Ilic v. Ducharme Fox LLP., 2021 ONSC 6184

Court File and Parties

Court File No.: CV-21-00661884 Date: 2021-09-22 Superior Court of Justice - Ontario

Re: Slavko Ilic, Applicant – and – Ducharme Fox LLP now known as Ducharme Weber LLP and Patrick Joseph Ducharme, Respondents

Before: E.M. Morgan J.

Counsel: Mathieu Bélanger and Jeanine Farmer, for the Applicant Patrick Ducharme, for the Respondents

Heard: September 17, 2021

Endorsement

jurisdiction of assessment officer

The difference between rules and standards has thus been described as one between legal directives that specify the factual triggers ex ante versus those that leave the determination of the relevant factual triggers to the adjudicator ex post.¹

1This referral for directions from an Assessment Officer presiding in a solicitor-client assessment hearing asks whether the timeline for requisitioning an Order for Assessment set out in section 3(b) of the Solicitors Act, RSO 1990, c S. 15, is a rule or a standard.

2The Applicant submits it is the latter, to be exercised with discretion to ensure fairness to the client. The Respondent submits it is the former, to be strictly enforced as a bright line delineation of jurisdiction outside of which an Assessment Officer is not authorized to proceed.

I. Background

3The Respondents are criminal defense lawyers. In June 2008, they were retained as counsel for the Applicant, Slavko Ilic, and represented him on a drug trafficking charge. The Applicant and the Respondents agreed to a block fee retainer in the amount of $200,000. The Applicant deposited $180,100 into the Respondents’ trust account.

4The case was resolved with a plea bargain and the Applicant’s guilty plea on December 8, 2009. During the course of the retainer, the Respondents delivered three accounts to the Applicant, dated September 9, 2009, October 13, 2009 and February 26, 2010.

5On April 26, 2010, the Applicant obtained an order for assessment for the Respondents’ final account dated February 26, 2010, on requisition from a registrar of the Superior Court of Justice in Kitchener, Ontario. The order fixed a hearing date of June 22, 2010. That hearing was held in Kitchner before Assessment Officer Robert Stevens.

6At the June 22, 2010 hearing, both parties appeared before Assessment Officer Stevens. The Respondent, Patrick Ducharme, represented himself and his firm, and the Applicant was represented by counsel, Michael Jaeger. The transcript of that hearing is in the record before me.

7Mr. Jaeger advised Assessment Officer Stevens that he was under the impression that that day’s attendance was for scheduling purposes only, and that he was not prepared to proceed on the merits at that time. Mr. Ducharme, in turn, raised the issue of the timeliness of the requisitioned order and the Assessment Officer’s jurisdiction to proceed with the hearing. He submitted that the hearing should not proceed because the order for assessment was requisitioned from a registrar past the 30-day window for doing so.

8Assessment Officer Stevens adjourned the assessment hearing sine dine. The transcript shows that he did so, in his words, “so that a motion may be brought to Superior Court of Justice to determine any preliminary issues, returnable on seven days notice but not before those issues are determined.” No motion as directed by the Assessment Officer was brought by the Applicant.

9On August 5, 2010, the Applicant took out another order for the assessment of the Respondents’ two interim accounts dated September 9, 2009 and October 13, 2009. This time the order was obtained on requisition from a registrar of the Superior Court of Justice in Toronto. The order fixed the date of November 30, 2010 for the assessment hearing for these two accounts.

10As had been noted by Assessment Officer Stevens, this requisition, like the previous one, was done out of time under the governing provision of the Solicitors Act – i.e. more than 30 days after the final account in issue was rendered. Mr. Ducharme’s partner, James Cooke, wrote to Mr. Jaeger on October 15, 2010, objecting to this procedure and reminding Mr. Jaeger that Assessment Officer Stevens has adjourned the previous matter so that a motion could be brought to court. Mr. Cooke specifically stated in his email to Mr. Jaeger:

I have the transcript from the last appearance and it is quite clear to me that Mr. Stevens adjourned the matter on the basis that the order was taken out well after the 30 day time limit. Although you’re dealing with different accounts on this particular appointment, it seems to me that the same thing applies.

11Messrs. Jaeger and Cooke agreed to adjourn the assessment hearing scheduled for November 30, 2010. On October 20, 2010, Mr. Jaeger wrote to the Assessment Office to request an adjournment of the hearing so that the parties could deal with the underlying legal issues in Superior Court prior to any assessment hearing resuming. The adjournment was granted sine die.

12The Applicant did not bring a motion to Superior Court to resolve the preliminary legal issues with respect to the interim accounts, just as he did not bring a motion to resolve the legal issues with the final account. Instead, on February 8, 2011, Mr. Jaeger, on behalf of the Applicant, filed a Notice of Action against Mr. Ducharme claiming damages in the amount of $150,000. The Notice of Action was followed up with a Statement of Claim dated March 9, 2011. After a series of initial skirmishes over a Demand for Particulars, Mr. Ducharme served his Statement of Defense on September 4, 2012.

13On July 17, 2014, Mr. Jaeger filed a Notice of Return of Assessment returnable October 7, 2014 in order to proceed with (or schedule a date to proceed with) the assessment hearing. During August 2014, Mr. Jaeger and Mr. Cooke exchanged a number of emails addressing the schedule for the assessment hearing as well as documentary production that Mr. Jaeger was seeking on his client’s behalf.

14On September 16, 2014, Mr. Jaeger advised Mr. Cooke by email that he had instructions to settle the matter. In order to negotiate a resolution, the parties agreed to adjourn the hearing date that had been set for October 7, 2014. On October 6, 2014, Mr. Jaeger advised the Assessment Office that the parties would be adjourning on consent. The matter was accordingly adjourned sine die.

15On November 2, 2014, Mr. Jaeger suggested abandoning the assessment procedure in Kitchener and re-applying in Toronto to expedite the process. Mr. Cooke agreed to the abandonment and to expediting the process. On November 20, 2014, Mr. Jaeger took out an Order for Assessment in respect of all three of the Respondents’ accounts from a registrar in Toronto. No motion was ever brought in Superior Court to authorize the issuance of an Order for Assessment that was beyond the statutory 30-day limit for obtaining an Order from a registrar.

16On December 7, 2014, the Applicant’s damages claim against Mr. Ducharme was dismissed for delay. Mr. Jaeger, still representing the Applicant in the civil action, had failed to take the necessary steps to set the matter down for trial.

17On October 15, 2015, the assessment hearing commenced in Toronto before Assessment Officer Richard Ittleman. The matter continued at a rather slow pace and consumed a number of hearing dates during the next several years. Final submissions were made to Assessment Officer Ittleman in April 2018.

18A year and a half later, on October 11, 2019, the parties received an email from Assessment Officer Ittleman stating that the Order for Assessment on which his jurisdiction was ostensibly premised had been made by a registrar beyond the 30 days authorized under section 3(b) of the Solicitors Act. In that correspondence, Mr. Ittleman requested submissions from the parties as to whether under the circumstances he possessed jurisdiction to continue with the assessment proceeding.

19Both parties provided submissions as requested. A year and a half later, on February 2, 2021, Assessment Officer Ittleman rendered his decision on the jurisdictional issue. In his written decision, he acknowledged that the Respondents had raised the jurisdictional impropriety of the assessment order when the matter was initially before Assessment Officer Stevens in Kitchener. He also indicated that the fact that the assessment proceeded before him without further objection from the Respondents did not change the jurisdictional analysis. In the operative portion of his reasons, he stated:

…in my view I did not possess jurisdiction to conduct the assessment because the Order for Assessment was obtained outside of the time period prescribed by section 3(b) of the Solicitors Act. That the Solicitor participated without objection does not serve to confer jurisdiction upon me where none existed under the statute.

20Having come to the conclusion that the matter had proceeded on the basis of a jurisdictional error, Assessment Officer Ittleman did not provide a remedy. Instead, he referred the matter to Superior Court for directions on how to proceed.

II. Time deadlines in the Solicitors Act

21The relevant sections of the Solicitors Act may look like rules in that they set out specific time deadlines, but the courts have tended to treat them as standards. Accordingly, they have not been applied to place specific, pre-determined obligations and rights on parties, but rather are seen as flexible statements of principle open to being interpreted in accordance with the exigencies demanded by the concept of fairness.²

22Section 3 of the Solicitors Act provides for the requisitioning of an Order for Assessment, as follows:

3. Where the retainer of the solicitor is not disputed and there are no special circumstances, an order may be obtained on requisition from a local registrar of the Superior Court of Justice,

(a) by the client, for the delivery and assessment of the solicitor’s bill;

(b) by the client, for the assessment of a bill already delivered, within one month from its delivery;

(c) by the solicitor, for the assessment of a bill already delivered, at any time after the expiration of one month from its delivery, if no order for its assessment has been previously made.

23Section 4(1) of the Solicitors Act makes it clear that after the expiry of the registrar’s 30-day jurisdiction, an Order for Assessment must be issued by the Court on application by a party. The limitation period for the entire process is one year from the date of the final account rendered by the lawyer, unless there are special circumstances in which case the time period is extended to two years. The relevant special circumstances are addressed in section 11 of the Solicitors Act, which provides: “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.”

24The Order for Assessment in the present case was obtained from a registrar more than four years after the final account was rendered. There is no question but that the registrar issued the order after the statutory period for doing so had expired. The Respondents emphasize what Assessment Officer Ittleman pointed out, that even if the Respondents can be taken as having consented to proceeding in this way (which the Respondents dispute), that cannot confer jurisdiction where there is none. As the Court of Appeal has put it in, “parties cannot empower a court with the authority to make a determination where it otherwise has no jurisdiction to do so or its authority is limited by statute.”³

25Applicant’s counsel nevertheless submits that this Court should order the proceeding before the Assessment Officer to continue, thereby allowing the Assessment Officer to issue his decision on the merits of the assessment proceeding. In doing so, counsel relies on the Court’s inherent jurisdiction to control its own processes and its own solicitors. The Court of Appeal has indicated that 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.”⁴ In other words, counsel for the Applicant argues that the relevant sections of the Solicitors Act are to be treated as standards leaving ample room for judicial discretion rather than as rules to be adhered to in their strictest sense.

26Counsel for the Applicant submits that he is supported in this view by Justice Sharpe’s reasons for judgment in Price,⁵ where a flexible reading of the timelines was explained in terms of the public’s perception of the legal system. In this view, the public is more prone to see justice in the application of flexible standards which take into account the impact of the provision on the client seeking the assessment than it is to see justice in bright-line rules which may leave clients without recourse to the procedure conferred by the Solicitors Act:

Public confidence in the administration of justice requires the court to intervene where necessary to protect the client's right to a fair procedure for the assessment of a solicitor's bill. As a general matter, if a client objects to a solicitor's account, the solicitor should facilitate the assessment process, rather than frustrating the process. See Orkin, The Law of Costs, 2^nd ed., loose-leaf (Aurora, Ont.: Canada Law Book, 2001), at p. 3-13. In my view, the courts should interpret legislation and procedural rules relating to the assessment of solicitors' accounts in a similar spirit. As Orkin argues, ‘if the courts permit lawyers to avoid the scrutiny of their accounts for fairness and reasonableness, the administration of justice will be brought into disrepute.’⁶

27Counsel for the Applicant further submits that the power of the Superior Court to order an assessment after the statutory deadlines have passed is never time barred. He submits that this Court does not need to rely on the Solicitors Act for its authority to issue an assessment order, since it has inherent jurisdiction to review the accounts of solicitors. Indeed, the courts have held that where there are special circumstances warranting it, this jurisdiction can be exercised without any time limitation.⁷ This authority includes the ordering of an assessment nun pro tunc, as Applicant’s counsel requests here, in particular if the statutory limitation had not passed when the case began.⁸

28All of that is accurate, and Applicant’s counsel is certainly correct in stating that there is a modern tendency in the legal system to eschew rules in favour of standards. The Courts have been active in this respect – for example, in preferring to read sentencing parameters as flexible guidelines rather than strictly enforced minimums and maximums,⁹ or in applying a malleable discoverability doctrine to what would otherwise be firm limitation periods.¹⁰ It is often the case that a statutory provision that appears to specify a precise timeline or other rule is read by courts as if it “serves what might be called a pedagogical function” that illustrates one, but not the only application of a more “cardinal value” such as protection of victims or fairness to individual litigants.¹¹

29Having said that, while the Court of Appeal has viewed the Solicitors Act timelines as leaving room for maneuver, it has been balanced in its approach to the way in which it has instructed courts to exercise their inherent jurisdiction to order an assessment of a lawyer’s account. That is, it has treated the requisition deadline and limitation periods in the Solicitors Act as embodying flexible standards rather than unbending rules, but has been clear that those standards are not wide open. Rather, they are to be exercised on a principled basis, taking into account the rights and the justice considerations with respect to both parties, not just the client seeking the assessment.

30Accordingly, while sections 3, 4, and 11 of the Solicitors Act are to be read generously in favour of the client party seeking fairness in challenging his or her solicitor’s account, it is also the fairness principle that defines the limits of this generosity. The Court of Appeal has gone out of its way to state that, “[a] party cannot claim entitlement to the mechanical grant of an automatic remedy without regard to the consequences to the rights of others that might flow by reason of the complaining party's own conduct, including any delay in asserting the claim.”¹²

31Justice Sharpe, for a unanimous Court of Appeal, explained this point with reference to assessments under the Solicitors Act and the prejudice caused to one party by the other party’s delay in asserting its rights:

[T]he law will prevent prejudice resulting from delay in asserting claims or legal arguments. This principle is applied through the doctrines of estoppel, laches, waiver and acquiescence. Rule 2.02(b) of the Rules of Civil Procedure, RRO 1990, Reg. 194 limits the right of a party to attack a proceeding or a step, document or order in a proceeding for irregularity if the party has taken a further step in the proceeding after obtaining knowledge of the irregularity [emphasis added].¹³

32The double-edged fairness articulated by the Court of Appeal applies as a limiting principle to the flexible standards by which the courts have interpreted the Solicitors Act. Indeed, it is this limiting principle that keeps the standard a standard, and prevents the preference for flexibility over bright-line rules from becoming a standardless regime.

33While a client in the position of the Applicant may not be held to a strict filing deadline or limitation period, a solicitor in the position of the Respondent may not be exposed to delayed assessment proceedings beyond the point of fairness. Put another way, a solicitor deserves no remedy based on a strict application of a statutory deadline if he or she has waited until the assessment procedure has run its course to raise an issue of jurisdiction that could have been raised at the outset. At the same time, a client deserves no remedy based on a flexible application of a statutory deadline if he or she has sat on their rights until the assessment procedure has run its course to raise an issue that was brought to their attention at the very outset.

34In the case at bar, the Applicant was not caught off guard by the requisitioning deadline of 30 days found in section 3 of the Solicitors Act. On the contrary, he was represented by counsel from the beginning, and his counsel was alerted to the 30-day timing/jurisdictional issue on the very first day of the very first proceeding he commenced against the Respondents.

35As the Court of Appeal has indicated, the time deadlines that establish an Assessment Officer’s jurisdiction can be flexible in view of the public’s need to perceive clients as being treated fairly by their solicitor and by the assessment process. But as the Court of Appeal has also indicated, the time deadlines are not so flexible as to allow a fully knowledgeable party, represented all along by counsel, to prejudice the other party by ignoring the statutory time requirements.

36In adjourning the first proceeding against the Respondents, Assessment Officer Stevens specifically instructed the Applicant to apply to the Superior Court in order to overcome the jurisdictional impediment that he identified. Applicant’s counsel never followed those instructions. As a result, the Applicant has not just “taken a further step”, to use Sharpe JA’s phrase, but has taken many steps over the course of many years, and has even initiated new assessment procedures, without curing the original defect – in fact, replicating the defect – that Assessment Officer Stevens told him to cure.

37The Applicant’s failure to cure the jurisdictional defect to which he was specifically alerted at the outset cannot be seen as an instance of his being prejudiced. Rather, his continued failure to do what he had been authoritatively instructed to do must weigh against granting him the remedy he now seeks.

III. Disposition

38The assessment procedure engaged in by the parties is a nullity. Assessment Officer Ittleman has no jurisdiction to proceed in this matter; in fact, at this point neither does any other Assessment Officer. The Respondents’ three accounts at issue remain unchanged and enforceable as originally rendered.

IV. Costs

39The Respondents have filed a Costs Outline in which they seek just over $15,000 in fees (plus HST) and $627.60 in disbursements (including HST) for this Application. In the ordinary case that would not be an unreasonably high costs request by litigation counsel. But this is not an ordinary case since Mr. Ducharme represented himself and his law firm and did not retain outside counsel.

40There is nothing improper about that, of course; Mr. Ducharme is perfectly capable of presenting his own case and has done so effectively. But this self-representation gives rise to a different set of considerations when it comes to costs.

41The Court of Appeal has set out the issue with respect to self-represented lawyers, as follows:

Where the self-represented litigant is a lawyer, he or she will not recover anything for the time spent on the matter that would necessarily have been devoted to the case had outside counsel been retained. There will likely be no clear way to differentiate between time devoted by the lawyer that would have been spent on the matter as ‘client’ and time devoted in lieu of retaining an outside lawyer to deal with the matter. Some time is clearly either ‘client time’ or ‘lawyer time’, but much of the time will be a blend of both.¹⁴

42While I do not doubt that Mr. Ducharme and his colleagues put in a substantial amount of time on this case, there is no evidence before me of lost opportunity costs for him or his firm. In that case, the Court of Appeal has instructed that self-represented lawyers who are successful in their case are to be awarded something akin to a nominal amount of costs.¹⁵ The disbursements are typically made payable in full.

43Costs are always discretionary under section 131 of the Courts of Justice Act. While the discretion is mine alone, it seems to me that some uniformity among motions judges is preferable in the interests of the justice and the public’s perception of justice.

44A review of cases similar to the case at bar shows that a somewhat typical award of costs would be in the range of $5,000 in fees plus disbursements.¹⁶ I would also add the applicable HST to the fees. This amount is not one that would take the Applicant by surprise; in fact, I note that the Applicant’s counsel’s Costs Outline puts his costs request on a partial indemnity basis at just under $7,000.

45As costs of this Application, the Applicant shall pay the Respondents $5,650 in fees and $627.60 in disbursements, both of which are inclusive of HST. These amounts are payable within 30 days of today’s date.

Footnotes

1. 1R. v. Rayo, 2018 QCCA 824, n. 44, quoting Russell D. Covey, “Rules, Standards, Sentencing, and the Nature of Law” (2016) 104 California L. Rev. 447, 459-60.
2. 22260695 Ontario Inc. v Invecom Associates Limited, 2016 ONSC 3327, at para 17.
3. 3Rothgiesser v. Rothgeisser, 2000 1153 (ON CA), [2000] OJ No. 33, at para 19.
4. 4Price v. Sonsini (2002), 2002 41996 (ON CA), 60 OR (3d) 257, at para 19 (Ont CA).
5. 5Ibid.
6. 6Ibid.
7. 7Guillemette v. Doucet, 2007 ONCA 743, at para 35.
8. 8Patkaciunas v. Economical Mutual Insurance Company, 2021 ONSC 5945, at para 11.
9. 9See, e.g., Rayo, supra, at paras 106-107.
10. 10See, e.g., Kamloops v Nielsen, 1984 21 (SCC), [1984] 2 SCR 2, at 40-42; Central Trust Co v Rafuse, 1986 29 (SCC), [1986] 2 SCR 147, at 224.
11. 11Rayo, at para 104.
12. 12Chippewas of Sarnia Band v. Canada (Attorney General) (2000), 2000 16991 (ON CA), 51 OR (3d) 641, 733 (Ont CA), leave to appeal dismissed, reconsideration dismissed, [2001] SCCA No. 63.
13. 13Price, supra, at para 20.
14. 14Benarroch v. Fred Tayar & Associates P.C., 2019 ONCA 228, at para 28.
15. 15Ibid., at para 34.
16. 16See, e.g., Fogler, Rubinoff LLP v. Houle, 2021 ONSC 6064, at para 12.