Law Times

Law Times • January 22, 2018 Page 3 www.lawtimesnews.com Conduct called 'shameful' Judge blasts lawyers over $3,500 dispute BY ALEX ROBINSON Law Times A n Ontario judge has criticized the conduct of two personal injury lawyers as "shame- ful" in a dispute over less than $3,500. In Cozzi v. Sidiropoulos, lawyer Peter Cozzi brought a claim against Joseph Sidiropou- los, alleging he had failed in an undertaking to protect his ac- count after the transfer of a file, as he had not paid the account. A client had retained Sidiropoulos to take over an action in which Cozzi had previously represent- ed the client. Sidiropoulos argued that he understood his undertaking was contingent on Cozzi delivering a complete file on a timely basis so that the action could proceed, which Cozzi had failed to do. Ontario Superior Court Jus- tice Michael Quigley found that Sidiropoulos had broken his promise to pay the account, but he dismissed Cozzi's appeal, as his claim was not brought with- in a two-year limitation period. "This is a petty claim for less than $3,500 that has been taking space in our justice system for close to nine years," Quigley said in the ruling. "The conduct of both parties has been shameful, one for its disdain of a professional obliga- tion and promise, and the other for having neither the energy nor the aptitude to properly pur- sue a legitimate claim on a time- ly basis." Bryan Kravetz, a lawyer with Grinhaus Law Firm, who was not involved in the matter, says the case highlights that lawyers should make sure undertakings are unambiguous. "It demonstrates how clear you have to be with an under- taking, and think more about it, and maybe even put conditions, because otherwise you can end up in a grey zone where there is ambiguity," he says. Kravetz says lawyers have professional obligations with re- spect to undertakings and have very powerful obligations to fulfil undertakings and honour them. The Law Society of Ontario's Rules of Professional Conduct hold that lawyers must "strict- ly and scrupulously fulfil any undertakings given by him or her and honour any trust con- ditions accepted in the course of litigation." The dispute has dragged on over eight years, since Cozzi first brought an action against his former client in Small Claims Court for $3,481 that had not been remitted to him from the account. That action was ad- ministratively dismissed after Cozzi failed to prosecute it. Sidiropoulos paid out a small component of the account to Cozzi, but he did not remit the $3,481 central to the dispute. He said that the client had instruct- ed him not to pay. Cozzi sought to have the dis- missal set aside 16 months after it had been dismissed, but the court refused to set it aside. The Divisional Court then upheld the dismissal. Cozzi then brought his claim against Sidiropoulos, also in Small Claims Court, for the same amount. A Small Claims Court dep- uty judge found the action was brought outside of the two-year limitation period and that Cozzi had no tenable cause of action as his claim against the client for the unpaid account had been dismissed. The deputy judge also found that Sidiropoulos had never undertaken to personally pay Cozzi's account, just to protect it. Holding the funds in trust would be sufficient to protect it, the deputy judge determined. In Cozzi's most recent appeal, the lawyer argued that the Limi- tations Act does not operate in respect of claims arising from a breach of a solicitor's undertak- ing. Quigley disagreed with the deputy judge's conclusion that there was no debt due to Cozzi after his action against the cli- ent was dismissed. He found that while there might not have been debt due from the client, the original dismissal would not have discharged Sidiropoulos' personal undertaking given to protect the account. "In my view, depending on the type of undertaking given, it must be at least arguable that the solicitor's promise exists inde- pendent of what the client does," Quigley wrote in the decision. "The lawyer ought not to be released from his promise be- cause the client instructs him not to pay the account." He also determined that there was no meaningful dif- ference between protecting and paying an account. "If the lawyer does not get paid that necessarily means that the obligation 'to protect' the fee failed, and so and the lawyer is required to pay," he wrote. Quigley, however, also found that Cozzi's claim should be dis- missed as it was brought outside of the limitation period. He said that while there are some exceptions in the Limi- tations Act as to the two-year limitation period, none of them applies to claims arising from a breach of a lawyer's undertaking. Quigley found neither Cozzi nor Sidiropoulos should be awarded costs, rejecting "the position" of both lawyers. "In my view, neither is entitled to costs, and it is disingenuous to suggest from his vantage point that Mr. Sidiropoulos has emerged vindicated, his reputa- tion intact," said the ruling. "The solicitor who gave a personal undertaking failed in his professional duty to honour it. Were it not for the lassitude of the appellant in pursuing his claim, he could and should have been held liable on his promise. The appellant should have suc- ceeded in his claim, but [he] has only his own conduct to blame for his inability to do so." Sidiropoulos says Quigley's comments about his conduct were unfair. He says the lawsuit was frivolous and notes that Cozzi has now lost this issue in at least five court decisions. Sidiropoulos says he does not feel that he gave an undertaking back in 2010 when he took over the file. He says he agreed to pro- vide a contingent undertaking that if Cozzi delivered the file materials, he would protect the account. He says that as Cozzi had not fulfilled the conditions of the al- leged undertaking, there was no undertaking. "Why would I undertake to promise to pay his fee if he is not even handing over the file?" he says. He adds that the law around what it meant to protect an ac- count was very ambiguous in 2010. At that point, he says, it was not clear that to protect and pay an account meant the same thing. "To suggest that I somehow knew in 2010 that to undertake to protect an account meant that I had to pay an account, well that's just not fair," he says. Sidiropoulos says that the law may be less ambiguous now, pursuant to this decision, as to what it means to protect an ac- count. He says that the main take- away for lawyers from the case is to not be ambiguous about whether they will pay an ac- count and to get direct and clear instructions from clients before making any kind of promises. Kravetz says the decision should help push lawyers to think more about the undertak- ings they give as far as protecting another lawyer's account. He says that being clear with the client and the previous law- yer is key. "I think that is the ideal scen- ario where both parties under- stand how the account is going to be paid, so that the client understands, the other lawyer understands and so that no one is asking questions later on," he says. Cozzi, and his lawyer Jordan Sobel, did not provide comment before deadline. LT NEWS An Ontario Superior Court judge had criti- cal words for two lawyers involved in a dispute over a file transfer. This is a petty claim for less than $3,500 that has been taking space in our justice system for close to nine years. Justice Michael Quigley DIRECTOR FACULTY RELATIONS Located in picturesque Kingston Ontario, Queen's University is seeking a Director, Faculty Relations, to join our team. Reporting to the Associate Vice-Principal (Faculty Relations), the incumbent must have experience developing bargaining strategies, and proven success as a chief negotiator of collective agreements, to be successful in this role. This position is a great opportunity for a labour lawyer or a human resources (HR) professional with a relevant post-graduate degree, who is looking for work-life balance, but not at the expense of having challenging and interesting work. With the possibility of a fteen minute commute to an internationally recognized institution like Queen's University, coupled with the natural beauty of the campus and city, this opportunity is certainly unique. If this description sounds like you, please visit Queen's University's Career Site at www.queensu.ca/humanresources/careers, click on the External Candidates link, and apply to job number J1117-1026 prior to February 4, 2018. The University thanks all who express interest in this position and advises that only those selected for an interview will be contacted. Queens_LT_Jan22_18.indd 1 2018-01-17 1:21 PM

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