In upholding a lower court decision that rejected the lawsuit, the Ontario Court of Appeal found the trial judge erred in ordering Louise Marcus to pay more than $160,000 in legal costs.
Instead, the court ordered Marcus, of Ottawa, to pay lawyer Carol Ann Cochrane $60,000 for trial costs, and another $20,000 for the appeal.
"To bring a merciful end to these proceedings, this court should determine the appropriate trial costs order rather than remit the issue to the trial court," the Appeal Court said in its decision.
Court documents show Marcus split from her husband in August 2005 and they came up with their own draft separation agreement. She then sought legal advice from Cochrane, who warned her against signing a final agreement.
Marcus ignored the advice.
About a year later, Marcus went to court to try to have the separation agreement set aside, and then went on to sue Cochrane claiming she had suffered an $80,000 loss as a result of the lawyer's negligence.
After an eight-day trial, Ontario Superior Court Justice Bonnie Warkentin dismissed the suit in early 2012.
"It was Ms. Marcus who chose not to, or failed to consider the legal advice she was being given," Warkentin decided.
Warkentin also found Marcus had not in fact suffered any real damages and, in a scathing judgment, said the plaintiff had acted unreasonably in pursuing her case against Cochrane.
As a result, the judge ordered her to pay the full legal freight — a position the Appeal Court found unfair. In lowering the costs award, the top court found Warkentin had gone too far.
Warkentin was wrong in finding Marcus had suggested Cochrane was dishonest and had falsified documents, and should not have made a cost award on that basis, the Appeal Court found.
The appellate court also noted that Marcus's own lawyer wanted to charge her a "completely unjustifiable" $375,000 to sue Cochrane for $80,000.
"It is important to remember that the dispute was essentially about a claim for approximately $80,000," the Appeal Court found.
"The comparison of what this dispute was about and what was spent on it is stark and difficult to justify."