COURT FILE NO.: CV-18-00608634-0000

DATE: 20230313

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MORGAN TOOMBS & O CANNABIS WE STAND ON GUARD FOR THEE CORPORATION AND PREDATOR STOPPERS INC., Applicants

– and –

RONALD FLOM, B.Com., LL.B. BARRISTERS & SOLICITORS, Respondent

BEFORE: E.M. Morgan J.

COUNSEL: Michael Swinwood, for the Applicant

Robert Trifts, for the Respondent

HEARD: March 13, 2023

ENDORSEMENT

[1] This Application is fashioned as a Motion to Oppose Confirmation of the Report and Certificate of Assessment. It is, in effect, an appeal of a ruling by Assessment Officer R. Bruce Brough dated October 7, 2022 and amended October 10, 2022.

[2] Taking account of partial payment of the fees owing, the Applicant was ordered to pay $10,281.00 for unpaid legal fees, plus $7,345.00 in costs, for a total of $17,626.00

[3] The Respondent advises that the Application comes on the heels of several unsuccessful steps taken by the Applicants to avoid paying the Respondent’s fees. These include filing a complaint against the Respondent with the Law Society of Ontario, which was dismissed without a hearing for having no merit, submitting a complaint to LawPro, which was dismissed without any furter action, and commencing an action in Ottawa concerning the same legal services as are at issue here, which was stayed by the court in Ottawa with substantial indemnity costs payable to the Respondent in the amount of $16,000.00.

[4] The Notice of Motion issued by the Applicant lists some 22 grounds on which to challenge the assessment. In his Memorandum of Fact and Law, counsel for the Applicants has perhaps thought better of that approach and has reduced his submissions to 3 grounds of appeal. None of those grounds have any substance whatsoever.

[5] The Applicants’ first ground is that, contrary to the jurisdiction of the Assessment Officer, a second bill issued by the Respondent was added to the assessment. This bill was added not by the Assessment Officer, but by Order of Justice Kimmel dated May 17, 2019. Justice Kimmel specifically endorsed the record: “I am granting leave to the plaintiff [Solicitor] to issue a new account to be added into the ongoing assessment process…” The Assessment Officer was clear in his ruling that he was abiding by the Order of Justice Kimmel and was assessing the “second bill” in order to determine whether a fair and reasonable amount was charged, and that in this respect he was proceeding as he would in the normal course of any assessment.

[6] The Respondent submits that in proceeding in this way, there was no error in principle or in the exercise of jurisdiction by the Assessment Officer. I agree. The Assessment Officer did assess additional fees in the amount of $11,952.00 from the second bill that Justice Kimmel had referred to him (which is an amount that the Respondent had indicated would be discounted from his bill in the event of prompt payment, which apparently was not made by the Applicants). In view of Justice Kimmel’s Order, the Assessment Officer was entitled to proceed in this way and make that assessment.

[7] The Applicant’s second ground is that the Assessment Officer incorrectly failed to follow the holding of another assessment officer in Ringuette v. Levinter & Levinter, 2005 CarswellOnt. 9239, para 38. There, the solicitor’s fees were found to exceed the complexity of the client matter in issue.

[8] There is, of course, no basis to say that one assessment officer is bound by the findings of another in a different case. More importantly, the Ringuette holding was based on findings of fact that distinguish it from the Applicant’s case. In Ringuette, the Assessment Officer found that “…the retainer involved a relatively simple and straightforward negligence claim and that the litigation proceedings were neither factually nor legally complex.”

[9] By contrast, in the case at bar the Assessment Officer found that the matter involved the sale of shares of a privately held company to a publicly traded company, and that a transaction of that nature was a complex one. The Assessment Officer also perceived that the sale of shares was compounded in its complexity by accompanying payments of cash and bonuses. He also found that the share transaction included “…a further employment agreement requiring stringent adherence to accepted transference rules, there can be little question that this was a complex matter.”

[10] The Assessment Officer in the present case also noted that the Applicants were experienced and sophisticated clients who had previously had both contract and litigation files with lawyers. In Ringuette, on which the Applicants again rely, the court indicated that there was an entire omission of any discussion of fees with the client.

[11] In the present case, the Applicants were fully informed of the Respondent’s hourly rates, having retained the Respondent previously. Indeed, the Applicants had paid the Respondent the same rates on prior occasions. There was no non-disclosure or “hidden fees” in respect of the Respondent’s retainer, as found in Ringuette.

[12] The Respondent submits that Ringuette is not authoritative for any principle relevant to the case at bar. I agree. Ringuette is a case that is confined to its own very different set of facts.

[13] The Applicant’s third ground is that the Assessment Officer misapprehended the evidence regarding what they submitted was an erroneous earnout provision drafted by the Respondent. This allegation of error on the Respondent’s part apparently was, according to Respondent’s counsel, raised for the first time by the Applicants at the assessment hearing.

[14] I observe that the Assessment Officer did not ignore the Applicant’s submission in this regard. Rather, he took account of it and noted that the earnout provisions were specifically approved by the Applicants. That approval was found by the Assessment Officer to be evidenced in “…a significant amount of written communication…to a client who was well educated, operated at least two other businesses, was a registered nurse and had an advisor who was actively involved.”

[15] Moreover, the Assessment Officer found as a fact that the Applicants’ point about the earnout provisions was unfounded as they had been warned not to close by the Respondent. In the Assessment Officer’s words, the Applicants had “accepted those terms despite being told don’t do this deal by the solicitor.”

[16] The Assessment Officer concluded that the individual Applicant “…is substantially the author of her own misfortune.” There was no evidence of negligence or error on the Respondent’s part before the Assessment Officer. Likewise, there is no indication in the record before me that the Assessment Officer misapprehended any of the evidence.

[17] The Application is dismissed.

[18] The Respondent seeks costs on a partial indemnity scale in the total amount of $12,585.79. Given the way that the Notice of Motion was presented, Respondent’s counsel was put to substantially more work than necessary under the circumstances.

[19] Costs are always discretionary under section 131 of the Courts of Justice Act. Under the circumstances, the Respondent’s request appears reasonable to me. Having heard cost submissions by both counsel at the hearing, and I find no basis on which to exercise my discretion beyond rounding the figure down for convenience.

[20] The Applicants shall pay the Respondent the all-inclusive amount of $12,500.00.

Date: March 13, 2023

Morgan J.