Starkman Barristers v. Cardillo, 2017 ONSC 5530

CITATION: Starkman Barristers v. Cardillo, 2017 ONSC 5530

COURT FILE NO.: CV-15-123859

DATE: 20170921

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Starkman Barristers

Applicant

– and –

John Cardillo, Neil Proctor, Medcap Real Estate Holdings Inc. and National Racquet Club Inc.

Respondents

Paul H. Starkman for the Applicant

F. Scott Turton for the Respondents

HEARD: August 28, 2017

ruling on motionS to oppose confirmation of assessment

Boswell j.

[1] The Applicant is a lawyer who acted for the respondents in a number of litigation-related matters. A divergence arose between the amounts billed by the lawyer for services rendered and the amounts paid by the clients for those same services. The lawyer arranged for his accounts to be taxed by an Assessment Officer. A decision was rendered on March 14, 2017. Both sides moved before this court to oppose confirmation of the assessment order.

[2] The clients assert that the assessment officer made some twenty-six legal errors, which they organize into four broad categories:

(a) The application of wrong legal principles;

(b) The misapprehension of material facts;

(c) Acting upon facts not in evidence; and

(d) Procedural errors.

[3] The lawyer submits that the clients’ motion should be dismissed. The only error made by the Assessment Offer, in the lawyer’s view, is his failure to assess costs in favour of the lawyer.

[4] While the written decision of the assessment officer is not error-free, in my view the intervention of this court is not warranted, save with respect to the issue of costs. For the reasons that follow, the clients’ motion is dismissed. The lawyer’s motion is granted insofar as it is appropriate to permit the parties to make submissions on the issue of costs.

A BRIEF HISTORY OF BILLED TIME

[5] Starkman Barristers presently consists of one barrister: Mr. Paul Starkman. He is a civil litigator with more than 23 years of experience.

[6] Mr. Starkman was hired by the respondents in January 2015 to assist them in responding to an oppression remedy application initiated in the commercial court in Toronto. Millions of dollars were in issue. Retainer agreements were executed that provided for Mr. Starkman to be paid at an hourly rate of $525 and his law clerk to be paid at $170 per hour.

[7] The initial file quickly turned into five files. In addition to the oppression remedy application, there was a claim based on the tort of intrusion on seclusion, a defamation action, an issue regarding the recovery of some fitness equipment shipped to Barbados, and the defence of a relatively straightforward debt collection case.

[8] Mr. Cardillo was the principal client. He was in the midst of a difficult divorce proceeding. He and his wife had been engaged in business together at some level and she was the instigator of the oppression remedy proceeding.

[9] Mr. Starkman prepared, or helped prepare, lengthy and detailed affidavits in response to the application. He attended on a number of procedural appointments in the commercial court and he attended on and conducted cross-examinations on the applicant’s affidavit material.

[10] The applicant in the oppression case - Mr. Cardillo’s former spouse - was represented by Bennett Jones LLP. Somehow they apparently came into possession of a large volume of email correspondences involving Mr. Cardillo and third parties, including solicitors he had engaged on other matters. Mr. Cardillo instructed Mr. Starkman to commence a tort action against Bennett Jones LLP, as well as his former spouse, alleging the tort of intrusion on seclusion. Mr. Starkman was further instructed to bring a motion to remove Bennett Jones LLP as counsel of record in the oppression remedy proceeding.

[11] The tort action proceeded through the pleadings stage, then Bennett Jones LLP brought a motion for summary judgment.

[12] While these two more significant proceedings were ongoing, Mr. Starkman assisted Mr. Cardillo with a number of other, more minor issues, as I have noted above.

[13] Mr. Starkman billed a total of $108,265.92 in relation to all of the matters he was working on. A total of $57,125.71 was paid on account, leaving a balance of $51,140.21.

[14] The clients made a number of further payments against the accounts by way of cheques that were not honoured due to insufficient funds. A larger, replacement cheque was also returned for insufficient funds. A series of post-dated cheques were provided but they proved not to be negotiable as a stop-payment order was placed on them by the clients.

[15] By August 2015 the relationship between the lawyer and the clients had irretrievably broken down. Mr. Starkman successfully obtained orders removing himself from the record on the proceedings he was engaged in for the clients. At the time, the oppression remedy application had yet to be argued. The same was true for the summary judgment motion in the tort action.

[16] In due course Mr. Starkman commenced an assessment of his accounts. An initial pre-assessment hearing took place before Assessment Officer K. Howe on October 6, 2015. A hearing date of March 8, 2016 was fixed for the assessment. The Assessment Officer endorsed the following that day:

Client undertakes to provide disclosure by January 15, 2016. Solicitor undertakes to respond by February 15, 2016.

[17] The disclosure referenced in the endorsement of K. Howe meant the identification by the clients of their specific objections to the accounts as rendered.

[18] The clients did not comply with the endorsement of October 6, 2016.

[19] On March 8, 2016 the clients raised objections about the scope of the assessment. The hearing was put over pending a motion to this court for directions. On June 23, 2016, McCarthy J. ordered that all of Mr. Starkman’s accounts, paid and unpaid, were to be referred for assessment.

[20] The assessment was rescheduled to September 13, 2016. On that date the hearing was adjourned on consent to December 20, 2016. Assessment Officer R. Bruce Brough made the following endorsement on September 13, 2016:

Client’s solicitor undertakes to disclose particulars of objections and or issues with the bills no later than November 2, 2016 and the solicitor undertakes to respond no later than December 1, 2016.

[21] In response to the September 13 endorsement, counsel to the clients provided Mr. Starkman with a one-page letter setting out the clients’ general complaints. There were no specific objections raised to any particular entries on the accounts – whether fees or disbursements. Instead, the objections were broad in nature, such as “the time expended was excessive and unwarranted time was spent on tasks”; “the matters were not complex, however were made more complex than necessary by you”; “you did not show any significant degree of skill or competency based on your experience”; and “no results were achieved”.

[22] The assessment proceeded before Assessment Officer Brough over two days: December 20, 2016 and January 11, 2017. Reasons for Decision were released on March 14, 2017. The lawyer’s accounts, rendered at $108,265.92 were assessed at $93,923.67, against which $57,125.71 had been paid, leaving an assessed balance owing of $36,797.96. The parties were not invited to make submissions on costs. Instead, no costs were ordered.

[23] The clients moved on March 24, 2017 for an order opposing confirmation of the assessment report. Mr. Starkman responded with his own motion opposing confirmation.

THE STANDARD OF REVIEW

[24] The Assessment Officer issued his certificate of assessment on March 14, 2017 in accordance with Rule 58.09 of the Rules of Civil Procedure. The Rules provide for a process by which an unhappy party may file objections with the Assessment Officer, essentially asking that she or he reconsider her or his decision and amend the certificate if deemed appropriate: see Rule 58.10. In this instance the respondents elected not to file objections with the assessment officer. Instead, they proceeded to bring a motion to oppose confirmation of the assessor’s certificate.

[25] A motion to oppose confirmation of an assessment officer’s certificate is properly made to this court under s. 6(9) of the Solicitor’s Act, R.S.O. 1990, c. S.15. Where objections are eschewed and a motion brought directly to oppose confirmation, the motion is in the nature of an appeal and is limited to errors relating to jurisdiction, procedural fairness or to patent misapprehensions of evidence. In other words, the hearing in this court is not about specific items on the lawyer’s bills(s): see RZCD Law Firm LLP v. Williams, [2016] O.J. No. 1690 (Div. Ct.).

[26] The Court of Appeal described the applicable standard of review in Rabbani v. The Regional Municipality of Niagara, 2012 ONCA 280 as follows, at para. 6:

The standard of review on an appeal from an assessment officer's decision is well established. The order below is discretionary. The hearing is an appeal, not an opportunity for the reviewing court to rehear the assessment and come to its own conclusion as to what is reasonable, absent an error in law, misapprehension of the evidence, palpable and overriding error on a factual matter, or an assessment amount that is so unreasonable as to constitute an error in principle.

[27] An Assessment Officer’s ruling is entitled to considerable deference.

THE PARTIES’ POSITIONS

[28] The clients asserted, in their motion to oppose confirmation, that the Assessment Officer erred in principle, exceeded his jurisdiction and misapprehended the evidence for the following reasons:

(a) He reversed the well-settled onus that requires the lawyer to prove his accounts;

(b) He erred in principle in applying the rules of evidence and, in the result, failed to understand counsel’s closing submissions;

(c) Allowed accounts that were patently unreasonable; and,

(d) Engaged in discussions with the lawyer in the absence of the clients and their counsel.

[29] In oral submissions, the clients’ counsel modified their position, arguing that the Assessment Officer made the following broad errors:

(a) He reversed the onus of proof, requiring that the clients establish why the accounts ought to be reduced;

(b) He misapprehended the facts;

(c) He relied on evidence not properly before him; and,

(d) He misconstrued an undertaking given by counsel as an order.

[30] The issue with respect to the Assessment Officer engaging in discussion with the lawyer in the absence of the clients and their counsel was not pursued.

[31] The clients’ counsel proceeded to painstakingly review the Assessment Officer’s ruling and pointed out what he counted as twenty-six errors (twenty-seven by my count). I have listed those purported errors on Appendix “A”. These individual errors are said to support the broad categories of error identified in oral argument.

[32] The clients urge the court to find that the Assessment Officer’s reasons are so flawed that they should be set aside and a new assessment ordered.

[33] Mr. Starkman objected to the clients raising issues not identified in their motion to oppose confirmation, in particular, a complaint about the Assessment Officer failing to mark exhibits during the hearing and the suggestion that he misconstrued counsel’s undertakings as court orders.

[34] Mr. Starkman otherwise took the position that the clients’ complaints are without merit.

[35] When the Assessment Officer’s decision was rendered, Mr. Starkman objected to the way in which costs were dealt with, in the absence of submissions. The Assessment Officer refused to change his position. Mr. Starkman asserts that he made an offer to settle that he bettered at the assessment. In the result, he argues, he should have been entitled to costs under Rule 49.

ANALYSIS

[36] I will address the broad errors raised by the clients in turn.

(1) Did the Assessment Officer reverse the onus?

[37] The short answer to this question is no. In my view the Assessment Officer did not misapprehend the onus nor misapply it.

[38] It is well-settled that a solicitor has the burden of proof on an assessment: Speciale Law Professional Corp. v. Shrader Canada Ltd., 2017 ONSC 3613 (Div. Ct.) at para. 42. The solicitor must establish that his or her fees are reasonable in view of a number of factors, often referred to as the Cohen and Kealey factors, which is a nod to the Court of Appeal case in which they were enumerated: Cohen v. Kealey & Blaney, 1995 CanLII 7155 (ON SC), [1995] O.J. No. 160. Those factors include:

• The time expended by the solicitor;

• The legal complexity of the matters dealt with;

• The degree of responsibility assumed by the solicitor;

• The monetary value of the matters in issue;

• The importance of the matters to the client;

• The degree of skill and competence demonstrated by the solicitor;

• The results achieved;

• The ability of the client to pay; and,

• The client's expectation as to the amount of the fee.

[39] It appears to me from a review of the entirety of the record, that the clients’ concerns about the shifting of the onus of proof have their root in two pre-trial endorsements made by Assessment Officers, compelling the clients to provide disclosure of their specific objections to the lawyer’s accounts.

[40] A real bone of contention throughout the assessment hearing and now at the appeal stage, is the nature of the disclosure orders made on October 6, 2015 and September 13, 2016 and what consequences, if any, flow from the clients’ failure to comply with them.

[41] I will repeat the endorsements here for ease of reference:

Client undertakes to provide disclosure by January 15, 2016. Solicitor undertakes to respond by February 15, 2016.

Client’s solicitor undertakes to disclose particulars of objections and or issues with the bills no later than November 2, 2016 and the solicitor undertakes to respond no later than December 1, 2016.

[42] The clients’ counsel emphasized that these endorsements were not court orders, but merely solicitors’ undertakings. I am of the view that the distinction is meaningless for the purposes of this proceeding.

[43] We are in an age of more active court management of time and resources. We are daily fighting against any complacencies in the administration of justice that contribute to inefficiencies and delays. The Supreme Court had mandated a more active judicial role in the management of cases in both the civil and criminal contexts in such recent decisions as Hryniak v. Mauldin, 2014 SCC 7 and R. v. Jordan, 2016 SCC 27.

[44] There can be no question, in my view, that the Assessment Officers who made the relevant endorsements, had the authority to do so and had the jurisdiction to manage the proceedings before them.

[45] It is clear that the intent behind the endorsements was to facilitate a focused hearing in an effort to increase efficiency and reduce the amount of time needed to conduct the hearing. It was fair to assume that the clients were not objecting to every single thing done by Mr. Starkman. It was, therefore, a useful exercise to attempt to narrow the issues and focus on just exactly what the real issues were. It should be remembered that there was no evidence that the clients complained about Mr. Starkman’s services at any time. It is clear from the record, and from Mr. Cardillo’s testimony, that he had personal health issues and financial stresses that resulted in an inability to keep Mr. Starkman’s accounts up to date. The reality is, the relationship broke down because the clients started writing bad cheques. In this context, it was more than fair to engage both sides in a process of identifying and narrowing issues.

[46] The clients did not buy into the court’s attempt to narrow the issues and focus the hearing. They made no effort to comply with the first endorsement and only a superficial effort to comply with the second.

[47] The non-compliance issue arose on the first day of the assessment hearing. The following exchange took place between the clients’ counsel and the Assessment Officer in relation to the September 13, 2016 endorsement:

MR. RADNOFF: Well, except that the law is it’s the onus on the lawyers to prove the account and I’ve provided – it didn’t say that I have to go through every entry.

THE COURT: Well, the onus is – I understand what the Solicitors Act says, and the onus is on the lawyer to prepare a defence, however, ultimately…

MR. STARKMAN: I’d say there was an order of the court that had to be complied with.

THE COURT: There was an order on September the 13^th which says, “undertakes to disclose particulars of objections, of objection and or issues with the bill.” And in essence, quite frankly, with one or two minor exceptions, this reads very much like a sheet that I hand out at the beginning of a pre-assessment that says here’s the nine factors of Cohen v. Kealey and Blaney. I accept that it says, “you didn’t do”, and then lists the nine factors. I would suggest that’s not what the intention of my endorsement was and I would have thought that would have been fairly clear. At the same point in time, you know, there is an onus on the solicitor to prove their bill. I agree. Equally so, as undoubtedly you are aware sir, that in court regardless of which side you are on, if you make a statement you are expected to prove it or at least sustain it in some way. So I’m, you know, in light of the fact that you were specifically told that the expectation was that the, you know, the court was looking for a very specific description of what the problems were with the bills. I’m finding this, to say the least, vague. So based on that I can only conclude that your expectation was, you know, a significant number of boxes of files were going to land and then we’d have been here for days on end.

[48] It seems to me that this exchange reveals a number of things. First, the Assessment Officer explicitly acknowledged that the onus was on the lawyer to prove his accounts. Second, the Assessment Officer correctly observed that, regardless of where the ultimate burden of persuasion falls, the party asserting a particular fact or state of affairs, has an evidentiary burden to establish what is asserted. And third, the Assessment Officer expressed some dissatisfaction with counsel’s cavalier attitude towards the content of the endorsement. Whether it was a court order, or a barrister’s undertaking to the court, compliance was expected.

[49] The clients are, in my view, essentially asserting that the orders requiring them to disclose any specific objections to the accounts – and concerns raised about their failure to comply with those orders – constitute a shifting of the burden of proof. They are wrong. The pre-trial endorsements were proper trial management.

[50] To be fair, the clients have isolated the following three comments made by the Assessment Officer in his ruling that they say support their assertion that the Assessment Officer reversed the onus of proof:

…I would first point out that the Client in this assessment failed to meet the burden of direction as set out in two separate endorsements within this file, thereby seriously disadvantaging the Solicitor in this assessment.

As with any legal proceeding, if someone is refusing to pay for services rendered, or objecting to the quantum of costs, there is a reasonable expectation that that individual will provide some reason for those refusals and or objections.

I do not agree that it is not appropriate to shift the burden to the clients to prove the accounts are not reasonable. In circumstances such as this, where the Client has simply refused to pay, or honour his dishonoured cheques, and then takes the position that the bill is unreasonable (only after the solicitor has refused to represent the client without further payment), I find that there is at least some responsibility on the part of the Client to explain why they are accepting services and refusing to pay for them.

[51] I have the following comments to make about the passages highlighted by counsel to the clients.

[52] First, the reasons have to be read as a whole, so that the isolated comments are understood in context.

[53] Second, the “burden of direction”, as referenced by the Assessment Officer, is simply an awkward way of saying that the clients failed to comply with their solicitors’ undertakings endorsed on two occasions by the court. That failure prejudiced the lawyer. That point is valid and does not represent a shifting of the burden of proof.

[54] Third, the language used by the Assessment Officer in the second and third passages isolated by the clients’ counsel is not the best. I can understand why a reasonable person reviewing the ruling might have some concern about whether the burden has been shifted. But when the reasons are read as a whole the concern should fade away.

[55] In the Conclusion section of his reasons, the Assessment Officer specifically observed that:

The burden of proof rests with the Solicitor to prove on a balance of probabilities that the bills were fair and reasonable. With the exceptions that I have previously outlined in my reasons, the Solicitor has proven his bills. He has demonstrated that he can substantiate the bills by the quantity and quality of work performed and by the results delivered.

This observation correctly states the law.

[56] The overall process followed by the Assessment Officer also makes it evident that he not only correctly stated the onus of proof, but he applied it as well. He reduced Mr. Starkman’s accounts in a number of respects, as a result of not being satisfied that the evidence supported the full accounts as rendered.

[57] Although the persuasive burden always rests with the solicitor, an evidentiary burden will shift to the clients once the solicitor tenders evidence sufficient to meet his evidentiary burden. In other words, once the solicitor leads sufficient evidence to prove the accounts on a balance of probabilities, the onus shifts to the clients to tender evidence in response. If they fail to adduce any evidence, then it will inevitably follow that the solicitor will succeed.

[58] The Assessment Officer’s comments were not ideal. But they must be read in the overall context of the reasons and the analysis he undertook. When looking at them in that context, they reflect no more than the following observations:

(a) The clients failed to comply with two orders compelling them to provide disclosure of any specific objections they had to the lawyer’s accounts;

(b) Where a solicitor has tendered evidence proving his accounts, the clients have an onus to tender evidence to support their objections, particularly where they have made no prior complaints and in fact have tendered NSF cheques in purported payment of the fees charged; and,

(c) In this case, the lawyer proved his accounts, subject to identified reductions.

[59] In my view, the onus was never improperly shifted and this ground of objection fails.

(2) Did the Assessment Officer Misapprehend the Evidence?

[60] There are a number of respects in which the Assessment Officer recited some of the evidence inaccurately. That said, in my view, the factual errors are relatively minor and do not material impact on the ultimate result.

[61] Fact finding is the domain of the trier of fact, not of appellate courts. The trier of fact – in this case the Assessment Officer – has had the opportunity to observe witnesses and documents in real time. A reviewing court has not. For this reason, the standard of review is very stringent. I must be satisfied that the Assessment Officer has made one or more palpable and overriding errors: Housen v. Nikolaisen, [2002] SCC 33.

[62] A finding is a palpable error if it is obvious, clearly wrong, unreasonable or unsupported by the evidence: Trillium Motor World Ltd. v. General Motors of Canada Ltd., 2017 ONCA 545. It is overriding if it is serious enough to vitiate the finding of fact in issue: Wilk v. Arbour, 2017 ONCA 21 at para. 18.

[63] There are a number of findings, identified by the clients, that I agree are palpably wrong, in view of the evidence tendered at the hearing. I agree that the following palpable errors were made:

(a) The Assessment Officer referred to this as an assessment of the bills of costs of the clients. This was, correctly stated, an assessment of solicitor/client accounts;

(b) The Assessment Officer referred to an application to remove a solicitor of record for using confidential information and liable (sic). The Assessment Officer conflated two proceedings. Correctly stated, there was a motion to remove counsel of record in the oppression remedy proceeding. There was a separate action for libel commenced against a different third party;

(c) The Assessment Officer referred to a separate action for return of equipment “that had not been returned during the divorce proceedings”. In fact, the equipment was sent to Barbaros in a transaction having nothing to do with the family law proceedings;

(d) The Assessment Officer described an issue of a promissory note that was being sued on. He said “the Client determined that the note would be written off”. This was wrong. Mr. Cardillo was a defendant in that action; and,

(e) The Assessment Officer found that the level of complexity of the work performed by the lawyer was increased in part because one action was dependent on the outcome of a family matter. In my review of the evidence, I do not see that any of the work performed by Mr. Starkman was contingent on anything occurring in the family law proceedings. That said, I think it a fair observation to conclude that the complexity of the work was increased due to the fact that it was inevitably affected by parallel proceedings between Mr. Cardillo and his ex-spouse.

[64] There were a number of other factual errors asserted by the clients, more particularly set out in Appendix “A”. There is sufficient support in the evidentiary record – either by direct or circumstantial evidence – to support the impugned findings apart from the five I have listed above.

[65] Of the five I have listed, they do not – individually or collectively – amount to much.

[66] The determination that the Assessment Officer made palpable and overriding errors may give me the jurisdiction to intervene. But the misapprehension of evidence does not automatically mean that intervention is justified.

[67] As the Court of Appeal noted in R. v. Bonnington, 2015 ONCA 122, at para. 12:

Misapprehension of evidence involves a "stringent standard": R. v. Lohrer, 2004 SCC 80, [2004] 3 S.C.R. 732, at paras. 1-2. This standard is met only "[w]here a trial judge is mistaken as to the substance of material parts of the evidence and those errors play an essential part in the reasoning process resulting in a conviction": R. v. Morrissey (1995), 1995 CanLII 3498 (ON CA), 22 O.R. (3d) 514 (C.A.), at p. 541, cited with approval in Lohrer.

[68] While the Assessment Officer may have been mistaken as to the substance of material parts of the evidence, I am not persuaded that those parts played an essential role in the reasoning process that led to his ultimate ruling.

[69] The Assessment Officer otherwise properly applied the Cohen and Kealey factors and gave detailed and careful reasons under each heading. In my view, there is no basis to intervene based on what I consider to be minor factual errors.

(3) Did the Assessment Officer rely on evidence not properly before him?

[70] This ground of objection really reflects two arguments. The first is that the Assessment Officer failed to properly mark a number of documents as exhibits such that it is unclear what the evidentiary record was that he relied on. In the circumstances, the clients submit that it is impossible for this court to properly review the factual findings made by the Assessment Officer.

[71] The second argument is that the Assessment Officer failed to deal directly with an objection advanced by the clients’ lawyer at the hearing. Specifically that Mr. Starkman could not rely upon his dockets, as business records, to prove the time his law clerk spent on the clients’ files.

[72] I will deal with these two objections in turn.

The Failure to Mark Exhibits

[73] There were only two exhibits marked at the assessment hearing. Exhibit 1 was an affidavit of Mr. Cardillo prepared in the context of the oppression remedy application. The second was Mr. Starkman’s “Supplementary Book of Documents”.

[74] None of the accounts in issue were marked Exhibits, though they were attached to the Notice of Assessment and referenced in the order of McCarthy J.

[75] A 400 page response to the objections made by the clients further to the September 13, 2016 endorsement of the Assessment Officer was filed with the court, but not marked an Exhibit. Mr. Starkman requested that it be marked an Exhibit but the Assessment Officer indicated that since it was served and filed, further to the endorsement, it need not be marked an Exhibit.

[76] The clients complain that the record is “a mess” and that it is not possible to determine what documents the Assessment Officer relied upon in reaching his decision.

[77] The clients’s counsel cited the decision of the Court of Appeal in 1162740 Ontario Limited v. Pingue, 2017 ONCA 52, in relation to the proper method of assembling a trial record.

[78] As Lauwers J.A. wrote, for a unanimous panel, at para. 14:

The goal of a trial judge in supervising the assembly of a trial record is completeness and accuracy so that the panel of this court sitting on the appeal can discern without difficulty exactly what was before her at any moment in the course of the trial.

[79] Justice Lauwers went on to observe that every document or thing put to a witness or to the trial judge as a piece of evidence should be made a numbered or lettered exhibit. Moreover, where a compiled document book is filed with the court, it is incumbent upon counsel to clarify the extent to which the authenticity of each document in the book is accepted, failing which that task falls to the court.

[80] In this instance, having reviewed the transcripts of the hearing, I am able to note that there wasn’t a whole lot of loose paper flying around during the hearing. The documents relied upon by the lawyer were bundled in three volumes: his original Book of Documents; a Supplementary Book of Documents; and the 400 page response to the clients’ objections. In additional, a loose copy of an affidavit was filed as Exhibit 1. All of these documents were before the court. Only the loose affidavit and the Supplementary Book of Documents were marked Exhibits. All of them should have been.

[81] Having said that, I am readily able to ascertain what was before the court and what documents the Assessment Officer relied upon. The authenticity of the documents was not raised in issue at the hearing, nor was it raised in issue at the hearing of these motions.

[82] The clients’ counsel at the hearing cross-examined the lawyer at some length on the documentary evidence filed and on other matters generally. No objection was taken at the hearing as to how the trial record was being assembled.

[83] The clients’ argument at the motion in opposition of confirmation is that courts should strive diligently to maintain proper trial records. I agree. That said, the failure to do so in this case was not significantly problematic and the clients’ concerns have significantly less force when raised for the first time on appeal.

[84] This ground of objection fails.

The Business Records Objection

[85] Mr. Starkman tendered his dockets and statements of account as business records. They reflected his time as well as the time of his law clerk. The clients’ counsel objected to Mr. Starkman giving evidence about what his law clerk did, taking the position that she must attend in person to give evidence about her own involvement in the clients’ files. Counsel contended that the purported business records were otherwise hearsay.

[86] The following exchange took place during Mr. Starkman’s examination in chief:

MR. RADNOFF: I have an objection if, if this issue is giving any evidence to what the clerk did, she’s not giving evidence.

MR. STARKMAN: Well, we served Evidence Act notices.

MR. RADNOFF: But that just makes it…

MR. STARKMAN: These are business records.

MR. RADNOFF: That just makes it admissible. It doesn’t mean that you’re proving her time.

MR. STARKMAN: Okay. But they go in as business records, that’s all, she keeps, you know, her dockets daily as I do.

MR. RADNOFF: No, but to be clear my objection is, is that he can’t give evidence as to what she did. She has to give evidence as to the work she did. The Business Act (sic) notice only makes this document admissible, you don’t have to put in evidence as to how it was made and stuff like that.

MR. STARKMAN: Okay that’s fine. I don’t have to prove that she did, it says what it says.

THE COURT: I hear the objection.

MR. RADNOFF: Okay. I just wanted to make it clear.

THE COURT: But I mean, in all fairness really all I heard Mr. Starkman say was simply reading the words off the page.

MR. RADNOFF: I understand that, and I appreciate that. Just Mr. Starkman said that he was not calling Tracy as a witness, and I just wanted to make it clear that our position at this assessment is that the time keeper is not present to give evidence as to the work they did.

MR. STARKMAN: I don’t agree with that. You know, these documents go in as business records and they say what they say. I am not embellishing on them. I’m not going to do that. They say what they say.

[87] The Assessment Officer did not make a specific ruling on the business records issue following this exchange. The issue arose again later in the day during the cross-examination of Mr. Starkman. The second exchange went as follows:

MR. RADNOFF: Well, sir, you worked on the file. You would know if she [the clerk] drafted the affidavits or if you did.

THE COURT: I’m going to stop that line of questioning. You have already objected to him testifying. Interestingly enough, it was on this exact entry that you objected. You’ve already objected to him testifying to what work his client – his clerk did, so you can’t now ask him to testify what work his clerk did. I’ve already supported that objection.

MR. RADNOFF: The reason I was…

THE COURT: You’ve asked your question of this…would he classify this as admin work or not and he’s answered it.

MR. RADNOFF: I know but in fairness to the record, what the witness says that he doesn’t have to give evidence of what the clerk did. Obviously my friend and I disagree on that point, but if ultimately this – at this hearing it’s decided that the clerk time is appropriate that’s why I’m cross-examining on it.

THE COURT: But you yourself said he can’t testify. Your objection was he can’t testify to what his clerk did and I agree with you. I supported your objection, okay. It’s pure hearsay. So you can’t now in cross-examination ask him to provide the court with hearsay evidence with any value.

[88] Clearly there was a disconnect between those present at the hearing, including the Assessment Officer, as to the issues of admissibility and use of the lawyer’s accounts and dockets.

[89] There was no dispute that they were business records and I think that is correct. The live issue was what purpose the business records could be used for.

[90] Section 35 of the Ontario Evidence Act provides for the admissibility of business records. Specifically:

35 (1) In this section,

“business” includes every kind of business, profession, occupation, calling, operation or activity, whether carried on for profit or otherwise; (“entreprise”)

“record” includes any information that is recorded or stored by means of any device. (“document”) R.S.O. 1990, c. E.23, s. 35 (1).

Where business records admissible

(2) Any writing or record made of any act, transaction, occurrence or event is admissible as evidence of such act, transaction, occurrence or event if made in the usual and ordinary course of any business and if it was in the usual and ordinary course of such business to make such writing or record at the time of such act, transaction, occurrence or event or within a reasonable time thereafter. R.S.O. 1990, c. E.23, s. 35 (2).

Notice and production

(3) Subsection (2) does not apply unless the party tendering the writing or record has given at least seven days notice of the party’s intention to all other parties in the action, and any party to the action is entitled to obtain from the person who has possession thereof production for inspection of the writing or record within five days after giving notice to produce the same. R.S.O. 1990, c. E.23, s. 35 (3).

Surrounding circumstances

(4) The circumstances of the making of such a writing or record, including lack of personal knowledge by the maker, may be shown to affect its weight, but such circumstances do not affect its admissibility. R.S.O. 1990, c. E.23, s. 35 (4).

Previous rules as to admissibility and privileged documents not affected

(5) Nothing in this section affects the admissibility of any evidence that would be admissible apart from this section or makes admissible any writing or record that is privileged. R.S.O. 1990, c. E.23, s. 35 (5).

[91] Section 35 does not entirely replace the common law, though it has been said to “eclipse” it: see Paciocco and Stuesser, The Law of Evidence, 6^th ed. (Toronto: Ont.: Irwin Law Inc., 2011) at page 168.

[92] In Ares v. Venner, 1970 CanLII 5 (SCC), [1970] S.C.R. 608, the Supreme Court held that nurses’ notes, “made contemporaneously by someone having a personal knowledge of the matters then being recorded and under a duty to make the entry or record should be received in evidence as prima facie proof of the facts stated therein.” The ruling in Ares v. Venner has been applied to all forms of business records in the years since it was released. In other words, its principles are not restricted to nurses’ notes, but have been applied to business records generally.

[93] Section 35 of the Ontario Evidence Act, does not include the “duty to record” requirement from Ares v. Venner. It provides instead that records are admissible if made in the usual and ordinary course of business and where it was in the usual and ordinary course of the business to make such records. “Business” includes a profession.

[94] Section 35(2) of the Evidence Act, which is consistent with the ruling in Ares v. Venner, provides that the record of a transaction is proof of its contents, so long as the conditions of the section are met.

[95] In the context of this case, Mr. Starkman’s law clerk made docket entries reflecting her work on the clients’ files. They were made in the usual and ordinary course of business. Moreover, it was in the usual and ordinary course of the law firm that those entries get made. Indeed, they are the means by which the labour of the firm is translated into an income.

[96] The statements and dockets were admitted as business records. The clients’ counsel did not object to their admissibility. They are proof of their contents. There seems to perhaps have been some confusion about that.

[97] Reading the record, I think it is a fair comment that it is unclear just exactly how the Assessment Officer treated the dockets. In my view, he was entitled to treat them as proof of their contents.

[98] At page ten of the Assessment Officer’s ruling, he addressed the failure of the law clerk to attend to give evidence as follows:

The Client raised the issue in their closing submissions that “TLP, who is a clerk, did not attend to give any evidence”. This statement is true. While the Solicitor did provide their dockets as business records they did not provide the Client with the opportunity to cross-examine those records in any substantive way. The Solicitor knew, or ought rightly to have known, that it is their responsibility to substantiate and defend their bills, which includes providing evidence in the form of testimony for entries of a significant nature. I find that the entries of the law clerk Ms. Pearce form a significant part of these bills and the lack of attendance of Ms. Pearce to some degree disadvantaged the Client. However, in view of the evidence provided to this hearing which clearly illustrates the body of work completed by Ms. Pearce, including examples of emails to and from the client with Ms. Pearce, samples of drafts and finished products, etc., it would be unreasonable to suggest that Ms. Pearce did nothing of value on this file to advance the Client’s interests. As such, I find a further reduction of the allowable hours for Ms. Pearce is appropriate in these circumstances and as such, I am assessing the allowable hours at a 66 % rate.

[99] The process engaged in by the Assessment Officer with respect to Ms. Pearce’s recorded time was to reduce the accounts for work she performed that the Assessment Officer regarded as clerical in nature, then reduce her docketed time further by a factor of 34% by reason of her failure to attend to give evidence.

[100] While the Assessment Officer was certainly entitled – based on his examination of the circumstantial evidence in the file – to find that the clerk had performed work of value and attribute a monetary figure to that work, it was unfair to the lawyer to reduce her billed time by one-third simply because she did not attend. The purpose of filing the accounts and dockets as business records – on notice – is to avoid the requirement of calling every record keeper as a witness.

[101] Had the clients’ lawyer sought to challenge the accuracy and/or reliability of the clerk’s docketed time entries, he could have sought her presence at the hearing: see Barber v. Humber River Regional Hospital, 2016 ONCA 897 at para. 67.

[102] In the final analysis, I conclude that the Assessment Officer erred in his treatment of the business records, but his error inured to the benefit of the clients given that he reduced the law clerk’s time by 19.5 hours due directly to her absence at the trial. At a billed rate of $170 per hour, the clients saved some $3,300.

(4) Did the Assessment Officer misconstrue an undertaking given by counsel as an order?

[103] I have already commented on this position of the clients. In my view it makes no difference to this proceeding whether the endorsements made in October 2015 and September 2016 were properly court orders or whether they simply a record of undertakings given by a solicitor. Either way, the court is right to expect compliance.

(5) Did the Assessment Officer err in his treatment of costs?

[104] The Assessment Officer made no order for costs. He did so based on what he described as the following convention:

If the bill is patently excessive – costs payable by the Solicitor

If excessive but not patently so – payable by the solicitor

If reasonable but apparently excessive – no costs

If patently reasonable – payable by the client.

[105] I have no difficulty with the convention as a general guideline. But here the Assessment Officer did not invite the parties to make submissions. That was an error in my view because it precluded the Assessment Officer from hearing about a Rule 49 offer to settle made by Mr. Starkman.

[106] Rule 49 applies to actions, applications and motions. An assessment of accounts is an application under the Solicitors Act and accordingly Rule 49 applies to it.

[107] The rule provides that where an offer is made by an applicant at least seven days before the hearing and not accepted and where the applicant obtains a judgment as or more favourable than the terms of the offer, the applicant is entitled to partial indemnity costs to the date the offer was made and substantial indemnity costs from that date, unless the court orders otherwise.

[108] Mr. Starkman was the applicant in the assessment hearing. He made an offer to settle on August 5, 2016. He proposed that the clients pay him $28,250, inclusive of fees, disbursements and HST. He achieved a better result after the hearing, though obviously success was divided.

[109] It may very well be that the cost result would have been the same, had the Assessment Officer turned his mind to the operation of Rule 49. But I am not in a position to say.

[110] I am, in the result, remitting the issue of costs back to the Assessment Officer for consideration in light of Mr. Starkman’s offer to settle.

[111] In terms of the costs of this motion, I invite the parties to make written submissions to me, on a 14 day turnaround. Mr. Starkman is to deliver his submissions by October 5, 2017 and the clients by October 19, 2017. Submissions should not exceed 2 pages, not including any Costs Outlines. Submissions should be delivered electronically to my assistant, Diane Massey at diane.massey@ontario.ca

Boswell J.

Released: September 21, 2017

APPENDIX “A”

Alleged Errors Identified by the Clients

1. The Assessment Officer referred to this as an assessment of the bills of costs of the clients. This was an assessment of solicitor/client accounts;

2. The Assessment Officer found that counsel to the applicant in the oppression remedy application followed a particularly litigious method of booking 9:30 a.m. appointments before the case management judge without canvassing dates. In fact, there were only 2 9:30 a.m. appointments brought and no evidence tendered that they were unreasonable;

3. The Assessment Officer referred to an application to remove a solicitor of record for using confidential information and liable (sic). In fact, there was a motion to remove counsel of record in the oppression remedy proceeding. There was a separate action for libel against a different third party;

4. The Assessment Officer referred to a separate action for return of equipment “that had not been returned during the divorce proceedings”. The equipment, which had been shipped to Barbardos had nothing to do with the divorce proceedings;

5. The Assessment Officer described an issue of a promissory note that was being sued on. He said “the Client determined that the note would be written off”. This was wrong. Mr. Cardillo was a defendant in that action;

6. The Assessment Officer found that Mr. Starkman had worked with Mr. Cardillo’s family counsel in an effort to resolve the issue surrounding the return of equipment from Barbarbos. Mr. Starkman gave evidence, however, that he was not involved in the family proceedings in any way;

7. The Assessment Officer found that the cross-examinations on affidavits filed in the oppression remedy application gave rise to numerous undertakings that required answering. But Mr. Starkman did not testify about undertakings;

8. The Assessment Officer found that Mr. Starkman asserted a solicitor’s lien on the clients’ files, but further found that there was nothing in the files that the clients did not already have. No one, however, testified that there was nothing in the files that the clients did not already have;

9. The Assessment Officer held that the clients “failed to meet the burden of direction”. There is no such burden in the clients’ submission. Finding that there is a fault on the part of the clients for not particularizing grounds of objection, is ill-placed, according to the clients;

10. While the Assessment Officer commented on the clients’ failure to provide disclosure as ordered, there was no acknowledgment that Mr. Starkman failed to bring a motion, prior to the assessment, to take issue with the disclosure that was given;

11. The Assessment Officer reversed the onuses of proof and persuasion by stating, “As with any legal proceeding, if someone is refusing to pay for services rendered, or objecting to the quantum of costs, there is a reasonable expectation that that individual will provide some reason for those refusals and or objections”;

12. The Assessment Officer referred to the lawyer as “defending” himself, when the lawyer was not defending anything; he had the onus of proof;

13. The Assessment Officer relied on a 400 page “response” the lawyer provided to the one-page list of objections delivered by the clients, when this response was not properly in evidence;

14. The Assessment Officer found that the level of complexity of the work performed by the lawyer was increased in part because one action was dependent on the outcome of a family matter, but that is not factually accurate;

15. The Assessment Officer misconstrued an undertaking given by counsel as the equivalent of a court order. He found that the clients should have provided their objections to the accounts in advance of the assessment, which was a procedural error;

16. He reversed the onuses of proof and persuasion when he said, “I do not agree that it is not appropriate to shift the burden to the clients to prove the accounts are not reasonable”;

17. The Assessment Officer made a ruling during the assessment that evidence about what the law clerk did was hearsay, yet he relied on Mr. Starkman’s dockets/ledgers to assess time spent by the law clerk;

18. The Assessment Officer found that notwithstanding the law clerk’s failure to attend and give evidence, there was a body of work completed by the clerk that was in evidence, including emails, drafts, etc. and that it would be unreasonable to suggest that the clerk did nothing of value on the file. The clients submit, however, that this “body of work” was not made part of the evidentiary record;

19. The Assessment Officer found that there were eight meetings between the lawyer and clients over the course of six months. But there was no evidence of such meetings in the evidentiary record, according to the clients;

20. The Assessment Officer made findings about who initiated calls and what they were about, in the absence of evidence to support those findings;

21. The Assessment Officer referred to having reviewed a Book of Documents; Supplementary Book of Documents; and a 400 page response to clients’ objections. There is no indication in the record of these documents having been entered as evidence.

22. The Assessment Officer found that the lawyer had negotiated a return of equipment that saved further litigation, but there is no evidence of this;

23. The Assessment Officer reversed the onuses of proof and persuasion when he said, “The Client did not provide this assessment with any evidence to suggest that the Solicitor had not performed to a degree of skill and competence that was in any way sub-standard”;

24. The Assessment Officer found that two affidavits prepared by the lawyer ultimately led to the settlement of the oppression remedy application, without evidence to support that finding;

25. The Assessment Officer failed to address, square on, the clients’ objection regarding the admissibility of the lawyer’s dockets as business records;

26. The Assessment Officer allowed disbursements even though the lawyer did not lead evidence on any of them, save one; and,

27. The Assessment Officer found that the “Client has recognized the indebtedness to the Solicitor and is simply refusing to pay.” The clients submit this is simply wrong.