ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-460294
DATE: 20130109
BETWEEN:
MICHAEL NAKHDJAVAN
Applicant
– and –
JAMES W. MURDOCH
Respondent
Michael Nakhdjavan, In person
Mandy L. Seidenberg, for the Respondent
HEARD: November 1, 2012
Ellen Macdonald J.
[1] This is an application for an order referring to an Assessment Officer’s accounts for services rendered by the Applicant Michael Nakhdjavan by Thorsteinssons LLP (“Thorsteinssons”).
[2] It is not disputed that the final account dated May 9, 2008 was paid by Mr. Nakhdjavan on May 16, 2008.
[3] Section 4(1) of the Solicitors Act, is relevant to the issues raised in this application:
- (1) No such reference shall be directed upon an application made by the party chargeable with such bill after a verdict or judgment has been obtained, or after twelve months from the time such bill was delivered, sent or left as aforesaid, except under special circumstances to be proved to the satisfaction of the court or judge to whom the application for the reference is made. [emphasis added]
[4] If a client does not bring an application for assessment of an account within 12 months of the delivery of the account, the client must prove the existence of special circumstances that justify an order that he or she be granted the opportunity for an assessment.
[5] The limitation under the Solicitors Act apples to the final bill. Interim accounts are not caught by the limitation period in s. 4(1). This general limitation period begins to run from the date that the “final” account is rendered. See Price v. Sonsini (2002, 2002 41996 (ON CA), 60 O.R. (3d) 257 at para. 15 (C.A.).
[6] The determination of whether a bill is final is a question of fact. The courts examine whether or not it appears that it was the clear intention of the parties that the bill was final. In this case it is not disputed that the May 9, 2008 account was Thorsteinssons’ final bill. At that time it would have been clear to Mr. Nakhdjavan that the retainer was terminated.
[7] Mr. Nakhdjavan has not demonstrated special circumstances. While there is no absolute time bar against applications for the assessment of lawyers’ accounts, the Superior Courts have inherent jurisdiction to order assessment of lawyers’ accounts outside of limitation periods but the client must demonstrate special circumstances to obtain such an order. See Guillemette v. Doucet (2007), 2007 ONCA 743, 88 O.R. (3d) 90 at paras. 34-36 (C.A.) (“Guillemette”).
[8] Mr. Nakhdjavan must meet the requirements of the Solicitors Act for the assessment of a bill that has been paid. In that respect, s. 11 of the Solicitors Act reads:
- the payment of a bill does not preclude the court from referring it for assessment if the special circumstances of the case, in the opinion of the court, appear to require the assessment.
[9] It is clear that Mr. Nakhdjavan bears the onus of satisfying this court that there are special circumstances under both ss. 4(1) and 11 of the Solicitors Act. The courts have acknowledged that there will be some overlap between what constitutes the special circumstances required under ss. 4(1) and 11 of the Solicitors Act.
[10] As set out in the factum of the Respondent, the factors that constitute “special circumstances” cannot be exhaustively listed, but these factors, particularly respecting s. 11, include:
(a) The passage of time, particularly where there has been a lengthy time period after a bill has been paid;
(b) The sophistication of the client;
(c) The adequacy of communications between the solicitors and the client concerning the accounts;
(d) Whether there is evidence of increasing lack of satisfaction of the client regarding the services provided on the accounts;
(e) Whether there is over-charging for the services provided;
(f) The level of detail in the bills;
(g) Whether a solicitor-client relationship still exists, making it impractical for a client to assess an account (i.e., over concerns of alienating the lawyer);
(h) Whether payments made could be characterized as involuntary.
See Guillemette and Teplitsky, Colson v. Daniels, [2006] O.J. No. 44 at paras. 12, 13 (Sup. Ct.).
[11] Mr. Nakhdjavan has provided no evidence of special circumstances within the meaning of s. 4(1) of the Solicitors Act. He bears the onus of proving special circumstances to the satisfaction of the court in order to obtain a reference of the account for an assessment when more than 12 months have elapsed since the final bill. He has failed to discharge this onus. I decline to make an order directing a reference for an assessment of the final account.
[12] In assessing “special circumstances” under s. 11 of the Solicitors Act, there is a common sense presumption that the payment of an account for services implies acceptance by the payor that the account is proper and reasonable. This presumption is strengthened when accounts are paid regularly and over a period of time. See Enterprise Rent-a-Car Co. v. Shapiro, Cohen, Andrews, Finlayson (1998), 1998 1043 (ON CA), 38 O.R. (3d) 257 (C.A.) and Guillemette.
[13] Mr. Nakhdjavan has not put forth evidence to rebut the presumption that the accounts were proper or to show that the accounts were excessive or unwarranted. On the contrary, the evidence is that the Thorsteinssons’ accounts were reasonable and proper. The firm adopted its regular practice to delegate work to lawyers with appropriate seniority and it sent regular detailed accounts for services to him.
[14] Mr. Nakhdjavan paid each account after it was rendered within a reasonable period of time over the course of some 15 months. The $5000 retainer was applied to pay the May 2007 bill and approximately five payments were made by Mr. Nakhdjavan after that time. I find no evidence of any expression of dissatisfaction by Mr. Nakhdjavan until May 2011 which was almost three years to the date after the payment of Thorsteinssons’ final account. More than one year later, Mr. Nakhdjavan brought this application.
[15] I now turn to the issue of the potential of prejudice to the law firm if an assessment is ordered and whether or not this potential constitutes a factor that the courts may consider that militates against granting an order to refer accounts to an assessment. See Wachmenko v. Conroy Trebb Scott Hurtubise LLP, 2010 ONSC 2687, [2010] O.J. No. 2025 (Sup. Ct.).
[16] In this case there is evidence that there would prejudice to Thorsteinssons if an assessment was ordered at this time. One of the lawyers who worked on the file and who would be required to give evidence is no longer at Thorsteinssons. He now resides in the Cayman Islands. Further, more than five years have elapsed since much of the work was done on Mr. Nakhdjavan’s file. This is a substantial period of time that would make it difficult for any of the lawyers who worked on the file to provide cogent and reliable evidence regarding the work done on the file.
[17] There is no evidence of special circumstances. For this reason I decline to make an order referring Mr. Nakhdjavan’s account for an assessment.
[18] An order shall go as well substituting Thorsteinssons LLP for James W. Murdoch as the Respondent in the style of cause. This order is already recorded on the record of the application.
[19] In all other respects, this application is dismissed. Costs of the application shall go on a partial indemnity scale in favour of the Respondent. If the parties cannot agree on the quantum of these costs, I may be spoken to.
Ellen Macdonald J.
Released: January 9, 2013
COURT FILE NO.: CV-12-460294
DATE: 20130109
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MICHAEL NAKHDJAVAN
Applicant
– and –
JAMES W. MURDOCH
Respondent
REASONS FOR JUDGMENT
Ellen Macdonald J.