Overview

[1] The Applicant, Vivian Reiss, brings this motion opposing confirmation of the Assessment Officer R. Ittleman’s certificate of assessment of her solicitor’s account (the “Certificate”). The Respondent, Chernos Flaherty Svonkin LLP (“CFS,” or the “Solicitors”), opposes the motion. The Respondent, Torys LLP (“Torys”), did not participate.

[2] From July 2013 to November 2014, the Applicant was billed a total of $153,532.42 in legal fees. The Applicant paid $52,967.00 in fees. The first four accounts were delivered by Torys and were paid. The subsequent ten accounts were rendered by CFS. The Applicant sought an assessment of the fees.

[3] After a three-day hearing in July 2015, the Assessment Officer rendered a decision on February 13, 2017 (the “Decision”). The Certificate reduced the account to $145,255.17. The Assessment Officer ordered the Applicant to pay $25,000.00 in costs for the assessment.

[4] For the reasons that follow, I dismiss the motion and confirm the Certificate.

Factual Background

[5] The Applicant was involved in a protracted family law proceeding with her former spouse, in which she was represented by Avra Rosen. The Applicant held an interest in a substantial real estate portfolio held by corporations jointly owned with her former spouse. The corporate assets were valued at over $30 million. In consultation with Ms. Rosen, the Applicant sought to retain highly-qualified commercial litigation counsel to assist with a potential oppression claim under the Business Corporations Act, R.S.O. 1990, c. B.16. In September 2013, Ms. Rosen contacted Sheila Block at Torys LLP, and asked Ms. Block to recommend a colleague on the understanding that she would be “parachuted in” as necessary. Ms. Block referred the matter to her partner, David Chernos.

[6] At a meeting in September 2013, the Applicant retained Torys. The parties disagree as to the scope of the retainer. The Applicant maintains that Torys was retained solely to obtain the sale of one of the properties, 124 Merton Street (“124 Merton”). The Solicitors state that they were retained to pursue an oppression claim, and to ensure that the family law litigation and the civil litigation were proceeding in concert.

[7] At the end of 2013, Mr. Chernos left Torys to start his own firm, Chernos Flaherty Svonkin LLP. The Applicant, in consultation with Ms. Rosen, chose to move her file from Torys to CFS.

[8] In the spring of 2014, the Applicant indicated that she was having cash flow problems and requested additional time to pay the monthly accounts. CFS agreed.

[9] In the fall of 2014, the Applicant terminated the retainer on the basis that she was having difficulty paying the various professionals and advisors working for her, because her assets were tied up in the family law proceeding. Mr. Chernos helped transition the file to Ms. Rosen, who advised that his assistance might be needed again if the matter went to trial.

Analysis

Standard of Review

[10] A motion to oppose confirmation of a certificate of assessment is in the nature of an appeal. Courts show “considerable deference” to the Assessment Officer’s decision: Wilson v. Edward, 2015 ONSC 596, at para. 12. The Assessment Officer conducts a detailed review of the accounts and renders a decision based on their expertise on the matter. A reviewing court is not to rehear the assessment and come to its own conclusion as to what is reasonable: Rabbani v. Niagara (Regional Municipality), 2012 ONCA 280, 2 M.P.L.R. (5th) 23, at para. 6.

[11] Where, as here, the Assessment Officer has heard oral evidence, the court is to treat the findings in the same manner as those made by a trial judge: Regan v. Petryshyn, [2007] O.J. No. 3942 (S.C.J.), at para. 20.

The Applicable Test

[12] The parties agree on the legal test to be applied in reviewing the Assessment. 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, the decision is entitled to deference: Rabbani, at para. 6.

[13] The Applicant challenges the Certificate on the basis that the Assessment Officer failed to properly review the evidence against the relevant factors, failed to perform his function and grapple with real issues, and made palpable and overriding errors. The Applicant also argues that the Decision is so unreasonable as to constitute an error in principle.

Did The Assessment Officer Properly Analyze the Relevant Factors?

[14] In Cohen v. Kealey & Blaney (1985), 10 O.A.C. 344 (C.A.), at para. 11, the Court of Appeal identified the factors to be considered by the Assessment Officer:

(i) The time expended by the solicitor;

(ii) The legal complexity of the matter;

(iii) The degree of responsibility assumed by the solicitor;

(iv) The monetary value in issue;

(v) The importance of the matter to the client;

(vi) The degree of skill and competence demonstrated by the solicitor;

(vii) The results achieved;

(viii) The client’s expectation as to the amount of the fee; and

(ix) The ability of the client to pay.

[15] The Assessment Officer has the discretion to assign weight to each of the factors as deemed appropriate in the circumstances: Regan, at para. 29.

[16] In essence, the Applicant’s position is that the Assessment Officer did not properly analyze the relevant factors both because he failed to properly assess the time spent in relation to the complexity of the matter and because no results were achieved by the Solicitors.

[17] The Assessment Officer assessed the matter as “above average” in complexity, based on his review of the evidence. The Applicant submits that the matter was not complex, and points to the materials drafted by the Solicitors: a notice of application, a notice of motion, two affidavits, and a brief factum, as demonstrating this. The Applicant highlights the absence of any case law on the oppression remedy in the draft factum. The Applicant argues that she was able to obtain the desired result, the sale of 124 Merton, which was ordered by Mesbur J. pursuant to the Family Law Rules, without resorting to oppression remedy principles or an oppression application.

[18] However, it was on the advice of the Applicant’s experienced family law lawyer that the Applicant sought and retained highly qualified commercial litigation counsel. The Applicant was in regular contact with Mr. Chernos. If the matter was as straightforward as the Applicant now claims, this would not have been necessary. While the result may have been achieved more simply than originally anticipated, this was not a foregone conclusion. Even when the Solicitors’ retainer was terminated, Ms. Rosen advised Mr. Chernos that his assistance might be required in the future, demonstrating that the matter was not, even then, as straightforward as is now argued. In my view, it is only in hindsight that the Applicant can assert that the matter was not complex. The Assessment Officer did not err in finding that the matter was of above average complexity.

[19] Once the Assessment Officer determined that the matter was of above average complexity, he assessed the hours spent by the Solicitors on this basis. In referring only to the draft materials produced by the Solicitors, the Applicant understates their participation. The Decision refers specifically to the high legal complexity, the need to liaise with Ms. Rosen and the experts, and the Applicant’s hands-on involvement in her case. The Assessment Officer also summarized and listed the work conducted by the Solicitors. In addition to drafting materials, they regularly met and communicated with the Applicant, Ms. Rosen, and the retained experts; they conducted cross-examinations; they attended case conferences; and they reviewed documentation and commented on drafts in the family law proceeding to maintain consistency.

[20] While the Applicant argues that the Assessment Officer failed to conduct a line by line analysis of the accounts, I find no basis for this conclusion. The Assessment Officer disallowed certain hours billed by the Solicitors, and reduced the accounts accordingly. The Assessment Officer was not required to explain the basis for his acceptance of each entry of the accounts.

[21] The Applicant submits that in analyzing the degree of responsibility assumed by the Solicitors, the Assessment Officer did not consider the factors identified in Holmes v. Lerners LLP, 2014 ONSC 5449, at para. 42. While the Assessment Officer did not conduct a point by point analysis of those factors, he clearly took them into consideration, either in that section of the Decision or at other points. With regard to keeping the client apprised, the Assessment Officer considered the detailed accounts and the “regular flow of emails and other communications” with the Applicant. Contrary to the Applicant’s submissions, the Assessment Officer found that work was appropriately delegated to a less expensive timekeeper. Based on Mr. Chernos’ notes, the Assessment Officer found that the hourly rate had been discussed. Moreover, the Assessment Officer’s finding that the Solicitors attended case conferences at Ms. Rosen’s request negates the Applicant’s argument that the Solicitors failed to keep costs down, for example by attending at court only when necessary. The Assessment Officer did not err in finding that the Solicitors fulfilled their responsibility “in a more than reasonable fashion.”

[22] The Applicant also challenges the Decision because the Assessment Officer considered the results achieved in conjunction with the degree of skill and competence exercised by the Solicitors. The Applicant argues that the factum drafted by the Solicitors was “useless” despite having obtained a positive result. The Assessment Officer did not err in finding that the work completed by the Solicitors was relied upon by the Applicant in the motion before Mesbur J. and that it contributed to the successful result. Mesbur J.’s reasons mention that relief was sought for oppression. The fact that Mesbur J. based her decision on the Family Law Rules does not mean that the totality of the arguments and circumstances were not useful.

[23] Given that the Assessment Officer has discretion to weigh the factors and the evidence in support of those factors, I find no error in the Assessment Officer’s application of the factors.

Did the Assessment Officer Make Palpable and Overriding Errors?

[24] The Applicant makes a complaint that the Assessment Officer committed palpable and overriding errors in relation to the following specific findings of fact:

• The scope of the retainer was to resist sale by the Applicant’s ex-spouse and advance her claim;

• The factum drafted by the Solicitors was not in its final form and was useful to obtaining the result;

• The accounts fell within the client’s reasonable expectations; and

• The Applicant’s cash flow issues were a pretext to avoid paying the Solicitors’ bills.

[25] The Applicant disagrees with the Assessment Officer’s factual findings, but those findings are more than supported in the record before him.

[26] On the scope of the retainer, the Assessment Officer rejected the Applicant’s evidence that Mr. Chernos was retained as a “figurehead” to be involved once in a while, because this was inconsistent with Ms. Rosen’s evidence that they were retained to commence an oppression application. It would also be inconsistent with the bulk of the evidence that showed that the Solicitors were closely involved with the matter.

[27] As noted above, the Assessment Officer did not err in finding that the factum was useful in obtaining the result. It was open to the Assessment Officer to find that the draft factum in the record was not the final factum, because it was unclear from the evidence whether it was in fact the final factum as filed. In any event, this is not material to the analysis of the relevant factors.

[28] Regarding the client’s reasonable expectations, the Assessment Officer accepted Mr. Chernos’ evidence of the September 2013 meeting, in which he advised the Applicant that his hourly rate was “under $900 per hour” and that Ms. Block’s hourly rate was “over $1000 per hour.” The Assessment Officer did not err in noting that the Applicant had not questioned or complained about the accounts as they were delivered. The Assessment Officer acknowledged that a failure to complain does not preclude a client from asserting a statutory right to an assessment of the account. He relied upon this evidence to find that the Applicant was on notice as to the hourly rates charged by the Solicitors, the hours spent, and the total amount incurred on a monthly basis.

[29] The Applicant argues that the Assessment Officer disregarded Ms. Rosen’s evidence when he found that the Applicant terminated the Solicitors’ retainer on the “pretext” that she was not able to pay. Contrary to this finding, Ms. Rosen testified that the Applicant was having difficulty paying all the professionals who were assisting her because her assets were tied up and she was having cash flow issues. However, nothing turned on this finding. It does not change the fact that the Applicant did not terminate the Solicitors’ retainer on the basis that their services were superfluous or unsatisfactory, or because the bills were excessive. The fact remains that none of these issues were raised.

[30] The Applicant argues that the Assessment Officer erroneously found that the Applicant was satisfied and even complimentary of the Solicitors’ work by disregarding the Applicant’s testimony that the material was not prepared in a timely manner. In a contemporaneous email, the Applicant commented that a draft affidavit was “strong and impressive.” While there was a complimentary email, there were no communications criticizing the material or its timeliness. Moreover, Ms. Rosen gave no evidence of delay by the Solicitors. The Assessment Officer did not err in his finding.

[31] While the Applicant argues that the Assessment Officer misapprehended the evidence and made palpable and overriding errors on factual matters, I find that this is a parsing of the evidence and the weight given to the evidence by the Assessment Officer. This is not the role of the court on review: Speciale Law Professional Corp. v. Shrader Canada Ltd., 2017 ONSC 3613 (Div. Ct.), at paras. 48, 51.

Was the Decision so Unreasonable as to Constitute an Error in Principle?

[32] The Assessment Officer considered the Applicant’s position on these factors in assessing the accounts, including many of the arguments made on this motion, but nonetheless found that the matter was complex, the accounts were consistent with the Applicant’s expectations, and that the Solicitors’ work helped achieve a positive result for the Applicant. Those findings could reasonably be made on the evidence before him. The Decision was not so unreasonable as to constitute an error in principle.

[33] The Assessment Officer did not, as the Applicant submits, fail to grapple with the real issues or engage in results-selective reasoning. I disagree with the Applicant that the Assessment Officer’s reasons are inadequate. Given the painstaking manner in which the parties challenged and substantiated the accounts, the Applicant may have expected a more detailed analysis of the specifics. However, it would be impractical and overly burdensome for an Assessment Officer to have to address every fact raised by a party over the course of a three-day hearing. The evidence included a voluminous documentary record and the testimony of the Applicant, Ms. Rosen, Mr. Chernos, and Tycho Manson, who worked with Mr. Chernos. In this case, the Assessment Officer has, as he is obligated to, set out reasons for the Certificate and provided an analysis of the appropriate factors and the evidence related to them, showing the path of reasoning: Bales and Beall LLP v. Fingrut, 2013 ONCA 266, aff’g, 2012 ONSC 4991; Wilson, at para. 90.

Conclusion

[34] Based on the foregoing, I see no basis for interfering with the Certificate and Decision. The Application is dismissed and the Certificate is confirmed.

Costs

[35] The parties each submitted a Costs Outline at the hearing of the motion. Both parties’ costs were comparable. The Applicant’s costs were approximately $12,707.00, while the Respondents’ costs were approximately $14,307.00, each on a partial indemnity basis.

[36] Pursuant to Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1), the court has broad discretion when determining the issue of costs. The overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26. Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the factors to be considered by the court when determining the issue of costs.

[37] I have considered these factors, as well as the principle of proportionality in r. 1.04(1.1) of the Rules of Civil Procedure, while keeping in mind that the court should seek to balance the indemnity principle with the fundamental objective of access to justice. The issue was not complex, but the amount at issue was significant. The arguments and material before me were substantially based on the submissions made to the Assessment Officer.

[38] Based on the foregoing, I fix total costs of the motion on a partial indemnity basis at $10,000.00, inclusive of disbursements and HST.

Nishikawa J.

Date: October 4, 2018

Reiss v. Torys LLP, 2018 ONSC 5893

Case Summary

Overview

Factual Background

Analysis

Standard of Review

The Applicable Test

Did The Assessment Officer Properly Analyze the Relevant Factors?

Did the Assessment Officer Make Palpable and Overriding Errors?

Was the Decision so Unreasonable as to Constitute an Error in Principle?

Conclusion

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 4

Legal Tests 1

Legislation 3