Court File and Parties
COURT FILE NOS.: CV-10-399569; CV-16-546023 DATE: 20181114 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: CHANTALE ABBOTT-KEITH, Plaintiff/Appellant AND: SANJAY SHAH and MEENA SHAH, Defendants/Respondents
AND: CHANTALE ABBOTT, Plaintiff/Appellant AND: CHRISTINA CALABRESE and JOHN PETRONI, Defendants/Respondents
BEFORE: Justice S. Nakatsuru
COUNSEL: Bryan Fromstein, for the Plaintiff/Appellant Jonathan B. Schrieder, for the Defendants/Respondents Calabrese and Petroni S. McGarry, for the Defendants/Respondents Shah
HEARD: November 6, 2018
Endorsement
1These two appeals were heard together. The plaintiff, Ms. Abbott, was in two separate motor vehicle accidents. She sued the defendants. These actions were settled. Part of that settlement required that the party and party costs be assessed by an Assessment Officer. This was done by Assessment Officer A. Palmer. She issued a Certificate of Assessment of Costs dated February 16, 2018. Assessment Officer Palmer reduced the costs claimed by Ms. Abbott in these two actions from $220,067.75 to $66,350.42 and awarded costs of the assessment against the plaintiff. Ms. Abbott appeals the Certificate of Assessment of Costs.
2Ms. Abbott raises a number of grounds of appeal: (1) The Assessment Officer erred by failing to performing a line-by-line analysis of the plaintiff’s dockets and disbursements and applied arbitrary deductions to the Bill of Costs; (2) The Assessment Officer breached the plaintiff’s rights to natural justice and procedural fairness by failing to consider the plaintiff’s objections under Rule 58.10 and only considered the defendants’ objections; 3) The Assessment Officer erred in principle in her application of the principles of proportionality and access to justice; 4) The Assessment Officer erred by applying a partial indemnity discount to the disbursements; 5) The Assessment Officer erred by reducing the costs award contrary to s. 20.1 of the Solicitors Act because the plaintiff’s counsel was being compensated by a contingency agreement; and 6) The Assessment Officer erred by ordering the successful plaintiff to pay the defendants’ costs of the assessment.
3I acknowledge that in the absence of an error in law, misapprehension of the evidence, palpable and overriding error on a factual matter, or an assessment so unreasonable that it amounts to an error in principle, an Assessment Officer’s decision is given great deference: Rabbani v. Niagara (Regional Municipality), 2012 ONCA 280 at para. 6. In this case, I find that no deference should be afforded as it is my view that the Assessment Officer denied the plaintiff a fair hearing by failing to provide her a fair opportunity to object to the Assessment Officer’s decision.
4The Divisional Court in RZCD Law Firm v. Williams, 2012 ONSC 2122 at paras. 30-39 dealt with the jurisdiction of the Superior Court to hear appeals from an Assessment Officer. Aside from appeals based upon jurisdictional error or a denial of fairness or natural justice, the law requires an objection to be made to the decision. Rule 58.10 sets this out:
OBJECTIONS TO ASSESSMENT
58.10 (1) On request, the assessment officer shall withhold the certificate for seven days or such other time as he or she directs, in order to allow a party who is dissatisfied with the decision of the assessment officer to serve objections on every other interested party and file them with the assessment officer, specifying concisely the grounds for the objections.
(2) A party on whom objections have been served may, within seven days after service or such other time as the assessment officer directs, serve a reply to the objections on every other interested party and file it with the assessment officer.
(3) The assessment officer shall then reconsider and review the assessment in view of the objections and reply and may receive further evidence in respect of the objections, and the assessment officer shall decide on the objections and complete the certificate accordingly.
(4) The assessment officer may, and if requested shall, state in writing the reasons for his or her decision on the objections.
5While an appellate court on rare occasions has set aside the certificate on appeal even where objections were not made to an Assessment Officer, such objections are generally required to properly base a valid appeal: RZCD Law Firm v. Williams at paras. 35 to 36. Section 17(b) of the Courts of Justice Act and rules 58.10 and 58.11 sets out an internal reconsideration process by the Assessment Officer that must be followed. This is clear from the mandatory language both requiring the reconsideration and written reasons when a party makes objections. As well, the right of a party to appeal an Assessment Officer’s decision is limited to issues where an objection has been made. The Assessment Officer is expected to be open to changing their mind upon considering the objections. This process is intended to discourage appeals other than those involving matters of real substance.
6In this case, the plaintiff was denied procedural fairness in making her objections. Counsel for the Shahs characterized what happened as a product of miscommunication. That may well be but the result was still the same. The plaintiff did not get a fair chance to make the objections that she wished.
7The following is the history of what happened after the Assessment Officer made her initial decision of January 15, 2018. On that date, she sent an email to the parties attaching her decision. She advised the parties that before she issued the report, they would have until January 29, 2018, to make submissions, if necessary, regarding the costs of the assessment.
8That same day, Mr. Schrieder, representing Calabrese and Petroni, responded by email stating that there were significant errors of fact in the decision and asked if the Assessment Officer would be inclined to reconsider these errors.
9On January 16, 2018, the Assessment Officer sent an email to counsel for the parties. She wrote:
Dear Counsel,
I will allow you to make a submission setting forth whatever facts you believe are in error.
Counsel for the Plaintiff is given 14 days to make its submission for reconsideration. Counsels for the Defendants are given 14 days to file a response. Counsel for the Plaintiff is given 7 days thereafter to reply. Submission is to be limited to 10 pages in length. My ruling on the motion for reconsideration will be issued thereafter.
Due to Counsel for the Plaintiff’s request, the January 29, 2018 deadline for submissions for costs related to the assessment is stricken.
10That same day, the Assessment Officer wrote another email advising she had mistaken Mr. Schrieder as representing the plaintiff when he represented the defendants, Calabrese and Petroni. She advised she was striking the above endorsement. She asked if there were any objections to Mr. Schrieder’s request and stated any proposed briefing schedule from the parties will be entertained. She asked that all parties respond by January 24, 2018. She stated that she will then issue an endorsement on the motion to reconsider thereafter.
11On January 16, 2018, Mr. Schrieder wrote very brief submissions on his client’s request for reconsideration. His submissions related to errors in the decision regarding what his clients settled for, regarding a mistake by reversing the settlements for the two defendants and the apportionment of costs, and regarding an omission in the decision in failing to find that the post-offer steps taken by the plaintiff were unnecessary.
12On January 22, 2018, Mr. McGarry on behalf of the Shahs sent an email with submissions. These too were brief. He agreed with Mr. Schrieder that the settlement amounts had been reversed between the parties. However, he disagreed with Mr. Schrieder’s submission that the apportionment of costs were related to the settlement of the damages.
13On January 23, 2018, Mr. Fromstein for the plaintiff emailed a lengthier set of submissions. He argued that the partial indemnity discount was applied twice. He further submitted that the disbursements were improperly reduced and there was no explanation why they were so reduced except for the photocopying. Further, he submitted that there was no basis in law to reduce disbursements on a partial indemnity scale. The plaintiff submitted that the decision was contrary to the fundamental objective of access to justice. The plaintiff then responded to Mr. Schrieder’s submissions. Finally, the plaintiff made submissions regarding there being no basis to reduce costs as a result of her failing to commence a second action six months after the second accident.
14On January 24, 2018, Mr. Fromstein again wrote to the Assessment Officer referring her to a case called Persampieri v. Hobbs that was released on January 22, 2018. He submitted that this decision of Justice M. Sanderson supported the plaintiff’s submission that any application of the proportionality principle could not justify such a drastic reduction in her costs. Mr. Fromstein ended by stating “For greater clarity the Plaintiff’s submissions yesterday and today are objections pursuant to Rule 58.10”
15On the same day, Mr. McGarry responded. He stated that the plaintiff was seeking to re-litigate the costs assessments through the email submissions though Mr. McGarry did respond to a couple of the plaintiff’s submissions. He ended with: “The plaintiff seeks, essentially, a wholesale change to the decision. The remedy available to them is an appeal pursuant to rule 58.11.”
16On February 5, 2018, Assessment Officer Palmer released her decision titled “Reconsideration of Clerical Error in January 15, 2018, Decision and Reasons.” In this decision, she agreed with the defendants and corrects what she states are clerical errors in her reasons regarding the defendants’ liability under the settlement agreement. As a result, she amended certain phrases in a number of the paragraphs of her January 15, 2018, decision. With respect to the other submissions that were advanced, the Assessment Officer stated:
As to all other matters raised, it appears that the parties, mainly counsel for the Plaintiff, took this opportunity and attempted to re-litigate the issues of the case that were already reviewed, considered and decided by the Court. This falls outside the scope of the motion brought by Defendants Calabrese and Petroni, is improper, and is more appropriate for appeal.
Accordingly, all other additional arguments made by the parties will not be considered.
17On February 7, 2018, Mr. Fromstein emailed the Assessment Officer and requested that the Assessment Officer withhold the certificate for 7 days as required by rule 58.10 so that he could make objections.
18On February 7, 2018, the Assessment Officer responded:
Dear Mr. Fromstein and all Parties,
You are correct that Rule 58.01(1) of the Rules of Civil Procedure allows for objections to be raised within 7 days from the date the decision is issued. In this instance, the decision was issued on January 15, 2018. January 24, 2018 was the deadline to raise any objections to the decision. The time under the rules to file an objection has passed. Accordingly, your request to file objections is denied.
19The costs decision for the assessment and the Certificate of Assessment of Costs were released on February 16, 2018.
20I find that the Assessment Officer made a number of significant errors in the manner in which the objections were dealt with.
21First of all, I find that the plaintiff did make a timely request to make objections within the meaning of Rule 58.10. The Assessment Officer erred in her interpretation of Rule 58.10(1).
22On February 7, 2018, when the Assessment Officer decided that the plaintiff was out of time, the Assessment Officer had not yet received submissions on costs. She had made her initial decision on January 15, 2018. However, she had not yet issued nor did she say when she would issue the certificate. At the time that Ms. Abbott made her formal request to make her objections in the email of February 7, 2018, and that the Assessment Officer withhold the certificate for 7 days, the Assessment Officer had given the parties until February 9, 2018, to make submissions on costs. In my view, Ms. Abbott’s formal request fell within Rule 58.10(1). The Rule speaks to the fact that once a request is made, the Assessment Officer must give the party 7 days to make their objections. The Rule does not say when the party must make the request to make objections. In other words, there is no 7-day limitation period from the date of a decision to make objections. Rather, the 7 days or more (depending on the exercise of the Assessment Officer’s discretion) runs from the time of the request, not any decision rendered. The request must just come before the Certificate of Assessment of Costs is issued. Thus, the plaintiff was entitled to have 7 days from the time she made her formal request on February 7, 2018, to make her objections. In this case, the Assessment Officer erred in believing otherwise.
23Secondly, in substance, the submissions made by the plaintiff on January 23rd and 24th were Rule 58.10 objections. They were made within the original schedule set up by the Assessment Officer. [1] Counsel for the plaintiff explicitly stated that their submissions were Rule 58.10 objections. Thus, these submissions were made in a timely fashion.
24Thirdly, regardless of the timing of the plaintiff’s objections, the Assessment Officer fundamentally misconstrued her role on such a reconsideration. The plaintiff in her submissions of January 23rd and 24th advanced issues that were not merely responding to Mr. Schrieder or Mr. McGarry’s submissions. Most of these issues were directed towards what she perceived to be other faults in the decision. This, the plaintiff was entitled to do. The plaintiff alerted the Assessment Officer to this fact by specifically pointing out for clarification that these were objections under rule 58.10. However, it is clear that the Assessment Officer did not consider them in her decision of February 7th. She seems to have accepted Mr. McGarry’s submission that these were matters for appeal. They were not. The Rules contemplate objections that go to the merits of the decision and may even involve rearguing matters that were argued on the assessment. Objections are not limited to minor, peripheral, or clerical mistakes. The Assessment Officer treated her decision as one that was so limited. In this, she fell into error. By doing so, she denied the plaintiff a fair hearing and a proper consideration of her objections.
25Natural justice or procedural fairness is a fundamental right unto itself. But here, it has even greater impact since in the absence of proper objections, the ability of an appellant to raise the issues on appeal is curtailed.
26Thus, the appeal should be granted on this ground alone.
27I have considered carefully what the proper remedy should be. I appreciate that I have significant powers on this appeal including the determination of the costs award myself: Skeggs v. Aloe-Gunnell, 2015 ONSC 2743; Newall v. Sax, 2018 ONSC 4517; Baes Beall LLP v. Fingrut, 2012 ONSC 4991, [2012] O.J. No. 4762 (S.C.J.).
28However, I decline to do so in this case for the following reasons.
29First of all, the plaintiff does not ask that I determine the costs. The plaintiff seeks a detailed line-by-line review of the Bill of Costs and submits that the proper remedy should be a fresh assessment conducted by another Assessment Officer.
30Secondly, I have considered whether there is any merit to the plaintiff’s grounds of appeal. There is no point to granting a remedy if the appeal is frivolous or obviously devoid of any merit. In my opinion, it is not. I do not intend to rule on the various complaints made. This would infringe on the power that is given to the Assessment Officer on a reconsideration. I will just say that the plaintiff has raised points of substance on this appeal.
31On the appeal, all the parties have agreed that the Assessment Officer’s reasons are not the most detailed or illuminating of decisions. While the issues raised in the assessment may affect the type of analysis done by the Assessment Officer regarding the Bill of Costs, the parties are entitled to know why and how certain fees or disbursements are or are not awarded. Reasons serve a purpose. It must explain to the parties, the appellate court, and the public why a decision was made. It does not serve these purposes if they merely lead a party to reasonably believe that an arbitrary deduction was made. There is some merit to the plaintiff’s complaint in this case.
32I also note that the plaintiff objects strongly that the costs award does not even cover the disbursements it incurred. He points to the case of 3664902 Canada Inc. v. Hudson’s Bay Co. for the proposition that disbursements reasonably spent should not be further reduced on the basis of partial indemnity which is what it is alleged the Assessment Officer did. Ms. Abbott further submits that a more detailed analysis of the actual disbursements should have been undertaken, and if it were, it would be seen they were reasonably necessary and in reasonable amounts, especially given that the settlement was not achieved until close to trial.
33Thirdly, I find that for me to conduct this costs assessment would not be in keeping with the legal framework set out. A proper reconsideration is required. I am mindful of the fact that a party may feel that making the same submissions to the decision-maker who has already rejected the submissions once before, is not a fruitful remedy. However, the Rules mandate this internal reconsideration. Further, I see that it can be a productive exercise. A party when equipped with the decision itself may be in a better position to address the concerns of the Assessment Officer and thus be better placed to persuade a change in position. On the other hand, for me to conduct the costs assessment would be an invitation to those dissatisfied with a decision of an Assessment Officer, to perfunctorily address the objections phase in order to go straight to an appeal.
34Finally, I see no reason why the reconsideration should not go back to Assessment Officer Palmer. The procedural unfairness is isolated to the objections phase. It does not taint the primary decision made on January 15, 2018. Further, the type of unfairness that happened here resulted from miscommunication between the parties and the Assessment Officer and a misunderstanding about the scope of what she was to consider and the running of the timelines in Rule 58.10. It does not reflect the type bias that might otherwise disqualify her. The Rule envisions this type of reconsideration be conducted by the same decision-maker. I am confident that Assessment Officer Palmer will give due regard and attention to all of the objections raised by the plaintiff and will deliver detailed and comprehensive reasons if requested for any decision she makes regarding this. Given that the Assessment Officer has already conducted a review of the case, it will be wasteful to duplicate this again with another Assessment Officer.
35Thus, I order that the Certificate of Assessment of Costs dated February 16, 2018, be quashed. The matter is remitted back to Assessment Officer Palmer for the hearing of any objections on the timetable that she may fix.
36If the issues of costs cannot be resolved between the parties, I will entertain written submissions, each one limited to two pages excluding any attachments (any Bill of Costs, Costs Outline, and authorities). The appellant shall file within 10 days of the release of these reasons. The respondents shall file within 7 days thereafter. There will be no reply submissions without leave of the court.
Justice S. Nakatsuru Released: November 14, 2018
1It is not clear if there was a timetable for submissions set up. If one looked at the second email of January 16, after the Assessment Officer became aware of her confusion about who Mr. Schrieder represented, it appears as if she was only asking for the parties’ intentions and was willing to set up a further timetable for submissions. However, the parties appear to have simply gone ahead and made submissions to her.