Court File and Parties
COURT FILE NO.: CV-17-00586591
DATE: 20180403
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: LINETT FAMILY TRUST (1984), 606314 ONTARIO LTD. and MARC LINETT, Clients/Applicants
AND:
AIRD & BERLIS LLP, Solicitors/Respondent
BEFORE: P. J. Monahan J.
COUNSEL: Tanya A. Pagliaroli, for the Client/Applicants
Pamela Miehls and Danielle Muise, for the Solicitors/Respondent
HEARD: March 1, 2018
ENDORSEMENT
[1] This is a motion by Aird & Berlis LLP (“A&B”) for an order dismissing an application brought by the Linett Family Trust (1984), 606314 Ontario Ltd. and Marc Linett (collectively, the “Clients”) for an assessment of A&B’s accounts. A&B rendered 31 accounts for a total amount of $107,456.62 (the “Accounts”) for legal services provided to the Clients between 2002 and 2012, of which $91,885.90 is been paid. The last of the Accounts was dated January 16, 2012 and an Order for Assessment was obtained by Marc Linett (“Linett”) on February 8, 2012. A&B argues that Linett is responsible for the inordinate delay in moving the assessment forward, that this delay has resulted in prejudice to A&B, and that the assessment should therefore be dismissed.
[2] The Clients resist the motion on the basis that there has been no lengthy, unexplained delay which would warrant the dismissal of the assessment before it is determined on the merits. They also deny that A&B’s right to a fair hearing on the merits has been prejudiced.
[3] The procedures for the assessment of solicitors’ accounts under the Solicitors Act[^1] contemplate that the process should proceed in a timely manner. It is for this reason, for example, that the Act requires that an order for an assessment should normally be obtained by the client within one month of the delivery of a solicitor’s final bill. The timely assessment of solicitors’ accounts is in the interests of both clients as well as solicitors, and supports public confidence in the administration of justice.
[4] In my view, there has been inordinate delay in conducting the assessment in this case and it is entirely possible that the delay may cause prejudice to A&B. Nevertheless, as is explained below, the delay that has occurred is primarily attributable to actions taken (or not taken) by the assessment office rather than by the parties themselves. I do not believe that it would be fair or appropriate to have this institutional delay result in the Clients being precluded from having their accounts assessed in accordance with the Act. Accordingly, A&B’s motion is dismissed with costs to the Clients.
Facts
[5] Linett is a senior partner at a law firm who has been practising personal injury litigation for over 30 years. When he decided to have the Accounts assessed, he was advised by colleagues that the assessment process in Toronto was severely backlogged. Thus, in the hopes of expediting the process, he obtained an Order for Assessment from the St. Catharines assessment office. The Notice of Appointment for Assessment was scheduled for November 15, 2012 in St. Catharines, which was the first date of those offered when Linett was available.
[6] Representatives of the parties attended in St. Catharines on November 15, 2012 and scheduled a five-day assessment hearing commencing the week of September 16, 2013. However A&B took the position that the matter should be transferred to Toronto since there was no connection between the issues in dispute and St. Catharines.
[7] After further discussions, in March 2013 the parties agreed that a mediation would be held in Brampton on October 2, 2013. If the issues in dispute could not be resolved at the mediation, the assessment would be transferred to Toronto. As a result of the scheduling of the Brampton mediation, the five-day assessment hearing that had been scheduled for St. Catharines the week of September 16, 2013 was adjourned.
[8] When the parties agreed to the October 2013 mediation, Linett had specifically requested that the senior A&B lawyer who had had carriage of the Clients’ file would be in attendance. A&B did not at that time make any specific request as to who should be required to attend on behalf of the Clients.
[9] On September 30, 2013, A&B wrote to Linett requesting confirmation that all of the Clients’ trustees and directors would be in attendance at the mediation. In particular, A&B indicated that they would not proceed with the mediation without prior assurance in writing that Linett’s former spouse, Joyce Linett, and his former law partner, Robert Karoly, would be in attendance. A&B indicated that it required this assurance “given the litigious nature of the relationship between the parties.”
[10] Linett replied on October 1, 2013, describing A&B’s request as “totally inappropriate” since at no time had it been a condition of the mediation that Joyce Linett and/or Robert Karoly be in attendance. Linett advised that in the event A&B chose not to attend, he would provide the assessment officer with correspondence detailing the terms upon which the mediation had been scheduled. He requested confirmation that A&B intended to proceed with the mediation.
[11] Linett copied the assessment officer on his October 1, 2013 letter to A&B. Based on that letter, the assessment officer indicated his agreement that “all of the trustees and directors of the applicants should attend” and he cancelled the mediation scheduled for the next day. It does not appear that the assessment officer communicated with either party, or sought any clarification with respect to the terms upon which the mediation had been scheduled, before deciding to cancel the mediation.
[12] No further progress was made with respect to the assessment until July 29, 2015, when Linett wrote to A&B confirming that he and Joyce Linett had authority to settle the matter on behalf of the Clients, and seeking dates for the mediation. Following further correspondence, the mediation was scheduled for February 17, 2016 in Toronto.
[13] On January 22, 2016, the assessment officer contacted A&B and indicated that the mediation scheduled for February 17, 2016 had to be cancelled because of a shortage of booking rooms in the Toronto assessment office. A&B suggested hosting the mediation at their offices but the assessment officer advised that he would have to get approval first and “such approval would likely take months, or more likely be denied.”
[14] Linett spoke to the assessment officer on January 27, 2016 about obtaining a new date for the mediation. It was Linett’s understanding that the assessment officer needed some time to obtain a mediation date and Linett was hopeful that he would hear from the officer by May 2016. Linett followed up with the assessment officer in April and again in May 2016. On May 31, 2016, the assessment officer called Linett to advise that he was retiring shortly and that he was solidly booked until then.
[15] Linett made further attempts to schedule the mediation with the assessment officer over the summer of 2016. However on September 14, 2016 the assessment officer confirmed that he was retiring on October 31, 2016 and that he was too busy to schedule a further mediation prior to that date.
[16] The parties then focused their efforts on having the assessment transferred from St. Catharines to Toronto. However in early January 2017, the parties learned that on May 29, 2014, the assessment officer had dismissed the assessment in St. Catharines, on the basis that it was to be heard in Toronto.
[17] There is no explanation as to the basis upon which the assessment officer made this decision. Neither party had requested that the assessment be dismissed. Further, no one from the assessment office contacted the parties to inform them that the assessment had been dismissed.
[18] In February 2017, Linett attempted to ascertain what steps would be necessary to allow the assessment to proceed despite the May 29, 2014 endorsement dismissing it. He was advised by the Toronto assessment office that it could still be transferred to Toronto upon request. However this advice turned out to be in error. Linett was later advised that he would first have to bring an application in St. Catharines to have the order dismissing the assessment set aside, following which a motion could be brought to have it transferred to Toronto.
[19] In June 2017, A&B indicated that they would oppose the reinstatement of the assessment on the basis of the significant delay that had occurred since the rendering of the Accounts, as well as delay on the part of Linett in pursuing the matter. Eventually it was agreed that the assessment would be reinstated in St. Catharines and then transferred to Toronto, without prejudice to A&B’s right to move to have the assessment dismissed for delay.
[20] The assessment was subsequently transferred to Toronto and is now scheduled for a five-day hearing commencing on April 15, 2019. On October 5, 2017, A&B brought the present motion to have the assessment dismissed for delay.
Issues
[21] The issue for determination is whether the assessment should be dismissed for delay pursuant to the Court’s inherent jurisdiction to control its own process.
Analysis
[22] A&B acknowledges that it cannot rely upon Rule 24.01 as a basis for dismissing the assessment, since the present proceeding is not an action. However they maintain that the court has inherent jurisdiction to control its own process, which includes the discretionary power to dismiss a proceeding for delay. Lengthy, unexplained delays can constitute an abuse of the court’s process justifying the exercise of the court’s discretionary power to dismiss a proceeding for delay.
[23] The parties are agreed that the criteria required to successfully invoke the court’s inherent jurisdiction to dismiss for delay may be informed by the same considerations that would be relevant in relation to motions brought under the Rules. An action may be dismissed for delay where the plaintiff has intentionally delayed the matter, or where the “inexcusable delay for which the plaintiff or his lawyers have been responsible has been such as to give rise to a substantial risk that a fair trial of the issues in the litigation will not be possible.”[^2]
[24] There is no suggestion in this case that Linett intentionally delayed the assessment. Accordingly, the following three criteria are relevant to a determination as to whether the assessment ought to be dismissed for delay: (i) whether the delay is “inordinate”; (ii) whether the delay is “inexcusable”; and (iii) whether the delay is such that it gives rise to a substantial risk that a fair adjudication of the issues will not be possible.[^3]
a. Whether the Delay is “Inordinate”
[25] Whether a delay is inordinate is determined simply by reference to the length of time from the commencement of the proceeding to the motion to dismiss. There is no general rule or time period beyond which a delay will be held to be inordinate; it is necessary to consider in each case the nature of the proceeding, the issues raised and the length of time that would ordinarily be required to deal with the various steps in the litigation.[^4] In the context of an action, courts have been prepared to find that a delay of 10 or more years constitutes an inordinate delay.[^5] Conversely, a delay of approximately 7.5 years was held not to be inordinate in the context of an action against a number of defendants for breach of fiduciary obligations.[^6]
[26] In this case, 5 years and 8 months elapsed from the commencement of the assessment to the motion to dismiss on October 5, 2017. Linett argues that this delay is not inordinate given the precedents referred to above, which have tended to require a delay approaching 10 years before dismissing an action.
[27] That said, in contrast to an action, an assessment is a relatively simple and straightforward proceeding involving a solicitor proving his or her accounts. The procedural steps involved in an action do not apply in the context of an assessment. The policy of the Act is that disputes over solicitors’ accounts should be addressed and resolved expeditiously, and for that reason establishes short timelines for the commencement of applications for assessment. In light of these considerations, I see no basis for concluding that it is acceptable to take more than 5 ½ years to bring such a simple process to completion.
[28] I am reinforced in this conclusion by the reasons of Sharpe J.A. in Marché d’Alimentation Denis Theriault Ltée v. Giant Tiger Stores Ltd.[^7] Although Sharpe J.A.’s comments were made in the context of an action, his observations to the effect that there is a strong public interest in promoting the timely resolution of disputes apply equally in the context of an assessment. As Sharpe J.A. observed, litigants involved in the civil justice system have an obvious interest in timely justice since “[d]elay multiplies costs and breeds frustration and unfairness.” Similar sentiments were expressed by Lebel J. in Blencoe v. British Columbia (Human Rights Commission), where he noted that “[f]or centuries, those working with our legal system have recognized that unnecessary delay strikes against its core values and have done everything within their powers to combat it.”[^8]
[29] Concerns over the impact of unnecessary delay in the justice system also underlie the Supreme Court’s decision in Hryniak v. Mauldin,[^9] where Karakatsanis J. characterized undue expense and delay as a threat to the rule of law. As Karakatsanis J. pointed out, when individuals are unable to obtain the prompt and effective resolution of their disputes through the justice system, their confidence in the administration of justice is undermined and they will look elsewhere for (apparently) more effective solutions. The Court concluded that procedural rules must be interpreted broadly in order to respond to these concerns, as part of a “culture shift” designed to create an environment promoting timely and affordable access to the civil justice system.
[30] I note that the determination of whether a delay is “inordinate” is merely the first element of the test for determining whether a proceeding should be dismissed for delay. Even in cases where a delay is found to be “inordinate”, it is necessary to consider responsibility for that delay along with any resulting prejudice. Moreover, in applying this test in the context of an application for an assessment, it is appropriate and necessary to have regard to the comments of Sharpe J.A. in Price v. Sonsini,[^10] to the effect that “public confidence in the administration of justice requires the court to intervene where necessary to protect the client’s right to a fair procedure for the assessment of a solicitor’s bill.” The Court’s inherent jurisdiction to control the conduct of solicitors and its own procedures may be applied to ensure “that a client’s request for an assessment is dealt with fairly and equitably despite procedural gaps or irregularities.” These considerations are pertinent in light of Goudge J.A.’s determination in Scaini that, in considering issues involving delay under the Rules, courts should determine the order that is “just in the circumstances of the particular case.”[^11]
[31] At the same time, courts should not countenance delays that are manifestly inappropriate. To do so would be to encourage the continuation of the very culture of delay and complacency that both the Court of Appeal and the Supreme Court of Canada have described as no longer acceptable.
[32] In light of these concerns and considerations, I find that a delay of 5 years and 8 months to complete the assessment of a solicitor’s accounts to be unacceptable and therefore inordinate.
b. Whether the Delay is “Inexcusable”
[33] The requirement that the delay be inexcusable requires a determination of the reasons for the delay and an assessment of whether those reasons afford an adequate explanation for it.[^12]
[34] A&B argues that Linett is largely responsible for the delay in this case and that he failed to offer an adequate explanation for it. A&B points, in particular, to the fact that Linett scheduled the assessment in St. Catharines when the matter had no connection with that jurisdiction. Choosing to bring the assessment in St. Catharines created significant complications and delays as the parties attempted over a period of years to have the matter transferred to Toronto. Moreover, Linett scheduled the original Notice of Appointment in St. Catharines for November 2012 when earlier dates in the spring of 2012 were available.
[35] A&B also contends that in the spring of 2013, Linett failed to schedule the mediation in a timely manner, resulting in a further delay of four months. Then, when the mediation was cancelled in October 2013, Linett waited an additional 22 months before contacting A&B to move the matter forward. A&B also points out that in early 2017, when the parties learned that the assessment had been dismissed in May 2014, Linett waited a further seven months before bringing an application to set aside the dismissal.
[36] It is true that commencing the assessment process in St. Catharines rather than Toronto turned out to be a source of significant complication and delay. However, I accept Linett’s explanation that he commenced the application in St. Catharines in good faith on the basis that he believed that the Toronto assessment office was significantly backlogged and that commencing the matter in St. Catharines would in fact expedite the process.
[37] He further explains that he scheduled the original Notice of Appointment for November 2012 since his schedule did not permit him to attend on the dates that were offered in the spring of 2012. Similarly, the mediation was scheduled for October 2013 rather than in May of that year since he already had commitments on the May dates that had been offered. Linett is a senior litigation counsel and scheduling delays of this magnitude are normal and to be expected. Taken as a whole, the delays associated with finding mutually convenient dates for the assessment, while regrettable, cannot fairly be characterized as “inexcusable”.
[38] More troubling is the fact that, following the cancellation of the mediation in October 2013, Linett did not contact A&B until the end of July 2015 to pursue the matter. This delay of approximately 22 months was substantial. However, Linett explains the delay on the basis that he was involved in a very lengthy and complicated matrimonial dispute with his former spouse, Joyce Linett, and a related corporate dispute also involving her and his former law partner, Robert Karoly. Litigation commenced in 1997 and was only finally resolved in early 2017. He indicates that due to ongoing litigation with Joyce Linett and Robert Karoly, he was unable to secure the necessary cooperation with respect to attending a mediation until 2015. Linett’s explanation is indirectly supported by A&B’s insistence that both Joyce Linett and Robert Karoly attend the October 2, 2013 mediation, given what A&B describes as “the litigious nature of the relationship between the parties”.
[39] As such, while the 22 month delay between October 2, 2013 and July 29, 2015 does raise concerns, I am prepared to accept the explanation offered by Linett as reasonable in the circumstances.
[40] In any event, in my view a much more significant cause of delay in this matter has been the actions or decisions of the assessment officer and/or the assessment offices in St. Catharines and Toronto. The first such event was the cancellation of the October 2, 2013 assessment on the day before it was scheduled to take place. The assessment officer made this decision without providing Linett with an opportunity to make submissions on the issue. Had the assessment officer instead directed the parties to attend before him as scheduled on October 2, 2013 to discuss the matter, it is entirely possible that the parties would have agreed to proceed despite the absence of Joyce Linett and Robert Karoly.
[41] This was followed by the May 29, 2014 dismissal of the assessment by the assessment officer, on the mistaken basis that the assessment had been transferred to Toronto. As noted above, no one requested the assessment officer to make this decision. This error was compounded by the fact that no one informed the parties of the dismissal of the assessment. It was not discovered until January 2017, which caused a delay of over nine months as Linett took steps to set aside the dismissal.
[42] Also puzzling is the fact that the mediation that was scheduled for February 17, 2016 in Toronto was cancelled in late January 2016 on the basis that there were no rooms available in the Toronto assessment office on that day. It strains credulity to believe that the assessment office would have been able to determine weeks in advance that there was no possibility of any suitable rooms becoming available on that particular day. In any event, even assuming that they had “overbooked”, on what basis was it determined that Linett’s assessment - which had been commenced four years previously - would be the one to be cancelled? Moreover, the assessment officer’s indication that it would “take months” to obtain approval to hold the mediation at A&B’s offices, and that such a request would in any event likely be denied, seems entirely unpersuasive in light of the fact that a relocation was required due to the assessment office’s own booking error.
[43] Having cancelled the February 17, 2016 assessment, the assessment officer continued to engage with the parties about the possibility of his mediating the matter. It was not until mid-September 2016 that the assessment officer confirmed that he would be unable to mediate the matter given his retirement scheduled for October 31, 2016. It was only at that point that the parties attempted to schedule the assessment in Toronto, whereupon they learned of the fact that it had previously been dismissed by the assessment officer in May 2014. They were subsequently incorrectly advised by the Toronto assessment office that the May 2014 dismissal would not prevent them from having the matter heard in Toronto. This mistaken advice resulted in further delay associated with the need to move in St. Catharines to have the matter reinstated.
[44] In short, the inordinate delay in having this assessment move forward lies largely at the feet of the assessment office rather than the parties themselves. It cannot be said to be “inexcusable” on the part of the Clients.
c. Whether the Delay would cause Prejudice to A&B
[45] Having found that the delay is not “inexcusable” on the part of the Clients, it is unnecessary for me to consider whether the delay would cause prejudice to A&B. Nevertheless, in my view it is appropriate to observe that, given the considerable time that has elapsed since the events that are the subject of the Accounts, there is a substantial risk that A&B will suffer prejudice in proving the Accounts.
[46] In the face of inordinate delay, a rebuttable presumption arises that the innocent party will be prejudiced because of the risk that a fair trial on the merits might not be possible.[^13] Here, A&B’s defence of the Accounts will depend on the recollection of its witnesses concerning services that were performed as long as 15 years ago. A number of the lawyers and law clerks who worked on the underlying file for Linett between 2002 and 2012 are no longer with the firm and are thus unavailable. Further, it is reasonable to presume that the ability of any witness to reliably recall events and conversations that occurred well over a decade ago has been severely compromised by the passage of time.
[47] Linett argues that an assessment is largely a documents case and there is no expectation that the solicitors would testify from memory as to the work product. Nor is there any suggestion, in contrast to Price v. Sonsini, that any of the working files of the solicitors have been destroyed or lost.
[48] While the assessment will largely be based on the documentary record, it will be challenging for A&B to offer a reasonable explanation and justification for the work that was done given the fact that a significant number of those who worked in the file are no longer available. In my view, it is reasonable to presume that the passage of time has been such that it will impair A&B’s ability to prove its Accounts, resulting in a substantial risk that a fair assessment on the merits will not be possible.
Conclusion
[49] I have found that the delay in this case is inordinate and that there is a substantial risk of prejudice to A&B’s ability to prove the Accounts. At the same time, however, Linett has offered a reasonable examination for most of the delay attributable to his conduct. In any event, I find that the vast majority of the delay that has occurred in this case is of an institutional nature, attributable to actions or decisions of the assessment officer and/or the assessment office.
[50] Accordingly, A&B’s motion is dismissed with costs to the Clients. I leave it to the parties to attempt to settle the quantum of costs. In the event that they are unable to so agree, the parties may make written costs submissions of up to three pages (excluding Bills of Costs and Offers to Settle), with the Clients’ submissions due 21 days from today and A&B’s submissions due 21 days later.
[51] Before concluding, I believe it is appropriate and necessary to observe that the circumstances described here raise serious questions about the fairness and effectiveness of the current process for assessing solicitors’ accounts in Ontario. As described earlier, there is a significant public interest in a fair procedure for the assessment of a solicitor’s bill. Not only is this important for the administration of justice, as well as for solicitors and their clients, it is a simple matter of consumer protection.
[52] The legislature has been able to devise effective processes to resolve disputes arising between a wide variety of licensed professionals and their clients in Ontario. It would appear timely for the relevant authorities and decision-makers to review the process for the assessment of solicitors’ accounts so as to ensure that a similarly fair, effective and expeditious dispute resolution process is in place.
P.J. Monahan J.
Date: April 3, 2018
[^1]: RSO 1990, c. S.15 (the "Act"). [^2]: Langenecker v. Sauve, 2011 ONCA 803 ("Langenecker") at paragraph 5 (per Doherty J.A., citing Lord Diplock in Allen v. Sir Alfred McAlpine & Sons, Ltd., [1968] 1 All E.R. 543 at page 556.) [^3]: Langenecker at paragraph 7. [^4]: See Langenecker at paragraph 8. See also the reasons of Goudge JA in Scaini v. Prochnicki, (2007) 2007 ONCA 63, 85 O.R. (3rd) 179 at paragraph 24, to the effect that, in considering issues involving delay under the Rules, courts should apply a flexible, contextual approach as opposed to a fixed formula, in order to "determine the order that is just in the circumstances of the particular case." [^5]: See, for example, Farhi Holdings Corp. v. Lambton (County), 2009 72026 (Ont. S.C.J); Wallace v. Crate’s Marine Sales Ltd., 2014 ONCA 671. [^6]: Bray v. Fijnheer, 2016 ONSC 1546. [^7]: 2007 ONCA 695 at paragraphs 25-26. [^8]: 2000 SCC 44, [2000] 2 S.C.R. 307 at paragraph 146 (per Lebel J. dissenting, although not on this point). [^9]: 2014 SCC 7, [2014] 1 S.C.R. 87, at paragraphs 1 - 7 and 24 - 33 [^10]: (2002) 2002 41996 (ON CA), 60 O.R. (3d) 257 (C.A.) ("Price") at paragraph 19. [^11]: Note 4, above. [^12]: Langenecker at paragraph 9. [^13]: Tanguay v. Brouse, 2010 ONCA 73 at paragraph 2.