Court File and Parties

Court File No: CV-22-60672
Date: 2025-02-14
Court: Superior Court of Justice - Ontario

Applicant/Solicitor: Sullivan Mahoney LLP
Respondent/Client: Grace McDonald

Before: Robert B. Reid
Counsel:

• J.P. Maloney, for the Applicant/Solicitor
• K. Wise, for the Respondent/Client

Heard: 2025-02-05

Introduction

[1] Grace McDonald is a former client of the law firm of Sullivan Mahoney LLP and a resident of the township of Wainfleet, Ontario.

[2] She seeks an order setting aside the Report and Certificate of Assessment made by assessment officer David Black dated August 31, 2023, including his order as to costs.

[3] Sullivan Mahoney LLP (“SM”) requests that the motion be dismissed.

Background Facts

[4] On June 12, 2020, Ms. McDonald retained SM in the person of Mr. J.P. Maloney to provide legal services concerning various matters arising from disputes between her and the Township of Wainfleet and between her and her neighbours.

[5] Ms. McDonald received an account from SM dated July 30, 2020, in the amount of $4,174.16. The bill was paid.

[6] Ms. McDonald also received an account from SM dated September 29, 2020, in the amount of $4,450.11 and a further account dated December 26, 2020, in the amount of $2,041.57. Those accounts remained outstanding, and in May 2022 SM applied for an assessment of the unpaid accounts pursuant to the Solicitors Act (“the Act”).

[7] On May 11, 2022, a pre-hearing conference was held between the parties and the assessment officer. Ms. McDonald was self-represented. A one-day hearing was scheduled for October 24, 2022, and the assessment officer endorsed that: “any documents that a party intends to rely upon at the hearing shall be served on the opposing party at least 30 days before the hearing and filed with the St. Catharines Civil Office with proof of service.”

[8] No documents had been filed by Ms. McDonald prior to the October 24 hearing as required by the May 11 endorsement. A retainer agreement had been filed by the solicitor.

[9] At the October 24 hearing, Ms. McDonald requested an adjournment because she wanted to seek a judge’s order amending the Registrar’s Order for Assessment to add the paid account. The solicitor initially opposed the adjournment request but then advised that he would consent if there was a new hearing date scheduled for later in 2022 and if the matter was marked peremptory as against Ms. McDonald.

[10] The assessment officer adjourned the hearing to Thursday, December 1, 2022, peremptory as against Ms. McDonald.

[11] At the December 1, 2022, hearing, Mr. Maloney made submissions relating to the accounts under assessment. Ms. McDonald elected not to cross-examine Mr. Maloney. She attempted to introduce photographs and emails as exhibits during her examination in-chief. Those documents had not been filed in advance in accordance with the assessment officer’s endorsement. Ms. McDonald was not allowed to introduce any of the documents except for the photographs which she then declined to submit.

[12] The assessment officer issued his “Decision and Reasons” dated June 23, 2023.

Positions of the Parties

[13] On behalf of Ms. McDonald, the main submission was that there had been violations of procedural fairness. The alleged violations arose from the assessment officer’s failure to provide a process for receiving and considering objections to his decision and from his decision to prohibit Ms. McDonald from introducing her documents as exhibits during the hearing.

[14] Further issues relate to the failure by the assessment officer to permit the assessment of the July 30, 2020 account which had not been the subject of the order for assessment, the strict enforcement of a filing deadline which the assessment officer had established as 30 days prior to the hearing, and making a costs award based on the usual rates of a solicitor without regard to the fact that the solicitor was, in effect, self-represented at the assessment hearing.

[15] On behalf of SM, it was submitted that the assessment officer conducted the hearing in a way that was procedurally fair including the enforcement of his own endorsement about the timely filing of documents. In the hearing itself, he considered the facts presented and appropriately applied the factors set out in Cohen v. Kealey and Blaney (1985), 26 C.P.C. (2d) 211 (Ont. C.A.). He was generous in his post-hearing correspondence, responding to Ms. McDonald’s questions, and he was not wrong in proceeding to assess the accounts which were the subject of the application without assessing the previous account which Ms. McDonald had paid. As to costs, the assessment officer noted case law on costs awarded to self-represented lawyers or law firms. He also considered the impact of an offer to settle made by SM for an amount less than his award. As well, he reduced the claim from $4,352 to an award of $2,525. He made no error in principle.

Applicable Legislative Provisions and Principles of Appellate Review

[16] The order for assessment of the two unpaid accounts rendered to Ms. McDonald by SM was a reference pursuant to s.3(c) of the Solicitors Act.

[17] According to s. 6(3) of the Act, the terms of an order for costs of the reference are “in the discretion of the [assessment] officer, subject to appeal, and shall be assessed by him or her when and as allowed.”

[18] Once the account is assessed, s. 6(5) of the Act provides that the account “shall be paid by the party liable to pay the amount, forthwith after confirmation of the certificate in the same manner as confirmation of a referee’s report under the Rules of Civil Procedure” (the “Rules”).

[19] Rule 54.09(1) of the Rules provides that, other than where there is a consent of both parties, the report, (in this case, the assessment officer’s order), is confirmed once 15 days pass after the service and filing of the order, unless a motion to oppose confirmation is served within that time. The Act provides in s.6(9) that a motion to oppose confirmation of the certificate shall be made to a judge of the Superior Court of Justice.

[20] Rule 54.09(3) requires that any motion disclose the reasons for opposing confirmation and must be served within 15 days after the report was filed and must name the first available date for hearing that is at least three days after service.

[21] Although the initial version of the notice of motion herein was for an order that the Certificate of Assessment not be confirmed, it was amended to request instead that the Certificate be set aside, and a fresh assessment ordered.

[22] Pursuant to s. 17(b) of the Courts of Justice Act (the “CJA”), an appeal lies to the Superior Court of Justice from a certificate of assessment where an objection was served under the Rules.

[23] A motion to oppose an assessment officer’s certificate is in the nature of an appeal as stated in Moore v. John A. Annen Barrister Professional Corporation, 2017 ONSC 7720, and the parties agree that this motion is an appeal.

[24] As described by the Ontario Court of Appeal in Samuel Eng and Associates v. Ho, 2009 ONCA 150, para. 1:

It is settled law that on an appeal from an assessment officer, the court is only concerned with questions of principle not with questions of amount or how the assessment officer exercised his discretion unless the decision is so unreasonable as to amount to an error in principle.

[25] That comment was endorsed and amplified by the Court of Appeal in Rabbani v. Niagara (Regional Municipality), 2012 ONCA 280 when the court observed at para. 6 that:

The hearing is an appeal, not an opportunity for the reviewing court to rehear the assessment and come to its own conclusion as to what is reasonable, absent an error in law, misapprehension of the evidence, palpable and overriding error on a factual matter, or an assessment amount that is so unreasonable as to constitute an error in principle.

[26] In summary, for questions of law, the standard of appellate review is correctness. For questions of fact, the standard of review is palpable and overriding error. Questions of mixed fact and law are reviewed for palpable and overriding error unless the error was in the application of a legal principle in which case a correctness standard applies. On issues of procedural unfairness, there is no standard of review: if something is unfair, it is unfair and is subject to appellate scrutiny. (Housen v. Nikolaisen, 2002 SCC 33)

Analysis

Refusal to Assess the July 30, 2020 Account

[27] Ms. McDonald raises several issues of procedural fairness that arose in the assessment proceeding.

[28] At the assessment hearing of October 24, 2022, Ms. McDonald requested the addition of the paid account of July 3, 2020 to the two accounts being assessed pursuant to the SM requisition for assessment. SM did not consent. The assessment officer apparently advised that to add the account would require a judge’s order and that Ms. McDonald would need to bring a motion for that relief. The matter was adjourned to December 1, 2022, peremptory on Ms. McDonald. There was no evidence that she had made or attempted to make such a motion.

[29] In Fellowes, McNeil, 34 O.R. (3d) 301 (C.A.), the court noted that the Act makes no provision for the assessment of accounts paid more than 12 months before the application is made. The July 3, 2020 account is in that category. The court has inherent jurisdiction to order the assessment of such accounts, but that jurisdiction is limited to circumstances amounting to fraud or gross misconduct.

[30] In this case, since no fraud or gross misconduct is alleged, it is unlikely that any court order would have permitted the addition of the paid bill to the assessment hearing. In any event, however, Ms. McDonald did not take any steps to seek such an order. As a result, there is no error on the part of the assessment officer in proceeding with the assessment without including the paid account of July 3, 2020.

Strict Enforcement of Filing Deadline

[31] Counsel for Ms. McDonald submitted that it was a breach of procedural fairness for the assessment officer to have refused to permit her filing of and referring to documents at the December 1, 2020, hearing, despite the objection of SM.

[32] The endorsement of May 11, 2020, clearly set out the requirement to serve any materials no less than 30 days before the hearing. Nothing was filed 30 days in advance of the October 24, 2020 intended hearing, or before the ultimate hearing of December 1, 2020 which was marked peremptory on Ms. McDonald and in fact nothing was filed at all prior to the hearing, even ignoring the 30 day requirement. When asked at the hearing, she was not even able to identify the number of documents and photographs she intended to rely on, although she estimated more than 20. SM did agree to permit Ms. McDonald to refer to photographs, but she chose not to do so.

[33] The assessment officer indicated that having documents filed in advance prevents the opposite party from being taken by surprise.

[34] Ms. McDonald advised at the hearing that: “I am not understanding I should have filed those kind of things, email or paper or letters, those kind of things or pictures for the convenience of the hearing they need to be filed, like prior to that hearing.” She went on to say that she thought she would have more time, because she anticipated the hearing would take longer than one day, even though there is no indication of any such information being provided to her, and that at the pre-hearing conference of May 11, 2022, this hearing was scheduled “for one day”.

[35] The assessment officer has the right and responsibility to control the process of the hearing, just as a judge does in court. The 30-day notice requirement was reasonable and clear. There is no evidence of any attempt at compliance by Ms. McDonald.

[36] Despite the submissions of counsel, it was not unreasonably inflexible on the part of the assessment officer to have maintained the procedural order he made. Her self-represented status provides Ms. McDonald no excuse. The language used was plain and easy to comprehend. She simply chose to ignore it.

[37] The submission that there was a breach of procedural fairness in failing to allow presentation of the documentary evidence at the hearing fails.

Post-hearing Procedural Fairness

[38] On behalf of Ms. McDonald, it was submitted that the assessment officer was procedurally unfair to her in failing to advise her about the process for filing an objection pursuant to rule 58.10. She had indicated her intention to do so following the release of his decision on June 23, 2023. Counsel submits that if she had been permitted to file objections, she would have been entitled to a reconsideration and review of the decision.

[39] The following is a summary of the communications between the officer and Ms. McDonald after he released his decision.

[40] She sought guidance on June 26, 2023, when she corresponded by email with the assessment officer advising in part as follows:

I believe there are some errors in the information presented and the basis of Decision is incorrect. I am seeking your guidance to understand my legal options. It is crucial for me to ensure that I correctly comprehend the legal steps and options, as I have had previous misunderstandings of the rules which caused me a disadvantage.

I have not yet decided on the next steps to take, but I will outline my understanding below. I would appreciate it if you could correct any misconceptions and confirm my understanding.

You will withhold the release of the certificate of assessment for at least 7 days, until June 30, 2023, or any other time you direct, to allow the dissatisfied party to oppose it.

If I choose to oppose, I need to serve the objection to you include [sic] Mr. Maloney, providing the grounds for objection. There are no standard forms, so I can send a letter via email.

At this stage, are the grounds for objection only brief or required to be fully detailed to support [sic] the objection? If detailed materials are necessary, a such a short time to provide it is not sufficient for me. I believe I would need to request an extension of the time frame.

Mr. Maloney will have an opportunity to submit a reply. After receiving all the materials, you will review or reconsider the case and complete the certificate accordingly.

If, after the completion of the certificate, I still believe the outcome is unfair, my next option is to appeal the certification to the Superior Court of Justice by filing a motion to be heard before a judge.

The objection to you must be taken as the first step; I cannot directly file a motion for appeal.

What is the deadline for me to file a motion after receiving the final certification you release? I couldn’t find the time frame in the Rules.

Previously, I expressed that it would be preferable to include all the bills, both unpaid and paid, for assessment. However, I hoped that the assessment outcome would be fair enough, so I wouldn’t need to file a motion. At this point, do I still have the legal option to bring a motion requesting a re-assessment that includes all the bills?

That is all I can think of for now. If there is anything I have overlooked, please point it out and provide me with further guidance.

[41] The assessment officer responded by email later in the day on June 26, 2023 in part as follows:

Second, I cannot provide you with legal advice or legal opinions. I can only provide you with general information about the assessment process. If you want legal advice or legal opinions, you may want to consult and/or retain a lawyer. If you cannot afford a lawyer, you may wish to contact the Pro Bono Ontario Free Legal Advice Hotline toll-free at 1-855-255-7256.

Third, it appears that you are confusing the assessment of a solicitor’s accounts under the Solicitors Act with the assessment of costs under Rule 58 of the Rules of Civil Procedure. An assessment of a solicitor’s accounts is the review by an assessment officer of the accounts of the lawyer as between that lawyer and his/her (former) client. An assessment of costs by an assessment officer is the process of the determination of the legal costs (i.e. legal fees, disbursements and taxes) between two or more parties involved in litigation payable by one party to another party. The assessment of a solicitor’s accounts under the Solicitors Act is separate and distinct from the assessment of costs under rule 58 of the Rules of Civil Procedure. The end result of an assessment under the Solicitors Act is the issuance by an assessment officer of a Report and Certificate of Assessment. The Report and Certificate of Assessment has the effect of a civil judgement in that it orders either the solicitor or the client to pay money owing to the other. The end result of an assessment of costs under Rule 58 of the Rules of Civil Procedure is the issuance of a Certificate of Assessment of Costs. The Certificate of Assessment of Costs has an effect similar to that of a civil judgement in that it orders one party to pay money owing to another party in a litigation matter.

Fourth, the process that you and Mr. Maloney are involved with is the assessment of a solicitor’s accounts under Solicitors Act. As a result, I will be issuing a Report and Certificate of Assessment and not a Certificate of Assessment of Costs at the end of the process.

[42] Whether Ms. McDonald sought outside advice as suggested by the assessment officer is unknown, although it is clear that she did not serve an Objection.

[43] On August 31, 2023, after receiving submissions in writing on costs related to the assessment hearing, the assessment officer entered his “Decision and Reasons on Costs” in which he awarded costs to the solicitor in the amount of $2,525.34 inclusive of HST and disbursements. On that same day, a Report and Certificate of Assessment was issued by the assessment officer in the amount of $9,177.08, relating to the two unpaid accounts and interest.

[44] A further exchange of correspondence took place between Ms. McDonald and the assessment officer which began on September 5, 2023. In her email of 8:18 a.m. September 5, she stated as follows:

I want to clarify that I am not seeking legal advice; rather, I am looking to understand the legal procedures and options available to me.

Could you please confirm or clarify whether, according to the governing Rules, Rule 58.10 allows a dissatisfied party the option to serve you with an objection, outlining the grounds for said objection, for your reconsideration of the Decision on Costs?

If this is correct, I intend to submit a formal objection. I am sending this email now as the long weekend following the release of the Decision on Costs [sic]. Could you please pause the process of releasing the certificate until I have received your confirmation? Upon receipt, I will consider making a formal objection.

[45] A few minutes later, the assessment officer responded by email in part as follows:

I believe that I sent you a previous email setting out the difference between an assessment of a solicitor’s account pursuant to the Solicitors Act and an assessment of costs pursuant to rule 58 of the Rules of Civil Procedure. An assessment of the solicitor’s account pursuant to the Solicitors Act involves the adjudication of a fee dispute between a lawyer and a (usually former) client. An assessment of costs pursuant to Rule 58 of the Rules of Civil Procedure involves the adjudication of the party and party costs of a proceeding. The two types of assessment are not related.

The procedure outlined in Rule 58.10 with respect to objections is directed to the process for an assessment of costs as opposed to the assessment of a solicitor’s account pursuant to the Solicitors Act. Accordingly, I am unable to receive objections from a dissatisfied party with respect to my decision on the issue of costs of the assessment in the case at bar.

[46] Later that same morning, Ms. McDonald corresponded with the assessment officer again. She said:

Thank you for your prompt response. However, this is confusing. I understand that after you released the Decision and Reasons of Assessment, I did bring up this question on the procedure of rejection, you clarified that the option for an objection does not apply to the decision of assessment, which is not governed by the Rules, but by the Solicitors Act. Therefore, I won’t be able to make an objection.

Now with the Decision and Reasons of Costs, the rule of 58.10 does not apply either, that means there is no such option for a party to make an objection neither to the assessment of the solicitor’s bill and the cost of assessment.

Now for what I read from your email above, the relative sentence I copied below. The meaning of your sentences, in other words, the rule 58.10 applies the orders or assessment for one party to pay to another party the legal fees for the civil proceedings. Therefore, it does not apply to the assessment to the solicitor’s account.

Please confirm I interpreted correctly.

Rule 58 of the Rules of Civil Procedure involves the adjudication of the party and party costs of a proceeding.

The procedure outlined in Rule 58.10 respect to objections is directed to the process for an assessment of costs as opposed to the assessment of a solicitor’s account pursuant to the Solicitors Act.

[47] The following morning, on September 6, 2023, the assessment officer responded by email. He said in part:

Objections are not available for any part of the process for an assessment of the solicitor’s account pursuant to the Solicitors Act. That includes no objection being available to the decision on the merits and no objection being available to the decision on costs. It is not unusual for a court or judicial officer to issue a decision on the merits of a matter and a subsequent decision on costs after costs submissions are received.

Objections are available as set out in Rule 58 of the Rule of Civil Procedure [sic] for an assessment of costs under Rule 58. The assessment of party and party costs under Rule 58 is a completely different process than the adjudication of costs of the costs of an assessment of a solicitor’s account pursuant to the Solicitors Act after decision on the merits.

[48] Email correspondence ended when on September 7, 2023, Ms. McDonald stated as follows to the assessment officer: “Thank you for the further clarifications; I now understand better. Therefore, the options left for me are to seek ways to deal with these matters in both appellate and civil court.”

[49] Ms. McDonald submits that the foregoing exchange demonstrated a failure on the part of the assessment officer to engage with her in her rights to object to his decision.

[50] That submission is an example of the common confusion between the procedures for assessment of an account under the Act and an assessment of costs of litigation under the Rules. As stated by MacLeod J. in Moore at para. 10 and A. Ramsay J. in Singh v. Reesa Heft and Heft Law (unreported CV-17-573071) at para. 88, rule 58 deals with assessment of costs as between litigants and not with proceedings under the Act.

[51] Unlike the situation in Singh where, notwithstanding the lack of statutory authority requiring reference to rule 58, the assessment officer embarked on the process of considering objections under it and then failed to follow the mandatory process, in this case the officer specifically did not do so.

[52] In any event, as confirmed by Perell J. in RZCD Law Firm LLP v. Williams, 2016 ONSC 2122, para. 34, the appeal may proceed without objections being filed, as to matters of jurisdiction including procedural fairness.

[53] As to procedural fairness, I find that the assessment officer engaged fully and promptly in response to Ms. McDonald’s queries. It was not his role to advise her about the steps available for her to question his decision, yet he did respond to each of her queries. She may not have understood the distinction between an assessment under the Act and one as between parties in litigation under the Rules and may well have been frustrated as a result. However, she was able to file her motion herein within the requisite time, to appeal and request that the Report and Certificate of Assessment be set aside.

[54] I conclude that the assessment officer made no error of law in proceeding without engaging the provisions of rule 58, and that he did not breach procedural fairness in his post-hearing communications with Ms. McDonald by failing to advise her of those provisions.

Basis for Costs Award

[55] On behalf of Ms. McDonald, it was submitted that the assessment officer should not have awarded costs payable by Ms. McDonald using the rates requested by SM, given that Mr. Maloney, while acknowledged to be a lawyer, was essentially self-represented in the proceeding. Instead, counsel submits that SM should have received a nominal amount.

[56] As noted above, s. 6(3) of the Act permits an award of costs in the assessment officer’s discretion. In this case, he considered the factors set out in rule 57.01 as well as the rule 49 offer. He also referenced current Ontario caselaw as to the awarding of costs to self-represented lawyers. His conclusion was that the policy undergirding rule 49 to encourage settlement was a significant factor to be applied so that costs should be awarded in an amount greater than a nominal amount, but less than the amount that would otherwise be applicable in normal litigation.

[57] The awarded costs were calculated at a partial indemnity rate, which was reduced from the submitted 70 per cent to 60 per cent for a total of $1,848 plus HST and disbursements.

[58] The award of costs does not disclose any legal error. Consideration was given to SM’s self-represented status, and to the applicable caselaw. It was reasonable for him to consider the significance of the rule 49 offer.

[59] The awarding of costs is a matter within the officer’s discretion, and there is no palpable and overriding error evident in the exercise of that discretion.

Conclusion

[60] For the foregoing reasons, the request for an order setting aside the Report and Certificate of Assessment dated August 31, 2023, including the Decision and Reasons of Assessment dated June 23, 2023, and the Decision and Reasons on Costs dated August 31, 2023 is denied and the appeal dismissed.

Costs

[61] The parties are encouraged to resolve the issue of costs of the motion between themselves. If they are unable to do so, they may submit their Bills of Costs and make written submissions, consisting of not more than three pages in length according to the following timetable:

• SM is to serve its Bill of Costs and submissions by February 21, 2025.
• Ms. McDonald is to serve her Bill of Costs and submissions by February 28, 2025.
• SM is to serve its reply submissions, if any, by March 7, 2025.
• All submissions are to be filed with the court with a copy to St.Catharines.SCJJA@ontario.ca and uploaded to Case Center by March 10, 2025.

[62] If no submissions are received by the court by March 12, 2025, or any agreed extension, the matter of costs will be deemed to have been settled.

Reid J.
Date: February 14, 2025