A lawyer was not responsible for maliciously prosecuting a paralegal accused of stealing client files, the Court of Appeal of Ontario said, overturning a lower court’s ruling.
A lawyer was not responsible for maliciously prosecuting a paralegal accused of stealing client files, the Court of Appeal of Ontario said, overturning a lower court’s ruling.
The appeal court questioned the trial judge’s finding that criminal charges, later withdrawn, affected the unlicensed paralegal’s ability to work. The lawyer was awarded $15,000 inclusive of disbursements and taxes for the appeal, and a costs award of $75,000 for the trial.
James Zibarras, a partner at the Toronto office of Miller Thomson LLP who represented the lawyer, says the decision sheds light on the expansion of the tort of malicious prosecution.
“I think that the main thrust of this case is that the tort of malicious prosecution …. is still getting some judicial attention as to how it should play out, especially in circumstances where the complainant is being sued, as opposed to the police officer that laid the charges,” says Zibarras. “This was a classic case where the plaintiff failed to call the police officer as a witness.”
The May decision, Curley v. Taafe, 2019 ONCA 368, focuses on a 2013 dispute between lawyer Lesley Mary Taafe, who had an exclusive referral agreement to get real estate and family law clients from unlicensed paralegal Antoinette Curley. The agreement dissolved early in 2013, but Taafe and Curley disagreed on the timeline and terms, the decision detailed.
Taafe, the lawyer, said she asked Curley, the paralegal, to return all of her client files by Jan. 15, 2013, but that Curley did not surrender all the files when they met. Curley, on the other hand, said that the meeting was only to exchange closed files. The two also disagreed about a Feb. 12, 2013 letter, in which Taafe said she would go to the police if Curley did not return the files.
Police charged Curley with theft under $5,000 and possession of stolen property under $5,000, but the charges were withdrawn, wrote Justice Gladys Pardu in the appeal decision, with Justices Peter Lauwers and Ian Nordheimer concurring.
The Taafe and Curley also disputed the paralegal’s alleged misuse of and alterations to the lawyer’s letterhead. Curley faced charges of fraud under $5,000 and forgery, also ultimately withdrawn by the Crown.
The lower court judge was “scathing in his assessment” of the lawyer’s conduct, and decided the Taafe should pay general damages of $50,000, punitive damages of $25,000 on a malicious prosecution claim, and $7,500 for wrongful termination of the contract with the paralegal.
Taafe consented to the paralegal’s possession of her files, and use of the letterhead, because she did not actually end the business relationship with the paralegal on Jan. 15, 2013, the lower court judge, Justice Mark Edwards of the Superior Court of Justice, said in his 2018 decision.
But it was an error for the trial judge to conclude that the lawyer initiated the prosecution against the paralegal when “the police exercised independent discretion and judgment over the Investigation,” Pardu wrote.
“The trial judge found that the appellant made misleading statements to police and withheld exculpatory evidence, specifically the video surveillance tape from which the still photos were extracted and turned over to the police,” wrote Pardu in the appeal decision. “Further, although no testimonial evidence was elicited from any police officer …. the trial judge concluded that had police known of the true state of affairs, the first information would never have been laid.”
Unlike Edwards, the panel of appeal court judges considered additional evidence: a letter Curley sent Taafe in April 2013. The paralegal’s letter to the lawyer said, “Please do not send anyone to pick-up any documents or files unless they have certified funds payable to Trinity Legal Services in the full amount as set out in my invoice of March 2, 2013.”
The lower court did not give the paralegal’s letter any weight because the lawyer’s counsel did not cross-examine the paralegal “about the specific parts of her own letter in which she appeared to a possession of the appellant’s files,” leaving the judge “to speculate as to what the respondent meant.”
It was an error not to give the letter any weight, the higher court said, writing that Curley’s letter “amounts to an admission that she retained files belonging to the appellant.”
“This letter had the potential to significantly affect the trial judge’s assessment of the relative credibility of the parties, however the trial judge discounted the effect of that letter,” Pardu wrote.
Pardu and the other appeal judges were also critical of Edwards for taking judicial notice of Curley’s ability to work amid the police investigation. The appeal decision noted that Curley started work for a credit union on Jan. 21, 2013 and received an $85,000 settlement from the credit union after she was terminated in June 2013.
“Apart from the respondent’s own statements regarding her tarnished reputation, there was no evidence that the charges had any effect on her ability to work or refer files to other lawyers,” the appeal decision said. “This is quite apart from the difficulty of awarding damages for loss of paralegal income when the respondent was not licensed by the Law Society to provide legal services.”
Curley’s counsel did not respond to requests for comment.
Zibarras says the rule in Browne v. Dunn — cited in the lower court’s decision to discount the letter as evidence — continues to be misunderstood. He also says that the court corrected its analysis of the breach of agreement between the lawyer and the unlicensed paralegal.
“It highlights the fact that client files belong to the lawyer or to the law firm. When a relationship with a law clerk is terminated, it is improper for the law clerk to try and hang on to client files — for any purpose — including to use those files as leverage to get paid,” Zibarras says. “I think the Court of Appeal reiterates that Taafe was justified in going to the police with the complaint in those circumstances …. She has a duty as a lawyer to be in possession of her files — and a duty to take action to have them returned in circumstances where there is a refusal by the law clerk to return them.”
