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Representation - Lawyers - Assessment of Lawyer's Bills (3). Nakano v. Cohen Highley LLP
In Nakano v. Cohen Highley LLP (Ont Div Ct, 2025) the Ontario Divisional Court critically reviews the solicitor-client assessment regime under the Solicitors Act:[4] The procedural history of this case demonstrates the confusion over the proper procedure for disputing the decision of an AO on a solicitor/client assessment.
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The Legislative Framework
Solicitor/Client Assessments
[6] The Solicitors Act[1] sets out the procedure for disputes over “fees, charges, and disbursements for business done by a solicitor.”
[7] Where the retainer of the solicitor is not disputed and there are no special circumstances, a client may request an order for the assessment of a bill.
[8] The Act describes the assessment as a “reference”. Subsection 6(5) describes the decision on the assessment as a “certificate” and provides that the certificate is confirmed “in the same manner as confirmation of a referee’s report under the Rules of Civil Procedure”.
[9] Subsection 6(9) states that a motion to oppose confirmation of the certificate shall be made to a judge of the Superior Court of Justice. Subrule 54.09(3)[2] sets out the requirements of a notice of motion to oppose confirmation.
Party and Party Costs Assessments
[10] Rule 58 of the Rules deals with the assessment of costs “where a rule or order provides that a party is entitled to the costs of all or part of a proceeding and the costs have not been fixed by the court…” (emphasis added). Costs are to be assessed by an Assessment Officer. As in a solicitor and client assessment, the AO is to set out the amount of costs assessed and allowed in a certificate.
[11] As Macleod J. noted in Moore v. John A. Annen Barrister Professional Corporation,[3] “Rule 58 deals with “assessment of costs” and not proceedings under the Solicitors Act” (emphasis added).
[12] Rule 58.10 provides for objections to an assessment:Objections to Assessment
58.10 (1) On request, the assessment officer shall withhold the certificate for seven days or such other time as he or she directs, in order to allow a party who is dissatisfied with the decision of the assessment officer to serve objections on every other interested party and file them with the assessment officer, specifying concisely the grounds for the objections
(2) A party on whom objections have been served may, within seven days after service or such other time as the assessment officer directs, serve a reply to the objections on every other interested party and file it with the assessment officer.
(3) The assessment officer shall then reconsider and review the assessment in view of the objections and reply and may receive further evidence in respect of the objections, and the assessment officer shall decide on the objections and complete the certificate accordingly.
(4) The assessment officer may, and if requested shall, state in writing the reasons for his or her decision on the objections. [13] Subsection 17(b) of the Courts of Justice Act[4] directs that an appeal lies to the Superior Court of Justice from “a certificate of assessment of costs issued in a proceeding in the Superior Court of Justice, on an issue in respect of which an objection was served under the rules of court” (emphasis added).
Conflation of the Procedures for Solicitor/Client and Party and Party Assessments
[14] Unfortunately, the objections procedure reserved for party and party assessments (costs of a proceeding) has been imported into the procedure for solicitor/client assessments. The Solicitors Act does not provide for objections. A motion to oppose confirmation of the certificate is to a judge of the Superior Court.
[15] The delivery of objections is a precondition to the issuance of a Certificate of Assessment, which grounds an appeal to the Superior Court on a party and party assessment.
[16] In RZCD Law Firm LLP v. Williams,[5] an appeal of a solicitor/client assessment, this court stated that it is an error to allow an appeal of a Certificate of Assessment without objections having been filed.[6] The court stated the following:[34] When an appeal is about the assessment officer’s jurisdiction; i.e., an appeal about the principle upon which the assessment proceeded or the fairness or natural justice of the assessment procedure rather than an appeal about particular items, then the appeal may proceed without objections having been made to the assessment officer.
[35] However, where the appeal from a certificate of assessment is confined to specific items in the solicitor’s bill, objections should be delivered, and if objections are not delivered, the appeal court may dismiss the appeal upon preliminary motion. [Citations omitted; emphasis added]. [17] The decisions relied upon by the Court in support of the statements at paragraphs 34 and 35 of RZCD were party and party assessments (see Campbell v. Baker; Robinson v. England; Snowden v. Huntington; Rowland v. Sackmar; Clark v. Virgo) and an assessment under the then Mental Incompetency Act (Re Avery). Although Brooker v. 626381 did involve a solicitor/client assessment, the core of that decision deals with an abuse of process by the client in the assessment process. Borden & Elliot v. Deer Home Investments ltd. and Wilson v. Gunn & Associates did involve solicitor/client assessments, but no authority was cited for the proposition that Rule 58.11 applies to solicitor/client assessments.
[18] In 1395804 Ontario Ltd. (c.o.b. Blacklock’s Reporter) v. Hameed,[7] this court declined to revisit whether RZCD was correct in deciding that objections were required to ground an appeal as that issue was not squarely before it on appeal.
[19] In Sullivan Mahoney LLP v. McDonald,[8] the court described whether objections were required on a solicitor/client assessment, as a “common confusion between the procedures for an assessment of an account under the Act and an assessment of costs under the Rules.”
[20] Judges in two recent decisions, Moore and Gilbert’s LLP v. David Dixon Inc.[9], have expressed frustration with the Solicitors Act as drafted. In Gilbert’s LLP, Nordheimer J., as he then was, described the language of the Solicitors Act as “confusing and problematic … render[ing] any coherent understanding of the objectives of that statue virtually impossible”.[10] MacLeod J. expressed a similar sentiment in Moore:... let me add my voice to those calling upon the legislature to review and update the Solicitor’s Act. In the interim I suggest the Rules Committee enact a clear procedure for assessment of lawyers’ accounts and approval of fee agreements.[11] [21] I accept that the objection procedure may be of some benefit in solicitor/client assessments, and I add my voice to those calling for legislative reform.
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