Focus On

BARRISTERS AND SOLICITORS - Compensation - Taxation or assessment of accounts

Wednesday, April 12, 2017 @ 8:34 AM  

Lexis Advance® Quicklaw®
Appeal by law firm from the dismissal of its application to recover outstanding accounts pursuant to s. 23 of the Solicitors Act (Act). The appellant commenced applications to obtain a declaration that two written retainer agreements, for the provision of legal services to the respondent, were fair and reasonable, and for an order that the respondent pay for the legal services rendered by the appellant in accordance with the retainer agreements. The respondent never disputed the terms of the retainer agreements nor the amount of the outstanding account; it simply failed to pay. The application judge dismissed the application on the basis that the appellant could only enforce its retainer via an assessment before an assessment officer, and that the appellant’s application pursuant to s. 23 of the Solicitors Act was improper. He concluded that the appellant could not resort to s. 23 of the Act absent a bona fide dispute as to the terms or effect of the written retainer agreements. The accounts had since been paid and, as a result, the matter was moot between the parties. However, the Court agreed to address the issue due to its importance to the profession. The respondent appeared through counsel at the hearing, but did not take any position on the appeal.

HELD: Appeal dismissed. While the Court was sympathetic to the dilemma that led the application judge to reach for an interpretation of s. 23 that restricted its application, and while the Court agreed that the section should be so restricted, it did not agree with the route that the application judge took to accomplish that goal. The plain words of s. 23 of the Solicitors Act did not set up, as a precondition to its application, that a dispute as to the “validity or effect” of the written fee agreement must exist. While s. 17 of the Act appeared to prohibit the recovery of any fees, pursuant to any written fee agreement relating to contentions work, unless the lawyer had first had the agreement examined and allowed by an assessment officer, such a requirement would have a dramatic impact on the Bar as there was already a backlog in assessment offices. A simple or usual written fee agreement did not fall within the scope of s. 16(1), was not covered by the requirement of review under s. 17 and was not subject to the prohibition against an action being commenced to enforce it under s. 23. A lawyer who had a simple or usual fee agreement, was entitled to have resort to the assessment if he or she so desired, but the lawyer was also entitled to commence an action to recover his or her fees as contemplated by s. 2. Clients also retained the right to require an assessment pursuant to s. 3 of the Act.

Gilbert's LLP v. David Dixon Inc., [2017] O.J. No. 1037, Ontario Superior Court of Justice - Divisional Court, H.E. Sachs, I.V.B. Nordheimer and N.J. Spies JJ., March 2, 2017. Digest No. TLD-Apr102017010