CITATION: Ares Law v. Rock, 2017 ONSC 758
BARRIE COURT FILE NO.: 13-0803
DATE: 20170131
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ares Law Professional Corporation and Bernard P. Keating, Solicitors
AND:
Ronald Rock, Client
BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN
COUNSEL: J.L. Nairn, Counsel for the Solicitors
L. James, Counsel for the Client
HEARD: January 19, 2017
ENDORSEMENT
[1] This motion proceeded by way of an appeal of a Report and Certificate of Assessment pursuant to the Solicitors Act, R.S.O. 1990, c. S.15. Ronald Rock, the client, brings a motion to oppose a Confirmation of the Report and Certificate of Assessment. Ares Law Professional Corporation and Bernard P. Keating, the solicitors, oppose the relief sought. In addition, the solicitors bring a cross-motion that a binding settlement had been entered into requiring the client to pay $125,602.83 as a result of Confirmation of the Report and Certificate of Assessment.
Background Facts
[2] In 2007, the client retained the solicitors to act for him against A&P Canada Co., c.o.b. as Food Basics in connection with a slip-and-fall accident. The solicitors continued to act for Mr. Rock until 2013, when the relationship broke down. The solicitors then successfully moved to remove themselves from the record. The client obtained new counsel, Matthew Joseal Igbinosun, to continue this action on his behalf. The client and his new counsel, Mr. Igbinosun, entered into an undertaking with the solicitor to protect his account. The wording of the undertaking and agreement provided as follows:
Undertaking and Agreement
I, Mr. Matthew Joseal Igbinosun, barrister and solicitor, and I Ronald Rock, hereby undertake to protect the account of Bernard P. Keating and Ares Law Professional Corporation, dated May 17, 2013, in the amount of not more than $50,000.
I, Bernard Keating, on behalf of myself and Ares Law Professional Corporation, agree that the account dated May 17, 2013, in the amount of not more than $50,000, shall be reduced in accordance with the resolution of the file, subject to negotiation between the parties and, if necessary, further assessment procedures.
I, Bernard Keating, agree to provide Mr. Rock’s physical file to Mr. Rock’s new solicitor, Mr. Joseph Igbinosun, upon receipt of this undertaking.
[3] This document was signed by Mr. Igbinosun, Mr. Rock, and Mr. Keating. It should be noted that on this form, the initial amount shown for the account was $139,302.57. That figure was scratched out and $50,000 was inserted in its place and initialled by all parties.
[4] Mr. Keating worked on this file over several years, up to and including attending a judicial pre-trial before Lauwers J.
[5] Unfortunately, Mr. Igbinosun passed away before Mr. Rock’s matter was completed. Mr. Rock continued on his own. He attended a second judicial pre-trial before MacKinnon J. Sometime after that, Mr. Rock entered into Minutes of Settlement with Food Basics. The settlement was for $30,000 for claim and pre-judgment interest. As to costs, para. 3 of the Minutes of Settlement provided that, “the defendants agree to pay costs directly to Bernard P. Keating (Ares Law Professional Corporation).” That document was signed by Mr. Rock and counsel for the defendants [Food Basics].
[6] A series of negotiations then followed between counsel for Food Basics and the solicitor to settle the amount of costs. I will discuss the correspondence between counsel later in these reasons. Unfortunately, the issues were not resolved. The solicitor then brought an application under the Solicitors Act to assess the Bill of Costs delivered to Mr. Rock. A hearing took place on March 1, 2016. The parties were represented by counsel and Mr. Keating gave evidence as to his Bill of Costs of $139,302.52. On April 21, 2016, in lengthy written reasons, the assessment officer assessed the outstanding costs at $125,602.83 for fees, disbursements and GST.
The Appeal by the Client
[7] The client appeals the assessment on the following bases:
(i) The assessment officer lacked jurisdiction due to special circumstances;
(ii) The assessment officer made an error in principle; and
(iii) The assessment officer misapprehended the evidence.
Cross-Motion of the Solicitors
[8] The solicitors oppose the client’s motion and, in addition, bring a cross-motion for a judgment on the basis that the parties entered into a binding settlement that costs would be paid in accordance with the amount determined by the assessment officer. That amount was subsequently determined to be $125,602.83. The solicitors submit that the Report and Certificate of Assessment ought to be confirmed and judgment granted for that amount.
The Legislation
[9] It is useful to set out the appropriate sections of the Solicitors Act, and in particular, ss. 3 and 9:
Order for assessment on requisition
- Where the retainer of the solicitor is not disputed and there are no special circumstances, an order may be obtained on requisition from a local registrar of the Superior Court of Justice,
(a) by the client, for the delivery and assessment of the solicitor’s bill;
(b) by the client, for the assessment of a bill already delivered, within one month from its delivery;
(c) by the solicitor, for the assessment of a bill already delivered, at any time after the expiration of one month from its delivery, if no order for its assessment has been previously made.
Assessment where a party not being the principal, pays a bill of costs
- (1) Where a person, not being chargeable as the principal party, is liable to pay or has paid a bill either to the solicitor, his or her assignee, or personal representative, or to the principal party entitled thereto, the person so liable to pay or paying, the person’s assignee or personal representative, may apply to the court for an order referring to assessment as the party chargeable therewith might have done, and the same proceedings shall be had thereupon as if the application had been made by the party so chargeable.
[10] I am satisfied that for the purpose of this motion, the client, Mr. Rock, and the defendant, Food Basics, are one and the same. Mr. Rock was the client. Food Basics was the defendant. By reason of the Minutes of Settlement, Food Basics agreed to pay his costs. As noted in s. 9(1) of the Solicitors Act, a third party, such as Food Basics, stands in the shoes of the client.
The Cross-Motion
[11] I will begin my assessment of these motions by referring to the correspondence between the solicitors and counsel for Food Basics leading up to the submission that Minutes of Settlement had been achieved. The following provides a timeline and summary of each letter’s contents:
May 4, 2015
From the solicitors: “…You advised that you would consider payment of our disbursements in this matter. I have enclosed our Schedule of Accessible Disbursements for both GST and HST which totals $43,720.52.”
May 6, 2015
From counsel for Food Basics: “I confirm that I have instructions from my client to pay half of your listed disbursements. I also spoke with Mr. Ron Rock and advised him that we would deal with you on this issue directly.”
June 4, 2015
From the solicitors: “I am writing further to your letters dated May 6 and June 4, 2015. Your client’s proposal is not clear. Please set out the specific terms of your client’s proposal and I will respond accordingly.”
June 8, 2015
From counsel for Food Basics: “My client’s insurer, Zurich, is willing to cover the cost of some of your listed disbursements at this time, as part of its settlement with the plaintiffs. I also understand that you have brought an action against the plaintiffs for your outstanding account, and we would like to offer to pay half of that amount as a way to settle that issue.”
June 9, 2015
From the solicitors: “Please find enclosed a copy of the Statement of Account dated May 17, 2013, which was provided to Mr. Rock in the total amount of $139, 302.52, inclusive of disbursements and HST. I accept your offer to pay half of this amount, $69,651.26, inclusive of HST in full and final settlement of my claim against Mr. Rock.”
June 18, 2015
From counsel for Food Basics: “I would like to clarify the terms of my client’s proposal. My client’s insurer, Zurich, is willing to cover the cost of some of your listed disbursements at this time as part of its settlement with the plaintiffs. Our understanding was that you had brought an action against the plaintiffs for your outstanding accounts consisting of only disbursements and our offer was, and is, to pay half of the disbursements amount as a way to settle that issue. We were not under the impression that you were pursuing your full outstanding account against the plaintiffs, inclusive of legal fees, as such, our offer to pay half does not include the same.”
July 14, 2015
From counsel for Food Basics: “Further to my client’s offer to you on costs, my client is now willing to pay half of your listed disbursements, plus $5,000 for your legal fees, or alternatively, we can have your costs assessed. My client would pay whatever amount that is determined by an assessment officer.” [Emphasis Added.]
July 14, 2015
From the solicitors: “I accept your offer to have my costs assessed and will accept payment from your client of the amount determined by the assessment officer… I have not attached a copy of the forty-page account as it was previously forwarded to you by courier, by letter dated June 9, 2015.”
[12] At no time in any of this correspondence did the parties make reference to the undertaking which was entered into between the solicitors, the client, and the client’s former counsel. It is clear that Food Basics was aware of this undertaking and was also aware of the full extent of the solicitors’ account which had been previously supplied to them.
[13] In my view, both the solicitor and counsel for the client had a full appreciation of the facts and circumstances surrounding the prior undertaking that fees would not exceed $50,000, as well as the solicitor’s actual account of $139,000. If the purpose of an assessment hearing was to determine fees and disbursements up to a maximum of $50,000, that should have been spelled out in clear and unambiguous language in the offer. It was not.
[14] I take comfort in the knowledge that the assessment officer dealt with this issue and stated:
The representative for the client, (and the defendants in the originating action) contend that the terms of the undertaking apply as part of the final settlement. As such, the amount the client should expect to pay for Mr. Keating’s fees is the $50,000 amount outlined in the undertaking.
I am not going to rule on whether or not the undertaking “died” with Mr. Igbinosun, as I do not feel that it is relevant to this situation. The defendants in the originating action [Food Basics] were not named as parties to the undertaking regarding Mr. Keating’s fees, nor did the defendants in the originating action make any attempt to reference this undertaking when the terms of settlement were completed. I quote from the Minutes of Settlement dated March 10, 2015, “The defendants agree to pay costs directly to Bernard Keating.”
[15] Food Basics agreed to pay an amount as determined by the assessment officer. However, in my view, that does not waive its right to appeal the results of that assessment. An assessment which contains an error in principle or a misapprehension of the evidence for example, could be subject to appeal to determine the appropriate amount of the assessment between solicitor and client.
[16] However, here, the assessment officer made findings of fact on the record before him. He heard evidence from the solicitor as to the amount of the costs claimed and made a determination of the appropriate amount of costs in the case. Findings of fact by an assessment officer are entitled to a high level of deference. The amount of costs found falls within the range of reasonable outcomes. Food Basics was well aware of the amount claimed by the solicitors prior to the hearing.
[17] The client submits that the assessment officer lacked jurisdiction due to the presence of “special circumstances”. As noted previously, s. 3 of the Solicitors Act provides that “where the retainer of the solicitor is not disputed and there are no special circumstances, an order may be obtained on requisition from the local registrar of the Superior Court of Justice.”
[18] The client’s position is set out in para. 32 of its factum:
The Moving Party (the client) is not submitting as a ground for appeal that there was a dispute regarding the retainer that would have made the praecipe of the order for an assessment improper under s. 3 of the Act. Rather, the Moving Party submits that there were “special circumstances” present that became evident during the assessment hearing on March 10, 2016, such that it was improper for the assessment officer to have proceeded with the assessment under s. 3.
[19] The solicitor submits that there were no special circumstances here, but drew the court’s attention to cases where special circumstances were found. In Ledroit v. Rooplall, 2011 ONSC 2751, the court concluded that the client’s evidence as to whether the retainer was changed under duress raised a genuine issue for trial. As well, the court found that there was a possibility that the solicitor breached his fiduciary duty. In Gaska v. Anderson, 2010 ONSC 1156, 85 R.F.L. (6th) 387, the court noted the solicitor’s failure to take certain steps and the unprofessional conduct of the solicitor. In Ontario (Attorney General) v. Napal, [2009] O.J. No. 1778 (Sup. Ct.), the court found that there were public monies at issue which were not properly scrutinized by the parties.
[20] In my view, there were no special circumstances here which would impact the jurisdiction of the assessment officer. The dispute between the parties about the enforceability of the undertaking and agreement does not amount to special circumstances.
[21] In Heritage Foods Inc. v. Martini Barile Marusic, LLP, 2004 CanLII 2646 (ON SC), the court provided this helpful guidance at para. 6:
There is no question that the respondent employed the solicitors to act on the respondent’s behalf. The only dispute is how much money the client owes. If the jurisdiction of an assessor were read in the narrow sense that the client suggests, it is doubtful that an assessor would ever be able to make a decision. Every dispute about quantum necessarily involves issues of credibility and a determination of what the agreement between the lawyer and the client was. The amount to be paid is clearly a term of the retainer, but it is a term that is left to the assessor to determine. This is the essence of the assessor’s function.
Conclusion
[22] I am satisfied that the assessor had jurisdiction under s. 3 of the Solicitors Act to make a determination on the facts before him. There were no special circumstances which would impede his statutory authority to make a just determination.
[23] I am satisfied that the client’s motion to set aside the Report and Certificate of Assessment should be dismissed.
[24] Based on the results of the cross-motion, it is ordered that there will be judgment for Ares Law Professional Corporation and Bernard P. Keating, the solicitors, in the amount of $125,602.83, together with an order confirming the Report and Certificate of Assessment.
Costs
[25] The parties are encouraged to settle the issue of costs. If they are unable to do so, I will receive written costs submissions of four pages or less in length. Submissions from counsel for the solicitors are due 20 days after the release of this Endorsement. Thereafter, counsel for the client will have 10 days to reply.
MULLIGAN J.
Date: January 31, 2017