CITATION: Petrone v. Magisano, 2017 ONSC 5070
COURT FILE NO.: CV-17-0088
DATE: 2017-08-24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
PETRONE & PARTNERS (formally Petrone Hornak Garofalo Mauro)
L. Cruse, for the Applicant
Applicant
- and -
FRANK MAGISANO AND LORFRANCO CORRIERO
N. Corriero, for the Respondents
Respondent
HEARD: August 24, 2017, at Thunder Bay, Ontario
Mr. Justice W.D. Newton
Decision On Motion
Overview
[1] This is an application for an order that a lawyer’s account dated August 19, 2014 be referred to assessment. After hearing submissions I made the following endorsement:
For reasons to be delivered I order that the Petrone account dated August 19, 2014 be referred to assessment on November 22, 2017 at 9 AM on the following conditions:
Cost as awarded by the assessment officer in the amount of $500.00 payable within 10 days.
Cost of today fixed in the amount of $5,000.00 on a substantial indemnity basis also payable within 10 days.
Failing payment of these costs the respondents may not contest the assessment.
[2] These are my reasons.
The Facts
[3] Mr. Agostino of the Petrone law firm represented Mr. Magisano for claims arising from a car accident in the 2012. These claims included a claim for accident benefits and a claim for damages (the “tort claim”).
[4] In June 2013, the accident benefit claim was settled for $48,000.00 and an account was rendered with respect to the AB claim for $9,600.00 plus HST and disbursements.
[5] Mr. Agostino proceeded with the tort claim. A statement of claim was issued. Necessary information to process the claim was obtained. A settlement proposal was submitted on April 29, 2014.
[6] On May 5, 2014, Ms. Corriero of the Lofranco Corriero law firm sent correspondence to Mr. Agostino advising that she had been retained on the tort claim. It appears that a retainer agreement was executed by Mr. Magisano with this new firm on April 9, 2014 and there is no explanation why Mr. Agostino was not informed of this change in representation earlier.
[7] On May 20, 2014, Ms. Coirriero’s law clerk forwarded an authorization and direction signed by Mr. Magisano directing the release of the file and containing the following acknowledgment:
I acknowledge that I have instructed the said M. Nicole Corriero to protect your account for fees and disbursements incurred on my behalf with respect to the above matter to date out of any settlement or Judgment proceeds.
[8] The file was transferred and on August 19, 2014, Mr. Agostino delivered his account to Ms. Corriero. The account was for fees of $15,480 plus HST and disbursements for a total of $18,579.90.
[9] On October 14, 2014, Ms. Corriero wrote to Mr. Agostino expressing some concerns with the account. She ended her letter with the following sentence:
Kindly clarify your bill accordingly, failing which we will have same assessed. [Emphasis added.]
[10] There is no evidence of any further correspondence between lawyers.
[11] Mr. Agostino deposes that it was brought to his attention that Mr. Magisano’s claim had been settled. An exhibit to his affidavit is a copy of the registrar’s dismissal order dated July 29, 2016. Mr. Agostino wrote the following to Ms. Corriero on December 21, 2016:
It has been brought to my attention that this file has been resolved. I look forward to payment of our statement of account dated August 19, 2014 at your earliest possible opportunity.
[12] He wrote again on January 18, 2017.
[13] Ms. Corriero responded on February 10, 2017 stating among other things:
Please be advised that I have been instructed not to pay this account as it is excessive for the work completed by your office on this matter.
[14] Mr. Agostino immediately responded on February 13, 2017 indicating that he would proceed with the assessment of the account and asking Ms. Corriero to confirm that the full amount of his account was withheld from the settlement proceeds in accordance with the authorization and direction executed by Mr. Magisano on May 16, 2014. The question relating to whether funds were held in trust was not answered.
[15] Mr. Agostino served Mr. Magisano with a requisition for assessment and notice of appointment for assessment of costs on February 21, 2017 for an assessment to be conducted on March 22, 2017.
[16] Neither Mr. Magisano nor Ms. Corriero attended on the assessment. Ms. Corriero prepared a “Response to Assessment of Account” requesting that the registrar dismiss the assessment on the grounds that there was no retainer agreement and that the limitation period to assess the accounts had passed.
[17] The regional hearings officer made the following endorsement:
Mr. Agostino appearing for the law firm; the client was not present and no one appearing for the client’s solicitor Nicole Corriero.
A Response to assessment of Account was filed on March 20, 2017; this is highly irregular. Mr. Agostino was not aware of this document. However, since now I am aware of the reasons an adjournment is requested; the assessment hearing is adjourned tentatively to November 22, 2017 at 9 AM. If an earlier date will become available, probably during the week of September 8 two 2017 both parties will be notified of the exact time.
An order from a Superior Court Justice, on whether or not the assessment will proceed, will have to be obtained before the above dates.
Since Mr. Agostino was not aware of the Response and did not receive that as of today and no one appearing for the opposing party, cost of the day is fixed at $500.
[18] Those costs have not been paid.
Position of the Parties
[19] Ms. Kruse, on behalf of the Petrone firm argues that these facts constitute “special circumstances” allowing a judge to refer the bill for assessment notwithstanding that the bill was delivered more than 12 months ago. She relies upon Guillemette v. Doucet, 2007 ONCA 743 and Lucas v. Puthon, 2013 ONSC 2799.
[20] Ms. Corriero argues that there are no “special circumstances” to extend the time for assessment past 12 months after delivery of the bill, that the bill is obviously inflated and that there is no retainer agreement that specifies how fees would be charged. Ms. Corriero relies upon Tory, Tory, Deslauriers & Binnington v. Concert Productions International Inc., [1985] O.J. No. 624.
The Law
[21] The Solicitors Act, R.S.O. 1990, c. S-15 provides as follows:
4.(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. R.S.O. 1990, c. S.15, s. 4 (1).
[22] In Tory, Tory, Deslauriers & Binnington v. Concert Productions International Inc. the court referred to the Ontario Court of Appeal decision Rooney v. Jasinski, 1952 CanLII 115 (ON CA), [1952] O.R. 869 on the meaning of special circumstances:
The words “special circumstances” in this connection include any circumstance of an exceptional nature affecting either the matter of costs generally or the client’s liability which a judge, in the exercise of judicial discretion, looks upon as testifying taxation.
[23] In Guillemette v. Doucet the Court of Appeal stated:
[35] I appreciate that my interpretation of the interaction of the Limitations Act and the Solicitors Act means that there is no absolute time bar against applications for the assessment of lawyers' accounts. This result may seem inconsistent with the purpose underlying the Limitations Act. However, solicitors' accounts have always been treated differently than other debts and even other professional accounts. A superior court has an inherent jurisdiction to review lawyers' accounts entirely apart from any statutory authority. That inherent jurisdiction was not subject to a time limit. My interpretation of the two Acts preserves that status quo: see Rooney v. Jasinski, 1952 CanLII 115 (ON CA), [1952] O.R. 869, [1952] O.J. No. 426 (C.A.), at p. 875 O.R.; Plazavest Financial Corp. v. National Bank of Canada, supra, at paras. 14-16.
[24] Lucas v. Puthon is similar to the current case in that the triggering event for the payment of the lawyer’s account was a future event, the sale of property, and the account was to be paid out of the sale proceeds. The judge in that case determined that the “limitation period” did not begin to run until the discovery that the property had been sold.
Analysis and Disposition
[25] On October 14, 2014, Ms. Corriero wrote to Mr. Agostino about the account and asked for clarification “failing which will have the same assessed.” She did not receive a response. She did not have the account assessed. She did nothing.
[26] The file was settled in the summer of 2016. Notwithstanding the acknowledgment that she was instructed to protect the account for fees and disbursements out of any settlement or judgment proceeds, Ms. Corriero did nothing. She did not notify Mr. Agostino that the file was resolved. When Mr. Agostino wrote her requesting payment of his account he did not receive a reply for about six weeks at which time Ms. Corriero advised that she was instructed not to pay the account as it was “excessive.” I note that the account included almost $1,000.00 in disbursements relating to medical records and the cost to issue the statement of claim.
[27] Since the respondents did not initiate assessment of the account, Mr. Agostino was entitled to assume that the challenge to his account had been abandoned. The silence surrounding the failure to disclose the settlement is deafening.
[28] When Mr. Agostino learned of the settlement and the refusal to pay his account, he promptly began the assessment process which the client and Ms. Corriero did not attend.
[29] I find that Mr. Agostino did not become aware of the triggering event, the settling of the tort claim, until December 2016 and that he, thereafter, moved promptly to assess. He was not apprised of the settlement despite the acknowledgment and direction. Despite the assertion that the account would be assessed, the respondents took no action to assess the account. I find that these are all “special circumstances” and I am satisfied that, notwithstanding that more than 12 months have elapsed since the account was delivered, an order for assessment is appropriate.
[30] In these circumstances, substantial indemnity costs are warranted. Mr. Agostino should not have been required to bring this application for the order for assessment. As such he should receive substantial indemnity costs. Substantial indemnity costs are also appropriate in this case to denounce and deter the conduct of the respondents in this case. An acknowledgment and direction was not honoured. The fact of settlement was not disclosed. The request for assessment was opposed.
[31] It was acknowledged during argument that no funds were held back from the settlement for Mr. Agostino’s account and therefore I do not order these funds be paid into court. However, as a precondition to the assessment, the costs as ordered by the assessment officer and by me are to be paid within 10 days.
“Original signed by”____
The Hon. Mr. Justice W.D. Newton
Released: August 24, 2017
CITATION: Petrone v. Magisano, 2017 ONSC 5070
COURT FILE NO.: CV-17-0088
DATE: 2017-08-24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
PETRONE & PARTNERS (formally Petrone Hornak Garofalo Mauro)
Applicant
- and -
FRANK MAGISANO AND LORFRANCO CORRIERO
Respondent
DECISION ON MOTION
Newton J.
Released: August 24, 2017
/lvp