



COURT OF APPEAL FOR ONTARIO

CITATION: Aird & Berlis LLP v. Oravital Inc., 2018 ONCA
    164

DATE: 20180220

DOCKET: C64038

Hourigan, Roberts and Nordheimer JJ.A.

BETWEEN

Aird & Berlis LLP

Plaintiff/Defendant by Counterclaim
(Respondent)

and

Oravital Inc. and Alliance H. Inc.

Defendants/Plaintiffs by Counterclaim
(Appellant)

Geoff R. Hall and Anu Koshal, for the appellants

Michael Kestenberg and Marc Kestenberg, for the
    respondent

Heard:  February 14, 2018

On appeal from the judgment of Justice Elizabeth Stewart of
    the Superior Court of Justice, dated June 15, 2017, with reasons reported at
    2017 ONSC 3391.

REASONS FOR DECISION

[1]

The appellants appeal from the judgment
    in favour of their former solicitors, the respondent law firm, Aird &
    Berlis, and from the dismissal of their counterclaim for damages for
    professional negligence against them.

[2]

For almost five years, Aird & Berlis
    was retained by the appellants to represent the appellant, Oravital Inc., in
    what the motion judge aptly described as acrimonious and protracted
    litigation commenced in June 2010 (the Oravital action).

[3]

After the appellants changed lawyers, Aird
    & Berlis commenced an action against the appellants to recover payment of
    its unpaid accounts in the amount of $182,569.63.  The appellants
    counterclaimed for $1,000,000, alleging that Aird & Berlis was negligent in
    its carriage of its retainer.  In particular, the appellants alleged that Aird
    & Berlis had failed to provide them with a meaningful assessment of the
    potential damages in the Oravital action, which would have allowed for an
    earlier conclusion of the litigation and avoided the incurrence of most of Aird
    & Berlis billed fees and disbursements.

[4]

Aird & Berlis successfully moved for
    summary judgment.  The motion judge found that there was no causal link between
    Aird & Berlis failure to obtain a formal damages assessment at an earlier
    stage and the continuation of the Oravital action by the appellants.

[5]

We agree that the appeal should be
    allowed and that the judgment and dismissal of the counterclaim be set aside. 
    As we are of the view that there are genuine issues requiring a trial, we will
    limit our reasons for allowing the appeal.

[6]

In our view, the motion judge erred in law
    in finding that the appellants principals as sophisticated business people were
    aware of the value of the damages and risks of litigation. This finding
    reflects a misapprehension of the solicitors duty of care to advise the
    clients about the legal basis for the damages and the risks of litigation.

[7]

We are also of the view that the motion
    judge erred in determining the claim and the counterclaim on a motion for
    summary judgment.  In particular, the motion judges disposition of the issue
    of causation was not open to her to make on the record before her.  Her
    findings concerning the appellants dominant purpose for carrying on the
    litigation and the assessment of their damages claim were not available on this
    record, even under the courts enhanced powers pursuant to r. 20.04(2.1) of the
Rules of Civil Procedure
, given
    the highly contentious inconsistencies about these issues that required a trial
    to resolve.

[8]

To be fair to the motion judge, the
    parties took the position that the issues in the action and the counterclaim
    could be resolved on a motion for summary judgment.  They were mistaken.

[9]

Accordingly, we allow the appeal, set aside the judgment and dismissal
    of the counterclaim, and remit the claim and counterclaim to trial.

[10]

As agreed, the appellants are entitled to
    their partial indemnity costs in the amount of $22,500, inclusive of
    disbursements and applicable taxes.

C.W. Hourigan J.A.

L.B. Roberts J.A

I.V.B. Nordheimer J.A.


