Fridays With Rogers Partners
At our weekly meeting, Chris MacDonald discussed the Court of Appeal’s decision in Goldentuler v Simmons Dasilva LLP, 2021 ONCA 219, wherein the defendants, Simmons Dasliva LLP and Ray Thapar, appealed the order of the motion judge dismissing their motion pursuant to r. 21.01(3)(b) of the Rules of Civil Procedure to dismiss the plaintiff’s action on the basis that the plaintiff was without legal capacity to commence or continue the action.
Background
The respondent, Edward Goldentuler’s, late brother was a lawyer in private practice. His brother commenced an action against a group of former employees who snuck into his office in the dead of night and stole 120 client files, and erased all electronic records of those files held at his office.
The respondent’s brother commenced an action against the former employees, but passed away while the litigation was ongoing. The respondent, who is also a lawyer, obtained an order to continue the action in the name of his late brother’s Estate.
The claim proceeded to an uncontested damages assessment and the Estate obtained judgment for just over 300,000. Afterwards, and supposedly in his capacity as Estate trustee, the respondent retained the appellants to pursue an appeal in the Court of Appeal. The appeal was successful and the damages award to the estate was increased to just over 900,000.
The judgment was satisfied, but a dispute arose between the respondent and the appellant about the appellant’s legal fees for the appeal. The respondent subsequently commenced this action, alleging solicitor’s negligence against the appellants, in his own name and in his personal capacity. He sought 2 million in damages.
Motion by the Defendants/Appellants to Dismiss the Action
Simmons Dasilva LLP and Ray Thapar brought a motion to dismiss the action on the grounds that the plaintiff did not have legal capacity to sue them, as they had acted for the Estate, not the plaintiff personally. The defendants also submitted that it was only the Estate that could have suffered any damages from the alleged negligence, not the plaintiff personally.
In response to the motion, Mr. Goldentuler alleged for the first time that the Estate’s chose-in-action against the ex-employees had been assigned to him, before the Estate retained the appellants, as part of his purchase of his late brother’s law firm from the Estate.
The motion judge identified the primary issue on the motion as who retained the defendants on the appeal of the Estate action, and therefore who was owed a duty of care by them, and who would be affected by the outcome of the appeal.
The motion judge concluded that Mr. Goldentuler had capacity to bring the action. The judge based this conclusion on two facts: (1) the account for legal fees was directed to him; and (2), he was the only party who could have been affected by the outcome of the appeal since he had purchased the law firm.
Decision & Reasoning of the Court of Appeal
The appeal was allowed and the motion judge’s order was set aside. In its place, the appellant’s motion was granted and the action dismissed. The appellants received costs for the appeal, and the costs award from the below decision was reversed to be in favour of the appellants.
In its reasoning, the Court of Appeal disagreed with the motion judge’s findings, and stated:
“. . .the motion judge made a palpable and overriding error in her determination of the motion. She did so by not addressing the crucial question that she herself had stated, that is, who retained the appellants? The answer to that question is clear, it was the Estate [emphasis added].”[1]
The Court stated that it did not matter that the account for legal fees was directed to the respondent, as the addressee of the account did not change on whose behalf the appellants were retained.
As a result, the Court found that Mr. Goldentuler did not have a personal claim arising from the retainer of the appellants, nor did he have standing to bring a solicitor’s negligence claim.
The Court denied Mr. Goldentuler’s request to amend the title of proceeding to add the proper plaintiff (i.e. his brother’s Estate), finding it was too late to do so, and that there was no indication whether the estate would consent to be added as a plaintiff in the action.
[1] Goldentuler v Simmons Dasilva LLP, 2021 ONCA 219, at para. 10.