Attis et al. v. Ontario (Minister of Health) et al.,

• Jurisdiction: Ontario
• Judge: Cunningham,Epstein,Sharpe
• Neutral Citation: 2011 ONCA 675
• Subject Matter: AGENCY,CONTRACTS,BARRISTERS AND SOLICITORS,PRACTICE
• Citation: 2011 ONCA 675,(2011), 285 O.A.C. 333 (CA),285 OAC 333,(2011), 285 OAC 333 (CA),285 O.A.C. 333
• Date: 26 September 2011
• Court: Court of Appeal (Ontario)

Attis v. Ont. (2011), 285 O.A.C. 333 (CA)

MLB headnote and full text

Temp. Cite: [2011] O.A.C. TBEd. NO.014

S. Joyce Attis and A. Tesluk (appellants) v. Her Majesty the Queen in Right of Ontario, as Represented by the Minister of Health, the Attorney General for Canada et al. (defendants/respondent)

(C52776; 2011 ONCA 675)

Indexed As: Attis et al. v. Ontario (Minister of Health) et al.

Ontario Court of Appeal

Sharpe, Epstein, JJ.A. and Cunningham, A.C.J.(ad hoc)

October 31, 2011.

Summary:

The plaintiffs' certification motion in the underlying class action was dismissed. Costs of $125,000 were awarded to the defendant Attorney General of Canada (AG) against the plaintiffs (Attis and Tesluk). Further amounts of $40,000 and $1,086.10 were ordered to be paid after unsuccessful appeals to the Court of Appeal and the dismissal of an application for leave to appeal to the Supreme Court of Canada. The plaintiffs were impecunious. Attis commenced proceedings against her counsel and his firm (Legge & Legge). The AG brought a motion, requesting that the costs awarded to the AG become the responsibility of Legge & Legge.

The Ontario Superior Court (per Cullity, J.), in a decision reported as [2010] O.T.C. Uned. 4508, ordered Legge & Legge to indemnify the plaintiffs for the costs awarded, on the basis that the law firm had not properly advised the plaintiffs of their potential exposure to costs. The court relied on rules 15.02(4), and 57.07(1)(c) of the Rules of Civil Procedure, and on the court's inherent jurisdiction with respect to the conduct of counsel. Legge & Legge appealed.

The Ontario Court of Appeal allowed the appeal.

Agency - Topic 5047

Relations between agent and third parties - On warranty of authority - Breach of warranty - General - [See third Barristers and Solicitors - Topic 857 ].

Barristers and Solicitors - Topic 857

Duty to court - Liability for costs - Review of personal liability - A motions judge in an underlying class action ordered the plaintiffs' counsel and his law firm to indemnify the plaintiffs for costs awards, on the basis that the firm had not properly advised the plaintiffs of their potential exposure to costs - The judge relied on, inter alia, rule 15.02(4) of the Ontario Rules of Civil Procedure - Rule 15.02(4) provided that "If a lawyer has commenced a proceeding without the authority of his or her client the court may, on motion, stay or dismiss the proceeding and order the lawyer to pay the costs of the proceeding" - The Ontario Court of Appeal held that the motions judge misapplied rule 15 - "Rule 15 is designed to terminate proceedings where a named plaintiff has not authorized commencement. The proceedings here, without question, were commenced with the plaintiffs' authority. Even if the plaintiffs did not understand the costs implications of initiating proceedings, that could not invalidate or nullify the authority they conferred upon their counsel to commence the proceedings. If there is any question concerning the legal advice the plaintiff received before conferring that authority, it is a matter between the solicitor and the clients" - See paragraphs 13 to 15.

Barristers and Solicitors - Topic 857

Duty to court - Liability for costs - Review of personal liability - Rule 57.07(1) of the Ontario Rules of Civil Procedure provided that "Where a lawyer for a party has caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default, the court may make an order ... (c) requiring the lawyer personally to pay the costs of any party" - A motions judge in an underlying class action ordered the plaintiffs' counsel and his law firm to indemnify the plaintiffs for costs awards, on the basis that the firm had not properly advised the plaintiffs of their potential exposure to costs - The judge relied on, inter alia, rule 57.07(1)(c) - The Ontario Court of Appeal held that rule 57.07(1)(c) was to be used only in exceptional circumstances and had no application in this case - The motions judge acknowledged that the conduct of plaintiffs' counsel was without reproach and there was no issue raised in that regard before the certification judge - See paragraph 16.

Barristers and Solicitors - Topic 857

Duty to court - Liability for costs - Review of personal liability - A motions judge in an underlying class action ordered the plaintiffs' counsel and his law firm to pay the defendant's costs for "breach of their implied warranty of authority" - The Ontario Court of Appeal held that the motions judge misapplied the law of breach of warranty of authority - Assuming without deciding that breach of warranty of authority would apply, such a breach could not have provided the defendant with recoverable damages - Because the plaintiffs were impecunious, even if they had provided authority to the law firm and lost, the defendant would not have recovered costs from them - To award the defendant costs now would be to put the defendant in a better position than if the action had proceeded with authority and failed - See paragraphs 17 to 21.

Contracts - Topic 666

Parties - Capacity - Contracts by representative of party - Warranty of authority - Breach of - [See third Barristers and Solicitors - Topic 857 ].

Practice - Topic 24

Actions - Conduct of - General - Directions from the court - [See Practice - Topic 3061 ].

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Costs - The plaintiffs' certification motion in the underlying class action was dismissed - Costs of $125,000 were awarded to the defendant Attorney General of Canada (AG) against the plaintiffs - Further amounts of $40,000 and $1,086.10 were ordered to be paid after unsuccessful appeals to the Court of Appeal and the dismissal of an application for leave to appeal to the Supreme Court of Canada - The plaintiffs were impecunious - The AG brought a motion, requesting that the costs awarded to the AG become the responsibility of the plaintiffs' solicitors (the law firm) - The motions judge ordered the law firm to indemnify the plaintiffs for the costs awarded, on the basis that the law firm had not properly advised the plaintiffs of their potential exposure to costs - The court relied on rules 15.02(4), and 57.07(1)(c) of the Rules of Civil Procedure, and on the court's inherent jurisdiction with respect to the conduct of counsel - The law firm appealed - The Ontario Court of Appeal allowed the appeal - The motions judge misapplied the rules.

Practice - Topic 3061

Applications and motions - General - Avoidance of multiplicity of proceedings - A motions judge in an underlying class action ordered the plaintiffs' law firm to indemnify the plaintiffs for costs awards, on the basis that the firm had not properly advised the plaintiffs of their potential exposure to costs - One of the original class plaintiffs (Attis) had commenced proceedings against her counsel and his firm before the defendant's motion - On appeal, the law firm argued that the motions judge created an unnecessary multiplicity of proceedings - The Ontario Court of Appeal commented that the motions judge, being aware of the civil proceeding and given the almost identical relief sought, should have directed the action to proceed - "The rather unconventional approach taken by the motions judge, in the face of an existing civil action, was one that ought to have been avoided. While perhaps not unfair, it would at the very least have been preferable, given the seriously conflicting positions, to direct a trial of the issue pursuant to Rule 37.13. This could easily have taken place at the same time as the trial of the Attis action" - See paragraphs 22 to 24.

Practice - Topic 7404

Costs - Solicitor and client costs - General principles - Solicitor ordered to pay client's or other party's costs - [See Practice - Topic 210.3 ].

Cases Noticed:

Royal Bank of Canada v. Starr, [1985] O.J. No. 1763 (Dist. Ct.), refd to. [para. 19].

Skylight Maritime SA v. Ascot Underwriting et al., [2005] E.W.H.C. 15 (Comm.), refd to. [para. 20].

Statutes Noticed:

Rules of Civil Procedure (Ont.), rule 15.02(4); rule 57.07(1)(c) [para. 2].

Authors and Works Noticed:

Waddams, Stephen M., The Law of Contracts (4th Ed. 1999), p. 327, para. 571 [para. 19].

Counsel:

Samuel S. Marr, for the appellant, Attis;

A. Tesluk, appearing in person;

J. Brian Casey and David Gadsden, for the appellants, Legge and Legge & Legge;

Paul J. Evraire, Q.C., Shain Widdifield and James Soldatich, for the respondent, Attorney General for Canada.

This appeal was heard on September 26, 2011, before Sharpe, Epstein, JJ.A. and Cunningham, A.C.J.(ad hoc), of the Ontario Court of Appeal. In reasons written by Cunningham, A.C.J., the Court of Appeal delivered the following judgment, released on October 31, 2011.