



COURT OF APPEAL FOR ONTARIO

CITATION: Versailles Convention Centre Inc.
(2074874
    Ontario Inc.) v. William Ross Gilmour (Gilmour Barristers), 2013
    ONCA 674

DATE: 20131105

DOCKET: C56931

Weiler, Gillese and Lauwers J.J.A.

BETWEEN

Versailles
    Convention Centre Inc. Formerly 2074874 Ontario Inc.

and 1579240 Ontario Inc.

Applicants (Appellants)

and

William Ross Gilmour carrying on business as
    Gilmour Barristers

Respondent (Respondent in appeal)

James S. G. Macdonald, for the appellant Versailles
    Convention Center Inc.

William Gilmour, in person

Heard and released orally: October 18, 2013

On appeal from the order of Justice Dale F. Fitzpatrick
    of the Superior Court of Justice, dated March 25, 2013.

ENDORSEMENT

Nature of the Appeal

[1]

The appellants appeal the dismissal of their application for an
    assessment of the accounts of the respondent, Gilmour, a lawyer.

History
of the Proceeding

[2]

The accounts that are the subject of this appeal were issued by Gilmour
    to his client, Faqir Padda. Padda, a minority shareholder in Versailles,
    brought an oppression action against Versailles and the two majority
    shareholders, who are also its directors, Taggar and Khakh. As part of that
    proceeding, Padda brought a motion to have a receiver/supervisor for Versailles
    appointed.

[3]

The motions judge granted Paddas motion and. made an order appointing
    Paddon + Yorke Inc., (P&Y) as supervisor for Versailles. Pursuant to para.
    43 of this order, the Supervisor [was thereby] authorized to pay the accounts
    for services of Gilmour Barristers in obtaining the within Order on behalf of
    [Padda] to be paid forthwith from the funds and assets of [Versailles]. This
    was, however, without prejudice to any Partys right to claim adjustment in
    the within action. The order also provided that, without a court order or
    P&Ys permission, only P&Y had the right to initiate any proceeding to
    the exclusion of all other persons including Versailles. Versailles was under
    the control of P&Y from April 2010 to May 2012.

[4]

Gilmour submitted a bill in the amount of $77,674.95 which P&Y paid
    in June/July 2010. The bill was $39,034.05 more than what was set out in
    Gilmours full indemnity costs outline submitted at the motion.

[5]

Taggar and Khakh directed their lawyer, James S.G. Macdonald, to request
    copies of the Gilmour accounts paid by P&Y. Macdonald wrote to the lawyer
    for P&Y and to Gilmour on January 7, 2011, requesting copies of the
    accounts. P&Y said it needed Gilmours consent to release a copy of his
    accounts. Gilmour asked why Taggar and Khakh should see the accounts and
    Macdonald sent an email on January 17, 2011, stating:

[Taggar and Khakhs] request for a copy of Mr. Paddas account
    from Gilmour barristers is made pursuant to the right of the parties under
    paragraph 43 of the [Supervision] order to claim an adjustment in these
    proceedings. [Taggar] as a director and manager of [Versailles] is entitled to
    review the basis on which an amount was paid by [Versailles] to Gilmour
    Barristers and, if it is found to be unreasonable, take steps to assess the
    account or have it adjusted in these proceedings.  Without being able to review
    the account, [Taggar and Khakh are] restricted from claiming an adjustment or
    having the account assessed.

[6]

Gilmour never responded to this email or nor did he provide copies of
    the accounts to Versailles, Taggar, Khakh or Macdonald.

[7]

Padda discharged Gilmour as his lawyer on August 17, 2011.

[8]

Padda settled his oppression action against Versailles, Taggar and
    Khakh in March 2012 by minutes of settlement. The minutes of settlement
    provided in para. 17 that the defendants shall be entitled to pursue any right
    they have to assess the accounts that Gilmour provided to P&Y.

[9]

In June 2012, Padda gave copies of the accounts to Taggar and Khakh,
    with redaction of the dollar amounts beside Retainers Applied and Previous
    Payments. It appeared to the appellants that Gilmour had been paid twice for portions
    of the accounts, once by Padda and again by Versailles.  Some parts of the
    accounts also appeared to be related to other steps taken for Padda that were
    unrelated to the motion for which Versailles had been ordered to pay costs.

[10]

Two
    and a half years after the costs were paid, but only two months after copies of
    the accounts were delivered directly to Versailles, Versailles sought an
    assessment of Gilmours costs on the basis of special circumstances pursuant
    to s. 4(1) of the
Solicitors Act
, R.S.O. 1990, c. S.15 and the
    inherent jurisdiction of the Court to ensure that a clients request for an
    assessment is dealt with fairly and equitably:
Price v. Sonsini
,
    [2002] O.J. No. 2607 (C.A.).

[11]

We
    note that the
Limitations Act
does not apply to the review of a
    solicitors account. In
Guillemette v. Doucet
[2007] ONCA 743, at
    paras. 35-36, this court found:

There is no absolute time bar against Application for the
    assessment of lawyers accounts Time alone will not preclude the examination
    of the suitability of a lawyers accounts where other circumstances compel a
    review of those accounts.

The Application Judges Decision

[12]

The
    application judge found that there were no special circumstances in this case
    to warrant an exception to the general rule that no assessment will be ordered
    after 12 months from the delivery of the bill. He held the appellants were
    essentially trying to challenge the supervision order now, years after it was
    made.

[13]

He
    found that Versailles had the Gilmour accounts in its possession since at least
    June/July when those accounts were paid by P&Y, acting as supervisor. The
    accounts were reviewed by experienced professionals, including P&Y and
    their counsel. The bill of costs was given to Versailles shortly after the supervision
    order was made, so Taggar and Khakh would have been aware of the substantial
    increase when they paid the $77, 674.95. P&Y also provided bi-weekly
    progress reports on litigation cash flow to all of the parties to the
    litigation. The application judge found that, therefore, every party involved
    would have known about the payments. There was a mechanism to challenge costs
    in the supervision order and the parties could have done so in the 12 months
    following the receipt of the accounts. Despite all of that, no one challenged
    the accounts or payment of the accounts for over two years leading up to the
    settlement in March 2012.

[14]

The
    application judge found that there was no unfairness here to create special
    circumstances under s. 11 of the
Solicitors Act
.

[15]

The
    application judge found, however, that no costs order should be made because it
    was not reasonable or appropriate for Gilmour to refuse to provide his accounts
    (even a redacted version) in response to the request of Taggar and Khakh in
    January 2011. He found that this fueled mistrust and contributed to this action
    ending up before the courts now. He concluded, in saying this, I note that
    Gilmour is bound by whatever instructions Padda was giving to counsel such that
    my comment should not be interpreted as criticism of Gilmour specifically.

Discussion

[16]

A
    finding of special circumstances turns on a fact driven exercise of judicial
    discretion.  This court will defer to that exercise of discretion absent an
    error in principle or a clearly unreasonable result:
Guillemette v. Doucet
,
    2007 ONCA 743, 88 O.R. (3d) 90, at para. 4.  In our view, this test is met as
    the cumulative effect of the errors made by the motions judge led to a clearly
    unreasonable result. In our view, there were special circumstances in this case
    to warrant an exception to the general rule that no assessment will be ordered
    after 12 months from the delivery of the bill.

[17]

The
    application judge erred in finding that the appellant was challenging the
    making of a costs order in favour of Gilmour. The application for an assessment
    of Gilmours costs was not a challenge to the costs order; it was a challenge
    to the amount of Gilmours costs and the right to challenge that aspect was
    preserved in para. 43 of the order.

[18]

The
    application judges finding that  Versailles had the information contained in
    Gilmours accounts for two years before commencing the application was also
    erroneous.  P & Y had the information.  P & Y paid the accounts. 
    Versailles had the information, for the first time, only two months before it
    brought the motion.

[19]

If
    the appeal is allowed, Gilmour has not shown that he will be prejudiced in any
    way. As indicated below there are other circumstances that compel a review of
    Gilmours accounts.

[20]

The
    application judge also made  findings of fact that were clearly wrong and not
    based on the evidence. The application judge imputed the knowledge of the
    Supervisor, P&Y, to Versailles. The record makes it clear that Versailles
    did not have that knowledge. It was P&Y, acting as supervisor at the time,
    who had possession of the accounts. In the circumstances, this does not amount
    to possession by Versailles. Versailles was under the control of P&Y. The
    persons running Versailles on a daily basis, Khakh and Taggar, were not aware
    of the details of the accounts at the time the payment was made out of
    Versailles money and they were not consulted on the decision to pay. As a
    result of the supervision order, Khakh and Taggar were restricted in their
    ability  to compel an accounting from Gilmour because, in the absence of a
    court order, or P&Ys consent, only P&Y could do so.

[21]

Furthermore,
    in the circumstances, the appellants took reasonable steps to attempt to obtain
    the accounts by requesting them from P&Y and from Gilmour. P&Y said it
    needed Gilmours consent which was not forthcoming. Before us, Gilmour
    submitted in oral argument that his refusal to accede to the request to provide
    his accounts was due to lack of instructions from his client, Padda. However,
    the affidavit evidence filed on his behalf does not bear that out.

[22]

It
    is also worthy of note that the application judge found that Gilmours response
    to Macdonalds request was not reasonable yet, in refusing to order an
    assessment, he allowed Gilmour to benefit from his own unreasonable behaviour.

[23]

Finally,
    the application judge failed to address the following factors:

·

The discrepancy between the costs outline Gilmour prepared for
    the motion and the total amount that was paid, which was almost double that
    amount;

·

The amount of the costs to which Gilmour was entitled was
    limited to the costs of the supervision motion but the face of the accounts
    that were paid indicates they also relate to other steps Gilmour took in the
    oppression proceeding; and

·

It appears that an overpayment of the accounts occurred because
    Padda made payments on the same account.

Disposition

[24]

Accordingly,
    the appeal is allowed, the order below is set aside and the appellants request
    for the assessment of the accounts of Gilmour dated January 25, 2010, February
    22, 2010, and April 1, 2010 is granted with a direction to the assessment officer,
    within that assessment, to determine what amount should have been properly paid
    to Gilmour under the terms of paragraph 43 of the supervision order.

[25]

Costs
    of the appeal and of the application below are to the appellant and are fixed
    at a total of $15,000, inclusive of disbursements and all applicable taxes.

K. M.
    Weiler J.A.

E. E.
    Gillese J.A.

P. Lauwers
    J.A.


