



COURT OF APPEAL
    FOR ONTARIO

CITATION:
Holmes v. Lerners
    LLP, 2012 ONCA 829

DATE: 20121128

DOCKET: C55537

Simmons, Cronk and Rouleau JJ.A.

BETWEEN

Scott Paul Holmes, The Scott Holmes Living Trust
    and the Corporation Controlled by Scott Holmes

Applicants (Respondents)

and

Lerners LLP

Respondent (Appellant)

Liza C. Sheard and Andrea M. Hill, for the appellant

Marc A. Munro, for the respondents

Heard: November 13, 2012

On appeal from the judgment of Justice J.A. Ramsay of the
    Superior Court of Justice, dated April 27, 2012.

By the Court:

[1]

The appellant solicitors appeal from the judgment of the application
    judge who directed the assessment of their legal accounts pursuant to the
Solicitors
    Act
. The respondents seek leave to cross appeal from the application judges
    decision denying them their costs of the application.

[2]

Because the accounts had been delivered more than 12 months before the
    application was brought and the accounts had already been paid, the respondents
    were required to show that special circumstances existed which warranted
    granting the application for an assessment. The application judge concluded
    that special circumstances existed because the bills were large, the delay in
    seeking an assessment order was relatively short, the bills had been paid by a
    court-appointed receiver rather than by the respondents themselves and,
    finally, any prejudice the appellant might suffer could be compensated by an
    appropriate direction for costs.

[3]

The appellant argues that the application judge misapprehended material
    evidence, failed to apply the principles that should have guided his exercise
    of discretion and failed to give sufficient weight to the relevant
    considerations.

[4]

We would not give effect to this submission. Sections 4 and 11 of the
Solicitors
    Act
, R.S.O. 1990, c. S. 15 give the court a broad discretion to determine
    whether special circumstances exist such that an assessment ought to be
    allowed. As stated by Doherty J.A., at para. 4 of
Guillemette v. Doucet
,
    2007 ONCA 743, A finding of special circumstances turns on a fact driven
    exercise of judicial discretion. This court will defer to that discretion absent
    an error in principle or a clearly unreasonable result. Although we agree with
    the appellant that certain parts of the application judges reasons could have
    supported a conclusion that the assessment of the appellants accounts was not
    justified, in the end, after weighing all the relevant factors, the application
    judge reached the conclusion that special circumstances existed in this case.

[5]

The application judges analysis and rejection of many of the grounds
    advanced by the respondents demonstrates that he was alive to all the arguments
    placed before him. This does not, however, take away from the application
    judges conclusion that special circumstances existed. As he found, the amount
    of the accounts was very significant, a total of about $650,000 in less than a
    year. In addition, although the accounts had been paid, they were paid by a
    court-appointed receiver who, in reviewing the accounts, would have had a
    different perspective and different concerns than those of the respondents.

[6]

The appellant further argues that, by concluding that the absence of
    prejudice to the appellant was relevant and supported his conclusion that
    special circumstances existed, the application judge, in effect, imposed an
    onus on the appellant to demonstrate prejudice.

[7]

We disagree. The application judge did not conclude that the absence of
    prejudice constituted special circumstances. It was simply one of a
    constellation of factors he considered in reaching his conclusion.

[8]

With respect to the cross appeal on costs, the respondents argue that,
    since they were successful on the application, they ought to have been awarded their
    costs.

[9]

The application judge exercised his discretion not to award costs to the
    respondents due in large part to his conclusion that a significant part of the
    application was devoted to dealing with the respondents numerous and serious
    allegations of bad conduct said to have been committed by the appellant. These
    allegations were all rejected by the application judge.

[10]

These
    unfounded and serious allegations not only consumed an inordinate length of
    time at the hearing, they had previously been considered and rejected by a
    judge, as well as the Law Society of Upper Canada.

[11]

Costs
    awards are entitled to a high degree of deference and, in our view, the
    application judge did not err in principle in fashioning his costs award. Nor
    is the costs award plainly wrong. See
Hamilton v. Open Window Bakery Ltd.
,
    [2004] 1 S.C.R. 303. Finally, it was within the application judges discretion
    to decline to award costs in the circumstances of this case.

[12]

For
    these reasons, both the appeal and the cross appeal are dismissed.

[13]

The
    respondents were successful on the appeal and are entitled to their costs. The
    amount awarded, however, needs to take into account the fact that they were
    unsuccessful on their cross-appeal. In the circumstances, therefore, we award
    the respondents costs on a partial indemnity scale fixed at $8,500, inclusive
    of disbursements and applicable taxes.

J.M.
    Simmons J.A.

E.A Cronk J.A.

Paul Rouleau J.A.

Released: November 28, 2012


