ENDORSEMENT

DIAMOND J.:

Overview

[1] The applicant brings a motion seeking directions from the Court in respect of the continuation of an assessment of legal accounts (described hereinafter) pursuant to an Order dated February 7, 2019 for the delivery and assessment of those accounts. In particular, the applicant asks for an Order that all of the said legal accounts be assessed, with the respondent providing an accounting of all monies recovered in the underlying litigation.

[2] When the parties attended before the Registrar to schedule the assessment, the respondent took the position that only its final account dated January 9, 2019 was subject to the assessment, and not numerous prior interim accounts rendered between 2012 – 2018.

[3] At the conclusion of the hearing, I took my decision under reserve.

Summary of Relevant Facts

[4] The respondent is a law firm that has carried on business since approximately 2018. John Adair (“John”) is a partner in the respondent, and was previously a partner in the firm of Adair Morse LLP (“AM”) until approximately mid-2013, and subsequently Adair Barristers LLP (“AB”) until the formation of the respondent. John was a partner at all three law firms.

[5] In or around June 2012, the New York City law firm of Singer & Moses retained AM to commence proceedings seeking the enforcement of a United States District Court judgment rendered in favour of clients of Singer & Moses known as the Bennett family. The United States District Court judgment was against the Islamic Republic of Iran.

[6] John was the lawyer with carriage of the matter at AM, AB and the respondent. The New York lawyer with carriage of the matter at Singer & Moses was Stephen Weiss (“Weiss”).

[7] In or around 2013, Weiss left Singer & Moses. Pursuant to Weiss’ instructions, AM and AB rendered legal accounts from 2013-2018 to either Weiss or another lawyer named Fay Kaplan.

[8] Between October 4, 2012 and April 10, 2018, 10 separate legal accounts were rendered by either AM or AB to Moses & Singer, Weiss and Kaplan. Those 10 accounts totaled in excess of $623,000.00.

[9] In or around April 2018, John was contacted by the applicant (a Washington, D.C. law firm) advising that it was now representing the Bennett family in the ongoing litigation. In a letter dated May 17, 2018 to John, the applicant advised that prior counsel had withdrawn from representing the Bennett family, and the Bennett family had “signed a new retainer agreement” with the applicant.

[10] The May 17, 2018 letter went on to state that the applicant now retained the respondent “in his stead.”

[11] The new retainer agreement was signed by all parties and dated September 5, 2018. I have reviewed this retainer agreement in detail. The applicant agreed to pay the respondent the same hourly rate that was being charged up to that point, plus reasonable and necessary expenses. The respondent was charging its legal fees on a time spent basis, and there was no contingency arrangement.

[12] The new retainer agreement went on to state that as the respondent had already billed and collected approximately $560,000.00 in legal fees to that point, and the balance of the work to be done would be billed at an amount not exceeding $25,000.00 exclusive of fees and expenses which would be deducted from any future recovery.

[13] The new retainer agreement specified that any funds collected were to be held in the respondent’s trust account and no distribution would occur until the Bennetts provided their approval.

[14] Other than the words “in his stead”, the new retainer agreement was silent as to creating any obligation upon the applicant guaranteeing payment obligations to the respondent on the part of any predecessor New York law firm and/or lawyer.

Decision

[15] For the reasons which follow, the motion is dismissed without prejudice to (a) the applicant’s right to bring a motion seeking to add further parties, and (b) the respondent’s rights, interests and claims/defences responding to any further motion(s) in this proceeding.

[16] To begin, it is clear that under the provisions of the Solicitors Act, R.S.O. 1990 c. S15, only three entities are able to have a legal account assessed and/or seek a referral for assessment: a client, a party chargeable with the account, or in limited circumstances a party who has in fact paid the account.

[17] The applicant was a client of the respondent, but only from September 5, 2018 onward, and thus only one legal account was rendered by the respondent to the applicant (i.e. the final account). There is no evidence to support the contention that the applicant was a party chargeable with the prior accounts, or a party who paid those prior accounts.

[18] The applicant attempts to circumvent this obstacle through two arguments:

(a) when the respondent ultimately paid itself with funds recovered in the enforcement proceedings, any outstanding accounts rendered to the predecessor New York law firms and/or lawyers were then retired, thereby changing the applicant’s status to a party who was chargeable with those accounts and in fact paid those accounts; and,

(b) the new retainer agreement, and specifically the words “in his stead”, amount to an assignment in law of the respondent’s previous retainer agreements with the prior New York law firms and/or lawyers.

[19] I do not accept either argument. If anyone could arguably be a party chargeable with the accounts, or a party having paid the accounts, it is the Bennett family and not the applicant. I agree with the respondent that the applicant is a stranger to all accounts rendered before the new retainer agreement was signed. The applicant simply does not have standing to complain about legal accounts rendered by the respondent (and AM or AB) to other New York law firms and/or lawyers who had no relationship with the applicant other than having represented the Bennett family during a prior time period.

[20] If the assessment was to proceed as requested by the applicant, and the assessment resulted in the reduction of legal fees and/or disbursements rendered by the respondent, how would the applicant have standing to be paid those refunded amounts when the applicant was never charged for those amounts in the first place?

[21] I cannot find on the record before the court that the new retainer agreement operates as a legal assignment of any prior retainer agreements. The words “in his stead” do not amount to an assignment, and to suggest otherwise is no doubt a slippery slope. There is nothing in the new retainer agreement, which was drafted by the applicant, that requires the applicant to honour the obligations of any prior New York law firms and/or lawyers who previously retained AM, AB or the respondent.

[22] Regrettably, there is also no evidence on this motion from the Bennett family. Perhaps the Bennett family was under the impression that the respondent took an assignment of prior retainer agreements. Perhaps the Bennett family have expressed displeasure or disappointment with the services performed and/or the amounts charged by the respondent. Even if both propositions are true, the Court cannot make any findings, or draw any inferences, upon a record which does not include any evidence from the Bennett family.

[23] The applicant further submits that it is an agent of the Bennett family. That may be true under Ontario law (and presumably New York law), but that alone does not create a legal assignment of the prior retainer agreements.

[24] I am mindful of the Court’s obligation to take the public interest component into consideration relating to the performance of legal services and compensation paid for those legal services. The jurisprudence requires the Court to maintain a supervisory role over disputes relating to the payment of legal accounts. That said, the applicant simply does not have proper standing to seek the relief on this motion, and as a result the motion is dismissed without prejudice to (a) the applicant’s ability to bring a motion seeking to add further parties, and (b) the respondent’s rights, interests and claims/defences responding to any further motion(s) in this proceeding.

Costs

[25] If the parties are unable to agree upon the costs of this motion, they may serve and file written costs submissions (totaling no more than five pages including a Costs Outline) in accordance with the following schedule:

(a) the respondent may serve and file written costs submissions within 10 business days of the release of this Endorsement; and

(b) the applicant may serve and file responding written costs submissions within 10 business days of the receipt of the respondent’s written costs submissions.

Diamond J.

Released: April 12, 2021

COURT FILE NO.: CV-19-00614109-0000

DATE: 20210412

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF THE SOLICITOR’S ACT

BETWEEN:

BOND & NORMAN LAW

Applicant

– and –

ADAIR GOLDBLATT BIEBER LLP

Respondent

ENDORSEMENT

Mr. Justice Diamond

Released: April 12, 2021

Bond & Norman Law v Adair Goldblatt Bieber LLP., 2021 ONSC 2656

Case Summary

ENDORSEMENT

Overview

Summary of Relevant Facts

Decision

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues