Almalki et al. v. The Attorney General of Canada et al.
[Indexed as: Almalki v. Canada (Attorney General)]
Ontario Reports
Court of Appeal for Ontario
Doherty, D.M. Miller and Paciocco JJ.A.
January 17, 2019
145 O.R. (3d) 140 | 2019 ONCA 26
Case Summary
Professions — Barristers and solicitors — Fees — Contingency fee
Contingency fee agreement providing that clients would join in application by solicitors under s. 28.1(8) of Solicitors Act for court approval of inclusion in fee payable to solicitors of percentage of amount paid to clients for legal costs — Motion judge correctly interpreting that provision as precluding clients from refusing to join in application on basis that "exceptional circumstances" did not exist — Provision not unenforceable on basis that it was contrary to s. 28.1(8) — Solicitors Act, R.S.O. 1990, c. S.15, s. 28.1(8).
Facts
The solicitors and clients entered into a contingency fee agreement which provided for the possibility of the solicitors applying to the court under s. 28.1(8) of the Solicitors Act for approval of the inclusion in the fee payable to them of a percentage of any amount paid to the clients for their legal costs, and required the clients to join in that application (paras. 15 and 16). The action was settled. The solicitors brought a motion for an order approving the settlement as it applied to the infant plaintiffs and approving the payment of legal fees under the terms of the contingency fee agreement. The pre-trial conference judge approved the terms of the settlement but, because the clients were contesting the solicitors' right to claim a portion of their legal costs, adjourned the issue concerning the contingency fee to another judge. The solicitors brought a supplementary motion seeking enforcement of the contingency fee agreement. The motion judge held that paras. 15 and 16 of the agreement were binding on the clients and that they were required to join in the application under s. 28.1(8). The motion judge subsequently held that the solicitors had established that "exceptional circumstances" existed and that they were therefore entitled to a portion of the amount paid to the clients as legal costs as part of the contingency fee agreement. The clients appealed.
Held
The appeal should be dismissed.
It was permissible for the solicitors to proceed by way of motion within the existing action rather than commencing a new proceeding by application. The word "apply" in s. 28.1(8) of the Solicitors Act merely indicates that the clients and solicitors must jointly put the matter before the court. An application was not the only mode of putting the matter before the court.
The motion judge correctly interpreted para. 16 as not leaving the clients free to take the position that there were no "exceptional circumstances" for the purposes of s. 28.1(8) of the Solicitors Act. One cannot "join in" an application and at the same time oppose that application. Paragraph 16 was not unenforceable on the basis that it was contrary to s. 28.1(8) of the Act. To facilitate access to justice, the Act contemplates fees that may include a payment by way of a premium of an amount from any costs paid to the client. The Act imposes no limitation on the parties agreeing to that payment, apart from requiring that the parties apply jointly for payment and that the court make its own determination of whether exceptional circumstances exist. The clients were not left unprotected by the motion judge's interpretation of s. 28.1(8). In determining whether "exceptional circumstances" exist, a judge hearing a s. 28.1 application will bear in mind his or her obligation to protect the client's interests. Moreover, the client can seek an assessment of the fees generated under the contingency fee agreement, including any payment of a premium, pursuant to ss. 23 and 24 of the Act.
The motion judge did not err in finding that "exceptional circumstances" existed in this case.
Appeal from the Orders
APPEAL from the orders of Chiappetta J. of the Superior Court of Justice dated June 5, 2017; June 23, 2017, 2017 ONSC 3857 (S.C.J.); and September 14, 2017 (S.C.J.).
Counsel:
Peter I. Waldmann, for appellants.
J. Thomas Curry and Tiffany M. O'Hearn Davies, for respondent, Stockwoods LLP.
Judgment
The judgment of the court was delivered by DOHERTY J.A.:
I. Overview
[1] This appeal arises out of a contingency fee agreement between the appellants and the law firm Stockwoods LLP ("Stockwoods"). More specifically, it concerns Stockwoods's entitlement under the terms of the agreement to a percentage of the settlement that was paid to the appellants for their legal costs.
[2] The motion judge held that Stockwoods was entitled to payment of that amount. The appellants claim that she erred in so holding. I would dismiss the appeal.
II. Background
[3] In March 2006, the appellants sued the Government of Canada for millions of dollars. The claim arose out of Abdullah Almalki's detention and torture in Syria, and the alleged complicity of the Canadian Government in that detention and torture. The other plaintiffs in the action were Mr. Almalki's wife, children and parents.
[4] In late 2008, Mr. Almalki approached Stockwoods about the possibility of acting for the appellants in their action against the Government of Canada. After about six weeks of negotiation, Stockwoods and the appellants entered into a contingency fee agreement, and Stockwoods assumed carriage of the action in early 2009. Mr. Almalki had retained his original lawyers on a contingency fee basis as well.
[5] At the same time that the appellants retained Stockwoods, Stockwoods took on two other clients who were advancing very similar claims against the Government of Canada. Those clients entered into virtually identical contingency fee agreements with Stockwoods.
[6] The three actions settled in early 2017. The settlement provided that the appellants were to receive a specified amount as damages and a separate specified amount for their legal costs. The settlement also included certain non-monetary terms.¹
[7] On March 21, 2017, Stockwoods, on behalf of the appellants, brought a motion for an order approving the settlement as it applied to the infant plaintiffs and approving the payments of legal fees under the terms of the contingency fee agreement. The approval of the settlement was not opposed. However, in the notice of motion, Stockwoods indicated that, on the day before the motion was to be heard, Mr. Almalki had advised Stockwoods that the appellants intended to contest Stockwoods's right under the contingency fee agreement to claim a portion of the amount paid to the appellants by the Government of Canada for their legal costs.
[8] The Solicitors Act, R.S.O. 1990, c. S.15 (the "Act") permits contingency fee agreements to include all or a portion of legal costs obtained as part of a settlement if two conditions are met. First, the solicitor and client must jointly apply to a judge for approval of the payment. Second, the judge must be satisfied that there are exceptional circumstances justifying the payment. Mr. Almalki contended that he had not agreed that exceptional circumstances existed and that he should be allowed to oppose the payment of the portion of the legal fees claimed by Stockwoods. Stockwoods agreed that this issue should be dealt with separately from the approval of the settlement.
[9] The pre-trial conference judge approved the terms of the settlement. At the request of counsel for the appellants, he adjourned the issue concerning the contingency fee agreement to another judge.
[10] Stockwoods brought forward a supplementary notice of motion seeking enforcement of the contingency fee agreement. That motion came before a different judge (the "motion judge"). Over the objection of counsel for the appellants, the motion judge ordered that the matter proceed by way of motion and that Stockwoods was not required to commence a new proceeding by way of application.
[11] On June 23, 2017, the motion judge held that the relevant provisions in the contingency fee agreement were valid and binding on the appellants. Under those provisions, and in particular para. 16, the appellants were required to join Stockwoods in its application for court approval to include in the fee payable to Stockwoods part of the amount paid to the appellants as costs. The motion judge held that the appellants were required by the agreement to support Stockwoods's application, and that they could not lead evidence or make submissions opposing Stockwoods's request for court approval of the payment: Almalki v. Canada (Attorney General), 2017 ONSC 3857 (S.C.J.).
[12] On September 14, 2017, the motion judge held that Stockwoods had established that "exceptional circumstances" existed. Accordingly, Stockwoods was entitled to a portion of the amount paid to the appellants as legal fees as part of the contingency fee agreement. She approved the payment of the portion of the costs as set out in para. 16 of the contingency fee agreement. She also awarded Stockwoods its costs on the motions in the amount of $60,000.
III. The Terms of the Contingency Fee Agreement
[13] Paragraph 4 of the contingency fee agreement provided that Stockwoods would receive a percentage of any settlement or judgment obtained by the appellants. The percentage depended on the timing and amount of the judgment or settlement. Paragraph 5 gave examples of the relevant calculations.
[14] In para. 19 of the agreement, the appellants undertook to consent to court approval of the contingency fee agreement. Paragraph 8, however, expressly preserved the appellants' right to apply to a court for a determination of whether the fees ultimately charged under the agreement were "fair and reasonable". The clients had six months from the receipt of Stockwoods's bill to apply for that assessment.
[15] In para. 11, the appellants acknowledged that they had been informed by Stockwoods that they should obtain independent legal advice before signing the contingency agreement. The appellants further acknowledged that they had an opportunity to seek independent legal advice before signing the agreement.
[16] Paragraph 16, and, to a lesser extent, para. 15 of the contingency fee agreement are at the centre of this litigation. Paragraph 16 provides for the possibility of Stockwoods applying to the court for approval to include in the fee payable to Stockwoods a percentage of any amount paid to the appellants by the Government of Canada for legal fees. That amount would be in addition to the percentage of any settlement or judgment owed to Stockwoods under para. 4 of the agreement.
[17] Paragraph 15 reads in part:
Unless otherwise ordered by a Court, the Clients are entitled in the first instance to receive any legal costs awarded by the Court, on a partial indemnity scale or substantial indemnity scale, if the Clients are the party entitled to legal costs.
[18] Paragraph 16 of the agreement states:
However, the Clients and Stockwoods LLP acknowledge and agree that, given the exceptional circumstances that may arise in this case and subject to the Court's approval, their mutual intent is that if the Clients receive any settlement, judgment or other recovery amount that includes an award of legal costs (including any such award for fees or disbursements), then any such amounts received by the Clients as legal costs be included in the net amounts to which the Fee calculation in para. 4 of this agreement is applied. Accordingly, if requested by Stockwoods LLP, the Clients agree to join in an Application under s. 28(8) [sic] of the Solicitors Act R.S.O. 1990, c. S-15 for approval by the Court of the payment to Stockwoods LLP of an appropriate percentage portion of any legal costs amounts received, by way of settlement, judgment, or otherwise.
[19] I will return to the language of para. 16 in more detail below.
IV. Relevant Provisions of the Solicitors Act
[20] Subject to exceptions which are irrelevant to this case, s. 28.1 of the Act allows solicitors and clients to enter into contingency fee agreements. The content of those agreements is circumscribed by the Act and regulations made under the Act. Contingency fee agreements are also subject to assessment under the "fair and reasonable" standard set down in ss. 23 and 24 of the Act: see Cookish v. Paul Lee Associates Professional Corp., 2013 ONCA 278, 39 C.P.C. (7th) 227, at paras. 42-43; Raphael Partners v. Lam, 61 O.R. (3d) 417; Henricks-Hunter (Litigation guardian of) v. 814888 Ontario Inc. (c.o.b. Phoenix Concert Theatre), 2012 ONCA 496, 28 C.P.C. (7th) 227.
[21] Section 28.1(8) is the key provision of the Act for present purposes. It provides:
28.1(8) A contingency fee agreement shall not include in the fee payable to the solicitor, in addition to the fee payable under the agreement, any amount arising as a result of an award of costs or costs obtained as part of a settlement, unless,
(a) the solicitor and client jointly apply to a judge of the Superior Court of Justice for approval to include the costs or a proportion of the costs in the contingency fee agreement because of exceptional circumstances; and
(b) the judge is satisfied that exceptional circumstances apply and approves the inclusion of the costs or a proportion of them.²
[22] Section 28.1(8) does two things. The first part of the section prohibits a term in a contingency fee agreement that provides for payment to the lawyer of all or part of an amount paid to the client for legal fees, in addition to any other amount owed under the contingency fee agreement. In other words, a lawyer cannot take a percentage of the amount paid to the clients for damages and a percentage of the amount paid for legal fees.
[23] The prohibition in the first part of s. 28.1(8) is, however, qualified by the exception set out in the rest of the section. That exception applies if the two criteria set down in subsections (a) and (b) are met. Subsection (a) requires that the solicitor and client bring a joint application before the court seeking approval of the term providing for payment of all or a portion of the costs paid to the client. Subsection (b) requires that the court be satisfied that "exceptional circumstances" exist justifying the inclusion of the provision requiring payment of all or part of the costs awarded to the client to his lawyer as part of the contingency fee agreement. The payment contemplated by s. 28.1(8) is referred to in some of the cases as a "premium". A contingency fee agreement that requires approval under s. 28.1(8) is not enforceable unless approved by the court: s. 28.1(9).
V. The Issues
[24] The appellants raise four issues on appeal:
Was Stockwoods permitted to proceed by way of motion in the action in seeking approval of the contingency fee agreement, or was it required to commence a new proceeding by way of application?
What is the correct interpretation of para. 16 and is it enforceable against the appellants?
Were the appellants wrongly denied the opportunity to make submissions on the existence of "exceptional circumstances"?
Did the court err in finding exceptional circumstances?
[25] In their factum, the appellants also seek leave to appeal the costs order made by the motion judge.
A. Could Stockwoods Proceed by Way of Motion?
[26] The appellants submit that s. 28.1(8) of the Act precluded Stockwoods from proceeding by way of motion within the existing action. Section 28.1(8) requires the solicitor and client to "jointly apply" for an order approving a contingency fee agreement that includes payment of costs paid to the client. According to the appellants, s. 28.1(8) required that Stockwoods initiate a new proceeding by way of application, rather than bring a motion in the existing action.
[27] I do not accept this submission. I do not read the word "apply" in s. 28.1(8) as referencing the need to bring a formal application as described in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. I read the word in a more generic way, as simply indicating that the parties must jointly put the matter before the court seeking the approval contemplated under the section: see 56 King Inc. v. Aviva Canada Inc., 2017 ONCA 408, at para. 4.
[28] In this case, the motion under s. 28.1(8) was brought with a motion for approval of the settlement as it related to the infant plaintiffs. The request to approve the settlement was properly brought by way of motion under rule 7.08. A motion for approval of a contingency fee agreement applicable to infant plaintiffs may also be brought as part of a motion for approval of the settlement: Contingency Fee Agreements, O. Reg. 195/04, s. 5(1)(b).
[29] The enforceability of the contingency fee agreement as against all of the appellants is, in my view, properly viewed as part of the motion for the approval of the settlement and the contingency fee agreement as it relates to the infant plaintiffs. The outcome of the arguments raised by Mr. Almalki challenging the contingency fee agreement would, if successful, impact on the infant plaintiffs as well as Mr. Almalki.
[30] I do not suggest that the matter could not have been properly brought forward by way of an application: see Solicitors Act, ss. 23, 28.1(11). In my view, however, an application was not the only mode of putting the matter before the court. The issues arising out of para. 16 of the contingency fee agreement were sufficiently connected to the motion brought for approval of the settlement and contingency fee agreement as applied to the infant plaintiffs to be, in reality, part of the same motion.
[31] I also agree with the motion judge that the appellants have shown no prejudice flowing from proceeding by way of motion rather than by application. The prejudice claim advanced by the appellants in this court rests, not in the nature of the procedural vehicle used to bring the matter forward, but rather in the motion judge's conclusion that the appellants, by virtue of agreeing to para. 16 of the contingency fee agreement, were required to support Stockwoods's motion under s. 28.1(8). There is no reason to think that the motion judge's analysis or conclusion would have been different had she addressed the issue wearing her application judge's hat rather than her motion judge's hat.
B. What Does Paragraph 16 Mean and Is It Enforceable?
[32] The motion judge interpreted para. 16 of the contingency fee agreement as requiring the appellants to support Stockwoods's application for a payment of a portion of the legal fees paid to the appellants as part of the settlement. The motion judge held that the appellants could not oppose the application or offer evidence to challenge the existence of the requisite "exceptional circumstances".
[33] The appellants attack this holding on two fronts. First, they submit that, on a proper interpretation, para. 16 does not preclude the appellants from opposing the motion under s. 28.1(8). Second, they argue that if the motion judge properly interpreted para. 16, it contravenes s. 28.1(8) of the Act and cannot be enforced.
[34] The arguments advanced on behalf of the appellants focus on the meaning and enforceability of para. 16 of the contingency fee agreement, and its interplay with s. 28.1(8) of the Act. Despite some of the assertions made in Mr. Almalki's affidavits about Stockwoods's dockets and their conduct of his case, there is no claim, apart from the challenge to para. 16 of the agreement, to the terms of the contingency fee agreement or the fee claimed under para. 4 of the agreement. The appellants have not sought to assess the fees under the "fair and reasonable" standard in ss. 23 and 24 of the Act.
(i) The Interpretation of Paragraph 16
[35] As often happens, the parties disagree over the standard of review applicable to the submission that the motion judge erred in her interpretation of para. 16 of the contingency fee agreement. I will assume, in keeping with the appellants' submission, that correctness is the appropriate standard. For the reasons that follow, I view the motion judge's interpretation as the only reasonable interpretation of para. 16 available, and therefore the correct interpretation.
[36] This contingency fee agreement was the product of lengthy negotiation between Mr. Almalki and Stockwoods. Several drafts of the agreement were exchanged and modified. Stockwoods recommended to Mr. Almalki that he obtain independent legal advice and he did so. According to Mr. Almalki, he did not seek advice about the meaning of para. 16.
[37] The Government of Canada made various offers to settle. Stockwoods explained the fee ramifications of these offers to Mr. Almalki, including the payment of a portion of the amount attributable to his costs to Stockwoods according to para. 16. Mr. Almalki had no questions about para. 16.
[38] According to Mr. Almalki's affidavit, he first raised para. 16 with Stockwoods shortly before the motion to approve the settlement because a plaintiff in one of the other two related actions questioned whether Stockwoods's contingency fee could include a proportion of the costs paid as part of the settlement. Mr. Almalki followed up on the question raised by the other plaintiff and eventually decided to object to para. 16. The question posed by the other plaintiff would, of course, have made no sense to Mr. Almalki unless he understood that the agreement he had signed contemplated that Stockwoods would be paid a proportion of any legal costs paid to him by the Government of Canada.³
[39] In her June 23, 2017 ruling, the motion judge acknowledged that contingency fee agreements were subject to closer scrutiny than purely commercial contracts. She went on, after a review of the relevant evidence, to hold, at para. 21:
In this case however, there is no evidence of fraud, duress, mistake of fact or unconscionability. There is no evidence of Mr. Almalki's failure to understand the fee agreement or specifically the effect of the language of paragraph 16. There is no evidence that the plaintiffs were misled by Stockwoods.
[40] The record fully supports these findings and I would defer to them.
[41] The language of paras. 15 and 16 is free of any ambiguity or uncertainty. Paragraph 15 acknowledges that the appellants are initially entitled to receive any amount awarded or paid to them as costs. Paragraph 16 qualifies para. 15 by providing that Stockwoods and the appellants mutually intend that, should exceptional circumstances arise, Stockwoods's fee should be calculated to include a portion of the amount paid by the Attorney General to the appellants for legal costs. The appellants undertake to join Stockwoods in an application for court approval of that payment.
[42] The appellants submit that para. 16 contemplates a joint application to the court, but leaves the appellants free to take the position that there are no "exceptional circumstances" justifying approval of the payment called for by para. 16. In the same vein, the appellants submit that the phrase "exceptional circumstances that may arise in this case" in para. 16 indicates that those circumstances did not exist as of the making of the agreement, and leaves open the question of whether there would be "exceptional circumstances" as of the time of the application called for in para. 16. The appellants contend that para. 16 contemplates that the client would be free to assess the circumstances at the time of Stockwoods's application and determine whether to support Stockwoods's claim that "exceptional circumstances" existed justifying the payment.
[43] I cannot accept either submission. Paragraph 16 reads in part:
If requested by Stockwoods LLP, the clients agree to join in an application under s. 28(8) [sic] of the Solicitors Act, R.S.O. 1990, C. s. 15, for approval by the court of the payment to Stockwoods LLP.⁴
[44] The words plainly declare that the clients will, if asked by Stockwoods, "join in" Stockwoods's request for approval. To agree to "join in" an application is to agree to support that application. One cannot "join in" an application and at the same time oppose that application.
[45] The appellants' reading of para. 16 is untenable in light of s. 28.1(8)(a) of the Act. That subsection requires that, as a precondition to the court considering whether exceptional circumstances exist, the solicitor and client must jointly apply for approval. The client in effect has a veto over the making of the application. Unless the client has committed to supporting the application, the lawyer will have no opportunity to convince the court that the required "exceptional circumstances" exist. If the appellants' interpretation of para. 16 of the contingency fee agreement is correct, the parties agreed that the appellants would, on the one hand, join in the application, but on the other hand, effectively maintain a veto over the court's consideration of whether "exceptional circumstances" justified an order under s. 28.1(8). I cannot accept this interpretation of the agreement.
[46] Nor, in my view, does the phrase "exceptional circumstances that may arise in this case" assist the appellants. The phrase simply recognizes that as of the date of the agreement no determination had been, or indeed could have been, made with respect to the existence of "exceptional circumstances". That determination is for the court at the time the application for approval of the payment is brought.
(ii) Is Paragraph 16 Unenforceable?
[47] The appellants next submit that if the motion judge properly interpreted para. 16 of the contingency fee agreement, the agreement is unenforceable as contrary to s. 28.1(8) of the Act. The appellants submit that the Act, and in particular s. 28.1(8), is consumer protection legislation designed to protect clients who are often at a very real disadvantage when negotiating fee arrangements with their lawyers: see Zeppieri & Associates v. Gupta, 2016 ONSC 6491 (S.C.J.), at para. 22.
[48] The appellants further submit that payment of a portion of the client's costs as part of the lawyer's contingency fee is very much the exception under the Act, and is limited to situations in which there are "exceptional circumstances". The appellants argue that to properly protect themselves, clients must be able to challenge a lawyer's claim that "exceptional circumstances" justify the payment of the premium. A contingency fee agreement which requires the client to commit to supporting the lawyer's application at a point in time when the client cannot make an informed assessment of the circumstances effectively allows the lawyer to contract out of one of the two protections provided to the client by s. 28.1(8): see Jean Estate v. Wires Jolley LLP, 2009 ONCA 339, at para. 82.
[49] I accept the appellants' characterization of the Act as consumer protection legislation. However, the Act is also intended to facilitate access to justice by providing for contingency fee agreements. These agreements allow clients who could not afford to retain counsel through traditional retainers to secure legal representation. Contingency fee agreements have proven particularly valuable in complex, expensive litigation in which the outcome is very much in doubt.
[50] To facilitate access to justice, the Act contemplates fees that may include a payment by way of a premium of an amount from any costs paid to the client. The Act imposes no limitation on the parties agreeing to this payment. Section 28.1(8) does, however, require that the parties jointly apply for payment and that the court make its own determination of whether the circumstances of the case justify the payment.
[51] Nor is the client placed in an unfair position by a provision in a contingency fee agreement which requires the client to eventually support the lawyer's application for payment of a premium. Presumably, a client who agrees to give up the effective veto over the payment contemplated by s. 28.1(8) does so upon a consideration of the other terms of the contingency fee agreement, and in particular the percentage of the damages the client will be required to pay to the lawyer under the agreement.
[52] Mr. Almalki was also in a position to assess the likelihood of "exceptional circumstances" developing in the course of this litigation. Anyone familiar with the nature of this lawsuit -- and Mr. Almalki certainly was -- would have had no difficulty anticipating that this litigation would be anything but routine and straightforward.
[53] The interpretation favoured by the motion judge also promotes the effective operation of the client and solicitor relationship in cases where the retainer involves a contingency fee agreement. The motion judge made this point, at para. 19:
Securing the clients' agreement to jointly apply to the court pursuant to s. 28.1(8) of the Act at the commencement of the solicitor and client relationship is not limited by the Act. There is good reason for this. The purpose of a contingency fee agreement in part is for the client and the lawyer to fully understand and agree to all terms that will determine the amount of money received by each party upon the completion of the solicitor and client relationship. The agreement provides both the lawyer and the client with equal expectations of legal fees that the client cannot otherwise pay for throughout the course of the litigation. It is prudent therefore for the parties to negotiate, agree and set out their intention concerning exceptional circumstances at the beginning of the relationship. This prevents conflict at the end of the relationship as a result of second thoughts or a reconsideration of fees and highlights the potentially impactful consequences of judicial approval in this regard on the distribution of the amounts recovered.
[54] The appellants are not left unprotected by the motion judge's interpretation of s. 28.1(8). The Act protects the interests of the client in at least two ways. First, the judge hearing the s. 28.1(8) application must be convinced that "exceptional circumstances" exist. In making that assessment, the court will bear in mind its obligation to protect the client's interests. Second, the client can seek an assessment of the fees generated under the contingency fee agreement, including any payment of a premium, pursuant to ss. 23 and 24 of the Act. Those fees must be "fair and reasonable".
[55] I am satisfied that the terms of para. 16 of the contingency fee agreement are consistent with s. 28.1(8) of the Act. Paragraph 16 recognizes that the client and the lawyer must bring a joint application as required by the section. It also recognizes that, despite the joint application, the court must still determine whether "exceptional circumstances" exist. The appellants' decision to agree to make the joint application, if requested by Stockwoods, reflects the requirements of the Act and does not, in my view, constitute a "contracting out" of those requirements.
C. Were the Appellants Denied the Opportunity to Make Submissions on the Question of "Exceptional Circumstances"?
[56] The appellants present this submission as a procedural due process issue. It is, in my view, a reformulation of the argument that by agreeing to bring a joint application with Stockwoods for court approval of the payment, the appellants were not agreeing to support the application. I have addressed that argument in the context of the submissions respecting the proper interpretation of para. 16 of the agreement, which required the appellants to support Stockwoods's application.
[57] My reading of para. 16 disposes of any procedural fairness argument. Procedural fairness does not demand that the appellants be given the opportunity to do something they promised they would not do.
D. Did the Motion Judge Err in Finding "Exceptional Circumstances"?
[58] The motion judge's reasons dated September 14, 2017 set out in detail the many reasons why she was satisfied that there were "exceptional circumstances" justifying the payment to Stockwoods under para. 16 of the contingency fee agreement. I do not propose to repeat those reasons.
[59] It is sufficient for my purposes to indicate that the factors identified by the motion judge were properly considered by her. Those factors included the factual and legal complexity of the litigation, the substantial financial risk assumed by Stockwoods during the several years in which it represented the appellants, the significant importance of the litigation -- not only to the parties, but to the public -- and the immense resources expended by Stockwoods in achieving what was a very good result for the appellants. In my view, these factors, all of which were supported by the record before the motion judge, justified the motion judge's finding of "exceptional circumstances".
VI. Should Leave to Appeal the Motion Judge's Costs Order Be Granted?
[60] The appellants did not make oral submissions on this issue. Stockwoods was successful in the proceedings before the motion judge and was clearly entitled to its costs on a partial indemnity basis.
[61] The appellants submit that this court should grant leave to consider whether the record before the motion judge properly established that costs should include time expended by Stockwoods's lawyers in respect of the motion. It does not appear that this was argued before the motion judge. In any event, I agree with counsel for Stockwoods that there is no arguable case against the entitlement of costs in relation to the time spent by the Stockwoods lawyers on the motion. Indeed, using lawyers familiar with the file may well have reduced the costs.
[62] I would not grant leave to appeal the costs order.
VII. Conclusion
[63] I would dismiss the appeal. Stockwoods is entitled to its costs of the appeal on a partial indemnity basis. Having reviewed the costs outline submitted by the parties, I would order costs in the amount of $32,000, inclusive of relevant taxes and disbursements.
Appeal dismissed.
Notes
¹ The motion record filed in the Superior Court of Justice for approval of the settlement was ordered sealed by McEwen J. on March 21, 2017. That order was continued by the order of Hoy A.C.J.O. dated June 20, 2018.
² Section 28.1(8) is to be repealed on a date to be proclaimed: Plan for Care and Opportunity Act (Budget Measures), 2018, S.O. 2018, c. 8, Sch. 31, s. 3(1).
³ The plaintiffs in the other two related actions have not challenged the contingency fee agreements.
⁴ The reference to s. 28(8) is clearly intended to be a reference to s. 28.1(8).
End of Document
