



COURT OF APPEAL FOR ONTARIO

CITATION: Almalki v. Canada (Attorney General), 2019 ONCA 26

DATE: 20190117

DOCKET: C64421

Doherty, Miller and Paciocco JJ.A.

BETWEEN

Abdullah Almalki, Khuzimah Kalifah, Abdulrahman
    Almalki, by his Litigation Guardian Khuzimah Kalifah, Sajeda Almalki, by her Litigation
    Guardian Khuzimah Kalifah, Muaz Almalki, by his Litigation Guardian Khuzimah
    Kalifah, Ruqaya Almalki, by her Litigation Guardian Khuzimah Kalifah, Zukariyya
    Almalki, by his Litigation Guardian Khuzimah Kalifah, Nadim Almalki and Fatima
    Almalki

Plaintiffs (Appellants)

and

The Attorney General of Canada, John Doe and Jane
    Doe

Defendants

Peter I. Waldmann, for the appellants

J. Thomas Curry and Tiffany M. O'Hearn Davies, for the
    respondent, Stockwoods LLP

Heard: December 10, 2018

On appeal from the orders of Justice Victoria R.
    Chiappetta of the Superior Court of Justice, dated June 5, 2017; June 23, 2017,
    with reasons reported at 2017 ONSC 3857; and, September 14, 2017.

Doherty J.A.:


I



OVERVIEW

[1]

This appeal arises out of a contingency fee agreement between the
    appellants and the law firm Stockwoods LLP (Stockwoods). More specifically,
    it concerns Stockwoodss entitlement under the terms of the agreement to a
    percentage of the settlement that was paid to the appellants for their legal
    costs.

[2]

The motion judge held that Stockwoods was entitled to payment of that
    amount. The appellants claim that she erred in so holding. I would dismiss the appeal.


II



BACKGROUND

[3]

In March 2006, the appellants sued the Government of Canada for millions
    of dollars. The claim arose out of Abdullah Almalkis detention and torture in
    Syria, and the alleged complicity of the Canadian Government in that detention
    and torture. The other plaintiffs in the action were Mr. Almalkis wife,
    children, and parents.

[4]

In late 2008, Mr. Almalki approached Stockwoods about the possibility of
    acting for the appellants in their action against the Government of Canada.
    After about six weeks of negotiation, Stockwoods and the appellants entered into
    a contingency fee agreement, and Stockwoods assumed carriage of the action in
    early 2009. Mr. Almalki had retained his original lawyers on a contingency fee
    basis as well.

[5]

At the same time that the appellants retained Stockwoods, Stockwoods
    took on two other clients who were advancing very similar claims against the
    Government of Canada. Those clients entered into virtually identical
    contingency fee agreements with Stockwoods.

[6]

The three actions settled in early 2017. The settlement provided that
    the appellants were to receive a specified amount as damages and a separate
    specified amount for their legal costs. The settlement also included certain
    non-monetary terms.
[1]


[7]

On March 21, 2017, Stockwoods, on behalf of the appellants, brought a
    motion for an order approving the settlement as it applied to the infant
    plaintiffs and approving the payments of legal fees under the terms of the
    contingency fee agreement. The approval of the settlement was not opposed. However,
    in the notice of motion, Stockwoods indicated that, on the day before the
    motion was to be heard, Mr. Almalki had advised Stockwoods that the appellants
    intended to contest Stockwoodss right under the contingency fee agreement to
    claim a portion of the amount paid to the appellants by the Government of
    Canada for their legal costs.

[8]

The
Solicitors Act
, R.S.O. 1990, c. S-15, (the Act) permits
    contingency fee agreements to include all or a portion of legal costs obtained
    as part of a settlement if two conditions are met. First, the solicitor and
    client must jointly apply to a judge for approval of the payment. Second, the
    judge must be satisfied that there are exceptional circumstances justifying the
    payment. Mr. Almalki contended that he had not agreed that exceptional
    circumstances existed and that he should be allowed to oppose the payment of
    the portion of the legal fees claimed by Stockwoods. Stockwoods agreed that
    this issue should be dealt with separately from the approval of the settlement.

[9]

The pre-trial conference judge approved the terms of the settlement. At
    the request of counsel for the appellants, he adjourned the issue concerning
    the contingency fee agreement to another judge.

[10]

Stockwoods
    brought forward a supplementary notice of motion seeking enforcement of the
    contingency fee agreement. That motion came before a different judge (the
    motion judge). Over the objection of counsel for the appellants, the motion
    judge ordered that the matter proceed by way of motion and that Stockwoods was
    not required to commence a new proceeding by way of application.

[11]

On
    June 23, 2017, the motion judge held that the relevant provisions in the
    contingency fee agreement were valid and binding on the appellants. Under those
    provisions, and in particular para. 16, the appellants were required to join
    Stockwoods in its application for court approval to include in the fee payable
    to Stockwoods part of the amount paid to the appellants as costs. The motion
    judge held that the appellants were required by the agreement to support
    Stockwoodss application, and that they could not lead evidence or make
    submissions opposing Stockwoodss request for court approval of the payment:
Almalki
    v. The Attorney General of Canada
, 2017 ONSC 3857.

[12]

On
    September 14, 2017, the motion judge held that Stockwoods had established that exceptional
    circumstances existed. Accordingly, Stockwoods was entitled to a portion of
    the amount paid to the appellants as legal fees as part of the contingency fee
    agreement. She approved the payment of the portion of the costs as set out in
    para. 16 of the contingency fee agreement. She also awarded Stockwoods its costs
    on the motions in the amount of $60,000.


III



THE TERMS OF THE CONTINGENCY FEE AGREEMENT

[13]

Paragraph
    4 of the contingency fee agreement provided that Stockwoods would receive a
    percentage of any settlement or judgment obtained by the appellants. The
    percentage depended on the timing and amount of the judgment or settlement.
    Paragraph 5 gave examples of the relevant calculations.

[14]

In
    para. 19 of the agreement, the appellants undertook to consent to court
    approval of the contingency fee agreement. Paragraph 8, however, expressly
    preserved the appellants right to apply to a court for a determination of
    whether the fees ultimately charged under the agreement were fair and
    reasonable. The clients had six months from the receipt of Stockwoodss bill
    to apply for that assessment.

[15]

In
    paragraph 11, the appellants acknowledged that they had been informed by
    Stockwoods that they should obtain independent legal advice before signing the
    contingency agreement. The appellants further acknowledged that they had an
    opportunity to seek independent legal advice before signing the agreement.

[16]

Paragraph
    16, and, to a lesser extent, paragraph 15 of the contingency fee agreement are
    at the centre of this litigation. Paragraph 16 provides for the possibility of
    Stockwoods applying to the court for approval to include in the fee payable to
    Stockwoods a percentage of any amount paid to the appellants by the Government
    of Canada for legal fees. That amount would be in addition to the percentage of
    any settlement or judgment owed to Stockwoods under para. 4 of the agreement.

[17]

Paragraph
    15 reads in part:

Unless otherwise ordered by a Court, the Clients are entitled
    in the first instance to receive any legal costs awarded by the Court, on a
    partial indemnity scale or substantial indemnity scale, if the Clients are the
    party entitled to legal costs.

[18]

Paragraph
    16 of the agreement states:

However, the Clients and Stockwoods LLP acknowledge and agree
    that, given the exceptional circumstances that may arise in this case and
    subject to the Courts approval, their mutual intent is that if the Clients
    receive any settlement, judgment or other recovery amount that includes an
    award of legal costs (including any such award for fees or disbursements), then
    any such amounts received by the Clients as legal costs be included in the net
    amounts to which the Fee calculation in para. 4 of this agreement is applied.
    Accordingly, if requested by Stockwoods LLP, the Clients agree to join in an
    Application under s. 28(8) [
sic
] of the
Solicitors Act
R.S.O.
    1990, c. S-15 for approval by the Court of the payment to Stockwoods LLP of an
    appropriate percentage portion of any legal costs amounts received, by way of
    settlement, judgment, or otherwise.

[19]

I
    will return to the language of para. 16 in more detail below.


IV



RELEVANT PROVISIONS OF THE
SOLICITORS ACT

[20]

Subject
    to exceptions which are irrelevant to this case, s. 28.1 of the Act allows
    solicitors and clients to enter into contingency fee agreements. The content of
    those agreements is circumscribed by the Act and regulations made under the
    Act. Contingency fee agreements are also subject to assessment under the fair
    and reasonable standard set down in ss. 23 and 24 of the Act: see
Cookish
    v. Paul Lee Associates Professional Corporation
, 2013 ONCA 278, 39 C.P.C.
    (7th) 227, at paras. 42-43;
Raphael Partners v. Lam
(2002)
, 61 O.R. (3d) 417 (C.A.);
Henricks-Hunter
    v. 814888 Ontario Inc.
, 2012 ONCA 496, 28 C.P.C. (7th) 227.

[21]

Section
    28.1(8) is the key provision of the Act for present purposes. It provides:

A contingency fee agreement shall not include in the
    fee payable to the solicitor, in addition to the fee payable under the
    agreement, any amount arising as a result of an award of costs or costs
    obtained as part of a settlement, unless,

(a) the solicitor and
    client jointly apply to a judge of the Superior Court of Justice for approval
    to include the costs or a proportion of the costs in the contingency fee
    agreement because of exceptional circumstances; and

(b) the judge is
    satisfied that exceptional circumstances apply and approves the inclusion of
    the costs or a proportion of them.
[2]

[22]

Section
    28.1(8) does two things. The first part of the section prohibits a term in a
    contingency fee agreement that provides for payment to the lawyer of all or
    part of an amount paid to the client for legal fees, in addition to any other
    amount owed under the contingency fee agreement. In other words, a lawyer
    cannot take a percentage of the amount paid to the clients for damages and a
    percentage of the amount paid for legal fees.

[23]

The
    prohibition in the first part of s. 28.1(8) is, however, qualified by the exception
    set out in the rest of the section. That exception applies if the two criteria
    set down in subsections (a) and (b) are met. Subsection (a) requires that the
    solicitor and client bring a joint application before the court seeking
    approval of the term providing for payment of all or a portion of the costs paid
    to the client. Subsection (b) requires that the court be satisfied that
    exceptional circumstances exist justifying the inclusion of the provision
    requiring payment of all or part of the costs awarded to the client to his
    lawyer as part of the contingency fee agreement. The payment contemplated by s.
    28.1(8) is referred to in some of the cases as a premium. A contingency fee
    agreement that requires approval under s. 28.1(8) is not enforceable unless
    approved by the court: s. 28.1(9).


V



THE ISSUES

[24]

The
    appellants raise four issues on appeal:

·

was Stockwoods permitted to proceed by way of motion in the
    action in seeking approval of the contingency fee agreement, or was it required
    to commence a new proceeding by way of application?

·

what is the correct interpretation of para. 16 and is it
    enforceable against the appellants?

·

were the appellants wrongly denied the opportunity to make
    submissions on the existence of exceptional circumstances?

·

did the court err in finding exceptional circumstances?

[25]

In
    their factum, the appellants also seek leave to appeal the costs order made by
    the motion judge.

A.

COULD STOCKWOODS PROCEED BY WAY OF MOTION?

[26]

The
    appellants submit that s. 28.1(8) of the Act
precluded
    Stockwoods from proceeding by way of motion within the existing action. Section
    28.1(8)
requires the solicitor and client to jointly apply for an
    order approving a contingency fee agreement that includes payment of costs paid
    to the client. According to the appellants, s. 28.1(8) required that Stockwoods
    initiate a new proceeding by way of application, rather than bring a motion in
    the existing action.

[27]

I
    do not accept this submission. I do not read the word apply in s. 28.1(8) as
    referencing the need to bring a formal application as described in the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194. I read the word in a more
    generic way, as simply indicating that the parties must jointly put the matter
    before the court seeking the approval contemplated under the section: see
56
    King Inc. v. Aviva Canada Inc.
, 2017 ONCA 408, at para. 4.

[28]

In
    this case, the motion under s. 28.1(8) was brought with a motion for approval
    of the settlement as it related to the infant plaintiffs. The request to
    approve the settlement was properly brought by way of motion under r. 7.08. A
    motion for approval of a contingency fee agreement applicable to infant
    plaintiffs may also be brought as part of a motion for approval of the
    settlement:
Contingency Fee Agreements
, O. Reg. 195/04, s. 5(1)(b).

[29]

The
    enforceability of the contingency fee agreement as against all of the
    appellants is, in my view, properly viewed as part of the motion for the approval
    of the settlement and the contingency fee agreement as it relates to the infant
    plaintiffs. The outcome of the arguments raised by Mr. Almalki challenging the
    contingency fee agreement would, if successful, impact on the infant plaintiffs
    as well as Mr. Almalki.

[30]

I
    do not suggest that the matter could not have been properly brought forward by
    way of an application: see
Solicitors Act
, ss. 23, 28.1(11). In my
    view, however, an application was not the only mode of putting the matter
    before the court. The issues arising out of para. 16 of the contingency fee
    agreement were sufficiently connected to the motion brought for approval of the
    settlement and contingency fee agreement as applied to the infant plaintiffs to
    be, in reality, part of the same motion.

[31]

I
    also agree with the motion judge that the appellants have shown no prejudice
    flowing from proceeding by way of motion rather than by application. The
    prejudice claim advanced by the appellants in this court rests, not in the
    nature of the procedural vehicle used to bring the matter forward, but rather
    in the motion judges conclusion that the appellants, by virtue of agreeing to
    para. 16 of the contingency fee agreement, were required to support Stockwoodss
    motion under s. 28.1(8). There is no reason to think that the motion judges
    analysis or conclusion would have been different had she addressed the issue
    wearing her application judges hat rather than her motion judges hat.

B.

what does paragraph 16 mean and is it enforceable?

[32]

The
    motion judge interpreted para. 16 of the contingency fee agreement as requiring
    the appellants to support Stockwoodss application for a payment of a portion
    of the legal fees paid to the appellants as part of the settlement. The motion
    judge held that the appellants could not oppose the application or offer
    evidence to challenge the existence of the requisite exceptional
    circumstances.

[33]

The
    appellants attack this holding on two fronts. First, they submit that, on a
    proper interpretation, para. 16 does not preclude the appellants from opposing
    the motion under s. 28.1(8). Second, they argue that if the motion judge
    properly interpreted para. 16, it contravenes s. 28.1(8) of the Act and cannot
    be enforced.

[34]

The
    arguments advanced on behalf of the appellants focus on the meaning and
    enforceability of para. 16 of the contingency fee agreement, and its interplay
    with s. 28.1(8) of the Act. Despite some of the assertions made in Mr.
    Almalkis affidavits about Stockwoodss dockets and their conduct of his case,
    there is no claim, apart from the challenge to para. 16 of the agreement, to
    the terms of the contingency fee agreement or the fee claimed under para. 4 of
    the agreement. The appellants have not sought to assess the fees under the
    fair and reasonable standard in ss. 23 and 24 of the Act.

(i)

The Interpretation of Paragraph 16

[35]

As
    often happens, the parties disagree over the standard of review applicable to
    the submission that the motion judge erred in her interpretation of para. 16 of
    the contingency fee agreement. I will assume, in keeping with the appellants
    submission, that correctness is the appropriate standard. For the reasons that
    follow, I view the motion judges interpretation as the only reasonable
    interpretation of para. 16 available, and therefore the correct interpretation.

[36]

This
    contingency fee agreement was the product of lengthy negotiation between Mr.
    Almalki and Stockwoods. Several drafts of the agreement were exchanged and
    modified. Stockwoods recommended to Mr. Almalki that he obtain independent
    legal advice and he did so. According to Mr. Almalki, he did not seek advice
    about the meaning of para. 16.

[37]

The
    Government of Canada made various offers to settle. Stockwoods explained the
    fee ramifications of these offers to Mr. Almalki, including the payment of a
    portion of the amount attributable to his costs to Stockwoods according to
    para. 16. Mr. Almalki had no questions about para. 16.

[38]

According
    to Mr. Almalkis affidavit, he first raised para. 16 with Stockwoods shortly
    before the motion to approve the settlement because a plaintiff in one of the
    other two related actions questioned whether Stockwoodss contingency fee could
    include a proportion of the costs paid as part of the settlement. Mr. Almalki
    followed up on the question raised by the other plaintiff and eventually
    decided to object to para. 16. The question posed by the other plaintiff would,
    of course, have made no sense to Mr. Almalki unless he understood that the
    agreement he had signed contemplated that Stockwoods would be paid a proportion
    of any legal costs paid to him by the Government of Canada.
[3]

[39]

In
    her June 23, 2017 ruling, the motion judge acknowledged that contingency fee
    agreements were subject to closer scrutiny than purely commercial contracts.
    She went on, after a review of the relevant evidence, to hold, at para. 21:

In this case however, there is no evidence of fraud, duress,
    mistake of fact or unconscionability. There is no evidence of Mr. Almalkis
    failure to understand the fee agreement or specifically the effect of the
    language of paragraph 16. There is no evidence that the plaintiffs were misled
    by Stockwoods.

[40]

The
    record fully supports these findings and I would defer to them.

[41]

The
    language of paras. 15 and 16 is free of any ambiguity or uncertainty. Paragraph
    15 acknowledges that the appellants are initially entitled to receive any
    amount awarded or paid to them as costs. Paragraph 16 qualifies para. 15 by
    providing that Stockwoods and the appellants mutually intend that, should exceptional
    circumstances arise, Stockwoodss fee should be calculated to include a portion
    of the amount paid by the Attorney General to the appellants for legal costs.
    The appellants undertake to join Stockwoods in an application for court
    approval of that payment.

[42]

The
    appellants submit that para. 16 contemplates a joint application to the court,
    but leaves the appellants free to take the position that there are no exceptional
    circumstances justifying approval of the payment called for by para. 16. In
    the same vein, the appellants submit that the phrase exceptional circumstances
    that may arise in this case in para. 16 indicates that those circumstances did
    not exist as of the making of the agreement, and leaves open the question of
    whether there would be exceptional circumstances as of the time of the
    application called for in para. 16. The appellants contend that para. 16
    contemplates that the client would be free to assess the circumstances at the
    time of Stockwoodss application and determine whether to support Stockwoodss
    claim that exceptional circumstances existed justifying the payment.

[43]

I
    cannot accept either submission. Paragraph 16 reads in part:

If requested by Stockwoods LLP, the clients agree to join in an
    application under s. 28(8) [
sic
] of the
Solicitors Act
,
    R.S.O. 1990, C. s. 15, for approval by the court of the payment to Stockwoods
    LLP.
[4]

[44]

The
    words plainly declare that the clients will, if asked by Stockwoods, join in Stockwoodss
    request for approval. To agree to join in an application is to agree to
    support that application. One cannot join in an application and at the same
    time oppose that application.

[45]

The
    appellants reading of para. 16 is untenable in light of s. 28.1(8)(a) of the
    Act. That subsection requires that, as a precondition to the court considering
    whether exceptional circumstances exist, the solicitor and client must jointly apply
    for approval. The client in effect has a veto over the making of the
    application. Unless the client has committed to supporting the application, the
    lawyer will have no opportunity to convince the court that the required exceptional
    circumstances exist. If the appellants interpretation of para. 16 of the
    contingency fee agreement is correct, the parties agreed that the appellants
    would, on the one hand, join in the application, but on the other hand,
    effectively maintain a veto over the courts consideration of whether
    exceptional circumstances justified an order under s. 28.1(8). I cannot
    accept this interpretation of the agreement.

[46]

Nor,
    in my view, does the phrase exceptional circumstances that may arise in this
    case assist the appellants. The phrase simply recognizes that as of the date of
    the agreement no determination had been, or indeed could have been, made with
    respect to the existence of exceptional circumstances. That determination is
    for the court at the time the application for approval of the payment is
    brought.

(ii)

Is paragraph 16 unenforceable?

[47]

The
    appellants next submit that if the motion judge properly interpreted para. 16 of
    the contingency fee agreement, the agreement is unenforceable as contrary to s.
    28.1(8) of the Act. The appellants submit that the Act, and in particular s.
    28.1(8), is consumer protection legislation designed to protect clients who are
    often at a very real disadvantage when negotiating fee arrangements with their
    lawyers: see
Zeppieri & Associates v. Gupta
, 2016 ONSC 6491, at
    para. 22.

[48]

The
    appellants further submit that payment of a portion of the clients costs as
    part of the lawyers contingency fee is very much the exception under the Act,
    and is limited to situations in which there are exceptional circumstances.
    The appellants argue that to properly protect themselves, clients must be able
    to challenge a lawyers claim that exceptional circumstances justify the
    payment of the premium. A contingency fee agreement which requires the client to
    commit to supporting the lawyers application at a point in time when the
    client cannot make an informed assessment of the circumstances effectively
    allows the lawyer to contract out of one of the two protections provided to the
    client by s. 28.1(8): see
Jean Estate v. Wires Jolley LLP
, 2009 ONCA
    339, 96 O.R. (3d) 171, at para. 82.

[49]

I
    accept the appellants characterization of the Act as consumer protection
    legislation. However, the Act is also intended to facilitate access to justice
    by providing for contingency fee agreements. These agreements allow clients who
    could not afford to retain counsel through traditional retainers to secure
    legal representation. Contingency fee agreements have proven particularly
    valuable in complex, expensive litigation in which the outcome is very much in
    doubt.

[50]

To
    facilitate access to justice, the Act contemplates fees that may include a
    payment by way of a premium of an amount from any costs paid to the client. The
    Act imposes no limitation on the parties agreeing to this payment. Section
    28.1(8) does, however, require that the parties jointly apply for payment and
    that the court make its own determination of whether the circumstances of the
    case justify the payment.

[51]

Nor
    is the client placed in an unfair position by a provision in a contingency fee
    agreement which requires the client to eventually support the lawyers
    application for payment of a premium. Presumably, a client who agrees to give
    up the effective veto over the payment contemplated by s. 28.1(8) does so upon
    a consideration of the other terms of the contingency fee agreement, and in
    particular the percentage of the damages the client will be required to pay to
    the lawyer under the agreement.

[52]

Mr.
    Almalki was also in a position to assess the likelihood of exceptional
    circumstances developing in the course of this litigation. Anyone familiar
    with the nature of this lawsuit  and Mr. Almalki certainly was  would have
    had no difficulty anticipating that this litigation would be anything but
    routine and straightforward.

[53]

The
    interpretation favoured by the motion judge also promotes the effective
    operation of the client and solicitor relationship in cases where the retainer
    involves a contingency fee agreement. The motion judge made this point, at
    para. 19:

Securing the clients agreement to jointly apply to the court
    pursuant to s. 28.1(8) of the Act at the commencement of the solicitor and
    client relationship is not limited by the Act. There is good reason for this.
    The purpose of a contingency fee agreement in part is for the client and the
    lawyer to fully understand and agree to all terms that will determine the
    amount of money received by each party upon the completion of the solicitor and
    client relationship. The agreement provides both the lawyer and the client with
    equal expectations of legal fees that the client cannot otherwise pay for
    throughout the course of the litigation. It is prudent therefore for the
    parties to negotiate, agree and set out their intention concerning exceptional
    circumstances at the beginning of the relationship. This prevents conflict at
    the end of the relationship as a result of second thoughts or a reconsideration
    of fees and highlights the potentially impactful consequences of judicial
    approval in this regard on the distribution of the amounts recovered.

[54]

The
    appellants are not left unprotected by the motion judges interpretation of s.
    28.1(8). The Act protects the interests of the client in at least two ways.
    First, the judge hearing the s. 28.1(8) application must be convinced that exceptional
    circumstances exist. In making that assessment, the court will bear in mind
    its obligation to protect the clients interests. Second, the client can seek
    an assessment of the fees generated under the contingency fee agreement,
    including any payment of a premium, pursuant to ss. 23 and 24 of the Act. Those
    fees must be fair and reasonable.

[55]

I
    am satisfied that the terms of para. 16 of the contingency fee agreement are
    consistent with s. 28.1(8) of the Act. Paragraph 16 recognizes that the client
    and the lawyer must bring a joint application as required by the section. It
    also recognizes that, despite the joint application, the court must still
    determine whether exceptional circumstances exist. The appellants decision
    to agree to make the joint application, if requested by Stockwoods, reflects
    the requirements of the Act and does not, in my view, constitute a contracting
    out of those requirements.

C.

were the appellants denied the opportunity to make submissions on the
    question of exceptional circumstances?

[56]

The
    appellants present this submission as a procedural due process issue. It is, in
    my view, a reformulation of the argument that by agreeing to bring a joint
    application with Stockwoods for court approval of the payment, the appellants
    were not agreeing to support the application. I have addressed that argument in
    the context of the submissions respecting the proper interpretation of para. 16
    of the agreement, which required the appellants to support Stockwoodss
    application.

[57]

My
    reading of para. 16 disposes of any procedural fairness argument. Procedural
    fairness does not demand that the appellants be given the opportunity to do
    something they promised they would not do.

D.

did the motion judge err in finding exceptional circumstances?

[58]

The
    motion judges reasons dated September 14, 2017 set out in detail the many
    reasons why she was satisfied that were exceptional circumstances justifying
    the payment to Stockwoods under para. 16 of the contingency fee agreement. I do
    not propose to repeat those reasons.

[59]

It
    is sufficient for my purposes to indicate that the factors identified by the
    motion judge were properly considered by her. Those factors included the
    factual and legal complexity of the litigation, the substantial financial risk
    assumed by Stockwoods during the several years in which it represented the
    appellants, the significant importance of the litigation  not only to the
    parties, but to the public  and the immense resources expended by Stockwoods
    in achieving what was a very good result for the appellants. In my view, these
    factors, all of which were supported by the record before the motion judge,
    justified the motion judges finding of exceptional circumstances.


VI



SHOULD LEAVE TO APPEAL THE MOTION JUDGES COSTS ORDER BE
    GRANTED?

[60]

The
    appellants did not make oral submissions on this issue. Stockwoods was
    successful in the proceedings before the motion judge and was clearly entitled
    to its costs on a partial indemnity basis.

[61]

The
    appellants submit that this court should grant leave to consider whether the
    record before the motion judge properly established that costs should include
    time expended by Stockwoodss lawyers in respect of the motion. It does not
    appear that this was argued before the motion judge. In any event, I agree with
    counsel for Stockwoods that there is no arguable case against the entitlement
    of costs in relation to the time spent by the Stockwoods lawyers on the motion.
    Indeed, using lawyers familiar with the file may well have reduced the costs.

[62]

I
    would not grant leave to appeal the costs order.


VII



[63]

I
    would dismiss the appeal. Stockwoods is entitled to its costs of the appeal on
    a partial indemnity basis. Having reviewed the costs outline submitted by the
    parties, I would order costs in the amount of $32,000, inclusive of relevant
    taxes and disbursements.

Released: DD JAN 17 2019

Doherty J.A.

I agree. B.W. Miller
    J.A.

I agree. David M.
    Paciocco J.A.





[1]

The motion record filed in the Superior Court of Justice for
    approval of the settlement was ordered sealed by McEwen J. on March 21, 2017.
    That order was continued by the order of Hoy A.C.J.O. dated June 20, 2018.



[2]
Section 28.1(8) is to be repealed on a date to be proclaimed:
Plan for Care
    and Opportunity Act (Budget Measures), 2018
, S.O. 2018, c. 8, Schedule 31,
    s. 3.



[3]
The plaintiffs in the other two related actions have not challenged the
    contingency fee agreements.



[4]

The reference to s. 28(8) is clearly intended to be a
    reference to s. 28.1(8).


