Judge strikes lawyer’s entire defence in negligence spat

An Ontario Superior Court judge has struck in its entirety, the statement of defence filed by well-known Toronto lawyer Steven Skurka, who is being sued for $32 million by a former client, alleging professional negligence.

‘Two wrongs do not make a right and provocation is not a reason to contravene the rules about pleading,’ wrote Justice Paul Perell.The pleadings filed by criminal defence lawyer Skurka in response to the allegations made by Israeli-Canadian businessman Nathan Jacobson contain unnecessary evidence and argument, concluded Justice Paul Perell.

Large sections of the statement of defence in Jacobson v. Skurka include “a level of detailed evidence one would not find in reasons for judgment after a trial,” the judge observed.

Another section of the pleadings was described by Perell as “replete with congratulatory, self-serving conclusions such as a ‘very solid plea agreement, really good plea, got him a better plea agreement because of our efforts,’” says the ruling, issued March 16.

“It may be the situation that Mr. Skurka was baited by the provocative pleading of Mr. Jacobson to respond with a provocative and polemic pleading of his own, but Mr. Skurka ought not to have taken the bait. Two wrongs do not make a right and provocation is not a reason to contravene the rules about pleading,” Perell wrote.

Jacobson was represented by Toronto lawyer Robert Trifts on the motion to strike the statement of defence. Skurka is represented by William McDowell, a partner at Lenczner Slaght LLP in Toronto and a bencher of the Law Society of Upper Canada.

“At the end of the day, Mr. Jacobson is pleased with this decision,” says Trifts, who is co-counsel with Ronald Flom in the litigation.

McDowell is out of the country and unavailable for comment. Paul-Erik Veel, a colleague at Lenczer Slaght who is also acting for Skurka, says “given that the overall matter is still before the courts, we’re not in a position to comment.”

Perell granted Skurka leave to amend his statement of defence along with directions to comply with the rules of pleading. Perell also denied Jacobson’s request to strike Skurka’s counterclaim, which seeks $1.8 million in damages for the tort of abuse of process.

The fractious legal dispute stems from Skurka’s past representation of Jacobson on criminal charges filed in 2006 by the United States government. Jacobson was alleged to have used his Tel Aviv-based credit card processing company to facilitate $126 million in illegal online pharmaceutical sales to U.S. customers.

Skurka was hired as the lead counsel and retained lawyers in the U.S. and Marie Henein in Toronto to assist with the defence. Jacobson is also suing Henein in a separate action. Her statement of defence refers to the allegations as “false, concocted, self-serving, and specious.” None of the allegations has been proven in court.

Jacobson has ties to senior Conservative politicians in Canada and intelligence officials in Israel. A photo taken in Ottawa in 2010 shows him standing between Prime Minister Stephen Harper and Israeli Prime Minister Benjamin Netanyahu.

Nearly two years before that photo was taken, Jacobson entered a guilty plea in the U.S. to a single count of money laundering. He forfeited $4.5 million, but remained free on bail pending sentencing. Last fall, after hiring new U.S. lawyers, Jacobson was permitted to strike his guilty plea and the charge was dropped, although the $4.5 million remained forfeited.

The decision issued by Perell this week is also critical of the content in the amended statement of claim filed by Jacobson in his action against Skurka. The Superior Court judge noted Jacobson professes his innocence of the allegations made by U.S. authorities in 26 paragraphs of his 68 paragraph amended statement of claim.

One subheading that states “complete vindication of Nathan Jacobson — an innocent man,” is an example of “the improper pleading of evidence and emotive grandstanding polemic that appears to have provoked Mr. Skurka to respond in kind,” Perell wrote.

The judge also suggested both sides have not complied with the Rules of Civil Procedure in the pleadings and fail to include “concise statements” of material fact.

Perell cited a paragraph that describes discussions between Skurka and Henein and when they would meet, as an example of unnecessary information in the pleading.

“With respect, nothing is added, not even interesting colour and narrative excitement or suspense, by knowing that Ms. Henein was out of the country and that Mr. Skurka arranged to meet with her upon her return to Canada. Mr. Skurka’s statement of defence is cluttered with this sort of useless information,” Perell stated.

The counterclaim by Skurka alleges that Jacobson is using the professional negligence action for an improper purpose.

“Allowing Mr. Skurka’s counterclaim would not discourage access to justice for plaintiffs suing their criminal defence lawyers, but it would discourage such plaintiffs from overreaching in their civil proceeding against their criminal lawyer and making their innocence in the criminal proceedings a material issue in the civil proceeding,” Perell wrote.

Update 12:55pm: Quotes added.

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