CITATION: 1395804 Ontario Ltd. (Blacklock’s Reporter) v. Hameed, 2024 ONSC 2797
DIVISIONAL COURT FILE NO.: DC-23-2816
DATE: 20240524
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
E. Stewart, Myers and Leiper JJ.
B E T W E E N:
1395804 Ontario Ltd. o/a Blacklock’s Reporter
Appellant (Defendant)
- and -
Yavar Hameed
Respondent (Plaintiff)
Jason Rabin, for the Appellant (Defendant)
Paul Champ, for the Respondent (Plaintiff)
HEARD via videoconference at Ottawa: February 6, 2024
E. STEWART J.
REASONS FOR DECISION
Nature of the Appeal
[1] The Appellant 1395804 Ontario Ltd. o/a Blacklock’s Reporter (“Blacklock’s”) appeals the decision of Hooper J. dated March 28, 2023 which dismissed Blacklock’s motion to oppose confirmation of the assessment of the account of the Respondent Yavar Hameed (“Hameed”) conducted pursuant to the Solicitors Act, R.S.O. 1990, c. S.15.
[2] In dismissing Blacklock’s motion to oppose confirmation, the motion judge determined that the Assessment Officer had jurisdiction to conduct the assessment. The motion judge also concluded that Blacklock’s failure to file an objection to the assessment prior to the issuance of the certificate of assessment was fatal to its challenge by motion of the result. Finally, the motion judge considered that there was no basis upon which interference with the costs order imposed by the Assessment Officer would be justified in these circumstances.
[3] On this appeal, Blacklock’s submits that the motion judge erred in finding that the relief sought by it was unavailable due to its failure to file an objection as provided for in the Rules of Civil Procedure. Blacklock’s also argues that the motion judge erred in finding that the Assessment Officer properly exercised her discretion in awarding costs of the assessment to Hameed.
[4] Blacklock’s asks this Court to vary the order of the motion judge and to refuse confirmation of the assessment. In the alternative, Blacklock’s asks for an order confirming the assessment but setting aside the costs order. Blacklock’s submits that Hameed should be ordered to pay Blacklock’s costs of the assessment.
[5] Hameed submits that the appeal is without merit. Accordingly, he asks that the decision of the motion judge be upheld in its entirety and the appeal be dismissed.
Assessment Hearing
[6] From 2012 to 2017 Hameed acted on behalf of Blacklock’s in connection with several legal disputes to which it was party. Although no formal written retainer agreement had been executed, Hameed had issued to Blacklock’s many periodic invoices over those six years for legal services he provided to it. Blacklock’s had paid these prior invoices without question or complaint.
[7] On November 20, 2017, Hameed informed Blacklock’s principal, Tom Korski, that he no longer wished to continue as Blacklock’s counsel.
[8] On February 14, 2018, Hameed sent Blacklock’s his final invoice in the amount of $83,581.63 for legal services rendered. Blacklock’s refused to make any payment or to take any steps to retire the invoice in whole or in part.
[9] When all efforts to obtain payment of his account failed, Hameed brought an application for assessment of his account pursuant to s. 3 of the Solicitors Act.
[10] Initially, Blacklock’s disputed the existence of any retainer of Hameed for provision of legal services. However, at the outset of the hearing, Blacklock’s conceded there was a valid retainer before the Assessment Officer.
[11] The assessment hearing took three days to complete. Over the course of the lengthy hearing, Blacklock’s challenged the full amount claimed for services by Hameed. Among other things, Blacklock’s criticized the amount of time expended on tasks performed by Hameed, questioned the validity of his dockets, attacked his competence in handling the assignments, and submitted that Hameed’s abrupt termination of his retainer should operate to relieve Blacklock’s of any requirement to pay for his services.
[12] The Assessment Officer ultimately determined that $45,000.00 was owing to Hameed by Blacklock’s for legal services provided by him and adjusted the amount owing pursuant to the account accordingly.
[13] After receiving submissions on costs from the parties, costs in the amount of $18,740.82 were ordered by the Assessment Officer to be paid by Blacklock’s to Hameed.
Decision of the Motion Judge
[14] Blacklock’s brought a motion seeking an order refusing confirmation of the assessment. It argued before the motion judge that the Assessment Officer lacked jurisdiction to conduct the assessment because the retainer of Hameed was in dispute, that her reasons for arriving at the assessed amount were inadequate, and that an error in principle was made in awarding costs against Blacklock’s when Hameed’s account for services provided had been significantly reduced upon assessment.
[15] The motions judge noted that Blacklock’s had failed to file any objection following the assessment and prior to the issuance of the certificate of assessment as required by Rules 58.09 and 58.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Similarly, Blacklock’s had not asked the Assessment Officer to delay the issuance of the certificate to permit it to do so.
[16] Blacklock’s argued that the filing of an objection was not necessary because a jurisdictional issue had been raised by it. It also submitted that its failure to file an objection was a mere procedural irregularity that the court could ignore given its inherent jurisdiction over the subject of costs.
[17] The motion judge referred to the decision of the Divisional Court in RZCD Law Firm v. Williams, 2016 ONSC 2122 (Div. Ct.) (“RZCD”) for a review of the legislative jurisdiction and then-applicable Rules when appealing a certificate of assessment.
[18] The motion judge’s analysis of RZCD is contained in paragraphs 20-22 of the decision under appeal, as follows:
[20] In RZCD Law Firm v. Williams, 2016 ONSC 2122, the Divisional Court reviewed the legislative jurisdiction and civil rules on appealing a certificate of assessment commencing at para. 30:
Section 6 (9) of the Solicitors Act provides that a motion to oppose confirmation of the certificate shall be made to a judge of the Superior Court of Justice.
Section 17 (b) of the Courts of Justice Act provides for appeals to the Superior Court of Justice from a certificate of assessment in respect of which an objection was served under the Rules of Civil Procedure. Section 17 (b) states:
- An appeal lies to the Superior Court of Justice from, …
(b) a certificate of assessment of costs issued in a proceeding in the Superior Court of Justice, on an issue in respect of which an objection was served under the rules of court.
Rule 58.11 provides that an appeal under s. 17 (b) of the Courts of Justice Act from a certificate of assessment in respect of which an objection was served is governed by rule 62.01 (which is the rule that provides the procedure for appeals from an interlocutory order). Rule 58.11 states:
APPEAL FROM ASSESSMENT
58.11 The time for and the procedure on an appeal under … 17 (b) … of the Courts of Justice Act from a certificate of an assessment officer on an issue in respect of which an objection was served is governed by rule 62.01.
As may be noted, appeals or opposition to the confirmation of a certificate of an assessment officer involve the delivery of objections. The procedure with respect to serving objections is a procedure designed to provide the assessment officer with an opportunity to reconsider and review his or her assessment in light of the objections and to amend his or her decision and certificate accordingly. The procedure is set out in rules 58.09 and 58.10, which state:
CERTIFICATE OF ASSESSMENT
58.09 On the assessment of costs, the assessment officer shall set out in a certificate of assessment of costs (Form 58C) the amount of costs assessed and allowed.
OBJECTIONS TO ASSESSMENT
58.10 (1) On request, the assessment officer shall withhold the certificate for seven days or such other time as he or she directs, in order to allow a party who is dissatisfied with the decision of the assessment officer to serve objections on every other interested party and file them with the assessment officer, specifying concisely the grounds for the objections.
(2) A party on whom objections have been served may, within seven days after service or such other time as the assessment officer directs, serve a reply to the objections on every other interested party and file it with the assessment officer.
(3) The assessment officer shall then reconsider and review the assessment in view of the objections and reply and may receive further evidence in respect of the objections, and the assessment officer shall decide on the objections and complete the certificate accordingly.
(4) The assessment officer may, and if requested shall, state in writing the reasons for his or her decision on the objections.
[21] Under this procedure, so long as the objecting party made a request for the assessment officer to withhold her certification, time would be afforded to that party to do so.
[22] Blacklock is correct that an exception to the above procedure exists for appeals that relate to the jurisdiction of the assessment officer: RZCD at para. 34. For those types of appeals, objections are not required to be delivered. This makes sense given the purpose of the objection is to provide the assessment officer with an opportunity to reconsider or to provide additional reasons to explain his or her rationale. If the appellant is arguing the assessment officer didn’t have jurisdiction in the first place, a process that allows time for reconsideration would make no sense.
[19] The motion judge determined that the jurisdictional exception did not apply in this case because Blacklock’s had conceded at the assessment hearing that the existence of a retainer was not in dispute. The only alleged “challenge to the retainer” concerned the hourly rate charged by Hameed – an issue of quantum, not retainer. The motion judge therefore determined that the assessment officer had full jurisdiction, and that there was no bona fide jurisdictional exception that pertained to this case to eliminate the requirement to file an objection prior to issuance of the certificate as required by the Rules.
[20] Blacklock’s further submitted that the motion judge had an inherent discretion to consider the costs of a proceeding despite any requirement to file an objection, and that such an error in principle by the Assessment Officer justified intervention. Specifically, Blacklock’s argued that when an Assessment Officer substantially reduces an account, costs of the assessment should be awarded to the client. Since the Assessment Officer did not follow that general guideline, Blacklock’s characterized that, and any failure to provide adequate reasons for doing so, as an error in law.
[21] The motion judge noted that an Assessment Officer enjoys significant discretion in any award of costs. She was not persuaded that adequate grounds existed to interfere with the exercise of that discretion in this case. Moreover, several factors were present in the proceeding that made the award one that was well within her discretion to order.
Jurisdiction
[22] An appeal lies to the Divisional Court from a final order of a judge of the Superior Court of Justice for a single payment of not more than $50,000, exclusive of costs, pursuant to ss. 19(1)(a) and (1.2)(a) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”).
Standard of Review
[23] The standard of review on an appeal from a decision of a motion judge on a motion to refuse certification of an Assessment Officer, in itself akin to an appeal (see: Heyday Homes Ltd. v. Gunraj, (2005) 44 CLR (3d) 169 (Ont. S.C.J.); Samuel Eng & Associates v. Ho, 2009 ONCA 150 (C.A.)), is well-established. The order of an Assessment Officer is discretionary and the hearing before the motion judge or before this Court on further appeal is not an opportunity for the reviewing court to rehear the assessment and come to its own conclusion as to what is reasonable, absent an error in law, misapprehension of the evidence, palpable and overriding error on a factual matter, or an assessment amount that is so unreasonable as to constitute an error in principle (see: Rabbani v. Niagara (Regional Municipality) 2012 ONCA 280).
Issues
[24] Two main issues are raised on this appeal. The first is: did the motion judge err in finding that the failure to file an objection was fatal to Blacklock’s entitlement to challenge the assessment officer’s report? The second is: did the motion judge err in finding that the Assessment Officer had properly exercised her jurisdiction to award costs to Hameed?
Failure to File an Objection
[25] Section 17 of the CJA refers to the requirement to file an objection under Rule 58.10 with respect to an “assessment of costs issued in a proceeding in the Superior Court of Justice”. However, section 3 of the Solicitors Act speaks only to the assessment of a solicitor’s bill. Blacklock’s points out that an assessment of a solicitor’s account under s. 3 is not an assessment of costs issued in a proceeding in the Superior Court of Justice.
[26] As noted, the decision in RZCD establishes that the ability to challenge the decision of an assessment officer on a solicitor’s bill requires the delivery of an objection prior to the issuance of a certificate of assessment. The Divisional Court suggests in its decision that the objection requirement applies to both assessments of solicitors’ bills under the Solicitors Act as well as assessments of costs in proceedings pursuant to s. 17 of the CJA. Although some lower court decisions have questioned RZCD, it has remained binding upon them.
[27] Blacklock’s relies upon the observation made in the decision in Moore v. John A. Annen Barrister Professional Corporation, 2017 ONSC 7720 that the assessment of costs between parties to litigation operates under a different statutory regime than the assessment of lawyers’ accounts to their own clients. Accordingly, to the extent that the Divisional Court concluded otherwise in RZCD, Blacklock’s submits that the Divisional Court erred.
[28] Further, Blacklock’s submits that the approach taken in RZCD has sown confusion, hampered access to justice for self-represented individuals, and worked against the public policy goal of permitting clients to challenge accounts rendered by solicitors.
[29] Hameed submits that the adoption of the objection requirement is a wise practice that preserves judicial resources, and there is no practical reason why this requirement should be different for an assessment under s. 17 of the CJA and one pursuant to the Solicitors Act. He also notes that Rule 1.04(20 permits reliance on analogous rules which he argues ought to apply here. Above all, the objection requirement permits any error to be corrected or any decision to be clarified before a certificate of assessment is issued, thus reducing potential areas for further conflict.
[30] Furthermore, Hameed submits that this aspect of the appeal is purely academic. It is clear that Blacklock’s no longer questions the Assessment Officer’s jurisdiction and has advanced no other substantive grounds to set aside the Assessment Officer’s decision on the merits. There is no real issue raised that might create a jurisdictional exception in this case.
[31] The motion judge agreed with Hameed’s submissions on this issue, as do I. In particular, the academic nature of Blacklock’s argument would mitigate against the appropriateness of a re-visitation by this Court of an issue already decided by a panel of the Divisional Court simply on the hypothetical postulation advanced by it.
[32] Accordingly, I would not give effect to this ground of appeal.
Disposition of Costs
[33] The reasons for the decision of the motion judge indicate that she did not consider that the failure by Blacklock’s to deliver an objection before the Certificate of Assessment was issued prevented it from raising its arguments on the motion as to the disposition of costs by the Assessment Officer.
[34] The transcript of the proceedings before the Assessment Officer records that she heard oral submissions on costs after her decision on the merits of the assessment had been provided to the parties. Another matter was pending before her that day waiting to proceed. Her decision was delivered orally and was in basic accordance with what was asked for by counsel for Hameed by way of costs. Although it may have been preferable for the Assessment Officer to provide some more expansive reasons for her decision, the context in which the decision was given made it evident that she did not need to hear any reply argument from counsel for Hameed and thereby had accepted the submissions made by him on the subject of costs.
[35] Blacklock’s seems to view itself as having achieved success on the assessment, a process initiated by Hameed as a result of Blacklock’s failure to honour the account submitted by him, simply because (as it asserts) Hameed’s account was “slashed” as a result of the assessment process. Blacklock’s argues that the account was patently unreasonable and the Assessment Officer’s decision was highly irregular and unprecedented, reflecting a failure to apply the general principle that costs should generally not be awarded to the solicitor in an assessment unless the account had been found to be patently reasonable.
[36] The motion judge did not agree with this argument advanced by Blacklock’s. Instead, the motion judge was prepared to defer to the significant discretion of the Assessment Officer to order costs following an assessment hearing. In so doing, the motion judge stated (at paras 31-33):
[31] In the case before me, I note that this was a multi-day hearing with over a thousand pages of documents filed. The application for the assessment was required because Blacklock refused to pay anything on the $83,000. This is not the type of case where the client was suggesting a lower figure and the parties couldn’t come to an agreement. Blacklock took the position they were not paying a penny.
[32] In addition, Mr. Hameed served an offer to settle two years prior to the hearing that was almost the exact amount of the reduced account. While it did not meet the test for a Rule 49 offer, it was open to the assessment officer to take that offer into account when deciding who should be paying costs: Rule 49.13.
[33] I also note that although the assessment officer did reduce the solicitor’s account, she made the specific finding that the time spent was legitimate and necessary: see Reasons for Decision at page 11. Her reduction turned on the fact that the client, Blacklock, was not kept apprised of the amount of fees accruing and therefore were not afforded an opportunity to shift strategy if the litigation was becoming too expensive (Reasons at page 14). The reduction was based on client expectation, not the fact that the bill was patently unreasonable. Therefore, even with my inherent jurisdiction over costs and the absence of reasons, there is no justification to interfere with the discretion of the assessment officer in awarding partial indemnity costs to the solicitor.
[37] Hameed was successful in establishing entitlement to payment in the significant amount of approximately $45,000.00, more than four years after his account had been provided to Blacklock’s. Much of the reduction of the account related to a degree of poor communication between solicitor and his client about the fees that were accruing, rather than any finding that the work had not been done or that services billed for were deficient or had not been provided. Further, Hameed had made an offer to settle at least two years before the assessment hearing for an amount just shy of the amount awarded to him, whereas Blacklock’s never offered to pay any portion of the outstanding accounts to settle the dispute. Instead, Blacklock’s required Hameed to pursue the full assessment process, denied any retainer until finally capitulating on that point, and then took several days at hearing to painstakingly dispute all of the items for which payment had been demanded.
[38] I therefore agree with the motion judge that there is no basis on the record before her or us that would justify interference with the exercise by the Assessment Officer of her discretion as to costs and her decision to award costs to Hameed as requested on his behalf. Indeed, I view that decision as having been amply supported by the course of the proceedings, the record of the hearing and the result.
[39] Accordingly, I would not give effect to this ground of appeal.
Conclusion
[40] For these reasons, this appeal is dismissed.
Costs
[41] The parties have agreed that the successful party shall be entitled to an award of costs in the all-inclusive amount of $5500.00. Accordingly, Blacklock’s shall pay to Hameed his costs of this appeal fixed at $5500.00, inclusive of all disbursements and applicable taxes.
E. Stewart J.
I agree _______________________________
Leiper J.
FL MYERS J (concurring)
[42] The appellant challenges the correctness of this court’s decision in RZCD Law Firm v. Williams, 2016 ONSC 2122 (Div. Ct.). But the issue does not arise on the facts of this case. Whether RZCD requires the delivery of a notice of objection or not, the appellant raises no issues that were or could be barred by its failure to do so.
[43] The issue of whether horizontal stare decisis precludes review of RZCD in this court must await a case in which the issue is actually raised. R. v. Sullivan, 2022 SCC 19, at para. 73.
[44] The issue of costs of a proceeding is highly discretionary and will only be interfered with on appeal if the Assessment Officer made an error in principle or if the award was clearly wrong. The Assessment Officer applied the correct law and her exercise of discretion was firmly rooted in the evidence. I would not grant leave to appeal costs.
[45] Like my colleagues, I would dismiss the appeal and order the appellant to pay costs to the respondent fixed at $5,500 all-inclusive.
_______________________________ FL Myers J
Released: May 24, 2024
CITATION: 1395804 Ontario Ltd. (Blacklock’s Reporter) v. Hameed, 2024 ONSC 2797
DIVISIONAL COURT FILE NO.: DC-23-2816
DATE: 20240524
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
E. Stewart, Myers and Leiper JJ.
B E T W E E N:
1395804 Ontario Ltd. o/a Blacklock’s Reporter
Appellant (Defendant)
- and -
Yavar Hameed
Respondent (Plaintiff)
REASONS FOR DECISION
E. Stewart J.
Released: May 24, 2024