CITATION: Cosentino v. S. Cosentino Leasing, 2010 ONSC 2611
COURT FILE NO.: DC-09-102-00
(Brampton)
DATE: 2010-05-04
ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
BETWEEN:
SAM COSENTINO
Plaintiff (Appellant)
– and –
S. COSENTINO LEASING LIMITED
Defendant (Respondent)
Sam Cosentino, Self-Represented
Plaintiff (Appellant)
Arthur MacColl, for the Defendant (Respondent)
HEARD: April 30, 2010
REASONS FOR JUDGMENT
GRAY J.
[1] The amount in issue in this Small Claims Court appeal is $9,635.70, plus pre-judgment interest. The appellant, who is a solicitor, sued on his account for legal services. The Deputy Small Claims Court Judge dismissed the action, holding that the relevant limitation period had expired.
[2] While this is a small case, it has some importance for solicitors. When does the cause of action arise? Does it arise when the solicitor’s work is completed, or does it arise upon the sending of a bill?
Background
[3] Sam Cosentino is a solicitor who was called to the bar in 1988. In October 1994, he was retained by his uncle’s company, S. Cosentino Leasing Limited, the respondent in this appeal. A third party claim had been issued against the company in an ongoing commercial civil action, in October 1994.
[4] The company was controlled by Sam Cosentino’s uncle, also named Sam. Since he was representing a family member, Mr. Cosentino agreed to a discounted rate of $150 per hour.
[5] Mr. Cosentino rendered his first interim account in August 1996. That account was paid promptly.
[6] Ultimately, the action was settled in April 1999, on the basis of a nominal payment to be made by the company in the amount of $2,000. A written release was signed on April 30, 1999, and the settlement funds were paid by Mr. Cosentino on behalf of the company on June 16, 1999.
[7] The Deputy Judge found that Mr. Cosentino’s retainer was complete upon payment of the settlement funds on June 16, 1999. He found that Mr. Cosentino was then at liberty to render his final account.
[8] Mr. Cosentino’s uncle died on August 17, 1999. Mr. Cosentino did not render his final account at that time, out of respect for his deceased uncle and his immediate family members. He put the file away and did not prepare a final written account until August 3, 2002.
[9] In calculating the final account, Mr. Cosentino’s time was billed at an hourly rate of $200. The Deputy Judge accepted Mr. Cosentino’s evidence that he and his uncle agreed that the discounted rate would increase over time. The Deputy Judge found that the account balance of $9,635.70 was fair and reasonable.
[10] Mr. Cosentino commenced his action in the Small Claims Court against the company on July 30, 2008. If Mr. Cosentino’s cause of action arose when the work was completed, which the Deputy Judge found was June 16, 1999, the action was statute barred. If the cause of action arose on delivery of Mr. Cosentino’s bill, on August 3, 2002, or one month later, the action was not statute barred.
[11] The Deputy Judge held that the cause of action arose upon completion of Mr. Cosentino’s retainer, when the work he was retained to do was completed on June 16, 1999. Accordingly, he held that the claim was statute barred.
[12] It was not in dispute between the parties that the limitations issue is governed by s. 45(1)(g) of the former Limitations Act. Accordingly, the action had to be commenced within six years after the cause of action arose. As noted, the Deputy Judge held that the cause of action arose on June 16, 1999. Thus, he held that the action was statute barred, and he dismissed it.
Submissions
[13] Mr. Cosentino submits that the Deputy Judge erred in two respects. First, he argues that the Deputy Judge committed palpable and overriding error in concluding that the retainer was complete on June 16, 1999. He submits that there was evidence that some things remained to be done after June 16, 1999, and accordingly the retainer was not complete.
[14] Second, Mr. Cosentino submits that in the case of work performed by a solicitor, the cause of action does not arise until 30 days have elapsed after the solicitor has rendered a bill for his or her services. In his submission, this result flows from s. 2(1) of the Solicitors Act, which provides as follows:
2(1) No action shall be brought for the recovery of fees, charges or disbursements for business done by a solicitor as such until one month after a bill thereof, subscribed with the proper hand of the solicitor, his or her executor, administrator or assignee or, in the case of partnership, by one of the partners, either with his or her own name, or with the name of the partnership, has been delivered to the person to be charged therewith, or sent by post to, or left for the person at the person’s office or place of abode, or has been enclosed in or accompanied by a letter subscribed in like manner, referring to such bill.
[15] Mr. Cosentino acknowledged the concern that such a result would mean that a solicitor could indefinitely postpone delivery of the bill, and thereby indefinitely extend the limitation period. However, he pointed out that, pursuant to s. 3 of the Solicitors Act, the client can obtain an order for delivery of the solicitor’s bill. Thus, he submits, any concern about a potential indefinite extension of the limitation period is obviated.
[16] For these reasons, Mr. Cosentino submits that his cause of action did not arise until one month after the delivery of his bill on August 3, 2002, and accordingly commencement of the action on July 30, 2008 was within the limitation period.
[17] Mr. MacColl, counsel for the respondent, submits that the Deputy Judge came to the right result, and for the right reasons. He submits that the appeal should be dismissed.
Analysis
[18] The result in this case is harsh. Mr. Cosentino did his uncle a favour by taking on the work at a reduced rate. He achieved a superb result. He delayed sending out his account out of respect for his deceased uncle and his family. When he finally got around to suing on the account, he was met with a limitations defence.
[19] While the result is harsh, that cannot affect the legal analysis. Any limitations defence can produce harsh results, but the policy of the legislature, to bar stale claims, must prevail if the facts so warrant.
[20] As to Mr. Cosentino’s first argument, I do not agree that there is any palpable and overriding error in the Deputy Judge’s conclusion that the retainer was at an end on June 16, 1999. There was ample evidence to support that conclusion. Indeed, it is noteworthy that in Mr. Cosentino’s bill, the last piece of work referred to was performed on June 16, 1999.
[21] As to Mr. Cosentino’s second argument, the matter is somewhat more complex. As noted earlier, it is not in dispute that the former Limitations Act governs this case. Section 45(1)(g) of that Act provides as follows:
45(1) The following actions shall be commenced within and not after the times respectively hereinafter mentioned,
(g) an action for trespass to goods or land, simple contract or debt grounded upon any lending or contract without specialty, debt for arrears or rent, detinue, replevin or upon the case other than for slander,
within six years after the cause of action arose,
[22] Ignoring the somewhat arcane terminology, there is no doubt that an action based on a claim for work or services rendered is governed by this provision, and must be commenced within six years after the cause of action arose. The question for determination is when the cause of action arose.
[23] In the case of an ordinary contract for work or services, the cause of action arises upon completion of the work or services. As noted by Lennox J. in Hunter v. Thompson (1927), 60 O.L.R. 185 (Ont. S.C.), citing Halsbury’s Laws of England, “On a general contract for work to be done the cause of action accrues when the work is done.” See also Pierre L. Morin Construction Ltd. v. Hitchcock (1990), 110 N.B.R. (2d) 313 (N.B.Q.B.).
[24] In the case of a solicitor’s work, the ordinary rule is the same. See Cline v. Campbell (1925), 28 O.W.N. 88 (Ont. S.C.); varied 29 O.W.N. 103 (Appellate Div.); Cameron v. Parsons (1936), 51 B.C.R. 70 (B.C.S.C.); and Coburn v. Colledge, [1897] 1 Q.B. 702 (C.A.).
[25] I do not accept Mr. Cosentino’s submission that in the case of a solicitor’s work the ordinary rule is altered by virtue of s. 2(1) of the Solicitors Act. That subsection simply erects a procedural hurdle before the solicitor can sue. It does not say that the solicitor has no cause of action until he or she renders a bill and 30 days have elapsed. The cause of action arises, as is the case in any other situation, when the work has been completed. If it were otherwise, the solicitor could indefinitely postpone the running of the limitation period by the simple device of not sending a bill.
[26] I do not accept Mr. Cosentino’s submission that s. 3 of the Solicitors Act affects the matter. That section allows the client to obtain an order for the “delivery and assessment” of the solicitor’s bill. The purpose is to permit the client to obtain review of the amount the solicitor will charge the client. The section does not require delivery of a bill simpliciter; rather, it requires delivery of the bill and an immediate assessment. The provision has nothing to do with when the cause of action arises.
[27] The very point argued by Mr. Cosentino was decided by the English Court of Appeal in Coburn, supra. There, it was argued that by virtue of s. 37 of the Solicitors Act, 1843, a cause of action for work done by a solicitor did not arise until one month after the delivery of a bill by the solicitor. All three members of the Court, consisting of Lord Esher M.R., and Lopes and Chitty L.JJ., rejected that argument and held that the cause of action arose upon completion of the work. The action was thus held to be statute barred.
[28] At pp. 705 and 706, Lord Esher M.R. stated as follows:
The action is brought by the plaintiff in respect of work done by him as a solicitor. In the case of a person who is not a solicitor, and who does work for another person at his request on the terms that he is to be paid for it, unless there is some special term of the agreement to the contrary, his right to payment arises as soon as the work is done; and thereupon he can at once bring his action. Before any enactment existed with regard to actions by solicitors for their costs, a solicitor stood in the same position as any other person who has done work for another at his request, and could sue as soon as the work which he was retained to do was finished, without having delivered any signed bill of costs or waiting for any time after the delivery of such a bill. Then to what extent does the statute alter the right of the solicitor in such a case, and does the alteration made by it affect or alter the cause of action? It takes away, no doubt, the right of the solicitor to bring an action directly the work is done, but it does not take away his right to payment for it, which is the cause of action.
[29] In my view, this reasoning applies equally to the situation in Ontario.
[30] At p. 709, Lopes L.J. stated:
Sect. 37 of the Solicitors Act, 1843, appears to me to assume that there is a cause of action, and merely to postpone the bringing of an action upon it until the period of one month from the delivery of the bill. There is nothing in the section, so far as I can see, inconsistent with the view that the cause of action arises when the work is completed; It was urged that, if this construction were adopted, a solicitor would have a shorter time during which he may abstain from bringing his action for work done than the rest of Her Majesty’s subjects. That may be so; but on the other hand, if the plaintiff’s contention is correct, the solicitor may abstain from delivering his bill for twenty years, and then at the end of that time he may deliver it and sue after the expiration of a month from its delivery. It seems to me that that would be a very anomalous and inconvenient result.
[31] In my view, this reasoning applies directly to the case at bar. For the reasons articulated earlier, the situation is not altered by s. 3 of the Solicitors Act, which allows a client to obtain an order for delivery and assessment of a bill. The fact that the client can secure delivery of a bill does not change the date the cause of action arose.
[32] While not necessary for my decision, I should note that the same result under the current Limitations Act, 2002 is not necessarily a given. Under s. 4 of that Act, “a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.” Rather than tying the commencement of the limitation period to the date the cause of action arose, its commencement is tied to the date a “claim” was discovered. Under s. 1 of the Act, “claim” means “a claim to remedy an injury, loss or damage that occurred as a result of an act or omission.” Whether, or how, this language applies to a claim for work performed or services rendered is uncertain. However, that is for another day.
Disposition
[33] For the foregoing reasons, the appeal is dismissed.
[34] Having heard submissions on costs at the argument of the appeal, I will award costs to the respondent fixed in the amount of $2,000, all-inclusive.
GRAY J.
Date: May 4, 2010
CITATION: Cosentino v. S. Cosentino Leasing, 2010 ONSC 2611
COURT FILE NO.: DC-09-102-00
(Brampton)
DATE: 2010-05-04
ONTARIO
SUPERIOR COURT OF JUSTICE
SAM COSENTINO
Plaintiff (Appellant)
– and –
S. COSENTINO LEASING LIMITED
Defendant (Respondent)
REASONS FOR JUDGMENT
GRAY J.
Released: May 4, 2010