relying on commentary by the Supreme Court of Canada in ter Neuzen v. Korn, 1995 CanLII 72 (SCC), [1995] 3 S.C.R. 674, [1995] S.C.J. No. 79, 127 D.L.R. (4th) 577, at p. 701 S.C.R., p. 595 D.L.R.

[34] Whether any formal standards regarding paralegals exist, I find that on any ordinary standard Mr. Chiarelli's advice was clearly wrong. While Ms. McNally is a lawyer, her advice mirrors what any competent advisor would recommend to someone in Ms. Elliot's situation. It doesn't take a lawyer -- or even a paralegal -- to figure out that spending nearly $1,800 to buy five weeks of time is throwing good money after bad. Unfortunately, after stating that he "really appreciated" Ms. McNally's evidence, the deputy judge did not explain why he disregarded it.

[35] Nor is it a defence for Mr. Chiarelli to say that he gave Ms. Elliot what she asked for, and therefore "delivered on the contract". In my view, his letter to her of January 22, 2003 promised far more than he delivered, and was grossly misleading. First, he incorrectly told her she needed an "injunction" to stop the eviction. A stay and an injunction are not the same at law. While both may operate to prevent or delay certain action, a stay is typically a much simpler and less costly process. Indeed, in the ORHT context, a stay is automatic upon filing a notice of appeal, and a process that most tenants can easily perform on their own, something Mr. Chiarelli well knew but did not share with Ms. Elliot.

[36] Second, Mr. Chiarelli referred to the eviction as "very unfortunate and unjust". As Mr. Chiarelli admitted in cross- examination, there was nothing unjust about the eviction process in this case. Ms. Elliot was several months behind in her rent and her landlord had every right to try and evict her. Mr. Chiarelli defended this statement by saying that all tenants believe an eviction is unjust, so he just "regurgitates their comments in [his] covering letter". But the role of a legal service provider is not to parrot his clients or tell them what they want to hear. It is to provide them with sound guidance that is correct in law and sensible [page235] in their circumstances. Anything less encourages them to continue down the wrong path.

[37] Third, the letter states that Mr. Chiarelli's "specialty" is "preventing evictions or significantly delaying an eviction" (his emphasis). That language suggests that even if he can't completely stop the eviction, at the very least he will delay it significantly. But by his own testimony Mr. Chiarelli failed even that, as he "bought" her only five weeks delay, when in his mind a significant delay is usually two to three months. The deputy judge's observation that that delay was significant to the landlord is, while undoubtedly true, irrelevant to this case, as the landlord is not the client here.

[48] I find Mr. Chiarelli liable on the basis of both professional negligence and breach of contract. With respect to the negligence claim, I find he fell below the standard of care of an ethical and competent paralegal. He filed an appeal without merit and did not inform Ms. Elliot of the consequences of doing so. With respect to the claim based on breach of contract, I find he failed to provide anything like the "significant delay" he promised. To cap things off, he charged her a flat fee of $1,200 for two hours work, an unconscionable amount of money. All in all, his actions were incompetent and unethical, and deserve no recompense whatsoever.