Court File and Parties
COURT FILE NO.: CV-17-567871 DATE: 20190321 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Arthur D. Landry, Plaintiff AND: Joaquim Gomes Dos Penedos, Nortex Roofing, Defendants
BEFORE: D.A. Wilson J.
COUNSEL: Jeffrey Wm. Strype, Counsel for the Plaintiffs Todd McCarthy, Counsel for the Defendants Dos Penedos and Nortex Roofing
HEARD: In Writing
Endorsement
[1] The Plaintiff, Arthur D. Landry (“Arthur”) was involved in two motor vehicle accidents: one that occurred on March 2, 2015; and another that happened October 31, 2015. While he suffered soft tissue injuries in the first accident, he sustained very serious injuries in the second collision. He was rendered unconscious at the scene and suffered a brain bleed, specifically a subarachnoid hemorrhage. His brain injury has been described by his treating doctors as very serious and he was designated catastrophic for the purposes of his entitlement to Statutory Accident Benefits (“SABS”).
[2] Actions were commenced and proceeded in the usual course. In each of them, Arthur’s claim was brought through a litigation guardian, his wife, Melanie Landry (“Melanie”). The first action dealing with the March, 2015 accident is action number CV-17-567872 while the second action is CV-17-567871. The parties to the tort actions, along with a representative from the accident benefits insurer, attended a private mediation in December, 2018 following which a tentative settlement was entered into, subject to court approval. Mr. Strype submitted Rule 7 motion records in both of the tort actions, seeking approval from the court of the proposed settlements.
[3] In the motions, in addition to approval of the proposed settlement, the Plaintiffs seek an Order to Continue, an order dismissing the claim of the Arthur’s daughter Hailey, an order approving the fee sought to be charged by counsel for the Plaintiffs and an order dismissing the actions without costs.
[4] The materials are deficient and I am not prepared to approve the settlement without further documentation for the reasons that follow.
Status of Arthur
[5] There is a paucity of medical documentation contained in the motion record on which the Court could assess the current level of functioning of Arthur. The only medical information before the Court is the driver assessment done in August 2017 which concluded he was capable of operating a motor vehicle. No expert reports have been included which opine on the nature and extent of Arthur’s head injury, his prognosis or current level of functioning.
[6] Instead, counsel seeks an Order to Continue permitting Arthur to continue the action without a litigation guardian. Mr. Strype deposes at paragraph 17 of his affidavit that Arthur has improved and he “is no longer in need of a litigation guardian.” He seemingly relies on the assessment done of his driving skills in arriving at this conclusion. Mr. Strype also states that he believes Arthur can manage his own financial and personal affairs and he bases this belief on the views of Arthur’s wife, Melanie.
[7] Since there are no records or reports from treating practitioners in the filed motion record, I am unable to assess Arthur’s level of functioning. It is clear that he suffered a serious traumatic brain injury in the October 2015 accident and that is why the actions were commenced through a litigation guardian. In order for the court to determine whether an Order to Continue ought to be made, it is necessary that Arthur be assessed by a certified capacity assessor to determine whether the Plaintiff lacks capacity or whether he is capable of making decisions and understanding their consequences.
[8] Counsel for the Plaintiffs is directed to forthwith arrange an assessment with a certified assessor for a determination of Arthur’s capacity. As well, counsel is to send a copy of the medical index to me for my review.
Proposed fees
[9] Mr. Strype seeks approval of fees for the tort actions in the sum of $398,390.71 which is 33.3% of the damages, interest and costs excluding disbursements, in accordance with the terms of the retainer agreement. In addition, Mr. Strype seeks payment of disbursements, plus “indemnity premiums of $1500 plus tax for each claim. In the proposed account, disbursements of $72,278.01 are noted “inclusive of interest at 15%” plus HST of $7,549.87. It is unclear what the interest is that is referenced.
[10] Counsel for the Plaintiffs is to provide a list of the disbursements incurred, along with the amounts. Counsel is to indicate what the interest of 15% relates to and its quantum. Counsel is to confirm what disbursements the Defendants paid for as part of the proposed settlement.
[11] In the final account, payments to Yorkfund Investment Inc. are listed, as well as payments to PhysioMed. Counsel is to explain what these payments relate to.
[12] The Contingency Fee Agreement (“CFA”) included at Tab F of the motion records states that a fee of “33.3% of the damages, interest and costs (not including disbursements)” can be charged on both the tort actions and the accident benefits settlement.
[13] In his affidavit, Mr. Strype deposes that the parties agreed to settle the tort actions for the all-inclusive sum of $1,275,000 and the Accident Benefits claims for $650,000 for a total sum of $1,925,000. In his affidavit, he states that costs “were included in an unspecified amount; although disbursements were paid in the amount of $72,278.01 plus HST of $7,549.87…” Mr. Strype has set out the fees to be charged at $615,057.38, which is 33.3% of $1,845,172.12 which is the settlement amount net of disbursements paid. I pause to note that it is unusual to have a CFA which stipulates a percentage to be charged based on the settlement amount for claim, interest and costs [emphasis mine].
[14] As I noted in Batalla v. St. Michael’s Hospital, 2016 ONSC 1513, the mere fact that the Plaintiffs signed a CFA does not equate with an entitlement to charge a fee according to the terms of such an agreement. As was pointed out in the report of the OCL, “A fee agreement is not binding on a party under a disability until it receives the approval of this Honourable Court.” [1]
[15] Section 24 of the Solicitors Act, R.S.O. 1990, c. S.15, reads as follows:
Upon any such application, if it appears to the court that the agreement is in all respects fair and reasonable between the parties, it may be enforced by the court by order in such manner and subject to such conditions as to the costs of the application as the court thinks fit…
[16] The Ontario Court of Appeal has made it clear that a CFA must be both fair and reasonable: see Raphael Partners v. Lam, (2002), 61 O.R. (3d) 417 (C.A.). The Court of Appeal dealt with the reasonableness of a fee agreement between a solicitor and client. The factors that are relevant to a consideration of the reasonableness are: the legal complexity of the matter; the results achieved; the risk assumed by the solicitor; and the time expended by the lawyer.
[17] I cannot determine whether the fee proposed to be charged is reasonable based on the materials filed. Counsel for the Plaintiffs is to submit a further affidavit addressing the factors as set out in Raphael Partners v. Lam. The affidavit is to be sent to my attention by March 29, 2019.
D. A. Wilson J. Date: March 21, 2019