Executive Summary: Key Legal and Evidentiary Issues

• Disputes over lawyer fee charges fall exclusively within the jurisdiction of Superior Court Assessment Officers and cannot be heard by Small Claims Court.
• The Solicitors Act functions as consumer protection legislation granting clients the right to seek bill assessment within 12 months of delivery without special leave.
• Small Claims Court lacks statutory authority to reduce or adjust legal accounts in the manner available to assessment officers or judges.
• Section 110 of the Courts of Justice Act permits transfer of matters between courts when filed in the wrong forum, though transfer may be declined when the client has already paid the account.
• Allegations of fraudulent billing and overcharging require determination by an Assessment Officer rather than proceedings in Small Claims Court.
• Payment of the disputed account after the retainer period ended triggered the requirement for "special circumstances" approval before assessment could proceed.

Background and retainer agreement

Xiangwei Chen retained the respondents Ge Li and Achkar Law Professional Corporation (ALPC) to commence an employment law and human rights claim against her former employer. Chen paid an initial retainer of $5,000.00 to commence the proceedings. The respondent Li began preparing legal materials on Chen's behalf, including a draft demand letter to be sent to Chen's former employer. Approximately one month into the retainer period, Chen reviewed the draft demand letter prepared by Li and determined she was dissatisfied with its content and legal approach. As a result of her concerns with the quality and direction of the work, Chen made the decision to terminate the retainer agreement with the respondents.

The fee invoice and client complaint

Following termination of the retainer, the respondent Li prepared an invoice for the legal services rendered during the approximately one-month period of representation. The invoice totaled $4,890.08, which included professional fees, disbursements, and Harmonized Sales Tax (HST). The respondent ALPC paid this invoice directly from Chen's retainer deposit and issued a refund to Chen of the remaining balance of $109.02. Chen believed she had been overcharged for the services provided and asserted that the invoice was unreasonable given the limited scope of work performed and the short duration of the retainer. Dissatisfied with the response from the respondents regarding the invoice, Chen filed a formal complaint with the Law Society of Ontario (LSO) alleging that she had been overcharged. During her complaint process, a representative of the LSO advised Chen to contact the Assessment Office. Chen followed this direction and attended at the Assessment Office. Subsequently, the LSO sent Chen a letter explaining that the Assessment Office of the Superior Court of Justice, not the Law Society, has jurisdiction over assessment matters, and that a court officer known as an Assessment Officer may review and adjust a lawyer's account in appropriate circumstances. Following receipt of the LSO letter, Chen attended at the civil intake office where she was instructed to proceed to Small Claims Court.

Small Claims Court proceedings and strike motion

Acting on the direction she received, Chen commenced a claim in the Toronto Small Claims Court in March 2024, approximately five months after terminating her retainer with the respondents. Her claim sought the return of her entire $5,000 retainer on the basis that she had been overcharged for the limited legal services provided. The respondents promptly brought a motion to strike the claim pursuant to Rule 12.02 of the Small Claims Court Rules, arguing that the claim disclosed no reasonable cause of action and constituted an inflammatory, wasteful, and abusive use of court process. On January 16, 2025, Deputy Judge Vicars of the Toronto Small Claims Court granted the respondents' motion to strike. In her decision, the Deputy Judge found that the Small Claims Court possessed no jurisdiction to hear Chen's claim because the dispute concerned the assessment and reduction of legal fees, which falls exclusively within the jurisdiction of the Superior Court's Assessment Office. The Deputy Judge cited the binding precedent established in Zeppieri & Associates v. Gupta, noting that the Small Claims Court has no jurisdiction to reduce or adjust a lawyer's bill in the manner available to an assessment officer or judge. Since the fees charged by the respondents constituted the sole issue to be determined in the lawsuit, the Deputy Judge concluded it would be a waste of time for the matter to proceed. The plaintiff was ordered to pay costs to the defendants in the amount of $304 inclusive of disbursements.

Grounds for appeal

Chen appealed the decision to the Divisional Court, raising several arguments. She submitted that the Deputy Judge's decision to strike her claim was unreasonable and failed to properly consider her position. She further argued that the Deputy Judge erred in refusing to transfer her claim to the Superior Court's Assessment Office where it could be properly heard. Additionally, Chen made serious allegations that one lawyer for ALPC, Filip Pejovic, had lied in his affidavit submitted in support of the motion, and that counsel for the respondents, Brett Hughes, had made false accusations about the appellant. Chen also asserted that ALPC's invoice had fraudulently overcharged her by billing for work performed before the retainer commenced, after the retainer ended, work not actually performed during the retainer period, and for services provided by legal staff whom she had not retained.

Divisional Court analysis and jurisdiction

Justice M.D. Faieta of the Divisional Court heard the appeal on October 21, 2025, and applied the appellate standard of review, which requires correctness for errors of law and palpable and overriding error for factual errors or errors of mixed fact and law. The court first addressed the foundational question of whether the Small Claims Court possessed jurisdiction over disputes concerning the assessment of lawyer fees. The court confirmed that pursuant to the Solicitors Act, which operates as a consumer protection statute rather than a monopoly protection measure, clients possess the right to refer their lawyer's bills to assessment if they believe the amount charged is not fair and reasonable. However, this assessment right must be exercised through the proper forum of the Superior Court's Assessment Office. The Small Claims Court lacks the statutory jurisdiction and procedures to reduce or adjust a lawyer's bill in the manner that an assessment officer or judge can, except where all parties agree. The court upheld the Deputy Judge's ruling that Chen's claim, which sought the return of her entire retainer based on alleged overcharging, was in essence asking the Small Claims Court to reduce the respondents' account. Since this fell squarely outside the Small Claims Court's jurisdiction, the Deputy Judge did not err in striking the claim.

Transfer analysis and Solicitors Act limitations

Regarding Chen's argument that the Small Claims Court should have transferred the matter to the Assessment Office, the Divisional Court examined Section 110 of the Courts of Justice Act, which provides that where a proceeding or step in a proceeding is brought before the wrong court, judge, or officer, it may be transferred or adjourned to the proper court, judge, or officer. The court acknowledged that in McTague Law Firm LLP v James, a Small Claims Court judge had held that the Small Claims Court possesses the jurisdiction to transfer a matter to an Assessment Officer. However, the Divisional Court determined that transfer should be declined in Chen's circumstances. Under Section 4(1) of the Solicitors Act, a client may apply to have their lawyer's bill assessed within 12 months of its delivery without requiring special leave. However, after 12 months have elapsed, or after the client has paid the account, the client must demonstrate "special circumstances" to obtain an assessment. Since Chen had already paid the $4,890.08 invoice in full through the application of her retainer deposit, she was no longer within the protected 12-month period and would need to satisfy the "special circumstances" requirement. The court found it appropriate to decline the transfer request under these circumstances, and therefore the Deputy Judge did not err in refusing to transfer the claim.

Allegations against counsel and Assessment Officer role

Justice Faieta noted that Chen's appeal focused heavily on allegations that the respondents' lawyers had lied in their affidavits and submissions to the Small Claims Court, and that the Deputy Judge had erred in not addressing these serious allegations. The court found it was appropriate for the Deputy Judge to refrain from addressing these allegations given that the Small Claims Court lacked jurisdiction over the matter entirely. The judge stated that any such allegations concerning fraudulent billing, misrepresentations, or improper charges would be matters for an Assessment Officer to determine if Chen sought an assessment to challenge the amount of fees and was granted the necessary leave to do so.

Outcome and costs

The Divisional Court dismissed Chen's appeal and upheld the decision to strike her claim. The successful parties in this matter were the respondents, Ge Li and Achkar Law Professional Corporation. The Divisional Court awarded the respondents costs of $2,339.10, inclusive, on a partial indemnity basis. This award was in addition to the $304 in costs previously ordered by Deputy Judge Vicars in the Small Claims Court, bringing the total costs awarded in favor of the respondents to $2,643.10. The decision was released on October 23, 2025.