COURT FILE NO.: CV-19-00629917-0000 DATE: 20221103
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF the Solicitors Act, R.S.O. 1990, c. S.15
And in the matter of Botnick & Botnick, Solicitors
B ETWEEN:
MICHAEL GEORGE FARRUGIA
Applicant
AND:
BOTNICK & BOTNICK
Respondent
BEFORE: Justice Sanfilippo
COUNSEL: Ljusi Brace, for the Applicant (Responding Party on Motion)
Adam C. Pantel, for the Respondent (Moving Party on Motion)
HEARD
(By Videoconference): August 18, 2022
ENDORSEMENT
Overview
[1] The Respondent law firm, Botnick & Botnick (the "Respondent" or the "Law Firm"), was retained by the Applicant, Michael George Farrugia (the "Applicant" or "Mr. Farrugia"), in 2009 to act in his matrimonial litigation. The Law Firm represented the Applicant until January 31, 2019.
[2] Over that period of some 10 years, the Law Firm prepared 14 invoices for services rendered. The Law Firm's last invoice to Mr. Farrugia was dated January 31, 2019. On February 1, 2019, the Law Firm obtained an Order removing themselves as counsel of record for Mr. Farrugia in his matrimonial litigation.
[3] On March 3, 2019, Mr. Farrugia notified the Law Firm, through his newly retained counsel, that he had concerns about the amount of the invoices that the Law Firm had rendered. On October 21, 2019, Mr. Farrugia sought a solicitor and client assessment of the Law Firm's invoices. He did so by filing a "Requisition for Delivery and Assessment – Client's Application", wherein he certified that he had requested that the Law Firm deliver its accounts and the Law Firm had failed to do so. Based on this certificate, the Registrar issued, on October 28, 2019, an "Order for Delivery and Assessment – Client's Application".
[4] The Law Firm brought this motion for an Order quashing the Registrar's Order for Delivery and Assessment on the basis that the Requisition on which its issuance was based was false. Mr. Farrugia responded by asserting that his certification that he had not received the Law Firm's accounts was correct because he did not receive each itemized account rendered to him throughout the 10-year retainer. I do not this submission. Mr. Farrugia was not entitled to seek a Registrar's Order for an assessment, but rather was required, by the Solicitors Act, R.S.O. 1990, c. S.15, to bring an Application for an order directing the assessment of the Law Firm's accounts.
[5] On the basis of the reasons that follow, the Registrar's Order for Delivery and Assessment is quashed, without prejudice to Mr. Farrugia bringing an Application for an order directing the assessment of the Law Firm's accounts.
I. THE EVIDENCE
A. The Accounts
[6] The moving party Respondent tendered into evidence the affidavit of Reuben Botnick, a partner of the Law Firm, sworn April 14, 2022. Mr. Botnick explained that the Law Firm's retainer extended over many years because of complexities in the matrimonial litigation.
[7] Mr. Botnick deposed that the Law Firm delivered to Mr. Farrugia many accounts from "time to time" and on each occasion, delivered a copy of the account to Mr. Farrugia at, or about, the date of its issuance. Mr. Botnick explained that Mr. Farrugia lived near the offices of the Law Firm, and at times would pick-up documents, including certain of the accounts. Mr. Botnick deposed that he provided Mr. Farrugia with the following:
(a) Fourteen accounts in the period from May 27, 2009 to October 29, 2018, which I will refer to as the "Interim Accounts";[^1]
(b) Periodically, the Law Firm would prepare and provide a document entitled "Account Summary" that would list the accumulation of invoices, and their accounting, to points in time. Mr. Botnick deposed that five such Account Summaries were prepared and provided to Mr. Farrugia in the period from January 16, 2013 to October 29, 2018 (the "Account Summaries").[^2]
(c) The Law Firm's final account dated January 31, 2019 (the "Final Account").
[8] On February 1, 2019, Mr. Botnick obtained an Order removing his law firm as solicitors of record for Mr. Farrugia. Mr. Botnick reported this development to Mr. Farrugia by letter dated February 1, 2019, writing as follows in relation to the Law Firm's accounts:
You have all our previous accounts including our account summary dated October 29, 2018. Delivered herewith is our final account for services rendered dated January 31, 2019.
[9] Mr. Botnick tendered the affidavit of Preya Singh, a lawyer who, at the material times, worked at the Law Firm. Ms. Singh deposed that she had a specific recollection of Mr. Farrugia, and his lengthy matrimonial litigation, and deposed that Mr. Farrugia "received every account then rendered on or close to the date it was rendered." Ms. Singh was not cross-examined.
[10] Mr. Farrugia tendered his affidavit, sworn May 3, 2022. Mr. Farrugia conceded that he received some of the accounts, and some of the Account Summaries, but deposed that he "did not receive every invoice that was rendered to me". Mr. Farrugia stated that many of the invoices represented a full year's work and complained that he "asked the Respondents on many different occasions for my invoices and inquired about work being done on my matter" but instead received only account summaries.
[11] Mr. Farrugia disputed that certain of the letters and invoices that Mr. Botnick swore that he sent to him were sent, or sent to the correct address, or sent in a manner that brought the accounts to his attention.
B. The Registrar's Order for Delivery and Assessment
[12] On October 21, 2019, Mr. Farrugia filed a requisition for the issuance of an Order for Assessment under s. 3 of the Solicitor's Act, which provides that "where the retainer of the solicitor is not disputed" and where "there are no special circumstances", the client may obtain an order for assessment from a local registrar of this Court in two circumstances. First, where the solicitor has not yet delivered a bill, the client may seek a Registrar's Order "for the delivery and assessment of the solicitor's bill": Solicitors Act, s. 3(a). Second, where the solicitor has already delivered a bill, the client may obtain a Registrar's Order for assessment "within one month from the date that the bill was delivered": Solicitors Act, s. 3(b). Mr. Farrugia could not file a requisition under s. 3(b) of the Solicitors Act because more than one month had passed since the Law Firm's delivery of its Final Account on January 31, 2019.
[13] Mr. Farrugia proceeded under s. 3(a) of the Solicitors Act, which is only available when the solicitor has not delivered a bill even though requested to do so. On October 28, 2019, Mr. Farrugia filed a "Requisition for Delivery and Assessment – Client's Application" (the "Requisition for Delivery and Assessment"), in which he certified, amongst other things, as follows:
"1. "The solicitor(s) was (were) requested to deliver the said bill and has (have) failed to do so."
[14] On the basis of the Requisition, the Registrar issued an Order on October 28, 2019 requiring the Law Firm to deliver a bill and referring the bill to an assessment (the "Registrar's Order for Delivery and Assessment"):
"IT IS ORDERED THAT pursuant to section 6(1) of the Solicitor's Act the said solicitor(s) deliver to the applicant(s) a bill of fees, charges and disbursements, within fourteen days from the service of this order … and that the same when delivered be referred to the Assessment Officer at 393 University Avenue, Toronto, Ontario M5G 1E6."
[15] Pursuant to the Registrar's Order for Delivery and Assessment, the Registrar set a date of January 27, 2020 for a preliminary appointment, and a tentative date of September 11, 2020 for the full day hearing.
II. THIS MOTION
[16] The sole relief sought in this motion was an Order quashing the Registrar's Order. The basis for this relief was that the Registrar's Order was issued on Mr. Farrugia's incorrect certification that "the solicitor(s) was (were) requested to deliver the said bill and has (have) failed to do so" and therefore must be quashed.
[17] Mr. Farrugia did not bring any process of his own. Specifically, Mr. Farrugia did not bring an Application for an order directing the assessment of the Law Firm's accounts under s. 4 of the Solicitors Act.
III. ANALYSIS
[18] The central factual question on this motion was whether Mr. Farrugia received the Law Firm's accounts including, most importantly for the assessment process, the Final Account. I find that he did. I do so principally by accepting Mr. Botnick's evidence that each of these accounts, including the Final Account, was provided to Mr. Farrugia over Mr. Farrugia's evidence that they were not. I will explain why.
[19] First, Mr. Farrugia conceded in his cross-examination that he signed an Acknowledgment on January 16, 2013 that he had received the six accounts rendered from May 27, 2009 to December 31, 2012.[^3] Mr. Farrugia again signed an Acknowledgment on January 3, 2014 that he had received the three accounts rendered from April 30, 2013 to December 31, 2013.[^4] Mr. Farrugia also acknowledged an Account Summary on the May 4, 2015 account that lists and totals all 11 accounts rendered by the Law Firm to Mr. Farrugia in the period from May 27, 2009 to May 4, 2015.
[20] Second, Mr. Botnick has shown that he made contemporaneous docket entries in issued accounts that record and confirm delivery to Mr. Farrugia of the Law Firm's accounts of January 21, 2015,[^5] May 4, 2015,[^6] and December 23, 2016.[^7] Most importantly, the Law Firm's account of January 31, 2019 contains detailed docket entries that contemporaneously record the provision to Mr. Farrugia of all the Law Firms' accounts.[^8]
[21] Third, the Law Firm showed that they provided Mr. Farrugia with Account Summaries that contained a running balance of the amounts that were outstanding, with listing of the specific accounts.
[22] Fourth, I accept Ms. Preya's unchallenged evidence that, based on her direct knowledge while working at the Law Firm and from her review of file material, the Law Firm provided Mr. Farrugia with each account as rendered. Ms. Preya deposed that she was personally involved in the delivery of accounts to Mr. Farrugia. This evidence corroborated Mr. Botnick's evidence.
[23] Fifth, Mr. Botnick admitted, in his demands of the Law Firm through his new counsel, that he had certain of the Law Firm's accounts. He disputed the amount of the accounts, and the completeness of his collection of accounts, but not that the Law Firm provided him with some accounts.
[24] On this evidence, I find that the Law Firm provided Mr. Farrugia with all the accounts at or about the dates on which they were rendered, including the Final Account which was delivered to Mr. Farrugia with Mr. Botnick's letter of February 1, 2019.
[25] The responding party Applicant argued, principally in reliance on Price v. Sonsini (2002), 2002 CanLII 41996 (ON CA), 60 O.R. (3d) 257 (C.A.), that even if Mr. Farrugia obtained the Registrar's Order for Delivery and Assessment on an incorrect Requisition, he should still be permitted to proceed with the Assessment afforded by the Registrar's Order on the basis of special circumstances and the Court's inherent jurisdiction to permit fair and equitable assessment of lawyer's bills. These submissions presumed that a flawed Requisition could be cured by application of principles applicable to solicitor and client assessments. In my view, it cannot, for reasons that I will now explain.
[26] In Price, the Court of Appeal set aside a Motion Judge's decision to quash a Registrar's Order of assessment. The Motion Judge's decision was based on two grounds: first, because the client had proceeded by way of requisition instead of application; second, because certain of the accounts assessed had been delivered more than one month before the Registrar's Order for assessment and therefore were outside the one-month limitation set out in s. 3(b) of the Solicitors Act. The Court of Appeal found that the Registrar's order for assessment was filed by the client within 30 days of the rendering of the final account and was thereby proper. The Court also found that the four earlier accounts were capable of assessment because they were interim accounts: see Price, at para. 15. This is unlike the current case, where the foundational order required to begin the assessment process, the Registrar's Order for Delivery and Assessment, was improperly obtained on an incorrect Requisition.
[27] In Price, and again in Guillemette v. Doucet, 2007 ONCA 743, at para. 35, the Court of Appeal explained that solicitor's accounts have always been treated differently than other professional accounts and that this Court has an inherent jurisdiction to review lawyer's accounts even apart from statutory authority. Where a limitation period is involved, the Court can exercise its discretion to provide relief based on special circumstances that warrant the assessment despite the passage of time beyond that otherwise provided by statute: Guillemette, at paras. 3, 29-36. But the tool of special circumstances cannot be used to salvage a defective Registrar's Order in the manner submitted by the responding party Applicant.
[28] The well-established principles set out in Price and Guillemette pertaining to solicitor and client assessments cannot, in my determination, save Mr. Farrugia's attempt to challenge the Law Firm's accounts by way of an assessment that was initiated on a flawed Requisition. The Registrar's Order for Delivery and Assessment must therefore be quashed. However, these principles could have been applicable to my determination if Mr. Farrugia had brought an Application for an order directing the assessment of the Law Firm's accounts. As no such Application was before me, and as I have not decided the issues that could be raised on any such Application, my decision to quash the Registrar's Order for Delivery and Assessment does not bar Mr. Farrugia from bringing an Application for an order directing the assessment of the Law Firm's accounts pursuant to s. 4 of the Solicitors Act. I thereby order that the quashing of the Registrar's Order for Delivery and Assessment is without prejudice to Mr. Farrugia bringing an Application for an order directing the assessment of the Law Firm's accounts.
IV. DISPOSITION
[29] I order that the Registrar's Order for Delivery and Assessment is quashed, without prejudice to Mr. Farrugia bringing an Application for an order directing the assessment of the Law Firm's accounts.
V. COSTS
[30] The parties are encouraged to discuss and agree on the issue of costs of this motion.
[31] If the parties cannot agree on the issue of costs, the moving party Respondent may deliver, by November 25, 2022, by email to my judicial assistant, written costs submission of no more than 4 pages, plus a costs outline (Rule 57.01(6)) not exceeding three pages in length. The responding party Applicant may deliver, by December 16, 2022, a written responding cost submission of the same length. If no party delivers any written cost submissions by December 23, 2022, I will deem the issue of costs to have been settled.
Justice Sanfilippo
Dated: November 3, 2022
[^1]: These fourteen accounts are dated as follows: (i) May 27, 2009; (ii) December 22, 2009; (iii) October 5, 2010; (iv) September 12, 2011; (v) October 1, 2012; (vi) December 31, 2012; (vii) April 30, 2013; (viii) June 28, 2013; (ix) December 31, 2013; (x) January 21, 2015; (xi) December 23, 2016; (xii) February 28, 2018; (xiii) October 17, 2018; and October 29, 2018.
[^2]: The five Account Summaries are dated as follows: (i) January 16, 2013; (ii) January 3, 2014; (iii) May 4, 2015; (iv) January 3, 2016; and (v) October 29, 2018.
[^3]: The January 16, 2013 Acknowledgement states as follows: "The undersigned acknowledges receipt from Botnick & Botnick of each of the above noted accounts, each as at its respective date. The undersigned irrevocably confirms satisfaction with the services provided and with the accounts, and the undersigned irrevocably promises to pay each account in full. … The undersigned acknowledges receipt of a copy of this account summary and security agreement.
[^4]: The January 3, 2014 Acknowledgment states as follows: "The undersigned acknowledges receipt from Botnick & Botnick of the above noted accounts, each as at its respective date".
[^5]: Law Firm Account of May 4, 2015, docket entry of February 2, 2015: "Also delivered to you our account for services rendered dated January 21, 2015."
[^6]: Law Firm Account of December 23, 2016, docket entry of June 15, 2015: "Delivery to you of a copy of our account for services rendered dated May 4, 2015."
[^7]: Law Firm Account of February 28, 2018, docket entry of January 19, 2017: "Discussion with respect to our account dated December 23, 2016."
[^8]: Law Firm Account of January 31, 2019, docket entry of October 30, 2018: "Preparation of Account Summary noting outstanding accounts in the amount of $25,194.30. Arrangement for copying of our accounts from January 21, 2015 to the present for delivery to you November 2, 2018"; docket entry of November 2, 2018: "Letter to you enclosing documents requested. Short meeting with you. Delivery to you of our said letter and satisfying all of your requests"; docket entry of November 30, 2018: "Noting that we have not heard from you since your pickup of copies of our accounts on November 2, 2018."