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BARRISTERS AND SOLICITORS - Compensation - Solicitor’s lien

Monday, August 31, 2020 @ 5:58 AM  

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Appeal by a law firm from a decision requiring the monies held in trust by the appellant to be paid to the respondent and from a trial judge’s decision refusing to set aside a family law decision and order that a portion of the money held in trust be used to satisfy the appellant’s lien. The appellant acted for the wife in a family law dispute involving her former husband. The wife’s share of the proceeds of sale of the family home was paid into the appellant’s trust account. The appellant claimed a solicitor’s lien against some of those monies for the legal fees owed by the wife. The wife then entered a common law relationship with the respondent. After that relationship broke down, the wife sought division of family property and the respondent sued her for money owing on a promissory note. The appellant did not act for either party in those proceedings and had no knowledge of the terms of the judgment requiring the trust funds to be paid to the respondent prior to it being issued. The trial judge refused to set aside the family law judgment ordering the appellant to pay money it held in trust to the respondent, finding he was functus officio, the appellant had no status to seek an order altering the Family Law Judgment, and the appellant’s lien claim was not just and proper in the circumstances.

HELD: Appeals allowed. The amount of $48,352 of the monies held in trust by the appellant were to be paid to the appellant in satisfaction of the wife’s outstanding account. The appellant had a right to appeal the Family Law Judgment. The judgment negatively affected the appellant’s lien claim with respect to that money. The money held in trust by it was not part of the spouses’ family property and thus was not subject to division pursuant to the family law application. The paragraphs in the formal judgment providing for payment out of the trust funds to the respondent were set aside. The trial judge did not err in concluding the Enforcement of Money Judgments Act had no application. The trial judge erred in concluding that the appellant did not have a valid lien against the monies it held in trust based on the judge’s erroneous interpretation of the orders requiring the appellant to hold the monies in trust and his failure to differentiate between charging and retaining liens. The funds came into the appellant’s hands because of the appellant’s efforts on behalf of the wife in obtaining and enforcing judgment against the husband and not because of the trust order. The appellant was entitled to payment of its outstanding fees and expenses in priority to the payment of the respondent’s judgment. There was no equitable basis for denying the appellant’s lien or refusing it payment out.

Phillips Legal Professional Corp. v. Schenher, [2020] S.J. No. 283, Saskatchewan Court of Appeal, R.K. Ottenbreit, J.A. Ryan-Froslie and R. Leurer JJ.A., July 23, 2020. Digest No. TLD-August312020002