Court File and Parties

Court File No.: CV-17-00575329-0000 Date: 20190111 Ontario Superior Court of Justice

Between: Vladimir Levine, Applicant – and – Michael S. Deverett c.o.b.a. Deverett Law Offices, Respondent

Counsel: Mitchell Worsoff, for the Applicant Alvin Meisels, for the Respondent

Heard: December 5, 2018

A.J. O’MARRA, j.

[1] Vladimir Levine (Levine) has brought an application to have the terms of a retainer agreement with the respondent, Michael Deverett, c.o.b.a. Deverett Law Office (Deverett) determined; specifically as to whether a non-party, Mikhail Titkine (Titkine), to the litigation for which the respondent was retained, is a “client” for the purpose of an assessment of the respondent’s accounts pursuant to s. 3 of the Solicitors Act, RSO 1990, c. S.15.

[2] The applicant is Russian and knew little English at the time he retained Deverett to act on his behalf with regard to a family law matter involving his second wife, Natalia Grigorievna Levina in 2011. He had a construction business in Russia, which required him to be away from Canada for extended periods of time and he wanted Titkine, his son-in-law to assist him by acting as a go-between with the respondent and to translate, communicate and assist him in his dealings with the respondent in the litigation.

[3] At the time the retainer agreement was entered on March 7, 2011 it included Titkine by name and signature. The introductory sentence to the retainer agreement reads as follows:

This letter confirms that you, Vladimir Levine and Mikhail Titkine, have retained Deverett Law Offices (Our “Firm”) to act on your behalf with regard to Vladimir’s family law matter.

This Letter will serve as a Lawyer/Client or Solicitor/Client retainer Agreement (the “Agreement), which will (i) set forth our understanding of the legal services to be performed, (ii) establish the basis and the procedure for payment for legal services, and (iii) govern all aspects of your relationship with our Firm. Please read the following provisions carefully so that you fully understand the terms of the Agreement.

[4] Both Levine and Titkine signed the agreement.

[5] The family law matter concluded on April 27, 2015 when Rogers J. in Newmarket, Ontario ordered Levine’s spouse to pay him a sum of $1,950,000.00, among other relief.

Assessment of Accounts

[6] Shortly afterwards the applicant moved to have the respondent’s account assessed.

[7] On November 14, 2016 at an assessment hearing, scheduled for 10 days before Assessment Officer C.M. Chiba, the respondent sought to have Titkine included as a “client” in the assessment process. The applicant objected to him being a party to the assessment as he was neither a party to the family law proceedings which gave rise to the assessment, nor was he responsible for paying any of the legal bills resulting from the litigation.

[8] Titkine, in his affidavit provided at the time, attested he had signed the retainer agreement because Levine had asked him to help with the litigation, translate all communications between Levine and the respondent and he assisted by preparing court documents. Further, he stated he had accepted financial responsibility to pay the respondent when Levine could not.

[9] As there was a dispute with respect to the retainer, Assessment Officer C.M. Chiba ordered the respondent to bring a motion before a judge for an order to add Titkine as a client for the purpose of the assessment.

[10] On March 22, 2017 Hood J. set aside the order for assessment having found that the extent of the retainer and the nature of the retainer was clearly in dispute. He stated:

Not only does Levine wish to challenge quantum, he also wishes to challenge any instructions from Titkine to Deverett to challenge the $250,000.00 in payment to Titkine and Natalia (Levine’s daughter from his first marriage and Titkine’s wife) and to argue that there was extortion and coercion by both Titkine and Deverett against him. By raising these issues Levine has put the retainer in dispute. He has raised the issue of who is the client; him or Titkine (see Pape v. Worthman para. 9). The Officer will have to determine the nature of the retainer agreement (see Park v. Perrier para. 20). This is not a bare allegation of a disputed retainer. This is a bona fide dispute. The Officer has no jurisdiction to proceed.

[11] Hood J. directed that the matter would have to proceed before a judge to have the terms and the scope of the retainer decided, which he suggested could be done either by application or in a claim. “That is for the parties to work out or failing agreement for Levine to decide.”

[12] After Hood J. set aside the order for assessment Levine, served a notice of application on May 16, 2017 requesting this court order that the respondent’s accounts be referred to an assessment officer for assessment and declaration that Levine is the only client for the purposes of an assessment. In response, Deverett served a notice of motion to strike the notice of application on the grounds that Levine’s request for an order referring the respondent’s accounts to be assessed by an assessment officer was contrary to Justice Hood’s ruling, amongst other concerns.

[13] On January 16, 2018 the motion to strike was before Sanfilippo J. who suggested after a number of case conferences that Levine consider amending his notice of application or “other process”. Subsequently, Levine amended the notice of application to request “a determination as to the terms of the retainer”.

The Issue

[14] In this unusual case, the core issue before me is whether Titkine, a non-party to the family law litigation between Levine and his second wife Natalia Grigorievna Levina, is a “client” of the respondent as well.

[15] The Rules of Professional Conduct defines “client” as “a person who:

a) consults a lawyer and on whose behalf the lawyer renders or agrees to render legal services; or

b) having consulted the lawyer, reasonably concludes that the lawyer has agreed to render legal services on their behalf; and

includes a client of the law firm of which the lawyer is a partner or associate, whether or not the lawyer handles the client’s work.”

[16] The assessment of the respondent’s accounts, which the applicant seeks is made pursuant to s. 3 of the Solicitors Act which provides as follows:

3. 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.

[17] There is no definition of the word “client” in section 3, which deals with either a client or solicitor requisitioning an assessment of a solicitor’s accounts.

[18] There are very few cases which deal with the question as to who is a “client” in terms of a s. 3 requisition of an assessment of a solicitor’s account. In Roach, Schwartz and Associates v. Pinnock et al, [2004] O.J. No. 1230 Spence J. in a dispute as to who the client was for the purpose of assessing a solicitor’s account in that case, and how it may be defined, looked to other sections of the Solicitors Act, in which a definition was set out:

[52] The term “retainer” in the context of the Solicitors Act means the act of authorizing or employing a solicitor or counsel. It is clear that this contract can be oral or written. In this case, it was oral.

[53] The Act does not contain a definition of “client” other than the definition set out in s. 15, which is stated to apply to sections 15 to 33 of the Act and would therefore seem not to be mandated for purposes of s. 3. Nevertheless, it may be helpful for the present matter. The definition is as follows:

“client” includes a person who, as a principal or on behalf of another person, retains or employs or is about to retain or employ a solicitor, and a person who is or may be liable to pay the bill of a solicitor for any services; (emphasis added).

[54] Apart from the definition, it would still seem as a matter of ordinary parlance that a person could be a “client” where that person retains a solicitor, either as principal or on behalf of another person, to provide services either to the retaining person or to another.

[19] The only other case referred to me concerning the definition of “client” is Dockrill v. Kickas et al in which Newbould, J. relied on Spence J.’s use of the s. 15 definition of client in Roach et al v. Pinnock to determine whether trustees of a trust that was the defendant were liable as “clients” on the basis that they had retained the solicitor to act on behalf of the trust defendant.

[20] It is a broader definition of client than contained in the Rules of Professional Conduct as it includes a person who is or may be liable to pay the bill of a solicitor for any services.

EVIDENCE

(a) Titkine’s evidence as to whether he is a “client”.

[21] Titkine stated in his affidavit, sworn August 20, 2018 at para. 6:

On March 7, 2011, Levine and I met with Michael S. Deverett to discuss the retainer. Mr. Deverett requested that both Levine and I sign the retainer agreement. Mr. Deverett wanted to have at least one client resident in Ontario who would be responsible to pay DLO’s (Deverett Law Office) account. I signed the retainer because Levine asked me to help him with the litigation. I also wanted to be a client of DLO because I wanted my communications with DLO to be protected by solicitor and client privilege and not disclosed without my permission. I accepted financial responsibility to pay DLO. When Levine ran out of money, I paid several DLO’s accounts. I accepted responsibility to translate all communications between Levine and DLO. I accepted responsibility to assist DLO in preparing court documents and otherwise.

[22] Further, he stated at para 8:

I played an integral role in the family law proceeding including without limitation: submitting affidavit evidence; translating documents submitted by both sides; assisting and obtaining documents and information; making retainer payments; and otherwise.

[23] In addition, he noted that at para. 12 of the affidavit, when Levine had run out of money, he and his wife paid a number of the respondent’s accounts from their personal funds. On February 27, 2013 he paid $1,000.00 and on August 12, 2013 he paid $40,000.00. Those funds, including amounts paid by his wife, were subsequently reimbursed to them.

[24] He testified that before the retainer agreement was entered into, Mr. Deverett explained he would only take the case if both he and Levine signed the retainer agreement and Levine agreed that he would sign as a client.

[25] He noted that he was named on each and every statement of account rendered by Deverett during the litigation.

[26] Titkine testified on examination that he assumed financial responsibility to pay DLO’s accounts when Levine could not pay as a result of him having run into financial difficulty with his construction firm in Russia, and subsequently declared bankruptcy. Also, when Levine had a serious head injury in April 2012 and he had difficulty communicating for a period of time, he was the person responsible to deal with Deverett. Further, when Levine suddenly transferred a property, contrary to a freezing order, to Marina, the mother of one of his children who had been taking care of him since his injury, Titkine assisted with the preparation of the response to a contempt motion brought by Levine’s wife.

[27] Titkine testified the respondent became concerned that Levine had run out of money as a bankrupt, he had a significant injury and he had acted in contempt of a court order. He asked the respondent to continue to act in the litigation. The respondent requested a further retainer of $40,000.00 to do so. Titkine paid the requested amount and assisted the respondent in providing documentation about Levine’s injury and personal circumstances to the court, which led to the dismissal of the contempt motion. In his evidence on examination October 11, 2018 at question 319 he stated:

So, I put together a package, (of his injuries)…and we showed it to Justice Kauffman and this helped us with the case, get rid of the contempt, get rid of the contempt. It was done entirely on my instructions, it was done entirely on my lead.

[28] In re-examination he was asked as to who provided instructions about offers to settle made by Mr. Deverett on Mr. Levine’s behalf during the four years of the litigation. Mr. Titkine said there were many offers made and in the beginning it had been Mr. Levine, but when he became sick, he did.

(b) Levine’s evidence as to Titkine as a “client”

[29] In Mr. Levine’s affidavit of May 19, 2017 at para. 6 he stated:

The respondent did not explain the terms of the retainer agreement to me prior to signing same and because I expected that he was a trustworthy person, being a lawyer I signed the document as directed. For reasons I do not understand without explanation offered to me by the respondent as to why the retainer agreement was also signed by Mikhail. … Mikhail was to provide his assistance with communications between the respondent and I (sic), but that all times I would be the instructing client. Mikhail in turn offered to assist me by providing translation services and, as he was my son-in-law, I expected that this service would be offered without cost to me.

[30] In cross-examination on September 13, 2018 Mr. Levine admitted that Mikhail Titkine had read and translated the contents of the retainer agreement to him, specifically the first line that included Titkine as a party to the agreement with Levine. He acknowledged that Titkine translated all the important parts of the retainer agreement. Levine also knew that Titkine had signed the agreement.

[31] He was asked: “Did he not sign it, because as the first sentence of the agreement states he was also a client?” Answer: “I thought maybe – I asked him to help me and we agreed that he would represent my interests in my agreement with Deverett.” (Emphasis added)

[32] Mr. Levine stated that he had not returned to Canada to attend court between 2012 and April 27, 2015 when the matter concluded. He never communicated directly with the respondent and he never made payments to the respondent’s account directly, only through Titkine. At one time, he had declared bankruptcy in Russia due to his failing business and he had run out of money to pay the respondent’s account.

Conclusion

[33] The definition of client in section 15 of the Solicitors Act, which states in part that a client is “a person who is or may be liable to pay the bill of a solicitor for any services” provides a useful guide in the circumstances of this case as to whether Titkine is a “client” for purposes of a section 3 assessment of accounts.

[34] Titkine stated in his evidence, he signed the retainer because Levine had asked him to help in the litigation. Titkine also wanted to be considered a client because he wanted his communications with the respondent protected by solicitor and client privilege and not disclosed without his permission. Further, he accepted financial responsibility to pay the respondent in order to continue his retainer and paid several of the respondent’s accounts when Levine had run out of money.

[35] Based on the evidence of both Levine and Titkine, I accept that Levine knew Titkine had signed the retainer agreement and was a party to the terms of the retainer, as referenced in the first line of the agreement. Named in the retainer agreement and as a signatory, Titkine became liable to pay Deverett’s bill and he made de facto payment of the solicitor’s account when Levine had been unable to do so. In addition, Levine stated, “…we agreed that he would represent my interests in my agreement with Deverett.”

[36] In applying the s. 15 definition of client, I am satisfied that Mr. Titkine was a client for the purpose of a section 3 solicitor’s accounts assessment.

[37] There is a matter of some concern that arose in submissions of counsel for the applicant on the hearing; an apparent rationale for Levine seeking the declaration that he is the only client in this matter. He alleges malfeasance and collusion by the respondent and Titkine to deny him a fair and true assessment.

[38] These concerns were raised earlier before Assessment Officer Chiba, as noted in the endorsement, dated November 16, 2016 at para. 10:

Furthermore, according to Mr. Worsoff, Mr. Titkine was in conflict of interest situation respecting Mr. Levine in that he, Mr. Titkine was engaged in some kind of improper or illicit arrangement with the Solicitor, Mr. Deverett who had made unauthorized payments to Mr. Titkine from the monies held in trust by the Deverett Law Offices for the benefit of Mr. Levine.

[39] Similarly, it was also noted in the endorsement of Hood J. that Levine wishes to challenge any instructions from Titkine to Deverett, specifically to challenge the $250,000.00 in payments to Titkine and Natalia and to argue that there was extortion and coercion by both Titkine and Deverett against him.

[40] Counsel for the applicant admitted in submissions that they decided to pursue this matter by application, rather than by commencing an action in order to expedite the process. However, in choosing to proceed by application, it has denied the respondent and Titkine the opportunity to defend against the applicant’s allegations, which is unfair to them.

[41] If Levine wishes to challenge the distribution of the proceeds from the action, the respondent’s accounts and to make allegations of malfeasance, he should have pursued this matter in an action setting out the full particulars of those allegations in order to permit Deverett and Titkine to respond appropriately in defence.

[42] In the result, the applicant’s request for a declaration that Levine is the only “client” for the purposes of an assessment of the respondent’s accounts pursuant to section 3 of the Solicitors Act is dismissed. The order sought by the respondent that Mikhail Titkine was a client in the circumstances is granted.

[43] Costs are awarded to the respondent. If the parties cannot agree between themselves as to costs, brief submissions no longer than 4 pages including costs outline may be submitted within 15 days of this ruling.

A.J. O’MARRA, J. Released: January 11, 2019