



COURT OF APPEAL FOR ONTARIO

CITATION: Best v. Ranking, 2016 ONCA 492

DATE: 20160621

DOCKET: C61271

Blair, Pardu and Brown JJ.A.

BETWEEN

Donald Best

Plaintiff

and

Gerald
    Lancaster Rex Ranking, Sebastien Jean Kwidzinski,

Lorne
    Stephen Silver, Colin David Pendrith, Paul Barker

Schabas,
    Andrew John Roman, Ma'anit Tzipora Zemel,

Fasken
    Martineau Dumoulin LLP, Cassels Brock and

Blackwell
    LLP, Blake, Cassels & Graydon LLP, Miller

Thomson
    LLP,
Kingsland Estates Limited
,
Richard Ivan Cox
,

Eric Iain
    Stewart Deane,
Marcus Andrew Hatch
,
Philip St.

Eval
    Atkinson
,
PricewaterhouseCoopers East Caribbean

(Formerly
    'PricewaterhouseCoopers')
, Ontario Provincial Police,

Peel
    Regional Police Service a.k.a. Peel Regional

Police,
    Durham Regional Police Service, Marty Kearns,

Jeffery
    R. Vibert, George Dmytruk, Laurie Rushbrook,

James
    (Jim) Arthur Van Allen, Behavioural Science

Solutions
    Group Inc., Tamara Jean Williamson,

Investigative
    Solutions Network Inc., Toronto Police

Association,
    Jane Doe #1, Jane Doe #2, Jane Doe #3, Jane Doe #4,

Jane Doe
    #5, John Doe #1, John Doe #2, John Doe #3, John Doe #4,

John Doe #5

Defendants (Respondents)

Paul J. Pape and Justin H. Nasseri, for the appellant,
    Paul Slansky

Mark Polley and Eric Brousseau, for the respondents

Heard: May 24, 2016

On appeal from the judgment of Justice Susan E. Healey of
    the Superior Court of Justice, dated October 13, 2015, with reasons reported at
    2015 ONSC 6279.

Pardu J.A.:

[1]

Paul Slansky, counsel for the plaintiff Donald
    Best, appeals from a decision requiring Mr. Slansky to pay costs personally, in
    the sum of $84,000, on a joint and several basis with his client. He submits
    that the motion judge erred in two respects:

·

The hearing was unfair, because he did not have adequate notice of
    the grounds upon which the motion judge grounded her decision to order him to
    pay costs personally.

·

The motion judge awarded costs against him because he took on a weak
    case, not on the basis pleaded by the respondents, which was that he had taken
    procedural steps which wasted costs.

[2]

More generally, Mr. Slansky submits that the
motion judge should not have ordered him to pay costs personally, and would not
    have done so had she exercised the extreme caution required.

[3]

For the following reasons, I would dismiss the
    appeal.

A.

Background

(1)

The first action

[4]

Donald Best was the appellants client. In 2007,
    Mr. Best, not then represented by the appellant, started an action for
    negligence and economic loss against 62 defendants  including three of the
    respondents on this appeal, Richard Ivan Cox, Kingsland Estates Limited and
    PricewaterhouseCoopers East Caribbean. This action (Action 1) was stayed on
    jurisdictional grounds in 2009: 75 C.P.C. (6th) 58 (Ont. S.C.J.).

[5]

Several of the defendants in Action 1, among
    them the respondents named above, moved for a finding of contempt against Mr.
    Best for failure to comply with court orders related to attempts to collect
    costs from him. Mr. Best failed to appear at the hearing of the motion and was
    held in contempt: 2010 ONSC 569. He failed to purge his contempt when given an
    opportunity to do so on February 22, 2010, choosing instead to live outside
    Canada for a period of time.

[6]

In 2012, Mr. Best returned to Canada and applied
    to purge the contempt. He swore an affidavit that contained accusations of
    perjury, conspiracy, fraud, obstruction of justice and fabrication of evidence
    by opposite parties and their counsel. These accusations were rejected as
    baseless by the contempt judge, who dismissed Mr. Bests application: 2013 ONSC
    9025. Mr. Best served 60 days in prison for contempt.

[7]

It was at this point that Mr. Slansky first
    appeared in court on behalf of Mr. Best. The latter sought to appeal to
    this court the finding of contempt and the dismissal of his application to set that
    finding aside. As part of his appeal, he brought a motion before Feldman J.A.
    on October 29, 2013 to remove counsel of record for the opposing parties.

[8]

At that time, Mr. Best, through Mr. Slansky,
    repeated his allegations of serious misconduct on the part of opposite counsel.
    Feldman J.A. indicated that the repetition of these allegations, in the face of
    express judicial findings rejecting them, required the court to express its
    condemnation by awarding costs on the full indemnity scale: 2013 ONCA 695.

[9]

A panel of this court rejected Mr. Bests
    attempt to review the order of Feldman J.A. and ordered him to pay costs owing
    to the defendants by April 1, 2014, failing which his appeal from the decision
    dismissing his action on jurisdictional grounds would be dismissed by the
    Registrar: 2014 ONCA 167.

[10]

Attempts by Mr. Best to stay the Court of Appeal
    decision and to obtain leave to appeal from the Supreme Court of Canada were
    unsuccessful. He did not pay the costs and his appeal was dismissed.

(2)

The second action

[11]

Before the Supreme Court released its decision
    on leave, Mr. Best started a new action, with the appellant as his counsel of
    record.

[12]

This action (Action 2) named 39 defendants, including
    the five respondents to this appeal. It added claims against opposing counsel from
    Action 1 and their firms, and claims against police and private investigators,
    alleging intentional torts committed during the contempt proceedings. The
    allegations included intentional infliction of harm and mental suffering,
    misfeasance of public office and abuse of authority, malicious prosecution,
    conspiracy to injure and invasion of privacy.

[13]

Once Action 2 was started, counsel for the respondents
    wrote to Mr. Slansky on October 24 and November 6, 2014 indicating that
    they intended to contest jurisdiction. They advised that for that reason they
    did not propose to file a defence and asked that he not note their clients in
    default.

[14]

The letters also noted that other defendants
    were bringing a motion to strike the claim entirely. Counsel proposed that the
    parties defer the jurisdiction motion until that other motion was decided. If
    the action were struck, there would be no need to proceed with the jurisdiction
    motion and the respondents would not incur the costs of so doing. By this
    point, Mr. Best owed $375,000 in unpaid costs awards to the three respondents
    who had been involved in Action 1.

[15]

Mr. Slansky responded that he would not agree to
    defer the jurisdiction motion until after the motion to strike. He demanded
    that the respondents serve either a defence or a notice of motion to challenge
    jurisdiction by November 25, 2014, failing which he would note them in default.

[16]

Counsel asked Mr. Slansky to reconsider his
    position on noting the respondents in default on November 17, 2014. He did not
    agree but extended his deadline for a Statement of Defence or notice of motion to
    contest jurisdiction to December 2. Failing receipt of either, Mr. Slansky
    noted the respondents in default on December 8 and advised their counsel.

[17]

At a case conference held on December 16, Mr.
    Slansky refused to agree to set aside the noting in default, and the case
    conference judge set a timetable to deal with a motion to set aside the noting
    in default.

[18]

On February 6, 2015, Mr. Slansky served counsel
    with notices of examination for two of the respondents. The respondents refused
    to produce themselves for cross-examination, and Mr. Best, in turn, brought a
    motion to compel them to give evidence. Justice McCarthy dismissed this motion
    on February 27, noting that there was nothing the respondents could add that
    would be relevant to the narrow issue to be determined on the motion to set
    aside.

[19]

Mr. Slansky eventually consented to an order
    setting aside the default judgment on March 9, 2015, just four days before the
    motion to set aside the noting in default was to be argued. Motion materials
    had already been prepared and exchanged. In a letter written two days later,
    counsel for the respondents informed Mr. Slansky that they intended to seek
    costs against him personally.

[20]

A hearing to determine the costs of the
    examination motion and the motion to set aside the noting in default took place
    on April 10, 2015. Justice McCarthy ordered substantial indemnity costs against
    Mr. Best, holding that Mr. Best had used the rules to create the need for an
    unnecessary and time-consuming motion. He described the plaintiffs conduct as
    reprehensible, requiring strong disapproval from the court. He said the
    plaintiffs conduct in noting the defendants in default and then opposing the
    setting aside of that step was entirely unnecessary and unreasonable.

[21]

Mr. Bests motion for leave to appeal the April
    10 costs order to the Divisional Court was dismissed: 2015 ONSC 5075. Upon
    learning that Mr. Best sought leave to appeal, counsel for the respondents
    again wrote to Mr. Slansky on April 29, 2015, informing him that they were
    considering seeking costs against him personally.

[22]

A further letter from counsel for the
    respondents followed on May 7, 2015, again warning of their intention to seek
    costs personally from him:

[I]t is not just a mere disagreement with your
    clients positions or actions that leads us to this drastic step of seeking
    costs against you personally.
Fundamentally, your approach to
    this litigation has been abusive and continues to waste an astonishing amount
    of money on legal costs.
You personally have caused
    these costs to be incurred without any reasonable cause by either acquiescing
    to absolutely unreasonable instructions from your client, or worse by advising
    your client to take the unreasonable steps he has taken through you. Either
    way, you personally are liable for these costs. [Emphasis added.]

(3)

The hearing of the motions to strike

[23]

From June 15 to 18,
the motions to strike brought by 21 of the 39 defendants in Action 2
    were argued before Healey J. The defendants sought to dismiss Action 2 as frivolous,
    vexatious and an abuse of process, or to strike the claim as disclosing no
    reasonable cause of action, without leave to amend.

[24]

On the first day of argument, nearly eight
    months after the issue was first raised, Mr. Slansky conceded that the
    respondents jurisdictional motion should await the outcome of the motions to
    strike.

[25]

On the third day of argument, counsel for the
    respondents again notified Mr. Slansky of their intention to seek costs against
    him personally.

[26]

On the fourth day of argument, Justice Healey
    dismissed the action as an abuse of process, making the jurisdiction motion
    moot. In her endorsement dated that same day, she ordered costs of the action to
    the respondents on a full indemnity basis. She noted that the respondents would
    be moving for an order under rule 57.07, requiring Mr. Slansky to be jointly
    and severally liable for the costs of the action. In reasons released later, she
    found that Action 2 had not a scintilla of merit and that it was the most
    vexatious and abusive claim to ever come before her: 2015 ONSC 6269, at para.
    7.

[27]

Mr. Best attempted to appeal from the dismissal
    of his action, but the appeal was dismissed after he failed to comply with an
    order to provide security for costs.

B.

The Notice of Motion

[28]

As noted, counsel for the respondents provided written
    notice of the respondents intention to seek costs personally against the
    appellant on four occasions during the course of Action 2: March 11, 2015;
    April 29, 2015; May 7, 2015 and June 17, 2015.

[29]

On July 22, 2015, the respondents served their Notice
    of Motion. Pursuant to rule 57.07(1)(c) of the
Rules of Civil
    Procedure
, they sought that Mr. Slansky be held jointly
    and severally liable with Mr. Best for all costs awarded in the respondents
    favour in Action 2  an amount totaling over $160,000. The motion was heard on
    September 3, 2015. On October 13, 2015, Healey J. ordered Mr.

Slansky to pay costs fixed at $84,000 on a joint and several basis
    with Mr. Best.

[30]

Rule 57.07 provides in part:


(1)

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.

(2)

An order under subrule (1)
    may be made by the court on its own initiative or on the motion of any party to
    the proceeding, but no such order shall be made unless the lawyer is given a reasonable
    opportunity to make representations to the court.

[31]

The grounds advanced in support of the motion
    emphasized, but were not limited to, the unreasonable procedural steps taken.
    The Notice of Motion included factors related to the merits of Action 2 at
    paras. (c) and (n):

Mr. Slansky counselled the plaintiff or
    otherwise allowed his client to proceed with a series of unmeritorious steps
    and to take unreasonable positions to achieve unattainable goals in this action;



On June 18, 2015, Justice Healey dismissed the
    entire action from the bench for being vexatious and an abuse of process and
    stated that Mr. Bests position lacked a scintilla of merit[.]

C.

Motion Judges decision

[32]

The motion judge observed that the onus lay upon
    the moving parties, the respondents, to establish that Mr. Slansky should pay
    costs personally, and that a two-step inquiry was required:

·

Did the lawyers conduct fall within rule 57.07(1) in that he caused
    costs to be incurred unnecessarily?

·

As a matter of discretion, applying the extreme caution principle,
    was the imposition of costs against the lawyer personally warranted? (See
Galganov v. Russell (Township)
, 2012 ONCA 410,
350 D.L.R. (4th) 679, application for leave to
appeal to
    S.C.C. discontinued, [2012] S.C.C.A. No. 382.
)

[33]

Counsel agreed that it was not necessary to show
    negligence, bad faith or reprehensible conduct in order to justify an award of
    costs under rule 57.07.

[34]

In addressing the first step of the inquiry, counsel
    for the respondents (who were referred to below as the Caribbean defendants)
    urged the motion judge to rely on the procedural steps undertaken by Mr.
    Slansky, rather than focusing on the lack of merit to Action 2. The motion
    judge described counsels submissions:

[Counsel] argues that it is sufficient that Mr. Slansky
    took unnecessary and vexatious steps that wasted costs, regardless of whether
    he was acting on his clients instructions. She focusses on five particular
    steps taken that she alleges were unreasonable, unnecessary and wasted costs:

(i)    the
    decision to note the Caribbean defendants in default;

(ii)    opposing
    the motion to set aside the noting in default;

(iii)   bringing
    an urgent motion to examine two of the Caribbean defendants for purposes of the
    above motion;

(iv)   opposing
    and delaying the determination of costs in the above motions; and

(v)   insisting
    that the jurisdiction motion had to be argued in June 2015, with the motions to
    dismiss/strike.

[35]

The motion judge found that Action 2 was an abuse of
    process, doomed to failure, and that Mr. Slansky should have known this. She explained
    that the specific examples of unnecessary costs provided by the respondents had
    to be seen within the context of the action as a whole. That action was
    dismissed as an abuse of process  a transparent attempt to re-litigate issues
    that had already been decided. Rather than being in the interests of justice,
    the litigation taxed the resources of a strained judicial system. It also taxed
    the resources of the respondents, who faced significant unpaid costs orders
    from the previous action.

[36]

The motion judge stated:

Both of these facts should have been known to Mr. Slansky,
    and should have guided his judgment in accepting this retainer to commence and
    conduct such an unmeritorious action. Further, for the reasons given, the
    arguments advanced by Mr. Slansky to justify commencing a second proceeding did
    not have a scintilla of merit. It is Mr. Slansky, who has legal training and
    expertise, upon whom responsibility for that act must lie. While Mr. Best may
    have given instructions to proceed, it would be within the purview of Mr.
    Slansky to guide him as to what causes of action could be supported on the
    facts presented to him; his judgment was misguided, at the expense of the
    moving parties.

[37]

The motion judge observed that the Statement of Claim in Action 2 was 90
    pages and 234 paragraphs. It made scandalous and unsupported allegations of
    dishonesty and fraud against lawyers and law firms, and it sought to extend
    those allegations by way of conspiracy theory to impugn the professional
    reputations of police officers, a private investigator and various police
    services, along with the Caribbean defendants.

[38]

The motion judge continued:

The responsibility for drafting such a claim rests ultimately
    with Mr. Slansky. The choice to repeat such allegations in affidavits and facta
    drafted by him, and to repeat those allegations on the record during
    submissions, was the exercise of Mr. Slanskys professional judgment.

[39]

The motion judge found that the entire action
    incurred and wasted costs unnecessarily, and that Mr. Slansky was instrumental
    in both starting and advancing the action in the manner that he did. The
    specific steps she found to have wasted costs were:

·

He drafted a claim that was an abuse of process because it was a
    collateral attack on prior rulings and sought to relitigate the same issues.

·

He issued and served the claim.

·

He based his legal rationale for commencing the action on a theory
    that had no chance of success.

·

The causes of action were not properly pleaded and lacked any
    factual basis.

·

He advanced serious and scandalous allegations in the claim, factum
    and oral submissions of fraud, dishonesty, criminal conduct, false
    representations and other improper conduct against various professional
    individuals knowing that courts had previously ruled that those same
    allegations were baseless.

·

He acted on unreasonable instructions from his client, or provided
    unreasonable advice to his client, regarding the scheduling of the respondents
    jurisdiction motion.

[40]

The motion judge observed that, had Mr. Slansky consented
    to deferring the respondents jurisdiction motion at the outset, the respondents
    would have incurred only minimal costs. Given the absence of prejudice to Mr.
    Best, in the event of such forbearance, the motion judge concluded that the
    tactic was adopted to place pressure on the Caribbean defendants for an
    improper purpose: retribution for Mr. Bests ill-conceived notion that they and
    their former lawyers were responsible for his incarceration, and to drive up
    their legal fees.

[41]

Turning to the second arm of the test, the
    motion judge concluded that this was one of the rare cases in which counsel
    should personally pay costs for the following reasons:

·

The need to deter the commencement of a third unmeritorious claim,
    potentially bearing Mr. Slanskys name as counsel of record.

·

Mr. Slansky should have known Action 2 was an abuse of process.

·

He advanced arguments that had no chance of success, despite what he
    described as his good faith belief to the contrary.

·

He drafted and advanced a claim that made spurious and unsupported
    allegations that maligned the professional reputation of lawyers and others,
    for which contrary findings had already been made by the court.

·

He may have deferred to his client on a matter of scheduling of a
    motion without evidence of prejudice to his client, or alternatively advised
    his client to take a position that unnecessarily incurred costs, without
    evidence that he needed to do so to safeguard his clients rights.

D.

Analysis

[42]

In oral argument on appeal, the appellant submits
    that the appellant did not have a reasonable opportunity to make representations
    to the court on the particular ground upon which the motion was decided, which was
    that the action lacked merit and should never have been brought by the
    appellant on behalf of Mr. Best. He indicated that the grounds listed in his
    factum distill down to that.

[43]

As I explain below, I do not accept the
    appellants argument. First, Mr. Slansky did have adequate notice that the
    merits of Action 2 would be a component of the rule 57.07 motion. Second, it
    was not merely the meritless nature of Action 2 that was a factor in the motion
    judges award of costs against Mr. Slansky, but rather that Action 2 was an
    abuse of process.

[44]

The motion judge exercised her discretion as to
    costs with extreme caution, as was required, and her decision is entitled to
    deference.

(1)

Was the requisite notice provided to Mr.
    Slansky?

[45]

I do not accept the argument that Mr. Slansky
    did not have adequate notice of the reliance upon the meritless nature of
    Action 2.

[46]

The Notice of Motion making the claim for costs
    against him included amongst the grounds:

·

He counselled the plaintiff or otherwise allowed his client to proceed
    with a series of unmeritorious steps and to take unreasonable positions to
    achieve unattainable goals in this action: para. (c).

·

On June 18, 2015, Justice Healey dismissed the entire action from
    the bench for being vexatious and an abuse of process and stated that Mr. Bests
    position lacked a scintilla of merit: para. (n).

[47]

Mr. Slansky was represented by counsel on the
    motion. He was aware, as of June 18, that the action had been dismissed as an
    abuse of process. His own factum filed on the motion devoted argument to the
    merits of the action. Overall, there was no unfairness in the notice given to
    him of the claim for costs.

[48]

While the lack of merit and abusive nature of
    the overall action was emphasized in the motion judges reasons, the motion
    judge also found that Mr. Slansky wasted costs unnecessarily by acting on
    unreasonable instructions from or providing unreasonable advice to his client
    on the scheduling of the respondents jurisdiction motion. In particular, she
    found that almost all of [the respondents] costs would have been saved had
    it not been insisted that the jurisdiction motion be argued in June 2015
    together with the motions to strike.

[49]

This core finding supporting the motion judges
    ruling  that counsel caused costs to be incurred without reasonable cause  is
    unassailable. It was open to the motion judge to conclude that it was a waste
    of costs to require the respondents to move to contest jurisdiction immediately
    rather than await the motion to strike by other defendants. It was also open to
    her to conclude that there was no justification for Mr. Slansky to require
    this, whether it was insisted upon by Mr. Best or not.

(2)

Does a lawyer become liable to pay costs
    personally because he starts an action that has little chance of success?

[50]

I agree with the submission of the appellant
    that the fact that a lawyer starts an action which is unlikely to succeed is
    not, on its own, a basis to award costs personally against that lawyer.

[51]

Rule 57.07 is designed to protect and
    compensate a party who has been subjected to costs being incurred without
    reasonable cause, not to punish a lawyer:
Galganov
, at para. 14.

[52]

The motion judge here did not make Mr. Slansky
    liable for costs personally simply because he started a case that was weak. As
    the motion judge pointed out, the nature of the proceedings is an important
    contextual factor in assessing whether costs wasted by a solicitor justify an
    order that he pay costs personally.

[53]

As this court held in
Galganov
, at para. 20:

[R]ule 57.07(1) requires an examination of the entire course
    of litigation that went on before the application judge so that the application
    judge can put in proper context the specific actions and conduct of counsel. This
    holistic examination of the lawyers conduct produces an accurate tempered
    assessment. [Citation omitted.]

[54]

The motion judge examined the entire course of
    the litigation in assessing the specific actions and conduct of counsel, as she
    was required to do. In particular, she focused on the vexatious or abusive
    nature of the proceeding. This is not a necessary element of an award of costs
    against counsel personally but is not unfamiliar in this context. (See e.g.
Soderstrom v. Hoffman-LaRoche Limited
(2008), 58 C.P.C.
    (6th) 160 (Ont. S.C.J.);
Donmor Industries Ltd. v. Kremlin
    Canada Inc. (No. 2)
(1992), 6 O.R. (3d) 506 (Gen. Div.); and
Baryluk
(Wyrd Sisters) v. Campbell
(2009), 81
    C.P.C. (6th) 172 (Ont. S.C.J.).)

[55]

On appeal, Mr. Slansky argues that Action 2 was
    not abusive. It was against many different parties and for different causes of
    action. That issue has now been conclusively determined by the dismissal of Mr.
    Bests appeal from the decision striking Action 2 as an abuse of process. Action
    2 made similar allegations of impropriety as had been voiced in the course of
    Action 1. The motion judge did not err in considering that Mr. Slansky
    incorporated into the pleading in Action 2 accusations of criminal misconduct
    against opposing counsel that had repeatedly been judicially rejected as
    baseless.

[56]

Finally, as this court indicated in
Galganov
, at paras. 23-25, deference is
    owed to a motion judges decision as to whether a lawyer should pay costs
    personally:

The determination as to costs is a matter within the discretion
    of the application judge. An appellate court may set aside a costs award if the
    application judge made an error in principle or if the costs award is plainly
    wrong.

In
Rand Estate
, this court held that:

The application judge who managed the proceedings was in a much
    better position than this court to make the necessary assessments underlying
    the findings of fact he eventually made. Those findings are, by their nature,
    somewhat subjective and the cold paper record cannot, in our view, capture all
    of the considerations that would be relevant to those findings. We defer to the
    [application] judges findings unless they are clearly in error and clearly
    material to his ultimate determination.

As a result, this court owes a high degree of deference to the
    application judges holding. [Citations omitted.]

[57]

I see no basis to interfere with the motion
    judges discretionary decision to order Mr. Slansky to pay some portion of
    the costs wasted.

[58]

In the event leave to appeal a costs order
    against counsel personally is necessary, I would grant leave.

E.

disposition

[59]

For these reasons, the appeal is dismissed with
    costs payable by Mr. Slansky in favour of the respondents in the agreed
    sum of $30,000 inclusive of HST and disbursements.

Released: RAB June 21, 2016

G. Pardu J.A.

I agree R.A. Blair
    J.A.

I agree David Brown
    J.A.


