Glanc v. O'Donohue & O'Donohue

90 O.R. (3d) 309

Court of Appeal for Ontario,

Weiler, Blair and MacFarland JJ.A.

May 20, 2008

Professions -- Barristers and solicitors -- Fees -- Assessment -- E and one of her two sisters retaining solicitors to act for all three sisters in estate litigation and arranging to have solicitors' accounts submitted to company in which three sisters had equal interests -- Company paying some accounts -- E subsequently moving to have accounts referred for assessment -- E having standing to have accounts assessed as she and not company was solicitors' client -- Exercise of court's inherent jurisdiction appropriate as clients were not told that accounts contained substantial premium or that they were entitled to have accounts assessed -- Assessment ordered.

E and her sisters, K and D were involved in an estate dispute with their uncle. E and K retained the solicitors and, because the solicitors' role was to advance the common interests of all three sisters, arranged to have the solicitors' accounts submitted to E Ltd., a company in which the sisters had equal interests. E Ltd. paid some of the accounts which were submitted. E subsequently discovered that the accounts contained a substantial undisclosed premium, and brought a motion to have the accounts referred for assessment. The motion judge rejected the request on the grounds that E did not have standing to have the accounts assessed as she was not a client and that there was no basis for invoking the inherent jurisdiction of the court to direct an assessment. E appealed.

Held, the appeal should be allowed.

E and K, and not E Ltd., were the solicitors' clients. Submission of the accounts to E Ltd. was a mechanism of convenience developed, with agreement on all sides, to accommodate the sisters by spreading the payment equally among the three of them.

The court below should have exercised its inherent discretion in the circumstances of this case and ordered that the accounts be referred for assessment. E nor K were not told that the accounts contained a substantial premium or that they were entitled to have the accounts assessed by an assessment officer to determine their fairness. The circumstances in which the paid accounts were tendered did not lend themselves to close scrutiny by the sisters, who had little opportunity to review them or to seek professional advice. There was no inordinate delay on the part of E in seeking to have the accounts assessed when she discovered that they contained an undisclosed premium.

APPEAL from an order of Thorburn J., [2006] O.J. No. 4833, 153 A.C.W.S. (3d) 988 (S.C.J.), dismissing a motion to have legal accounts referred for assessment.

Cases referred to Kayor Energy Systems Inc. v. Davies, Ward & Beck, [2001] O.J. No. 2436, [2001] O.T.C. 468, 106 A.C.W.S. (3d) 30 (S.C.J.); McGugan v. McGugan (1892), 1892 CanLII 10 (SCC), 21 S.C.R. 267, [1892] S.C.J. No. 55, affg [1892] O.J. No. 16, 19 O.A.R. 56 (C.A.), distd Beecher, Barker, and Street (Re), [1860-1869] O.J. No. 93, 19 U.C.R. 607, 2 Chy. Chrs. 215 (U.C. Ct. Ch.); Goodman and Carr v. Goldstein Estate, [1988] O.J. No. 273 (S.C.), consd Other cases referred to Adam J. Brown Professional Corp. v. Farber, [2005] O.J. No. 334 (S.C.J.); Arnoldi v. Tremaine (1925), 1925 CanLII 431 (ON CA), 57 O.L.R. 310, [1925] O.J. No. 53, [1925] 3 D.L.R. 911 (S.C. (A.D.)); Park (Re) (1889), 41 Ch. D. 326 (C.A.); [page310] Price v. Sonsini (2002), 2002 CanLII 41996 (ON CA), 60 O.R. (3d) 257, [2002] O.J. No. 2607, 215 D.L.R. (4th) 376, 162 O.A.C. 85, 22 C.P.C. (5th) 1, 115 A.C.W.S. (3d) 334 (C.A.); Storer & Co. v. Johnson (1890), 15 App. Cas. 203 (H.L.) Statutes referred to Solicitors Act, R.S.O. 1990, c. S.15, ss. 3 [as am.], 4, 9(1), 11 [as am.] Solicitors Act 1843 (U.K.), 6 & 7 Vict., c. 73 Rules and regulations referred to Rules of Professional Conduct, rule 2.08(1)

Terrence O'Sullivan and Rocco Di Pucchio, for appellant. No one appearing for respondent O'Donohue & O'Donohue. William E. Pepall and Melissa Panjer, for respondent on appeal Hughes Amys LLP.

The judgment of the court was delivered by

BLAIR J.A.: -- Overview

[1] Estelle Glanc seeks to set aside the order of Justice Thorburn dated December 5, 2006, refusing her request to have certain legal accounts rendered by the law firms O'Donohue & O'Donohue and Hughes Amys LLP referred for assessment. The motion judge rejected the request on essentially two bases: (i) that Estelle did not have standing to have the accounts assessed, and (ii) that there was no basis for invoking the inherent jurisdiction of the court to direct an assessment.

[2] By the time this appeal was heard, the issues between Estelle and O'Donohue & O'Donohue had been resolved through mediation, leaving only the matter of the referral of the Hughes Amys' accounts to be determined.

[3] For the reasons that follow I would allow the appeal. In my view, the court below should have exercised its inherent discretion in the circumstances of this case and ordered that those accounts be referred for assessment.

Background

[4] Estelle and her sisters, Krysia Piorczynski and Diane McKay, were involved in an estate dispute with their uncle following the death of their father, Ted Piorczynski. [page311]

[5] Ted Piorczynski and his brother, Ben, had created a successful real estate portfolio valued at approximately $43 million. The portfolio was held for the most part in a partnership known as the Everlast Group. The Everlast Group was owned 50 per cent by Ted's company, Everlast Construction Company Limited ("Everlast"), and 50 per cent by another company, Ben-Ted Construction Limited, which in turn was owned by both Ted and Ben.

[6] Estelle and Krysia were each entitled to a 40 per cent interest in their father's estate and Diane was entitled to 20 per cent. All three sisters also owned corporations that held shares indirectly in Everlast.

[7] Following Ted's death in 1998, a dispute arose between Ben -- who was initially the estate trustee -- and his nieces with respect to Ted's estate and Everlast. Estelle and Krysia retained Melville O'Donohue, an experienced estate litigator, to represent them in this dispute. Diane had her own counsel. Mr. O'Donohue was assisted by his son, Stephen O'Donohue, who was also a member of the firm. When the senior O'Donohue became ill, Jack Fitch of the Hughes Amys firm was retained by Estelle and Krysia -- at the suggestion of Stephen O'Donohue -- to handle the estate litigation aspects of the dispute and to assist the O'Donohue firm in that regard.

[8] At the suggestion of Estelle, Mr. Fitch agreed to render his legal accounts for services rendered to the sisters to Everlast. This suggestion was made because, as Estelle pointed out, even though she and Krysia had retained Mr. Fitch, everyone agreed that the Hughes Amys role was to advance the common interests of all three sisters, and all three sisters had an equal indirect interest in Everlast.

[9] The estate issues were ultimately resolved, to the very considerable financial advantage of the sisters. The settlement resulted in a corporate restructuring and the transfer of real estate into a fund that would generate substantial payments to Estelle, Krysia and Diane. Indeed, the evidence indicates that while their uncle Ben initially proposed that the interests of the three sisters in their father's estate be purchased for $10 million, the result of the settlement was that Estelle and Krysia together realized a gross amount of more than three times that amount ($30.9 million).

[10] As part of the settlement Everlast came under the control of Ted's estate. There were to be three closings, each generating payments to the sisters. Both the O'Donohue and Hughes Amys firms presented significant accounts for payment at the time of the first closing in June 2004, and -- by direction from the sisters -- these accounts were paid by Everlast. [page312]

[11] The O'Donohue account covered a period of three years and was for $2,694,109.30. The appellant asserts that it included an undisclosed premium of $1.2 million in addition to compensation on an hourly basis.

[12] The Hughes Amys account -- which, as instructed by Estelle and Krysia, was directed to and paid by Everlast -- was in the amount of $696,695.46. The appellant alleges that this account, too, contained a very substantial undisclosed premium. She estimates this premium at $300,000, although it is not clear where that figure comes from as the amount of the premium, if any, has not been disclosed by Hughes Amys. Mr. Fitch does not say in his affidavit that there was no premium. In correspondence, however, his counsel took the position that the notion of a premium implied "that Hughes Amys agreed to act on the basis that it would be compensated for its work on an hourly basis", whereas counsel was "informed that no such agreement was in place with respect to [the $696,000 account]".

[13] Estelle says that she and Krysia were concerned about the size of the accounts but had little time to review them and felt pressured to sign the direction authorizing Everlast to pay them out of the first closing proceeds. Estelle and Krysia each received $523,000 from the first closing.

[14] At no time was it disclosed to Estelle or Krysia that either of the accounts contained a premium. At no time were they advised that they were entitled to have the accounts assessed or that authorizing Everlast to pay the accounts might in some way affect their right to do so. There was no written retainer between Estelle and Krysia and either of the law firms. There was no contingency agreement. There were no discussions in advance concerning a premium, and no oral agreement to that effect is alleged by either law firm.

[15] Only later, in the fall of 2004, following enquiries of Stephen O'Donohue by Estelle's personal solicitor, did the appellant learn about the $1.2 million premium contained in the O'Donohue account. Stephen O'Donohue's explanation was that the premium was justified by the exceptional result achieved and the degree of risk undertaken, among other things. There is no question the results were quite favourable to the sisters and that the law firms carried the accounts for a period of time.

[16] In December 2004, Estelle obtained an order on requisition under the Solicitors Act, R.S.O. 1990, c. S.15 to assess the O'Donohue accounts rendered to her and Krysia. She requested Tom Welsh, the new C.E.O. of Everlast, to assess the Hughes Amys accounts but he declined. In December 2004, January 2005, July 2005 and August 2005, she asked Hughes Amys to [page313] agree to add their accounts to the O'Donohue assessment. Hughes Amys refused to do so.

[17] In the meantime, the O'Donohue firm submitted a further series of accounts to Everlast covering services rendered to Everlast from July 2004 through to the end of 2005. These accounts totalled around $250,000. Hughes Amys rendered a further account to Everlast on April 18, 2005 totalling $47.052.34.

[18] The O'Donohue assessment was scheduled for trial in April 2006. In December 2005, Estelle brought a motion in the O'Donohue proceeding to add the Hughes Amys accounts and some subsequent accounts rendered by the O'Donohue firm to Everlast to those proceedings. As mentioned at the outset of these reasons, the motion judge rejected Estelle's request to have the accounts referred for assessment. While the appeal respecting the O'Donohue accounts has been settled, the question whether the Hughes Amys account should be referred remains.

Analysis

[19] There are two reasons why the appeal must be allowed, in my view.

[20] First, I do not accept the argument that Estelle was not "the client" but that Everlast was. Estelle and Krysia were in reality the clients for whom the O'Donohue and Hughes Amys firms provided services. Estelle therefore has standing to have the accounts assessed.

[21] Secondly, the Rules of Professional Conduct of the Law Society of Upper Canada require that Estelle and Krysia, as clients, be told (a) whether the accounts contained a premium, and (b) that they had the right to have the accounts assessed under the Solicitors Act. They were told neither. Underlying these requirements is the important principle that courts have an inherent jurisdiction over the conduct of solicitors and over their own process in order to maintain public confidence in the administration of justice and to ensure that a client's request for an assessment is dealt with fairly and equitably: see Price v. Sonsini (2002), 2002 CanLII 41996 (ON CA), 60 O.R. (3d) 257, [2002] O.J. No. 2607 (C.A.), at para. 19.

Estelle and Krysia were the clients

[22] There can be little doubt that, especially prior to the first settlement closing in June 2004, both the O'Donohue and the Hughes Amys firms were acting for and representing the interests of Estelle and Krysia. Estelle and Krysia were the clients of the firms. Evidence of this is found in how the parties themselves described their relationship. [page314]

[23] Stephen O'Donohue swears in his affidavit that "[i]n June 2001, our firm was retained by Estelle Glanc . . . and her sister Krysia Piorczynski." The retainer was joint and was in relation to matters arising out of their interests as beneficiaries of their late father's estate and a dispute about the estate with their uncle, Ben.

[24] Jack Fitch deposed that when he first became involved in the matter in October 2002, he met with Stephen O'Donohue and was briefed on "O'Donohue & O'Donohue's involvement in the matter on behalf of Estelle Glanc and Krysia Piorczynski" and was asked if he "would act as counsel on their behalf with respect to the matter" (emphasis added). He "agreed to do so" and to "assist O'Donohue & O'Donohue in their efforts".

[25] In December 2003, when the estate dispute was settled, Estelle suggested -- supported by Krysia -- that Everlast be responsible for paying the law firms' accounts. She suggested this because even though the law firms had not been representing Diane, Diane had benefited from the work done, and they all had a one-third interest in Everlast. Diane agreed. Mr. Fitch states:

Diane McKay's agreement in this regard was in recognition of the role that Hughes Amys LLP had played in advancing the common interest of Estelle Glanc, Krysia Piorczynski and Diane McKay in the matter and resulted in a sharing of Hughes Amys LLP's charges which would otherwise, presumably, have been born by Estelle Glanc and Krysia Piorczynski only. (Emphasis added)

[26] In his letter of June 17, 2004, to Estelle and Krysia, enclosing a copy of the Hughes Amys account rendered to Everlast, Stephen O'Donohue concluded by advising them that the O'Donohue & O'Donohue "account for professional services rendered and disbursements incurred on your behalf" (emphasis added) would be rendered shortly.

[27] I conclude, therefore, that the clients of the law firms were Estelle and Krysia. A mechanism of convenience was developed -- with agreement on all sides -- to accommodate the sisters by spreading the payment equally amongst the three of them: Everlast would pay the accounts. It did not matter to the law firms whether Estelle and Krysia or the corporation were responsible on the surface because the accounts were to be paid out of the settlement funds regardless. Had there been a shortfall and had Everlast been unwilling to pay, I have no doubt payment would have been sought from Estelle and Krysia.

[28] Thus, I do not see the pertinence of s. 9(1) of the Solicitors Act, which permits "a person, not being chargeable as the principal party" but who "is liable to pay or has paid" a bill, to apply to [page315] have that bill assessed. There was some debate here, and before the motion judge, about whether Estelle qualified as a person "liable to pay" for the purposes of that provision. In my view, it matters not. Subsection 9(1) would apply if Everlast was seeking the assessment (as a person "not being chargeable as the principal party" but who has paid the bill). Everlast is not challenging the accounts, however. Estelle has standing to do so, in my view -- and she is supported by Krysia in this regard -- simply because she was the client and may attempt to exercise her rights under ss. 3 and 4 of the Solicitors Act as such.

[29] Respectfully, the motion judge erred in holding that Estelle did not have standing because she was not a client and thus not a person "liable to pay".

[30] The motion judge also erred, in my opinion, when she determined that even if Estelle were "liable to pay" the bill she had no standing to do so because she was only one of the persons liable to pay. At para. 35 of her reasons she said:

The courts have held that a person who is responsible to pay a portion of the account is not a person with standing to request the referral of an account for assessment as that person is not liable to pay the bill in whole, within the meaning of the Solicitors Act. (See McGugan v. McGugan, 1892 CanLII 10 (SCC), [1892] O.J. No. 16 (C.A.) at para. 6 and Kayor Energy Systems Inc. v. Davies, Ward & Beck, [2001] O.J. No. 2436 (S.C.J.) at paras. 23, 24 and 28).

[31] Here, however, Estelle is not "a person who is responsible to pay a portion of the account" (emphasis added). The evidence is that she and Krysia jointly retained the law firms. In the absence of some indication to the contrary -- there is none here -- Estelle and Krysia would each be liable for the whole amount of the bill. Moreover, I am not persuaded that either McGugan v. McGugan, 1892 CanLII 10 (SCC), [1892] O.J. No. 16, 19 O.A.R. 56 (C.A.), affd (1892), 21 S.C.R. 267, [1892] S.C.J. No. 55 or Kayor Energy Systems Inc. v. Davies, Ward & Beck, [2001] O.J. No. 2436, [2001] O.T.C. 468 (S.C.J.) support the proposition for which they are cited.

[32] McGugan involved an attempt by an individual ratepayer to have a solicitor's bill of costs that was delivered to and paid by the school trustees referred for taxation. The Court of Appeal affirmed that he was not the person chargeable with the bill or liable to pay it, even though he may, ultimately, have had to bear an aliquot portion of it in his capacity as a taxpayer. Mr. McGugan was not the client. His circumstances were quite different than those of Estelle Glanc vis-à-vis Hughes Amys LLP.

[33] Kayor Energy is distinguishable as well. Kayor Energy Systems Inc. was a shareholder of a company called Peel Resource Recovery Inc. The company borrowed money from a bank and was obligated under the loan agreement to pay the [page316] bank's legal fees. Davies, Ward & Beck acted for the bank and rendered accounts that were paid by the company. Later, after the company had paid its outstanding indebtedness Kayor sought to have the accounts assessed. Kayor had sold its shares in the company at the time the indebtedness was paid out, but the bank had declined to release the shares until certain other accounts of Davies had been paid. Justice Dunnet dismissed Kayor's application to have the accounts assessed. Kayor was not the client, nor was it the person chargeable, nor was it a person not chargeable but liable to pay. Kayor had not paid the accounts. Even if Kayor had a claim pursuant to an assignment it had taken from the company, the 12-month limitation under s. 4 of the Solicitors Act had expired and Kayor had failed to establish special circumstances. The case did not relate to a claim by a person responsible for paying only a portion of the account.

[34] The motion judge also relied on the old case of Beecher, Barker, and Street (Re), [1860-1869] O.J. No. 93, 19 U.C.R. 607 (U.C. Ct. Ch.), a determination by the Secretary of the Upper Canada Court of Chancery in Chambers, and on the decision of Master Donkin in Goodman and Carr v. Goldstein Estate, [1988] O.J. No. 273 (S.C.), for the proposition that all parties retaining the solicitors must be part of the request to assess an account. While I have some reservations about the continuing soundness of that principle as a general proposition in the present day -- longstanding as it may be -- it is not necessary to decide the question here because all parties to the retainer are part of the request. The line of authorities relied upon is distinguishable on the basis that it relates to situations in which a client has obtained an ex parte registrar's order for assessment by requisition, without notice to the solicitors, whereas in the present case Hughes Amys had notice of the client's initiative and has been able to respond. In any event, although Estelle brought forward the motion, she is supported in it by Krysia. The clients are in agreement about the assessment. Diane's absence is not critical since she did not retain the Hughes Amys firm.

[35] For all of the above reasons, I conclude that Estelle has standing to seek to have the accounts assessed. She and Krysia were the clients.

Inherent jurisdiction and fairness

[36] With respect to the accounts of the O'Donohue and Hughes Amys firms, neither Estelle nor Krysia was told whether the accounts contained a substantial premium or that they were entitled to have the accounts assessed by an assessment [page317] officer to determine their fairness. These omissions were significant, in my view.

[37] I do not mean by this to be critical in the least of the fact that the accounts were presented at the time of the first settlement closing. I wish to underscore that nothing I say in these reasons is intended to be a reflection on the quantum of the accounts or the existence or quantum of any premium. The resolution of those matters is for another day. It appears evident that the O'Donohues and Mr. Fitch provided stellar services to their clients and achieved an excellent result. Indeed, nothing in the materials or in the submissions of the appellant's counsel, Mr. O'Sullivan, suggests otherwise. The clients are nonetheless entitled to have the fairness and proprietary of those accounts determined.

[38] Lawyers are officers of the court and owe a fiduciary duty to their clients. Rule 2.08(1) of the Rules of Professional Conduct require that lawyers "not charge or accept any amount for a fee or disbursement unless it is fair and reasonable and has been disclosed in a timely fashion" (emphasis added). The commentary to rule 2.08 enumerates an illustrative list of factors to be taken into account in determining whether a fee is fair and reasonable. It then continues with the following specific directive:

The fiduciary relationship between lawyer and client requires full disclosure in all financial dealings between them and prohibits the acceptance by the lawyer of any hidden fees. . . . . .

Breach of this rule and misunderstandings about fees and financial matters bring the legal profession into disrepute and reflect adversely upon the general administration of justice. A lawyer should try to avoid controversy with a client about fees and should be ready to explain the basis for the charges (especially if the client is unsophisticated or uninformed about how a fair and reasonable fee is determined). A lawyer should inform a client about his or her rights to have an account assessed under the Solicitors Act. (Emphasis added)

[39] Hughes Amys raises two procedural arguments as impediments to Estelle's ability to have the accounts assessed. First, it submits that the steps taken to add the Hughes Amys accounts to the O'Donohue assessment were flawed; essentially, the process did not constitute an application to refer an account for assessment under s. 4 of the Solicitors Act and was not an appropriate procedure for an assessment by requisition under s. 3. Secondly, it argues that Estelle is out of time even if the process is treated as a s. 4 application because it was not commenced within 12 months of the Hughes Amys account being delivered and there were no "special circumstances". [page318]

[40] I would not give effect to either submission for the following reasons.

[41] There are "special circumstances" here, in my view, and the procedural impediments, if any, are not fatal to the appellant's position in the circumstances. I say this for the following reasons.

[42] This court emphasized the importance of the court's inherent jurisdiction as the guardian of public confidence in the administration of justice in Price v. Sonsini, supra. At para. 19, Sharpe J.A. said:

Public confidence in the administration of justice requires the court to intervene where necessary to protect the client's right to a fair procedure for the assessment of a solicitor's bill. As a general matter, if a client objects to a solicitor's account, the solicitor should facilitate the assessment process, rather than frustrating the process. See Orkin, The Law of Costs, 2nd ed., looseleaf (Aurora, Ont.: Canada Law Book, 2001), at p. 3-13. In my view, the courts should interpret legislation and procedural rules relating to the assessment of solicitors' accounts in a similar spirit. As Orkin argues, "if the courts permit lawyers to avoid the scrutiny of their accounts for fairness and reasonableness, the administration of justice will be brought into disrepute." The court has an inherent jurisdiction to control the conduct of solicitors and its own procedures. This inherent jurisdiction may be applied to ensure that a client's request for an assessment is dealt with fairly and equitably despite procedural gaps or irregularities. (Citations omitted; emphasis added)

[43] Sachs J. applied this principle in Adam J. Brown Professional Corp. v. Farber, [2005] O.J. No. 334 (S.C.J.), when the solicitor objected that the motion had not been brought by a proper form of application under s. 11 of the Solicitors Act. Justice Sachs disposed of this objection stating, "In my view this is precisely the type of procedural objection that the court should not be persuaded by in proceedings where a client is seeking a fair opportunity to assess a solicitor's bill." Here, I would dispose of the appellant's objection that Estelle should not be permitted to piggy-back her assessment of the Hughes Amys accounts onto the requisition proceeding pertaining to the O'Donohue & O'Donohue in the same fashion.

[44] Finally, procedural issues notwithstanding, it is well-established that the court has a discretion to direct the assessment of a solicitor's account apart from the provisions of the Solicitor's Act: see Park (Re) (1889), 41 Ch. D. 326 (C.A.); Arnoldi v. Tremaine (1925), 1925 CanLII 431 (ON CA), 57 O.L.R. 310, [1925] O.J. No. 53, [1925] 3 D.L.R. 911 (S.C. (A.D.)), at pp. 915-16 D.L.R., Middleton J.A.; and Storer & Co. v. Johnson (1890), 15 App. Cas. 203 (H.L.). In the latter case -- in which the client was out of time and therefore had no right to tax the solicitor's bill under the U.K. Solicitors Act 1843, 6 & 7 Vict., c. 73 -- no less an authority than Lord Halsbury, L.C. said at p. 206 App. Cas.: [page319]

But it was of course open to the Court to pronounce a judgment which should do justice between the parties when once the case was brought before them.... I think it is quite clear that the Solicitors Act did not deprive the Court of the jurisdiction which they always possessed to do justice in the premises when dealing with one of their officers, and that they might therefore order that the costs should be taxed . . .

[45] Estelle's attempt to have the Hughes Amys accounts assessed should be dealt with in the same spirit. In this regard, I note the following in particular:

(a) Estelle and Krysia were not told whether the accounts rendered contained substantial premiums.

(b) They were not told they had the right to have the accounts assessed. Instead, their concerns, when raised, were waived off with light banter, Stephen O'Donohue suggesting that O'Donohue "could make the bill higher" and Mr. Fitch commenting that they were lucky they were not in the United States where they would have to pay 33 per cent of the gross funds generated.

(c) The circumstances in which the $2.69 million O'Donohue account and the $696,000 Hughes Amys account were tendered did not lend themselves to close scrutiny of the accounts by the sisters. The accounts were significant and lengthy but they were presented at the time of the first settlement closing when Estelle and Krysia were about to receive over half a million dollars each and when they, perhaps understandably, might be less critical and vigilant. Although they were concerned about the accounts, Estelle and Krysia had little opportunity to review them or to seek professional advice, and Estelle states in her affidavit that she was of the view that she had no choice but to sign the direction and that, if she did not, neither Krysia nor she would receive their distributions.

(d) There was no inordinate delay on the part of Estelle (ultimately supported by Krysia) in seeking to have either the O'Donohue & O'Donohue or the Hughes Amys accounts assessed. She only discovered during the fall of 2004, through enquiries of her personal counsel, that the O'Donohue accounts contained an undisclosed premium of $1.2 million. On December 15, 2004, she obtained an order on requisition to assess those accounts. While this may have been outside the one-month time limit for [page320] obtaining such an order on requisition, [See Note 1 below] it was well within the time period prescribed for an application for assessment under s. 4 of the Solicitors Act.

(e) At around the same time, Estelle's counsel asked for Mr. Fitch's consent to add the Hughes Amys accounts to the O'Donohue assessment. This request -- which was repeated in January 2005 and again in July and August 2005 -- was refused. The formal motion to add the Hughes Amys accounts to the O'Donohue assessment was brought in December 2005.

(f) Estelle had attempted to persuade the new C.E.O. of Everlast, Tom Welsh, to have Everlast assess the accounts. Everlast declined to do so.

(g) Finally, while the attempt to add the Hughes Amys assessment to the O'Donohue proceeding may have been irregular, I can see no prejudice to Hughes Amys resulting from the irregularity. The law firm has had ample opportunity to defend the proceeding and, as noted above, was well aware of Estelle's desire to have the accounts assessed in a timely fashion once the existence of the premium was discovered.

[46] All of these considerations point to the fairness, in the circumstances of this case, of directing that the Hughes Amys accounts be assessed. It is unnecessary for this court to address the O'Donohue accounts because they have been settled.

Disposition

[47] For all of the foregoing reasons, I would allow the appeal and direct that Estelle is entitled to have the Hughes Amys accounts referred to assessment. Since the issues regarding the O'Donohue & O'Donohue accounts have been resolved, it may be cleaner -- from a procedural point of view -- if the assessment were to take place under the rubric of a new application pursuant to the Solicitors Act. I would grant Estelle leave by this Order to commence such an application.

[48] Estelle is entitled to her costs of the appeal fixed in the amount of $18,000 inclusive of GST and disbursements.

Appeal allowed.

Notes

Note 1: This leaves aside the argument about whether the accounts were interim or final accounts. Time does not run until the final account has been rendered: see Price v. Sonsini.