SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-14-00505206

DATE: 2015-09-01

RE: Aida Tammer, Plaintiff

– AND –

Levitt & Grosman LLP, Defendant

BEFORE: Justice E.M. Morgan

COUNSEL:
Edwin Upenieks and Sahar Cadili, for the Plaintiff

Sunira Chaudhri, for the Defendant

HEARD: August 31, 2015

ENDORSEMENT

[1] The Defendant is a law firm and the Plaintiff is the firm’s former client. The Plaintiff has obtained an Order of Assessment, which the registrar issued on April 29, 2014. The Defendant seeks to set that Order aside on the basis that the Plaintiff was out of time and the registrar lacked jurisdiction to issue it.

[2] The Plaintiff resists the Defendant’s motion, and cross-moves for production of the Defendant’s time dockets and its trust and client ledgers relating to the Plaintiff’s file. The Plaintiff also requests that, in the event that I find she was out of time in requisitioning the Order of Assessment, I find that special circumstances exist which would permit an Order of Assessment to issue under s. 11 of the Solicitors Act, RSO 1990, c 15, notwithstanding that the account has been paid.

[3] In 2009, the Plaintiff retained Howard Levitt at the Lang Michener law firm to represent her in her employment claim against the CIBC. When Mr. Levitt left that firm to join the Defendant, the Plaintiff remained with him and continued the retainer at the Defendant firm. The retainer agreement authorized the Defendant to, inter alia, receive settlement and other funds into its trust account, and to apply those funds toward payment of its fees and other disbursements.

[4] On April 17, 2013, the Defendant sent a letter to opposing counsel confirming the settlement they had negotiated on the Plaintiff’s behalf. As part of that settlement, the Defendant was to advise the opposing side of the legal fees the Plaintiff had incurred pursuing her claim. The April 17, 2013 letter indicates that the Defendant enclosed a copy of its final invoice in respect of this file. That letter also indicates that it was “cc’d” to the Plaintiff.

[5] There is no evidence, however, that the “cc” copy was ever sent to the Plaintiff. The letter purports to have been sent by fax, but the Defendant has produced no fax cover or confirmation sheet. Counsel for the Defendant advises that her firm usually sent invoices to the Plaintiff by regular mail, but there is also no covering letter suggesting that the invoice was mailed to the Plaintiff. Likewise, no employee of the Defendant has sworn that he or she actually addressed the envelope or physically put the invoice in the mail.

[6] The Plaintiff swears that she never received an invoice from the Defendant in April 2013. She explains in detail in her affidavit precisely what she received in respect of the settlement, and the invoice from her counsel is not among the documents that were delivered to her. She did not recoil from this evidence in cross-examination. Her evidence in this respect stands uncontroverted.

[7] In fact, several weeks later, on May 14, 2013, the Plaintiff picked up her cheque for the settlement funds (minus the Defendant’s fees and disbursements) from the Defendant’s office. That cheque was accompanied by a letter to the Plaintiff from the Defendant stating that its invoice would be sent to her shortly. This correspondence makes it clear that the Plaintiff had not received an invoice in April 2013.

[8] Despite this obvious fact, the Defendant has maintained that the Plaintiff is out of time because she did not requisition an Order for Assessment within 30 days of having supposedly received the invoice on April 17, 2013. A year later, on May 5, 2014, the Plaintiff requested a copy of her invoice from the Defendant. Mr. Levitt responded to this request by email, setting out his position that she had already received the invoice when she received the funds:

I am sorry but we sent the account and interim accounts at the time. It went with the cheque.

[9] That statement was patently wrong.

[10] The Defendant has produced in its motion record a copy of the detailed statement of account that it says went out to the client. It is dated July 11, 2013. In other words, it was created a full three months after the date that Mr. Levitt alleged the Plaintiff received it. That, of course, is impossible.

[11] Moreover, there is no evidence that the July 11, 2013 itself statement was sent to the Plaintiff when it was created. Again, there is no cover letter or any other confirmation that it was transmitted by any means to the Plaintiff. And again, the Plaintiff swears that she never received it, and there is no reason not to believe her.

[12] I understand that there are occasions on which clients have a self-interest in asserting that they did not receive an invoice from a law firm: see Fiset v Falconer, [2005] OJ No 4023, at para 48 (SCJ). However, there is nothing to suggest that is the case here. The Plaintiff was very diligent during the course of the litigation in carefully reviewing the interim invoices she received, and there is no reason to think that she would not do the same for the final invoice. The Defendant had deducted the amount of its invoice from the Plaintiff’s settlement funds, so she was already out of pocket for the legal fees; if she were inclined to dispute the invoice, it was to her advantage to expedite the matter rather than to delay it.

[13] In April 2014, the Plaintiff called the Defendant firm and asked for a copy of her invoice. She explained that it was tax season, and she needed a copy in order to deduct the fees from her income tax. On April 29, 2014, Mr. Levitt’s assistant wrote an email to Mr. Levitt saying that the Plaintiff and called and wanted the Defendant to “resend” the invoice dated July 11, 2013.

[14] Counsel for the Defendant stresses the word “resend”, submitting that this establishes that the Plaintiff had already received the invoice once before. With respect, however, it establishes no such thing.

[15] In the first place, “resend” is Mr. Levitt’s assistant’s word, not the Plaintiff’s. Moreover, the word and, indeed, the entire conversation, suggests that while the Defendant may think it sent the invoice, the Plaintiff did not receive it. If she already had it, she presumably would not need a new copy of it. Counsel for the Defendant suggests that she may have had the invoice but lost it, and thereby needed it resent. That is possible but speculative. As indicated, the Plaintiff swears that she never received it, and the Defendant has nothing to counter that sworn evidence.

[16] The Defendant sent a copy of the July 11, 2013 invoice to the Plaintiff on April 29, 2014. It contained a detailed description of the work done but, unlike its previous interim accounts, did not provide a breakdown of the time spent on each task. The Plaintiff immediately requisitioned an Order of Assessment.

[17] Section 3(b) of the Solicitors Act provides that an Order of Assessment may be issued by the registrar within a month of the delivery of a bill by a law firm. I find that the Plaintiff was within this statutory time period. The evidence establishes that she did not receive the final account until April 2014, not April, May, or July 2013, as the Defendant asserts.

[18] All of the conditions in s. 3 of the Solicitors’ Act have been satisfied. The 30 day deadline for obtaining an Order of Assessment has been met, and the retainer itself is not disputed – that was confirmed for me by counsel for the Plaintiff, and is clear from the nature of the Plaintiff’s complaint about the Defendant’s invoice, which essentially submits that the fees are too high. This court has on previous occasions held that, “…the mere fact that a solicitor’s account is higher than what was expected does not constitute special circumstances”: Dekeyser Estate v Curran, 2015 ONSC 381, para 15, citing Tory v Concert, 1985 CarswellOnt 655, at para 9.

[19] It should be noted that the Plaintiff has paid the Defendant’s bill. As indicated, the Defendant deducted its own fees before forwarding the settlement funds from its trust account to the Plaintiff in May 2013. This payment, however, does not prevent the matter from going before an Assessment Officer. Section 11 of the Solicitors Act provides:

11. 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.

[20] The identification of “special circumstances” for the purposes of this section necessitates a fact-specific inquiry: Echo Energy Canada Inc. v Lenczner Slaght Royce Smith Griffin LLP, 2010 ONCA 709, at para 32.

[21] In Glanc v O’Donohue & O’Donohue, 2008 ONCA 395, at para 45, the Court of Appeal determined that it is a special circumstance where the client was not told that a premium was being charged. That is the case here. The itemized invoice of July 11, 2013 does not contain the time allocation for each entry like the previous bills did. This obscures the fact that there is a premium attached to the fees charged in this bill.

[22] The premium charged by the Defendant may or may not be justified. The settlement achieved by the Defendant appears to have been advantageous to the Plaintiff, but the parties dispute exactly how advantageous the settlement should have been to warrant a premium on the bill.

[23] In any case, the obscuring of the premium, combined with the Defendant’s refusal to produce copies of its dockets and its trust and client ledgers, constitutes the kind of special circumstance that section 11 addresses. It is one thing to charge a premium for success where this billing is properly disclosed; it is quite another thing to hide the fact that a premium has been charged. It will be for the Assessment Officer to determine whether the Defendant’s bill is or is not too high.

[24] On August 25, 2014, Assessment Officer G. Argyropoulos issued a direction to the Defendant to produce “all time dockets; trust ledger; client ledger”. I gather that in recent days the Defendant has finally produced some, but not all, of its time dockets. The fact that the Defendant’s bill dated July 11, 2013 did not provide a breakdown of the time spent on this file, combined with the Defendant’s reluctance to disclose its time dockets, makes this a case where special circumstances apply.

[25] The matter shall proceed to assessment. The Defendant shall forthwith produce to the Plaintiff all of the time dockets related to its representation of her that it has not produced to date. The Defendant shall also forthwith produce to the Plaintiff the relevant trust and client ledgers.

[26] Turning to the question of costs, counsel for the Plaintiff has submitted two Costs Outlines. One outline is for the motion for production and the other is for the Plaintiff’s response to the Defendant’s motion to set aside the Order of Assessment. On a partial indemnity basis, the Plaintiff seeks the all-inclusive amounts of $16,000 for the former motion and $12,000 for the latter response.

[27] Counsel for the Plaintiff submits that the materials for the two motions are in large part repetitive of each other. She also contends that the motion for production was premature, since it is only relevant if the Defendant is unsuccessful in its motion to set aside the Order of Assessment as that would dispense with the need for production altogether.

[28] The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c)). Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 OR (3d) 291 (Ont CA), at paras 26, 37.

[29] As I read the materials filed, the motion for production is not overly repetitive of the response to the motion to set aside. The legal issues are different, which means that the factum and legal research supporting the factum is distinct in one motion from the other. There was also additional evidence filed to support the motion for production.

[30] It makes no sense to say that the motion for production should have waited until the Defendant’s motion to set aside the Order of Assessment was resolved. In essence, the production motion sought to reconfirm in the form of a court order the direction already issued by Argyropoulos A.O. This direction should have been fully complied with by now. The Plaintiff’s need to bring its motion for production was caused by the Defendant’s failure to properly respond to the Assessment Officer’s direction.

[31] The amounts sought by the Plaintiff appear reasonable to me. The Defendant law firm has fought hard against its client’s right to assessment their account. The firm is entitled to its day in court on these issues; but at the same time, it is well aware of the cost consequences that its non-success in these motions will engender.

[32] The Defendant shall pay the Plaintiff a total of $28,000 in costs for the two motions, inclusive of all disbursements and HST.

Morgan J.

Date: September 1, 2015