CITATION: Investigation Counsel PC v. Dorrett, 2024 ONSC 2915
DIVISIONAL COURT FILE NO.: DC-23-422
DATE: 20240524
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Lococo, LeMay and O’Brien JJ.
BETWEEN:
LESLIE DORRETT also known as LESLIE JANE DORRETT, and DORRETT & ASSOCIATES PROFESSIONAL CORPORATION
Appellants (Defendants)
– and –
INVESTIGATION COUNSEL PROFESSIONAL CORPORATION
Respondent (Plaintiff)
Leslie Dorrett, Self-represented and for the Professional Corporation, Appellants
Ashley Ferguson for the Respondent
HEARD: March 26th, 2024 and in writing.
LeMay J.
REASONS FOR DECISION
[1] The Appellants, Leslie Dorrett and Dorrett and Associates Professional Corporation, entered into a solicitor-client relationship with the Respondent law firm Investigation Counsel P.C. in October of 2017. Work was performed by the Respondent law firm over the next several months. The Respondent rendered accounts in the total amount of $82,715.46. The Appellants paid the Respondent $50,000. There was a dispute over outstanding invoices totaling $32,715.46.
[2] For the reasons that follow, I would dismiss the appeal.
Background Facts
[3] The Appellants retained the Respondent to investigate suspicious transfers from the Appellants’ law firm to Ms. Dorrett’s ex-husband, who had worked in the law firm in some capacity. Ms. Dorrett was concerned that she had fallen victim to a fraudulent scheme between her ex-husband and an accountant.
[4] A retainer agreement was signed on October 11th, 2017 and services were rendered. The retainer was described by the motions judge as follows:
[20] The context here is that the defendants came to the plaintiff with a complaint that the individual defendant's former husband had defrauded her law firm over the course of 15 years and had done so in collusion with TD Bank. She provided the plaintiff with 12 briefs of evidence and 16 bankers boxes of documents.
[21] The retainer agreement identified the immediate assignment as follows:
You have asked us to investigate issues relating to your dealings with Manuel Corrondo, Nocera and potentially others, for the purposes of providing you our legal opinion on commencing an action and bringing pre-action asset freezing motions, and ultimately for recovery.
[22] In other words, the defendants wanted a legal opinion about their chances of obtaining interlocutory asset freezing orders and an opinion of their chances of ultimate recovery. An opinion of that nature requires careful review of the facts, especially when those facts span 15 years and involve the review of 12 evidence briefs and 16 boxes of documents.
[5] At the time that this retainer was signed, the Appellants were facing a potential limitations issue. As a result, the Respondent was required to move promptly to secure the Appellants’ rights. Notices of Action were issued against both Ms. Dorrett’s ex-husband and her financial institution very quickly after the Respondent was retained. A detailed review of the facts was then done by the Respondent and ultimately Statements of Claim were issued in November 2017, although they were never served.
[6] On March 14th, 2018, the Appellants sought to have the files transferred to a different counsel. The Respondent was prepared to co-operate in this transfer. However, the Respondent did not hear from the Appellants and was required to get off the record as the deadlines for the service of the Statements of Claim were quickly approaching.
[7] Ultimately, the outstanding amounts were not paid. In September 2018, the Respondent commenced an action against the Appellants for the outstanding fees. The Appellants asked for time to pay the accounts and did not deliver a Statement of Defence.
[8] After waiting for the Appellants to deliver a Statement of Defence, the Respondent noted them in default in June 2019. The events around this time are summarized by the motions judge as follows:
[9] I also note that the defendants tried to requisition an Assessment earlier and then withdrew it. The circumstances are worth summarizing. When the defendants failed to defend this action, they were noted in default after failing to defend. The default was set aside at the defendants' request and the action proceeded. The defendants then requisitioned an Assessment on the basis of a summary of invoices that the defendants presented to the Assessment Office as the first communication of the invoices. That is to say, they requisitioned the assessment on the basis that they were doing so within 30 days of receiving the invoices. That was not accurate. When that came to light, the defendants withdrew the requisition of an assessment and agreed to proceed with this action. When doing so, the defendants wrote to the Assessment Office saying:
This matter is proceeding by civil action between the parties, and the applicant Dorrett hereby wishes to withdraw the Order for Assessment, which was commenced by way of a Client's Application.
[9] The matter then proceeded to a summary judgment motion. That motion was heard by Koehnen J. and summary judgment was granted in favour of the Respondent on June 22nd, 2023.
The Procedural History in This Court
[10] The Appellants’ materials were filed in mid-August 2023. The Respondent’s materials were filed at the end of August 2023. A hearing was set before this panel for March 26th, 2024 for a half day. At the time the materials were filed, the Appellants were represented by counsel. That counsel got off the record on March 12th, 2024, although I understand from Ms. Dorrett that it had always been her intention to argue the appeal herself.
[11] On March 22nd, 2024, the Friday before the hearing, Ms. Dorrett wrote to the panel and advised that she was ill and was not medically able to argue the appeal. The adjournment was opposed, and we heard oral argument on the adjournment request on March 26th, 2024, by video conference. At that time, the parties agreed to proceed in writing. Therefore, in an endorsement released that same day (reported at 2024 ONSC 1802), the Panel determined that the adjournment would be granted, the appeal would proceed in writing on the material filed and additional written submissions and that the individual Appellant would not be permitted to provide additional evidence.
[12] The panel’s March 26th, 2024 endorsement set out a timetable for the additional written submissions. The Appellants were required to provide their submissions by April 29th, 2024. The Appellants were given a longer period than would usually have been granted in order to complete their submissions as the individual Appellant was self-represented (although a lawyer) and had been ill in the days leading up to the hearing.
[13] The Appellants did not file additional submissions nor upload them to CaseLines. As a result, on May 3rd, 2024, the Divisional Court Panel Co-ordinator wrote to Ms. Dorrett and advised her of the deadline and the fact that her submissions were overdue. She was told that she was required to serve, upload and file the additional submissions if she wished to have the panel consider them.
[14] I have checked with both the Divisional Court office and on CaseLines, and nothing additional has been either filed or uploaded by the Appellant. Earlier this week, the Respondent provided brief submissions. The Respondent advised that it was their understanding that the Appellant did not plan to make any submissions, and they asked for the Court to make a decision based on the written record that we have. As a result, I will now consider the issues on the basis of the materials that were filed for the appeal. These include both detailed appeal materials and factums from both parties.
The Standard of Review
[15] The standard of review on an appeal is described in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. On a question of law, the standard of review is correctness. On questions of fact, the standard is palpable and overriding error. Finally, on questions of mixed fact and law, the standard lies upon a spectrum.
[16] The Appellants argue that the motions judge applied an incorrect legal test in assessing the onus on a moving party to show that there was no genuine issue for trial. The Appellants argue that, since the Respondent moved for summary judgment on its accounts, the judge had the responsibility of determining whether the Respondent’s solicitor’s accounts were fair and reasonable.
[17] Regardless of how the issue is framed, the overarching question in this case is whether the motions judge grappled with the factual issues before him. Determining whether an account is fair and reasonable is a question of fact. As a result, I am of the view that the issues in this case are questions of fact, which are governed by the standard of palpable and overriding error.
[18] I should add that, even if there was a question of mixed fact and law or a question of pure law in this case, the appeal would still be dismissed as the motions judge did not err in either his identification of the legal standards or his factual determinations in respect of the application of those standards.
The Issues
[19] The Appellants have, in essence, raised three issues, as follows:
a) In granting judgment, did the motions judge improperly failed to scrutinize the Respondent solicitor’s account?
b) Did the motions judge improperly grant summary judgment?
c) Should the motions judge have referred the matter for an assessment under Rule 54 of the Rules of Civil Procedure?
[20] I will address each issue in turn.
Issue #1 – Did the Motions Judge Fail to Scrutinize the Solicitor’s Account?
[21] In support of their submissions on this question, the Appellants advance two arguments. First, they argue that the Court has an obligation to scrutinize the invoices of a lawyer because they are contingent debts and that a proper quantum meruit assessment must be performed. Second, they argue that the solicitor owes a fiduciary duty to their client and, as a result, granting summary judgment in these types of cases would set a dangerous precedent. This dangerous precedent would allegedly be set if a lawyer could avoid a comprehensive assessment of their legal accounts by simply commencing an action and then moving for summary judgment. Neither argument has any merit.
[22] On the first point, regardless of whether the lawyer’s accounts are a contingent or a realized debt, they still flow from a contract for services. The terms of that contract, and whether the solicitor properly fulfilled their retainer is a question of fact. In this case, the motions judge thoroughly reviewed the accounts and rendered his judgment on whether the accounts were reasonable, at least on a preliminary basis. He then went on to observe that there was no evidence from the Appellants to support any alternate conclusion. As I will explain more fully when dealing with the second issue, I see no basis to interfere with those determinations.
[23] This brings me to the argument that granting summary judgment would set a dangerous precedent in this case. That argument is not supported by either the facts or the law in this case. The motions judge has correctly explained how the Appellants missed the deadline for invoking the assessment procedure under the Solicitor’s Act. There is no basis by which the Applicant can impose the Solicitor’s Act process on the Respondent at this late date. In any event, the test for summary judgment required the motions judge to consider the evidence proffered by both sides. He did so. There is nothing either wrong in law or dangerous in the approach adopted by the motions judge.
Issue #2 – Was Summary Judgement Appropriate?
[24] The Appellants argue that the motions judge improperly applied the test in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87. They argue that, given the obligations of a lawyer to their client, the motions judge should have applied a special test for summary judgment. I disagree.
[25] There are several problems with the type of specialized test for summary judgment that the Appellants are suggesting. First, as described above, the Appellants did not avail themselves of the process as set out in the Solicitor’s Act, R.S.O. 1990, c. S 15. Having failed to use those processes, it is difficult to see how they would be entitled to those protections. Put another way, it is difficult to justify extending the protections of the Solicitor’s Act to a party that has failed to adhere to the timelines under the Act.
[26] In this regard, the Appellants rely on Price v. Sonsini (2002), 2002 41996 (ON CA), 60 O.R. (3d) 257 (C.A.) and specifically on the Court of Appeal’s statements that the court has an inherent jurisdiction to control the conduct of solicitors. While I agree with the Appellants’ general proposition, I see no reason why it changes the analysis in the case before this Court. The Appellants failed to comply with the timelines under the Solicitor’s Act, and the Respondent was entitled to enforce its claims for unpaid legal fees in the courts.
[27] Second, there is no basis in the text of Rule 20 for a separate or higher test for summary judgment. Rule 20 states that the Court “shall grant summary judgment if the Court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.” There is no language in this rule that supports a higher test for summary judgment in an action for the recovery of a solicitor’s account.
[28] Third, the analysis of a motions judge on a summary judgment motion will be similar to the analysis of an assessment officer when assessing an account. It requires the parties to put “their best foot forward”, and the motions judge to weigh the evidence that is provided. In this case, the motions judge considered the evidence and found that the Appellants had not provided any evidence that would counteract the accounts that the Respondent had provided.
[29] I should specifically mention the $27,000 disbursement for the forensic accountant. The Appellants challenge the inclusion of this disbursement on the basis that the Appellants had not agreed to provide the Respondent with authority to proceed with this disbursement. The Appellants argue that this was a question of credibility and should have been left to trial. I disagree. At paragraphs 26-32 of his reasons, the motions judge sets out the history of the forensic accountant. The written communications between the parties show that the Appellants were aware that a forensic accountant was being retained. There is no evidence to show any objection to that retainer. There is ample evidence to support the motions judge’s determination that the costs of the forensic accountant were properly incurred by the Respondent.
[30] More generally, the Appellants argue that the motions judge did not apply the factors set out in Cohen v. Kealey (1985), 10 O.A.C. 344 (C.A.). These factors go beyond merely the time spent and require a Court assessing costs to look at such things as the complexity of the matter, the degree of responsibility assumed by the solicitor, the monetary value of the matters in dispute and the competence of the solicitor. It requires a contextual analysis of the accounts.
[31] The Appellants argue that the motions judge improperly treated the Respondent’s claims as a claim for liquidated damages rather than considering and applying the Cohen factors. This assertion is not supported by the motions judge’s reasons. Specifically in paragraph 18 of his reasons, the motions judge notes that he has a sufficient record to perform at least a preliminary assessment of the quantum meruit value of the services performed by the Respondent. It would then be up to the Appellants to demonstrate that such a preliminary view is “unreliable because there is evidence sufficient to establish the existence of a genuine issue that requires a trial to resolve.”
[32] The motions judge then goes on to specifically consider the work that was performed by the Respondent. A contextual reading of his decision shows that he performs the analysis that is envisioned by Cohen. The other issues that the Appellants have raised, such as whether the civil fraud claim could be commenced based solely on police charges, are questions of fact. There are no palpable or overriding errors in the motion judge’s factual conclusions. As a result, there is no error on the part of the motions judge.
[33] Finally, one of the considerations in Hryniak is proportionality. The claim in this case is for less than $40,000. Absent a significant issue of credibility, it is difficult to see how there would be a genuine issue requiring a trial in this case.
Issue #3 – Should the Motions Judge Have Ordered a Reference?
[34] In my analysis of the previous two issues, I have explained why I reject the Appellants’ arguments that the motions judge erred in granting summary judgment. In terms of directing a reference, I would simply repeat those points and note that the Appellants sought a reference under Rule 54 and then subsequently withdrew that request. The remedy of a Rule 54 reference is a discretionary one.
[35] In this case, the motions judge explained that a reference to an Assessment Officer was not appropriate because of the scheme for the assessment of costs and the principles relating to summary judgment. In his reasons, the motions judge explained why both these factors supported his decision to deny the Appellants’ request. These explanations are both reasonable and founded in the evidence that was before the motions judge.
[36] In that regard, I note the history reproduced at paragraph 8, above. In summary, the Appellants delayed in seeking an assessment and then sought one by incorrectly claiming that invoices had first been sent less than thirty days before the assessment was requested. When the inaccuracy came to light, the Appellants withdrew the request for an assessment and agreed to proceed by way of a civil action. It would be an extremely unusual exercise of discretion for a judge to order an assessment after the party seeking that order had decided to proceed by way of an action and had withdrawn a previous request for an assessment. Therefore, I see no reason to interfere with the motions judge’s exercise of discretion in this case.
Conclusion
[37] For the foregoing reasons, I would dismiss the appeal.
[38] The Respondent has provided a bill of costs, which shows partial indemnity costs of $3,952.74 and full indemnity costs of $6,587.90, in each case inclusive of HST and disbursements.
[39] In my view, the high test for substantial indemnity costs, as set out in S & A Strasser v. Richmond Hill (Town) (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243 (C.A.), has not been met.
[40] I would award costs in the sum of $4,000 all inclusive, payable by the Appellant to the Respondent.
LeMay J.
I agree _______________________________
Lococo J.
I agree _______________________________
O’Brien J.
Released: May 24, 2024
CITATION: Investigation Counsel PC v. Dorrett, 2024 ONSC 2915
DIVISIONAL COURT FILE NO.: DC-23-422
DATE: 2024 05 24
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Lococo, LeMay and O’Brien JJ.
BETWEEN:
DORRETT also known as LESLIE JANE DORRETT, and DORRETT & ASSOCIATES PROFESSIONAL CORPORATION
Appellants
-and-
INVESTIGATION COUNSEL PROFESSIONAL CORPORATION
Respondent
ReASONS FOR DECISION
LeMay J.
Released: May 24, 2024