Court File and Parties
COURT FILE NO.: 11-53210 DATE: 2016/07/06 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Helena Guergis, Plaintiff AND Arthur Hamilton, Cassels Brock & Blackwell LLP and The Honourable Shelly Glover, Defendants
BEFORE: Justice Charles T. Hackland
COUNSEL: David Sheriff-Scott and Stephen Victor QC, for the Plaintiff Paul D’Angelo, for the Defendant, Conservative Party of Canada
HEARD: June 29, 2016
Endorsement
C.T. Hackland J.
[1] The solicitors for the plaintiff, Victor Ages Vallance LLP, (VAV) seek a declaration that they hold a valid solicitor’s lien over the sum of $47,886 which sum is held by Stockwoods in trust on behalf of their clients Arthur Hamilton and Cassels Brock and Blackwell LLP. These funds represent costs Mr. Hamilton and the Cassels Brock firm were ordered to pay to the plaintiff. The costs in issue were awarded pursuant to my order of January 20, 2016 and the order of Warkentin J. dated January 25, 2016. VAV also seek a charging order against the said funds under section 34(1) of the Solicitors Act, R.S.O. 1990, c. S.15.
[2] This relief is opposed by the Conservative Party of Canada (CPC). CPC has served a garnishment notice against these funds. CPC has a costs order in their favour against the plaintiff in the sum of $41,555.13, arising from their successful motion to have this action dismissed as against CPC in August 2012, which order was affirmed by the Court of Appeal in June of 2013.
[3] The position of CPC is that the equities of this situation weigh in favour of declining to award the plaintiff’s solicitors the requested charging order. The position of the solicitors (VAV) is that the cost awards which constitute the fund currently held by counsel for Mr. Hamilton and Cassels Brock LLP would not have come into existence but for the efforts of VAV and their counsel, Borden Lavner Gervais, and that significant legal costs were incurred by them, well in excess of the costs awarded. VAV therefore asserts an entitlement to a solicitor’s lien on the fund.
[4] I accept the applicant’s argument that the fund in question came into existence owing to the lawyers’ efforts and therefore a solicitor’s lien arises. (see Tots and Tears Sault Ste Marie Ltd, (1975), 11 O.R. (2d) 103) As such, the solicitor’s lien takes priority over garnishment from other creditors such as the CPC.
[5] Section 34(1) of the Solicitors Act provides for a charging order which is a mechanism to enforce a solicitor’s lien. The section states:
Where a solicitor has been employed to prosecute or defend a proceeding in the Superior Court of Justice, the court may, on motion, declare the solicitor to be entitled to a charge on the property recovered or preserved through the instrumentality of the solicitor for the solicitor’s fees, costs, charges and disbursements in the proceeding.
[6] The case law suggests that there must be some evidence that the client will not or cannot pay the lawyer’s fees. Moreover, a charging order will not be granted if it would offend the principles of equity, either by reason of the conduct of the solicitor or unfairness to the creditors by allowing the charging order to have effect.
[7] I accept the evidence of the applicants that their accounts have not been paid due to the plaintiff’s impecuniosity. There are a number of unanswered questions about the disposition of the proceeds of the sale of the plaintiff’s Ottawa home. However, on the balance of probabilities, I will accept her evidence as to the disposition of the proceeds of sale. She was not cross-examined on her affidavit. I would also not deny the plaintiff’s solicitors a charging order merely because they appear to have a contingency fee arrangement, which implies an acceptance by the solicitors of a degree of risk of non-payment. I would also not view the four years during which the plaintiff’s solicitors have gone unpaid as some sort of waiver of their entitlement to a solicitor’s lien on funds which have now come into existence from their efforts.
[8] CPC also argues that an equitable set-off, for the costs owing to them, should be recognized in the circumstances. They say that where costs are awarded in the same cause or matter, a solicitor’s lien is subject to the right of set-off in the same cause or matter. They assert that the right to set-off the costs award against a previous costs award in the same action takes precedence over a claim by a solicitor for unpaid fees. I would not give effect to that argument. In order for there to be a set-off, there must be a mutuality of debts between the parties. The defendants Hamilton and Cassels Brock owe costs to the plaintiff and the plaintiff owes money, not to Mr. Hamilton and Cassels Brock, but to her own solicitors.
[9] The court will exercise its discretion to declare that the applicants VAV have a valid solicitor’s lien over the fund in the sum of $47,866 currently held by the solicitors for Arthur Hamilton and Cassels Brock and Blackwell LLP herein, in priority to all other creditors and will grant a charging order under s. 34(1) of the Solicitors Act over the said fund and an order directing the said solicitors to pay the fund to the plaintiff’s solicitors (VAV).
[10] If the applicant VAV wishes to seek costs of this motion, they shall provide the court with a concise written submission within 14 days of the release of this endorsement and the respondents shall have 14 days to respond from the time of being served with the applicant’s submissions.
Justice Charles T. Hackland Date: July 6, 2016
COURT FILE NO.: 11-53210 DATE: 2016/07/06 ONTARIO SUPERIOR COURT OF JUSTICE
RE: Helena Guergis, Plaintiff AND Arthur Hamilton, Cassels Brock & Blackwell LLP and The Honourable Shelly Glover, Defendants
BEFORE: Justice Charles T. Hackland
COUNSEL: David Sheriff-Scott and Stephen Victor QC, for the Plaintiff Paul D’Angelo, for the Defendant, Conservative Party of Canada
Costs ENDORSEMENT Hackland J. Released: July 6, 2016