Notable Cases

COURT OF APPEAL FOR ONTARIO

CITATION: McCarthy Tétrault LLP v. Guberman, 2012 ONCA 679

DATE: 20121010
DOCKET: C55369

Sharpe, Gillese and Watt JJ.A.

BETWEEN

McCarthy Tétrault LLP

Plaintiff (Respondent)

-and-

Joel Stephen Guberman

Defendant (Appellant)

1. Gardner Hodder and Stefan A. De Smit, for the appellant

Robert MacDonald, for the respondent

Heard: October 4, 2012

On appeal from the judgment of Justice A. Duncan Grace of the Superior Court of Justice, dated March 27, 2012.

ENDORSEMENT

[1]          The appellant is a lawyer specializing in immigration law.  The respondent is a leading Canadian full-service law firm.  Stephen Grant, a partner with the respondent, acted as the appellant’s lawyer in his divorce proceedings.

[2]          The respondent sued the appellant for unpaid legal bills.  The appellant defended and counterclaimed for an order that the bills be referred for assessment.

[3]          In his pleadings, the appellant sets out in detail the alleged  failure of his lawyer to address a material change in circumstance for over a year, and his failure to detect and then address in a timely fashion a mathematical error in an arbitration award.  Both of these matters, it is alleged, not only cost the appellant in financial terms, they also contributed to difficulties the appellant had with Canada Revenue and the Family Responsibility Office, which brought about further financial loss.

[4]          Both parties moved for summary judgment.  The sole issue was whether the appellant was entitled to have his lawyer’s accounts assessed.

[5]          By judgment dated March 27, 2012, the motion judge granted summary judgment in favour of the respondent for the full amount of its claim (the Judgment).

[6]          The appellant appeals and asks that the Judgment be set aside and the accounts be referred for assessment.

ANALYSIS

[7]          We would allow the appeal.

[8]          As the motion judge correctly noted, because the appellant’s motion to refer the accounts for assessment was made more than one month but less than twelve months after the date of the firm’s last account, neither ss. 3 or 4 of the Solicitors’ Act, R.S.O. 1990, c. S.15, applied.  Whether to refer the accounts was a matter to be decided based on the court’s inherent jurisdiction.  The motion judge also correctly noted that the appellant did not have to establish special circumstances and that in the usual case, little is required for the exercise of that jurisdiction.  See Fellowes, McNeil v. Kansa Canadian Management Inc. (1997), 34 O.R. (3d) 301 (C.A.), at para. 6.  

[9]          However, in dismissing the appellant’s motion to have the accounts referred to an assessment officer, the motion judge relied heavily on the fact that the appellant had repeatedly promised to make payments on the accounts.  The motion judge stated that the request for assessment appears “to have been disingenuous and tactical”.

[10]       With respect, this appears to be unsupported on the record.  While the appellant had made such promises, the facts that underlay the allegations in the appellant’s pleadings occurred during the course of the solicitor-client relationship and were known to the solicitor.  For example, in the Reply to Counterclaim, the respondent acknowledges the mathematical error, that it “may have been” detected by the appellant, and that the respondent took steps to have it rectified.  There is no dispute that the steps taken were at the appellant’s cost.

[11]       Furthermore, the request for an assessment of the accounts was made within two days of the appellant retaining counsel in this matter and prior to the commencement of the present proceeding.

[12]       This is not a situation where the factual basis for the claims in the statement of defence and counterclaim was not known to the solicitor prior to the commencement of the lawsuit.  Nor was the request for assessment advanced for the first time after a lawsuit had been commenced.  Nor is the defence and counterclaim frivolous.  Having carefully read the pleadings, in the circumstances of this case, we cannot say that the request for assessment is disingenuous and tactical.

[13]       The right of a client to have a lawyer’s account assessed is an important one, not to be taken away except in compelling circumstances.  As this court has stated, 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: see Price v. Sonsini (2002), 215 D.L.R. (4^th) 376, at para. 19.

DISPOSITION

[14]       Accordingly, the appeal is allowed and the Judgment is set aside.  The appellant’s motion for summary judgment to have the accounts referred for assessment is granted.  The appellant is entitled to its costs both here and below, fixed at $6,000 and $7,000, respectively, inclusive of disbursements and applicable taxes.

“Robert J. Sharpe J.A.”

“E.E. Gillese J.A.”

“David Watt J.A.”