



COURT OF APPEAL FOR ONTARIO

CITATION: Sheikh v. Pearl, 2016 ONCA 523

DATE: 20160630

DOCKET: C60394

Simmons, LaForme and Huscroft JJ.A.

BETWEEN

Zahira Sheikh by her Litigation Guardian, Ahmed
    Hussein Sheikh, Ahmed Hussein Sheikh, Lubna Sheikh, Saleh Omer Sheikh, and
    Yasmeen Sheikh

Plaintiffs (Respondents)

and

Daniel Pearl and Reva Pearl

Defendants

Jeffrey S. Leon and Gannon G.
    Beaulne, for the appellant Levinter & Levinter LLP

R.P. Quance and D. Waldman,
    for the respondents Zahira Sheikh by her Litigation Guardian, Ahmed Hussein
    Sheikh, Ahmed Hussein Sheikh, Lubna Sheikh, Saleh Omer Sheikh, Yasmeen Sheikh
    and Himelfarb Proszanski LLP

Heard: December 10, 2015

On appeal from the order of Justice Frederick L. Myers of
    the Superior Court of Justice dated April 17, 2015.

Simmons
    J.A.:

A.

Introduction

[1]

The appellant, Levinter & Levinter LLP, acted as counsel for the plaintiffs
    (the personal respondents) in this personal injury action for many years.
    After their solicitor-client relationship broke down, the appellant somehow obtained
    a judgment in the personal injury action against their former clients, the
    personal respondents, for $206,000, for legal fees and disbursements. A
    different law firm, Himelfarb Proszanski LLP (the respondent law firm), took
    over conduct of the personal injury action for the personal respondents and
    participated in the proceeding by which the $206,000 judgment was obtained.

[2]

The parties to the personal injury action later moved under rule 7.08 of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, for approval of a
    proposed settlement of the action. Court approval was required because two of
    the personal respondents were under a disability. Under the terms of the
    proposed settlement, the appellant was to receive $206,000 on account of its
    legal fees and disbursements in accordance with the $206,000 judgment.

[3]

The settlement approval judge did not approve the proposed settlement. Among
    other things, he recommended in an endorsement that the appellant receive $102,500
    in satisfaction of its account. In addition, he stipulated that if all parties
    and law firms were not prepared to resolve matters as he suggested, the
    settlement is not approved and all issues would have to be resolved in an
    active litigation process with independent representation for [the injured
    personal respondent].

[4]

The appellant did not consent to the settlement approval judges recommendation.
    Nonetheless, the respondent law firm advised the appellant that it intended to
    obtain a judgment implementing the settlement approval judges recommendations.
    In due course, the respondent law firm obtained a partial judgment signed by
    the settlement approval judge, which provided, in part, that the appellant
    would receive $102,500 in satisfaction of its outstanding account.

[5]

About a year after the partial judgment was issued, the appellant moved
    for an order under rule 59.06(2)(c) to carry into operation the $206,000
    judgment by varying the partial judgment to accord with the $206,000 judgment.

[6]

Relying on s. 34(2) of the
Solicitors Act
, R.SO. 1990, c. S.15,
    the appellant also requested an order declaring that the respondent law firm is
    jointly and severally liable for the balance owing to the appellant under the
    $206,000 judgment because the respondent law firm disbursed all funds payable
    under the partial judgment in the face of the $206,000 judgment.

[7]

The motion judge dismissed the appellants motion, holding that rule 59.06(2)(c)
    does not authorize a Superior Court judge to determine which of two subsisting
    Superior Court orders is correct.

[8]

The appellant appeals from the motion judges order.

[9]

The main issue on appeal is the proper interpretation
    of rule

59.06(2)(c).

[10]

In oral submissions on appeal, the appellant also asked
    that its motion be amended, if necessary, to claim relief under rule 37.14 and
    that relief be granted under that rule.

[11]

For the reasons that follow, I would dismiss the
    appeal.

B.

Background

(1)

The personal
    injury action

[12]

In January 1992, the personal respondent Zahira Sheikh (Ms. Sheikh) suffered
    serious injuries in a car-pedestrian accident. She and the other personal
    respondents retained the appellant and, in December 1993, commenced this action
    for damages arising from the accident. At the time the action was commenced,
    the personal respondent Yasmeen Sheikh was a minor. In 1998, Ms. Sheikh was
    declared incapable of managing her personal and financial affairs and two of
    the personal respondents, Ahmed Hussein Sheikh and Lubna Sheikh, were appointed
    as joint guardians of her person and property.

(2)

The
    solicitor-client relationship breaks down

[13]

The appellant acted as counsel for the personal respondents for many years
    both in relation to the personal injury action and in relation to a no-fault
    benefits claim that was settled in 1998.

[14]

In 2007, the solicitor-client relationship between the appellant and the
    personal respondents broke down and the respondent law firm took over the
    conduct of the action for the personal respondents.

[15]

According to the appellant, at a case conference held in February 2007,
    the defendants in the action indicated they would be alleging impropriety on
    the part of Ms. Sheikhs family members in relation to the use of accident
    benefits funds. Ultimately, the Public Guardian and Trustee began an
    investigation into the family members guardianship. The appellant asserts that,
    at a March 2007 pre-trial, Ms. Sheikhs family members provided instructions to
    settle her claim but then later disputed that such instructions had been
    provided. According to the appellant, the solicitor-client relationship broke
    down after these events.

(3)

The appellant obtains a charging order and judgment for its legal fees

[16]

After the respondent law firm assumed carriage of the action, the appellant
    and the respondent law firm were unable to agree on how to address the
    appellants outstanding account. In September 2008, the appellant obtained a
    charging order with the consent of the respondent law firm. The charging order
    provides that the appellant is entitled to a first charge in the amount of
    $485,868.05, plus interest, or in the alternative, an amount to be determined
    by an Assessment Officer, in respect of the within action for [its] legal fees,
    costs, charges and disbursements incurred in the within action.

[17]

According to the appellants account, the
$485,868.05
    comprised
$269,305.50 for fees, $54,140.04 for disbursements,
    $18,570.98 for taxes and $143,851.53 for unpaid invoices from third-party
    suppliers, including $64,941.66 for outside counsel.


[18]

The charging order also required the appellant to forward its file to
    the respondent law firm within 10 days.

[19]

Prior to the charging order being made, the respondent law firm had commenced
    an assessment proceeding on behalf of the personal respondents concerning the
    appellants outstanding account. On June 11, 2011, the appellant and the respondent
    law firm agreed that the appellants outstanding account would be settled for
    $150,000 on account of fees and $56,000 on account of disbursements, for a
    total of $206,000.

[20]

No certificate of assessment was taken out arising from the June 2011
    settlement of the assessment proceeding. Instead, the appellant brought a
    motion in the personal injury action for enforcement of the settlement of
    [its] account. On April 27, 2012, a judgment was issued in this action which provides
    that the personal respondents shall pay to the appellant a total of $206,000 on
    account of fees and disbursements together with post-judgment interest of 3 per
    cent per annum from June 13, 2011. The appeal record does not include the
    motion record that led to the $206,000 judgment. However, the motion judges
    reasons relating to the $206,000 judgment recite the settlement and describe
    the contested issue on the motion as relating to interest. The formal judgment
    describes the relief sought on the motion. However, the appeal record includes
    no explanation of the basis on which this relief was, or could be, obtained in the
    personal injury action.

(4)

The settlement
    approval process

[21]

According to the appellant, at some point it learned from the respondent
    law firm that it was preparing material for court approval of a settlement the
    parties to the personal injury action had reached and that the appellants account
    would be included in the settlement approval material in accordance with the $206,000
    judgment.

[22]

On April 22, 2013, the settlement approval judge, who also conducted the
    February 2007 case conference and March 2007 pre-trial, issued an endorsement
    in which he was critical of the appellants account and described the $206,000
    judgment several times as a purported judgment.

[23]

In his endorsement, the settlement approval judge observed that [a]ll
    of the problems with the care for Ms. Sheikh and misuse of her money arose on
    [the appellants] watch. He said that as Ms. Sheikh was under a disability and
    Yasmeen Sheikh was recited as a minor, court approval of the fees settlement
    was required. He said that [w]hat purports to be a Judgment was issued as the
    result of the appellants motion for enforcement of the settlement and noted
    that the appellant was not a party to this action and that no new action, nor
    any application to enforce a private contract, had been started. Nor had Ms.
    Sheikh been provided with separate representation despite the conflict between
    her guardians in their personal capacity and their representative capacity. He
    expressed concern that fees and disbursements from the accident benefits file
    had crept into this action, that the $206,000 judgment was based on a
    contract entered into by a guardian with a conflict of interest, and that no
    determination had been made under rule 7
[1]
as to Ms. Sheikhs liability for the fees and disbursements.

[24]

The settlement approval judge was also critical of the account from
    outside counsel, which he appears to have mistakenly described as $143,851.53
    (as opposed to
$64,941.66 disclosed in the appellants
    account) and which he said had been settled for $89,274.23.

[25]

The settlement approval judge proposed that Ms. Sheikhs liability to
    the appellant be fixed at $102,500 and that her liability to outside counsel be
    fixed at $41,000. He concluded his endorsement by stating that if all parties
    and law firms did not agree to his proposal, the settlement was not approved:

If the parties and law firms are not prepared to resolve
    matters as suggested, the settlement is not approved and all issues among all
    parties will have to be resolved in an active litigation process with independent
    representation for Ms. Sheikh.

[26]

The appeal record does not include the material
    filed with the settlement approval judge nor does the affidavit filed by the
    representative of the respondent law firm who had carriage of the file (the lawyer
    with carriage) (not Mr. Quance or Mr. Waldman) disclose whether he or anyone
    else appeared before the settlement approval judge prior to the April 22, 2013
    endorsement.

[27]

However, in a letter dated April 23, 2013 from
    the lawyer with carriage to all interested counsel, which was appended to the
    lawyer with carriages affidavit, the lawyer with carriage states: After
    several months of back and forth between [the settlement approval judge] and I
    in an attempt to resolve this matter, he has released a partially unsatisfactory
    endorsement.

[28]

In his letter, the lawyer with carriage goes on
    to explain that the settlement approval judge differed with him over the
    appellants account. To avoid having the matter return to litigation and
    because his clients had already agreed to the appellants account, he proposed
    a solution under which the appellant would receive an additional $76,000,
    consisting of $41,000 allocated by the settlement approval judge to pay outside
    legal counsels fees, which had already been paid, and $35,00 for future legal
    fees. The lawyer with carriage concludes his letter by acknowledging this would
    not leave the appellant with full payment of its account, but that he was
    trying to come as close to their previous proposal as possible and keep the
    rest of us from being thrown back into the fray.

[29]

In his affidavit, the lawyer with carriage
    states that he offered to write to the settlement approval judge to advance his
    proposal but that the appellants response indicated it wanted to be paid in
    full and was contemplating submissions to the settlement approval judge,
    meeting with him or an appeal of his decision.

[30]

A partial judgment dated June 3, 2013 signed by
    the settlement approval judge stipulates in para. 7 that the appellant shall
    receive $102,500.00, inclusive of fees, disbursements and applicable taxes, in
    satisfaction of its outstanding account.

[31]

The lawyer with carriage does not describe in
    his affidavit what further steps were taken to obtain the partial judgment or
    to notify the appellant of the date of any planned attendance before the
    settlement approval judge or of the date when materials would be delivered to
    the settlement approval judge. Certain e-mail exchanges between the lawyer with
    carriage and the appellant, appended to the lawyer with carriages affidavit, indicate
    that the lawyer with carriage advised the appellant he intended to obtain a
    judgment consistent with the settlement approval judges endorsement and also
    demonstrate that the appellant contemplated the possibility of making
    submissions to the settlement approval judge or appealing any judgment he
    issued if it was inconsistent with the $206,000 judgment:

E-mail dated May 2, 2013, sent at 3:09 p.m.
    from the lawyer with carriage to a representative of the appellant

Here are the affidavits. They disclosed the
    amount the previous judge had ordered, and the Order for $206,000, plus
    interest was included as an Exhibit.

As a gesture of goodwill, I am willing to ask
    [the settlement approval judge] to order that your firm receive the additional
    $76,000 I set out in my letter, in addition to the $102,500 [the settlement
    approval judge] believed was reasonable. That is $178,500, which isnt that far
    from the $206,000. Our clients really deserve some closure after twenty years,
    dont you think?

The alternative is for me to settle as per
    [the settlement approval judges] endorsement, and then your firm can try to
    obtain the full $206,000 through him. However, if you intend to bring my
    clients into your battle with him over fees, the Public Guardian and Trustee
    (which recently reviewed and gave approval to the breakdown after [the
    settlement approval judge] pulled them back into the fold) and I will have to
    become involved and we may have to seek costs.

I have a draft letter to [the settlement
    approval judge] in accordance with my previous letter which is ready to go. Can
    I send it and ask him to allocate $178,500 to your firm, or must we delay
    closure for our clients (and our firms) even longer? [Emphasis added.]

E-mail dated May 14, 2013, sent at 11:03
    p.m. from the representative of the appellant to the lawyer with carriage

I note your position that you will settle on the terms set
    out in [the settlement approval judges] endorsement. If you proceed in this
    fashion I trust you will hold the full amount of [the appellants] account as
    per the charging order obtained in this matter until our account is dealt with
    by way of agreement or assessment.

Any attempt to circumvent the charging order obtained will be
    opposed.

I am attempting to contact the Office of the PGT in order to
    determine their position.
I will also wish to make submissions to [the
    settlement approval judge] regarding this matter
. I understand His Honour is
    currently on holiday. [Emphasis added.]

E-mail dated May 15, 2013, sent at 12:07
    p.m. from the lawyer with carriage to the representative of the appellant

When I said I would settle on the terms set
    out in [the settlement approval judges] endorsement, I meant that I would
    forward your firm the $102,500, and leave the extra funds as set out in my
    letter where they are (whether in Court, in Legacys
[2]
hands, or in my trust
    account). Presumably there would be other excess funds temporarily held in one
    or more of those places too, since my draft Judgment set out a relatively exact
    breakdown.

I would take my firms fees as set out in my
    draft Judgment, and only allocate the extra [the settlement approval judge]
    gave to Mr. Sheikh and to my firm once everything is settled by his Honour.

E-mail dated May 15, 2013, sent at 4:17
    p.m. from the representative of the appellant to the lawyer with carriage

If, and I dont concede that it is, the
    [$206,000 judgment] is invalid, we continue to have a charging order against
    the file for the sum of $485,868.05, or in [
sic
] amount as assessed by an assessment officer. I think you would
    only be able to release funds in excess of the $485k until [the appellants]
    account is assessed.

I dont understand how [the settlement
    approval judge] believes he has the authority to overrule another Judgment of
    the Court [the $206,000 judgment]. This is especially so when the Public
    Guardian & Trustee (representing Ms. Sheikh) has provided their blessing
    and made no objection.
It may well be that it will be necessary to appeal
    any Judgment made by [the settlement approval judge] should it not include [the
    appellants] account confirmed by Judgment
.

Believe me, I would much rather see this
    matter finished so that this long chapter can be closed. I only see that
    happening if we can arrange a meeting with [the settlement approval judge]
    (with yourself, [the appellant] and the PGT) so that this can be ironed out.
    [The settlement approval judges] endorsement has significant errors and
    misconceptions which need to be corrected
.
    [Emphasis added.]

Let me have your thoughts.

E-mail dated May 15, 2013, sent at 5:37
    p.m. from the lawyer with carriage to the representative of the appellant

I dont think the charging order had any
    further effect once [the $206,000] Order came into existence, and certainly
    [the settlement approval judge] has the parens patriae jurisdiction to make a
    final Judgment in the best interests of Mrs. Sheikh and the Sheikh family,
    particularly in light of the fact that he has greater knowledge of the case and
    the financial issues than [the $206,000 judgment judge] ever did.

I think the clients have waited long
    enough. I will proceed to issue and enter a Judgment in accordance with [the
    settlement approval judges] endorsement
, and I
    will allow the Court, Legacy Private Trust, and our office to hold onto those
    funds that are different from my draft Judgment (which left your firm with
    $206,000 plus interest at 3% from June 13, 2011). Everything else will be
    distributed once the Judgment is ready, including the immediate sum of $102,500
    to your firm.

Your firm can argue with [the settlement
    approval judge] about the differential
. [Emphasis
    added.]

[32]

The appeal record does not reveal whether there
    were further communications between the respondent law firm and the appellant
    prior to the partial judgment being obtained or contain any details of what
    steps were taken to obtain the partial judgment.

[33]

During a cross-examination on his affidavit
    filed on the rule 59.06(2)(c) motion, the representative of the appellant who
    dealt with the lawyer with carriage indicated that he (the representative of
    the appellant) assumed it would be incumbent on the lawyer with carriage to
    arrange a meeting with the settlement approval judge as the lawyer with
    carriage was dealing with the settlement approval judge.

(5)

The appellant moves under rule 59.06 on June 26, 2014

[34]

On June 26, 2014, the appellant brought a motion
    under rules 59.06 and 1.04 to carry into operation the $206,000 judgment
    by varying para. 7 of the settlement approval judges partial judgment to
    accord with the $206,000 judgment. The motion was later amended to add a
    request, based on s. 34(2) of the
Solicitors Act
, for an order declaring that the respondent law firm is jointly and
    severally liable with the personal respondents to pay the unpaid balance owing
    under the $206,000 judgment.

[35]

According to the affidavit filed by the
    representative of the appellant who dealt with the lawyer with carriage, the
    appellant received the partial judgment on July 5, 2013 and also received
    $102,500 at some point. In the cross-examination on his affidavit, the
    appellants representative explained that the appellant did not take steps to
    address the partial judgment until June 2014 because the instructing partner
    became ill in the summer of 2013, was hospitalized for a number of months and
    did not return to his office until the beginning of 2014. After he returned to
    the office and was advised of what had taken place, the instructing partner
    began to seek out counsel to determine how to deal with the matter.

(6)

The respondent law firm disburses funds under the partial judgment

[36]

In his affidavit filed on the motion, after
    referencing the partial judgment and the e-mails quoted above, the lawyer with
    carriage states that [a]s no further word, action or appeal ever issued from
    [the appellant], the settlement funds were ultimately disbursed by our firm in
    accordance with the decision of [the settlement approval judge]....

C.

Rule 59.06(2)(c)

[37]

Rule 59.06(2)(c) provides: A party who seeks to
     carry an order into operation  may make a motion in the proceeding for the
    relief claimed.

D.

The motion judges reasons

[38]

The motion judge dismissed the appellants
    motion. He found that rule 59.06(2)(c) does not authorize a Superior Court
    judge to determine which of two conflicting orders of that court is correct. He
    said this was not a case of varying an order to deal with a matter not
    adjudicated, as in
Clarke v. Clarke
,
2013 ONSC
    5352, at para. 29. Nor was it a case of removing an impediment to reflect the
    true intent of the court, as in
Phillips Estate v. Ontario (Public
    Guardian & Trustee)
(1999),
102 O.T.C. 67 (Ont. S.C.),
    at para. 11. Rather, the orders reflected two different intents.

[39]

The motion judge also rejected the appellants submission
    that he could rely on
res judicata
or the
    decision in
Doucet-Boudreau v. Nova Scotia (Department of Education)
,
2003 SCC 62, [2003] 3 S.C.R. 3, at para. 81, to vary the 2013
    judgment. He concluded that he was being asked to invalidate a subsisting order
    of the court. He said this was a matter for the Court of Appeal.

[40]

The motion judge concluded his reasons by
    observing: Why neither counsel went back to [the settlement approval judge] is
    a mystery. He held this was not a case for costs.

E.

Positions of the parties on appeal

(1)

The appellant

[41]

The appellants primary argument is that the
    motion judge erred in holding that rule 59.06(2)(c) does not authorize the
    variation of the partial judgment it seeks. In the alternative, if rule 59.06(2)(c)
    is not the correct rule, in oral argument on the appeal, the appellant asked
    that its notice of motion be amended to seek relief under rule 37.14 and that
    the relief it seeks be granted under that rule.

[42]

The appellant submits that rule 59.06(2)(c) is
    broadly worded to permit a party who seeks to carry an order into operation 
    to bring a motion in the proceeding for the relief claimed. Under rule 1.03, order
    includes a judgment.

[43]

In this case, the $206,000 judgment finally
    determined the amount owing under the appellants account:
Ruetz v.
    Morscher and Morscher
(1995), 28 O.R. (3d) 545 (Gen.
    Div.), at paras 14-15.

[44]

Moreover, prior to the partial judgment being
    issued, the settlement approval judge stipulated that if all parties and law
    firms did not agree to the resolution he proposed, the settlement is not
    approved and the issues would have to proceed through a litigation process.

[45]

The appellant did not consent to the resolution
    proposed by the settlement approval judge  and the record does not reveal that
    the settlement approval judge was informed of that fact.

[46]

Absent the appellants consent, the settlement
    approval judge was without jurisdiction to vary a final order and it was never
    his intention to do so. Paragraph 7 of the partial judgment should thus be
    treated as ineffective and can properly be ignored:
McIntosh v.
    Parent
(1924), 55 O.L.R. 552 (C.A.), at para. 26;
Graham
    v. Canada
(2000), 209 F.T.R. 22, at para. 32.

[47]

In the particular circumstances of this case, rule
    59.06(2)(c) permits a Superior Court judge to grant the relief claimed and the
    motion judge erred in holding otherwise.

[48]

In support of its arguments relating to rule
    59.06(2)(c), the appellant points out that in
Clarke
,
the court held that that rule creates an independent source of
    jurisdiction to give directions or make an order to carry an order into
    operation. Further, in
Phillips Estate
, the
    court stated the subrule extends to any situation where a party seeks to
    remove a perceived impediment to the operation of an order, thereby allowing it
    to reflect the true intention of the court which granted the order. According
    to the appellant, no case law supports the proposition that rule 59.06(2)(c)
    cannot remove an impediment to the operation of an order just because the
    impediment is contained in a subsequent order.

[49]

The appellant submits that the only relevant
    consideration is the intent of the court that issued the initial order and
    finally determined the issue under consideration. A final order cannot be
    called into question by a subsequent judge who lacks jurisdiction to adjudicate
    the matter.

[50]

Finally, the appellant relies on
Doucet-Boudreau
, at para. 81, where the Supreme Court of Canada referred
    specifically to rule 59.06(2)(c) before observing that the practice of
    providing further direction on remedies in support of a decision is known to
    our courts, and does not undermine the availability of appeal.

[51]

In the alternative, if rule 59.06(2)(c) does not
    afford a remedy, the appellant should be permitted to amend its motion on
    appeal to claim relief under rule 37.14. Rule 37.14 permits a party or other
    person affected by an order obtained without notice to move to vary or set
    aside the order. Although the rule provides that the person should move
    forthwith, delay is not a bar to relief being granted. It makes sense for this
    court to deal with the matter on the merits under rule 37.14 because the issues
    for the court are essentially the same as the issues raised on the appellants
    motion under rule 59.06(2)(c) as is the record.

(2)

The respondents

[52]

The respondents submit that it is
    well-established that rule 59.06(2)(c) does not confer the power to set aside a
    previous order of the court:
Salvador v. Mathe
r
(1999), 37 C.P.C. (5th) 214 (Ont. Div.
    Ct.), at para. 13;
Attis v. Canada (Minister of Health)
,
2009 CarswellOnt 7872 (S.C.), at para. 9. Moreover, the motion
    judge was correct in distinguishing the authorities to which he referred in
    that none involved a superior court determining which of two subsisting Superior
    Court orders is correct.

[53]

In any event, the respondents dispute the
    appellants submission that the settlement approval judge lacked jurisdiction
    to review the $206,000 judgment. That judgment did not address approval of the
    settlement that had been reached as required under rule 7.08.

[54]

The respondents point out that the lawyer with
    carriage informed the appellant of his intention to proceed with the settlement
    prior to obtaining the partial judgment. In its e-mails, the appellant
    contemplated the possibility of making submissions to the settlement approval
    judge or appealing his judgment. Despite ample opportunity both before and
    immediately after the partial judgment was issued, the appellant did nothing
    for about one year. The appellant has not demonstrated bad faith on the part of
    the lawyer with carriage. In all the circumstances, the appellant should not be
    permitted to re-open now a proceeding that extended over many years and has
    long been settled.

F.

Analysis

[55]

I would not accept the appellants submissions.

[56]

As a starting point, I do not agree that rule 59.06(2)(c)
    affords a remedy to the appellant in this case.

[57]

I acknowledge that the rules must be liberally
    construed to secure the just, most expeditious and least expensive
    determination of every civil proceeding on the merits and that, where matters
    are not provided for in the rules, the practice shall be determined by analogy
    to them: rules 1.04(1) and (2).

[58]

Nonetheless, I do not think these broad
    interpretive principles support reading authority into rule 59.06(2)(c) to
    grant the relief requested so that para. 7 of the partial judgment would
    read that the appellant shall receive $206,000, instead of $102,500, in
    satisfaction of its account.

[59]

Where the rules contemplate that an existing
    order may be set aside or varied other than by way of an appeal, they say so
    explicitly.

[60]

For example, rule 37.14(2) provides that the
    court
may set aside or vary
the order
    (emphasis added) where it was obtained on a motion without notice, or where a
    party fails to appear on a motion through accident, mistake or insufficient
    notice. Rule 59.06(1) provides that an order 
may be amended


(emphasis added) where it contains an error arising from
    an accidental slip or omission or where it requires amendment in any
    particular on which the court did not adjudicate. And rule 59.06(2)(a) permits
    a party to move to have an order

set aside or varied
on the ground of fraud or of facts arising or discovered after it
    was made (emphasis added).

[61]

Unlike these rules, rule 59.06(2)(c) does not
    contain explicit language that would authorize the court to set aside, vary or
    amend the terms of a subsisting order.

[62]

Further, contrary to the appellants attempts to
    characterize its request as nothing more than carrying the $206,000 judgment
    into operation, l agree with the motion judge that to do so, the motion judge
    would have had to choose between conflicting orders of the Superior Court and
    would have to invalidate a subsisting order of the Superior Court. Rule
    59.06(2)(c) does not provide a Superior Court judge with authority to do so. I
    also agree with the motion judge, for the reasons he gave, that none of the
    authorities on which the appellant relied before the motion judge supported
    granting the relief requested.

[63]

Finally, rule 59.06(2) specifies that a party
    may make a motion in the proceeding for enumerated relief. As the appellant is
    not a party to the personal injury action, it is not clear to me that it was
    entitled to apply in this proceeding for relief under rule 59.06(2) in any
    event.

[64]

As I see it, the more difficult issue is whether
    the appellant should be permitted on appeal to amend its motion to claim relief
    under rule 37.14, a rule it did not rely on in the court below.

[65]

Rule 37.14(1) provides, in part, that a person who
    is affected by an order obtained on motion without notice or who fails to
    appear on a motion through insufficient notice may move to set aside or vary
    the order, by a notice of motion that is served forthwith after the order comes
    to the persons attention and names the first available hearing date that is at
    least three days after service of the notice of motion. Rule 37.14(2) provides
    that [o]n a motion under subrule (1), the court may set aside or vary the
    order on such terms as are just.

[66]

Although granting relief under rule 37.14 is discretionary,
    the requirements of the rule make it clear that a party or other person
    affected by an order who seeks relief must proceed with dispatch and that any
    significant delay could militate against granting relief. Particularly in a
    case involving a final order, the requirement to move promptly serves not only to
    avoid prejudice, but also to preserve the important value of finality in civil
    litigation.

[67]

Here, the appellants lengthy delay in taking
    steps to challenge the partial judgment together with its failure to advance
    any real explanation for much of that delay tells strongly against granting
    relief.

[68]

The appellant received the partial judgment on
    July 5, 2013 but took no steps to challenge it until almost a year later on June
    28, 2014. The only explanations provided for this lengthy delay are that the
    instructing partner was ill and out of the office through to the beginning of 2014
    and that following his return he sought advice from counsel.

[69]

I cannot understand why a multi-partnered law
    firm
[3]
could not take appropriate steps
    to protect its own interests simply because a senior partner was ill. But even
    if the delay while the instructing partner was ill was reasonable, the further
    delay of six months to determine a course of action is not. Timelines for
    taking steps are an integral part of the
Rules of Civil Procedure
. Decisions have to be made in accordance with those timelines. In
    my view, the appellant has not provided an adequate explanation for its delay
    in taking steps to challenge the partial judgment.

[70]

On the other hand, the appeal record does not
    disclose how the partial judgment was obtained in the absence of the appellants
    consent to the reduction of its legal fees or whether the lawyer with carriage
    advised the settlement approval judge of the lack of consent.

[71]

The settlement approval judge said in his April
    22, 2013 endorsement that if the parties and law firms did not accept his
    suggested resolution, the proposed settlement was not approved and all issues
    among all parties [would] have to be resolved in an active litigation process
    with independent representation for Ms. Sheikh. Considering the endorsement as
    a whole, the settlement approval judge was contemplating not only that the
    personal injury action would continue, but also that the $206,000 judgment
    would be challenged.

[72]

In the face of this endorsement, it is difficult
    to understand how the partial judgment could have been obtained in the absence
    of the appellants consent.

[73]

Moreover, based on this endorsement, in the
    absence of the appellants consent, advising the settlement approval judge that
    the appellant was not consenting to a reduction of its legal fees was not
    optional, it was mandatory. To the extent that the respondent law firm may be
    relying on its advice to the appellant that it intended to obtain the partial
    judgment as a justification for not informing the settlement approval judge
    that the appellant was not consenting, such reliance is ill-conceived. In the
    face of the settlement approval judges endorsement, the lawyer with carriage
    had an overriding duty to advise the court the appellant was not consenting,
    lest the court be misled. That is because the settlement approval judge had
    said the settlement was not approved unless all parties and law firms agreed
    with his proposal.

[74]

If the lawyer with carriage did not advise the
    settlement approval judge that the appellant was not consenting, that omission,
    although possibly well-intentioned, could amount to serious misconduct that
    could potentially, of itself, justify an order setting aside the partial
    judgment, either in whole or in part, despite the appellants delay.

[75]

In oral argument, the respondents did not dispute
    that a possible inference arising from the appeal record is that the lawyer
    with carriage did not advise the settlement approval judge that the appellant
    was not consenting to the settlement approval judges proposal. Another
    possible inference may be that the settlement approval judge changed his mind.

[76]

That said, had the appellant moved under rule 37.14
    to set aside all or part of the partial judgment, as it was entitled to do, the
    rule 37.14 motion record would properly have included all the material that was
    before the settlement approval judge both when he issued his April 22, 2013
    endorsement and when he signed the partial judgment. That material was not
    included in the rule 59.06(2)(c) motion record. Nor, apparently, did the
    appellant cross-examine the lawyer with carriage on his affidavit filed on the rule
    59.06(2)(c) motion to determine how he obtained the partial judgment in the
    face of the settlement approval judges April 22, 2013 endorsement and in the
    absence of the appellants consent. In the result, the appeal record does not
    include important evidence that would have been before the court on a rule
    37.14 motion concerning how the partial judgment was obtained. Responsibility
    for this omission lies squarely at the feet of the appellant.

[77]

Taking account of all the circumstances, I would
    not permit the appellant to amend its motion on appeal. The strongest argument
    favouring the appellants entitlement to relief under rule 37.14 on appeal lies
    in the possible inference that the lawyer with carriage did not advise the
    settlement approval judge that the appellant was not consenting to the
    reduction of its legal fees. But had the appellant moved under rule 37.14, that
    question would have been squarely before the court and could have been
    determined based on proper material. In the absence of a proper record, I
    conclude that it would be unfair to the respondents to permit the appellant to
    amend its motion on appeal to claim relief under rule 37.14.

[78]

In any event, assuming the appellant may be
    entitled to relief under rule 37.14, it seems possible to me that the only proper
    remedy may be to set aside the partial judgment in its entirety. If that is the
    case, it would be necessary that the appellant also serve the defendants to the
    action with its notice of motion.

G.

Disposition

[79]

Based on the foregoing reasons, I would dismiss
    the appeal.

[80]

As for costs, I would address the issue in two parts.

[81]

In the first part, I would decline to award costs of the appeal to the
    respondent law firm relating to the issue of its joint and several liability
    for the balance claimed by the appellant under the $206,000 judgment. The
    question of how the lawyer with carriage obtained the partial judgment without
    the appellants consent in the face of the settlement approval judges
    endorsement cried out for an explanation to the court. The respondent law firm
    failed to provide that explanation. I would not therefore make an order for
    costs of the appeal relating to the joint and several liability issue in favour
    of the respondent law firm.

[82]

In the second part, unless the respondent law firm has, or proposes to,
    waive its fees and disbursements to the personal respondents in connection with
    the underlying motion and the appeal, I would direct the respondent law firm to
    deliver brief written submissions within 14 days following the release of this
    endorsement concerning whether an order should be made under rule 57.07(1)(a)
    disallowing any costs of the appeal or the motion below as between the
    respondent law firm and the personal respondents and requiring the respondent
    law firm to reimburse the personal respondents for any such costs already paid,
    if any. The submissions should disclose the costs incurred for the motion and
    the appeal and should identify the costs attributable to the rule 59.06 issue
    and those attributable to the joint and several liability issue.

[83]

The genesis of the underlying motion was the conduct of the lawyer with
    carriage in obtaining the partial judgment, apparently without the appellants
    consent. The personal respondents are innocent victims in the legal quagmire
    that has ensued.  Moreover, if the partial judgment was obtained without
    advising the settlement approval judge that the appellant was not consenting, it
    is difficult to understand why the personal respondents should bear any
    responsibility for the costs of proceedings arising from that omission.

[84]

Given the respondent law firms failure to explain how the partial
    judgment was apparently obtained without the appellants consent, the
    respondent should explain why the personal respondents should bear any of the
    costs of the appeal and the motion below. Depending on whether a rule
    57.07(1)(a) order is made, the court will also require information necessary to
    make an order for costs of the appeal in favour of the personal respondents
    against the appellant in relation to the rule 59.06 motion but excluding any
    costs for the joint and several liability issue.

[85]

Finally, even if a rule 57.07(1)(a) order is made in favour of the
    personal respondents, I would not consider making a rule 57.07(1)(c) order in
    favour of the appellant.

[86]

The appellant was unsuccessful on the appeal. Further, the explanation
    provided for failing to take some steps on its own to make submissions to the
    settlement approval judge demonstrates a lack of diligence and initiative. The
    appellant also failed to cross-examine the lawyer with carriage on his
    affidavit filed on the rule 59.06 motion to determine how he obtained the
    partial judgment without the appellants consent in the face of the settlement
    approval judges endorsement. The appellant thus bears some responsibility for
    the partial judgment being taken out without its consent and significant
    responsibility for the inadequate record that is before the court.

Released:

JUN 30 2016                                     Janet
    Simmons J.A.

JS                                                     I
    agree H.S. LaForme J.A.

I
    agree Grant Huscroft J.A.





[1]
Rule 7.08(1) provides: No settlement of a claim made by or against a person
    under disability, whether or not a proceeding has been commenced in respect of
    the claim, is binding on the person without the approval of a judge. Rule
    7.08(4) prescribes the material that must be filed on a motion for approval of
    a settlement involving a person under disability, which includes an affidavit
    of the litigation guardian and an affidavit of the lawyer for the litigation
    guardian.



[2]

According to an affidavit filed by the lawyer with carriage,
    after being retained his first step was to deal with the Public Guardian and
    Trustees office, which had concerns about how the Sheikh family was handling
    funds. Eventually this led to Legacy Private Trust being engaged to manage
    funds earmarked for Ms. Sheikh.



[3]

On his cross-examination, the appellants representative
    confirmed that he was a junior partner at the time of these events.


