ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY LAW

COURT FILE NO.: FS-03-FP-285589FIS
DATE: 20130222

BETWEEN:

MANUEL SANTOS,

Applicant

– and –

CRISTINA MARIA SANTOS,

Respondent

Adam Pantel, Counsel for J. Dannial S.E. Baker, solicitor who acted for the Applicant at Trial

HEARD: SEPTEMBER 27, 2012, with additional Written Submissions received October 23, 2012

endorsement: greer j.:

[1] Counsel appears before me today, on behalf of J. Dannial S.E. Baker, (“Baker”) who was counsel in this action on a 2-day uncontested trial. My Judgment was delivered on January 22, 2007. The matrimonial action was commenced on April 11, 203, by Manuel Santos, the Applicant (“the Husband”) against Cristina Maria Santos, the Respondent (“the Wife”).

[2] Baker, as the Husband’s counsel, never took out a formal Judgment, nor did he ever deal with the issues of Costs in the action. Sometime in 2011, Baker contacted the Law Society of Upper Canada about this problem, presumably when the Husband complained to the Society or to Baker about his failure to do so.

[3] Mr. Adam Pantel, counsel appointed by the Society’s insurer, Law Professional Indemnity Company, contacted me on November 9, 2011, to see how the problems arising out of Baker’s failure to deal with the issuing of the Judgment, the Divorce Order and the Costs of the Action could be resolved.

1. Some background information

[4] There were 6 interim Motions in this action heard by the Court. The last Motion was heard on June 15, 2004. On that Motion, I struck the Wife’s Pleadings and ordered Costs of that Motion against her in the amount of $3,000.

[5] The Husband was represented by Ms. Tracey Foster as counsel until May 2005, when she got off the Record. Ms. Foster kept detailed time dockets during her retainer. She rendered a number of legal accounts to the Husband, all of which he paid. These accounts totalled $48,107 inclusive of disbursements and GST.

[6] At Trial, the Husband was represented J. Dannial S.E. Baker. The Trial was uncontested. I rendered a 72-paragraph Judgment on January 22, 2007 in the Husband’s favour. Para. 66 of it, includes the transfer of the Wife’s interest in the matrimonial home and in a property in Portugal to the Husband.

[7] In para. 67, I ordered that the Husband, when taking out my Judgment, to add to it, “…as schedules thereto, the proper legal description of both properties so that the Judgment may be appropriately registered in the two jurisdictions.”

[8] In para. 69, I dealt with issue of Costs. I said:

The Husband has been successful in his claims before the Court and is therefore entitled to his Costs. The Husband shall prepare a Bill of Costs showing both full indemnity and partial indemnity, complete with all disbursements and GST, with legal argument on the scale of Costs to be applied. He shall also send copies of his lawyer’s legal bills sent to (sic) (by) him, copies of the lawyer’s time dockets. Submissions shall also be made with respect to the Costs of the Motions before Mr. Justice O’Connell and Madam Justice Mesbur where Costs were reserved to the Trial Judge, and any submissions with respect to whether, the $1,500 Costs awarded by Mr. Justice Rivard and the $3,000 awarded by me, were paid on the Motions before us.

[9] In para. 70, I said, “Judgment to issue for the Husband in accordance with these Reasons.” I also ordered that the Divorce be granted.

[10] I heard nothing with respect to the Judgment and/or the Costs until November 9, 2011, 4 years and 10 months after the Trial took place.

2. Lawyers Professional Indemnity Company Inquiry

[11] On November 9, 2011, Mr. Adam Pantel, Counsel, for the Lawyers Professional Indemnity Company, wrote to me asking me “…to assist with matters arising from a family law trial over which you presided back in October, 2006.” I was told that “…for a variety of reasons”, Baker never took steps to have the Judgment taken out, and that he had never taken steps to deal with the Costs issues as set out in my Judgment.

[12] I reviewed my copy of the Judgment to familiarize myself with the background and Orders arising out of it. The Court staff were, at first, unable to locate the Court File. Baker spoke to my Secretary, Ms. Misko, on November 25, 2011 saying he had requested the file almost a year ago and was told it was “lost” and could not be located. He attempted again in early November to have the file located and it was eventually found. Baker told Ms. Misko he needs the file “…to do his Bill of Costs”.

[13] On November 22, 2011, I wrote to Mr. Pantel and suggested he send me, for review, a “Draft Judgment” of the relief I had had granted. I then wrote:

With respect to Costs Submissions, you will have to prepare a Bill of Costs and make Written Submissions, serve them on the former wife, if her whereabouts are known. Send them to me with the former wife’s address and I will do an Endorsement to allow her time to respond to them and to submit a Written response to me. I will the fix Costs and set out my Reasons.

At that point, I was unaware that Ms. Foster had been counsel for 3 years and had rendered all her legal accounts to the Husband to the end of her retainer in 2005.

[14] On July 13, 2012, Baker’s Counsel sent me the Divorce Order to sign. I asked him to arrange a September 2012 date for an appearance before me. In that letter of August 13, 2012, I said:

I have reviewed the dockets of Ms. Foster and her Accounts, all of which appear to have been paid. There are no Accounts of Mr. Baker as rendered nor any dockets. There also must be some explanation as to where the information, set out as Mr. Baker’s account, comes from. I also require legal submissions on the scale of Costs, with supporting case law, if any, which make reference to a delay in rendering a legal account.

3. The September 27, 2012 appearance before me

[15] Mr. Pantel appeared with Baker before me on September 27, 2012. I was informed that the Husband had been unable to locate the Wife. Further, Counsel informed me that the Husband has received no child support from the Wife pursuant to my Order. Both children of the marriage reside with him.

[16] In his letter of July 13, 2012 to me, Baker’s Counsel said:

Mr. Baker’s total time in respect of his involvement in the family law proceeding was 40 hours at $200 per hour for a total of $8,000 plus GST of $400 for a total of $8,400.

[17] I was then told at the hearing that Baker kept no dockets for the 2-day Trial, although he did prepare an “account dated January 10, 2007” in the amount of $20,000.

[18] Baker, I am told, was called to the Bar in 1985, so he had been in practice approximately 21 years when he took the Trial in October of 2006. I am told he had to “work to get the file from Ms. Foster, and that he rendered other bills”, and he prepared 2 document briefs for Trial. He says 20 hours was spent researching and working on submission and that in total it was more “than 40 hours” work. Baker’s billing rate was now said to be $500 per hour.

[19] It was Baker’s Counsel’s position that Baker “can render a final account tomorrow”, and the Husband would have to pay it.

[20] In Mr. Pantel’s letter to me of July 13, 2012, he set out the difficulties Baker had in obtaining the file and Ms. Foster’s Accounts, and in obtaining the proper legal description from the Husband of the Portuguese property. That description had to be translated into English for the purposes of the Ontario Judgment.

[21] Mr. Pantel also included copies of Ms. Foster’s Accounts totalling $48,107.20 inclusive of disbursements and GST. The time is shown as 224.8 hours at $200 per hour for $44,960 fees. Mr. Pantel proposed to submit all these accounts plus Baker’s Account which Baker said was “…40 hours at $500 per hour (or $20,000) so that I could fix Costs. He then said that the Husband wanted all these accounts added together for a total of $59,168.61 on a full indemnity basis, or $40,000 on a partial indemnity basis.

[22] I told them I was not prepared to accept Baker’s Account, given that he was now saying his billable rate was $500 per hour and he now wanted $20,000. Baker had simply added a draft Bill of Costs setting out Foster’s time, and a list of what I assume were her disbursements. He then added his so-called account, which includes 10 headings as follows:

By J. Dannial S.E. Baker

To:

Review of file
Setting Down for Trial
Meetings with client
Preparing Trial Record
Preparing for Trial
Attendances at Trial
Legal Research
Preparation of Submissions
Preparation of Orders
Letters and phone calls to Revenue Canada

Total Hours: 40 hours

Disbursements:

Photocopies and Binding

[23] There were no dates on the Account to show what was the period of Baker’s legal retainer by the Husband and it was addressed to “Cristina Maria Santos”, on the assumption I would have awarded Costs against her.

[24] I refused to accept this as a Bill of Costs, when there never was any account addressed to the Husband. There were no dockets kept. The attendance at Trial was 2 days, not more than 6 hours per day in the Courtroom. That, would only account for $3,000 per day for 2 days. No evidence was produced to show that the Husband knew this was the rate he was being billed at. Baker produced no file of his own on the case even though Ms. Foster must have produced her file to him. He had to rely on the Court file to find documentation he should have had in his own file.

[25] Baker had kept no dockets, yet wanted to render such an account nearly 5 years late. The only information given to me for the delay was that Baker had been ill with cancer. There was no explanation as to the date of the diagnosis, or time and date of treatment, nor was I told the date when the Husband got in touch with the Law Society of Upper Canada about the problems.

[26] Since what was presented to me, did not comply with the terms about Costs Submissions as set out in my Judgment I ordered Counsel to research whether this account complied with the provisions of the Solicitors Act, R.S.O. 1990, C. S.15 (“the Act”) and whether the delay rendered the sending of an account at this late date to the client was proper.

[27] I received a 3-page letter from Baker’s Counsel, enclosing a copy of the Act. He relies on S. 2(3) of the Act, in saying that Baker’s account was, “…sufficient in form if it contains a reasonable statement of description of the services rendered with a lump sum charge”. His position is that while best practices would dictate detailed dockets and particulars with respect to time spent, it was not mandatory under the Act.

[28] Counsel further said that there was no time-frame contained in the Act as to when a lawyer may render a final Account to a client. He says that Baker could render his account now to the Husband, and that it would oblige the Husband to make payment of the account. Baker’s estimate of 40 hours work, despite no dockets, is reasonable for the work done, says counsel.

[29] Counsel attempted to justify the $500 per hour Baker now says he could charge, pointing to the Costs Grid that came into effect where a lawyer with more than 20 years experience could charge up to $450 per hour on a substantial indemnity scale.

4. Analysis

[30] As I see the issues before me in this matter, they can be summarized as follows:

1. Is Baker’s bill, as set out in this Endorsement in sufficient form under S. 2(3) of the Solicitors Act, R.S.O. 1990, C. S.15 (“the Act”)?

2. What discretion do I have to accept or refuse to fix Costs of Baker in these circumstances?

3. Is there a time limit during which a legal bill may be submitted to a client by a solicitor?

4. Should any such Costs as fixed by me be ordered to be paid by the Respondent Wife, given the Husband’s success at Trial?

[31] Where legal charges are lumped together in one sum and presented to a client, S. 2(3) of the Act reads:

A solicitor’s bill of fees, charges or disbursements is sufficient in form if it contains a reasonable statement or description of the services rendered with a lump sum charge therefor together with a detailed statement of the disbursements, and in any action upon or assessment of such bill if it is deemed proper further details of the services rendered may be ordered.

Baker’s proposed bill is bereft of detail with no time amount spent on each step in the proceeding. Is then his bill “a reasonable statement or description”, under S. 2(3) of the Act? The Husband had received numerous bills/statements from Ms. Foster before Baker took over the file. Details of hours, amount of time and hourly rate and disbursements were clearly set out in her accounts. All of this is missing in Baker’s so-called account. He has guessed at the photocopying and binding costs. He appears to have asked for no retainer from the Husband, so the Husband (unless Baker orally told him) would never have expected an hourly rate of $500 as compared to Ms. Foster’s rate of $200 per hour.

[32] In Tripkovic v. Glober, 2003 43027 (ON CA), [2003] O.J. No. 1930, 64 O.R. (3d) 381 (C.A.), the solicitor had mailed his account to the client. It had few details. The solicitor, however, had discussed his fees with the clients, and they were aware that the insurance settlement funds were in his trust account and his fees would be deducted. The Judge in the first instance found that the account rendered lacked sufficient particularity to qualify as a bill under S. 11 of the Act, as the clients had obtained an order to have it assessed. The Judge, at first instance, even though the statutory 12-month period had elapsed, held that the insufficient detail was such to allow the clients to have it assessed. In para. 56 of the Court of Appeal’s decision, it held the following in relation to S. 2(3) of the Act:

The purpose of ss.2(3), 3, 4 and 11 is to provide assistance to both clients and solicitors in relation to bills rendered by solicitors. They reflect a balance between legitimate needs of clients to challenge accounts in an expeditious way with the equally legitimate need of solicitors to be paid for their services.

There, the Court said that the interpretation of legislation is to be performed contextually. The circumstances of each case must therefore be examined by the Court to determine if s. 2(3) applies.

[33] With respect to S. 2(3) of the Act, while not having to apply the test under this subsection of the Act in the circumstances before her, Madam Justice Gillese stated the following in para. 78 as to the requirements under the Act:

Bills lacking in particulars are not unknown in the practice of law and there are situations, in my view, where a generalized form of bill is sufficient. In making such comments, it should not be taken that I am suggesting that generalized bills are generally acceptable. Clearly, much legal work is performed in situations where a bill with sufficient particulars is required so that the client is both informed of the services rendered on his or her behalf and able to obtain advice as to the reasonableness and propriety of the bill. Equally clearly, there are situations in which a generalized form of bill is sufficient. What is “sufficient in form” and gives a “reasonable statements or description of the services rendered” is surely dependent upon the context and any new formulation of the test must take that into account.

I adopt the reasoning in this case.

[34] Arising out of this analysis of the subsection comes the question as to how the Husband, in this matter before me, is informed of the services rendered nearly 5 years ago and how he is now, with the bill if given to him in 2013, is to obtain advice on the propriety of the bill and its reasonableness?

[35] In Merklinger v. Jantree No. 3 Limited Partnership, [2004] O.J. No. 5996 (S.C.J.), a plaintiff’s request on a motion for Costs to be fixed in the amount of $115,925 or partial at $93,958, were reduced by Mr. Justice Bryant and fixed at $25,900 plus disbursements and GST since there was little or no documentation, including dockets, to support the claims being made. He also, in para. 52, refused to award any amount for a Law Clerk’s time as there were no dockets or other material to support that part of the bill.

[36] When a Judge makes a specific detailed Order as to what written submissions must be made on Costs and what evidence is to be included, it is not to be ignored by the solicitor. In Toronto Standard Condominium Corp. No. 1703 v. 1 King West Inc., [2009] O.J. No. 4659 (S.C.J.), Master Glustein set out a timetable to be followed on Costs submissions. The Defendant failed to comply with the Order and the Master refused to accept the late submissions.

[37] Not only did Baker not comply with the terms of para. 69 of my Judgment with respect to the paragraph on Costs, by not preparing a Bill of Costs within a reasonable time, he sent no copies of any legal bills sent to his client nor any copies of time dockets as set out, nor did he advise the Court whether his client had received the Costs already awarded to him on previous Motions.

[38] A Judge may refuse to Order Costs to a solicitor which there has been an extensive delay in putting a claim forward. In Klein v. Zagdanski, [2004] O.J. No. 4800 (S.C.J.), Mr. Justice Lane, in para. 8 of his decision where the Costs’ issue was raised three years after his decision on a Motion costs released, said:

That is just too long. The whole thrust of the Rules as to Costs in recent years has been to have them fixed by the judge who heard the matter at or shortly after the hearing when the judge is in the best position to weigh the numerous factors which are relevant to the fixing.

[39] The Family Law Rules have made that clear under R. 24(1) where Costs follow the event and should promptly follow the results. Baker wants me to order that the Wife pay all the Costs as fixed by me, for her failure to comply with previous Court Orders and for the Costs of the uncontested Trial.

[40] There is no evidence that the Wife ever received a copy of my Judgment when it was issued. I am now told that the Husband cannot locate her. There is no evidence to know the efforts made by Baker or the Husband to locate the Wife.

[41] The Husband was successful in the litigation and under the Family Law Rules, a successful party is entitled to Costs. Counsel points to the decision of Cook v. Cook, 2012 ONSC 1141, where the successful party was awarded Costs on a substantial indemnity basis because an Offer to Settle was not accepted and the Judgment exceeded it. He also examined the unreasonable behavior of the Applicant. In my view, the facts of Cook, supra, are so distinctly different from the situation before me, that the case has no relevance to the situation before me.

[42] Under subsection 24(11)(f) of the Family Law Rules, I may consider any relevant matter not already listed, when considering Costs. The case law cited by me, makes it clear that the Judge has a wide distinction in determining whether Costs should be awarded.

[43] Under s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, and the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Costs are in the discretion of the Court and it may determine to whom and to what extent costs shall be paid. Various factors are set out in the Rules for the Judge to consider in reaching a quantum figure for Costs or for disallowing them.

[44] There is no statutory time limit under the Rules or Acts respecting when a Bill of Costs sent to a client is out of time. On the other hand, Rule 2.08(1) of the Rules of Professional Conduct provides the following:

A lawyer shall 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.

5. Conclusions

[45] With respect to Ms. Foster’s accounts, all sent to the Husband in timely fashion and with sufficient detail as to the tasks performed, number of hours and hourly rate, the Husband paid all of the bills.

[46] I reviewed all her accounts, beginning March 3, 2003 through to May 5, 2005. I fix those Costs, at $35,000, inclusive of disbursements and GST, on a partial indemnity basis. They shall be paid by the Respondent Wife to the Applicant Husband, given his total success at Trial. Those Costs shall include Costs ordered by all Motions Judges.

[47] I have ordered the partial indemnity scale given that Ms. Foster’s Accounts include such items as travelling to Court, time relating to a defamation issue, calls and letters to various named persons without any context to show it related to the matrimonial litigation, letters and calls to CCRA, and a Small Claims Court issue.

[48] I award no Costs to Baker for his work on the Trial, given the reasons I have set out in this Endorsement. In my view, S. 2(3) of the Act applies in these circumstances. The nearly 5-year delay was unconscionable and the prejudice of the delay to the Husband is so severe, that the delay is inexcusable. The Wife’s name remained on the title to 2 properties without any protection to the Husband during those years.

[49] As noted in Marché D’Alimentation Denis Therault Ltée v. Grant Tiger Stores Ltd., 2007 ONCA 695, [2007] O.J. No. 3872, O.A.C. 22, in para. 25, the Court’s rules and case law rest upon an important principle: there is a strong public interest in promoting a timely resolution of disputes. The Court pointed to the principle that justice delayed is justice denied. In para. 33, the Court says that excusing a delay of great magnitude and gravity “risks undermining public confidence in the administration of justice”.

[50] To accept a legal bill based on no file, no records of the solicitor and no dockets, would prejudice the Husband. To allow this bill to go to assessment under the Act, when the bill of Costs of Baker was not sent to the Husband, would in my view undermine the justice system based on the circumstances of this case. The Husband would be faced with the Costs of poor legal services, that in end, had to be remedied through the Society’s insurer. The Husband thought he would receive his divorce and the transfer of the Wife’s interests in the two properties transferred to him in 2007, not 2012.

6. Orders

[51] The following Orders shall issue:

1. Order to go that the Respondent, Cristina Maria Santos, pay to the Applicant, Manuel Santos, Costs of this proceeding, which I fix at $35,000 inclusive of disbursements and GST plus interest at the Courts of Justice Act rate from the date hereof to the date of payment.

2. There shall be no Bill of Costs rendered by J. Dannial S.E. Baker to Manuel Santos for legal services rendered by him in this action, for the reasons set out herein.

3. Counsel for Baker shall speak to me with respect to the wording of the Judgment to be issued in this action and with respect to the draft Divorce Order he left with me.

[52] All Orders to go accordingly.

Greer J.

Released: February 22, 2013

COURT FILE NO.: FS-03-FP-285589FIS
DATE: 20130222

ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY LAW

BETWEEN:

MANUEL SANTOS,

Applicant

– and –

CRISTINA MARIA SANTOS,

Respondent

ENDORSEMENT

GREER J.

Released: February 22, 2013