Klein c. Wechsler

Republished citation follows // Emphasis added

Citation:     Klein c. Wechsler, 2016 QCCS 6188 (CanLII), <http://canlii.ca/t/gw445&gt;


[1]         Plaintiff filed an application[1] seeking an order to have Defendant pay him interim costs, meaning “any and all legal fees” and “all deposition related costs”.

[2]         Plaintiff’s application is made in the context of a professional liability suit he has instituted against Defendant for an amount of $1,150,000. He alleges that Defendant, who acted for him in an action in damages for constructive dismissal, harassment and loss of reputation against his former employer and a former employee, put his commercial interests ahead of Plaintiff and to his detriment. Defendant would have let the employer’s attorney believe that if the case did not settle he would cease representing Plaintiff. This would have had highly damaging consequences on the settlement discussions[2]. Plaintiff would have been forced to accept $40,000 as a settlement and paid $15,000 to his former colleague who had filed a counter-claim. He would have been told by Defendant that the settlement was free of tax which turns out to be untrue[3].

[3]         In addition, Plaintiff makes a general allegation that Defendant contravened to the Code of Ethics of Advocates[4] which prevented Plaintiff’s chances of obtaining a positive outcome of his suit[5].

[4]         In the present proceedings, Plaintiff is no longer represented by an attorney and pleads that his financial situation prevents him from obtaining legal counsel and that he is not in a position to have his rights asserted. He qualifies the present litigation as a “David versus Goliath” battle.

1.            THE LAW

[5]         In the matter of B.C. v. Okanagan Indian Band,[6] the Supreme Court of Canada confirmed that this Court has discretionary powers to award interim costs in appropriate cases. The criteria that must be present are as follows:

a)     The party seeking the order must be impecunious to the extent that, without such an order, that party would be deprived of the opportunity to proceed with the case;

b)     The claim to be adjudicated is prima facie meritorious;

c)      And there must be special circumstances sufficient to satisfy the court that the case is within the narrow of cases where this extraordinary exercise of its powers is appropriate.[7]

[6]         In Okanagan, the litigation was of public interest, which led the Supreme Court to state that the third criterion must concern issues that transcend the individual interest:

  1. […]

3.   The issues raised transcend the individual interests of the particular litigant, are of public importance, and have not been resolved in previous cases.[8]

[7]         In a subsequent decision rendered in the matter of Little Sisters Book and Art Emporium v. Canada,[9] the Supreme Court precised that the standard to award interim costs is a high one that is warranted only in rare and exceptional cases.[10] The matter has to be sufficiently special that it would be an injustice if the costs were not awarded. The Court also wrote that the application must relate both to the individual applicant and to the public at large:

39.  First, the injustice that would arise if the application is not granted must relate both to the individual applicant and to the public at large.  This means that a litigant whose case, however compelling it may be, is of interest only to the litigant will be denied an advance costs award.  It does not mean, however, that every case of interest to the public will satisfy the test.  The justice system must not become a proxy for the public inquiry process, swamped with actions launched by test plaintiffs and public interest groups.  As compelling as access to justice concerns may be, they cannot justify this Court unilaterally authorizing a revolution in how litigation is conceived and conducted.[11]

(the Court’s emphasis)

[8]         In St-Arnaud v. C.L.,[12] a matter that dealt with a demand for interim costs in the context of a medical malpractice claim, the Court of Appeal underlined that the reasons given by the majority of the Supreme Court in Little Sisters[13] aim to enhance the importance of the third condition:

[26]   Il est toujours délicat de citer des extraits d’un jugement longuement motivé et riche en nuances. Néanmoins, ma compréhension des motifs majoritaires dans l’arrêt Little Sisters m’amène à penser que les juges Bastarache et LeBel ont tenu à atténuer l’importance des deux premières conditions énumérées au paragraphe 40 de l’arrêt Okanagan (reproduit ci-haut) pour rehausser celle de la troisième condition. […]

[9]         In short, it is essential for the applicant to show that the injustice, if his demand for an interim costs is not granted, also relates to the public at large.

[10]      This Court recognized the importance of that condition in various decisions and amongst others, Groupe Bennett Flee Inc. v. Hydro-Québec,[14] Alla v. Bombardier Inc.[15] and Gagné v. Autorité des marches financiers[16] where similar interim costs demands were refused because the litigation was of no concern to the public at large.

[11]      However, it is possible for an impecunious party to obtain interim costs in a private matter if a prima facie demonstration can be made that the other party is taking an abusive position. Indeed, since a victim of abusive proceedings can claim damages on the basis of general liability principles, the Court of Appeal, in the matter of Hétu v. Notre-Dame-de-Lourdes (Municipalité de),[17] concluded that an applicant may obtain interim costs when special circumstances justify that the Court exercises its discretionary powers:

[56]   Dans le cas d’un abus de procédure, les honoraires extrajudiciaires peuvent être recouvrés à titre d’indemnité pour le préjudice causé par la faute, mais non à titre de dépens.  Les principes énoncés dans l’arrêt Okanagan, précité, en matière d’octroi de provisions pour frais, ne sont alors pas applicables, du moins pas directement.

[57]   Je suis cependant d’avis que l’octroi d’une provision pour frais, correspondant à une partie des honoraires extrajudiciaires raisonnables anticipés, demeure possible en vertu de l’art. 46 C.p.c., si la partie qui la sollicite établit qu’elle est si dépourvue de ressources qu’elle serait incapable, sans cette ordonnance, de faire entendre sa cause (état d’impécuniosité) et que la procédure de l’autre partie apparaît prima facie abusive.  En d’autres mots, qu’il existe des circonstances suffisamment spéciales pour que le tribunal soit convaincu que « la sauvegarde de ses droits » justifie l’exercice du large pouvoir discrétionnaire que lui confère l’art. 46 C.p.c., tel qu’en vigueur depuis le 1er janvier 2003.[18]

[12]      In rare cases, interim costs were awarded on that basis in presence of bad faith.[19]

[13]      Recognizing the real and serious difficulties to have access to the judicial system, the Court of Appeal nevertheless concluded that this issue lies with the legislator and that the Courts cannot intervene to balance the parties’ resources:

[26]   […]

Le principe prétorien circonscrit dans l’arrêt Little Sisters ne peut avoir pour effet, à mon sens, de rectifier une difficulté réelle et sérieuse, mais fréquente, d’accès à la justice dans un litige qui ne dépasse aucunement « le cadre des intérêts [des] plaideur[s] ».

[27]   […] Mais il s’agit d’un problème qui met directement en cause l’accès à la justice, un thème que la Cour suprême du Canada, dans les paragraphes 5 et 44 de l’arrêt Little Sisters, tient explicitement à distance du pouvoir exceptionnel d’ordonner une provision pour frais. Ce pouvoir ne doit pas servir à rectifier au cas par cas l’effet de « contraintes financières [qui] compromettent, chaque jour, l’examen de demandes » peut-être fondées. Et si en l’espèce il pouvait servir à cette fin, à ce stade du procès et en toute logique il ne permettrait de financer que le pourvoi actuel devant la Cour, et non le litige qui s’instruira plus tard et au fond devant la Cour supérieure.[20]
2.            QUESTION

[14]      Plaintiff established that his financial means are limited and that he is not in a position to pay for the services of a lawyer. Thus, the real issues raised by his application are the following:

−         Is Plaintiff’s litigation of importance to the public at large, as per the criteria of the Okanagan[21] case; and

−         Is Plaintiff prima facie a victim of an abuse of proceedings, as per the criteria of the Hétu [22]case?
3.            ANALYSIS
3.1.        The Okanagan[23] test

[15]      In the Court’s opinion, Plaintiff failed to demonstrate how his case transcends his interests. He pleaded that since Defendant is an officer of the law, the issue concerns the public at large. This is a wrong conception of that notion.

[16]      Plaintiff’s action remains a private matter that is governed by the general rules of liability found in the Civil Code of Quebec and related regulations like the Code of Ethics of Advocates.[24] He is seeking an award in damages. There is nothing in those proceedings that concerns the public at large.

[17]      For that reason alone, Plaintiff cannot rely on the discretionary powers of this Court, as explained in the cases of Okanagan[25] and Little Sisters,[26] to obtain an interim costs award.
3.2.        The Hétu[27] test

[18]      The main issue raised by Plaintiff’s suit is whether or not he consented to the terms of the settlement intervened with his former employer and colleague.

[19]      In his defense, Defendant refers to an e-mail that was sent to Plaintiff confirming the settlement and to the steps taken by Plaintiff in execution of said settlement:

46.  Defendant confirmed the settlement to Plaintiff on September 17, 2010, as appears from Defendant’s e-mail of September 17, 2010, a copy of which is communicated herewith, under seal, as Exhibit D-16;

47.  Plaintiff fully agreed to this settlement, signed the releases and the letter of retraction and cashed the cheque that was remitted to him pursuant to the settlement;[28]

[20]      Therefore, Plaintiff has the burden to show that he did not give a valid consent due to Defendant’s acts. He also needs to establish that he would have been in a position to obtain more, had it not been for the alleged Defendant’s behavior. His burden is a high one and the proceedings as well as the exhibits and the depositions do not lead this Court to conclude that Defendant has taken a prima facie abusive position.

[21]      Indeed, without deciding on the merit, the allegations of the Defense provide a serious contestation of Plaintiff’s claim.

[22]      In addition, in the course of the present proceedings, Defendant has managed this matter in a normal and acceptable way considering the issues and the amount in litigation. Plaintiff’s claim is made against a professional for an amount of $1,150,000. It’s expected that this professional will challenge Plaintiff’s allegations.

[23]      In his application, Plaintiff has made extensive complaints about Defendant and his lawyers on how the agreement on the conduct of the proceedings was negotiated and followed, on the particulars requested, his discovery and the one he conducted of the Defendant.

[24]      The Court has reviewed the transcript of both depositions and cannot conclude that the Defendant and his lawyers acted abusively. It appears that Plaintiff, who was not represented by a lawyer, has a different understanding of what is relevant to the proceedings and how a discovery should be conducted.

[25]      Also, disagreements on the dates and steps to be included in the agreement on the conduct of the proceedings, as well as disagreements on the relevance of certain documents do not necessarily constitute a wrongdoing.

[26]      In conclusion, Plaintiff is not a victim of abusive proceedings either on the position taken by Defendant on the merit or on how Defendant and his lawyers have used the legal process.

[27]      As stated by the Court of Appeal, the fact that Plaintiff is making a claim does not give him the right to obtain an interim costs even if he is impecunious:

[14]   Le simple fait de poursuivre une autre personne ne peut générer le droit de se faire financer par cette personne, même pour une partie démunie.  Il n’est pas conforme à l’économie du Code de procédure civile qu’une partie, ici le défendeur, soit condamnée à financer l’autre partie avant de connaître le sort du litige. C’est pourtant l’avenue dans laquelle risque de nous entraîner la décision attaquée puisque si le raisonnement vaut pour les frais de l’expert qui sera présent lors de l’examen médical, il vaut aussi pour les frais inhérents à la tenue des interrogatoires préalables et, voire même, à l’institution de l’action.[29]

FOR THESE REASONS, THE COURT:

[28]      DISMISSES Plaintiff’s application for interim costs;

[29]      WITH COSTS in favor of Defendant.


JEAN-FRANÇOIS MICHAUD, J.S.C.

Mr. Sidney Klein

Plaintiff

Mtre. Marie-Josée Bélainsky

Mtre. Jo-Annie Perron

De Michele et avocats

Attorneys for the Defendant

Date of hearing:

November 2, 2016

[1]    Motion for Case Management Orders dated August 16, 2016.

[2]    Plaintiff’s action, at para. 17.

[3]    Ibid, at para. 23.

[4]    Since March 26, 2015, this regulation has been replaced by the Code of Professional Conduct of Lawyers, CQLR c. B-1, r. 3.1.

[5]    Plaintiff’s action, at para. 7.

[6]    2003 SCC 71 (CanLII), [2003] 3 S.C.R. 371.

[7]    Ibid, at para. 36.

[8]    Ibid, at para. 40.

[9]    2007 SCC 2 (CanLII), [2007] 1 S.C.R. 38.

[10]    Ibid, at para. 38.

[11]    Ibid, at para. 39.

[12]    2009 QCCA 97 (CanLII).

[13]    Little Sisters Book and Art Emporium v. Canada, supra, note 9.

[14]    2010 QCCS 2072 (CanLII).

[15]    2016 QCCS 3621 (CanLII).

[16]    2014 QCCS 369 (CanLII); Motion to appeal dismissed, 2014 QCCA 949 (CanLII).

[17]    2005 QCCA 199 (CanLII).

[18]    Hétu c. Notre-Dame-de-Lourdes (Municipalité de), supra note 17.

[19]    9022-8818 Québec Inc. (Magil Construction Inc.) (Syndic de), 2005 QCCA 275 (CanLII), at para 62; Survivance (La), compagnie mutuelle d’assurance vie v. Distribution Groupe association DGA Inc., 2007 QCCA 341 (CanLII); Distribution Groupe association DGA Inc. v. Survivance (La), compagnie mutuelle d’assurance-vie, 2007 QCCS 6885 (CanLII).

[20]    St-Arnaud v. C.L., supra note 12.

[21]    B.C. v. Okanagan Indian Band, supra note 6.

[22]    Hétu v. Notre-Dame-de-Lourdes (Municipalité de), supra note 17.

[23]    B.C. v. Okanagan Indian Band, supra note 6.

[24]    Supra note 4.

[25]    B.C. v. Okanagan Indian Band, supra note 6.

[26]    Little Sisters Book and Art Emporium v. Canada, supra note 9.

[27]    Hétu v. Notre-Dame-de-Lourdes (Municipalité de), supra note 17.

[28]    Defense dated April 2, 2014.

[29]    Lacoste v. Gaudette, 2000 CanLII 9754 (QC CA), 2000 CanLII 9754 (QC C.A.).


Citation:     Klein c. Wechsler, 2016 QCCS 6188 (CanLII), <http://canlii.ca/t/gw445&gt;

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