



COURT OF APPEAL FOR ONTARIO

CITATION: Ares Law Professional Corporation v. Rock, 2017
    ONCA 569

DATE: 20170704

DOCKET: C63702

LaForme, Hourigan and Paciocco JJ.A.

BETWEEN

In The Matter of the
Solicitors
    Act


And In The Matter of

Ares
    Law Professional Corporation and

Bernard
    P. Keating

Solicitors (Respondents)

and

Ronald Rock

Client (Appellant)

Louise James, for the appellant

Joanna L. Nairn, for the respondents

Heard: June 30, 2017

On appeal from the order of Justice G. M. Mulligan of the
    Superior Court of Justice, dated January 31, 2017.

REASONS FOR DECISION

[1]

This is a dispute over an assessment of a lawyers fees and
    disbursements. Below, the assessment officer assessed the lawyers account at
    $125,602.83. The client brought a motion to oppose confirmation, which was
    dismissed, and the motion judge granted judgment to the lawyer. The client
    appeals. We dismiss the appeal for the reasons that follow.

Background

[2]

The respondents, Ares Law and Bernard Keating (together, Ares Law) were
    retained pursuant to a contingency fee agreement with Mr. Rock, the client in
    an action against Food Basics. The agreement provided that in the event the
    retainer was terminated the fee would be billed on an hourly-rate basis. It
    also provided that the client would pay all disbursements reasonably incurred
    in furtherance of the clients claims.

[3]

After five years the solicitor-client relationship broke down and Ares
    Law were removed as solicitors of record. The client retained new counsel, Mr.
    Igbinosun.

[4]

Importantly, after the retainer was terminated, Ares Law, Mr. Igbinosun,
    and the client entered into an agreement (the Undertaking). It provided that
    Mr. Igbinosun and the client were undertaking to protect the account of Ares
    Law in the amount of not more than $50,000. And, depending on the resolution of
    the case, this amount could be subject to possible negotiated reduction or an
    assessment.

[5]

Mr. Igbinosun subsequently passed away and the client chose to
    self-represent. The client ultimately entered into a settlement agreement with
    Food Basics for $30,000. The agreement also contained the following: The
    defendants agree to pay costs directly to Bernard P. Keating (Ares Law
    Professional Corp.). It did not contain any reference to the Undertaking, and
    Ares Law had no say in its negotiation or drafting.

[6]

Regarding Ares Laws costs, Food Basics lawyers, acting on behalf of the
    client, advised:

My clients insurer, Zurich, is willing to cover the cost of
    some of your listed disbursements at this time, as part of its settlement with
    the plaintiffs. I also understand that you have brought an action against the
    plaintiffs for your outstanding account, and we would like to offer to pay half
    of that amount as a way to settle that issue.

[7]

Then they later advised:

Further to my clients offer to you on costs, my client is now
    willing to pay half of your listed disbursements, plus $5,000 for your legal
    fees, or alternatively, we can have your costs assessed.
My
    client would pay whatever amount that is determined by an assessment officer
.
    [Emphasis added].

[8]

Ares Law accepted that offer and the matter proceeded to assessment.

The Assessment

[9]

The original amount of Ares Laws account was $139,302.52. The
    assessment officer made some small adjustments and ultimately assessed the
    outstanding amount at $125,602.83.

[10]

In reaching his decision, the officer performed a detailed analysis of
    the nine factors relevant to cost assessments, as enumerated by this court in
Cohen
    v. Kealey & Blaney
(1985), 10 O.A.C. 344, [1985] O.J.
    No. 160 (C.A.).

[11]

Notably, the assessment officer rejected the argument that the Undertaking
    applied to limit Ares Laws total recovery to $50,000. He held it would have
    applied had Mr. Igbinosun represented the client at the time of the settlement,
    but because the client was then acting for himself the agreement no longer
    governed. He further concluded that the undertaking was not incorporated into
    the settlement with Food Basics and the client should reasonably expect to pay
    fees pursuant to the retainer agreement.

Confirmation of the Assessment

[12]

The client brought a motion to oppose confirmation of the assessment,
    and Ares Law brought a cross-motion for judgment in the amount of the
    assessment. The motion was dismissed and the cross-motion was allowed.

[13]

The appellant has now filed a second appeal to this court, advancing
    essentially the same arguments it did on the confirmation motion.

Standard of Review

[14]

The appeal to this court from the motion judges decision is one of the
    rare instances when a litigant has a second appeal as of right. That is, since
    there is only one judgment, that given by the confirming judge, the appeal to
    this court is as of right:
Capsule Investments Ltd. et al. v. Heck
(1993),
    12 O.R. (3d) 225 (C.A.), at para. 6. Because of the need for finality within a
    reasonable time, there is an accentuated need to identify palpable and
    overriding error in factual matters before interfering at this second level of
    review:
Capsule Investments Ltd.
, at para. 7.

Issues and Analysis

[15]

The appellant raises essentially four grounds of appeal. We would not
    give effect to any of them.

[16]

First, the appellant asserts that the assessment officer failed to
    appreciate the peculiar position of Food Basics and Mr. Rock  that Food
    Basics, having agreed to assume liability for paying Mr. Rocks account,
    stepped into Mr. Rocks role at the assessment hearing. As a result, the
    assessment officer at times properly interpreted the client to mean Mr. Rock
    and at other times improperly interpreted it to mean Food Basics.

[17]

We disagree. Reading the assessment officers decision as a whole, it is
    evident he appreciated Mr. Rock was the client. Where he referred to Food
    Basics, he did so in a manner consistent with a proper understanding of its
    role.

[18]

Second, the appellant argues the assessment officer misapprehended the
    evidence regarding the true value of the claim in determining the
    reasonableness of the lawyers fees.

[19]

We do not accept this submission. Although the assessment officer held
    that the value of the claim was likely higher than the $30,000 for which it was
    ultimately settled, the history of this litigation provided ample evidence to
    support that view. The appellant is unable to point to any palpable error in
    the assessment officers view of the value of the claim, and thus there is no
    basis to interfere with it.

[20]

Third, relying on s. 3 of the
Solicitors Act
, R.S.O. 1990, c.
    S. 15, the appellant argues the assessment officer did not have jurisdiction
    because there were special circumstances in this assessment. However, as the
    motion judge correctly found at para. 20, the issues the appellant has
    identified do not constitute special circumstances that would impact the
    assessment officers jurisdiction.

[21]

We agree with Ares Law; special circumstances that operate to oust
    jurisdiction are exceptional situations or conditions  particularly those that
    cause quantum and accounting of fees to become entwined with larger legal and
    factual questions  such that assessing costs necessarily requires answering
    questions outside the assessors jurisdiction. We would adopt the description
    of
special circumstances expressed in
Middlebrook
    & Company v. McCormack
, 2011 ONSC 376,

[2011] O.J. No. 177, at para. 9: they are
    typically questions that require a decision from the court by action or
    application. There were no such questions at play here.

[22]

Further, nothing about the Undertaking dispute changed the essence of
    the issue on the assessment, namely, the reasonableness and quantum of fees
    recoverable. That inquiry is the same when making the determination generally as
    it is when the quantum has been expressed as a term of a written retainer and
    the allegation is that this term was subsequently changed: see
Aird &
    Berlis v. Federchuk
(1997),
    34 O.R. (3d) 406 (Gen. Div.), at para. 18
. In either case, the inquiry
    is squarely within the assessment officers jurisdiction.

[23]

Fourth, the appellant contends the assessment officer and motion judge
    erroneously treated the Undertaking as irrelevant to the clients expectations
    regarding costs because Food Basics was not a party to the Undertaking. We see
    no merit in this submission. As the motion judge correctly noted at para. 13:

both the solicitor and counsel for the client had a full
    appreciation of the facts and circumstances surrounding the prior undertaking
    that fees would not exceed $50,000, as well as the solicitors actual account
    of $139,000. If the purpose of an assessment hearing was to determine fees and
    disbursements up to a maximum of $50,000, that should have been spelled out in
    clear and unambiguous language in the offer. It was not.

[24]

Thus, if the appellant believed the Undertaking applied to limit the
    assessed account, then he  not Ares Law  had the obligation to raise that
    issue in advance of the hearing, but failed to do so. Moreover, even if the
    Undertaking applied, by its terms it was subject to negotiation between the
    parties and, if necessary, further assessment proceedings. Further
    negotiations and an assessment proceeding did occur. Those events, contemplated
    by the Undertaking, clearly overtook the putative $50,000 cap. And, the parties
    agreed to be bound by the result of the assessment.

Disposition and Costs

[25]

For those reasons, we would dismiss the appeal. The respondents are
    entitled to costs of the appeal fixed in the amount of $10,000, inclusive of all
    applicable disbursements and taxes.

H.S.
    LaForme J.A.

C.W. Hourigan J.A.

David M. Paciocco
    J.A.


