COURT FILE NO.: CV-15-00541260-0000
DATE: 20210115
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE SOLICITORS ACT
BETWEEN:
Fasken Martineau DuMoulin LLP
Moving Party and Respondent on Appeal
– and –
Behdad Hosseini and Homayoon Sanayei
Responding Party and Appellant
Anastasia Rek, for the Moving Party, Respondent on Appeal
Z. Matthew Kaslik, for the Responding Party, Appellant, Behdad Hosseini
No one appearing, for the Respondent/Client, Homayoon Sanayei
HEARD: October 15, 2020
BEFORE: VELLA j.
REASONS FOR DECISION
[1] The client, Behdad Hosseini (“Client”) appeals to this court from the Certificate of Assessment Officer A. Palmer (the “Assessment Officer”) dated October 15, 2019 (the “Costs of Assessment Certificate”). The Client also brings a cross motion to extend the time for appealing the Report and Certificate of Assessment dated September 11, 2019 (the “Assessment Certificate”) and amend the Notice of Appeal to include an appeal from the Assessment Certificate, should same be needed.
[2] The solicitor, Fasken Martineau DuMoulin LLP (the “Solicitor”) brings a motion to quash the appeal on jurisdictional grounds.
[3] Homayoon Sanayei, the other client, has neither appealed nor joined in any motion before the court and did not appear at this proceeding.
Issues
[4] The motion to quash, and the related cross motion, raise the following issues:
(a) Does the Client need leave to appeal and if so, should it be granted? This issue requires a determination as to whether the Client has properly appealed from the Assessment Certificate and Costs of Assessment Certificate or just the latter.
(b) Was the Client required to file an objection in advance of the release of the Costs of Assessment Certificate as a pre-requisite to his right to seek leave and/or appeal from it? If so, do the specific factual circumstances in this matter relieve him from that step in the interests of justice?
(c) Is the appeal an abuse of process?
[5] The appeal raises the following issues:
(a) Did the Assessment Officer err by finding that the Solicitor filed its requisition for an order for an assessment in time and did not need to establish “special circumstances” under s. 4(1) of the Solicitors Act, R.S.O. 1990, c. S.15? This issue engages with the interplay between s. 3(c) and s. 4(1) of the Solicitors Act.
(b) In the alternative, did the Assessment Officer err in awarding costs of the assessment to the Solicitor on a substantial indemnity basis and in her quantification of the award of costs (as reflected in the Costs of Assessment Certificate)? This issue engages primarily with the principles of indemnification and of proportionality in the scale and quantification of the award in favour of a “self-represented” law firm. Further, did the Assessment Officer err in granting an interim costs award.
Background and Chronology of Procedural Steps and Decisions
[6] In September 2013, the Client and Mr. Sanayei retained the Solicitor and executed a joint retainer. Importantly, the retainer itself is not in dispute.
[7] The Solicitor rendered two accounts dated January 31, 2014, and June 26, 2014, respectively, to the Client and Mr. Sanayei (collectively, the “Solicitor’s Accounts”).
[8] Those accounts remained outstanding and the Solicitor obtained an order upon requisition pursuant to s. 3(c) of the Solicitors Act from the Registrar of the Superior Court of Justice on November 25, 2015, for an assessment of the Solicitor’s Accounts. This step was taken approximately 17 months after the rendering of the final account.
[9] The assessment hearing was scheduled to be heard on October 3, 2018. However, in light of the Client’s recent hiring of new lawyers, the Client requested an adjournment at the outset of the hearing.
[10] It appears, on the basis of the evidentiary record, that the Solicitor had some notice of the request for an adjournment but advised the Assessment Officer that it had no prior knowledge. The Solicitor sought costs thrown away in the sum of $2,000. The Assessment Officer granted the adjournment but ordered the Client to pay $2,000 as costs to the Solicitor within 30 days.
[11] The assessment hearing proceeded on November 20, 2018. At the outset of the assessment hearing, the Client’s lawyer raised (for the first time) the issue of the alleged late filing by the Solicitor of its requisition for the order for assessment. However, the Assessment Officer dismissed that argument, finding that it was raised without prior notice and, in any event, the Solicitor had filed its requisition in time. The hearing then proceeded.
[12] On April 11, 2019, the Assessment Officer released her reasons and decision and found that the Client and Mr. Sanayei owed the total amount of the outstanding Solicitor’s Accounts in the sum of $14,917.80 (the “April 11, 2019 Decision”). The Assessment Officer advised that before issuing her report she may be spoken to regarding costs on assessment. She provided the parties with an opportunity to deliver written submissions by no later than April 30, 2019. She stated that the report and certificate would be issued once the issue of costs has been resolved.
[13] On April 18, 2019, the Client’s lawyer requested that the Assessment Officer’s report and certificate be withheld to allow him time to serve and file his objections pursuant to rule 58.10(1). The objections were enclosed with that letter (the “Objections”).
[14] The Client’s Objections were, in the main, that the Assessment Officer:
(a) erred in failing to stay the proceeding and permitting the assessment to continue on November 20, 2018, because the requisition for assessment issued November 25, 2015, was beyond the time for filing a requisition under the Solicitors Act and the Solicitor had not established any “special circumstances” to proceed beyond the 12-month limitation period prescribed in s. 4(1) of the Solicitors Act;
(b) had exceeded her statutory jurisdiction under s. 90 of the Courts of Justice Act, R.S.O. 1990, c. C.43 by: (1) having granted, in effect, an order for leave to the Solicitor to extend the applicable statutory limitation period for the assessment; and (2) applying the ratio of Guillemette v. Doucet, 2007 ONCA 743, 88 O.R. (3d) 90 (“Guillemette”), to allow the Solicitor to proceed with the assessment approximately 17 months after the accounts were delivered without applying to a judge to prove “special circumstances” for exceeding the 12-month limitation period in s. 4(1) of the Solicitors Act;
(c) erred by authorizing the assessment to proceed in direct contrast to the “settled law of Ontario” that (allegedly) requires a Solicitor seeking an assessment under s. 3(1) of the Solicitors Act to file a requisition within 12 months after issuance of the subject account; and
(d) erred in making an interim costs award without an evidentiary record concerning a material fact in dispute.
[15] The Objections provided other grounds that were not pressed on appeal.
[16] The Solicitor replied to the Objections, on May 13, 2019, that there was no limitation period for filing its requisition as the assessment was initiated under s. 3(c) of the Solicitors Act and s. 4(1) had no application to the subject assessment proceeding.
[17] The Solicitor further submitted that, in the alternative, if there is a limitation period applicable to this solicitor-initiated assessment, the Assessment Officer’s application of the ratio set out in Guillemette was correct in that the two-year limitation period provided in s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (“Limitations Act”) applied. As the requisition was brought within two years of the Solicitor’s Accounts, it was not time barred.
[18] The Client delivered his reply submissions dated May 22, 2019, but it was rejected as it was filed one day late.
[19] On September 11, 2019, the Assessment Officer delivered her reasons and decision to the Client’s Objections and issued the Assessment Certificate. She affirmed her ruling that she did not have to grant leave to the Solicitor to commence the assessment hearing because the Solicitor had not exceeded the two-year limitation period under s. 4 of the Limitations Act. As well, the Solicitor did not have to show “special circumstances” existed to proceed with the assessment because the assessment was ordered under s. 3(c) of the Solicitors Act. The Assessment Officer also affirmed the interim costs award for costs thrown away as a result of the adjournment of the initial hearing date.
[20] In her conclusion, the Assessment Officer confirmed the April 11, 2019 Decision and issued the Assessment Certificate in the amount of $14,917.80 for fees, disbursements and HST plus prejudgment interest payable by the clients to the Solicitor for a total of $15,882.04 owing as of September 11, 2019. The Assessment Officer also indicated that after she receives the cost submissions with respect to the assessment “[a] separate Report and Certificate will be issued with respect to costs, if needed by the parties”.
[21] The parties were then provided an opportunity to deliver submissions with respect to the costs of the assessment hearing by no later than September 25, 2019.
[22] On September 25, 2019, the Solicitor delivered its cost submissions to the Assessment Officer. The Solicitor sought the sum of $45,282.43 on a substantial indemnity basis or $50,382.41 on a full indemnity basis as costs of the assessment.
[23] Approximately 45 minutes before the submissions were due, the Client’s lawyer requested a one-day extension to file the costs submissions. The Client’s lawyer proceeded to submit his cost submissions one day late, on September 26, 2019.
[24] After inviting submissions on the request for an extension, and noting the Solicitor’s objection, the Assessment Officer denied the Client’s request for a one-day extension and ruled that she would not review his submissions.
[25] The Assessment Officer then released her reasons and decision on costs on October 15, 2019 (the “October 15, 2019 Costs Decision”) and issued her Costs of Assessment Certificate at the same time. She fixed costs payable to the Solicitor for the sum of $39,000 (all inclusive) on a substantial indemnity basis. In its preamble, the Costs of Assessment Certificate references the Assessment Certificate.
[26] The Client commenced this appeal by the Notice of Appeal dated October 22, 2019.
[27] In or around January 10, 2020, the Solicitor delivered its motion record to quash this appeal dated January 10, 2020.
[28] The Client then brought a cross motion seeking leave to extend the time to appeal the Assessment Certificate, and to amend the Notice of Appeal to expressly reference the Assessment Certificate, if needed.
[29] The original appeal hearing date, scheduled for May 15, 2020, had to be adjourned due to the court’s suspension of regular operations effective March 15, 2020 as a result of COVID–19.
[30] By order of Myers J. dated September 14, 2020, the motions were ordered to be heard at the same time as the appeal, with costs reserved to the judge hearing the appeal.
Motion to Quash and Cross Motion to Amend and Extend the Time to Appeal from the Assessment Certificate
[31] The Solicitor seeks an order quashing the appeal in its entirety. It submits that this court lacks jurisdiction to hear the appeal on the following grounds:
(a) The Client failed to seek leave to appeal the order awarding costs of the assessment, and the only appeal before the court is with respect to the Costs of Assessment Certificate;
(b) The Client failed to file objections to the October 15, 2019 Costs Decision, before the issuance of the Costs of Assessment Certificate; and, in the alternative,
(c) The Appeal is an attempt to re-litigate substantially the same arguments as those that were already submitted by the Client in his Objections made in response to the April 11, 2019 Decision and is therefore an abuse of process.
[32] Under the Solicitors Act, a client who is aggrieved by an assessment officer’s decision (in a solicitor-initiated assessment of accounts under s. 3(c) of that Act) is required to file a document setting out their objections to the decision prior to the issuance of the certificate. Under Rule 58.10, upon request, the assessment officer must withhold the certificate for seven days (or such other time as she, he, or they directs) in order to allow the aggrieved party to serve and file their objections. After reviewing the objections and any reply, the assessment officer rules on the objections and completes and issues the certificate accordingly. The objection process is a prerequisite to the client’s right to appeal the decision to this court under s. 17(b) of the Courts of Justice Act and Rule 58.11. The certificate, once issued, is then enforceable against the client by the solicitor, subject to an appeal.
[33] The assessment officer also has the jurisdiction to award or refuse the costs of an assessment to either party, and fix those costs. The costs order is a matter within the discretion of the assessment officer, as is the assessment of the solicitor’s accounts.
[34] A client has a right to appeal from the certificate of assessment and any related certificate awarding costs of the assessment (if issued) to this court under s. 17(b) of the Courts of Justice Act and Rule 58.11, with respect to those matters for which an objection was made. The procedure for an appeal from a certificate issued by an assessment officer is set out by Rule 62.01.
Scope of Appeal and Time for Commencement of the Appeal
[35] Fundamental to the Solicitor’s position is its contention that the appeal is from the Costs of Assessment Certificate only. If this is correct, then leave to appeal from this certificate was required to be obtained by the Client from this court. The Solicitor relies on s. 133(b) of the Courts of Justice Act which provides:
No appeal lies without leave of the court to which the appeal is to be taken,
(b) where the appeal is only as to costs that are in the discretion of the court that made the order for costs. [Emphasis added.]
[36] The Solicitor relies on the well-established proposition that, in court proceedings, leave of the court is required to appeal a costs decision where it is independent of the decision on the merits of the proceeding: Pollard Windows Inc. v. 1736106 Ontario Inc., 2019 ONSC 5361 (Div. Ct.), at para. 5; Mullin v. Lagace, 2015 ONCA 757, at para. 12.
[37] An assessment officer conducting an assessment under the Solicitors Act is an officer of the court. As such s. 133(b) of the Courts of Justice Act applies to her costs decisions, in the same way as it applies to costs decisions of Masters: Houghton and Houghton Inc. et al. v. Farncomb Kirkpatrick et al., 2017 ONSC 1478, at para. 16; Christian Jew Foundation v. Christian Jew Outreach, 2007 CanLII 20096 (Ont. Sup. Ct.), at para. 12.
[38] Section 6(3) of the Solicitors Act provides:
The costs of the reference are, unless otherwise directed, in the discretion of the officer, subject to appeal, and shall be assessed by him or her when and as allowed.
[39] In Schwisberg v. Kennedy, 2004 CanLII 7574 (Ont. Sup. Ct.) at para. 44, aff’d [2006] O.J. No. 1224 (Div. Ct.), the court interpreted s. 6(3) of the Solicitors Act to mean that costs of a solicitor-initiated assessment are within the discretion of the assessment officer, unless there is any indication to the contrary.
[40] The Solicitor submits, correctly, that the Notice of Appeal states that the appeal is only from the Costs of Assessment Certificate, so leave is required.
[41] The Solicitor notes that had the appeal been intended to be from the Assessment Certificate, the Client had to commence his appeal within seven days from the issuance of the Assessment Certificate, and he did not do that.
[42] The Client replies that what he has called the “final Certificate” in the Notice of Appeal incorporated by reference the Assessment Certificate through its preamble. He submits that it is clear on the face of the Notice of Appeal, and the grounds pleaded, that he intended all along to appeal from the Assessment Certificate on the jurisdiction (limitation period) argument. He further submits that the Assessment Officer is only entitled to issue one certificate and that therefore the “final Certificate” combined the Assessment Certificate and the Costs of Assessment Certificate into the last issued certificate.
[43] The Client points to the regime set out in Rules 58.09 to 58.10 and the reference throughout those Rules to “a certificate of assessment of costs” for this proposition. The Client says that the rules only contemplate the issuance of one certificate. Therefore, the “final certificate” must be the certificate from which an appeal can be taken. However, the Client does not offer any case law authority to support his interpretation of the Rules.
[44] I disagree with the Client’s interpretation of the Rules. The Rules provides the procedure for appealing a “certificate of assessment”. The Rules do not foreclose the issuance of a subsequent certificate relating to the costs of the assessment. By analogy, courts routinely issue a decision disposing of the merits of the proceeding, to be followed by a separate decision awarding the costs of the proceeding. The Courts of Justice Act and the Rules contemplate the situation in which an appeal is restricted to a costs decision, independent from the decision on the merits. Where an appeal is only with respect to the decision awarding costs of the proceeding, leave must be sought from the appellate court.
[45] The Client also submits that the court will not quash an appeal under s. 134(3) of the Courts of Justice Act unless the appeal is “manifestly devoid of merit” or there is “good reason to believe that the appeal is frivolous and vexatious”: Schmidt v. Toronto-Dominion Bank (1995), 1995 CanLII 3502 (ON CA), 24 O.R. (3d) 1 (C.A.); Clarke v. Fok, [2003] O.J. No. 489 (Div. Ct.). Further, a motion to quash should not be used as a “screening” tool to weed out appeals without hearing submissions on the appeal, particularly where the appeal raises an important question of law. According to the Client, this appeal raises important questions of law on the Assessment Officer’s jurisdiction and on the applicable limitation period governing a lawyer’s requisition for an order of an assessment of its accounts.
[46] In my view, the Notice of Appeal ought to have pleaded the Assessment Certificate in addition to the Costs of Assessment Certificate. However, I agree with the Client that it is clear on the face of the Notice of Appeal, and his factum, that he is appealing from the Assessment Certificate with respect to the jurisdictional and limitations grounds before this court and the Costs of Assessment Certificate with respect to the quantum and scale of costs awarded. This is evident from the Notice of Appeal and its stated grounds for the relief:
The Appellant asks that the Certificate: (a) be set aside and that the Respondent (applicant/solicitor) Fasken Martineau DuMoulin LLP’s requisition in order for assessment both dated as filed on November 25, 2015 be stayed and/or vacated.
[47] This intention is also evident from the grounds of appeal reflected in the Notice of Appeal. At least seven of the eleven pleaded grounds are reflected in the Objections delivered by the Client to the Assessment Officer in response to the April 11, 2019 Decision.
[48] In my view, the Solicitor has had appropriate notice of the scope of this appeal and has not been prejudiced in any way. The grounds challenging the jurisdiction of the Assessment Officer on the alleged expiry of a limitation period was raised in the Client’s Objections to the April 11, 2019 Decision, and is addressed at length in the Client’s factum.
[49] The Solicitor fully addressed the limitation period argument in its factum and at oral argument before this court. The mistake is apparent on the face of the Notice of Appeal and I have the jurisdiction to proceed with the hearing of this appeal on the merits in relation to the limitation period argument and intend to do so under Rule 1.04(1), Rule 2.01 and s. 134(1)(c) of the Courts of Justice Act. I hereby grant an amendment to the preamble of the Notice of Appeal to reference the appeal as being from both the Assessment Certificate and the Costs of Assessment Certificate.
[50] As the Solicitor noted, the Rules require that a Notice of Appeal from a certificate of assessment be served within seven days from the issuance of the certificate (Rule 62.02(2)). In this case the Notice of Appeal was served within seven days from the issuance of the Costs of Assessment Certificate, but more than 30 days after the issuance of the Assessment Certificate.
[51] The case law is also clear that the time for commencing an appeal starts from the date the decision on the merits is pronounced, unless there is any material matter outstanding to be decided. The jurisprudence is equally clear that an outstanding decision on costs (related to the proceeding) will not postpone the commencement of the limitation period relevant to an appeal.
[52] Therefore, the seven-day limitation period for the commencement of an appeal ran from the date of the Assessment Certificate, issued on September 11, 2019, and not the date of the subsequent Costs of Assessment Certificate which was issued on October 15, 2019. Accordingly, the Notice of Appeal was issued out of time.
[53] This raises the issue of whether the court should grant an extension of time, as requested by the Client in his cross-motion, to cure this defect. The court has jurisdiction to do so pursuant to Rule 3.02:
(1) Subject to subrule (3), the court may by order extend or abridge any time prescribed by these rules or an order, on such terms as are just.
(2) A motion for an order extending time may be made before or after the expiration of the time prescribed.
(3) An order under subrule (1) extending or bridging a time prescribed by these rules and relating to an appeal to an appellate court may be made only by a judge of the appellate court.
[54] In addition, I have jurisdiction to make such order as is considered just on an appeal under s. 134(1)(c) of the Courts of Justice Act.
[55] The factors governing the test for extending time to deliver an amended Notice of Appeal is set out by the Court of Appeal in Monteith v. Monteith, 2010 ONCA 78 (“Monteith”), at para. 11:
(a) whether the appellant formed an intention to appeal within the relevant period;
(b) the length of the delay and explanation for the delay;
(c) any prejudice to the respondent;
(d) the merits of the appeal; and
(e) whether the justice of the case requires it.
[56] I have considered the Monteith factors and find that the justice of the case requires that I grant an extension of time for the commencement of this appeal to the date the Notice of Appeal was served. The Appellant clearly intended to appeal from the Assessment Certificate, as is evident from the Objections filed at the time, and the fact that the Client ordered transcripts of the assessment hearing on September 24, 2019. The Client also clearly intended to raise the limitation period argument relative to the Assessment Certificate on the face of the Notice of Appeal filed. It is clear that the Client’s reference to the Costs of Assessment Certificate in the Notice of Appeal was intended to incorporate by reference an appeal from the Assessment Certificate. The Solicitor made full argument on the limitation period issue in its factum and the matter was fully argued at the appeal. The merits of the appeal were put into issue at the outset from the Notice of Appeal, and justice requires that this matter be decided on the merits in these circumstances. The issues raised in this appeal are meritorious and raise an important issue. The Client’s lawyer’s inadvertence in assuming that the Costs of Assessment Certificate was the sole and final all-encompassing certificate, which in effect subsumed the Assessment Certificate, is understandable given the lack of guidance on this issue in the case law and the arguable ambiguity in Rules 58 and 62 and their respective references to certificates of assessment but not separate costs of assessment certificates.
[57] In addition, the Assessment Officer’s reasons predating the issuance of the Assessment Certificate also give rise to confusion as to whether only one all-encompassing certificate would be eventually issued.
[58] I do not accept the Solicitor’s submission that if the appeal is successful it will be prejudiced by having to possibly return the funds, or part thereof, already paid by Mr. Sanayei. The Solicitor had notice of this possibility from the Notice of Appeal itself. Section 134(5) of the Courts of Justice Act permits the court’s powers on appeal to be exercised even if it is in favour of a party who did not appeal. In any event, the potential prejudice is outweighed by the other factors I have considered.
[59] As a result, I am granting leave to amend the Notice of Appeal to expressly plead an appeal from the Assessment Certificate.
[60] This outcome allows the appeal to be heard on the merits consistent with Rule 1.04.
Is the Client’s failure to have filed an objection in advance of the Costs of Assessment Certificate fatal to his right to appeal?
[61] The Solicitor also attacks the appeal on the basis that the Client failed to issue an objection to the costs decision issued by the Assessment Officer, in advance of the issuance of the Costs of Assessment Certificate.
[62] Rule 58.11 and s. 17(b) of the Courts of Justice Act provide that a client may appeal on an issue in respect of which an objection was served.
[63] It is undisputed that no such objection was filed in advance of the Assessment Officer issuing her Costs of Assessment Certificate.
[64] The Solicitor relies on the decision of RZCD Law Firm LLP v. Williams, 2016 ONSC 2122 (Div. Ct.) (“RZCD Law Firm LLP”) in support of its position that serving objections is a prerequisite to appealing a certificate of assessment. At para. 35, the Divisional Court confirmed that “if objections are not delivered, the appeal court may dismiss the appeal upon preliminary motion”. At paras. 34-36, the Divisional Court stated that:
When an appeal is about the assessment officer’s jurisdiction; i.e., an appeal about the principle upon which the assessment proceeded or the fairness or natural justice of the assessment procedure rather than an appeal about particular items, then the appeal may proceed without objections having been made to the assessment officer.
However, where the appeal from a certificate of assessment is confined to specific items in the solicitor’s bill, objections should be delivered, and if objections are not delivered, the appeal court may dismiss the appeal upon preliminary motion.
Instead of dismissing the appeal, the court has rarely exercised discretion to set aside the certificate to allow objections to be made nunc pro tunc, but, generally speaking, appeals on specific items in the lawyer’s bill should be based on objections delivered to the assessment officer. [Citations omitted].
[65] In RZCD Law Firm LLP, the Divisional Court was dealing specifically with the failure by the law firm to deliver objections with respect to specific items in the solicitor’s account under assessment. Furthermore, the Divisional Court reserved discretion to the appeal judge in determining whether the appeal ought to be dismissed. The Divisional Court did not have before it the circumstances faced by this court; namely when the failure to deliver an objection has occurred due to the Assessment Officer failing to provide any opportunity for the Client to request that she withhold her certificate to allow him to deliver an objection. This occurred because the Assessment Officer issued her decision and certificate simultaneously.
[66] The Assessment Officer’s failure to provide any opportunity to the Client to make an objection constituted a failure of “fairness or natural justice” in the procedure. The Client’s failure to deliver costs submissions in a timely way in advance of the Assessment Officer’s release of her decision on costs did not, in my view, deprive the Client of the right to appeal from the Costs of Assessment Certificate. By releasing the October 15, 2019 Costs Decision at the same time as the Costs of Assessment Certificate, the procedure for making objections set out in Rule 58.10 was frustrated.
[67] The Solicitor submits that although the Costs of Assessment Certificate and the October 15, 2019 Costs Decision were issued simultaneously, this did not preclude the Client from requesting that the Assessment Officer withhold the Costs of Assessment Certificate before she issued the certificate. This submission does not make sense to me. In order for a meaningful objection to be made (and whether an objection should be made), the Client needed to know what that decision, and its underlying reasons, would be. If the Solicitor is correct, then clients must always issue objections before they know what the outcome will be or risk losing their right to appeal. I reject this submission.
[68] Notably, the Client did provide submissions on the costs issue to the Assessment Officer that took issue with the Solicitor’s position, albeit one day late. Although the Assessment Officer chose to not review those submissions, the Solicitor had a copy of them and hence notice of the Client’s position.
[69] As I have had the full benefit of legal argument regarding the merits of the Costs of Assessment Certificate, I find that it is in the interests of justice that I dispense with the requirement (under Rule 58.11) that the Client have filed an objection with respect to the October 15, 2019 Costs Decision rendered by the Assessment Officer, pursuant to Rule 2.03, and applying the factors set out by the Court of Appeal in Wellwood v. Ontario Provincial Police, 2010 ONCA 386, 102 O.R. (3d) 555.
[70] I recognize that s. 17(b) of the Courts of Justice Act grounds an appeal from a certificate of assessment of costs “on an issue in respect of which an objection was served under the rules of court.” However, I am exercising my discretion under s. 134 of the Courts of Justice Act and Rule 2.03, based on the same considerations set out in Wellwood, to dispense with compliance with this statutory requirement for the appeal. Again, it was through no fault of the Client that he was unable to file an objection in light of the Assessment Officer’s simultaneous release of her October 15, 2019 Costs Decision and the Costs of Assessment Certificate. No prejudice has been demonstrated by the Solicitor that would justify declining the exercise of the court’s discretion to rectify this injustice.
The appeal is an abuse of process
[71] Finally, the Solicitor states that the appeal is an attempt to relitigate the issues resolved by the Assessment Officer in the Assessment Certificate. This ground of the Solicitor’s motion to quash the appeal relies on a finding that the Assessment Certificate is not properly before the court.
[72] The Solicitor relies, in part, on Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77. In that landmark decision, at para. 46, the Supreme Court of Canada stated the following in relation to the common law abuse of process doctrine:
A desire to attack a judicial finding is not, in itself, an improper purpose. The law permits that objective to be pursued through various reviewing mechanisms such as appeals or judicial review. Indeed reviewability is an important aspect of finality. A decision is final and binding on the parties only when all available reviews have been exhausted or abandoned. What is improper is to attempt to impeach a judicial finding by the impermissible route of re-litigation in a different forum. Therefore, motive is of little or no import.
[73] However, in light of my finding that the appeal includes an appeal from the Assessment Certificate, this argument cannot be successful. The Client is not “re-litigating” the Assessment Certificate, but rather is appealing it, as is his right, thus invoking a permissible reviewing mechanism.
[74] The motion to quash is therefore dismissed, and the cross motion to amend the Notice of Appeal and extend the time to appeal from the Assessment Certificate is granted.
The Appeal of the Assessment Certificate and the Costs of Assessment Certificate
[75] This is an appeal of an Assessment Certificate and the related Costs of Assessment Certificate by the Client, pursuant to ss. 90(4)(b) and 17(b) of the Courts of Justice Act, and Rules 62.01(1)(b) and 58.09-58.11. Section 90(4)(b) of the Courts of Justice Act addresses costs assessed from proceedings before tribunals, whereas s. 17(b) addresses assessment of costs for proceedings that were brought in the Superior Court of Justice. Accordingly, I am proceeding under s. 17(b) of the Courts of Justice Act.
Standard of Review
[76] The standard of review with respect to decisions of assessment officers is set out in Rabbani v. Niagara (Regional Municipality), 2012 ONCA 280, at para. 6:
The standard of review on an appeal from an assessment officer’s decision is well established. The order below is discretionary. The hearing is an appeal, not an opportunity for the reviewing court to rehear the assessment and come to its own conclusion as to what is reasonable, absent an error in law, misapprehension of the evidence, palpable and overriding error on the factual matter, or an assessment amount that is so unreasonable as to constitute an error in principle.
[77] In RZCD Law Firm LLP, at para. 46, the Divisional Court set out the standard of appellate review of a certificate of assessment as follows:
A motion to oppose an assessment officer’s certificate is in the nature of an appeal, and the court is concerned only with errors in principle and not mere questions of amount, unless the amounts are so inappropriate as to suggest an error in principle; thus, the decision of the assessment officer can be disturbed only if: (a) there is absence of excess of jurisdiction; (b) there has been some error in principle; or (c) there has been some patent misapprehension of the evidence. [Citations omitted].
[78] Therefore, I must determine whether the Assessment Officer committed an error of law, committed a palpable and overriding error due to the misapprehension of the evidence or some factual matter, or whether her assessment was otherwise so unreasonable as to constitute an error in principle.
- Appeal of the Assessment Certificate
[79] The Client raises the following issue on his appeal of the Assessment Certificate:
(a) What is the appropriate time period within which the Solicitor had to file a requisition for order for an assessment of costs under s. 3(c) of the Solicitors Act? Related to this issue is whether the Solicitor was required to prove “special circumstances” under s. 4(1) of the Solicitors Act in order to proceed with the assessment hearing.
What limitation period, if any, applies to solicitor-initiated assessments under s. 3(c) of the Solicitors Act?
[80] The Client claims that the Registrar erred in issuing an order, upon the Solicitor’s requisition, for an assessment of accounts because the requisition was filed more than 12 months after the final account was issued, contrary to s. 4(1) of the Solicitors Act. Accordingly, the Assessment Officer lacked jurisdiction to proceed on an order issued from a late filed requisition. In these circumstances, the Client submits that the Solicitor had to seek leave of a judge to file the requisition late, by establishing “special circumstances” under s. 4(1) of the Solicitors Act, which the Solicitor failed to do.
[81] In addition, the Client alleges that the Assessment Officer erred when she found that s. 4 of the Limitations Act was the applicable time period governing solicitor-initiated assessments under s. 3(c) of the Solicitors Act, and therefore the requisition and assessment proceeding were not time barred.
[82] The Client acknowledges that the Solicitor brought this assessment proceeding under s. 3(c) of the Solicitors Act but says that the 12-month limitation period, and “special circumstances” requirement, contained in s. 4(1) of that Act nonetheless governs this assessment proceeding.
[83] Both parties advised that they could not find any case law that has dealt with the issue of the applicable limitation period for solicitor-initiated assessments under s. 3(c) of the Solicitors Act, or the interplay between that section and either s. 4(1) of the Solicitors Act or s. 19 of the Limitations Act. Accordingly, this appears to be a case of first impression.
[84] It is common ground that the requisition for the subject order for assessment was obtained under s. 3(c) of the Solicitors Act which provides:
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,
(b) 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. [Emphasis added.]
[85] The Client’s argument is that as there is no fixed time imposed by s. 3(c) on a solicitor’s right to obtain a requisition, therefore the 12-month period reflected in s. 4(1) of the Solicitors Act must apply. The Client supports this position by noting the consumer protection nature of the Solicitors Act, and his bald assertion that it is “common knowledge” that the court “always” applies a 12-month limitation period in these types of solicitor-initiated assessments.
[86] Section 4(1) of the Solicitors Act states:
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. [Emphasis added.]
[87] The issue raises one of statutory interpretation. The essence of the Client’s position is that the 12-month time period, together with the “special circumstances” requirement for late filing, from s. 4(1) of the Solicitors Act should effectively be read into s. 3(c) of that Act in order to prevent the “absurd” result of there being no limitation period whatsoever imposed on solicitors seeking to have their accounts assessed.
[88] The Solicitors Act was enacted in 1990 and is a consumer protection statute: Zeppieri & Associates v. Gupta, 2016 ONSC 6491. The Client urges that it would be inconsistent with the nature of consumer protection if solicitors were permitted an unlimited timeframe within which to request an assessment of accounts as against clients, whereas clients must commence their assessment proceedings within 12 months from the rendering of the final account, absent demonstrating special circumstances. The Client further submits that it is logical that the 12-month time period from s. 4(1) be read into s. 3(c) to fill this ostensible gap in the legislation. I disagree.
[89] Section 3(c) explicitly states that a solicitor may bring a requisition to have its accounts assessed “at any time” after delivery of its account provided:
(a) the retainer is not disputed,
(b) there are no special circumstances,
(c) the solicitor has waited one month after delivery of its account to file the requisition, and
(d) no order for assessment of it has been previously made.
[90] In this case, it is agreed by the parties that the retainer is not under dispute, no special circumstances have been advanced by either party, the requisition was filed more than a month after the subject accounts were delivered, and there was no prior order for an assessment made.
[91] Second, s. 4(1) of the Solicitors Act explicitly refers to applications for a reference brought “by the party chargeable with such bill”. The party chargeable is the client, not the solicitor. Hence this provision has no application to the solicitor-initiated assessment under s. 3, again on a plain reading of this section.
[92] The Solicitor submits that in the event there is a limitation period, then s. 4 of the Limitations Act is the only statute to fill that ostensible gap, as the Assessment Officer ultimately concluded based on her interpretation of Guillemette.
[93] The Assessment Officer carefully reviewed the arguments made on this issue in the course of her September 11, 2019 reasons for decision and affirmed in the Assessment Certificate (with the benefit of written submissions from both parties). She reached the conclusion that, if there is a fixed limitation period, it is set out by s. 4 of the Limitations Act; namely two years from one month after the date of the last rendered account. As the requisition was filed approximately 17 months from the date of the last rendered account, she found that the requisition had been filed in a timely manner. The Solicitor was not required to prove special circumstances under s. 4(1) of the Solicitors Act in order to proceed with the assessment.
[94] I do not agree with the Client’s submission that the Assessment Officer’s concurrence “with the [Client’s] representation that the Solicitors Act states that there is a twelve (12) month limitation on the right to file an Assessment” meant that she agreed with the further submission that the 12-month limitation contained in s. 4(1), together with that provision’s added requirement that special circumstances had to be proven to the satisfaction of a judge in order to extend that limitation period, therefore applied to an assessment conducted under s. 3(c). Indeed, it is clear from a review of the Assessment Officer’s decision rendered on September 11, 2019, in advance of issuing the Assessment Certificate, that she rejected the Client’s extension of that argument.
[95] At para. 23f.iii. of her decision, in response to the Clients Objections (dated September 11, 2019), the Assessment Officer held:
23f.iii. After review of the parties’ arguments and submissions, the Assessment Officer concurred with Hosseini’s representation that the Solicitors Act states that there is a twelve (12) month limitation on the right to file an Assessment. However, the Assessment Officer also stated that precedent is clear that the Statute of Limitations Act trumps the twelve (12) month period and extends it to two (2) years for the Solicitor to bring an assessment. Based on the date that the Requisition of Assessment and Order for Assessment was filed, the Assessment Officer held that it is clear that the Application was filed well within the two (2) year limitation requirement.
[96] At paras. 28 and 29 of the Assessment Decision, the Assessment Officer concluded:
In my review of the Objection submissions, the evidence shows that the final bill was issued to the Client on dated June 26, 2014. As noted above, Section 3(c) of the Solicitors Act permits the Solicitor to file an assessment a month after the bills are delivered. In this instance, one month after the final bill was delivered is approximately July 26, 2014, which means that under the Act the earliest the Solicitor was permitted to initiate an assessment was on July 26, 2014.
Further, consistent with the court’s holdings in Echo Energy Canada Inc. and Guillemette, the two (2) year limitation in the Limitations Act trumps the twelve (12) month limitation provision in the Solicitors Act. This means that the Solicitor in this instance would have had two (2) years from July 26, 2014, which is approximately July 26, 2016, to file a requisition and get an order for assessment from the Court. The facts in this case show that the Solicitor filed the Requisition and Order for Assessment on November 25, 2015, well within the limitations period. Therefore, an order from a Judge granting extension of the limitations period is not required based on the facts in this instance.
[97] The jurisprudence relied upon by the Client, in support of his position that an extension of time was required to be granted by a judge upon satisfaction of the existence of special circumstances (as defined by the case law), was all decided under s. 4(1) of the Solicitors Act. For example, in Gestion Trans-Tek Inc. v. Bresner, 2005 CanLII 49969 (Ont. Sup. Ct.) at issue was an application for a reference brought by the client (the party chargeable) under s. 4(1) of the Solicitors Act. These cases have no application to the assessment conducted by the Assessment Officer.
[98] A close examination of Guillemette is warranted in this appeal. In that matter, the client had sought a reference under s. 4(1) of the Solicitors Act to assess his lawyers accounts. The application for the assessment was commenced approximately 33 months after the client had paid his lawyer’s last account.
[99] The Court of Appeal considered the 12-month limitation period contained in s. 4(1) of the Solicitors Act and its interplay with s. 4 of the Limitations Act which set out the “basic” two-year limitation period. The Court of Appeal, per Doherty J.A., at para. 11, stated by way of introduction that, “[a] client may challenge his or her solicitor’s accounts by way of an assessment. The provisions of the Solicitors Act governing applications for assessments are notoriously unclear”.
[100] Looking at the interrelationship between s. 4(1) and s. 11 of the Solicitors Act, the Court, at paras. 14-15, stated:
Section 11 no longer imposes any time limit on the bringing of the application for an assessment of paid accounts. The present s. 11, however, maintains the requirement that in all cases where the client seeks to assess paid accounts, the client must demonstrate “special circumstances”. The “special circumstances” requirement reflects the commonsense inference that payment of an account implies an acceptance of the reasonableness of the account. [Citations omitted.]
Section 4 of the Solicitors Act was not amended by the Limitations Act. The 12-month time period that runs from the delivery of the accounts applies to all accounts whether paid or unpaid, as does the “special circumstances” exception to that 12-month time limit. Consequently, an application to assess paid accounts brought more than 12 months after delivery of those accounts is subject to the “special circumstances” requirements in both ss. 4 and 11. [Emphasis added.]
[101] The Court of Appeal confirmed that “claims” as defined in the Limitations Act includes assessments of solicitor accounts under the Solicitors Act: Guillemette, at para. 19.
[102] The Court of Appeal then examined the interrelationship of s. 19 of the Limitations Act and s. 4(1) of the Solicitors Act. The Court of Appeal concluded, at paras. 23 and 32-33, that as the Solicitors Act is not exempt from the Limitations Act, the basic two-year limitation period supersedes the 12-month limitation set out in s. 4(1) of the Solicitors Act:
Section 19 reflects the legislature’s intention to jettison the numerous limitation provisions scattered throughout the statutes in favour of the generally applicable provisions found in the Limitations Act. With the exception of the statutes identified in s. 19(1), that section negates the operation of limitation periods found in other statutes if the claim in issue is one to which the Limitations Act applies. The Solicitors Act is not listed in the Schedule referred to in s. 19(1) of the Limitations Act, and does not incorporate by reference any of the statutes listed in that Schedule. Consequently, and subject to the transitional provisions in s. 24 of the Limitations Act, any limitation periods in the Solicitors Act do not apply to a claim to which the Limitations Act applies.
I think the “special circumstances” qualifier in s. 4 of the Solicitors Act falls within s. 20 of the Limitations Act. The 12-month time period in s. 4 has repeatedly been described as a limitation period…
Consequently, while by virtue of s. 19 of the Limitations Act, the two-year limitation period in that Act trumps the 12-month limitation period in s. 4, s. 20 of the Limitations Act preserves the “special circumstances” exception set out in s. 4 of the Solicitors Act.
[103] However, the Court of Appeal, recognizing that its interpretation of the interaction between the Limitations Act and s. 4 of the Solicitors Act means there is no absolute fixed limitation period for client-initiated assessment of solicitor accounts (due to the preservation of the “special circumstances” extension) stated at para. 35:
I appreciate that my interpretation of the interaction of the Limitations Act and the Solicitors Act means that there is no absolute time bar against applications for the assessment of lawyers' accounts. This result may seem inconsistent with the purpose underlying the Limitations Act. However, solicitors' accounts have always been treated differently than other debts and even other professional accounts. A superior court has an inherent jurisdiction to review lawyers' accounts entirely apart from any statutory authority. That inherent jurisdiction was not subject to a time limit. My interpretation of the two Acts preserves that status quo. [Citations omitted.]
[104] The Court of Appeal found in the alternative, at para. 42, that if s. 4 of the Limitations Act did not apply to override the 12-month limitation period, then:
Guillemette's claim was discovered before January 1, 2004. Under the terms of s. 24(5) [of the Limitations Act], any limitation period imposed on her action against Doucet had to be found in the Solicitors Act and not the Limitations Act. Section 4 of the Solicitors Act permitted the action assuming the judge found "special circumstances" at any time after the accounts were delivered.
[105] The Client submits that the 2-year limitation analysis from Guillemette does not apply because the subject assessment was obtained and conducted under s. 3(c) of the Solicitors Act. Therefore, says the Client, the 12-month limitation period from s. 4(1) applied to this s. 3(c) assessment and the Solicitor had to seek leave from a judge to start the assessment process late, and could only succeed if it proved “special circumstances”. The Client submitted that the Assessment Officer acted ultra vires her jurisdiction by effectively finding “special circumstances” and granting the requisite extension of time to commence the assessment process. Further, under the same reasoning, the Registrar should not have issued an order for an assessment in the first place.
[106] Sections 19-20 of the Limitations Act address the application of that Act to limitation periods contained in other statutes:
19 (1) A limitation period set out in or under another Act that applies to a claim to which this Act applies is of no effect unless,
(a) the provision establishing it is listed in the Schedule to this Act; or
(b) the provision establishing it,
(i) is in existence on January 1, 2004, and
(ii) incorporates by reference a provision listed in the Schedule to this Act.
(2) Subsection (1) applies despite any other Act.
20 This Act does not affect the extension, suspension or other variation of a limitation period or other time limit by or under another Act.
[107] The Solicitors Act is not listed in the Schedule to the Limitations Act. An assessment of a solicitor’s account is a “claim” within the meaning of the Limitations Act. Therefore, according to the analysis in Guillemette, s. 4 of the Limitations Act which sets out the basic limitation period of two years for these types of claims, arguably “trumps” the existence of the no limitation period in section 3(c) of the Solicitors Act.
[108] On the other hand, I was not referred to any case law authority in which s. 19 of the Limitations Act was interpreted so as to impose a limitation period to such a claim in a proceeding where the governing statute explicitly imposes no limitation period such as appears the case with s. 3(c) of the Solicitors Act. Section 19 seems to address competing limitation periods.
[109] Should s. 19 of the Limitations Act not apply to impose a limitation period on assessments commenced by solicitors under s. 3(c), then consistent with the plain reading of that provision, there is no limitation period applicable to solicitor-initiated assessments commenced under s. 3(c) of the Solicitors Act. Solicitors may file a requisition “at any time” after the statutory conditions of that provision are fulfilled.
[110] However, as the issue concerning the applicability of s. 19 of Limitations Act to impose a new limitation period where the subject statute explicitly imposes no limitation period was not fully argued, and makes no difference to the outcome in light of the fact that the requisition was filed within two years after one month from the delivery of the Solicitor’s Accounts (thereby satisfying both s. 4 of the Limitations Act and the statutory directive reflected in s. 3(c) of the Solicitors Act that the requisition can be filed “at any time”), I will leave this determination to another day.
[111] In any event, the Assessment Officer did not import into s. 3(c) the requirement from s. 4(1) of the Solicitors Act that solicitors apply to a judge to establish special circumstances if their requisition is filed after the 12-month limitation period from that provision as evidenced by paras. 18-21 of her decision:
Section 4 of the [Solicitors] Act indicates that its limitation period applies only to an application made by the Client in a Solicitor-Client relationship. This means that in this instance this limitation period would have only applied to the Respondents. In the alternative, if there was a limitation period the Applicant agrees with the Assessment Officer’ [sic] interpretation of Guillemette, that the applicable limitation period would be two (2) years under the Limitations Act. The Applicant filed the application within two (2) years, and therefore, met this limitation period.
Lastly, the Assessment Officer did not grant leave. Instead, she pointed out to [the Client’s] counsel that the applicable limitation period under section 4 of the Solicitors Act was actually the established two (2) years under the Limitations Act per Guillemette. Prior to the hearing taking place [the Client] had not made the Applicant or the Court aware that he would argue that this limitation period existed; therefore, the Applicant was unable to make submissions at that time with respect to the Section 4’s application.
Section 3(c) of the Solicitors Act states that “[w]here 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, 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.”
This court has said that the two (2) year limitation in the [Limitations Act] trumps the 12-month provision in section 4(1) of the Solicitors Act. See Echo Energy Canada Inc. v. Lenczner Slaght Royce Smith Griffin LLP, 2010 ONCA 709, at para. 49, and Guillemette v. Doucet, 2007 ONCA 743, at para. 33.
[112] The Assessment Officer did not rely on the 12-month limitation period set out in s. 4(1) of the Solicitors Act or the “special circumstances” requirement in her analysis of the time period required, if any, within which solicitors must file a requisition under s. 3(c) of the Solicitors Act. It is clear from her reasons, issued in response to the Client’s Objections that, applying the Court of Appeal’s interpretation of the interaction between the Solicitors Act and the Limitations Act from Guillemette, there is either no limitation period at all under s. 3(c) of the Solicitors Act or, alternatively, the two-year limitation period under s. 4 of the Limitations Act now overrides the “at any time” portion of s. 3(c) of the Solicitors Act. Either way, the Solicitor filed its requisition and obtained an order for the assessment in time.
[113] I see no error in principle in the Assessment Officer’s analysis that justifies interference with her decision. Furthermore, there is no misapprehension of the evidence or facts that constitute an overriding and palpable error.
[114] For the reasons stated I am dismissing the appeal with respect to the Assessment Officer’s decision and Assessment Certificate.
- Appeal of the Costs of Assessment Certificate
[115] The Client submits that the Assessment Officer made an error in principle on the following matters with respect to the Costs of Assessment Certificate:
(a) awarding interim costs thrown away as a term of granting the client an adjournment of the assessment hearing without inviting submissions and based on a misconception surrounding the circumstances of the request;
(b) failing to apply the principles of proportionality and indemnity in quantifying the costs;
(c) awarding costs on a substantial indemnity basis to lawyers who were self-represented in the assessment proceeding; and
(d) failing to deny or reduce costs under Rule 57.05.
[116] The Client did not raise in his Notice of Appeal the Assessment Officer’s denial of his request for an extension of time to submit his Cost Outline and submissions.
General Principles
[117] Costs of a solicitor-client assessment are within the discretion of the assessment officer pursuant to s. 131(1) of the Courts of Justice Act and Rule 58.05(6).
[118] In assessing costs of the assessment proceeding, the Assessment Officer must take into consideration the factors listed under Rule 57.01.
[119] The overriding principles in determining costs are fairness, reasonableness, and proportionality. The reasonable expectations of the “losing party” is also an important consideration: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). The general principle is that costs on a partial indemnity scale should follow the event. That principle should only be departed from for very good reasons such as misconduct of a party or other conduct that warrants the court’s expression of disapproval, or where the mandatory costs consequences of Rule 49 (offers to settle) apply.
[120] The burden is on the Client to demonstrate that the Assessment Officer either made an error in principle or her decision is so unreasonable as to amount to an error in principle: see, for example, Samuel Eng and Associates v. Ho, 2009 ONCA 150, at para. 1.
Interim Costs Award
[121] The Client submits that the Assessment Officer erred when she awarded costs of $2,000 on an interim basis as a term of granting the adjournment requested by him. The Client states that the error was in the Assessment Officer’s alleged failure to provide an opportunity to adduce evidence to correct the Solicitor’s statement that she did not have prior notice of the request for an adjournment.
[122] The Assessment Officer fully addressed this issue in her September 11, 2019 Decision, with the benefit of receiving written submissions reflected in the Client’s Objections and the Solicitor’s Reply (dated May 13, 2019). First, it was clear from her endorsement of October 18, 2018 that the Assessment Officer had no prior notice of the request for an adjournment, which was made in the face of the Client having almost two years notice of the hearing date. Second, the Assessment Officer provided the opportunity to make full submissions on this issue. Third, the other client, Mr. Sanayei, and the Solicitor had come prepared to proceed with the assessment hearing. Fourth, the evidentiary record before the Assessment Officer failed to show any reasonable basis for not alerting the parties and the Court sooner of the request for an adjournment. Fifth, it was evident that the parties expended time and expense to prepare for the hearing and were therefore entitled to costs thrown away. Finally, the Assessment Officer turned her mind to the principle of proportionality in fixing the costs. The Assessment Officer concluded, at para. 49 of her decision, that the Client “failed to provide any facts or authority for review or re-consideration to show any error or misapprehension of the facts”.
[123] The Client has not demonstrated that the Assessment Officer erred in principle or that she misapprehended the facts based on the evidentiary record that was before her. The Client had the onus to adduce evidence in support of his request for an adjournment, and he failed to do so. Accordingly, the Assessment Officer’s award of interim costs against the Client is affirmed.
The Scale of Costs Awarded
[124] The Solicitor sought recovery of its legal costs and disbursements on a full or substantial indemnity basis, in the amounts of $50,382.41 or $45,282.43 respectively.
[125] The Assessment Officer awarded costs of the assessment on a substantial indemnity basis. She did so for the following reasons, derived from her October 15, 2019 Costs Decision:
(a) the Clients’ allegations were “groundless and the Applicant [Solicitor] “should not have to pay a penny towards the costs of obtaining justice and litigation that it had no choice to pursue”;
(b) on January 8, 2013, the Solicitor offered to settle the matter for $8,000. Despite repeated follow-up by the Solicitor, the clients never responded to the offer before its expiration; and
(c) on February 18, 2015, the clients made an offer to settle the assessment in the amount of $5,000. The Solicitor accepted the offer and requested payment instructions however the clients never followed up essentially reneging on their offer. As a result of the Client’s failure to follow through on the settlement, the Solicitor was forced to engage in the assessment.
[126] The Assessment Officer concluded that “based on the conduct of the Respondents [Mr. Hosseini and Mr. Sanayai] prior to and throughout the proceeding, and their failure to accept a reasonable offer, an award of full or substantial indemnity is appropriate.”
[127] The Client submits that the Assessment Officer erred in awarding the Solicitor costs on a substantial indemnity basis in part because the Solicitor was a self-represented party and is therefore disentitled from indemnity. However, it is well-established that solicitors who are self-represented in assessment hearings [as is often the case] are entitled to a costs award in the normal course determined with respect to the factors. This position is supported by s. 36 of the Solicitors Act: see also, Fong v. Chan, 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (C.A.).
[128] The fact that there was an exchange of formal offers, both of which were substantially less than what the Solicitor received under the Assessment Certificate, and the fact that the Solicitor accepted the Client’s written offer, but the Client then failed to honour that settlement, is a proper factor to consider in awarding costs on a substantial indemnity basis. The Assessment Officer relied on Rules 49.10 and 49.13 in considering this factor and concluded the Solicitor “should not have to pay a penny towards the costs of obtaining justice in litigation that it had no choice but to pursue”.
[129] The factors relied upon by the Assessment Officer, including the conduct of the Client prior to and during the course of the assessment hearing and the offers to settle, form a fair and reasonable basis upon which the award of costs on a substantial indemnity basis was made.
The Quantum of Costs Awarded (including the failure to apply Rule 57.05)
[130] After reviewing the costs submissions and bill of costs of the Solicitor, the Assessment Officer reduced the sum requested because of evidence of:
(a) excessive docketing;
(b) duplication of work; and
(c) work incurred as a result of an inexperienced articling student’s learning curve.
[131] The Assessment Officer turned her mind to the principles set out in Inzola Group Ltd. v. The Corporation of the City of Brampton, 2017 ONSC 3822, at para. 58, citing Real Group v. Core Precision, 2011 ONSC 5815 that a client should not bear the cost of a “team approach to litigation”. She also considered the factors in Rule 57.01 and the reduction of fees based on a solicitor’s learning curve relying on Goodman and Carr v. Tempra Management Ltd., [1991] O.J. No. 263 (Ct. J. (Gen. Div.), Assessment Officer) and Biggs, Sloan & Strype v. Sangha, [1990] O.J. No. 3432 (H. Ct. J., Assessment Officer). She critically reviewed the Solicitor’s Cost Outline and, applying the principles derived from these cases, reduced the costs claimed to $39,000 all-inclusive in exercise of her discretion under Rule 58.05(6).
[132] The main complaint by the Client is that the quantum of costs awarded is wholly disproportionate to the sum awarded on the assessment of costs which, it will be recalled, was $14,917.80. In addition, the Client submits that pursuant to Rule 57.05(1), as this amount fell within the monetary jurisdiction of the Small Claims Court, no costs, or a lower award of costs, was justified.
[133] Dealing with the Rule 57.05(1) argument first, it should be noted that that those costs consequences only apply where a proceeding was brought in the wrong court. As such, it has no application to an assessment since the Solicitors Act requires that assessments be brought before assessment officers. The assessment was brought in the correct forum.
[134] With respect to the argument that the Assessment Officer failed to consider the reasonable expectations of the party who is subjected to the costs award, it must be recalled that the costs submission of the Client was rejected and not reviewed by the Assessment Officer, due to its late filing. Consequently, the Client’s costs submission is not before this Court. In any event, at para. 29 of the October 15, 2019 Costs Decision, the Assessment Officer essentially addressed the reasonable expectations of the unsuccessful party with respect to paying costs for a duplication of work, and the other factors causing a reduction in the costs awarded.
[135] I also agree with the Solicitor’s submission that the situation before the Assessment Officer is analogous to the cases where an unsuccessful party fails to provide a cost outline. In those cases, it has been held that there is no basis for finding that the unsuccessful party spent less time than the successful party: Fresco v. Canadian Imperial Bank of Commerce, 2010 ONSC 1036; Finn Way General Contractor Inc. v. S. Ward Construction Inc., 2014 ONSC 4071; Hague v. Liberty Mutual Insurance Co., 2005 CanLII 13782 (Ont. Sup. Ct.). However, I do not accept the Solicitor’s further submission that I should draw the inference that the unsuccessful party spent as much or more time than the successful party in the circumstances of this case.
[136] Second, while the quantum of the costs of the assessment awarded is more than 200% of the assessment costs awarded, that fact, in and of itself, does not mean that the Assessment Officer erred in principle or that her costs award was so unreasonable as to constitute an error in principle.
[137] The quantum recovered in a proceeding is only one of the factors to be considered in assessing costs of the proceeding. There are numerous cases in which the costs awarded in a proceeding were far in excess of the quantum recovered as damages in a proceeding. For example, in A & A Steelseal Waterproofing Inc. v. Kalovski, 2010 ONSC 2652, at para. 21, the Court described the principle of proportionality as follows:
Further, while costs awarded must be reasonable, it is not the case that the mere fact that costs exceed the damages awarded renders such an award inappropriate: Bonaiuto v. Pilot Insurance Co., 2010 CarswellOnt 1039. As has been stated, the fact that costs significantly exceed the amount at stake, at least in the main action, is regrettable but it is well-known to counsel that this is one of the risks involved in pursuing or defending a case.
(See also Cimmaster v. Piccione, 2010 ONSC 846, at para. 19.)
[138] Based on a review of the October 15, 2019 Costs Decision, it is clear that the Assessment Officer turned her mind to the relevant principles and facts before her which included the exchange of offers to settle, the conduct of the Client that prolonged the assessment process, the “baseless allegations” of the Client, and the fact that the Solicitor was forced to proceed with an assessment hearing, in the face of an accepted offer to settle, in which its accounts were ultimately fully upheld and not reduced.
[139] I see no basis to interfere with the Assessment Officer’s exercise of her discretion in fixing the costs of the assessment in the sum of $39,000 all-inclusive. This is bearing in mind the standard of review set out by the Court of Appeal in Samuel Eng and Associates, at para. 1, that a court reviewing an assessment officer’s certificate is “only concerned with questions of principle not with questions of amount or how the assessment officer exercised his discretion unless the decision is so unreasonable as to amount to an error in principle.” I find no error in principle in the Assessment Officer’s award of costs of the assessment, nor is the amount so unreasonable, in the circumstances before the court, as to constitute an error in principle.
Disposition and Order
[140] Accordingly, the motion to quash is dismissed, the motions to extend time to appeal from the Assessment Certificate and leave to amend the Notice of Appeal are granted, and the appeal is dismissed.
[141] The Assessment Certificate and Costs of Assessment Certificate of Assessment Officer Palmer is affirmed.
[142] The parties should attempt to agree on costs. However, in the absence of agreement, the Solicitor is to deliver its Cost Outline together with written submissions not to exceed three pages (double spaced) by January 22, 2021. The Client is to deliver his Cost Outline and written submissions not to exceed three pages (double spaced) by January 29, 2021.
Justice S. Vella
Released: January 15, 2021
COURT FILE NO.: CV-15-00541260-0000
DATE: 20210115
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE SOLICITORS ACT
BETWEEN:
FASKEN MARTINEAU DUMOULIN LLP
Moving Party and Respondent on Appeal
- and –
BEHDAD HOSSEINI AND HOMAYOON SANAYEI
Responding Party and Appellant
REASONS FOR DECISION
Justice S. Vella
Released: January 15, 2021