COURT FILE AND PARTIES

COURT FILE NO.: FS-12-36086

DATE: 20150930

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MATTHEW WOODS, PAUL WOODS, COLLEEN WOODS, JASON WOODS and JAMES WOODS, Applicants

AND:

ROBERT JOHN HOOPER, Respondent

BEFORE: The Honourable Mr. Justice Robert B. Reid

COUNSEL: C. Rawn, Counsel, for the Applicants

A. Wynperle, Counsel, for the Respondent

HEARD: August 7, 2015

ENDORSEMENT

Introduction:

[1] The respondent, Mr. Hooper was plaintiffs’ counsel in a medical malpractice action which concluded with a jury verdict on March 7, 2008 in favor of the applicants. The applicant, Matthew Woods was the injured plaintiff. The other applicants are members of Mr. Woods’ family who made claims in the action under the Family Law Act, R.S.O. 1990, c. F.3.

[2] There is a dispute about the amount of Mr. Hooper’s account for legal services.

[3] The account was rendered on June 3, 2008 with a reporting letter and was paid on that date out of funds received by Mr. Hooper from the defendant in the litigation.

[4] An appointment for assessment was made dated June 24, 2008.

[5] The assessment hearing scheduled for February 4, 2009 was adjourned to July 22, 2010. The July 22 hearing was adjourned on consent with the expectation that the applicants would seek direction from the court on certain jurisdictional and procedural issues. An application for that purpose was issued on July 20, 2012.

This motion:

[6] Part of the relief sought in the application is an order permitting the entire solicitor’s account dated June 3, 2008 to be assessed on behalf of all the applicants. Alternatively, the application seeks an order that the Woods family members be added as “clients” in the assessment proceeding.

[7] Mr. Hooper brings this motion seeking to suspend any interest owing to the applicants and for a declaration that the Woods family members have breached the limitation period for bringing an assessment under the Solicitors Act, R.S.O. 1990, c. S.15.

[8] In opposing the motion, the Woods family in effect seek the specific orders claimed in the application to which I have referred.

Factual background:

[9] The June 3, 2008 account from Mr. Hooper indicated that it was “in account with” Matthew Woods, Colleen Woods, Paul Woods, Jason Woods and James Woods. The fee was shown as a total. The accompanying covering letter named each of the five clients and broke the judgment and costs into separate amounts for each of them. According to that breakdown, approximately 13% of the fees were charged to the FLA clients.

[10] On June 24, 2008, Matthew Woods attended with his father, Paul Woods, at the court registrar’s office and requested an assessment of Mr. Hooper’s account. An appointment for assessment was made that day in the name of Matthew C. Woods.

[11] In early September, 2008, an attendance was required so that the assessment officer could fix a date for the assessment. Ms. Kelly Buffett, an associate lawyer from Mr. Hooper’s firm, attended as did Paul Woods and Matthew Woods. The evidence of Mr. Hooper, which is hearsay on the point, is that the assessment officer explained that since only Matthew Woods’ name appeared on the assessment, the assessment would involve him alone.

[12] On September 10, 2008, Mr. Hooper met with the Woods family and confirmed that the outstanding assessment was as to Matthew Woods alone. That position was confirmed further in an email dated September 12, 2008 from Mr. Hooper to Paul Woods.

[13] No attempt was made to amend the appointment for assessment to include the Woods family members.

[14] Matthew Woods has deposed that his expectation when securing the appointment for assessment was that the entire account would be assessed including that which related to his family members. He and Paul Woods, Colleen Woods, Jason Woods and James Woods have deposed that all of the family members named in the June 3, 2008 account expected to receive their proportional share of any benefit resulting from a reduction in the account through assessment.

[15] The applicants retained legal counsel to assist them in the assessment proceeding on January 7, 2009.

[16] I have been provided with some details of a mediation session which took place on June 22, 2010. Although typically a mediation is conducted on a without prejudice basis, both parties have deposed to and relied on the details of the mediation.

[17] At the mediation, counsel for Mr. Hooper confirmed the position that the assessment only involved Matthew Woods.

[18] On July 22, 2010, counsel for Mr. Hooper wrote to the assessment officer confirming the adjournment of the hearing and that on consent, the parties “wish to proceed by way of an application to the Superior Court”. He added that the application is expected to include all the FLA claimants and that “the Plaintiffs will take no position with respect to any limitation issue”. He continued: “In any responding material or viva voce evidence, Mr. Hooper will be allowed to rely upon all the potential remedies available to him through the law.” In his affidavit, Mr. Hooper explains that the offer to forego any limitation issues was based on the assessment being conducted by the Superior Court.

Issue #1: Will the FLA claimants be included in the assessment process?

[19] It is clear that the Woods family members other than Matthew Woods are not named in the appointment for assessment. It is also clear that they were advised on a number of occasions that they would be foreclosed from the assessment proceeding accordingly.

[20] Section 3 of the Solicitors Act provides that an order may be obtained on requisition for the assessment of a bill already delivered within one month of its delivery. Section 4(1) of the Act appears to extend the time for referral to an assessment to twelve months after the bill was delivered. That twelve month extension can be increased under special circumstances.

[21] The Limitations Act, 2002, S.O. 2002, c. 24 provides in section 4 for a basic limitation period of two years. The Ontario Court of Appeal held in Guillemette v. Doucet, 2007 ONCA 743, 88 O.R. (3d) 90, at para 33 that the basic two-year limitation period set out in the Limitations Act, 2002 supersedes the limitations set out in the Solicitors Act with the result that a client has two years to commence an assessment.

[22] On the facts of this case, Matthew Woods and his family members had two years from June 3, 2008 to request an assessment. Only Matthew Woods did so.

[23] Matthew Woods and Paul Woods were given notice by the assessment officer and by Mr. Hooper about the deficiency in the original assessment request and the Woods family retained legal counsel to assist them with the assessment well within the two-year window. I note that there is no denial in the affidavit material filed by the applicants that they received specific advice to the effect that the assessment as framed would apply to Matthew Woods only.

[24] The family members who were individually named plaintiffs in the preceding litigation and who were individually identified in the solicitor’s account are not included by implication in the assessment process begun by Matthew Woods.

[25] The question then becomes whether or not “special circumstances” exist to override the two-year limitation. If so, presumably the FLA plaintiffs could be added to the assessment proceeding.

[26] The applicants submit that there are four bases for this court to find special circumstances:

a. The June 3, 2008 account was not individualized as required by the Law Society of Upper Canada’s Rules of Professional Conduct;

b. The inclusion by Mr. Hooper of funds received from the defendant as costs and a percentage of damages is an illegal method of calculating an account;

c. The respondent agreed not to take a position regarding any limitation issue; and

d. As a matter of public policy and in the interest of justice, the court should intervene to protect the clients’ rights to a fair procedure.

(a) Was the account format improper?

[27] The applicants allege that because there was no account given in compliance with the Law Society’s rules, there was never an account delivered to the applicants within the meaning of the Solicitors Act and as such no limitation period was ever triggered.

[28] As noted, the account directed to Matthew Woods and the FLA plaintiffs was formatted globally and inclusive of all services. It was accompanied by a covering letter that broke down the judgment and the fees charged for each client. Disbursements were itemized on a trust statement and in the account itself.

[29] Rule 3 of the Rules of Professional Conduct provides in subsection 6-4 that: “where a lawyer is acting for two or more clients in the same matter, the lawyer shall divide the fees and disbursements equitably between them, unless there was an agreement by the clients otherwise.” I am satisfied that the covering letter was a clear communication to the applicants of the amount of fees charged to each of them, and that there appeared to be an equitable division, based on the percentage of the total damages that each received.

[30] I find no breach of Rule 3, subsection 6-3 of the Rules of Professional Conduct which requires a separation of the amount charged as between fees and disbursements. The disbursement total was $92,147.54. The defendants in the litigation paid $73,474.05. The difference in part was covered by interest paid by the defendants on the disbursements totaling $13,162.99 leaving a balance of $5,510.50. Mr. Hooper reduced his account by that amount so that no disbursements were paid from the damage settlement.

[31] Under those circumstances, the lack of a specific allocation of disbursements to the individual clients is of no consequence and certainly does not rise to the level of special circumstances which could abrogate the application of the limitation period.

(b) Was the account calculated illegally?

[32] On behalf of the Woods family, it was submitted that the account was calculated illegally. The solicitor charged 15% of the damage total and added the amount of the party and party costs received from the defendants. There is a dispute as between the parties as to whether an agreement or proper retainer existed. There was no pre-authorization of the arrangement by the court.

[33] The issue about the propriety of charging a fee based on party and party costs plus a percentage of the damage award is a factual and legal matter that is central to the assessment, and it is raised squarely in the application. However, it would be inappropriate to allow the FLA clients to bootstrap from the presence of that central issue, which has yet to be determined, to an inclusion of their claims in the assessment process. By that logic, special circumstances would exist whenever there is a potentially legitimate issue to be argued in the assessment. In my view, the possible merits of an assessment do not trump the requirements of the Limitations Act, 2002.

(c) Did Mr. Hooper agree to waive the limitations issue?

[34] The Woods family submits that based on the July 22, 2010 letter from counsel for the respondent, Mr. Hooper is now precluded from relying on a limitations defence.

[35] The terms of the letter, to which I have already referred, are ambiguous. The letter provides that “the plaintiffs” will take no position with respect to any limitation issue. Who are the plaintiffs? Only the Woods family fit that description. Even if the reference is to Mr. Hooper, the succeeding sentence indicates that Mr. Hooper will be allowed to rely on all the potential remedies available to him through the law which, presumably, includes any limitation defence.

[36] I conclude that the alleged waiver is not sufficiently clear to constitute special circumstances and thus to preclude consideration of the limitations issue in this motion.

(d) Do public policy and procedural fairness constitute special circumstances?

[37] The FLA claimants submit that the interest of justice and public confidence in the administration of justice require that they be permitted to participate in the assessment process. They argue that the administration of justice would be brought into disrepute if they are prevented from proceeding to have their accounts assessed.

[38] I agree that under certain circumstances, technical considerations should not prevent clients from having their accounts assessed. Some leeway may be necessary, especially for self-represented parties or those who, despite their best efforts, fail to comply with proper procedures.

[39] In this case however, Paul Woods (one of the FLA clients) was advised by the assessment officer in the presence of Matthew Woods that the assessment would be only as to Matthew Woods. The same advice was given by Mr. Hooper verbally to the FLA clients and subsequently confirmed by him with Paul Woods in writing. The applicants do not deny receiving that information. They retained counsel approximately five months before the expiration of the two-year limitation.

[40] There is no explanation why the FLA clients did not move to amend the assessment proceeding to add their names.

[41] It seems unreasonable to me for the FLA clients to suggest that the administration of justice could be brought into disrepute by refusing to include them in the assessment. It is they who have taken no steps within a reasonable time to protect their own interests despite ample opportunity and advice. It cannot be said that Mr. Hooper has frustrated their attempts and in fact he appears to have been fair in highlighting the issue as early as three months after the account was delivered.

[42] Analogizing to the analysis of s. 24(2) of the Charter mandated by the Supreme Court of Canada in R. v. Grant, 2009 SCC 32, [2009] S.C.J. No. 32, when looking at the question of whether the administration of justice is brought into disrepute, it is necessary to use a long-term, forward-looking societal perspective, rather than one that is individually focussed. I do not think that a reasonable person, aware of all the relevant circumstances, would conclude that a failure to add the FLA clients to the assessment would bring the administration of justice into disrepute.

[43] The applicants submit that since the bulk of the account is proceeding to an assessment and since the respondent has the same case to meet whether there is one party to the assessment or five, it would be inequitable to exclude the FLA parties from the assessment. In effect, the applicants suggest that the limitation period should be ignored because Matthew Woods’ request for assessment was done in a timely way. In my view, that submission does not have merit since it negates the application of the Limitations Act, 2002, basically giving a “free pass” simply because another party has proceeded properly.

Issue # 2: Should interest on any overpayment be suspended?

[44] Mr. Hooper seeks an order that the interest which might run on any overpayment ultimately determined in the assessment be disallowed. Section 33(4) of the Solicitors Act permits such determination on assessment by an assessment officer where it is “just in the circumstances”.

[45] I see no reason to interfere with the discretion of the assessment officer in that regard. Any facts that might constitute the basis for a denial of interest could be argued at the ultimate assessment hearing. In the event that a final determination of the issue is dealt with in this court, the matter of interest would be an issue for the court at that time.

Conclusion:

[46] The FLA clients were not named in the appointment for assessment. The expiry date of the applicable limitation period prior to which the original appointment could have been amended or a fresh appointment requested was on or about June 3, 2010. No such amendment or new request was made.

[47] For the reasons indicated above, I conclude that the applicants have not satisfied their onus of establishing that special circumstances exist to allow the court to overlook the expiry of the limitation period. As a result, the relief requested in paragraphs two through five of the notice of motion is granted and the relief requested in paragraph 1(a) and 1(b) of the application is denied.

[48] Also for the reasons indicated above, I am not satisfied that there should be an order for the suspension of any interest owing to the applicants by the respondent, reserving that matter to the assessment officer or judge making a final determination of the solicitor’s account after assessment. Therefore the relief claimed in paragraph one of the notice of motion is denied.

Costs:

[49] The parties have indicated to me that there are other matters upon which the court will be asked to rule prior to the actual assessment of the account. That being the case, I am inclined to reserve a decision on costs of this motion to such time as any further motions and the application itself have been heard so that costs may be assessed globally. If the parties agree, they are to confirm in writing and I will issue an endorsement accordingly.

[50] If the parties wish to make submissions as to costs, they must do so according to the following schedule:

a. The respondent (moving party) is to serve and file written costs submissions and a bill of costs on or before October 16, 2015.

b. The applicants (responding parties) are to serve and file written costs submissions and a bill of costs on or before October 30, 2015.

c. The respondent (moving party) is to serve and file any responding submissions on or before November 6, 2015.

[51] If no submissions are received by November 6, 2015, I will assume that costs have been resolved.

Reid J.

Date: September 30, 2015