Court File and Parties

COURT FILE NO.: CV-18-592687 - 0000 DATE: 2019/03/18 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Gary Posner AND Elaine Kay, Plaintiffs

• and - WEIRFOULDS LLP, CLARE E. BURNS, BIANCA V. LA NEVE, HULL & HULL LLP, IAN M. HULL and DOREEN LOK YIN SO, Defendants

Counsel: David Marcovitch for the Plaintiffs Michael R. Kestenberg for the Defendants Hull & Hull LLP, Ian M. Hull and Doreen Lok Yin So

HEARD: March 5, 2019

PERELL, J.

Reasons for Decision

A. Introduction

[1] Gary Posner and Elaine Kay, as assignees of the claims of the Estate of James Kay, sue WeirFoulds LLP, Claire E. Burns, and Bianca V. La Neve (collectively, the “WeirFoulds Defendants”), and Hull & Hull LLP, Ian M. Hull, and Doreen Lok Yin So (collectively, the “Hull Defendants”).

[2] In their action against the Hull Defendants, Gary Posner and Elaine Kay seek an assessment under the Solicitors Act of a $320,000 account for legal services rendered by the Hull Defendants to Sean Kay but paid by the Estate of James Kay pursuant to Terms of Settlement that were approved by court Order.

[3] The Hull Defendants move for a summary judgment dismissing Mr. Posner and Mrs. Kays’ action as against them; i.e., the Hull Defendants move to have the claim for an assessment dismissed.

[4] The Hull Defendants submit that Mr. Posner and Mrs. Kays’ action should be dismissed for two reasons: (a) they cannot demonstrate “special circumstances”, which is a prerequisite for an assessment under the Solicitors Act; and, (b) the action is an impermissible collateral attack against a court order.

[5] For the reasons that follow, I grant the summary judgment motion and I dismiss the action as against the Hull Defendants.

B. Solicitors Act

[6] The relevant provisions of the Solicitors Act are set out below.

Order for assessment on requisition

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.

No reference on application of party chargeable after verdict or after 12 months from delivery

4. (1) No such reference shall be directed upon an application made by the party chargeable with such bill after a verdict or judgment has been obtained, or after twelve months from the time such bill was delivered, sent or left as aforesaid, except under special circumstances to be proved to the satisfaction of the court or judge to whom the application for the reference is made.

Directions as to costs

(2) Where the reference is made under subsection (1), the court or judge, in making it, may give any special directions relative to its costs.

Assessment where a party not being the principal, pays a bill of costs

9. (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.

What special circumstances may be considered in such case

(2) If such application is made where, under the provisions hereinbefore contained, a reference is not authorized to be made except under special circumstances, the court may take into consideration any additional special circumstances applicable to the person making it, although such circumstances might not be applicable to the party chargeable with the bill if he, she or it was the party making the application.

Order for delivery of a copy of the bill

(3) For the purpose of such reference, the court may order the solicitor, his or her assignee or representative, to deliver to the party making the application a copy of the bill upon payment of the costs of the copy.

Assessment at instance of third person

(4) When a person, other than the client, applies for assessment of a bill delivered or for the delivery of a copy thereof for the purpose of assessment and it appears that by reason of the conduct of the client the applicant is precluded from assessing the bill, but is nevertheless entitled to an account from the client, it is not necessary for the applicant to bring an action for an account, but the court may, in a summary manner, refer a bill already delivered or order delivery of a copy of the bill, and refer it for assessment, as between the applicant and the client, and may add such parties not already notified as may be necessary.

Application of s. 6

(5) The provisions of section 6, so far as they are applicable, apply to such assessment.

Payment not to preclude assessment

11. The payment of a bill does not preclude the court from referring it for assessment if the special circumstances of the case, in the opinion of the court, appear to require the assessment.

Agreements between solicitors and clients as to compensation

16. (1) Subject to sections 17 to 33, a solicitor may make an agreement in writing with his or her client respecting the amount and manner of payment for the whole or a part of any past or future services in respect of business done or to be done by the solicitor, either by a gross sum or by commission or percentage, or by salary or otherwise, and either at the same rate or at a greater or less rate than that at which he or she would otherwise be entitled to be remunerated. R.S.O. 1990, c. S.15, s. 16 (1).

Definition

(2) For purposes of this section and sections 20 to 32,

“agreement” includes a contingency fee agreement.

Reopening of agreement

25. Where the amount agreed under any such agreement has been paid by or on behalf of the client or by any person chargeable with or entitled to pay it, the Superior Court of Justice may, upon the application of the person who has paid it if it appears to the court that the special circumstances of the case require the agreement to be reopened, reopen it and order the costs, fees, charges and disbursements to be assessed, and may also order the whole or any part of the amount received by the solicitor to be repaid by him or her on such terms and conditions as to the court seems just.

C. Facts

[7] James Kay passed away on December 8, 2013. Gary Posner, who is an accountant, and Elaine Kay, who was James Kay’s widow, were named trustees of James Kay’s Estate. They retained WeirFoulds LLP as lawyers for the Estate. As will emerge from the narrative below, a third trustee, Bryan Tannenbaum, was appointed later pursuant to the terms of a settlement agreement.

[8] On July 29, 2014, Sean Kay filed a Notice of Objection to the issuance of a certificate of appointment of Gary Posner and Elaine Kay as Estate Trustees of his late father James Kay. Elaine Kay is Sean Kay’s mother. Sean Kay is a beneficiary of the Estate.

[9] On October 9, 2014, Sean Kay retained the Hull Defendants to act as litigation counsel in an application to challenge the validity of two codicils and the primary and secondary wills of his late father James Kay, which were dated June 7, 2011.

[10] On October 9, 2014, Sean Kay commenced an application for directions, which included a challenge to the validity of his father’s testamentary instruments. The Respondents were Mr. Posner and Mrs. Kay, as Estate Trustees, Mrs. Kay, Allyson Goldstein, Melanie Candice Kay, Wendy Joy Kay, as beneficiaries of the Estate, and the Children’s Lawyer, representing the interests of minors and unborn and or unascertained beneficiaries.

[11] Mr. Posner and Mrs. Key entered an appearance, and WeirFoulds was the lawyer of record for them.

[12] The procedural history of Sean Kay’s application is as follows:

a. On October 9, 2014, the application was commenced

b. Allyson Goldstein, Melanie Candice Kay, and Wendy Joy Kay did not file Notices of Appearance.

c. On March 4, 2015, on consent, Justice McEwan made an Order giving directions. Among other things, the Order required Mr. Posner and Mrs. Kay to produce documents and financial and medical information concerning the late James Kay. Pursuant to the Order (and the Order of the Honourable Judge Susan J. Diott of the United States District Court of the Southern District of Ohio Western Division), the Bank of Nova Scotia Trust Company was appointed the custodian of certain Insurance Proceeds.

d. In November 2015, Sean Kay brought a motion for the appointment of an Estate Trustee during Litigation.

e. On December 17, 2015, Justice Conway ordered that Mr. Posner and Mrs. Kay deliver outstanding financial disclosure (as required by Justice McEwan’s Order) by January 15, 2016.

f. On January 26, 2016, Justice Conway ordered the parties to proceed to mediation before the return of Sean Kay’s motion for the appointment of an Estate Trustee during Litigation.

[13] On February 24, 2016, there was a mediation with the Honourable Marshall Rothstein presiding as mediator. Mr. Posner and Mrs. Kay were represented at the mediation by Claire Burns and Bianca Le Neve of WeirFoulds LLP and by Robert Hall, Q.C. Along with them was Gaoling Wing Yu, an accountant and bookkeeper for the Estate.

[14] Sean Kay was in attendance at the mediation, represented by Mr. Hull and Ms. So.

[15] Louis Lebowitz attended for the Children’s Lawyer to represented the interests of minors and unborn and or unascertained beneficiaries of the James Kay Estate.

[16] At the mediation session, Sean Kay’s application challenging the will challenge was settled, and the parties at the mediation signed Terms of Settlement.

[17] After the mediation, the Terms of Settlement were signed by Sean’s sisters, Allyson Goldstein, Melanie Kay, and Wendy Kay.

[18] For present purposes, the relevant provisions of the Terms of Settlement are set out below:

TERMS OF SETTLEMENT

1. The estate of the late Jimmy Frederick Kay (“Jimmy”) shall be administered pursuant to the terms of the Primary Last Will and Testament and the Secondary Last Will and Testament each dated June 7, 2011 (the “2011 Wills”) except that the estate trustees shall be Gary Posner (“Gary”), Elaine Kay (“Elaine”) and a third trustee (the “Independent Trustee”) to be agreed on by the parties as set out below.

2. The three estate trustees, Gary, Elaine and the Independent Trustee, shall act unanimously in respect of all matters and decisions unless a Court orders otherwise. It is agreed that Gary, Elaine, and the Independent Trustee, shall act as the directors of any corporation for which the estate was voting control unless a Court decides otherwise.

3. Gary, Elaine and the Independent Trustee shall also be the trustees of the KFF Trust.

4. The following payments shall be made from the proceeds of the Columbus Life Insurance Company policy on Jimmy’s life (the “Insurance Proceeds”) currently held by the Bank of Nova Scotia Trust Company (“Scotiatrust”) as custodian pursuant to the Consent Order of Justice McEwan dated March 4, 2014:

(b) the total payment of $320,000.00 (including disbursements) plus H.S.T. on account of Sean’s legal fees, to Hull & Hull LLP in trust;

(c) the total payment of $390,000 (including disbursements) plus H.S.T. on account of the legal fees of Elaine and Gary, to WeirFoulds LLP, in trust;

(d) the total payment of $7,500 (including disbursements) plus H.S.T. on account of the legal fees of the Children’s Lawyer, payable to the Office of the Children’s Lawyer; and

13. After payment of the amounts outlined in paragraph 12 above, the remaining Insurance Proceeds shall be distributed equally among Elaine, Sean, Allyson Goldstein, Melanie Kay and Wendy Kay.

14. The parties shall consent to judgment incorporating the terms set out above, to a declaration that the 2011 Wills are valid, and to otherwise dismissing Sean’s application and original motion for production of the 2011 Wills with prejudice.

15. These terms of settlement shall be sent to Allyson Goldstein, Melanie Kay and Wendy Kay and each shall be asked to execute same.

16. These terms of settlement are conditional upon obtaining court approval on behalf of the minor, unborn and unascertained beneficiaries. The motion for court approval shall be brought by Gary and Elaine. It shall be served upon the parties, Melanie, Wendy, Allyson, Wyatt Kay and Noa Kay.

17. These terms of settlement are not severable.

[19] At the mediation, Mr. Posner and Mrs. Kay and their counsel did not request any information about the legal expenses of Sean Kay that were being paid as part of the settlement. They did not obtain time dockets or the actual accounts with respect to the legal charges made by the Hull Defendants to Sean Kay.

[20] On May 27, 2016, Mr. Posner and Mrs. Kay, brought a motion on consent for court approval of the Terms of Settlement and for implementation of its terms. The motion was supported by an affidavit from Mr. Posner. The consent was signed by him, Mrs. Kay, Sean Kay and the other parties either personally or through their lawyers.

[21] On June 16, 2016, Justice Wilton-Siegal granted the motion and made the following endorsement:

All parties have been served and no objections received. Service has included Mr. Yu as well as the two adult contingent beneficiaries and the existing estate trustees named under the 2011 will. On consent of all of the parties to the Minutes of Settlement, and in the absence of any objection of any of the other contingent beneficiaries, order to go in the form attached.

[22] Justice Wilton Siegel approved the settlement on behalf of Ezra Dylan Goldstein, a minor, Samuel Elias Goldstein, a minor, and for all unborn and unascertained beneficiaries of the Estate and the KFF Trust. The Order declared the testamentary instruments valid.

[23] Paragraph 17 of Justice Wilton-Siegel’s Order stated:

17. THIS COURT ORDERS that the proceeds of the Columbus Life Insurance Company policy on the Deceased life (the “Insurance Proceeds”) currently held by the Bank of Nova Scotia Trust Company as custodian pursuant to the consent Order of Justice McEwan dated March 4, 2015 … shall be paid as follows

(b) $320,000 plus H.S.T. to Hull & Hull LLP in trust, as total payment on account of Andrew Sean Kay’s legal fees (including disbursements);

(c) $390,000 plus H.S.T. to WeirFoulds LLP in trust, as total payment of Elaine Kay and Gary Posner’s legal fees (including disbursements);

(d) $7,500 plus H.S.T. to the Office of the Children’s Law as total payment of the legal fees of the Children’s Lawyer (including disbursements);

[24] On July 6, 2016, pursuant to paragraph 17 of Justice Wilton-Siegel’s Order, the Bank of Nova Scotia Trust Company paid the Hull Defendants $361,000 in full and final payment of its account for legal services.

[25] Two months passed and on September 6, 2016, Mr. Yu by email message requested that the Hull Defendants provide copies of their invoices to Sean Kay. The Hull Defendants did not respond to Mr. Yu’s request or to his follow up emails until September 20, 2016, when Mr. Hull sent the following letter to Mr. Posner and Mrs. Kay directly:

We write with respect to the administration of the Estate of James Frederick Kay (the “Estate”) and the court ordered requirement of the Estate Trustees act unanimously.

Lastly, we confirm receipt of three e-mails from Wing Yu dated September 6, 12, and 20 2016 requesting an invoice with respect to the court-ordered payment of $320,000, plus H.S.T. to our firm in trust (at subparagraph (b) of the Judgment). While we do not consider any communications which do not copy all three Estate Trustees as a legitimate request from the Estate, the court-ordered payment to our firm was made in trust for our client for his legal fees (rather than the Estate). Accordingly, no further vouchers are required to substantiate the amount that approved by the Court, and we will not render an invoice.

[26] There was no further activity with respect to the Hull Defendants’ accounts for eighteen months, until on February 23, 2018 and by Statement of Claim filed on March 22, 2018, Mr. Posner and Mrs. Kay, as assignees of the claims of the Estate of James Kay, sued the WeirFoulds Defendants and the Hull Defendants.

[27] In their action, Mr. Posner and Mrs. Kay claimed from all the defendants a full and complete accounting of all legal fees charged by them with regard to the Estate of James Kay and in particular the challenge brought by Sean Kay. They claimed an assessment of the fees charged by the defendant law firms.

[28] On August 28, 2018, the Hull Defendants delivered their Statement of Defence.

[29] On September 6, 2018, the Hull Defendants brought a motion for a summary judgment dismissing the action as against them. The motion was supported by an affidavit from Ian Mackersy Hull of the Hull Defendants.

[30] On September 11, 2018, the WeirFoulds Defendants delivered their Statement of Defence.

[31] On October 22, 2018, Justice Diamond scheduled the Hull Defendants’ summary judgment motion and made the following file direction:

Motion for summary judgment on behalf of Hull & Hull Defendants. Motion for March 5, 2019 for two hours. Counsel confirm no risk of partial summary judgment concerns due to claim against Hull & Hull Defendants being separate and distinct from other defendants. Timetable attached and approved. […]

[32] On November 15, 2018, Mr. Posner delivered an affidavit to oppose the Hull Defendants summary judgment motion. In his affidavit, Mr. Posner deposed that he and Mrs. Kay received accounts from WeirFoulds, which he attached to an exhibit to his affidavit. He also attached five invoices from Rendigs, Fry, Kiely & Dennis LLP, an American law firm that had provided services to the Estate and charged $17,035.72 between December 2014 and April 2015. He deposed that his demands for accounts from the Hull Defendants had been rebuffed.

[33] Twenty-six WeirFoulds accounts (166 pages) were attached to Mr. Posner’s affidavit. The accounts are summarized as follows:

1. August 11, 2014 $9,013.90
2. August 27, 2014 $2,933.71
3. October 5, 2014 $2,555.95
4. November 10, 2014 $5,961.05
5. December 9, 2014 $6,987.98
6. January 23, 2015 $13,495.05
7. February 19, 2015 $9,298.34
8. March 12, 2015 $21,341.38
9. April 14, 2015 $16,782.59
10. May 13, 2015 $11,493.47
11. June 10, 2015 $16,728.01
12. July 29, 2015 $4,568.99
13. August 13, 2015 $3,509.81
14. September 15, 2015 $3,240.64
15. October 12, 2015 $3,291.05
16. November 11, 2015 $5,426.43
17. December 8, 2015 $6,940.43
18. January 13, 2016 $8,735.24
19. January 18, 2016 $64,107.17
20. February 18, 2016 $30,903.12
21. March 14, 2016 $51,906.11
22. April 30, 2016 $23,703.52
23. May 17, 2016 $8,375.73
24. July 7, 2016 $14,464.25
25. August 9, 2016 $2,421.82
26. August 18, 2016 $904.68

[34] It may be noted that there are twenty invoices that WeirFoulds issued in the period after Sean Kay’s Notice of Objection on July 29, 2014 and before the February 24, 2016 mediation. These invoices total $247,314.31. It may be noted that there are six invoices issued after the mediation session total and these invoices total $101,776.11. The grand total of the twenty-six invoices is: $349,090.42. All the legal services were in response to the proceedings initiated by Sean Posner to challenge the testamentary instruments of his late father.

[35] In his affidavit for the summary judgment motion, Mr. Posner also deposed how the matter of accounts was dealt with at the mediation that occurred on February 24, 2016 as follows:

8. The mediation lasted a day, but the negotiation aspect only lasted about an hour. Most of the issues outstanding were resolved before the mediation commenced. During the first hour Mr. Rothstein explained the process. The remaining issues were dealt with in short order. The bulk of the time was spent trying to choose a third trustee and drafting the settlement agreement.

9. Payment of the lawyer accounts was included in the settlement agreement. This inclusion was requested by the lawyers.

10. We were not advised why inclusion of the lawyer accounts was necessary. The settlement dealt with estate issues. Inclusion of lawyer fees was not necessary to conclude estate matters. The fee obligation could have been dealt with in a different matter, outside the settlement agreement.

11. Further, we were not given copies of the accounts. We were not given the opportunity to review the accounts. We were not advised of our right to have the accounts assessed. This was known to the lawyers. We assumed the lawyers would justify their fees by delivery of their accounts and, if necessary, that the fees would be reviewed and justified on assessment.

12. Despite inclusion of the lawyer’s accounts in the settlement agreement and in the subsequent consent order, we thought we still had the right to review and assess the accounts in the normal course to ensure that the amounts requested were fair and reasonable.

[36] On December 7, 2018, Mr. Hull was cross-examined on his affidavit.

[37] The summary judgment motion was argued on March 5, 2019.

D. Is the Case Appropriate for a Summary Judgment?

[38] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the court shall grant summary judgment if: “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.” With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced. Rule 20.04 (2.1) states:

20.04 (2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

[39] In Hryniak v. Mauldin, 2014 SCC 7 and Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, the Supreme Court of Canada held that on a motion for summary judgment under Rule 20, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers introduced when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[40] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rules 20.04 (2.1) and (2.2). As a matter of discretion, the motions judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole. To grant summary judgment, on a review of the record, the motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him or her to draw the inferences necessary to make dispositive findings and to fairly and justly adjudicate the issues in the case. Campana v. The City of Mississauga, 2016 ONSC 3421; Ghaeinizadeh (Litigation guardian of) v. Garfinkle Biderman LLP, 2014 ONSC 4994, leave to appeal to Div. Ct. refused, 2015 ONSC 1953 (Div. Ct.); Lavergne v. Dominion Citrus Ltd., 2014 ONSC 1836 at para. 38; George Weston Ltd. v. Domtar Inc., 2012 ONSC 5001.

[41] Hryniak v. Mauldin does not alter the principle that the court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial. The court is entitled to assume that the parties have advanced their best case and that the record contains all the evidence that the parties will present at trial. Dawson v. Rexcraft Storage & Warehouse Inc., 1998 ONCA 4831, [1998] O.J. No. 3240 (C.A.); Bluestone v. Enroute Restaurants Inc. (1994), 1994 ONCA 814, 18 O.R. (3d) 481 (C.A.); Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 S.C.R. 372 at para. 11.

[42] At civil practice court, the parties agreed that the case is an appropriate one for a summary judgment with respect to the Hull Defendants. In their responding factum, Mr. Posner and Mrs. Kay recanted on this concession because they read the Hull Defendants’ factum as raising broader arguments than the Hull Defendants’ Notice of Motion.

[43] In my view, Mr. Posner and Mrs. Kay were wrong in withdrawing the concession because the factum changed noting about the appropriateness of the case for a summary judgment and more to the point, the case is indeed appropriate to be decided without the forensic machinery of a trial. A trial judge would be in no better position to do justice.

[44] In my opinion, in the immediate case, there are no genuine issues requiring a trial and the case at bar is an appropriate case for a summary judgment. It is further my opinion that if there were genuine issues requiring a trial, then there is a more than adequate evidentiary record to decide the genuine issues and it would be in the interests of justice to do so.

[45] With respect to the case against the Hull Defendants, the facts are not in dispute. There are no issues of credibility. The issues can be determined based on the documentary record.

[46] My determination that the action should be dismissed as against these defendants does not affect the determination of the action against the WeirFoulds defendants, who are differently situated than the Hull Defendants. There is no risk of inconsistent findings of fact in the action against the WeirFoulds Defendants with respect to the facts found for or against the Hull Defendants. WeirFoulds were the lawyers for Mr. Posner and Mrs. Kay; the Hull Lawyers were the lawyers for Sean Kay. It is only through the intervention of s. 9 of the Solicitors Act, discussed next, that Mr. Posner and Mrs. Kay have any right to an assessment of the Hull Defendants’ accounts. The case against the Hull Defendants is very different than the case against the WeirFoulds Defendants.

[47] A summary judgment is fair and the most efficient way of determining the case as against the Hull Defendants, and it is in the interests of justice to dispose of this claim.

E. Are the Plaintiffs Entitled to an Assessment under the Solicitors Act?

[48] The Hull Defendants’ accounts, which have never been produced, were rendered to Sean Kay, the firm’s client. None of Mr. Posner, Mrs. Kay, or the Kay Estate were clients of the Hull Defendants. However, under the Terms of Settlement, the Hull Defendants’ accounts to Sean Kay were paid by the Estate, and, thus, Mr. Posner and Mrs. Kay as assignees of the Kay Estate rely on s. 9 of the Solicitors Act, which is set out above, to claim an entitlement to an assessment of the Hull Defendants’ accounts.

[49] Pursuant to s. 9 of the Solicitors Act, Mr. Posner and Mrs. Kay submit that they qualify as “a person not being chargeable as the principal party” who “is liable to pay or has paid a bill to the solicitor or to the principal party” and, therefore, they “may apply to the court for an order referring to an assessment as the party chargeable might have done”.

[50] I pause to note that in the immediate case, since the mediation was designed to settle court proceedings, section 12 of the Terms of Settlement might have better characterized the payments to Sean Kay (and to the Children’s Lawyer for that matter) as a payment of a party-and-party bill of costs to fully indemnity him for his costs of litigation. This would have taken the matter of an assessment of a lawyer’s bill outside of the ambit of the Solicitors’ Act and into the ambit of the Courts of Justice Act, but the Terms of the Settlement did not treat the legal accounts in this manner, and, therefore, I shall accept that s. 9 of the Solicitors Act is available to Mr. Posner and Mrs. Kay.

[51] Thus, Mr. Posner and Mrs. Kay “may apply to the court for an order referring to an assessment as the party chargeable might have done”.

[52] The Solicitors Act prescribes a twelve-month limitation period after delivery of a final account and since, in the circumstances of the immediate case, the account of the Hull Defendants was paid in July 2016 and Mr. Posner and Mrs. Kay’s action came in February 2018 (twenty months later), the authorities establish that for the court to order an assessment pursuant to s. 9 of the Solicitors Act, Mr. Posner and Mrs. Kay must demonstrate what is known as “special circumstances”.

[53] The principal of special circumstances also applies in cases where a party seeking an assessment does so after the lawyer’s bill has been paid. Thus, in the immediate case, Mr. Posner and Mrs. Kay must show special circumstances for two reasons: (a) because they are seeking an assessment more than twelve months after the delivery of the bill of accounts; and (b) because they are seeking an assessment of accounts that have already been paid.

[54] “Special circumstances” are circumstances of an exceptional nature affecting the matter of costs or the liability of a client that a judge, in the exercise of his or her judicial discretion in each particular case, may consider relevant to justify ordering an assessment of the account. Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377; Glanc v. O’Donohue & O’Donohue, 2008 ONCA 395, 90 O.R. (3d) 309 (C.A.); Plazavest Financial Corp. v. National Bank of Canada (2000), 2000 ONCA 5704, 47 O.R. (3d) 641 (C.A.). In determining whether there are special circumstances, the court exercises a broad discretion to be exercised on a case-by-case basis and with an eye to all of the relevant circumstances. Guillemette v. Doucet, 2007 ONCA 743, 88 O.R. (3d) 90 (C.A.); Plazavest Financial Corp. v. National Bank of Canada (2000), 2000 ONCA 5704, 47 O.R. (3d) 641 (C.A.). Special circumstances is a fact-specific inquiry. Echo Energy v. Lenczner Slaght Royce Smith Griffin LLP, 2010 ONCA 709, leave to appeal to S.C.C. refused [2010] S.C.C.A. No. 484.

[55] The factors relevant to whether there are special circumstances include but are not limited to: (a) the sophistication of the client; (b) the adequacy of communications between the client and the lawyer; (c) whether there is evidence of increasing lack of satisfaction by the client regarding the lawyer’s services; (d) whether there is evidence of overcharging; (e) the extent of the details of the bills; (f) whether the lawyer and client relationship has terminated or is ongoing; and (g) whether the payments could be characterized as involuntary. Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377. The payment of the account is a factor to consider in determining whether there are special circumstances, Davies, Ward & Beck v. Union Industries Inc. (2000), 2000 ONCA 5722, 48 O.R. (3d) 794 (C.A.), but the starting points are the perspective of the client and the public confidence in the administration of justice that requires the court to intervene where necessary to protect the client’s right to a fair procedure for assessment of a solicitor’s bill. Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377; Echo Energy v. Lenczner Slaght Royce Smith Griffin LLP, 2010 ONCA 709, leave to appeal to S.C.C. refused [2010] S.C.C.A. No. 484 (S.C.C.); Andrew Feldstein & Associates Professional Corp. v. Keramidopulos, 2007 ONSC 36833; Price v. Sonsini (2002), 2002 ONCA 41996, 60 O.R. (3d) 257 (C.A.).

[56] What amounts to special circumstances differs when the issue is whether an assessment should be permitted after the twelve-month limitation period imposed by the Solicitors Act as contrasted with the issue of whether an assessment should be permitted of a paid account. In the latter context, the special circumstances requirement reflects the inference that payment of an account implies that the client accepted the account as reasonable. Echo Energy v. Lenczner Slaght Royce Smith Griffin LLP, 2010 ONCA 709, leave to appeal to S.C.C. refused [2010] S.C.C.A. No. 484 (S.C.C.); Guillemette v. Doucet (2007), 2007 ONCA 743, 88 O.R. (3d) 90 (C.A.). When the account has been paid, the special circumstances must tend to undermine the presumption that the account was accepted as proper or show that the account was excessive or unwarranted. Hofman v. Bennett Jones LLP, 2011 ONSC 7124. On the one hand, the court should look at the matter from the client’s perspective to determine whether the presumption that the account was reasonable is sound, but, on the other hand, in considering whether an assessment should be ordered, the court should protect lawyers from vulnerability to refunding accounts that have been paid for some considerable period of time without prior protest or objection from the client. Hofman v. Bennett Jones LLP, 2011 ONSC 7124.

[57] Special circumstances are also a factor in situations where a lawyer and client have entered into an agreement as to compensation pursuant to s. 16 of the Solicitors Act and then the client or a person chargeable with or entitled to pay the account and who has paid it wishes to have the agreement reopened and the already paid account assessed.

[58] In the context of a s. 16 agreement, in Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377 at para., the facts of which are discussed in the next section of these Reasons for Decision, Justice Epstein discussed the role of the court in supervising lawyer’s fees in general and in the particular context of fee agreements between a lawyer and client. She stated for the Court of Appeal:

The role of the courts

77 The courts have inherent jurisdiction as well as jurisdiction under the Solicitors Act to order lawyers' accounts to be assessed. Both sources of jurisdiction respond to the public interest component of the rendering of legal services and lawyers' compensation, and the importance of maintaining public confidence in the administration of justice.

78 In Plazavest Financial Corp. v. National Bank of Canada (2000), 2000 ONCA 5704, 47 O.R. (3d) 641 (C.A.), at para. 14, Doherty J.A. explained how the public interest informs the court's role in supervising the rendering of legal services and payment of legal fees:

The rendering of legal services and the determination of appropriate compensation for those services is not solely a private matter to be left entirely to the parties. There is a public interest component relating to the performance of legal services and the compensation paid for them. That public interest component requires that the court maintain a supervisory role over disputes relating to the payment of lawyers' fees. […]

79 In Price v. Sonsini (2002), 2002 ONCA 41996, 60 O.R. (3d) 257 (C.A.) at para. 19, Sharpe J.A. further elucidated the court's role:

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. As a general matter, if a client objects to a solicitor's account, the solicitor should facilitate the assessment process, rather than frustrating the process...

84. As noted by courts considering the meaning of "special circumstances" within other provisions of the Solicitors Act, however, the language implies that the court has a broad discretion to determine the matter having regard to all the circumstances in the case, but that ordering an assessment after payment will be the exception rather than the rule: […]

Special circumstances

83.The question is, therefore, whether the record supports a finding that special circumstances exist here that require the Fee Agreements to be reopened and an assessment ordered. The jurisprudence reveals limited consideration of the scope of "special circumstances" as expressed in s. 25 of the Solicitors Act, in particular.

86. With this in mind, I view the authorities and the objectives of the Solicitors Act as supporting the following broader test: "Special circumstances" are those in which the importance of protecting the interests of the client and/or public confidence in the administration of justice, demand an assessment.

[59] In the immediate case, I see no special circumstances that would in 2019, justify ordering an assessment of a legal account that was paid in 2016 as an aspect of a settlement in which Mr. Posner and Mrs. Kay were represented by their own lawyers.

[60] Mr. Posner and Mrs. Kay avail themselves of s. 9 of the Solicitors to request an assessment because they say they paid the Hull Defendants’ account, but, truth be told, they only, practically speaking, paid the account, much like a losing party will pay the party and party costs to indemnify the winning party for what he or she paid their own lawyer.

[61] More typically, under s. 9 of the Solicitors Act “a party who is not the principal;” i.e., a party who is not the lawyer’s client has a more proximate relationship with the lawyer who is being paid. A more typical example where s. 9 operates is the situation where a mortgagor of property agrees to pay the mortgagee’s lawyer for his or her services in preparing the loan documentation and in placing the loan. Those services of the mortgagee’s lawyer, of course, are for the mutual benefit of the mortgagor and the mortgagee but at the expense of the mortgagor, and it makes perfectly good sense and good policy that the mortgagor who pays for the services have a right to have them assessed. In the immediate case, the Hull Defendants were never providing services for the mutual benefit of Sean Kay and Mr. Posner and Mrs. Kay who were Sean Kay’s litigation foe.

[62] In the circumstances of this case, it is a non sequitur for Mr. Posner and Mrs. Kay to say that the court should maintain a supervisory role over disputes relating to the payment of a lawyer’s fees. They was no such dispute. What there was, in the immediate case, was a settlement of the costs of estate litigation and, save for the court’s supervisory interest with respect to that settlement as it affected children and all unborn and unascertained beneficiaries of the Estate and the KFF Trust, which supervision the court exercised, there is no reason for the court to be particularly interested in whether the Estate paid too much to settle the litigation by entering into a contract. As a general policy of the administration of justice, courts encourage parties to settle their disputes including disputes about the payment of legal expenses.

[63] It is also a non sequitur for Mr. Posner and Mrs. Kay to rely on the principle that as a general matter, if a client objects to a solicitor's account, the solicitor should facilitate the assessment process, rather than frustrating the process. When Mr. Hull rebuffed the inquiries of Mr. Yu in September 2016, he was quite right to do so. He had no lawyer client relationship with Mr. Posner and Mrs. Kay and no obligation to facilitate an assessment process of a matter that had been settled by an agreement that had already received court approval.

[64] But if all of the above is a faulty analysis and Mr. Posner and Mrs. Kay can genuinely avail themselves of s. 9 of the Solicitors Act, I perceive no special circumstances.

[65] Addressing some of the relevant factors:

a. I cannot speak about the sophistication of Ms. Kay and all I know is that Mr. Posner is an accountant, from which I infer that he is not unsophisticated, but, in any event, they were both represented by very experienced estate lawyers.

b. They obviously were not receiving communications from the Hull Defendants about the accounts being rendered to Sean Kay, but Mr. Posner and Mrs. Kay were personally and actively involved in the own litigation, and they received twenty-six accounts from their own lawyers, which would give them a sense of the reasonableness of what Sean Kay was being charged by the Hull Defendants. And Mr. Posner and Mrs. Kay would have known that in estate litigation, often both the winners and the loser’s legal fees are paid from the Estate’s coffers.

c. At the time of the mediation, Mr. Posner and Mrs. Kay did not have the details of the Hull Defendants’ accounts, and Mr. Posner and Mr. Kay allege that their lawyers did not seek to scrutinize the Hull Defendants accounts and did not disabuse them of their belief that assessments of all the accounts could come latter, which are aspects of Mr. Posner and Mrs. Kays’ action against WeirFoulds, but these aspects do not raise special circumstances with respect to the Hull Defendants’ accounts.

d. There is no patent evidence of overcharging. It was apparently a large and complex estate with assets in more than one country. In the litigation, there was a serious allegation had been made about the validity of the testamentary instruments. From the number of court attendances, it appears that Sean Kay was putting litigation pressure on the Estate Trustees.

e. Public confidence in the administration of justice is not engaged. There was a fair process. There was hard bargaining and a mediation before an esteemed former Justice of the Supreme Court of Canada and a court approved settlement.

f. Assuming that Mr. Posner and Mrs. Kay had a right to have the Hull Defendants’ accounts assessed, then there is no explanation from them why after they had been rebuffed by the Hull Defendants, they waited so many months after the accounts were paid to bring an action to have the bills assessed.

g. There is the factor that the Terms of Settlement, which Mr. Posner and Mrs. Kay signed with legal representation and advice, is expressly made so that the terms of the agreement, many of which are favourable to the beneficiaries of the Estate including Mrs. Kay are non-severable. It seems unfair that Mr. Posner and Mrs. Kay are attempting to renegotiate a settlement.

h. Mr. Posner and Mrs. Kay say that it is simply unfair that the Estate does not have a chance to test the reasonableness of the Hull Defendants accounts especially because the Hull Defendants paid no consideration for what they received in the settlement. There is nothing unfair here. It was Sean Kay who gave the quid for the quo of having his liability to pay the accounts of the Hull Defendants paid from Estate assets.

i. And, there is the factor, discussed below, that there is a strong argument that Mr. Posner and Mrs. Kay action is barred as a collateral attack on the Order of Justice Wilton-Siegel.

[66] I, therefore, conclude that Mr. Posner and Mrs. Kay have failed to demonstrate special circumstances, and, therefore, the Hull Defendants should be granted a summary judgment dismissing the action as against them.

F. Is the Plaintiffs’ Action Barred as a Collateral Attack on Justice Wilton-Siegel’s Order?

[67] The above conclusion is dispositive of Mr. Posner and Mrs. Kays’ action, but there is a second mutual exclusive reason to dismiss the action. I agree with the Hull Defendants’ argument that the action is an impermissible collateral attack against a court order for which there is no basis to set aside.

[68] In R. v. Wilson, 1983 SCC 35, [1983] 2 S.C.R. 594 at pp. 599-600, Justice MacIntrye stated:

It has long been a fundamental rule that a court order, made by a court having jurisdiction to make it, stands and is binding and conclusive unless it is set aside on appeal or lawfully quashed. It is also well settled in the authorities that such an order may not be attacked collaterally, and a collateral attack may be described as an attack made in proceedings other than those whose specific object is the reversal, variation, or nullification of the order or judgment. Where appeals have been exhausted and other means of direct attack upon a judgment or order, such as proceedings by prerogative writs or proceedings for judicial review, have been unavailing, the only recourse open to one who seeks to set aside a court order is an action for review in the High Court where grounds for such a proceeding exist. Without attempting a complete list, such grounds would include fraud or the discovery of new evidence.

[69] A collateral attack to an existing court order in subsequent proceedings is regarded as an abuse of process. Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77. Collateral attacks are objectionable because they re-litigate already decided matters. The underlying policy of the collateral attack principle is that an order made by a court or tribunal having jurisdiction to make the order stands and is binding and conclusive unless it is set aside on appeal or lawfully quashed in a proceeding to have the order set aside on grounds of fraud or new evidence. R. v. Wilson, 1983 SCC 35, [1983] 2 S.C.R. 594; R. v. Litchfield, 1993 SCC 44, [1993] 4 S.C.R. 333. The result of the collateral attack principle is that a court will not entertain a collateral attack against an existing court order that has not been set aside. Streisfield v. Karnovsky, [2005] O.J. No. 2493 (Div. Ct.).

[70] In Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377, Mr. Clatney was seriously injured in a motor vehicle accident. He entered into a fee agreement with Bertschi Orth Solicitors and Barristers LLP, which law firm commenced a tort action for him. Before the tort action was resolved, he changed lawyers to Quinn Thiele Mineault Grodzki LLP, and he signed a contingency fee agreement with that law firm. The litigation settled for $800,000, but the settlement proceeds were tied up when a charging order was granted to Bertschi Orth. The charging order tied up the settlement proceeds until the Berschi Orth account was assessed and the respective share of fees between Bertschi Orth and Quinn Thiele determined. All of the settlement funds were paid into court.

[71] Bereft of the settlement funds and facing bankruptcy, Mr. Clatney pleaded for the law firms to resolve the matter of what he owned for fees and to help him. They didn’t. Ultimately, self-represented, he consented to an Order that authorized fee payments to the law firms. Then, he sought an assessment of the lawyers’ accounts, but the application judge dismissed the application with the brief endorsement: “By virtue of the [Consent Order], I have no jurisdiction to hear this matter as it is in fact a matter of an appeal to the Court of Appeal subject to leave etc.”

[72] The Court of Appeal reversed the decision, and it ordered both law firms’ accounts to be assessed. Justice Epstein said that the collateral attack doctrine would have barred an assessment, but the application judge should have exercised his discretion to set aside the Consent Order, which would have removed the bar of the Consent Order and allowed the Court to consider whether there was special circumstances.

[73] So, Justice Epstein set aside the Consent Order, and, as noted above, she addressed the matter of special circumstances. On the collateral principal attack principle, she stated:

Did the Consent Order deprive the application judge of jurisdiction to order an assessment, if one was warranted?

51. I agree with the application judge's view, expressed in his endorsement, that the Consent Order, as it stood, was a bar to his assuming jurisdiction to consider the request that the Fee Agreements be assessed. While the Consent Order remained in place, an assessment of the Fee Agreements would have allowed the appellant to avoid the consequences of the order issued against him; namely, the final acceptance and payment of the fees and disbursements to the respondents. In such circumstances, an order that the Fee Agreements be assessed would have constituted "an attack made in proceedings other than those whose specific object is the reversal, variation, or nullification of the order": [citations omitted] In short, an assessment order would have amounted to an impermissible collateral attack on the Consent Order.

52. My difficulty with the application judge's view is that, here, the appellant specifically re-quested that the application judge set the Consent Order aside, removing any collateral attack concerns. In my view, the application judge should have considered this request and his failure to do so constituted an error in law.

[74] Applying the principles of Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377 to the case at bar, Mr. Posner and Mrs. Kay make no effort to have Justice Wilton-Siegel’s Order which approved the Terms of Settlement, set aside, which they are obviously loath to do because: (a) it was obviously a very favorable Order; and (b) there is no apparent basis for setting aside the Order on the grounds of fraud, the discovery of new evidence, or otherwise. Thus, the Order stands, and it forecloses, Mr. Posner and Mrs. Kay moving for an assessment of the Hull Defendants’ accounts. The collateral attack doctrine provides a second reason to dismiss Mr. Posner and Mrs. Kay’s action as against the Hull Defendants.

G. Conclusion

[75] For the above reasons, I dismiss Gary Posner and Elaine Kays’ action against the Hull Defendants with costs (as agreed) on a partial indemnity basis of $22,189.37, all inclusive.

Perell, J. Released: March 18, 2019