



COURT OF APPEAL FOR ONTARIO

CITATION: Robins Appleby LLP v. Todd Family Holdings Inc.,
    2019 ONCA 920

DATE: 20191122

DOCKET: C67162

van Rensburg, Paciocco and Thorburn JJ.A.

BETWEEN

Robins Appleby LLP

Creditor (Respondent)

and

Todd Family Holdings Inc.

Debtor (Appellant)

and

Roy John William Gardiner

Garnishee

Gary
    Sugar, for the appellants Todd Family Holdings Inc. and GMS Law Professional
    Corporation

Ellad Gersh and Joseph
    Jamil, for the respondent

Heard and released
    orally: November 20, 2019

On appeal from the order of
    Justice Laura A. Bird of the Superior Court of Justice, dated December 27, 2018.

REASONS FOR DECISION

[1]

Robins Appleby LLP (Robins) represented Todd Family Holdings Inc. (Todd)
    in a lawsuit against Mr. Gardiner. Robins attempted to get off the record,
    mid-trial, for non-payment of fees but was ordered to continue. Despite the
    rift between solicitor and client, Robins successfully pursued the lawsuit,
    securing a judgment of $2.2 million, and a massive costs award approaching $1
    million. After trial, Robins was released as counsel of record.

[2]

After continued non-payment of fees by Todd, Robins obtained a charging
    order and a summary judgment for unpaid fees (fee judgment).

[3]

In the meantime, Mr. Gardiner had appealed the trial decision. The
    appeal was allowed in part. Specifically, Todd had obtained control of Mr. Gardiners
    business six years before the lawsuit was completed. Mr. Gardiner contends that
    the returns Todd received in doing so are greater than the damage award. Based
    on the evidence before it, this court has ordered an accounting and
    reconsideration of the damages award. The litigation continues.

[4]

GMS Law Professional Corporation (GMSL) is now acting for Todd in that
    continuing litigation pursuant to a contingency fee agreement. In the course of
    that continuing litigation GMSL secured a costs award against Gardiner in
    connection with a motion. Robins discovered this and issued 16 notices of garnishment,
    allegedly to intercept the costs owed to Todd.

[5]

In response to the notices of garnishment, Todd and GMSL brought a
    motion seeking:

1.

A declaration that GMSL has a charging order or lien pursuant to the
Solicitors
    Act
, R.S.O. 1990, c. S-15, s. 34(1) (charging order);

2.

A declaration that the GMSL charging order has priority over Robins
    charging order;

3.

An order vacating the notices of garnishment; and

4.

A sealing order.

[6]

The sealing order request was made in response to the pleading and
    supporting materials filed by Robins. Todd alleges that these documents include
    confidential information. Robins does not admit that it improperly disclosed confidential
    information but consented to the sealing order. After a contested motion on the
    remaining issues, the other relief sought by Todd and GMSL in the motion was
    denied.

[7]

Todd and GMSL now appeal all orders made in the motion decision, save
    for the sealing order. We would dismiss their appeals.

[8]

The motion judge denied the charging order because she was not satisfied
    that there was evidence that Todd cannot or will not pay GMSLs fees. Such a
    finding, including a finding that it is likely that the fees will not be paid
    without a lien or charging order, is a prerequisite to a charging order:
Weenan
    v. Biadi
, 2018 ONCA 288, 141 O.R. (3d) 276, at paras. 15, 24. The motion
    judge was entitled to come to the decision that GMSL had not met this burden.
    The motion record confirmed Todds desire to pay GMSL, and the motion judge
    found the affidavit evidence relating to the ability of Todd to pay to be
    inconsistent. Moreover, depending on the terms of the contingency agreement,
    there may be no fees due and payable, or the agreement may make the risk of
    non-payment negligible. Yet the terms of the contingency agreement between Todd
    and GMSL were not proved by Todd and GMSL, who bore the burden of proving an
    inability to pay.

[9]

Further, Todd and GMSL say that the contingency fee agreement is
    completely irrelevant and that the evidence about Todds impecuniosity was
    uncontroverted. The existence of the contingency fee agreement was clearly
    material and relevant. The motion judge rejected the assertion that GMSL would
    not be paid, in part because of the contingency fee agreement. She noted that
    the fact that GMSL entered into a contingency fee agreement with the debtor
    suggests that the law firm believes that it will secure a judgment from which
    it can recover its fees.

[10]

In these circumstances, the motion judge was entitled to exercise
    discretion not to grant the GMSL the charging order. There is therefore no need
    for us to address the priority dispute.

[11]

Nor did the motion judge err in refusing to vacate the garnishment notices.

[12]

Todds argument that the motion judge erred in this regard is predicated
    on Todds claim that the garnishment notices contravene the continued duty of
    loyalty Robins owes to Todd. Todd argues that enforcement of the judgment would
    prejudice Todds ability to pursue the action and would constitute an
    adversarial position against a former client relating to the previous retainer.

[13]

We do not agree. Rather, we agree generally with the views expressed by
    the motion judge. Lawyers who have earned their fees in an action will not ordinarily
    be required to wait for that action to end before enforcing judgment for unpaid
    fees. Former lawyers have no control over the conduct or completion of the
    action and should not have to wait indefinitely for outstanding fees. Absent
    exceptional circumstances, enforcing payment pending completion of the action will
    not be inconsistent with the ongoing duty of loyalty or put the lawyer in an
    adversarial position relating to the previous retainer. The motion judge was
    not satisfied on the evidence before her that this was such a case. She found
    that Todd had not established that enforcement of the fee judgment would impede
    Todds ability to maintain the action or constitute an adversarial position
    relative to Robins former retainer. We see no error in that decision.

[14]

Nor was the motion judge obliged in resolving the issues before her to
    address Todds claim that privileged and confidential information was
    wrongfully disclosed by Robins in its materials responding to the motion. The
    motion judge found that Todd and GMSL were not eligible for a charging order because
    of the inadequacy of their own evidence about Todds ability to pay.
We are not persuaded that the information the appellants
    contend is confidential is actually so.
Even if it occurred, the disclosure
    of confidential information is not relevant to whether the garnishment notices
    should be set aside. The right to garnish arises from the debt created by the
    fee judgment, not from the materials filed in response to the motion to set
    aside the garnishment notices. Whether confidential information was improperly
    disclosed in connection with this motion has no bearing on whether the notices
    of garnishment should be vacated.

[15]

The appeal of the motion decision is therefore dismissed.

[16]

We would grant leave to appeal the costs order but deny the costs appeal.
    The motion judge was not obliged to treat success on the motion as divided, or
    to split responsibility for costs on this basis. We owe deference to the motion
    judges discretion and would not interfere.

[17]

The costs appeal is therefore also dismissed.

[18]

Finally, we order, on consent, that the transcript of Todds examination
    in aid of execution found at Tab 20 of the Exhibit Book and Tab 20 of the
    Appeal Book and Compendium be sealed and not form part of the record in this
    appeal.

[19]

Costs in this appeal are ordered to be paid by the appellants in the
    amount of $15,000, inclusive of applicable taxes and disbursements.

K. van Rensburg J.A.

David M. Paciocco
    J.A.

Thorburn J.A.


