Higgerty Law, which focused on contingent-based personal injury law and class action litigation, was placed under Law Society custodianship and a receiver was appointed pursuant to section 13(2) of the Judicature Act, RSA 2000, c J-2. Easy Legal Finance Inc (“ELFCo”) was the largest secured creditor, being owed more than $1.4 million (“ELFCo Loan”).

ELFCo sought a charging lien or a charging Order pursuant to Rule 10.4(2) over the proceeds of the contingency files that were transferred out of Higgerty Law. ELFCo argued that since it had a security interest in all the Higgerty Law property, this gave ELFCo the right to assert a solicitor’s lien in respect of its files. The Court noted that the Alberta case law did not support that a non-lawyer with a secured interest could assert a solicitor’s lien. However, the Court held it did not need to determine this issue as ELFCo had not satisfied Rule 10.4(2)(a). Specifically, there was no evidence that the files transferred out of Higgerty Law would not involve recovery by the firm, which would then allow it to pay its creditors. As such, ELFCo was not entitled to a charging Order pursuant to Rule 10.4. The Court also dismissed ELFCo’s argument for a charging lien, noting that while it was in the Court’s discretion to grant such a lien, it was not an appropriate case to do so. In the result, ELFCo’s Application was dismissed.