Court of Appeal for Ontario

Date: 20220112 Docket: C69327

Doherty, Tulloch and Thorburn JJ.A.

Between

UL Lawyers Professional Corporation Applicant (Appellant)

and

Jasbir Notay Respondent (Respondent in Appeal)

Counsel: Sunish R. Uppal and Vismay Merja, for the appellant Jamie Min, for the respondent

Heard: January 5, 2022 by video conference

On appeal from the order of Justice Thomas A. Bielby of the Superior Court of Justice, dated March 23, 2021.

Reasons for Decision

[1] The appellant law firm (“UL”) acted for the respondent in motor vehicle litigation. The respondent discharged UL and retained the Naimark Law firm (“Naimark”). UL sought an undertaking from Naimark to protect UL’s account for legal fees and disbursements arising out of the retainer with Mr. Notay. Ultimately, no undertaking satisfactory to UL was provided by Naimark. UL sought a solicitor’s lien in the amount of $73,195.75 against the proceeds of the settlement of the accident benefit claims arising out of the motor vehicle litigation.

[2] The application judge identified the three criteria which must be satisfied to obtain a solicitor’s charging order. The solicitor must show:

• the fund or property over which the charging order is sought is in existence at the time the order is sought;
• the property must have been recovered or preserved through the instrumentality of the solicitor; and
• there must be some evidence that the client cannot or will not pay the lawyer’s account: see Bilek v. Salter Estate.

[3] The application judge was satisfied the first two criteria were met. He concluded, however, that there was no evidence the client would not or could not pay the fees. The application judge relied on what he found to be a clear undertaking given by Naimark to protect UL’s account for fees and disbursements.

[4] Counsel for UL submits the application judge made a palpable and overriding error in concluding that a clear undertaking had been given by Naimark. In addition to alleged errors in respect of the evidence before the application judge, counsel also relies on the fact that after the application judge’s decision, Mr. Notay commenced a $5,000,000 lawsuit against UL. In that action, he claims that UL was negligent and in breach of its fiduciary duty to him in the context of the tort litigation arising out of the automobile accidents. UL argues that this lawsuit, on its own, constitutes “some evidence that the client cannot or will not pay” UL’s fees and disbursements.

[5] The evidentiary burden on a solicitor to show the client cannot or will not pay the lawyer’s fees is a low one. There need only be “some evidence”. The evidence before the application judge arguably cleared that evidentiary hurdle. The undertaking relied on by Naimark was arguably ambiguous. Naimark’s refusal to provide an undertaking in the terms requested by UL, and its delay in responding to UL’s request for clarification, along with disputes over the amounts of certain disbursements, provide reasons to doubt that Mr. Notay would pay the fees and disbursements in issue. Furthermore, after about four months of wrangling over the terms of the undertaking to pay UL’s fees and disbursements, Naimark appeared to further qualify the undertaking to protect UL’s fees by including the indication that any undertaking would be subject to the client’s approval. No approval was forthcoming. Finally, the tone of the communications between UL and Naimark took on a decidedly hostile tone, suggestive of the possibility of litigation over UL’s fees and disbursements.

[6] Ultimately, it is unnecessary to decide whether the application judge made a clear and palpable error in declining to make the order sought by UL. The lawsuit commenced by Mr. Notay after the application was heard, considered along with the factors identified by the application judge, provides “some evidence” that Mr. Notay would not pay UL’s account.

[7] The appeal is allowed. UL is entitled to a solicitor’s lien on the funds obtained through settlement of the accident benefit claims in the litigation brought on Mr. Notay’s behalf in the amount of $73,195.75.

[8] The appellant, having successfully reversed the result on the application, is entitled to costs on the application. We fix those costs at $1,662 plus H.S.T., the amount the application judge had awarded to Mr. Notay on the application. UL is also entitled to costs of the appeal. We fix those costs in the amount of $4,867, inclusive of disbursements and H.S.T.

“Doherty J.A.”

“M. Tulloch J.A.”

“J.A. Thorburn J.A.”