



COURT OF APPEAL FOR ONTARIO

CITATION: Thurston v. Ontario (Childrens Lawyer), 2019 ONCA
    640

DATE: 20190731

DOCKET: C65982

Huscroft, Trotter and Zarnett JJ.A.

BETWEEN

Barbara Thurston

Plaintiff (Respondent)

and

Her Majesty the Queen
    in Right of Ontario as represented by the

Office of the Children's
    Lawyer (Ontario)

Defendant (Appellant)

Vanessa Glasser, for the appellant

Tina K. Lee, for the respondent

Heard: June 24, 2019

On appeal from the order of Justice Andra Pollak of the Superior
    Court of Justice, dated September 24, 2018, with reasons reported at 2018 ONSC
    2137.

Huscroft J.A.:

OVERVIEW

[1]

Barbara Thurston (the respondent) is a sole
    practitioner lawyer who provided legal services to the Office of the Childrens
    Lawyer (the OCL) pursuant to a series of agreements over a period of 13 years,
    the last of which expired on March 31, 2015.

[2]

The OCL did not renew her retainer following the
    expiry of the last agreement. The respondent brought a claim alleging that she
    was a dependent contractor and was therefore entitled to 20 months notice of
    termination. The OCL brought a motion for summary judgment dismissing her claim.
    That motion was dismissed and the OCL appeals.

[3]

I conclude that the motion judge erred in
    concluding that the respondent was a dependent contractor.

[4]

I would allow the appeal for the reasons that
    follow.

BACKGROUND

The facts

[5]

The respondent was a member of the OCL Personal
    Rights Panel, one of approximately 380 lawyers retained by the OCL to provide
    legal services in regard to custody, access, and child protection matters. She
    was first appointed to the OCL panel of lawyers in 2002, for a two-year period.

[6]

The respondent remained a member of the OCL panel
    for the next 13 years pursuant to a series of fixed-term contracts, each of
    which required her to apply for reappointment as each contract expired. There
    was no automatic right of renewal for the contracts. However, on each occasion
    she was reappointed to the panel, initially for two-year terms and then from
    2012 on an annual basis.

[7]

The respondent maintained an independent legal
    practice while she was a member of the OCL panel, and that practice formed a
    majority of her billings. Her OCL work accounted for anywhere from a low of 14.8%
    to a high of 62.6% of her annual total billings. Over the 13-year period that
    she was on the OCL panel, OCL billings accounted for an average of 39.9% of her
    annual billings.

[8]

The respondents last retainer agreement expired
    in 2015. On March 31, 2015, the expiry date of that agreement, the OCL informed
    the respondent that her retainer was not going to be renewed. The respondent
    was given one year to wind down her existing OCL files and was not subsequently
    appointed to the OCL panel.

The retainer agreement

[9]

The respondents 2012 retainer agreement ran
    until March 31, 2013, but was extended from April 1, 2013 to March 31, 2014, and
    again from April 1, 2014 to March 31, 2015. It included the following
    provisions:

The term may be extended or subsequently
    renewed in the discretion of the Childrens Lawyer.



No guarantee of work

The OCL makes no guarantee of the total value
    or volume of work to be assigned to you. You confirm that in your capacity as
    an OCL agent, you are not an employee of the OCL.



Termination of Agreement

In order to effect an orderly transition, you
    agree to give the OCL sixty days written notice of your intention to resign
    from the OCL panel

The Childrens
    Lawyer, or her designate, reserves the right, at her sole discretion, to
    terminate this retainer agreement at any time, without fault and without
    liability.

The motion judges decision

[10]

The respondent conceded that she was not an
    employee. The issues before the motion judge were whether the respondent was a
    dependent contractor and, if so, whether she was entitled to reasonable notice
    or payment in lieu of reasonable notice, despite the fixed-term nature of the
    retainer agreement.

[11]

The motion judge found that the respondents
    relationship with OCL was continuous for a 13-year period with no break. During
    that period, the respondent performed the work of the OCL under the OCLs
    control and was perceived by the public to be an employee of the OCL. An
    average of 39.9% of the respondents total billings from her legal practice came
    from the OCL during the period in which she was on the OCL panel, and the trend
    was for an increasingly larger portion of the respondents income to come from
    the OCL  reaching a high of 62.6% in 2012-2013, though dropping to 50% in the
    final year in which she was retained. In brief reasons, the motion judge
    concluded that these factors were sufficient to tip the balance in favour of
    a finding of dependent contractor status. In particular, the motion judge noted
    the permanence of the respondents relationship with the OCL, the fact that she
    performed work that is integral to the OCL, and the public perception that she
    was an OCL lawyer.

[12]

The motion judge rejected the OCLs alternative
    position that there was no obligation to provide notice or payment in lieu of
    notice at the expiry of a fixed-term agreement. She distinguished the cases
    proffered in support of the OCLs position on the basis that the respondents
    contract was renewed for 13 years, without break in service, in addition to the
    factors outlined above. The motion judge dismissed the OCLs motion for summary
    judgment and seized herself of the trial of the notice and damages issues.

DISCUSSION

Jurisdiction to hear the appeal

[13]

A preliminary issue arose concerning whether the
    appeal was properly before this court  in particular, whether the motion judge
    had made a final order concerning the respondents status as a dependent
    contractor.

[14]

The order dismissing the appellants motion for
    summary judgment includes the following provisions:

THIS COURT ORDERS
    that the OCL had not met its burden of proof that Ms. Thurston was an
    independent contractor. Ms. Thurston was a dependent contractor.

THIS COURT ORDERS
    that findings of fact in relation to this motion, as stated in the Courts Endorsement,
    dated June 27, 2018, were intended to be binding on the parties.

THIS COURT ORDERS
    that the remaining issues for trial are the appropriate notice and damages, if
    any, to be awarded to Ms. Thurston.

THIS COURT ORDERS
    that the Honourable Madam Justice Pollak shall remain seized of the trial,
    provided the trial can be scheduled in a timely and expeditious manner without
    adverse delay or consequences to the parties.

[15]

The wording of the order followed
    an exchange between counsel and the motion judge, after counsel for the
    appellant had taken the view that the motion judge had, in her endorsement,
    made no findings of fact or law in dismissing the motion for summary judgment,
    and that all issues were to be determined at trial. Counsel wrote to the court
    seeking clarification on the nature of her decision.

[16]

The motion judges assistant replied on behalf
    of the motion judge in an email dated August 8, 2018. The parties were informed
    that on the issues put before the Court, findings of fact were made and
    intended to be binding on the parties.  The reference to there being no
    genuine issue for trial refers to the fact that the Court was able to make a
    decision with respect to the only issue put before the Court by the parties 
    that is the Plaintiffs status on the basis of the record before it. The only remaining
    issues concerned the appropriate notice and damages to be awarded to the
    respondent.

[17]

I am satisfied that the motion judges
    clarification confirms that she made a conclusive finding on the dependent
    contractor issue. This was the issue on which the motion depended. Although r.
    20.04(4) of the
Rules of Civil Procedure
, R.R.O.
    1990, Reg. 194, is not cited in the email clarification, the rule was put to the
    motion judge by counsel for the appellant, her response is clear, and there is
    no doubt that the motion judge intended her determination to be binding on the
    parties at trial:
Skunk v. Ketash
, 2016 ONCA
    841, 135 O.R. (3d) 180, at para. 58.

[18]

Accordingly, this appeal is from a final order
    of a judge of the Superior Court of Justice and is properly before this court.

The respondent is not a dependent contractor

[19]

Given the respondents concession that she was
    not an employee of the OCL, it was necessary to determine only whether she was
    a dependent or independent contractor.

[20]

The appellant submits that the motion judge erred:

1.

in applying this courts analysis in
McKee v. Reids Heritage Home
    Ltd.
, 2009 ONCA 916, and
Keenan v. Canac Kitchens Ltd.
, 2016 ONCA
    79;

2.

in failing to consider all of the relevant factors going to economic
    dependence, including whether any dependence was self-induced;

3.

in concluding that the relationship was continuous for 13 years; and

4.

in concluding that the OCL had a high degree of
    control over the respondents work.

[21]

The respondent submits that the motion judges
    decision is a factual one entitled to deference on appeal, and in any event is
    correct.

[22]

In my view, the motion judge misapprehended the
    nature of the legal standard and failed to give effect to several relevant
    considerations in applying that standard. The result is an unreasonable
    decision that cannot stand.

[23]

As this court set out in
McKee
at para. 30, dependent contractor status is a non-employment
    relationship in which there is a certain minimum economic dependency, which
    may be demonstrated by complete or near-complete exclusivity. Minimum
    economic dependency is a vaguely worded standard, and its application yields
    outcomes that are highly context-specific:
McKee
, at para. 38. It follows that a judges decision as to the nature
    of a working relationship is generally entitled to deference.

[24]

But the determination as to dependent contractor
    status must be made having regard to the purpose of the concept: the extension
    of the common law entitlement to notice of termination from employees to
    dependent contractors. That extension was justified in
McKee
on the
    basis that, like employees  and
unlike
independent contractors 
    dependent contractors are to a large extent economically dependent, albeit on a
    contracting party rather than an employer.

[25]

In distinguishing dependent from independent
    contractors,
McKee
made clear that exclusivity of service provision, and
    therefore of income, is key. As the court put it, exclusivity is
determinative
, as it demonstrates economic dependence; exclusivity, the court
    said, is a hallmark of the dependent contractor category:
McKee
, at
    para. 34. In
Keenan
, at para. 25, this court
    emphasized that exclusivity was integrally tied to the question of economic
    dependency and that the determination of exclusivity requires consideration of
    the full history of the relationship in question.

[26]

These two cases constitute the primary guidance
    from this court on the issue of distinguishing dependent and independent
    contractors. Since
McKee
was released in 2009, several lower court
    decisions have interpreted and applied the concept of exclusivity to
    determine a contractors status. In several cases in which a dependent
    contractor relationship was found to exist, the relationship was absolutely
    exclusive in nature:
see, e.g.,
Cormier v. 1772887 Ontario Limited c.o.b.
    as St. Joseph Communications
, 2019 ONSC 587
;

V.P.M. Marketing v. Jenne
, 2018
    ONSC 4627
;

Tetra Consulting v. Continental
    Bank et al.
, 2015 ONSC 4610,
and
Ford v. Keegan
, 2014 ONSC 4989.

[27]

In cases in which a dependent contractor
    relationship was found to exist but exclusivity was not absolute, substantially
    more than a majority of the dependent contractors income was earned from the
    contracting party:

see, e.g.,
Beattie v. Women College Hospital,
2018
    ONSC 1852
; Sarnelli v. Effort Trust Co
., 2011 ONSC 1080.

[28]

In this case, there is no question that the
    respondent did not work exclusively for the OCL. On the contrary, the OCL
    expected her to maintain a private legal practice throughout the entire time that
    she was retained, and she did so.

[29]

Putting the respondents case at its highest,
    over the course of her retainer an average 39.9% of her annual billings came
    from the OCL. To be sure, that is a significant percentage of the respondents
    billing, and the loss of the OCL retainer would have had a substantial impact
    on the respondents legal practice and her income. But that is not determinative
    of her status as a dependent contractor. On no account can 39.9% of billings be
    said to constitute exclusivity or near-complete exclusivity, such that
    economic dependence on the OCL is established.

[30]

Exclusivity is a categorical concept  it poses an
    either/or question, and near-complete exclusivity must be understood with
    this in mind. Near-complete exclusivity cannot be reduced to a specific
    number that determines dependent contractor status; additional factors may be
    relevant in determining economic dependency. But near-exclusivity necessarily
    requires substantially more than 50% of billings. If it were otherwise,
    exclusivity  the hallmark of dependent contractor status  would be rendered
    meaningless.

[31]

The motion judge did not properly take account
    of the following considerations:

-

the respondents contracts with the OCL contemplated that she
    would continue her private practice and required her to confirm that she did
    not work exclusively for the OCL;

-

the respondent continued to operate her private legal practice
    during the entire period of her retainer;

-

the respondent was not guaranteed a minimum number of files or
    amount of work with the OCL;

-

the OCL reserved the right, at its sole discretion, to terminate
    the respondents retainer agreement at any time, without fault and without
    liability;

-

the respondent had her own office, supplies, and staff; and

-

the respondents private practice constituted the main source of
    her total income throughout the period.

[32]

In short, the OCL was one of the respondents
    clients  a very important client, but only one of her clients. The loss of a
    client will be more or less significant to any contractor, but care must be
    taken in applying dependent contractor case law to professionals such as
    lawyers working under retainer agreements.

[33]

In this case, the respondents loss of the OCL retainer
    results in a 39.9% reduction in the billings generated by her legal practice.
    That is a significant loss, but it is insufficient to establish the requisite economic
    dependency. As a result, there is no need to consider the appellants
    alternative position that any economic dependence was self-induced.

[34]

From the OCLs perspective, the respondent was
    one of many lawyers on retainer across Ontario. The longevity of the
    respondents retainer with the OCL did not transform it into a relationship of
    enduring dependency, as the respondent submits. The terms of the retainer
    make it plain that the respondent had no entitlement to any minimum level of
    work. Specifically, as noted above, the retainer agreement in place from
    2012-2015 stated:

The OCL makes no guarantee of the total value
    or volume of work to be assigned to you.

[35]

The motion judges failure to give effect to
    these considerations renders her conclusion that the respondent was a dependent
    contractor unreasonable. The motion judge focused on the work the respondent
    performed for the OCL, noting that the OCL had a great deal of control over her
    work and working conditions and that the public perceived the respondent to be
    an OCL employee. But the OCL did not control the respondents work in general,
    and its control over her OCL work was necessary given the nature of the
    relationship that the retainer established and the OCLs public function. Moreover,
    regardless of any public perception the terms of the contract clearly
    distinguished lawyers on retainer from OCL in-house lawyers. But the key point
    is this: only 39.9% of earnings came from the OCL during the relevant period.
    This cannot reasonably be categorized as a near-exclusive relationship
    without changing the nature of the legal test.

[36]

The respondent argues that the only way that she
    could practice childrens law was to do so with the OCL. That may be true, but it
    is irrelevant: the respondent had no entitlement to work in her preferred area
    of practice. She is in no different position than any other lawyer who has lost
    a preferred client. The terms of her retainer made the nature of her
    relationship with the OCL clear.

[37]

This conclusion is sufficient to dispose of the
    appeal.

CONCLUSION

[38]

I would allow the appeal
and substitute an order granting the appellants
    motion for summary judgment and dismissing the respondents action.

[39]

I would award the appellant costs of the appeal
    in the agreed amounts of $20,000 and $5,000 on the motion, both figures
    inclusive of taxes and
disbursements.

Released: B.Z. July 31, 2019

Grant Huscroft J.A.

I agree. Gary Trotter J.A.

I agree. B. Zarnett J.A.


