Written Retainer Agreement Ousts Small Claim Court’s Jurisdiction

December 8, 2014

Image via Brainden.com

If you’re an Ontario litigator and thought suing your client for fees in Small Claims Court based upon a written retainer agreement was an option, then take a read of Justice Nordheimer’s decision in Jane Conte Professional Corporation v. Josephine Smith, 2014 ONSC 6009 (CanLII), (Div.Ct.).

The case dealt with an appeal by the defendant client from the decision of Deputy Judge Prattas, dated April 29, 2014, dismissing her motion to dismiss her former counsel’s action for unpaid accounts.  The plaintiff lawyer commenced an action against the client defendant in the Small Claims Court seeking to recover payment of the sum of $26,051.59 pursuant to a contingency fee agreement relating to a personal injury action.  Nordheimer J. allowed the appeal, set aside the order of the Deputy Judge and dismissed the claim for want of jurisdiction and held, in part:

[16]      It will be seen from these sections that the Legislature has established a process by which the validity and enforceability of written fee agreements between lawyers and clients are to be handled.  There is nothing in any of these sections that gives any authority to the Small Claims Court to consider issues arising under a written fee agreement including a contingency fee agreement.  Indeed, as I have already mentioned, the Small Claims Court is expressly excluded from considering such matters.

[20] In my view, once a lawyer chooses to enter into a written agreement with his or her client “respecting the amount and manner of payment for the whole or a part of any past or future services in respect of business done or to be done by the solicitor” then the lawyer is bound by the procedures set out in ss. 20 to 32 of the Solicitors Act. In particular, if the lawyer wishes to enforce the agreement then he or she must, as set out in s. 23, bring an application for that purpose in the court “in which the business or any part of it was done or a judge thereof, or, if the business was not done in any court, by the Superior Court of Justice”. I repeat that s. 23 expressly excludes the Small Claims Court from this authority.

Nordheimer J. expressly rejected the former lawyer’s argument that the contingency fee agreement was a “hybrid” agreement, ousting it from judicial scrutiny under ss.20-32 of the Solicitors Act, R.S.O. 1990, c. S.15, stating:

[23]      Further, even if the respondent is correct that the Agreement in this case was both a contingency fee agreement and a regular fee agreement, depending on how events unfolded, that result would not take the Agreement outside the application of ss. 20 to 32 including the enforcement procedure set out in s. 23 since those provisions apply to all written fee agreements.

[24]      Consequently, I concluded that the Small Claims Court had no jurisdiction to consider a claim made by a lawyer based on a written fee agreement including a contingency fee agreement.  I would note, in passing, that this conclusion appears to be consistent with the general rule that questions involving the nature, validity or effect of a contingency fee agreement should be resolved by judges:  Cookish v. Paul Lee Associates Professional Corp.,[2013] O.J. No. 1947 (C.A.) at para. 39.

This decision may come as a big surprise to most who sue their clients for unpaid legal accounts in Small Claims Court.

It is puzzling that the Small Claims Court retains jurisdiction in actions between a lawyer and client for unpaid accounts where there is no written retainer agreement, but loses jurisdiction where there is a written retainer agreement. Of course, all contingency fee agreements must be in writing pursuant s. 28.1(4) of the Solicitors Act.

Incidentally, the Court of Appeal for Ontario previously held that where a written retainer agreement includes an  arbitration clause for fee disputes, it is enforceable, as long as the arbitrator applies the protections under the Solicitors Act: : see, Jean Estate v. Wires Jolley LLP, 2009 ONCA 339 (CanLII) (Ont. C.A.).

So Long, Farewell

January 29, 2014

Harakiri (1962) DIRECTOR: Masaki Kobayashi

Following my initial reaction, I have had some more time to reflect on the recent decisions of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 and  Bruno Appliance and Furniture, Inc. v. Hryniak2014 SCC 8 [collectively “Hryniak“] and what it means, in the wake of Hryniak, to have a blog called “The Trial Warrior“.

Frankly, I am experiencing severe cognitive dissonance.

I started this blog back on August 10, 2009 with modest objectives: to write about legal topics that interested me and hopefully my readers and to share ideas, arguments and trends with other blawgers.

My subject-matter was, admittedly, esoteric — cutting a wide swath from civil litigation to international law to professionalism and ethics —- but it was the greatest vehicle to participate in the Blawgosphere and meet some great legal minds along the way, some of whom I have had the distinct privilege in meeting in person or talking over the phone. Mind you, the legal blawging community has changed dramatically since I started, as it had in the first wave in the early 2000’s.

I often blogged about trial strategy and tactics, but I noticed, in the last couple of years, fewer and fewer reported trial decisions and appeals. Yes, I am aware of the oft-repeated statistic (anecdotal or apocryphal as it may be) that 95% of civil cases settle or are dismissed before trial. So what about the other 5%? While I continue to have a number of my own cases go to trial, I expect a major seismic event in the the conduct of a trial of an action in the Ontario courts, especially in Toronto.

C’est la vie. C’est la guerre.

What troubles me greatly is not the name of this personal blawg: I could have used a catchier title or theme. This one stuck over the years. I could change the name to “EXTREME HAIL DAMAGE ATTORNEY BLOG ™ ” or “THE HTRATCTTTCATHOUH BLOG ™”.

So what’s my problem, you ask?

Here’s what the Court of Appeal for Ontario said about the purpose of summary judgment and the primacy of the civil trial in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764 (CanLII) :

[38]         However, we emphasize that the purpose of the new rule is to eliminate unnecessary trials, not to eliminate all trials. The guiding consideration is whether the summary judgment process, in the circumstances of a given case, will provide an appropriate means for effecting a fair and just resolution of the dispute before the court. [emphasis in the original]

Now, compare what the  Supreme Court of Canada’s view in Hryniak v. Mauldin, 2014 SCC 7 :

[2]                              Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system.  This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case.  The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just. [emphasis added]

Thanks to my fellow blawgers: Scott Greenfield, Mark Bennett, Brian Cuban, Ken White, Gideon, Rick Horowitz, Karim Renno, Keith Lee, Eric Turkewitz and many others who have been gracious in linking to my posts and challenging my preconceptions, biases, nescience and cantankerousness.

I may start up a new blawg, eventually. In the meantime, I wish to express my gratitude to my regular readers. I will not commit seppuku and shut down The Trial Warrior Blog; rather, I will indulge in the irony of the death of the civil trial in Canada by keeping it as an internet monument, until it gets ripped off by some splogger.

Thanks,

Antonin I. Pribetic

2014 Canadian International Law Students Conference

January 28, 2014

CILSC

I am privileged to be the keynote speaker at the upcoming  2014 Canadian International Law Students Conference, jointly presented by the International Law Society of University of Toronto Faculty of Law and Osgoode Hall Law School on Saturday, 1 February 2014 from 9:30 AM to 6:00 PM (EST). Here are the event details:

Event Details

The CILSC provides a forum for law students, academics, practitioners, and leaders in the field to exchange ideas about Canada’s international and domestic performance in public and private international law. Speakers will also touch on how to begin exploring a career in this field. For speaker bios visit www.cilsc.com

The conference has a history of attracting prominent speakers involved in the practice and study of international law. This year we are featuring speakers across five panels:

Panel 1: Litigating Foreign Cases in Canadian Courts
Panel 2: International Intellectual Property Law
Panel 3: Careers in Public International Law
Panel 4: Careers in Private International Law
Panel 5: Law and the Syrian Crisis

Schedule:

9:30-9:45 Introductions
9:45-11:00: Substantive panel 1 (Public)
11:15-12:30: Substantive panel 2 (Private)
12:30-1:30: Lunch
1:30-2:30: Concurrent Career Panels
2:45-4:00 Substantive Panel (Syria)
4:00-5:30 Reception

Ticket Information:

Online Student Ticket: $12.00

In-person Student Ticket: $10.00

For in-person tickets, Osgoode students please contact cassandrastefanucci@osgoode.yorku.ca; U of T students please contact james.rendell@mail.utoronto.ca or ws.wu@mail.utoronto.ca. These tickets will be available at the door.

Professional Tickets: $75.00

Current members of the bar who attend the conference are eligible for up to 3.75 hours of CPD credits. We will provide holders of Professional Tickets materials to be submitted to the law society for CPD credits.

If you’re interested in a career in international law or want to hear about the latest international law developments from leading academics and practitioners , this is a must-attend program.

The Trial Warrior Blog, But Not Yours Truly, Gets Cited By An Ontario Court

January 23, 2014

[15]           The plaintiffs rely on a document entitled The Trial Warrior Blog dated November 11, 2013 that discusses Kaynes v. BP2013 ONSC 5802 (CanLII), 2013 ONSC 5802 (“Kaynes”). The plaintiffs rely on the fact that the defendant Penn West’s shares are traded over the Toronto Stock Exchange in support of their allegation that Penn West carries on business in Ontario.  In Kaynes, an Ontario Court assumed jurisdiction over a foreign issuer in a securities class action.  TheKaynes decision can be readily distinguished from the claims in this action because the plaintiff in Kaynes sought leave to bring a statutory action for secondary market representation under Part XXIII.I of the Securities Act, R.S.O., 1990, c. S.5, as a result of alleged misrepresentations in the defendant’s prospectus. The Court considered the analysis in Van Breda and held that the alleged “statutory tort” was a new connecting factor created by section 138.3 of the Securities ActThere are no such claims nor is there any allegation of a breach of an Ontario statute in this case.

Manson v. Canetic Resources Ltd., 2014 ONSC 261 (CanLII), per Beaudoin J.

Well, it’s more than a document, it’s a blog post: Antonin I. Pribetic, “Ontario Court Assumes Jurisdiction Over Foreign Issuer in Securities Class Action”, The Trial Warrior Blog: http://thetrialwarrior.com/2013/10/24/ontario-court-assumes-jurisdiction-over-foreign-issuer-in-securities-class-action/ , October 24, 2013) .

Still, I’m pleased that self-represented plaintiffs took the time to cite The Trial Warrior Blog, even without author or link attribution.

Carry on.

Happy Trails and Happy Trials: Supreme Court of Canada Rules On the Test for Summary Judgment

January 23, 2014

 Today’s Supreme Court of Canada decisions on the summary judgment appeals in Hryniak v. Mauldin, 2014 SCC 7 and  Bruno Appliance and Furniture, Inc. v. Hryniak2014 SCC 8  offer a somewhat less than “full appreciation” of the test summary judgment established by the Court of Appeal for Ontario. [See my backgrounder on the Court of Appeal for Ontario’s “full appreciation” test  here.] 
Read the rest of this entry »


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