



COURT OF APPEAL FOR ONTARIO

CITATION: Weenen v. Biadi, 2018 ONCA 288

DATE: 20180321

DOCKET: M48284 (C61429)

Epstein, Hourigan and Paciocco JJ.A.

BETWEEN

Matthew Weenen

Plaintiff

(Respondent/Responding Party)

and

Graziano Biadi

Defendant

(Appellant/Non-Party)

Sarah Turney and Anastasia Reklitis, for the moving
    party, Fasken Martineau DuMoulin LLP

Yan David Payne, for the responding party, Matthew Weenen

Heard: In writing

REASONS FOR DECISION

overview

[1]

Fasken Martin DuMoulin LLP (the Law Firm) successfully represented
    Matthew Weenen (the Client) in an action against his neighbour, Graziano
    Biadi. The Client had sought damages against Biadi, for causing flooding on the
    Clients property. After an 18-day trial, Mr. Biadi was ordered to pay the
    Client $390,000 in damages and $550,000 in costs. In June, 2017 this court
    dismissed Mr. Biadis appeal of the damages award and ordered him to pay the
    Client his costs of the appeal in the amount of $50,000.

[2]

After the appeal was dismissed, the Law Firm brought a motion to this
    court for a charge or lien in the amount of $360,836.88 on the funds Mr. Biadi
    has been ordered to pay the Client. The law firm seeks this remedy as either a
    charging order under s. 34(1) of the
Solicitors Act
, R.S.O. 1990, c.
    S.15, or a lien under the courts inherent jurisdiction. The sum of $360,836.88
    is the remaining balance the Law Firm says it is owed out of the approximately
    $820,000 in fees and disbursements it charged the Client for representing him
    in these proceedings.

[3]

The Client contests the amount owed to the Law Firm. He initiated an
    assessment process before the Law Firm brought this motion.

[4]

When it initially brought its motion, the Law Firm sought only a
    charging order under s. 34 of the
Solicitors Act
. Section 34 provides
    as follows:

34. (1) Where a solicitor has been employed to prosecute or
    defend a proceeding in the Superior Court of Justice, the court may, on motion,
    declare the solicitor to be entitled to a charge on the property recovered or
    preserved through the instrumentality of the solicitor for the solicitors
    fees, costs, charges and disbursements in the proceeding.

[5]

The motion was first heard by Brown J.A., sitting alone. However, Brown
    J.A. questioned this courts jurisdiction to grant a s. 34 charging order to
    secure solicitors fees over the damages and costs awarded by the Superior
    Court. In the light of his concern, the matter was referred to the panel that
    heard the appeal.

[6]

The Law Firm then sought to amend its notice of motion to add an
    alternative claim for a lien for its fees and disbursements based on the
    courts inherent jurisdiction. This request was allowed and the parties provided
    further submissions  on both the jurisdictional issue identified by Brown J.A.
    and the merits.

[7]

For the reasons that follow, we are of the view that while this court
    has the jurisdiction to make either order, the Law Firms motion for a charging
    order or a lien should nonetheless be dismissed.

analysis

(1)

The legal framework

[8]

Solicitors have special rights both under statute and at common law to
    facilitate payment of their client accounts: Edwin G. Upenieks & Robert J.
    van Kessel,
Enforcing Judgments and Orders
, 2d ed. (Toronto:
    LexisNexis Canada Inc., 2016), at s. 8.1. These include both charging orders,
    under s. 34 of the
Solicitors Act
, and solicitors liens on funds,
    derived from the courts inherent jurisdiction: see
Halton Standard
    Condominium Corp. No. 627 v. Grandview Living Inc.
, 2017 ONSC 1761, at
    paras. 29-30;
Thomas Gold Pettinghill LLP v. Ani-Wall Concrete Forming Inc.
,
    2012 ONSC 2182, 349 D.L.R. (4th) 431, at paras. 84-89.

[9]

This takes us to the question of jurisdiction raised by Brown J.A.

[10]

A
    courts inherent jurisdiction to declare a lien on the proceeds of its
own
judgments is well-established:
Thomas Gold Pettinghill LLP
, at para.
    89;

Re Tots and Teens Sault Ste. Marie
    Ltd.
(1976), 11 O.R. (2d) 103 (S.C.), at p. 108;

Welsh v. Hole
(1779), 99 E.R. 155 (K.B.), at pp. 155‑56. It follows that this court has
    the inherent jurisdiction to grant, when warranted, a solicitors lien over the
    $50,000 in costs awarded in favour of the Client on the appeal.

[11]

In
    the light of this conclusion, the question remains as to whether this court has
    jurisdiction to issue a charging order under the
Solicitors Act
or a
    solicitors lien over the damages and costs awarded by the Superior Court.

[12]

In
    our view, it does. A judge of the Court of Appeal is, by virtue of his or her
    office, a judge of the Superior Court with all of the jurisdiction, power and
    authority of a judge of that court under s. 13(2) of the
Courts of Justice
    Act
, R.S.O. 1990, c. C.43, and under s. 134(1) of that Act may make any
    order or decision that could have been made by the court appealed from. There
    is no dispute that a judge of the Superior Court has the jurisdiction, both
    pursuant to s. 34 of the
Solicitors Act
and, as previously indicated, under
    the courts inherent jurisdiction, to grant a charging order or lien on the
    damages and costs awarded in that court: e.g.,
Dalcor Inc. v. Unimac Group
    Ltd.
, 2017 ONSC 945, 136 O.R. (3d) 585, at para. 14;
Thomas Gold
    Pettinghill LLP
, at para. 89. To the extent a Superior Court judge could order
    a charge or a lien, a Court of Appeal judge is accordingly empowered to do so
    the same.

[13]

It
    follows that this Court has jurisdiction to issue a charging order over the
    amounts the trial judge ordered Mr. Biadi to pay the Client under s. 34(1) of
    the
Solicitors Act
or a lien under the courts inherent jurisdiction. What
    remains to be determined is whether this relief should be granted.

[14]

In
    order to obtain a charging order or a lien on the monies in issue, the onus is
    on the solicitor to demonstrate that a charging order or lien is warranted. The
    decision is discretionary:
Taylor v. Taylor

(2002), 60 O.R.
    (3d) 138 (C.A.), at para. 34;
Foley v. Davis
(1996), 49 C.P.C. (3d)
    201 (Ont. C.A.), at p. 202. In deciding whether or not to exercise that
    discretion, courts must balance the circumstances and equities of each case
    and client:
Taylor
, at para. 34.

[15]

The
    test for a charging order under s. 34 is clear. To obtain a s. 34 charging
    order a solicitor must demonstrate that:


i.

the fund or property is in existence at the time the order is granted:
Langston
    v. Landen
, [2008] O. J. No 4936 (Ont. S.C.J.), at paras. 28-29;


ii.

the property was recovered or preserved through the instrumentality
    of the solicitor;
Kushnir v. Lowry
, [2003] O.J. No. 4093 (C.A.), at
    para. 2;


iii.

there must be some evidence that the client cannot or will not pay the
    lawyers fees;
Kushnir
,
at para. 2; see also
Guergis v. Hamilton
, 2016 ONSC 4428, at para. 6;
Thomas
    Gold Pettinghill LLP
, at para. 88;
Foley,
at p. 202.

[16]

Charging
    orders exist alongside, and in addition to, a courts inherent jurisdiction to
    grant a solicitors lien. Although distinct, they are two sides of the same
    coin, and overlap significantly in purpose and effect. As this court observed
    in
Taylor
, at para. 28, s. 34 of the
Solicitors Act

is
    a codification of a courts inherent jurisdiction in equity to declare a lien
    on the proceeds of a judgment where there appears to be good reason to believe
    that the solicitor would otherwise be deprived of his or her costs.

[17]

In
    our view, the conceptual differences between the two orders, such as how and
    when they are acquired, do not justify the application of different tests. The
    two types of charges cover the same circumstances and have identical
    objectives. Regardless of which of the two remedies is sought, it is our view
    that the three elements outlined above must be established.

(2)

The application of the framework

[18]

Here,
    the first element is satisfied. The judgments in favour of the Client exist. As
    a
chose in action

or judgment debt, those judgments are a
    property right against which the charge or lien may attach:
Fancy
    Barristers P.C. v. Morse Shannon LLP
, 2017 ONCA 82, at para. 9;
Pino
    v. Vanroon
(1998), 28 C.P.C. (4th) 274 (Ont. Gen. Div.), at para. 10;
Mpampas
    v. Steamatic Toronto
, 2009 CanLII 61417 (Ont. S.C.), affirmed 2010 ONCA
    373.

[19]

The
    second element is also satisfied. There is no dispute that the Law Firm was
    instrumental in recovering the monies owed under the judgments.

[20]

The
    only branch of this test that is seriously contested is the third element 
    whether the evidence supports a finding that it is likely that the Law Firm
    will not be paid what is ultimately found owing by the Client:
Taylor
,
at para. 34.

[21]

The
    Client has paid more than $460,000 in legal fees to the Law Firm. This includes
    payments of $55,000 since January 5, 2016, including a payment of $10,000 on
    June 7, 2017, only a few weeks before the appeal was dismissed and the Client
    initiated assessment proceedings.

[22]

The
    Law Firm submits that the Client has had financial difficulties in the past
    that have prevented him from being able to pay his outstanding accounts. The
    Law Firm has rendered 51 accounts to the Client throughout these protracted
    proceedings. Twelve remain unpaid. The Law Firm contends that it has demanded
    payment of the outstanding amounts owed from the Client, but to no avail. It
    points to the fact that the Client had to refinance his home in order to pay an
    earlier account, arguing that it has every reason to believe that the Client
    cannot or will not pay what it owes the Law Firm.

[23]

The
    Client says that the evidence does not support either proposition. The Client
    attests to the fact that he has sufficient liquid assets to pay the Law Firm
    the amount the Assessment Officer determines should be paid  even if it is the
    full amount the Law Firm says is owing, as set out above. The Client says his
    willingness to pay can be demonstrated by the regular flow of payments he has
    made during the time when the Law Firm represented him in this matter.

[24]

In
    our view, the Law Firm has not discharged its burden of establishing that it
    will likely not be paid without a charging order or lien: see
Taylor
,
at para. 34.

[25]

The
    correspondence between the parties demonstrates that the Law Firm has asked the
    Client for instalment payments toward the outstanding accounts on at least four
    occasions over the past several years. Tellingly, the Client has made payments
    on three of those four occasions. The Law Firm does not appear to have
    requested the full amount due on the outstanding accounts or a corresponding
    refusal or inability to pay. There is, of course, the pending assessment but,
    in our view, the fact that the Client contests the amount he owes the Law Firm
    is not evidence of his inability or unwillingness to pay.

[26]

The
    evidence supports a finding that the Client owes money to the Law Firm for
    unpaid accounts. However, this in and of itself does not justify a charging
    order or lien.

[27]

On
    this record, we are of the view that the Law Firm has not satisfied us that we
    should exercise our discretion to grant the requested charging order or lien. The
    motion is therefore dismissed.

[28]

Finally,
    we note that originally, the Law Firm also sought an order pursuant to rule
    72.05(1) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, that
    the $50,000 in costs of the appeal currently being held by the Accountant of
    the Superior Court as security not be dealt with except on notice to the Law
    Firm. We have been advised that this money has already been paid out. The
    motion for an order pursuant to rule 72.05(1) is therefore also dismissed, as
    moot.

[29]

If
    the parties cannot agree on costs, they may provide the court with brief
    written submissions not exceeding three pages within 14 days of the release of
    these reasons.

Gloria Epstein
    J.A.

C.W. Hourigan
    J.A.

David M.
    Paciocco J.A.


