Clatney v. Quinn Thiele Mineault Grodzki LLP et al., 2016 ONCA 377

• Judge: Cronk, Epstein and Huscroft, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: November 13, 2015
• Jurisdiction: Ontario
• Citations: 2016 ONCA 377;(2016), 349 O.A.C. 286 (CA)

Clatney v. Quinn Thiele Mineault (2016), 349 O.A.C. 286 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. MY.019

Mark Clatney (applicant/appellant) v. Quinn Thiele Mineault Grodzki LLP and Bertschi Orth Solictors and Barristers LLP (respondents/respondents)

(C60500; 2016 ONCA 377)

Indexed As: Clatney v. Quinn Thiele Mineault Grodzki LLP et al.

Ontario Court of Appeal

Cronk, Epstein and Huscroft, JJ.A.

May 19, 2016.

Summary:

In March 2008, the applicant (Clatney) was seriously injured in a motor vehicle accident. The respondents were the two law firms that represented him in his tort claim. The claim was settled in July 2013 for $800,000, which included the Family Law Act claims of Clatney's wife and two teenaged sons. Certain funds were distributed. Under an August 21, 2013 court order, the settlement monies then remaining, approximately $655,000, were held under a charging order pending resolution of the accounts of the respondent, Bertschi Orth Solicitors and Barristers LLP ("Bertschi Orth") for fees rendered and disbursements incurred in representing Clatney in the initial stages of his tort action. In November 2013, $70,000 of that $655,000 was paid into court on behalf of Clatney's sons. On December 3, 2013, a consent order was issued that provided for the release of the remaining monies, approximately $585,000. The consent order specified payment to the respondents of amounts in full satisfaction of their fees and disbursements, with the remainder to Clatney. As a result of this order, Clatney realized a net amount of $274,142.47. The respondents received $310,000, in total. On November 25, 2014, Clatney applied for an order that both accounts be assessed and, if required, an order setting aside the consent order and related settlement documents.

The Ontario Superior Court (application judge) dismissed the application, holding that: "By virtue of the [consent order] I have no jurisdiction to hear this matter as it is in fact a matter for an appeal to the Court to Appeal subject to leave etc." Clatney appealed.

The Ontario Court of Appeal allowed the appeal, set aside the consent order and directed that the costs, fees charges and disbursement incurred or chargeable respecting the matters included therein be assessed. The court rejected the respondents' submissions that: an order to set aside a court order could only be obtained by way of a motion under rule 59.06 of the Rules of Civil Procedure (Rules); Clatney's application was under rule 14.05 and the remedies provided for under that rule did not include the order Clatney requested; consequently, the application judge was procedurally barred from considering the request. Acceding to this procedural argument would not be consistent with the principles that formed the foundation of the Rules. Clatney had no choice but to start a new proceeding as the tort action had been dismissed. Clatney did so by Notice of Application seeking an assessment of the respondents' accounts. It was within that valid application that Clatney specifically requested that the application judge set aside the consent order, which removed any collateral attack concerns. The role of rule 59.06 was to provide an expeditious procedure for setting aside court orders; however, it did not prescribe or delineate a particular test. The court stated that "Ultimately, under r. 59.06 or within a separate action, an individual seeking to set aside an order is required to show 'circumstances which warrant deviation from the fundamental principle that a final [order], unless appealed, marks the end of the litigation line' ... Thus, a court is not limited to setting aside an order in instances of fraud or facts arising or discovered after the order has been made [rule 59.06(2)(a)]." The court set aside the consent order where it was necessary to achieve justice between Clatney and the respondents relating to the legal costs associated with the tort action. The court granted relief under s. 25 of the Solicitors Act, holding that the Fee Agreements should be reopened and an assessment of the respondents' fees and disbursements should take place. The court considered, inter alia, that the consent order pertained to agreements relating to the amount and payment of legal fees and disbursements, and agreements of this type involved the public interest in a way that other private contractual matters did not. Thus, the interests of justice in this case had to be understood in the light of the court's supervisory role over the rendering and payment of legal accounts. Special circumstances existed that required the Fee Agreements to be reopened and an assessment ordered. The court stated that "'Special circumstances' are those in which the importance of protecting the interests of the client and/or public confidence in the administration of justice, demand an assessment." The court awarded Clatney costs of the application, fixed in the amount of $10,000, and costs of the appeal of $15,000, both inclusive of disbursements and applicable taxes.

Barristers and Solicitors - Topic 3249

Compensation - Taxation or assessment of accounts - Where client has paid bill - See paragraphs 61 to 95.

Courts - Topic 2004

Jurisdiction - General principles - Inherent jurisdiction - See paragraph 77.

Practice - Topic 3

General principles and definitions - Policy of practice rules - See paragraphs 43 to 50.

Practice - Topic 8

General principles and definitions - Effect of noncompliance with rules - See paragraph 46.

Practice - Topic 5408.1

Judgments and orders - General - Collateral attack - See paragraphs 51 and 52.

Practice - Topic 5539

Judgments and orders - Consent orders - Setting aside - General - See paragraphs 43 to 74.

Practice - Topic 5540

Judgments and orders - Consent orders - Setting aside - Grounds - See paragraphs 53 to 74.

Practice - Topic 6246

Judgments and orders - Setting aside orders - Procedure for (incl. new evidence issues) - See paragraphs 43 to 60.

Practice - Topic 6255

Judgments and orders - Setting aside orders - Consent orders - See paragraphs 43 to 74.

Counsel:

Paul Auerbach, for the appellant;

William R. Hunter, for the respondent, Quinn Thiele Mineault Grodzki;

Cheryl Letourneau, for the respondent, Bertschi Orth Solicitors and Barristers.

This appeal was heard on November 13, 2015, by Cronk, Epstein and Huscroft, JJ.A., of the Ontario Court of Appeal. Epstein, J.A., delivered the following decision for the court on May 19, 2016.