DATE: 20060424

DOCKET: C44078

COURT OF APPEAL FOR ONTARIO

GILLESE, BLAIR and JURIANSZ JJ.A.

B E T W E E N :

ROBERT E. SOMERLEIGH

Walter Weickowski for the appellant

Respondent

(Responding party)

• and -

JEFFREY POLHILL

Richard Culpeper for the respondent

Appellant

(Moving party)

Heard: January 25, 2006

On appeal from the order of Justice Helen M. Pierce of the Superior Court of Justice dated September 17, 2004.

GILLESE JJ.A.:

[1] Robert Somerleigh, a solicitor, provided legal services to Jeffrey Polhill on a number of matters. On September 17, 1991, Mr. Somerleigh obtained an order dismissing an action against Mr. Polhill, with costs (“the action”).

[2] On August 14, 1992, Mr. Somerleigh took steps to serve Mr. Polhill with a Notice of Appointment for Assessment of a Bill of Costs (the “Notice”) and an Order for Assessment of Costs (the “Order for Assessment”), for services rendered in relation to the action. At the assessment, no one appeared for Mr. Polhill. The assessment officer issued an order dated September 15, 1992, for the full amount of costs sought: $6,908.34 (the “Assessment Order”)[^1]. Pursuant to the Solicitors’ Act, R.S.O. 1990, c. S.15, the Assessment Order was made an order of the Ontario Court (General Division)[^2].

[3] Mr. Polhill says that he was never served with the Notice or the Order for Assessment. He says that the first time the Assessment Order came to his attention was in January of 1994, at which time his sawmill and backhoe were seized and sold pursuant to a writ of seizure and sale that the respondent had obtained. On the undisputed evidence, Mr. Polhill attended the auction, did not take issue with the debt and made no attempt to stop the sale of his goods.

[4] On September 16, 2004, twelve years after the Assessment Order was issued and over ten years after the sale of his goods, Mr. Polhill moved, under rules 19.03 and 19.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to set aside the Assessment Order and stay the writ of seizure and sale.

[5] On September 17, 2004, Justice Pierce dismissed the motion with costs.

[6] Mr. Polhill appeals. He argues that Mr. Somerleigh failed to prove that he had been served with the Notice and the Order for Assessment and that the failure to properly serve the originating documents renders the entire process a nullity. Consequently, he says, the Assessment Order must be set aside and the writ of seizure and sale stayed.

[7] For the reasons that follow, I would dismiss the appeal.

BACKGROUND

[8] Mr. Somerleigh argued that Mr. Polhill was served with the Notice and Order for Assessment by means of leaving copies with Clifford Cole at 223 Kingston Street, Thunder Bay, Ontario.

[9] The balance of the key background facts are well-summarised in paragraphs 4 to 9 of the reasons of the motion judge, set out below.

[4] The time for appealing a Notice of Assessment under Rule 62.01(2) is seven days after the date of the order or certificate appealed from. The substance of this rule was in place at the time of Mr. Polhill’s assessment. Even were it not so, Mr. Polhill could have applied to the court to set aside the Notice of Assessment once it came to his attention. On the client’s own evidence that would have been in January of 1994. Rule 19.08 permits an aggrieved party to move to set aside a default judgment. The moving party must move expeditiously after becoming aware of the default judgment, explain the reason for the default and show an arguable case on the merits. Even if I accept that Mr. Polhill became aware of the assessment in January of 1994 at the earliest, he can hardly be said to have moved expeditiously to set it aside. Nor is there any adequate explanation for the delay.

[5] The solicitor deposes that he observed Mr. Polhill attending at an auction of his backhoe early in 1994. This auction was conducted by the assessment officer Alvin Franks. The evidence before me, which is not disputed, is that Mr. Polhill did not take issue with the debt prior to the auction, attempt to speak with the auctioneer about the matter, or attempt to stop the sale.

[6] Further affidavit evidence filed by the solicitor deposes that Mr. Polhill paid his accounts with cheques containing the return address of 223 Kingston Street, Thunder Bay, and that he continues to correspond with the law firm with that return address.

[7] The solicitor’s affidavit acknowledges that shortly before the trial, from which the fees resulted, the property at 223 Kingston Street was transferred to Mr. Polhill’s parents. It also sets out that Cliff Cole was personally known to the solicitor, having given evidence at Mr. Polhill’s trial voluntarily and without subpoena. The solicitor deposed that, prior to the assessment, he personally attended at 223 Kingston Street attempting to contact Mr. Polhill and met with Mr. Cliff Cole in his absence. Mr. Cole advised the solicitor that he would ensure that any documents left at 223 Kingston Street for Mr. Polhill would be given to him. There is further evidence that the solicitor’s clerk spoke with Mr. Cole shortly after he accepted service of the documents and Mr. Cole confirmed that the assessment documents were given by him to Mr. Polhill.

[8] I am satisfied on the evidence before me that the Notice of Assessment came to Mr. Polhill’s attention in advance of the assessment. But even if I am wrong in that conclusion, Mr. Polhill has done nothing to move in a timely way to set aside the assessment [emphasis added].

[9] There is no adequate explanation for the delay in bringing a motion to set aside the assessment of costs. The law must function with some certainty so that decisions of the court, including solicitor and client assessments, speak with some finality. There has in this case been excessive delay in bringing this matter back before the court, now some 10½ years beyond the time that Mr. Polhill, by his own admission, says the matter came to his attention.

THE ISSUES

[10] The appellant says that Mr. Somerleigh was obliged to serve him properly with the Notice and Order for Assessment and that proper service was not effected. The failure to effect proper service occurred because the appellant was neither personally served with the documents, nor served in accordance with the alternatives to personal service in rule 16.03 of the Rules of Civil Procedure in that:

(1) no attempt was made to personally serve him with the documents;

(2) no service was made at his residence;

(3) Cliff Cole was not an adult member of his household; and,

(4) the originating documents were not placed in a sealed envelope addressed to him nor were they mailed to him the same day or the next day at his residence.

[11] The appellant contends that, in the absence of proper service, the proceedings are a nullity. Consequently, he says, there was nothing to move against and there can be no onus on him to explain his delay in moving to set aside the Assessment Order or to satisfy the court that he moved in a timely fashion.

Preliminary Issue Concerning The Jurisdiction of the Court

[12] The appellant originally brought his appeal to the Divisional Court. A panel of the Divisional Court held that it did not have jurisdiction to hear the matter and ordered the matter transferred to the Court of Appeal.[^3]

[13] Prior to the oral hearing of this appeal, counsel were referred to this court’s recent decision in Sinnadurai v. Laredo Construction Inc., 2005 46934 (ON CA), [2005] O. J. No 5429 (C.A.) and asked to make submissions on the jurisdiction of the Court of Appeal to hear the appeal. At the oral hearing of the appeal, counsel advised that it was their joint view that jurisdiction properly lay with the Divisional Court. The panel agreed with that submission. Contrary to the conclusion reached by the Divisional Court, this appeal comes within that court’s jurisdiction as the Assessment Order is for a single payment of under $25,000. However, in order to spare the parties further expense, at our request, the members of this panel were appointed as judges of the Divisional Court for the purpose of hearing the appeal.

ANALYSIS

[14] I accept that the respondent failed to serve the appellant personally with the documents and that he failed to comply with the alternative methods to personal service provided by the Rules of Civil Procedure. I do not accept, however, that this failure renders the entire process a nullity.

[15] Rule 2.01(1) of the Rules of Civil Procedure[^4] expressly provides that any failure to comply with the rules is an irregularity, not a nullity. It reads as follows:

2.01(1) A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity, and the court,

(a) may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in the dispute; or

(b) only where and as necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part.

[16] As is pointed out by Garry D. Watson and Justice Craig Perkins in Holmested and Watson: Ontario Civil Procedure, looseleaf (Thomson Canada Ltd.: Toronto, 1993) at 2 - 6, rule 2.01 begins with a double declaration. It declares that a failure to comply with the rules is an irregularity. It also declares that such a failure does not render a proceeding or step or order in a proceeding a nullity.

[17] The Assessment Order that the appellant moved to set aside was made on September 15, 1992, and filed as an order of the court pursuant to the Solicitors Act. In accordance with rule 2.01(1), the respondent’s failure to comply with the rules of service provided by the Rules of Civil Procedure does not render the Assessment Order a nullity. Rather, that failure is an irregularity and, in accordance with rule 2.02(1)(b), the court may set aside the Assessment Order, as a matter of discretion, “only where and as necessary in the interest of justice.”

[18] In my view, this is not a case where setting aside the Assessment Order is “necessary in the interest of justice.” My conclusion rests on the findings of fact made by the motion judge, findings that have not been attacked on appeal.

[19] The motion judge found, on the appellant’s own admission, that some 10 1/2 years had elapsed from the time that the Assessment Order came to the appellant’s attention to when he brought his motion to set it aside. She also found that the appellant had not moved in a timely way to set aside the Assessment Order and that he had not offered an adequate explanation for the delay.

[20] On the record, the motion judge was fully justified in these findings. The appellant had experience with the court system in a number of proceedings in which Mr. Somerleigh and his partners represented him. On his own evidence, the appellant also has a great deal of experience in bringing complaints about this matter. In his affidavit filed in support of the motion, he deposes that after his sawmill and backhoe were seized and sold in January 1994, he went to the courthouse and complained. The record shows that, over the years, he has complained to many people and organisations about Mr. Somerleigh and the assessment, including the federal Minister of Justice, the Regional Senior Justice, the Law Society of Upper Canada and the Ontario Judicial Council. He has complained also to lawyers, family members and court personnel about the matter. It strains credulity to the breaking point to hear the appellant allege that he was delayed in using the court system to set aside the Assessment Order because he did not know what to do “until now”.

[21] Before disposing of this matter, I wish to note that the motion below to have the Assessment Order set aside was brought pursuant to rule 19.08 of the Rules of Civil Procedure. In my view, rule 19.08 is inapplicable in the circumstances of this case. Rule 19 governs default proceedings and rule 19.08 specifically governs the setting aside of default judgments. The Assessment Order was filed as an order of the court pursuant to the Solicitors Act; it was not a default judgment and it was not obtained pursuant to the default proceedings. The proper route in the circumstances of this case was for the appellant to have sought the leave of the court, pursuant to rule 2.02 of the Rules of Civil Procedure, to move to attack the Assessment Order on the basis of irregularity. The relevant part of rule 2.02 reads as follows:

A motion to attack a proceeding or a step, document or order in a proceeding for irregularity shall not be made, except with leave of the court,

(a) after the expiry of a reasonable time after the moving party knows or ought reasonably to have known of the irregularity;

[22] Given the motion judge’s findings as set out above, it is clear that leave would not have been given as the appellant had not sought leave within a reasonable time after knowing of the irregularities in respect of service.

DISPOSITION

[23] Accordingly, I would dismiss the appeal with costs to the respondent fixed at $4,000.00, inclusive of disbursements and GST.

RELEASED: April 24, 2006 (“EEG”)

“E. E. Gillese J.A.”

“I agree R. A. Blair J.A.”

“I agree R. G. Juriansz J.A.”

[^1]: The bill of costs shows a charge for services of $10,192.11 and disbursements of $69.23. $3,353.00 had been paid on account, leaving $6,908.34 owing.

[^2]: Now the Ontario Superior Court of Justice.

[^3]: See Somerleigh v. Polhill, [2005] O.J. No. 4367 (Div. Ct.).

[^4]: The wording of rule 2.01 was the same in 1992. It came into effect pursuant to O. Reg. 560/84.