



COURT OF APPEAL FOR ONTARIO

CITATION: St. Jean v. Armstrong, 2017 ONCA 145

DATE: 20170221

DOCKET: C60876

MacFarland, van Rensburg and Huscroft JJ.A.

BETWEEN

Cindy St. Jean, Claude Pothier and Adam Pothier
    (by his Litigation Guardian Claude Pothier)

Plaintiffs (Appellants)

and

Richard Armstrong, Co-Op Taxi and Marcel
    Desjardins

Defendants (Respondents)

BETWEEN

Adam Pothier (by his Litigation Guardian Claude
    Pothier)

Plaintiff (Appellant)

and

Royal & Sun Alliance Insurance Company of
    Canada

Defendant (Respondent)

Geoffrey Adair, Q.C., and Kathleen Erin Cullin, for the
    appellant Cindy St. Jean

No one appearing for the respondents

Heard: February 13, 2017

On appeal from the judgment of Justice R.G.S. Del Frate
    of the Superior Court of Justice, dated May 4, 2015.

ENDORSEMENT

[1]

This is an appeal by the solicitors who represented the plaintiffs in
    two proceedings in the Superior Court which ultimately led to a motion for
    approval of the infant settlement reached in both of those proceedings.

[2]

It is not, as the title of proceedings would indicate, an appeal by
    those plaintiffs.

[3]

There are no responding parties to this appeal. The plaintiffs do not
    oppose this appeal nor do the respondents. The Childrens Lawyer was served
    with the appeal materials but takes no position on the appeal.

[4]

The solicitors appeal the motion judges decision to reduce their fee on
    the accident benefits claim, and to not award them GST/HST (which they claim at
    a prorated rate of 8%) in addition to the amount claimed for fees. They also
    appeal the motion judges refusal to grant a sealing order and his failure to
    refer their fees to an assessment officer.

[5]

At the outset of argument, Mr. Adair, on behalf of the solicitors,
    abandoned the appeal in relation to the sealing order and did not make any
    argument in relation to the assessment point.

[6]

The facts of the motor vehicle accident giving rise to this matter are
    set out in paragraphs two and three of the reasons of the motion judge. The
    infant plaintiff suffered a traumatic brain injury and has permanent sequelae
    as a result of the accident.

[7]

Mr. Wallbridge was retained shortly after the accident to act in
    relation the tort and accident benefits claims. In July, 2006, about two years
    post-accident, Mr. Pothier signed a contingency fee agreement (CFA). The
    relevant part of that document provides:

Assuming we obtain a settlement on your behalf, we will charge
    one third of your recovery, plus GST and disbursements.

[8]

Both actions ultimately settled before trial in the amounts set out in
    paragraphs eight to ten of the reasons of the motion judge:

Tort Action

Damages                         $550,000.00

Costs including HST       $110,000.00

Disbursements
$84,510.00

Total                                $744,510.00

Accident Benefits Claim

Total Amount                   $850,000.00

Costs
$125,000.00

Total                                $975,000.00

[9]

The global settlement, inclusive of costs, was $1,719,510.00. In accordance
    with the CFA counsel sought fees in the amount of $466,000.00 plus GST/HST of
    $37,280 plus disbursements of $84,510.00 for a total of $587,790.00.

[10]

The motion judge requested and received further information
to
    substantiate the claim for one third of the AB Claim
. He met with counsel
    twice and ultimately held a hearing on December 18, 2014.

[11]

He reviewed the jurisprudence in relation to CFAs and
    particularly in relation to those involving claims both in tort and for
    accident benefits. In particular he noted
Raphael Partners v. Lam
(2002), 61 O.R. (3d) 417 (S.C.), as well as
Henricks-Hunter v. 814888
    Ontario Inc.
, 2012 ONCA 496, among others. He also noted Justice Wilkins
    decision in
Adler v. State Farm
(2008), 92 O.R. (3d) 266, which as he
    noted
highlighted the difference between a CFA requiring court approval in
    a tort claim and an AB claim.

[12]

The motion judge approved the CFA in relation to the tort claim and
    approved the agreement in relation to that claim. He allowed fees in the sum of
    $183,333.00 but made the amount inclusive of HST. This amount reflected one
    third of the $550,000.00 amount allocated for damages.

[13]

He then reduced the amount sought for legal fees in relation to the AB
    claim from $280,500.00 to $170,000.00 again, such figure to be inclusive of
    HST. There was no issue in relation to the disbursements which were allowed as
    claimed.

[14]

In his reasons in paragraphs 25 through 40, the motion judge considered
    the nature of each of the distinct claims made.

[15]

He pointed out the difficulty he had in relation to the reconstructed docket
    entries.

[16]

He accepted the distinction in the jurisprudence between tort and
    accident benefit claims and contrasted the risk assumed by the firm in the tort
    claim compared to the relative lack of risk on the AB claim.

[17]

There was a serious risk that there could be no recovery on the tort
    claim but no such risk existed in relation to the AB claim  it wasnt a
    question of if but rather how much would be recovered with the limits
    prescribed by the legislation.

[18]

In his able argument, Mr. Adair emphasized the excellent result achieved
    by counsel in having achieved an overall settlement in excess of $1.7 million
    dollars. He stressed the high risk nature of the tort claim, the length of
    time counsels firm carried the case (some eight years before settlement was
    reached) and the high disbursements carried by the firm. None of this was lost
    on the motions judge. But while there was risk in the tort claim, there was little
    risk in the AB claim. Adam was covered under the policy, and while there were
    some differences over the amount to be paid for attendant care benefits,
    payments were made and the claim was ultimately settled after pleadings.

[19]

Counsel also pointed out that the sum of $275,000.00 had been paid in
    accident benefits, in addition to the $850,000.00 lump sum of the settlement
    amount. No fees were charged in relation to these monies and he says the lawyer
    is entitled to something for that.

[20]

We do not agree. First, until argument on this appeal, the lawyers never
    claimed any fees in relation to this amount. Secondly, it was not part of any
    settlement on which the CFA was based.

[21]

The initial agreement was that the plaintiffs would pay a percentage
    based on the settlement amount  not on any and all amounts they received.

[22]

We are not persuaded that the motion judge made any errors in his
    consideration of these claims. We agree with his conclusion that the AB claim
    did not entail the sort of risk and complexity that the tort claim did.

[23]

Nor do we agree that he erred in considering the tort and AB claims
    distinctly. Before the motion judge, counsel took that approach and sought to
    be paid on that basis of one third of the $550,000.00 allotted to the damages
    in the tort claim and one third of the $850,000.00 for the AB claim.

[24]

In our view, it was not an error for the motion judge to consider the
    fee claims for the tort action and the AB action separately. The claims were
    different with different risks associated with each of them.

[25]

We do not agree with the submission that the motion judge ought to have
    simply looked at the big picture and considered the claimed amount for fees
    of $466,000.00 in relation to the total amount of the settlement for damages
    which was $1,400,000.00 in both claims.

[26]

In our view, it was appropriate for him to treat these matters as he did
    and particularly so when it was the way counsel presented it to him.

[27]

Every case must be considered on its own particular facts and we are
    satisfied the motion judge carefully considered the issues raised in relation
    to this settlement and we would not interfere with his overall conclusion.

[28]

That said, an issue does arise in relation to the GST/HST. The CFA does
    clearly say that the lawyers were to be paid one third of any settlement plus
    GST and disbursements. The motion judge fixed the fees (which were percentage
    calculations) inclusive of HST. He approved the CFA in relation to the tort
    claim and accordingly the GST/HST on those fees ought to have been paid to the
    lawyers in addition to the fee amount. The GST/HST at the prorated rate of 8%,
    on fees of $183,333.00 is $14,666.64.

[29]

Similarly, in our view, although he reduced the fee on the AB claim to
    $170,000.00, the lawyers should have the GST/HST of $13,600.00.

[30]

When the lawyers raised this issue with the motion judge after the
    release of his reasons and asked that he amend this finding, the motion judge
    considered that he was
functus
at that point and accordingly the issue
    was left for this court.

[31]

In the result, the judgment is amended in accordance with these reasons.
    In all other respects the appeal is dismissed.

J. MacFarland J.A.

K. van Rensburg J.A.

Grant Huscroft J.A.


