DSM v KLS, 2021 ABQB 1024


10.4: Charging order for payment of lawyer’s charges

Case Summary

The Applicant brought an Application against the lawyer Respondent for the return of certain trust monies, and the lawyer Respondent brought a Cross-Application for a Charging Order over those monies under Rule 10.4. Pursuant to Rule 10.4, the Respondent could apply to the Court to get a Charging Order over the remaining monies being held in trust by him, so long as the Respondent met the following conditions:

(a) The lawyer’s charges are unlikely to be paid without a charging order;

(b) The lawyer ran or defended litigation;

(c) The lawyer’s efforts in the suit resulted in the recovery or preservation of the property that is the subject of the charges;

(d) The charges are limited to fees and disbursements incurred in the suit; and

(e) Notwithstanding these conditions having been met, the Court need not give this charge if it seems unfair.

The Court held that it would be unfair to grant the Charging Order. The Respondent held $25,000.00 in trust for the Applicant for 14 years before deciding to seek a Charging Order to secure payment of an outstanding account in the sum of $892.24, dating January 25, 2008. The Respondent held the monies in trust for the Applicant as a means of security to pay arrears in child support in the event that the Applicant was forced into bankruptcy and could not pay his ex-spouse. The Applicant’s dispute with the ex-spouse had resolved, however, and the Applicant forgot about the trust funds. The Court found that while the Respondent’s outstanding account was unlikely to be paid, the 14-year delay was not necessary and not reasonable. Accordingly, the Court ordered the Respondent to return the trust monies to the Applicant.

View CanLII Details