Bennett Law Chambers Professional Corporation v. Zareh

Bennett Law Chambers Professional Corporation v. Zareh Collection Decisions of the Court of Appeal Date 2013-11-08 Neutral citation 2013 ONCA 686 Docket numbers M43035 Judges Sharpe, Robert J. Subject Civil Decision Content COURT OF APPEAL FOR ONTARIO CITATION: Bennett Law Chambers Professional Corporation v. Zareh, 2013 ONCA 686 DATE: 20131108 DOCKET: M43035 Sharpe J.A. (In Chambers) BETWEEN In the matter of the Solicitors Act and in the matter of section 47 of the Legal Aid Regulation, 106-99 Bennett Law Chambers Professional Corporation Solicitors (Respondents in Appeal) and Akbar Zareh, Kingsway Real Estate Brokerage and Maxcom Realty Inc. Clients (Appellants) Alexandrina Valvova, for the appellants J. Sebastian Winny, for the respondent Heard: November 5, 2013 Motion for an extension of time to file a Notice of Appeal. ENDORSEMENT [1] The moving parties seek an order extending the time to serve a Notice of Appeal from an order dismissing their motion to set aside an order for the assessment of the respondent’s bills under the Solicitors Act. The moving parties sought leave to appeal in the Divisional Court in a timely manner but the parties agree that the appeal lies to this court without leave as the order is final in nature. [2] It is common ground that the following factors are to be considered: 1) whether the appellant formed an intention to appeal within the relevant period; 2) the length of and explanation for the delay; 3) any prejudice to the respondent; 4) the merits of the appeal; and 5) whether the justice of the case requires it. [3] See Kefeli v. Centennial College of Applied Arts and Technology (2002), 23 C.P.C. (5th) 35 (Ont. C.A.); Kirby v. Hope Place Centres, [2013] ONCA 90, aff’d 2013 ONCA 459. [4] I am satisfied that consideration of the first three factors favours granting an extension. The appellants formed an intention to appeal within the relevant period and a reasonable explanation for the delay is offered. While the appeal would delay the respondent in its effort to collect legal fees, there would be no other prejudice. [5] With respect to the fourth and fifth factors, the respondent submits that the appeal lacks merit, and as RZCD are in a conflict of interest, the justice of the case weighs against granting the extension. [6] These two issues are intertwined. The legal issue raised is whether the respondent lacked authority to seek an assessment of legal fees for work done by Mr. Bennett. Mr. Bennett did most of the work for which fees are sought while a member of the RZCD Law Firm. That same law firm appears as counsel for the appellants and contends that the billings form part of RZCD’s assets and that the respondent’s only recourse is against the firm, not the clients. Thus, while RZCD represents the appellants who resist payment of the fees, RZCD advances its own claim to the fees to defeat the claim of the respondent. [7] When RZCD moved on behalf of the appellant clients to set aside the notice for assessment, the respondent moved to have RZCD removed as solicitors of record on grounds of conflict of interest. RZCD requested an adjournment to consider obtaining outside counsel. The motion judge chose to deal with RZCD’s motion on the merits. The motion judge observed that she found “it somewhat disturbing to have the clients’ interests argued by Mr. Callahan, a partner in the RZCD law firm, whose invoices may be the subject of the assessment”, but she refused the adjournment request and deferred any consideration of the respondent’s conflict motion. [8] The only relevant evidence as to the respondent’s authority was an Associate Agreement dated June 1, 2002. Although Mr. Bennett subsequently became a partner in the firm, no other agreement was produced. Article 5 of the agreement provides that in the event of termination, fees earned to the date of termination remain payable to the partnership and will be paid to the associate upon collection less any debts owing by the associate to the partnership. On the other hand, provisions in Article 7 provide that the associate shall receive 100% of fees billed, and that the associate “assumes all responsibility for collection of unpaid accounts” while the partnership “shall take all reasonable steps to facilitate the said collection of unpaid accounts”. [9] The motion judge concluded that the agreement was ambiguous and applied the contra proferentem principle against the law firm. [10] I turn first to the merits of the appeal. The Notice of Appeal is deficient. It repeats grounds formulated for the purposes of leave to appeal to the Divisional Court that have no application in this court. The remaining grounds are purely generic and fail to identify specific alleged errors in the order appealed from. [11] That said, it is my view that the interpretation of the Associate Agreement does raise an arguable legal issue. On the other hand, it would appear from the Associate Agreement that whether it is for the respondent or RZCD to claim the fees from the appellants, the respondent is ultimately entitled to 100% of the fees billed. [12] I turn finally to the “justice of the case”. My concern is that the appeal appears to be presented as if it raised an issue between the respondent and Mr. Bennett’s former law partners who claim that the fees at issue belong to them. The appellants seem to serve as a proxy for RZCD in this dispute. There was no affidavit from the clients to support the motion to set aside the assessment and no evidence, apart from the Associate Agreement, as to the financial arrangements between Mr. Bennett and his former law firm. The position taken by RZCD in this matter is, as the motion judge put it, disturbing. [13] On the other hand, as I have noted, the appellant clients may have an arguable ground of appeal. [14] In these circumstances, I grant the motion for an extension of time to file the Notice of Appeal for fifteen days from the date of this endorsement, but add this: it is my view that it would greatly assist the proper and orderly presentation of this appeal if RZCD were to remove themselves as solicitors of record. That would ensure that if the appeal does proceed, any right of the appellant clients will not be confounded or confused by the participation of RZCD as counsel in a matter in which they appear to have, and to be advancing, their own personal interest. [15] I note that as this appeal falls into the “hold-up” category in relation to the assessment, it should be expedited in the usual way for such appeals. [16] In my view, this is not a case for costs.