Wayne Rusnak, Ronald Blacko, Randy Kachur v. David Rusnak, 2011 SKPC 104

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2011 SKPC 104 Date: July 18, 2011 File: 98/09 Location: Yorkton _____________________________________________________________________________ Between: Wayne Rusnak, Ronald Blacko, Randy Kachur and David Rusnak c/o business under the firm name and style of Rusnak, Blacko, Kachur, Rusnak - and - Leon Dutchak Mr. David Rusnak For the Plaintiff/Defendant by Counterclaim Mr. Leon Dutchak For the Defendant/Plaintiff by Counterclaim _____________________________________________________________________________ JUDGMENT R.

GREEN , J _____________________________________________________________________________ I. OVERVIEW [ 1 ] David Rusnak is a lawyer practicing in Yorkton. Leon Dutchak resides in Canora. Mr. Rusnak claims $900.00 from Mr.

Dutchak, as the remaining portion of an unpaid account, together with interest from July 27, 2007 and the costs of issuing this claim. Mr. Dutchak counterclaims for $9,500.00, alleging negligence by Mr. Rusnak in his representation of Mr. Dutchak, together with the costs of the counterclaim. David Rusnak’s evidence [ 2 ] Mr. Rusnak first met with Mr. Dutchak on April 3, 2007. Mr. Dutchak retained Mr. Rusnak to represent him regarding the family law matters of division of property, custody and access. Mr. Rusnak eventually withdrew as Mr.

Dutchak’s lawyer by way of a notice of withdrawal of solicitor on August 23, 2007. Despite that withdrawal, in the fall of 2007, Mr. Dutchak further consulted Mr. Rusnak for advice on a potential civil action against the police. As a result, Mr. Rusnak provided Mr. Dutchak with a letter dated November 29, 2007 (Exhibit P-1). In that letter, in addition to the advice offered about a potential civil claim against the police, Mr.

Rusnak said: As it relates to your outstanding account, I am prepared to reduce the existing balance to an amount of $7,500.00 plus PST and GST thereon; this would result in a corresponding reduction of the GST and PST. You would get the GST back as you are registered for GST; the PST I must remit to the province. [ 3 ] In early February 2008, Mr. Dutchak paid Mr. Rusnak $7,500.00. Mr. Rusnak then wrote to Mr. Dutchak in a letter dated February 6, 2008 (Exhibit P-2). That letter reads: Thank you for your payment of $7,500.00.

In my letter dated November 29, 2007, a copy of which I have enclosed, I stated that I would be prepared to reduce the existing balance to an amount of $7,500.00 plus PST and GST thereon, an additional $900.00, which is still outstanding. Please forward this outstanding balance forthwith. [ 4 ] Mr. Rusnak next met with Mr. Dutchak at his office in Yorkton in September 2009. Mr. Rusnak said this was as a result of a request by Mr. Dutchak that Mr. Rusnak represent him again in the family law action. At that meeting Mr. Dutchak gave Mr. Rusnak a cheque for $900.00 dated September 15, 2009.

On September 18, 2009, Mr. Dutchak stopped payment on that cheque (Exhibit P-3). [ 5 ] As a result, Mr. Rusnak wrote to Mr. Dutchak on September 24, 2009 (Exhibit P-4), indicating that he had spoken to the lawyer representing Mr. Dutchak’s estranged wife, and setting out the conditions that would have to be met before Mr. Rusnak would again represent Mr. Dutchak in the family law proceedings. These included: 1) Payment by Mr. Dutchak of $20,000.00 to satisfy an interim distribution order against him made by the Court of Queen’s Bench; 2) Payment by Mr.

Dutchak of a taxable costs order made against him by the Court of Queen’s Bench in April 2009; 3) Payment by Mr. Dutchak of a taxable costs order made against him by the Saskatchewan Court of Appeal; and 4) Compliance by Mr. Dutchak with financial disclosure orders made by the Court of Queen’s Bench in the family law proceeding. [ 6 ] In addition to the above conditions being met, Mr. Rusnak required a retainer of $5,000.00 to return as solicitor of record for Mr. Dutchak. Regarding the $900.00 debt, Mr.

Rusnak said the following in his letter: The $900.00 that you provided the writer on September 15, 2009, has been returned as “payment stopped”. You had also indicated that you would be making a further payment for the taxable cost and for one half of the interest that had accrued regarding our memorandum of account, which was the subject of a Small Claims action that was adjourned to September 14, 2009, at 10:00 a.m., on the basis that this payment would be made in order to conclude the matter in its entirety, and upon the writer contacting Doreen Clark to arrange for mediation.

I did this and set out certain conditions for it to happen, which included a retainer for the writer. As you have not fulfilled your terms of the agreement I will be seeking the entire amount, including accrued interest as calculated.

[ 7 ] Mr. Rusnak’s claim was originally commenced on July 14, 2009, and was adjourned from time to time in this Court. Mr. Rusnak said it was adjourned a number of times so that Mr. Dutchak could tax his account with the Registrar of the Court of Queen’s Bench in Yorkton. Mr. Dutchak did not do this. Leon Dutchak’s evidence [ 8 ] Mr. Dutchak claimed that Mr. Rusnak did not take sufficient care in preparing documentation for the family law proceedings with his estranged wife Sharon Dutchak. He said Mr.

Rusnak did not sufficiently advocate for him by including some of his concerns about his wife in documentation provided to the Court of Queen’s Bench. While I was not given the entire Queen’s Bench file, I was provided with copies of the draft and sworn affidavits of Leon Dutchak and his parents Mary and Edward Dutchak. [ 9 ] Mr. Dutchak said the draft affidavits were prepared some time in early May 2007 and that on May 10, 2007, he was arrested by the RCMP in Canora on an allegation that he had uttered a threat to a member of his family. In response, Mr. Rusnak faxed some material to the RCMP, which included Mr.

Dutchak’s draft affidavit. [ 10 ] These affidavits, in updated form, were sworn by all three parties on May 14, 2007 before Mr. Rusnak in his office, and then filed at the Court of Queen’s Bench in response to the interim application brought by Mrs. Dutchak. [ 11 ] Mr. Dutchak’s allegations of negligence against Mr. Rusnak, as best I can determine, are that:

(1) The draft affidavit provided to the RCMP in Canora did not contain information regarding a trip Mrs. Dutchak had taken with the children in a blizzard. When Mr. Dutchak found out about this trip, he said that “they all could have been killed”, which he interpreted as, somehow, having been converted by his wife into a threat by him;

(2) Mr. Rusnak did not include in Mr. Dutchak’s sworn affidavit reference to two incidents, one in which Mrs. Dutchak was acting erratically in the presence of the children at Good Spirit Lake, and another where his son was reported lost, but later was found in Mrs. Dutchak’s house, Mr. Dutchak claimed with her full knowledge;

(3) Mr. Rusnak did not include in the affidavit reference to an incident where Mrs. Dutchak ran over one of the children with an all- terrain vehicle, and then did not take the child to the hospital and an incident where the RCMP in Canora warned Mrs. Dutchak about one of the children standing in the back seat of her car;

(4) Mr. Rusnak did not respond adequately to financial information provided by Mrs. Dutchak, regarding investments she claimed to possess or to Mrs. Dutchak’s claim that Mr. Dutchak had not properly supported her. Mr. Dutchak, at this trial, filed copies of cheques he had written to Mrs. Dutchak (Exhibit D-1) which he claimed to have given to Mr. Rusnak; and

(5) Above all, that he hired Mr. Rusnak to get a court order for mediation, and this did not happen. [ 12 ] Regarding his payment of $7,500.00 to Mr. Rusnak, Mr. Dutchak admitted that he had paid this, but said, upon reflection, he thought it was enough in total, and that he did not have to pay the further $900.00. He then said that, when he did make the $900.00 payment, there was an agreement between he and Mr. Rusnak that the cheque would only be cashed if Mr. Rusnak brought a court application for mediation. As this did not happen, he stopped payment on the cheque. He also claimed that Mr.

Rusnak promised him that he would get a refund of the GST he paid, but he only got a portion of this back from the federal government. Edward Dutchak’s evidence

[ 13 ] Mr. Dutchak called his parents as witnesses at the trial. Edward Dutchak recalled the incident at Good Spirit Lake, and said that it was brought up with Mr. Rusnak at his office when he was present. He also recalled his grandson being locked in an old house, and that this was brought up with Mr. Rusnak. He claimed that Mr. Rusnak received a number of cell phone calls during their consultation. [ 14 ] On cross-examination, Edward had little recollection of the affidavit he swore on May 14, 2007. He admitted that Mr.

Rusnak went through the affidavits with all three parties, and that they read the affidavits before swearing them. He further admitted that a major issue in the litigation was whether money and property given by Mr. and Mrs. Dutchak to their son, Leon Dutchak, would have to be divided with Sharon Dutchak. Edward Dutchak’s position was, emphatically, that it would not be divided. Mary Dutchak’s evidence [ 15 ] Mary Dutchak also recalled the incident with her grandson Justin, when he was lost at the house. In effect, she blames Sharon Dutchak for the incident and claims that it was a “set up” by Sharon.

She says these incidents were not included in the affidavits sworn on May 14, 2007 and that Mr. Rusnak was told about these incidents. On cross-examination, it was clear that she, as well, did not want Sharon Dutchak to share in any of the property that Mr. and Mrs. Dutchak had gifted to their son. Mr. Rusnak’s rebuttal evidence [ 16 ] In rebuttal, Mr. Rusnak referred to a long series of documents from his file, which showed the correspondence between he and Leon Dutchak. I am satisfied that these documents show that he kept frequent contact with Mr. Dutchak, and apprised him of what was happening. [ 17 ] Mr.

Rusnak denied any agreement with Mr. Dutchak that the $900.00 cheque was based on an agreement that he apply for mediation with the Court of Queen’s Bench. He said that he discussed this with Mrs. Dutchak’s lawyer, but that Mrs. Dutchak would not agree to mediation, except on some very strict conditions that Mr. Dutchak did not appear willing or able to meet. Further, he said it was not possible to obtain a court order for mediation, as this was voluntary, and depended on the consent of both parties. [ 18 ] Further, Mr. Rusnak said that his attempts to represent Mr.

Dutchak were made difficult throughout, because Mr. Dutchak was himself, at the same time Mr. Rusnak was dealing with Mrs. Dutchak’s lawyers, dealing with Mrs. Dutchak’s brother (his brother- in-law), trying to effect a settlement with his estranged wife. [ 19 ] Mr. Rusnak further denied that he was ever told about the Good Spirit incident or the incident where Mr. Dutchak’s son was lost temporarily at the house.

He said he faxed the draft affidavits to them in advance of their meeting at his office, and they then made suggestions to him about changes to the affidavits which he incorporated in the affidavits sworn on May 14, 2007. [ 20 ] Regarding what happened with the RCMP in Canora, Mr. Rusnak said he faxed the draft affidavits to the RCMP in Canora, despite the fact that he was not formally retained by Mr. Dutchak at that point on a criminal matter. He said he did so to show the context within which the allegations were being made. He said he further did this to secure Mr. Dutchak’s release, which in fact happened.

He noted that Mr. Dutchak, at some time, entered into a peace bond in Canora Court and that, as a result, the uttering threats charge was stayed by the Crown. II. ANALYSIS Mr. Rusnak’s claim

[ 21 ] Regarding Mr. Rusnak’s claim for $900.00, this was an amount paid to Mr. Rusnak by Mr. Dutchak in mid-September 2009. Mr. Dutchak then stopped payment on the cheque, claiming that Mr. Rusnak had reneged on an agreement to apply for court-ordered mediation. Mr. Rusnak denies that any such agreement was made, and indeed, says that such an order could not be achieved as mediation, at the Court of Queen’s Bench in Yorkton, depends on the consent of both parties which in this case was not possible. I accept that, legally, Mr.

Rusnak’s statements are accurate. [ 22 ] Given the contradictory evidence on this point, I am not satisfied on a balance of probabilities that Mr. Rusnak agreed to what Mr. Dutchak claimed he did. Nor am I satisfied that Mr. Rusnak was retained to give advice to Mr. Dutchak on matters of taxation, including the amount of a GST refund Mr. Dutchak would receive from the Government of Canada. [ 23 ] In total, I am satisfied, on a balance of probabilities, that Mr. Rusnak was owed $900.00 by Mr. Dutchak, for services rendered by Mr. Rusnak to Mr. Dutchak.

I am further satisfied that he has not been paid this amount, and that he is entitled to a judgment for the full amount, together with interest from July 27, 2007 and the cost of issuing this summons. Mr. Dutchak’s counterclaim [ 24 ] Mr. Dutchak did not, at any point in evidence, explain where the figure of $9,500.00 came from. I note his counterclaim states that this was the amount he paid Mr. Rusnak. Obviously, that is not accurate. As best I can determine, $9,500.00 represents Mr. Rusnak’s original account, before it was reduced. [ 25 ] The genesis of Mr. Dutchak’s claim is that Mr.

Rusnak was negligent in preparing the affidavits sworn on May 14, 2007 and that he failed to achieve a court order for mediation. I have already found that Mr. Rusnak could not, at the Court of Queen’s Bench in Yorkton, obtain such an order. As a result, the question is whether Mr. Dutchak has proved, on a balance of probabilities, that Mr. Rusnak was negligent. [ 26 ] I have reviewed the documents filed. Exhibit P-6 includes three successive versions of Leon Dutchak’s affidavit, leading to the affidavit he swore on May 14, 2007 (Exhibit P-5).

As well, I was provided with two successive draft affidavits of Mary Dutchak (Exhibit P-6). In one of Mr. Dutchak’s draft affidavits I note, in paragraph 35, reference to his concern about the weather conditions that Mrs. Dutchak drove in with the children, and, in paragraph 39, a denial by him that he has ever threatened his wife. [ 27 ] The draft affidavits contained written notations, which show that Mr. Rusnak was updating the affidavits based on his instructions from Mr. Dutchak. I am satisfied that Mr.

Rusnak updated the affidavits of Leon, Edward and Mary Dutchak as he was instructed, and had each party read their affidavit before swearing it. I find no negligence by Mr. Rusnak in so doing. [ 28 ] Also filed, as Exhibit P-20, was a custody and access report, ordered by the Court of Queen’s Bench, and dated May 13, 2008. That report recommends, amongst other provisions, that Mr. Dutchak have supervised access and that this arrangement be reviewed by the Court in one year. [ 29 ] This counterclaim was commenced on December 10, 2009, after Mr. Rusnak filed his claim for the unpaid balance of $900.00.

The date of counterclaim, therefore, is more than two and a half years after these affidavits were sworn. Regardless of whether his counterclaim is out of time under The Limitation of Actions Act , I am not satisfied that Mr. Dutchak has proved negligence on Mr. Rusnak’s part. [ 30 ] There is no evidence that any concern was expressed by Mr. Dutchak about the content of the sworn affidavits until Mr. Dutchak filed his Counterclaim and Dispute Note on December 10, 2009. Indeed, he rehired Mr. Rusnak to advise him, in November of 2007, on a civil matter (two months after Mr.

Rusnak had withdrawn as his lawyer because Mr. Dutchak would not provide the financial information he was ordered to produce by the Court of Queen’s Bench). Then Mr. Dutchak again sought to retain him, on the original family law action, in September of 2009. I do not accept he would have taken such a course of action if he honestly believed that Mr. Rusnak had been negligent in early May 2007, causing him $9,500.00 in damages.

[ 31 ] I am further satisfied that Mr. Rusnak provided draft copies of the affidavits to Mr. Dutchak and his parents, sought their input into changes, and reviewed the affidavits with them before the affidavits were sworn. This in my view does not represent the actions of a negligent lawyer. Given the conflicting evidence, I am not satisfied on a balance of probabilities that Mr. Rusnak was told about the Good Spirit incident or the incident where Mr. Dutchak’s son was lost in the house.

Even if it had been told to him, which I am not satisfied of, the Dutchaks could have drawn the lack of reference to these incidents to Mr. Rusnak’s attention. I am satisfied they did not. [ 32 ] Regarding the “ATV” incident and the “back seat standing” incident, there was no indication of when or how Mr. Rusnak was advised of this. I am not satisfied that any discussion of this with Mr. Rusnak, if it occurred, in turn resulted in any negligence on Mr. Rusnak’s part, given the opportunity Mr. Dutchak and his parents had to review the affidavits before swearing them. [ 33 ] Regarding the draft affidavit Mr.

Rusnak faxed to the Canora RCMP, I do not see how this constitutes negligence. The affidavit contained clear evidence of the “family law” context within which the allegations were being made, and had the effect of securing Mr. Dutchak’s release. [ 34 ] Regarding Mr. Dutchak’s complaint that Mr. Rusnak failed to respond to financial statements made by Mr. Dutchak’s wife, I accept Mr. Rusnak’s evidence that he was handcuffed by Mr. Dutchak’s refusal to provide him, and the Court of Queen’s Bench, with accurate information about his finances. Indeed this is the reason he withdrew as Mr. Dutchak’s lawyer.

In my view that information was required for Mr. Rusnak to adequately respond on Mr. Dutchak’s behalf, and, as a result, there is no evidence of negligence on his part regarding the financial issue. [ 35 ] I am satisfied that the more likely explanation for Mr. Dutchak’s actions in filing the counterclaim is that suggested in argument by Mr. Rusnak; that Mr. Dutchak was unhappy with the outcome of the Queen’s Bench action and contents of the custody and access report. In particular he was unhappy that his access to his children was to be supervised, and sought to blame Mr.

Rusnak, in retrospect, for that result. [ 36 ] The issue before me is not a rehearing of the custody action, despite the repeated references by Mr. Dutchak and his parents to the many concerns they have about Sharon Dutchak’s ability to parent and the number of issues upon which they believe she was untruthful. The custody and access report recommends a reconsideration of supervised access. None has been applied for by Mr. Dutchak to date. A further application by Mr. Dutchak to the Court of Queen’s Bench is a further option, should he chose to do this. [ 37 ] The issue before me is whether Mr.

Dutchak’s counterclaim has been proven. In total, I am not satisfied on a balance of probabilities that Mr. Rusnak was negligent in his representation of Mr. Dutchak. The counterclaim is dismissed. III. CONCLUSIONS [ 38 ] For the reasons set out above:

(1) Mr. Rusnak is given judgment against Mr. Dutchak for $900.00 together with interest under The Pre-judgment Interest Act from July 27, 2007 and the cost of issuing this claim ($20.00).

(2) Mr. Dutchak’s counterclaim is dismissed. R. Green, J