Court of Appeal for Ontario

Date: January 22, 2018 Docket: C63951 Judges: Laskin, Sharpe and Fairburn JJ.A.

Parties

Between

Srebrolow Lebowitz Spadafora PC Plaintiffs (Respondents)

and

PW Lawyers Professional Corporation and Paul Wilkins Defendants (Appellants)

Counsel

For the Appellants: Thomas Slade and Cory Giordano

For the Respondents: James Srebrolow and Gianmarco Fabiano

Hearing

Heard and released orally: January 22, 2018

On appeal from: The judgment of Justice Jasmine Akbarali of the Superior Court of Justice, dated May 19, 2017.

Reasons for Decision

[1] The appellants make three submissions:

(I) the motion judge erred in her calculation of net fees under the agreement;

(II) the motion judge erred by imposing liability on PW Lawyers on the basis of a constructive trust; and

(III) the motion judge erred in her costs award.

[2] On the first issue, the appellants argue two points. First, under the agreement net fees can be broader than total fees less referral fees. Second, the payment from Wilkins to his paralegal was a referral fee.

[3] On the first point, the motion judge found that net fees equals total fees less referral fees. We agree with her finding, which is supported by the language of the agreement.

[4] On the second point, we also agree with the motion judge that the payment to the paralegal was compensation and not a referral fee. "Referral fee" is not defined in the agreement, but, in the common understanding in the profession, a referral fee means a referral from an outside lawyer to the firm. No evidence was led to show that the respondent firm had any different practice. The paralegal was not listed as a referring source under the schedule to the agreement. Finally, the Rules of Professional Conduct on which the motion judge relied, though enacted after the agreement was entered into, reflect the well understood meaning in the profession of a referral fee.

[5] On the second issue, the motion judge was correct in finding that it would be unjust for the corporation not to be liable. We add that under clause 4 (iii) of the agreement, Wilkins agreed to pay to the respondent law firm any amount owing to himself "and/or any further entities/firm".

[6] On the third issue, the motion judge made no error in her costs award that would justify our intervention. Leave to appeal costs is thus refused.

[7] For these brief reasons, the appeal is dismissed, with costs to the respondent in the amount of $20,000, inclusive of disbursements and HST.

John Laskin J.A.

Robert J. Sharpe J.A.

Fairburn J.A.