Court of Appeal for Ontario

Date: 2017-06-29 Docket: C63090

Justices: Watt, Benotto and Roberts JJ.A.

Between

Steven R. Yormak Appellant/Plaintiff

and

Karl Arvai and Karl Arvai Professional Corporation Respondents/Defendants

Counsel

Stephen R. Yormak, appearing in person

Louis J. Crowley, for the respondents

Heard and released orally: June 26, 2017

On appeal from: the order of Justice J. Paul Howard of the Superior Court of Justice, dated November 14, 2016.

Reasons for Decision

[1] The appellant seeks payment of a 15 percent referral fee in relation to a judgment that the respondent obtained for a client in a personal injury file that the appellant had referred to the respondent.

[2] The appellant submits that the motion judge erred in granting summary judgment to the respondent and in dismissing the appellant's action. He argues that the respondent breached his contractual obligations of good faith in failing to obtain the client's consent to payment of the referral fee at the time of the respondent's retainer.

[3] We disagree.

[4] We find no error in the motion judge's decision. As the motion judge found, the appellant and the respondent are practising lawyers in good standing who are subject to the Rules of Professional Conduct of the Law Society of Upper Canada. As such, their referral fee arrangement had to comply with what was then r. 2.08(7) of the Rules. Rule 2.08(7) provided that a referral fee may only be paid by one lawyer to another if:

(a) The fee is reasonable and does not increase the total amount of the fee charged to the client; and

(b) The client is informed and consents.

[5] The motion judge found, correctly in our view, that the appellant's requested referral fee did not comply with any of the requirements of r. 2.08(7). In particular, when informed of the proposed referral fee, the client did not consent to the amount claimed by the appellant, finding it to be unreasonable. The client would only consent to the payment of a lesser amount, which was paid to the appellant by the respondent, and which the motion judge found was reasonable in the circumstances of this case.

[6] The appellant submits that the issue of "reasonableness" of the amount of his claim and the amount paid requires a trial. We agree with the motion judge that "there is no genuine issue requiring a trial" with respect to the quantum of the referral fee.

[7] Accordingly the appeal is dismissed.

[8] Costs to the respondent are payable by the appellant in the amount of $9,000, inclusive of all disbursements and applicable taxes.

"David Watt J.A."

"M.L. Benotto J.A."

"L.B. Roberts J.A."