Court Of Appeal Summaries (Nov 9-13, 2015)

The Court of Appeal released a number of civil decisions this week. Topics include whether an assessment officer has the jurisdiction to rule on the enforceability of a contingency fee agreement between a lawyer and client, personal injury, summary judgment, the waiver of conditions of closing on a real estate transaction, wrongful dismissal and claims between insurers in the statutory accident benefits context.

Evans Sweeny Bordin LLP v. Zawadzki, 2015 ONCA 756

[Gillese, Lauwers and Brown JJ.A.]

Counsel:

William L. Roland, for the appellants

Michael Bordin, for the respondents

Keywords: Solicitor and Client, Assessment of Accounts, Contingency Fee Agreements, Whether Fair and Reasonable, Jurisdiction to Determine, Rules of Civil Procedure, Rule 54, References

Facts:

The appellants were owners and developers of lands that were valued at approximately $20 million and subject to two mortgages. They defaulted on the mortgages and later reached a settlement whereby they consented to foreclosure in the event they did not perform the terms of the settlement. In 2006, the mortgagee obtained ex parte final orders of foreclosure against the properties, and the appellants unsuccessfully pursued relief from foreclosure.

The appellants retained the respondent solicitors to appeal the judgment denying them relief. The parties negotiated a contingency fee agreement (the "Agreement") whereby the appellants agreed to pay the respondents for incurred legal fees as well as well as a bonus in the event the appeal was granted. The appeal was granted and the respondents rendered an account for the bonus (2.5% of the value of the property, being $500,000). The appellants obtained an order to assess that account and two other accounts before an assessment officer.

The assessment officer decided that the Agreement was neither fair nor reasonable and reduced the respondents' accounts by $44,179.78 and disallowed the bonus completely. Both parties moved to oppose this confirmation, with the appellants seeking a further reduction of the invoiced amounts and the respondents seeking payment of the $500,000 bonus.

The motions judge dismissed the appellants' motion to reduce the amount payable and granted the respondents' claim to the bonus. The motions judge found that the assessment officer lacked the jurisdiction to consider the fairness and reasonableness of the Agreement and, in any event, he would have set aside the assessment officer's conclusion that the Agreement was not fair and reasonable.

The appellants then appealed that order. Specifically, they sought to restore the decision of the assessment officer or in the alternative sought an order directing the assessment of the Agreement before a judge of the Superior Court of Justice.

Issues:

(1) Did the motions judge err in holding that the assessment officer had no jurisdiction to consider the enforceability of the Agreement?

(2) Did the motions judge err in holding that the Agreement was fair and reasonable?

Holding: No to both. Appeal Dismissed.

Reasoning:

(1) No. The motions judge correctly applied the principles in Cookish v Paul Lee Associates Professional Corporation to conclude that the assessment officer lacked jurisdiction to consider the enforceability of the Agreement. Issues involving the enforceability of contingency fee agreements are to be resolved by judges. While a judge can refer issues to an assessment officer for determination pursuant to the reference procedure in Rule 54 of the Rules of Civil Procedure, a judge should not refer issues concerning the enforceability of a contingency fee agreement. At the very most, a judge may refer to an assessment officer the calculation of the quantum of a contingency fee under a valid contingency fee agreement. Finally, where a judge orders a reference to an assessment officer, the assessment order must contain clear language of delegation.

The motions judge correctly held that the assessment officer lacked the jurisdiction to decide whether the Agreement was fair and reasonable, as it did not refer to him any issue concerning the enforceability of the Agreement.

(2) The motions judge was entitled to consider the fairness and reasonableness of the Agreement. Rule 54.09(5) provides that a judge hearing a motion to oppose confirmation of a report "may confirm the report in whole or in part or make such other order as is just." Moreover, pursuant to Bales Beall LLP v. Fingrut, if a judge hearing a motion to oppose finds that an assessment officer committed an error in principle, the judge may either correct the error or refer the matter back for correction.

The record before the motions judge was adequate. The appellants knew that the issue of the fairness and reasonableness of the Agreement would be argued as the respondents specifically sought an order that they were entitled to be paid the bonus pursuant to the Agreement. Moreover, the parties agreed that it was open to each to file whatever evidence it considered relevant. The motions judge was thus able to review all pertinent documentation.

While the appellants submitted that the motions judge failed to accord proper deference to the findings of fact made by the assessment officer, the court found that the motions judge extensively canvassed the officer's key findings and provided detailed reasons.

Finally, the motions judge properly informed himself of the factors relevant to determining the reasonableness of the Agreement as of the date of the assessment hearing. He reviewed them in detail and placed the greatest weight on the value of the property in question and the risk of the solicitors not getting paid. He thus did not commit an error of law, misapprehend any evidence, or make a palpable and overriding error on a factual matter which would justify appellate intervention. His allowance of the $500,000 bonus was not so unreasonable as to constitute an error in principle; under the circumstances, a bonus equivalent to 2.5% of the value of the property in issue was not unreasonable.

McDowell v. St. Lawrence Parks Commission, 2015 ONCA 755

[Feldman, Lauwers and Benotto JJ.A.]

Counsel:

E. Lilles, for the appellant

Santini, for the respondent

Key Words: Torts, Negligence, Personal Injury, Slip and Fall, Third Party Claim, Indemnity

Facts: The appellant (the "Appellant") was the defendant and the respondent (the "Respondent") was the third party. The trial judge found the Appellant did not prove its claim for indemnity or negligence against the Respondent in the third party action.

The Appellant operates Fort Henry and the Respondent runs the Garrison Restaurant at the Fort Henry. The plaintiff went to an off-hours banquet at the Garrison Restaurant. She went to the washroom but did not return; she fell into a moat and injured herself.

The Appellant had a service agreement with the Respondent that set out the Respondent's obligations at Fort Henry. Its primary obligation was to operate the restaurant during Fort Henry's regular hours of operation and during off-hours for banquets and special events. A clause in the agreement provided that the Respondent was required "to promote a safe working environment and assure that health and safety needs of staff and customers are met following relative guidelines, policies & procedures at all times." There was also an indemnity provision. The Appellant argues that the Respondent breached its obligation because it did not escort the plaintiff to the bus at the end of the banquet, or in the alternative, was negligent in doing so.

Issue: Did the trial judge err by finding the Appellant did not prove its claim for indemnity or negligence against the Respondent?

Holding: Appeal dismissed. Costs were awarded in the agreed amount of $15,000 inclusive of disbursements and HST.

Reasoning:

No. The trial judge did not err in his finding or analysis.

The trial judge found that regardless of whether the Respondent had a duty to escort patrons, the Appellant did not prove that the plaintiff's fall happened when the other guests left the restaurant. He did not find a nexus between the Respondent's failure to get patrons safely to the bus and the plaintiff who fell into the moat.

The only indication of the timing of when the plaintiff went to the washroom was in the pleading that she went after dinner. There was no actual evidence in the record to that effect. The only witness was the restaurant manager who saw the plaintiff after she fell in the moat. The trial judge did not cut off any cross-examination on the issue.

The trial judge did not err in his discretionary decision that allowed the Respondent to withdraw its jury notice. There is no basis to conclude a jury would...