Price v. Sonsini

Price v. Sonsini Collection Decisions of the Court of Appeal Date 2002-07-05 Docket numbers C37033 Judges McMurtry, Roy; O’Connor, Dennis; Sharpe, Robert J. Subject Civil Decision Content DATE: 20020704 DOCKET: C37033 COURT OF APPEAL FOR ONTARIO McMURTRY C.J.O., O’CONNOR A.C.J.O. and SHARPE J.A. BETWEEN: ) ) DAVID G. PRICE ) ) Edwin G. Upenieks for the appellant Respondent ) ) ) - and - ) ) NINO FRANCIS SONSINI ) ) ) Eric R. Murray, Q.C. for the respondent Appellant ) ) Heard: June 12, 2002 On appeal from the order of Justice Lorna-Lee Snowie dated August 22, 2001 quashing the order for assessment of a solicitor’s accounts and proceedings taken pursuant to that order. SHARPE J.A.: [1] This appeal concerns the procedure to initiate the assessment of a solicitor’s bill of costs under s. 3 of the Solicitor’s Act, R.S.O. 1990, c. S.15. FACTS [2] On September 12, 1994, the appellant retained the respondent, a solicitor, to represent him in family law litigation. Over the course of one year, between September 16, 1994 and September 18, 1995, the respondent rendered five accounts to the appellant, totalling $133,350.14. The respondent described the first four accounts as “interim accounts” in his accompanying letters to the appellant. [3] The appellant paid the first three accounts, with modest reductions for his prompt payment. The appellant partially paid the fourth and largest account for approximately $75,500.00. However, the relationship between the parties deteriorated. When the appellant refused further payment, the respondent pressed the appellant for payment. The respondent also asked the appellant to sign an undertaking waiving his rights to an assessment, agreeing to sign a direction that any proceeds from the sale of the matrimonial home be paid to the respondent and agreeing to sign a direction that the appellant’s parents give the respondent priority over their mortgage in the matrimonial home. When the appellant refused to sign the undertaking, the respondent refused to act any further. On September 18, 1995, the respondent rendered a final account, which the appellant did not pay. [4] On October 3, 1995, on requisition, the appellant obtained an ex parte registrar’s order for the assessment of all five accounts. The matter proceeded to an assessment hearing almost four years later. At the commencement of the hearing, the following exchange took place between the assessment officer (Mr. Canning), the respondent (Mr. Price, acting on his own behalf), and the appellant’s counsel (Mr. Furlan): MR. CANNING: I just wanted to open up with agreement as to what bills are actually before me for assessment…. MR. PRICE: All right. MR. CANNING: …and a total, without any credit for payments or transfers or anything else and that is 133,350? MR. PRICE: Yes. … MR. CANNING: Well, it’s agreed that there are six bills and…. MR. FURLAN: Five accounts actually. MR. PRICE: Five accounts. [5] The assessment officer then asked whether there were any preliminary issues to be addressed. The respondent did not raise any preliminary issues. Nor did the respondent question the assessment officer’s jurisdiction or the propriety of the requisition and order for assessment of the five accounts. [6] The assessment hearing proceeded over five days in September of 1999. At the conclusion of the hearing, the assessment officer reserved his decision. On October 27, 2000, the assessment officer gave written reasons and a report and certificate substantially reducing the respondent’s accounts. The assessment officer assessed the accounts at $47,819.03. Since the appellant had paid the respondent $67,531.10, the assessment officer ordered the respondent to repay the appellant the difference of $19,712.07. The assessment officer also ordered the respondent to pay the appellant $6,000 in pre-judgment interest and $10,000 in costs of the assessment. [7] On November 14, 2000, the respondent served a notice of motion opposing confirmation of the assessment officer’s report and certificate of assessment. That motion was adjourned. On August 14, 2001, the respondent served a notice of motion seeking to quash or set aside the registrar’s order for assessment on the ground that the registrar had no jurisdiction to order the assessment of the respondent’s accounts. [8] On August 22, 2001, the motions court judge heard both motions. She granted the respondent’s motion to quash the registrar’s order for assessment on two grounds. First, she held that the procedure was “defective” because the evidence indicated that the appellant had proceeded not by requisition but by application. Second, she held that since four of the five bills had been delivered more than one month before the registrar’s order, they fell outside the one-month limitation period in s. 3(b) of the Solicitor’s Act. Section 3(b) provides: 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 Ontario Court (General Division), … (b) by the client, for the assessment of a bill already delivered, within one month from its delivery; [9] On the basis of these two grounds, the motions court judge quashed the registrar’s order for assessment and all proceedings taken pursuant to that order. She ordered the appellant to pay the respondent the solicitor and client costs of the motions, fixed at $8,000 plus disbursements and GST, and the costs of the assessment hearing, fixed at $10,000. The motions court judge made no finding with respect to the respondent’s motion opposing confirmation of the assessment officer’s report and certificate of assessment. ISSUE [10] This appeal raises the issue whether the motions court judge erred in quashing the registrar’s order for assessment. ANALYSIS [11] For the reasons that follow, it is my view that the motions court judge erred with respect to both grounds for quashing the registrar’s order for assessment. [12] With respect to the first ground – that the procedure was “defective” – it is clear that the appellant proceeded by requisition and not by application. At the time the matter was argued before the motions court judge, the court file appears to have been lost. The motions court judge appears to have based her ruling on a file notation that the order for assessment had been granted on “application”. However, the court file has since been found and indicates that the appellant proceeded by requisition. While this suffices to dispose of the issue, I must add that even if the appellant had proceeded by application, I would not have found that this justified quashing the order for assessment and nullifying all that followed. [13] I am also of the view that the motions court judge erred with respect to the second ground for quashing the order for assessment: that four of the respondent’s accounts fell outside the limitation period in s. 3 of the Solicitor’s Act. [14] In support of the motions court judge’s order under appeal, the respondent has sought to rely on the decision of this court in Davies, Ward & Beck v. Union Industries Inc. (2000), 48 O.R. (3d) 794. In that case, the client obtained an ex parte registrar’s order on requisition pursuant to s. 3 for the assessment of twenty-nine bills rendered over a twelve-year period for a variety of services. The solicitors moved immediately to set aside the order for assessment on the ground that only the last bill fell within the one-month limitation period in s. 3. This court held that the order for assessment should be set aside because there were “special circumstances” within the meaning of s. 3. The client was required to obtain an order for assessment on notice to the solicitor. [15] However, in my view, there are at least two significant factors that distinguish Davies, Ward & Beck from the present case. First, in Davies, Ward & Beck, the client sought to assess twenty-nine accounts rendered over twelve years and for a variety of services. Here, the appellant has sought to assess four interim accounts and one final account rendered over one year and for a single matter. I agree with the appellant that upon delivery of the final bill, the appellant was entitled obtain a registrar’s order for the assessment of all five accounts on requisition pursuant to s. 3. In Enterprise Rent-a-Car Co. v. Shapiro, Cohen, Andrews, Finlayson (1998), 38 O.R. (3d) 257 (C.A.) at 262, this court held that “[t]he distinction between interim and final bills is well entrenched in our law and should be retained”. This court also affirmed the principle established in Lang, Michener, Cranson, Farquharson & Wright v. Newell, [1985] O.J. No. 272 (H.C.J.), aff’d., [1986] O.J. No. 2459 (Ont. C.A.) and Lipsett v. Bliss (1976), 15 O.R. (2d) 35 (Master), aff’d., (1976), 15 O.R. (2d) 35n (H.C.J.), that where interim accounts are rendered in connection with the same matter, the limitation period for assessment under the Solicitor’s Act begins to run from the date of the final account, even if some of the interim accounts have been paid. [16] The respondent submits that this general principle has no application to the one-month limitation period found in s. 3 and that the appellant was required to obtain an order for assessment from a judge pursuant to s. 4 or s. 11 of the Solicitor’s Act. I would reject that submission. Interim accounts are necessary as a matter of commercial reality, even though it may be difficult to assess the value of legal services before the solicitor’s work is completed. A rule that required clients to move for immediate assessment of interim accounts would force clients into the invidious position of straining, if not rupturing, the solicitor-client relationship before the retainer has ended. Clients should not be forced to choose between harming the solicitor-client relationship and foregoing the right to have an interim account assessed. Rather, under s. 3, clients should be entitled to move for an assessment of an interim account within one month of delivery of the final account. [17] There is also a second and even more important factor that distinguishes this case from Davies, Ward & Beck. In Davies, Ward & Beck, the solicitors moved to challenge the order for assessment immediately. Here, the respondent raised no objection to the order for assessment until more than five years after it was granted, after he had participated in a lengthy assessment hearing and after he had suffered an adverse result. In my view, the respondent’s failure to raise a timely objection to the procedure used to obtain the order for assessment is fatal. The respondent must have known that the order for assessment included all five accounts and that it had been obtained on requisition pursuant to s. 3. If the respondent considered the procedure inappropriate or defective, he should have moved to have the order quashed prior to the assessment or he should have raised a preliminary objection before the assessment officer. The respondent did not take these steps. Instead, he fully participated in the assessment and only brought an objection to the procedure several years after the order for assessment had been made, in the face of an adverse decision. To allow him to nullify the assessment now would be contrary to the law and to common sense. [18] I do not accept the respondent’s submission that this court’s decision in Davies, Ward & Beck required the motions court judge to quash the order for assessment as a nullity. Although this court found in Davies, Ward & Beck that the registrar lacked jurisdiction to order an assessment, that finding must be read in light of the facts of that case, including the fact that the objection to the order for assessment was raised in a timely fashion. I cannot accept that Davies, Ward & Beck must be read as effectively creating a jurisdictional time-bomb to be exploded at any time at the whim of the solicitor to demolish the proceedings, whatever stage they have reached. [19] 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, 2nd ed. (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”. The court has 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. See Krigstin v. Samuel (1982), 31 C.P.C. 41 (Ont. H.C.J.) and Minkarious v. Abraham, Duggan (1995), 27 O.R. (3d) 26 (Gen. Div.) at 55-57. See also Re Solicitor, [1972] 2 O.R. 571 (H.C.J.) at 574, where the court held that a solicitor’s reversal of position with respect to the procedure to be followed on an assessment should be approached cautiously. [20] Accepting the respondent’s position would also be contrary to the principle that the 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, R.R.O. 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. In Chippewas of Sarnia Band v. Canada (Attorney General) (2000), 51 O.R. (3d) 641, leave to appeal to S.C.C. dismissed, reconsideration dismissed, [2001] S.C.C.A. No. 63, this court held at p. 722 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”. [21] An assessment officer has jurisdiction to assess solicitors’ accounts. The Solicitor’s Act sets out the procedures to initiate assessments. Fairness and the orderly administration of justice require that solicitors raise procedural objections in a timely manner. To allow such objections to be raised years later, after a lengthy and costly hearing on the merits, would be to invite chaos. Accounts long settled could be reopened because of overlooked or long forgotten procedural shortcomings. It follows that the respondent is now precluded in law from raising his procedural objections. DISPOSITION [22] I would allow the appeal and set aside the order of the motions court judge quashing the registrar’s order for assessment and the proceedings taken pursuant to that order. Regrettably, the only option available to us is to remit the matter to another judge of the Superior Court of Justice for confirmation of the assessment officer’s report and certificate. The costs of the assessment awarded by the assessment officer should be left to the judge dealing with the confirmation. The appellant is entitled to his costs before the motions court judge, which I would fix at $5,000. The appellant is also entitled to his costs of this appeal, which I would fix at $15,000. Both costs awards are inclusive of disbursements and GST. “Robert J. Sharpe J.A.” “I agree R.R. McMurtry C.J.O.” “I agree D.R. O’Connor A.C.J.O.” Released: July 5, 2002