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T-2824-72
Weight Watchers International Inc. (Plaintiff) v.
Morray Burns, Adelaide Daniels, Harold Daniels, Bernard C. Kurtz, Sam Kwinter, Weight Watch ers of Ontario Limited, Adelaide Daniels Enter prises Limited, Counterweight Limited, Weight Watchers (Atlantic) Limited, Weight Watchers of New Brunswick Limited, Weight Watchers of Newfoundland Limited, Canadian Association of Organizations for Weight Watchers, Bernard C. Kurtz Limited, Weight Wise Limited (Defend- ants)
Trial Division, Kerr J.—Ottawa, August 19 and 28, 1975.
Practice—Application for charging order on defendant's costs—"Gap" rule—Analogy to Ontario Rules of Practice— Federal Court Rules 5, 1900—Ontario Rules of Practice and Procedure 696.
Defendant's solicitor applied for a charging order on costs awarded to defendant Burns for his unpaid expenses. The whereabouts of Burns appears unknown.
Held, granting the order, in absence of a specific rule of this Court, under Rule 5, analogy may be made to Rule 696 of the Ontario Rules of Practice. Taxable costs ordered to be paid by plaintiff to defendant Burns are "property recovered or pre served through the instrumentality of a solicitor" within the meaning of Rule 696.
Doyle v. Doyle (1975) 4 O.R. (2d) 111, agreed with.
APPLICATION. COUNSEL:
K. Plumley for plaintiff.
W. F. Green for defendant Burns.
SOLICITORS:
Gowling & Henderson, Ottawa, for plaintiff. W. F. Green, Toronto, for defendant Burns.
The following are the reasons for judgment rendered in English by
KERR J.: The notice of motion reads as follows:
TAKE NOTICE that an application will be made by Weldon F. Green before the Honourable Court at the Court House in the City of Toronto, on Monday, the 14th of April, 1975, at 11:00 o'clock, in the forenoon or so soon thereafter as the application may be heard for an Order pursuant to Rule 5 of the General Rules and Order of this Honourable Court and Rule 696 of the Supreme Court of Ontario for a Declaration that the said Weldon F. Green, the Solicitor for the defendant, Morray Burns is entitled to a charge upon the taxable costs awarded to said defendant by this Honourable Court in the above Order of Mr. Justice Kerr, for said Solicitor costs, charges, expenses of or in reference to the action and applications referred to therein when he was employed by said defendant, Morray Burns, as his Solicitor, to defend such action and applications; and that the costs of this application be taxed as between Solicitor and client and added to the amount for which said charge is granted; or
for such further order as may seem just;
This application was heard along with an application by the plaintiff for an order to vary my order of October 11, 1973, so as to provide that no costs shall be payable by the plaintiff to the defendant Morray Burns. I dismissed the plain tiffs said application this day, and my reasons and order are of record. Therefore, as of now, my order of October 11, 1973, remains without variation, and this decision is being made on that basis.
Mr. Green seeks to charge the said October 11, 1973, order for payment of costs for his costs, charges and expenses to the extent that they remain unpaid, and for the power to enforce such charge by way of taxation of the bill of costs and execution or in such other manner as the Court may direct.
It has been made to appear that the present whereabouts of the defendant Morray Burns are unknown to Mr. Green, and it is thought that he is in the United States. Substituted service of the notice of motion was authorized by Mr. Justice Collier.
At the hearing counsel referred to Rule 1900(1) and (3) of the Federal Court Rules, the relevant portions of which read:
Rule 1900. (1) Subject to the provisions of these Rules, a judgment or order for the payment of money, not being a judgment or order for the payment of money into court, may be enforced by one or more of the following means, that is to say,
(e) a charging order,
(3) Paragraphs (1) and (2) are without prejudice to any other remedy available to enforce such a judgment or order as is therein mentioned or as is provided by section 56 of the Act.
Section 56(1) of the Federal Court Act is as follows:
56. (1) In addition to any writs of execution or other process that are prescribed by the Rules for enforcement of its judg ments or orders, the Court may issue process against the person or the property of any party, of the same tenor and effect as those that may be issued out of any of the superior courts of the province in which any judgment or order is to be executed; and where, by the law of that province, an order of a judge is required for the issue of any process, a judge of the Court may make a similar order, as regards like process to issue out of the Court.
It does not appear that there is any Rule of this Court that expressly provides for a charging order of the kind now sought.
There is, however, Rule 5 of the Federal Court Rules, reading as follows:
Rule 5. In any proceeding in the Court where any matter arises not otherwise provided for by any provision in any Act of the Parliament of Canada or by any general rule or order of the Court (except this rule), the practice and procedure shall be determined by the Court (either on a preliminary motion for directions, or after the event if no such motion has been made) for the particular matter by analogy
(a) to the other provisions of these Rules, or
(b) to the practice and procedure in force for similar pro ceedings in the courts of that province to which the subject matter of the proceedings most particularly relates,
whichever is, in the opinion of the Court, most appropriate in the circumstances.
Rule 696 of the Rules of Practice and Procedure of the Supreme Court of Ontario is as follows:
696. (1) Where a solicitor has been employed to prosecute or defend any cause or matter, the court may, upon a summary application, declare such solicitor, or his personal representa tives, to be entitled to a charge upon the property recovered or preserved through the instrumentality of such solicitor, for his costs, charges and expenses of or in reference to such cause, matter or proceeding, and all conveyances and acts done to defeat, or which may operate to defeat, such charge or right are, unless made to a bona fide purchaser for, value without notice, absolutely void and of no effect as against such charge.
(2) The court may make an order for taxation of such costs, charges and expenses and for the raising and payment of the same out of the property.
No decision of this Court dealing directly with the matter has been drawn to my attention.
Mr. Plumley, counsel for the plaintiff, opposed the motion, submitting mainly that the Court lacks jurisdiction to make the charging order, that sec tion 56 of the Federal Court Act and the Court's Rule 1900 and the Ontario Supreme Court's Rule 696 are not applicable, that the exercise of the power to make a charging order is discretionary and is not exercised unless there are funds in Court or property recovered or preserved through the endeavours of the solicitor and that it is in the nature of a salvage order; and that the right of Morray Burns to tax his costs is not "property recovered or preserved" through the instrumental ity of a solicitor. Mr. Plumley cited the following cases: Dales v. Byrne (1916) 35 O.L.R. 495 at 500; Scholey v. Peck, re Metcalfe and Sharpe (1893) 68 L.T. 118 cited in Re L & D Cartage & Development Co. Ltd. v. Sterling Construction Co. Ltd. [1963] 2 O.R. 420; Re: Bulmor (1926) 30 O.W.N. 71; Homstead & Gale, Vol. 3, Rule 696, pp. 2565-2570.
Mr. Green cited a decision of O'Leary J., in the High Court of Justice of Ontario, Doyle v. Doyle', from which I quote the following extracts:
While the power of the Court under Rule 696 is a discretion ary power, prima facie, a solicitor is entitled to a charging order as security in respect of the fruit of his labour, for as was stated by Middleton, J.A., in Conklin v. Milhousen (1928) 33 O.W.N. 351, "while the costs are technically awarded to the litigant, they are earned by the solicitor".
The substantial questions for my determination on this application are:
(a) Whether a judgment for costs is "property recovered through the instrumentality of the solicitor" such as to entitle the solicitor to a charge under Rule 696, upon the said judgment for his costs in reference to the action out of which the judgment arose.....
It appears from Nevills v. Ballard [(1898), 18 P.R. (Ont.) 134], and such decisions as Faithful v. Ewen (1878), 7 Ch. D. 495, and Cole v. Eley [1894] 2 Q.B. 350, that a judgment debt is considered "property recovered" within the meaning of Rule 696.
Accordingly, I conclude that a judgment for costs is property recovered through the instrumentality of the solicitor.
(1975) 4 O.R. (2d) 111 at 114, 115.
In my opinion the matter should be dealt with by this Court by analogy to the practice and procedure in the Supreme Court of Ontario, par ticularly its Rule 696.
I also think that the taxable costs ordered to be paid by the plaintiff to the defendant Morray Burns by my order of October 11, 1973, are "property recovered or preserved through the instrumentality" of Mr. Green, within the meaning of the said Rule 696.
Therefore, an order will go declaring that Mr. Green is entitled to a chargè upon the taxed costs awarded to the defendant Morray Burns by this Court in its order of October 11, 1973, for Mr. Green's costs, charges and expenses, to the extent that they remain unpaid, of or in reference to the action and applications referred to therein when he was employed by the said Morray Burns, as his solicitor, to defend such action and applications; and ordèring that the plaintiff shall pay Mr. Green's costs of this application, to be taxed on a party and party basis, unless agreed as to amount, and that they shall be added to the other taxable costs to which the charge applies.
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