Court of Appeal for Ontario
Date: 2017-01-31 Docket: C62453 Judges: Benotto, Brown, and Miller JJ.A.
Parties
Between
Fancy Barristers, P.C., Hassan Fancy, Nathaniel Hughes, by his Litigation Guardian Adam Hughes, Adam Hughes, personally, and Dawn Pearson
Appellants
and
Morse Shannon, LLP
Respondent
AND BETWEEN
Fancy Barristers, P.C., Hassan Fancy, Ibrahim Nasir, by his litigation guardian Tahir Nasir, and Tahir Nasir, personally
Appellants
and
Morse Shannon, LLP
Respondent
Counsel
Shahzed Siddiqui, for the appellants
Jerome R. Morse, for the respondent
Hearing and Appeal
Heard: January 23, 2017
On appeal from: the judgment of Justice D.A. Wilson of the Superior Court of Justice, dated June 27, 2016.
Endorsement
Background
[1] This appeal involves a dispute between law firms that resulted in a charging order granted by the application judge for fees.
[2] Fancy Barristers P.C. ("Fancy") was retained on a contingency fee basis by two minor plaintiffs in two separate actions: one for medical negligence; and the other for motor vehicle injury. Both clients signed agreements with Fancy in the following terms:
…the client agrees to pay to Fancy Barristers P.C. as and for their fees, twenty five percent (25%) of all amounts recovered on the client's behalf (paid and received) plus party and party costs plus GST excluding costs and disbursements, regardless of the source of said recovery, in respect of client's claims. The client shall also pay for disbursements and for GST on the fees and disbursements which shall likely be collected from the insurer.
[3] Fancy then retained Morse Shannon LLP ("Morse") pursuant to two agency agreements to assist with pursuing the two claims. The agency agreements provided that Morse and Fancy would split the fees in the two actions after repayment for docketed time and disbursements.
[4] Morse spent time on the two actions and incurred fees and disbursements. However, the relationship between Morse and Fancy broke down and eventually Fancy terminated the agency agreements. Fancy did not pay Morse for its docketed time or disbursements. Nor did Fancy provide an undertaking to pay Morse out of any eventual proceeds from the actions.
Application for Charging Orders
[5] Morse applied for charging orders in both actions under s. 34 of the Solicitors Act, R.S.O. 1990, c. S.15, to ensure that it would be paid out of any eventual proceeds.
[6] The application judge granted the orders.
Grounds of Appeal
[7] Fancy appeals, and submits that the application judge erred by granting the charging orders. It submits that Morse does not have a retainer agreement with the minor plaintiffs; that there was no outstanding account between Morse and the minor plaintiffs; that the test to obtain a charging order was not met, as there was no fund yet in existence; that the order is inequitable; and that the order should have been limited to a specific amount.
[8] We do not accept these submissions.
Analysis of the Charging Order Test
[9] Section 34 of the Solicitors Act provides that the court may grant a charge on property recovered or preserved through the instrumentality of the solicitor for the solicitor's fees, costs, charges and disbursements. The test for a charging order is well-established: see Thomas Gold Pettinghill LLP v. Ani-Wall Concrete Forming Inc., 2012 ONSC 2182, 349 D.L.R. (4th) 431, at paras. 84-88. Here, the respondent Morse was employed to prosecute the litigation; the funds – in the form of a chose in action - were in existence at the time the order was granted; the funds were recovered through the instrumentality of the lawyer; and, as found by the application judge, there was evidence that the lawyer's account would not be paid. The application judge applied this test and there is no reason to interfere with the exercise of her discretion.
Scope of the Charging Order
[10] During the course of oral argument, the panel raised the terms of the charging order which appear to cover the entire proceeds of the plaintiffs' recovery, not just the 25% referred to in the agreements. Fancy relied on this as a further ground to set aside the order. However, Morse acknowledged that it was never its intent to interpret the order to apply to the entire proceeds. It referred to the notice of application and the claims made against Fancy in support of this position. In our view, had this issue been raised as the only ground of appeal, Morse would have consented and the appeal would not have been necessary. It is clear in the application judge's comments that the charging order was to apply to the 25% plus fees and disbursements only, not the entire recovery. The order may, if necessary, be amended accordingly.
Allegation of Judicial Bias
[11] Fancy further submitted that the application judge was biased. It relies on the fact that she appears to have changed her view on certain points.
[12] There is a strong presumption of judicial impartiality and a heavy burden on a party who seeks to rebut this presumption. Judicial impartiality has been called "the key to our judicial process": Wewaykum Indian Band v. Canada, 2003 SCC 45, [2003] 2 S.C.R. 259, at para. 59. Nothing in the material before us comes close to rebutting the presumption of impartiality.
Disposition
[13] For these reasons, the appeal is dismissed with costs payable by the appellant Fancy to the respondent Morse fixed in the amount of $14,000 inclusive of disbursements and HST.
"M.L. Benotto J.A."
"David Brown J.A."
"B.W. Miller J.A."
