Judge orders punitive damages to be paid

A small claims deputy judge has ordered a lawyer to pay punitive damages after he threatened criminal charges against a physiotherapist who was bringing a civil action against him.

Deputy Judge Roderick McDowell found that Hamilton lawyer Girolamo Falletta’s conduct in a dispute over $1,300 was “wrong and deserving of condemnation.” The matter started as a simple contract case involving an unpaid account the physiotherapist had charged a personal injury client of Falletta. As the client did not have the ability to pay for physiotherapy, the lawyer and his firm took an undertaking to protect the account. 

When the physiotherapist contacted Falletta about the unpaid account, the lawyer responded by threatening criminal charges, which he continued to do when the physiotherapist said he would pursue a civil claim, according to the decision. McDowell found Falletta’s conduct “astounding and reprehensible” as well as “wrong and deserving of condemnation.” 

Thomas Mathews, the lawyer representing the plaintiff, says the decision serves as a reminder for lawyers that they have to answer to the courts for their own actions at all times.

“It’s a privilege to practise law and sometimes it’s easy to get carried away with our own capabilities and powers,” he says. 

In March 2017, the physiotherapist sent an email to Falletta demanding payment of the outstanding invoice. 

In response, Falletta said, “Go ahead. My client states that the amounts you charged were not what was agreed upon. In my opinion that constitutes fraud. If you want to proceed with that I will be attending at the local prosecutors office to lay charges for fraud. You should be careful the next time you threaten someone,” according to the decision. 

The physiotherapist started a claim against Falletta’s client, the lawyer and his firm, Centennial Law Group LLP. 

When the plaintiff contacted Falletta again to inform him of his intention to sue to retrieve the unpaid account, McDowell’s decision said the lawyer continued to threaten criminal charges in a second email. 

The plaintiff withdrew the claim against Falletta’s client, but it proceeded with the claim against the lawyer and his firm. 

The outstanding issue for McDowell to rule on in the proceeding was whether Falletta should pay punitive damages, as the defendants no longer disputed the outstanding account. 

In his decision, McDowell cited a 2002 ruling, Whiten v. Pilot, in which the Supreme Court of Canada held that “punitive damages can be awarded in the absence of an accompanying tort” and that the requirement of an independent tort would complicate proceedings. 

The plaintiff sought $23,000 in punitive damages, but McDowell awarded $5,000. Falletta has appealed the matter to the Divisional Court, contending that McDowell erred by allowing information that was discussed at the settlement conference at trial. Falletta’s lawyer, Ronald Allan, is arguing that McDowell made a number of other errors, including in how he applied the principles set out in Whiten v. Pilot. Allan says that in breach of contract cases relying on Whiten that involve punitive damage awards, the offending party was always in a position of power and there was usually or always a duty in law owed to the offending party.  In those cases, the offending party also exercised its power over the other party in an unfair manner, which was done over the course of a long period of time, Allan says. 

“The facts of this case do not resemble Whiten or cases relying on Whiten in this regard,” Allan says. 

“The plaintiff in this instance was not able to establish a tort and, thus, in our view, there should not have been an award of punitive damages based on the facts.”