REasons for Decision

I. Background to Initial Motion

[1] In 2012, the Applicant, Prudence Gonsalves was the plaintiff, in action FS-12-18256, in which she sued her spouse Steven Serymgeour, in what became a hotly contested matrimonial matter. Following the trial, where the firm acting for the Applicant on this motion were largely successful on behalf of their client, an appeal was taken by the husband. His appeal was found to have been largely unsuccessful, in a 2017 unanimous decision of the Court of Appeal, dated August 2^nd, 2017.

[2] In or about July 28, 2014, the Applicant, changed counsel and retained Elliot Birnboim of the firm Chitiz Pathak LLP (''CP") to take over as lawyer of record in the family law proceedings against Mr. Scrymgeour. At that time, Gonsalves signed a direction in favour of CP, directing all proceeds from the matter be paid to the CP in trust, which, understandably, provided some security to the law firm for payment of its fees and charges.

[3] This motion relates to the, available or appropriate, approach to disputing the quantum of legal fees charged by the CP firm for legal services provided, prior to September, 2017 for the matrimonial trial decided in Ms. Gonsalves’ favour and for the defence of an appeal, taken by her spouse to the Court of Appeal.

[4] In her unanimous reasons at the Court of Appeal, Roberts J.A., in part, addressed the costs awards of the trial judge which the husband sought to appeal as part of the relief sought by him:

“ C. LEAVE TO APPEAL COSTS

[24] While not pressed in oral argument, the appellant seeks leave to appeal the costs order dated May 1, 2017. I see no basis on which to grant leave.

[25] The trial judge found that the respondent had obtained a more favourable result at trial than her offer to settle and was entitled to full recovery costs from the date of her offer in accordance with the provisions of r. 18( 14) of the Family Law Rules.

[26] The trial judge reviewed the factors enumerated under r. 24{11) of the Family Law Rules. In particular, the trial judge found that the appellant's pre-trial conduct in failing to pay spousal support and opposing an order that their youngest son move back in with the respondent notwithstanding the recommendation of the Office of the Children's Lawyer, was unreasonable. He also found that the parties' respective costs were comparable.

[27] Based on all of the circumstances, the trial judge awarded the respondent costs in the amount of $280,000, which represented a significant reduction of the $376,540.32 in costs claimed by the respondent.

[28] I see no error in the trial judge's cost award and would not interfere.

D. DISPOSITION

[29] For these reasons, I would allow the appeal with respect to the recalculation of the respondent's share of the family home, and dismiss the cross-appeal and motion for leave to appeal the costs order.

[30] I would amend the first paragraph of the trial judge's October 27, 2016 order to read as follows: ''The Respondent shall pay to the Applicant the amount of $527,000."

[31] As for costs of the appeal, the parties agreed that $50,000 on a substantial indemnity basis and $35,000 on a partial indemnity basis would be appropriate.

[32] In my proposed disposition, the appellant would achieve modest success on a narrow issue that took up little time at trial and on appeal: namely, the $68,530 reduction in the amount payable to the respondent as her share of the value of the family home. I agree with the respondent's submissions that this outcome ought not to affect the costs disposition at trial nor justify an award of costs to the appellant on appeal.

[33] The appellant submitted an offer to settle with respect to the appeal. While it is open to this court to consider offers to settle, having reviewed the appellant's offer, in my view it represents little compromise and has no relevance given the outcome of the appeal or the cross-appeal.

[34] While in my proposed disposition, the respondent would prevail on many issues on the appeal, her cross-appeal would be dismissed.

[5] I note again that the Court of Appeal’s decision was released on in early August of 2017. Then, some two years later, the plaintiff undertook a process to challenge the quantum she was billed up to 2017, by the Chitiz Pathak firm that represented her, successfully at the trial and on the appeal. Her former counsel now challenges the timeliness of such an Application.

[6] The present Motion to Strike, was brought before me, by the Respondents to the sought assessment, i.e. Mr. Elliot Birnboim of Chitiz Pathak LLP and the law firm Chitiz Pathak LLP (“the Respondents”) in response to the Applicant’s Notice of Preliminary Appointment, dated August 28, 2019 , and an Order of Delivery and Assessment dated August 28, 2019.

[7] On this motion, “CP” the plaintiff’s lawyers on both the trial and appeal assert that:

“Not only has the Applicant issued this assessment years after the deadline provided for in the Solicitors Act, any claim is contrary to the Limitations Act – more than two years after the last account.”

[8] CP submits in their factum that this challenge to the Respondents’ legal fees is difficult to understand as:

a) The Applicant was represented by the Respondents in her acrimonious family law litigation with her former common law spouse, namely Mr. Steven Scrymgeour (“Mr. Scrymgeour”). The litigation spanned an approximate three (3) year period. The Respondents agreed to represent the Applicant when she was in dire financial and personal circumstances, with virtually no retainer, assuming the entirety of the risk of success or failure;

(my emphasis)

b) As a result of the Respondents efforts, the Applicant was overwhelmingly successful through Trial and through Appeal by a well-represented and well-financed opposing party. Substantial costs were awarded by the trial judge, following a review of the Respondents’ fees; and,

c) During the two (2) years since the retainer ended, the Applicant had other counsel (and requested that her own accountant have significant interaction with the Respondents). There is no seeming excuse (and the Applicant’s Affidavit material discloses none) as to the reason for the delay.

[9] The trial lawyers assert that the Applicant’s request is highly prejudicial:

“It passes the onus to the Respondents of proving its bills despite the fact that work was done starting more than five (5) years before, none of the Associates involved are with the firm (and indeed, the primary Associate no longer lives in Canada), and the file has been turned over. It would pose a virtually impossible burden on the Respondents.”

[10] It should be noted that at the return of the Respondents’ present Motion, the parties entered into a Consent Order where they agreed to adjourn the Respondents’ Motion to February 25, 2020, to accommodate a timetable for the filing of Affidavits, Reply material, and cross- examinations. Costs of the Respondents’ Motion were reserved to the return of the Motion.

[11] The Respondents further assert that:

“The Applicant has refused to attend for cross-examination on her Affidavit material. In the face of Applicant’s counsel’s conduct, the Respondent submitted four (4) questions for written examination instead. The Applicant has refused to answer these questions.”

[12] Owing to a number of circumstances, many flowing from the effects upon the court system of various attempts to avoid the impact of the COVID-19 virus, regrettably the materials relating to this matter were unintentionally mis-filed, misplaced, or overlooked for an extended period, resulting in an inordinate delay in the release of this decision.

II. Moving Parties’ Summary of Facts

[13] The Respondent Firm, with my emphasis added, asserts in an affidavit sworn in October 2019, that “Between June 2014 and August 2017, the Applicant retained the services of the Respondents to act on her family law matters. She had previously been in litigation with her husband for several years and her case had stalled. When she retained the Respondents, she had zero money, zero support, and did not have residency of her children. No steps had been taken to advance her matter towards trial and had no results. When she retained the Respondents, she was at “rock bottom.” There were no material offers of settlement of any kind from Mr. Scrymgeour.” [my emphasis]

[14] The Applicant’s family law action apparently involved a myriad of legal issues including imputation of income, child and spousal support, custody and a most complex, joint family venture claim. Based upon the extensive materials filed by both sides, it is clear to me that by the time the case reached the Court of Appeal, the Plaintiff spouse was no neophyte to Ontario’s civil litigation environment.

[15] The Respondent firm asserts:

“Over the course of the three (3) year retainer, the Respondents obtained significant financial assistance for the Applicant on an interim basis, recovered care of her children, and obtained withheld disclosure. The matter proceeded through several Motions, case conferences, and most notably a thirteen (13) day Trial plus an Appeal to the Court of Appeal.”

[16] It also appears clear to me, from the court decisions filed, that the results that the Applicant spouse obtained, as a result of the legal services provided by the Respondent firm, were both very significant and favourable. It would appear uncontested that the Respondents obtained these results despite the Applicant’s common law spouse having access to very significant financial resources (including extensive family resources) and demonstrating a commitment, by him, to ensure that the family law litigation was fought, at every stage of the proceeding, by well known and 30+ year experienced, opposing family law counsel.

[17] It also appears uncontested that apart from the Applicant having recovered care of her children and obtaining interim and ongoing support based on an imputed income, the total recovery for the Applicant was approximately $950,000, including $280,000, towards costs, as well as increased and retroactive support (and primary residence of the children).

[18] As noted above, the Applicant’s Trial decision was appealed by Mr. Scrymgeour and proceeded to the Court of Appeal. Apart from a “nominal” credit, the lower Court decision was upheld, other than a small (approximately $50,000 adjustment).

[19] Based on the information placed before me I am satisfied that the Applicant’s family law litigation was complex and dealt with issues such as Joint Family Venture, Imputation of Income, and Retroactive Support Calculation and Tax.

[20] I feel that some recognition of the risk taken by the Respondents needs to be considered as well. I accept the Respondents’ submission that:

“The case was highly successful despite a drawn-out litigation battle and great risk undertaken by the Respondents given that the Applicant had nominal resources to fight this dispute.”

[21] I find these extracts from the Respondents’ factum persuasive:

“There is no issue that the Applicant was well aware of the Respondents’ fees from the interim bills. These fees were not questioned or disputed until well after the Applicant had utilized the Respondents’ services for the (successful) defence of the decision at the Court of Appeal level.”

“Notably, Justice Glustein who acted as the Trial Judge reviewed the Respondents’ dockets in detail, and observed, in that the hourly rates charged and the time spent were reasonable. In his Endorsement on Costs, he noted that there were “perhaps 1000 dockets entries for almost 5 years” and that any issues raised “do not detract from the overall reasonableness and propriety of the fees charged.” (Para 68). He observed that the fees of opposing counsel were similar in this “hard fought litigation”. He further observed that “it is not surprising that Gonsalves would have been required to incur somewhat higher fees (than Scrymgeour) (para 59) given the relative sophistication of the parties.”

[22] The moving law firm asserts that the Respondents’ services effectively ended on the hearing of the appeal of the Trial decision on July 19, 2017. As a consequence, I find that the Respondents retainer ended at that time. “It appears that in late 2017, the Applicant was acting now on her own accord and renegotiating with Mr. Scrymgeour and his new counsel. It appears that she concluded such a renegotiation on her own.”

[23] As noted above, the Court of Appeal decision was released in August of 2017. Thereafter, at the Applicant’s request, on October 22, 2018, she was provided with a total summary of the legal fees that she had paid.

[24] Thereafter, on October 31, 2018, the Applicant asked that the Respondents review the fees charged with her then accountant, Mr. Michael McPherson. On that date, Mr. McPherson apparently sent the Applicant an e-mail stating inter alia: “I’ve attached a pdf document entitled Legal Fees. This is my schedule summarizing your Chitiz Pathak LLP legal invoices and payments, based on the information provided to date.” The Respondents reviewed the chart in detail with Mr. McPherson who raised no issues. “Overall, the Respondents spent considerable time on the telephone, assisting Mr. McPherson.”

[25] In its submissions before me CT asserts that following the Respondents’ telephone discussion with Mr. McPherson, the Applicant apparently circulated “a highly accusatory and insulting letter among the Respondent’s partners”.

III. Present Representation of Plaintiff and Scheduled Assessment

[26] In December 2018, the Respondents received a telephone call from Ms. Reesa Heft (“Ms. Heft”). Thereafter, discussions about the Applicant’s account was then assumed by Ms. Heft’s (then) Associate lawyer, Ms. Scarlett. (counsel on this motion)

[27] Counsel for the Respondent firm asserts that, at a later point, “without prejudice” discussions between the Respondents and Ms. Scarlett ceased, in on or about February 2019. However, a modest portion of the Trust balance was then delivered to Ms. Scarlett.

[28] Approximately nine (9) months, after the plaintiff having retained Ms. Heft and Ms. Scarlett, on August 28, 2019, the presently challenged Notice of Assessment was issued.

[29] The Chitiz Firm submits:

“Not only is this delay beyond the month (let alone year) for assessment of accounts, any claim would be statute barred and the delay has been egregious. There is no excuse for the delay or the missed timelines given the Applicant’s access to counsel and her accountant, Mr. McPherson.”

[30] In their factum Ms. Gonsalves’ present counsel provide their perspectives on this matter. They note that it proceeded through several conferences and motions, going to trial in 2016 and 2017 for a total of 13 days before the Honourable Justice Glustein. Over the course of the retainer, the client costs of proceeding through trial, as between the parties, were ordered by Justice Glustein, after written submissions, and his reasons for decision were released on May 1, 2017. The client owed the law firm $ 248,371.34 as of July 2016.

• Justice Glustein ordered costs in the amount of $ 280,000.00 inclusive of disbursements and taxes, to be paid by Scrymgeour to Gonsalves, after trial. A total of $ 372,000.00 (rounded) was sought by Gonsalves, on a full indemnity basis. Justice Glustein reduced the amount finding there was some duplication; excessive time spent in certain areas; and a motion brought by Gonsalves and dismissed, without finding the facts necessary supporting the motion.

• Steven Scrymgeour appealed Justice Glustein' s decision and sought leave to appeal the costs order. Prudence Gonsalves defended the appeal and commenced a cross-appeal on issues related to Scrymgeour's imputed income. The appeals were heard July 17, 2017. Clearly the fees and charges to Gonsalves after the appeal, had not been reviewed by Justice Glustein.

• Scrymgeour was successful on one ground of appeal. This resulted in a reduction of approximately $ 68,530.00 from the amount due to Gonsalves. The balance of Scrymgeour's appeal, the motion for leave to appeal the costs order; and the entirety of Gonsalves' cross appeal, were dismissed. No costs were ordered payable on the appeal or cross appeal. The reasons for decision of the Court of Appeal for Ontario were released August 2, 2017.

• In or about August 16, 2017, Steven Scrymgeour delivered payments to CP, in trust, in excess of $700,000.00, in satisfaction of his obligations ordered by Justice Glustein. Scrymgeour also delivered a further $7,026.25 to CP on September 15, 2017.

[31] The Client’s factum continues, with these portions emphasized by me:

“On September 14, 2017 CP delivered a Statement of Account to Gonsalves, via email, in the amount of $ 290,856.81. The account was dated August 16, 2017. This account was paid in full to CP on August 16, 2017, from proceeds received from Scrymgeour. Delivery of this account to the Client occurred 29 days after the date appearing on the account.

[32] This factum continues:

• On September 14, 2017 when delivering the account to the Client, Juliet Vergara advised Gonsalves “We will issue you a cheque for the total amount in trust, but will hold back $ 25,000.00 to cover costs for enforcement issues.”

• On September 15, 2017, CP prepared a trust cheque payable to Prudence Gonsalves in the amount of $ 363,113.71.

[33] The factum acknowledges that as of September 15, 2017, $ 32,026.25 was retained in trust, on account of Gonsalves legal matter. In the circumstances this appears to me to be a relatively small and arguably justified amount.

[34] It is, however, asserted that:

• From that date through to February 1, 2019, the whole amount of funds were retained by CP, without authority, in contravention of the trust obligations owed to Gonsalves.

• Gonsalves repeatedly requested Birnboim and CP deliver the balance of the trust funds to her; explain their fees and charges; return documents, and; answer questions, about rate increases. The requests began in October 2017 and continue to date, both verbally and in writing. Birnboim's response, in January and again in March 2018, was he would review the matter and if there were unbilled fees, he would bill them, and should there be a balance owing the client, it would be delivered. Despite Birnboim's statement, no bill was delivered, and no funds were paid to Gonsalves.

[35] The factum further acknowledges and submits that in March 2018,

“Birnboim advised Eric Sadvari he was no longer acting on behalf Gonsalves, and directing Mr. Sadvari to deliver a motion upon the client, directly. Ms. Gonsalves made a further written request of Birnboim for payment of the funds in trust to her and to conclude her business with the firm. Birnboim responded via email, the same date, with the subject line "WITHOUT PREJUDICE". Gonsalves was being asked to sign a release in order to receive her trust funds.”

[36] On October 18, 2018 Gonsalves delivered another letter, to Daniel Chitiz and Paul Pathak, requesting the funds be paid out to her and requesting they address her concerns, as she had not received any satisfactory explanations from Birnboim.

[37] Ms. Gonsalves, at some point thereafter, retained Reesa Heft to address a motion to change brought by Scrymgeour. On January 16, 2019 a letter was delivered to Birnboim and CP, with a signed direction, requiring payment in full of the sums held in trust on account of Gonsalves matter.

[38] On February 1, 2019, Birnboim delivered a trust cheque payable to Gonsalves in the amount of $ 19,216.51 representing a portion of the funds held in trust. Counsel for Ms. Gonsalves asserts that no further invoices or statements of account have been delivered to Gonsalves to justify withholding funds.

[39] There are six (6) accounts (not including any account in respect of funds retained) spanning three (3) years. The total charged to Gonsalves by CP is $ 466,356.91 inclusive of disbursements and HST.

[40] Ultimately I will need to determine whether in the overall circumstances of this case, the time for having an assessment ought to be extended. It does not appear that the client was unaware of her rights and I am left with evaluating whether, in these specific circumstances an Assessment ought to be allowed to proceed in light of frank acknowledgements as made on her behalf.:

[20] The client has consistently requested the retained funds be paid to her and that her questions concerning their fees and charges be answered. Only after Gonsalves retained other counsel were a "portion" of the retained funds paid out.

IV. Consideration of Entitlement to Assessment Situations

Interim or Final Account?

[41] The Chitiz Firm asserts that “although it cannot possibly affect the outcome of the case, it is clear that the final accounts were final”.

[42] According to Price v Sonsini, 2002 41996 (ON CA), [2002] O.J. No. 2607, (at paragraph 15) where there are interim bills rendered in connection with the same matter, the limitation period prescribed by the Solicitor’s Act begins to run from the date of delivery of the final account, even if some of the interim bills have been paid. However, it was established in the case of Fellowes, McNeil v Kansa Canadian Management Services Inc., ([1997] CarswellOnt 2606 at paragraph 7) that it is a question of fact in the circumstances of each case as to whether an account is interim or final.

[43] In Coventree Inc. v Stockwoods LLP, (infra), if a client is able to appreciate the nature of the services rendered by the solicitor, this will support a finding of the accounts rendered to be final. In contrast in the present case, counsel submits that “Given that in the present case the Trial and Appeal were all concluded and the retainer terminated in 2017, it is clear that the accounts rendered to that time were final prior to the Applicant launching the present initiative. It is submitted that any doubt of the client’s “appreciation” is dispelled, given this professional involvement:

On October 31, 2018, the Applicant had her accounts reviewed by Mr. McPherson; and,
Again, in December of 2018, she retained Ms. Reesa Heft and Ms. Elee Scarlett of Heft Law to review these same accounts.

[44] Given the termination of the retainer, I am satisfied that, by virtue of the time periods elapsed, these accounts were “final”.

[45] Further, as established in Coventree Inc. v Stockwoods LLP, [2012] ONSC 2737, at paragraph 26, “the language in section 11 of the Solicitor’s Act clearly implies that assessment after payment will be the exception, rather than the rule.”

Entitlement to Assessment Situations

[46] The issues for the Court’s consideration, on this motion to strike the Applicant’s assessment application, include the following:

a) Is the Applicant statute-barred from bringing her assessment application pursuant to the Solicitor’s Act? ;

b) Does the Applicant’s matter meet the threshold of special circumstances pursuant to the Solicitor’s Act to justify an order for assessment?

c) Is there evidence of any demonstration of fraud or gross misconduct that would justify an order for an assessment ?; and,

d) Does the Applicant’s delay in bringing an assessment application prejudice the Respondent?

(a) Is the Applicant statute-barred from bringing her assessment application pursuant to the Solicitor’s Act?

[47] The Applicant is seeking to refer this matter for assessment at Toronto, Ontario, “due to special circumstances”.

[48] The Respondent Firm asserts that the Applicant has not brought her assessment application within the prescribed time set out in the Solicitor’s Act, (R.S.O. 1990, c. S. 15) and as such, the client is time-barred from doing so. I therefore turn to the applicable provisions in this legislation, that is separate and apart from the Rules of Civil Procedure (established under the Courts Of Justice Act as R.R.O.1990, Reg 194)

[49] The Solicitor’s Act addresses the general provisions for billing and recovery of fees incurred for of legal services (whether related to litigation or not). On its face the Act limits the client only one month from the receipt of an account to request an assessment. This separate legislation sets out at sections 3, 4(1) and 11, elements of the procedure that a client is to follow in order to obtain an “assessment” of accounts rendered to a client, in the following circumstances:

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.

[50] The use of Section 3 is specially addressed and restricted in Section 4 (my emphasis):

4.(1) No such reference shall be directed upon an application made by the party chargeable with such bill after a verdict of 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 provided to the satisfaction of the court or judge to whom the application for the reference is made.

[51] In this action the successful client at trial and on Appeal, sought on the return date of the present motion to satisfy me that these circumstances are sufficiently “Special”. If that pre-requisite is established, then Section 11 comes into play:

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. [my emphasis]

[52] What is clear to me is that the Applicant is seeking to assess accounts that have been paid from funds received from her spouse more than 12 (twelve) months prior to the bringing of her assessment application. As such, she is statute-barred from bringing this Application, pursuant to the Solicitor’s Act, unless she is able to establish that the bills were interim and not final or sufficient Special Circumstances are proven.

(b) Does the Applicant’s matter meet the threshold of special circumstances pursuant to the Solicitor’s Act to justify an order for assessment?

[53] The 1952 case of Rooney v Jasinski, [1952] CarswellOnt 83, at paragraph 15, established the threshold for special circumstances as follows:

“Special circumstances includes any circumstances of an exceptional nature affecting the matter of costs or the liability of a solicitor’s client which a judge, in the exercise of his or her judicial discretion in each particular case, may consider to justify a taxation.” Fiset v Falconer [2005] CarswellOnt 4519, at paragraph 39

[54] Further, case law indicates that, while the Court exercises a broad discretion in ascertaining all of the relevant circumstances in order to determine whether special circumstances exist, on a case-by-case basis – but a principled approach must be applied. [see Fiset v Falconer [2005] CarswellOnt 4519, at paragraph 39]

c) An Absolute Bar? Is there evidence of any demonstration of fraud or gross misconduct that would justify an order for an assessment ?

[55] It has been established in Hirchberg v Krol & Krol , [2001] CarswellOnt 2509, that if the solicitor’s bill is paid and more than twelve (12) months has elapsed, the Solicitor’s Act does not provide an opportunity for a solicitor’s account to be assessed. Instead, the client must show that the solicitor demonstrated fraud or gross misconduct.

[56] In Hirchberg it was alleged that the solicitor’s “mis-statement of interest rate to be charged on overdue accounts, and the solicitor’s failure to set out hours spent, or hourly rates on the accounts” amounted to fraud or gross misconduct. Justice Mesbur found that neither of these allegations amounted to fraud or gross misconduct.

[57] As previously mentioned, the Respondents had provided very detailed accounts to the Applicant, and as such, there can be no finding of fraud or gross misconduct on the part of the Respondent firm. Further, in his trial reasons (now found at 2017 ONSC 2651 at paragraph 67) Justice Glustein reviewed the accounts in detail and observed that the hourly rate charged, and the time spent on the Applicant’s family law matter, were reasonable. He stated that there were “perhaps 1000 docket entries for almost 5 years” and that any issues raised therein, “do not detract from the overall reasonableness and propriety of the fees charged.” He also observed that the fees of opposing counsel were similar in this “hard fought litigation.”

d) Does the Applicant’s delay in bringing an assessment application prejudice the Respondent?

[58] The Applicant is seeking to assess accounts that relate to matters which occurred prior to August 2016, and the Respondents assert that a delay of this extent, results in prejudice to them.

[59] In this regard I have also considered the application of the Laches. Laches is an equitable defence, or doctrine. A defendant who invokes the doctrine is asserting that the claimant has delayed in asserting its rights, and, because of this delay, is no longer entitled to bring an equitable claim. Failure to assert one's rights in a timely manner can result in claims being barred by laches: it is a maxim of equity that, "Equity aids the vigilant, not the negligent."

[60] However, delay alone is not enough to prevent a claimant obtaining relief. The consequence of the delay must be that it would be unfair for the court to give relief, usually because the defendant has changed its position because of the delay. The party asserting laches has the burden of proving that it is applicable. Laches is distinguishable from the statute of limitation, which prevents a party from asserting claims after the designated limitations period has expired.

[61] Specifically, the evidence before me is that the professionals that worked on the Applicant’s family law matter no longer work for Chitiz Pathak LLP, with the exception of Mr. Birnboim. In addition, Mr. Birnboim in his personal capacity is not a proper party to this assessment application, as he did not render the accounts to the Applicant.

[62] The assessment that the Applicant obtained appears to have been improper. It should not have been issued, given that it is outside the statutory permitted period of the Solicitor’s Act and no Motion for leave was advanced.

[63] The Respondents assert that the impact of an assessment of fees, at this stage, is enormous, especially given the following issues identified by them:

• While the Respondents will have some recollection of some matters that can be refreshed from a review of the file (which would take an abundance of time given the magnitude of the Applicant’s family law case, and as such, would result in Mr. Birnboim taking time away from his current litigation practice),

• Mr. Birnboim’s recollection in particular of matters as much as five (5) years ago is necessarily sparse;

• Given the protracted period of the retainer, not surprisingly, there were several junior lawyers who assisted the Respondents – none of them work at the firm any longer;

• Indeed, the primary Associate who assisted prior to, at trial and at the appeal, has moved to the UK; and,

• The file would have been significantly pared down when it was sent to storage in 2018. It is doubtful now that a complete file would be available to assist in review.

[64] In a Western Canadian case , Vo v Phillips Legal Professional Corp [2014] SKQB 149, at paragraph 15 the Court acknowledges that “any determination of what is “just” requires a balance to be struck between what is fair for the client, and what is fair for the lawyer.”

[65] Another Saskatchewan decision (Cowessess Indian Band No. 73 v Barbant and Co. Law Office [2015] SKQB 412, at paragraph 42) suggests that when a solicitor is required to piece together years of billing on numerous different attendances, prejudice would arise. That case observes, as well, that such an enormous endeavour that would require a solicitor had to put his practice on hold in order to gather information and refresh his memory on the multitude of services provided to the client is inequitable.

[66] With the case at bar, since many of the Associates who worked on the Applicant’s family law file no longer work with the Respondents, other than Mr. Birnboim, it would require a significant amount of time for him to review three (3) years worth of accounts and services rendered to the Applicant during her retainer, allowing for prejudice to arise.

[67] In another related case, ( Cowessess First Nation No. 73 v. Phillips Legal Professional Corp [2018] SKQB 156, at paragraph 234) the court observes that where there is evidence that potential witnesses are no longer available as they have left the firm that they were working for in relation to the matter in question, prejudice could arise. It is further stipulated that such prejudice is dependant on circumstances as to the extent of the delay in bringing the assessment, as well as whether such a delay resulted in prejudice to the solicitor that he would not reasonably have expected to anticipate and avoid.

[68] Overall I am inclined to the view that in the present case, the Applicant had ample time to bring her assessment application, and the delay of approximately five (5) years in doing so results in prejudice to the Respondent, specifically with respect to the amount of work that would be required to assess the details of the many accounts rendered within the Applicant’s retainer many years ago, as well as the loss of potential witnesses who may well be unavailable to provide support and evidence in the present environment.

[69] I conclude that there was neither a timely motion to extend brought, nor evidence adduced of anything that could constitute an explanation for the delay which could possibly constitute, what I regard as “Special Circumstances”. After having received years of virtually “risk free” legal services from the Respondents and obtained an exemplary result on a difficult case, the Applicant has not convinced me that a review of the accounts is appropriate at this late date.

[70] The Respondents brought a motion to set aside the Registrar's Order on the grounds that:

• the Registrar had no jurisdiction to issue the Order due to the passage of time;

• the Registrar's Order was granted, without notice to the Respondents;

• the assessment is statute barred, and;

• the accounts relate to a period of time in excess of 5 years

[71] Employees have been paid and moved on. It is time this case to be drawn to an overall conclusion.

[72] As a consequence, I have determined that the Applicant’s Assessment Application should be set aside, as its issuance results in sufficient probable prejudice to the Respondents to entitle them to such a decision. In the result, the Registrar’s Order is set aside.

[73] The Applicant opposed the Respondent's motion and brought a cross motion requiring the Respondents to:

i. deliver up the balance of funds held, in trust, or

ii. provide a final account to the Applicant for all sums claimed due and owing to the Respondents, and;

iii. to refer that account and all previous accounts of the Respondent's for assessment on the grounds there are special circumstances and it is in the interests of justice, to refer the accounts for assessment.

V. Proportionality

[74] There remains the issue of remaining funds held by the Respondents.

[75] Rule 1.04 has an impact on my conclusion in this case as it gives overall guidance on an appropriate approach to the present motion:

INTERPRETATION

General Principle

1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

Proportionality

(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

Matters Not Provided For

(2) Where matters are not provided for in these rules, the practice shall be determined by analogy to them.

ORDERS ON TERMS

1.05 When making an order under these rules the court may impose such terms and give such directions as are just.

[76] Counsel for the Client asserts in her factum that the only cogent reasons for a lawyer to retain trust funds are: a continuing retainer, the clients consent to retention, to satisfy an undertaking made, or unbilled work for which they will deliver a bill of fees and charges. in particular they argue:

The statutory, legal and professional duties require fulfillment of trust obligations. The lawyer owes a duty to the client to account for all funds received and all charges against those funds. To retain funds, in trust, without accounting to the client, is without lawful authority, falling into the realm of misappropriation, professional misconduct and breach of duty.

[77] I see no evidence that the funds in question were ever held in any account other than a Trust Account. The justification for retaining a relatively small amount in trust, does not strike me as unreasonable in the circumstances of this case.

[78] In Guillemette v. Doucet, 2007 ONCA 743, the Ontario Court of Appeal held "there is no absolute time bar against applications for assessment of lawyer's accounts, where special circumstances are established. The passage of time is one factor to be considered, however, time alone will not preclude the examination of the suitability of a lawyer's accounts, where other circumstances compel a review of those accounts". However, I am not convinced that any at other circumstances exist in this case, to justify compel a review of all CP accounts.

[79] Orkin on The Law of Costs outlines several factors the court considers when determining whether special circumstances exist. The categories are not exhaustive, and are not limited to fraud or gross misconduct. Some of these factors selected by the applicant’s counsel, are:

the sophistication of the client;
the adequacy of communications between solicitor and client concerning the account;
whether there is evidence of increasing lack of satisfaction by the client regarding the services relating to the accounts;
whether there is overcharging for services provided;
the extent of detail of the bills;
whether the solicitor/client relationship is ongoing; and,
whether payments can be characterized as voluntary

[80] Weighing the evidence before me, I am not convinced that there is sufficient weight in the elements identified to amount to the necessary “Special Circumstances”

[81] The Court of Appeal in Price v. Sonsini, 2002 41996 (ON CA), 60 O.R.(3d) 257, noted ''where interim accounts are rendered in connection with the same matter, the limitation under the Solicitors Act only begins to run from delivery of the final account, even if some of the interim accounts have been paid. The Court is imbued with an inherent jurisdiction to control the conduct of solicitors and its own procedures. "This inherent jurisdiction may be applied to ensure that a client's request for an assessment is dealt with fairly and equitably, despite procedural gaps or irregularities"

[82] While, the public's confidence in the administration of justice is at the core of the Court's supervisory role over the appropriate compensation for legal services, there is now as well, an overarching requirement that the rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

[83] Counsel for the client submits that “Costs determined by the Court, as between parties at the conclusion of litigation, does not preclude assessment as between a lawyer and client.” They note the Court of Appeal in Ghaeinizadeh v. Bennett Jones, noted “It is not unfair to allow the client to assess the solicitor's bill after costs are fixed and awarded because the client's interests in the two processes are different. A client advances different interests in making party and party costs submissions and assessing the solicitor's account”. “A client's submission that the solicitors account was reasonable for the purpose of party and party costs is not a concession that the account was reasonable between a solicitor and client”. [Ghaeinizadeh v. Bennett Jones LLP 2014 ONCA 267]

[84] However, such a situation still needs to be considered in the specific factual context before this Court.

[85] The Courts have both the statutory jurisdiction provided under the Solicitors Act as well as inherent jurisdiction to order lawyers' accounts be assessed, if special circumstances are shown. Both sources of jurisdiction respond to the public interest in maintaining public confidence in the administration of justice and protecting clients interests in having a fair and equitable process to address disputes concerning legal fees.

[86] A client centered approach must be employed in determining whether to order assessment of lawyer's accounts. Ensuring the public's confidence in the administration of justice , is preserved, while also protecting the client's right to question the reasonableness and fairness of amounts charged to them. The vulnerability of the client is another factor for the Court to consider, in the factual matrix, including whether the law firm facilitated or frustrated the client in pursuit of assessment.

[87] Relying upon Echo Energy Canada Inc. v. Lenczner Slaght Royce Smith, Griffin LLP, 2010 ONCA 709 the Applicant’s counsel submits that there is a concomitant public interest in ensuring there is transparency, fairness and reasonableness of lawyers' accounts. “The exercise of a clients' right to assessment may prolong litigation, however it is not, on its own, a sufficient reason to deprive the client of the right where special circumstances have been made out”.

[88] However, notwithstanding this guidance, I am not satisfied in the specific circumstances of this case an, at this stage that a sufficient justification for a “Special Circumstance” has been established, in this case.

VI. Disposition

[89] This Motion presented a number of competing concerns. Neither side was without some faults. Ultimately I take a “but for” approach.

[90] But for the efforts and risks of non-payment undertaken by the law firm the Applicant might well not have been in the favourable position she is today. The more recent approaches to the matters in dispute on the present motion by the law firm have not reflected well on “civility” in such matters as the attempted cross-examination of the CT firm representative, with regard to this motion.

[91] Thus, applying proportionality and weighing the respective over-all positions of both sides, I believe that the following combination of relief is the most “just and equitable” in the circumstances of this case.

[92] First, the Assessment of fees sought by the Applicant is denied. An Order is hereby made, setting aside the order of the Registrar referring the bill of fees, charges and disbursements delivered to the Applicant by the Respondent solicitors, dated August 28, 2019 (the “Order for Assessment”);

[93] However, Secondly, the Respondent Lawyers are to deliver the full balance of funds held in trust account, to the Applicant, or as directed by the Applicant, within 35 days. My intent being that the entire trust balance still held by the firm from the court ordered payments made by the defendant in the main action, will now be transferred without any deductions whatsoever. As well. they will update and deliver, the most recent accounting provided to the Applicant’s counsel to reflect the completion of the payments out.

[94] Lastly, neither side shall be entitled to any costs from the other with respect to this motion. Success was divided and neither side will be responsible to the other side for any costs of this motion.

VII. In Conclusion

[95] I am obliged to all counsel for the quality and assistance of their submissions in this matter.

[96] My term as a Master of this Court is now at an end. My 12 years in this honoured office, which has existed, in what is now Ontario, since 1837, have given me an opportunity to address countless disputes in an era where our courts are mandated to construe the law liberally in an effort to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

[97] I believe I have properly applied that obligation in this case and that my decision in the present case reflects an appropriate resolution that will permit the parties in this dispute, to leave this case behind and to turn their attention to other important matters.

Master D. E. Short

DATE: June 3, 2021

DS/ R.387

Gonsalves v. Birnbaum; 2021 ONSC 4014

Case Summary

REasons for Decision

I. Background to Initial Motion

II. Moving Parties’ Summary of Facts

III. Present Representation of Plaintiff and Scheduled Assessment

IV. Consideration of Entitlement to Assessment Situations

Interim or Final Account?

Entitlement to Assessment Situations

(a) Is the Applicant statute-barred from bringing her assessment application pursuant to the Solicitor’s Act?

(b) Does the Applicant’s matter meet the threshold of special circumstances pursuant to the Solicitor’s Act to justify an order for assessment?

c) An Absolute Bar? Is there evidence of any demonstration of fraud or gross misconduct that would justify an order for an assessment ?

d) Does the Applicant’s delay in bringing an assessment application prejudice the Respondent?

V. Proportionality

VI. Disposition

VII. In Conclusion

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Statutory Provisions 4

Legal Tests 1

Legislation 1