Davies, Ward & Beck v. Union Industries, Inc.

Davies, Ward & Beck v. Union Industries, Inc. [Indexed as: Davies, Ward & Beck v. Union Industries Inc.]

48 O.R. (3d) 794

[2000] O.J. No. 1769

Docket No. C31670

Court of Appeal for Ontario

Labrosse, Weiler and Sharpe JJ.A.

May 24, 2000

Professions -- Barristers and solicitors -- Fees -- Solicitor and client account -- Assessment -- Special circumstances -- Client may requisition order for assessment of solicitor's bill of account if there are no special circumstances -- No single factor needs to be special circumstance by itself -- If special circumstances present, registrar not having jurisdiction to order assessment of solicitor's bill -- Solicitors Act, R.S.O. 1990, c. S.15, s. 3.

Beginning in 1986, UI Inc. retained DW & B for legal services relating to litigation, a proposed appeal and attempted collection of a judgment, including securities issues and representation in bankruptcy proceedings. Between April 15, 1987 and October 13, 1998, DW & B rendered 29 bills of costs, all of which were paid except the last one dated October 13, 1998 and delivered October 28, 1998. On November 23, 1998, pursuant to s. 3 of the Solicitors Act, which provides that where the retainer of the solicitor is not disputed and there are no special circumstances, a local registrar of the Ontario Court (General Division) may on requisition order the assessment of a bill already delivered, within one month from its delivery, UI Inc. obtained ex parte an order from the registrar that the 29 bills be assessed. By way of notice of motion dated December 29, 1998, DW & B sought to set aside the order, essentially on the grounds that, as of the date of the order, a timely requisition could be ma de only with respect to the last bill. The motion was dismissed. DW & B appealed.

Held, the appeal should be allowed.

Section 3 of the Solicitors Act allows a client to obtain an order on requisition only when four statutory conditions have been satisfied: (a) the retainer is not in dispute (not an issue in this case); (b) there are no special circumstances; (c) the bill is already delivered; and (d) the requisition is made within one month of the delivery of the bill. In this case, the registrar did not have jurisdiction to issue the order on requisition. First, as first noted by the court during the argument of the appeal, the requisition submitted for the order indicated that the bill of costs had been delivered on or about 1996. This requisition was defective. Even if the reference to 1996 was a typographic error to be corrected to refer to 1998, a proper requisition must include a month and a day in order to comply with precondition (d). Second, the statutory condition that there be no special circumstances was not satisfied. In this case, there were special circumstances, which include any circumstance of an exceptional nature affecting the matter of costs or the liability of a solicitor's client which a judge in the exercise of his or her judicial discretion in each particular case, may consider to justify an assessment. The totality of the circumstances must be considered and no single factor needs to be a special circumstance by itself. In the present case, in light of the large number of bills, the lengthy period of time involved, the nature of the services, the different file numbers on some of the bills, and the payment of 28 out of 29 bills, special circumstances exist. Accordingly, the appeal should be allowed.

APPEAL from the dismissal of a motion to set aside an order made pursuant to s. 3 of the Solicitors Act, R.S.O. 1990, c. S.15 for the assessment of a solicitors' bill.

Cases referred to Aird & Berlis v. Federchuk (1997), 1997 12167 (ON SC), 34 O.R. (3d) 406, 14 C.P.C. (4th) 159 (Gen. Div.); Peel Terminal Warehouses Ltd. v. Wootten, Rinaldo & Rosenfeld (1978), 1978 1655 (ON CA), 21 O.R. (2d) 857, 10 C.P.C. 160 (C.A.); Rooney v. Jasinki, 1952 115 (ON CA), [1952] O.R. 869, [1953] 1 D.L.R. 225 (C.A.); Solicitor (Re), 1940 356 (ON SC), [1940] 4 D.L.R. 712, [1940] O.W.N. 438 (S.C.), affd 1940 324 (ON CA), [1940] 4 D.L.R. 821 (Ont. C.A.) Statutes referred to Solicitors Act, R.S.O. 1990, c. S.15, ss. 3, 11

Eleanore A. Cronk and Mitchell A. Flagg, for appellant. Mary Jane Stitt, for respondent.

The judgment of the court was delivered by

[1] LABROSSE J.A.: -- Davies, Ward & Beck appeals the order of Colin Campbell J. which dismissed its motion to set aside the order of the Registrar of the Assessment Office of the Ontario Court (General Division) relating to the assessment of bills of fees and disbursements delivered to Union Industries, Inc.

[2] This appeal concerns the statutory authority and consequent jurisdiction of the registrar to make an order on requisition under s. 3 of the Solicitors Act, R.S.O. 1990, c. S.15 (also referred to as "the Act").

The Facts

[3] Davies, Ward & Beck ("the solicitors") was retained initially by Union Industries, Inc. ("the client") in July 1986. Over the course of the next 12 years, the solicitors provided various services to the client related to litigation leading to a judgment, a proposed appeal from that judgment, and attempted collection of the judgment including services related to securities issues and representation in bankruptcy proceedings.

[4] Between April 15, 1987 and October 13, 1998, the solicitors rendered 29 bills of costs to the client. All bills were paid in full by the client except the last one dated October 13, 1998 and delivered to the client on October 28, 1998.

[5] On November 23, 1998, pursuant to s. 3 of the Solicitors Act, the client requisitioned an order from the Registrar of the Assessment Office of the Ontario Court (General Division) ("the registrar") "that the bill of fees, charges and disbursements by the said solicitor, copies of which are attached hereto, be referred" for assessment. To the draft order, was attached all 29 bills that had been rendered to the client.

[6] The order was obtained ex parte on the same date.

[7] The material submitted to the registrar consisted of a requisition by client for assessment of solicitor's bill signed by Blake, Cassels & Graydon on behalf of the client, a draft order with all bills attached, a notice of appointment which was intended to be completed by the assessment officer and a solicitor's requisition for an appointment to assess costs. This last document bears no relevance to the proceedings: it is not a solicitor who is seeking the assessment of his or her own bill, it is the client seeking assessment of its lawyers' bills.

[8] By way of notice of motion dated December 29, 1998, the solicitors sought to set aside the order of the registrar, essentially on the grounds that, as of the date of the order, a timely requisition could be made only with respect to the last bill delivered on October 28, 1998. They argued that the other 28 accounts of various dates from April 15, 1987 to August 4, 1998 could only be referred for assessment upon application to the court pursuant to other sections of the Solicitors Act.

[9] On February 24, 1999, Campbell J. ("the motions judge") concluded that:

(a) the accounts were part of a continuum of legal services provided by the solicitors;

(b) there was an absence of evidence that previous bills, although paid, were to be considered final;

(c) there was an onus on the solicitors to show the accounts were interim accounts; and

(d) the Registrar did not lack jurisdiction to make the order.

The motions judge dismissed the motion without costs.

[10] It is my view that the motions judge erred in dismissing the motion. The registrar had no jurisdiction to issue the order on requisition. Even assuming that the registrar had jurisdiction, it was evident on the material that there were special circumstances and the client was not entitled to obtain an order on requisition.

Analysis

[11] Section 3 of the Solicitors Act provides, in part, as follows:

3. Where the retainer of the solicitor is not disputed and there are no special circumstances, an order may be obtained on requisition from a local registrar of the Ontario Court (General Division),

(b) by the client, for the assessment of a bill already delivered, within one month from its delivery;

[12] This section allows a client to obtain an order on requisition only when four statutory preconditions have been satisfied: (a) the retainer is not is dispute (not an issue in this case); (b) there are no special circumstances; (c) the bill is already delivered; and (d) the requisition is made within one month of the delivery of the bill. See Re Solicitor, 1940 356 (ON SC), [1940] 4 D.L.R. 712, [1940] O.W.N. 438 (S.C.), affirmed without reasons 1940 324 (ON CA), [1940] 4 D.L.R. 821 (Ont. C.A.) which confirmed that the authority of the registrar to issue an order for assessment is confined by the statutory preconditions.

[13] In Peel Terminal Warehouses Ltd. v. Wootten, Rinaldo & Rosenfeld (1978), 1978 1655 (ON CA), 21 O.R. (2d) 857, 10 C.P.C. 160 (C.A.), this court concluded that a master could not allow an application to tax a solicitor's bill where, because of a gap in the Solicitors Act, there was no statutory basis for the taxation. The master must find his jurisdiction to act in either the statute or a rule of court. Where no such jurisdiction existed, the master could not act. A fortiori, this principle applies in the present case and the registrar had no authority to issue an order for assessment on requisition except as expressly conferred by the statute. In other words, a registrar has no inherent jurisdiction.

[14] The requisition submitted to the registrar on November 23, 1998 reads as follows:

I REQUIRE and Order under section 3 of the Solicitors Act for the assessment of the Solicitor and client bill of costs delivered to me on or about 1996, the retainer of the solicitor not being disputed and there being no special circumstances.

Although one of the bills is dated April 16, 1996, the registrar, on November 23, 1998, had no jurisdiction under s. 3(b) to refer for assessment a bill of costs delivered "on or about 1996". The requisition on its face is defective as the stated time of delivery of the bill falls outside the scope of the subsection.

[15] Campbell J. did not address this defect. Presumably, he did not notice it and it was not brought to his attention. It was not addressed by either counsel in their respective factum or during oral argument. This court brought it to the attention of counsel after judgment had been reserved and counsel were given the opportunity to, and did, provide their submissions.

[16] It is submitted on behalf of the client that the year "1996" is a typographical error and that the client had intended that the requisition refer to 1998. This submission has no merit. It is questionable that the registrar, exercising a purely administrative function, had the authority to issue the order on requisition even if she concluded that the year stated was a typographical error. However, even if the year is changed to read "1998" (there are five bills dated in 1998), the correction does little to assist the client. The requisition must include a month and a day, not simply the year, in order to comply with precondition (d). The one-month window in the subsection requires the requisition to be more specific than the year the bill was delivered, otherwise it fails to comply with the statute.

[17] The requisition was defective. The draft order and the order in its final form spoke of the 29 bills attached hereto. It must be remembered that it is the requisition that forms the basis for the granting of the order: it is not the order that operates to validate the requisition. Unless the requisition was amended to specify the date, month and year in order to conform to the statute, the defect was fatal and the registrar had no jurisdiction to, and should have refused to, issue the order on requisition.

[18] Assuming, however, that this defect can be overlooked and that the requisition could be read to relate to the date, month and year of the last bill to conform with precondition (d), there is another equally persuasive reason why the order should not have been issued. It relates to precondition (b). This issue was not addressed by Campbell J.

[19] The unusual circumstances revealed in the material presented to the registrar brought into question precondition (b), namely, whether there were "special circumstances".

[20] These unusual circumstances are:

1. the bills involved a large number of accounts (29 bills);

2. the accounts had been rendered over a period of over 11 years;

3. the services described in the bills established that fundamentally different services had been rendered which included accounts for services relating to litigation (both for judgment and appeal), corporate services, and bankruptcy proceedings;

4. the bills disclosed two different file numbers, which may be indicative of some degree of finality between certain bills; and

5. all accounts rendered had been paid, except the last bill.

With respect to this last particular, I am aware that in Aird & Berlis v. Federchuk (1997), 1997 12167 (ON SC), 34 O.R. (3d) 406, 14 C.P.C. (4th) 159 (Gen. Div.), Molloy J. considered the effect of a paid bill when dealing with s. 3 of the Act. She stated at p. 411:

Suffice to say for present purposes that I do not regard the payment of an account to constitute a "special circumstance" which would preclude an assessment under s. 3(b).

I note that Molloy J. used the singular while s. 3 refers to "special circumstances" in the plural.

[21] In my view, the payment of accounts is a factor to be considered in deciding whether or not there are "special circumstances". The totality of the circumstances must be considered. No single factor needs to be a special circumstance by itself. I find support for this conclusion in the wording of s. 11 of the Act which specifically deals with the payment of bills and special circumstances.

[22] The phrase "special circumstances", as it appears in s. 3 of the Solicitors Act, was considered by this court in Rooney v. Jasinki, 1952 115 (ON CA), [1952] O.R. 869, [1953] 1 D.L.R. 225 (C.A.). It was said to include "any circumstances of an exceptional nature affecting the matter of costs or the liability of a solicitor's client which a judge, in the exercise of his judicial discretion in each particular case, may consider to justify a taxation" [at p. 875 O.R.]. As the court noted, if special circumstances are present, the solicitor (or the client) may apply to the court, on notice, for an order for assessment.

[23] In the present case, in light of the large number of bills, the lengthy period of time involved, the nature of the services, the different file numbers and the payment of 28 out of 29 bills, the only reasonable conclusion is that there were "special circumstances". Section 3 of the Act provides, in limited circumstances, a summary and inexpensive procedure for an assessment of costs between solicitor and client. This is not such a case. I do not accept the submission that the client was entitled to requisition the order and, in effect, shift the onus to the solicitors on a motion to set it aside. The client should not have sought the order on requisition. The application for an order for taxation of the solicitor and client bills should have been brought on notice to the solicitors with proper evidentiary support.

[24] Accordingly, I would allow the appeal with costs of the motion below and this appeal. I would set aside both the order of Campbell J. dated February 24, 1999 and the order of the registrar dated November 23, 1998.

Appeal allowed.