PARAGON CAPITAL CORPORATION LTD v STARKE DOMINION LTD, 2020 ABCA 216
BIELBY, ANTONIO AND FEEHAN JJA
1.4: Procedural orders
4.22: Considerations for security for costs order
9.18: Judgments and orders subject to conditions
10.4: Charging order for payment of lawyer’s charges
The Court considered whether the Chambers Judge erred in granting a charging Order to secure payment of legal fees owed to a law firm, when the firm did not provide evidence that it had met the requirements of Rule 10.4(2)(a), and in particular the requirement that it demonstrate that its fees would not be, or were unlikely to be paid unless the charging Order was granted. The Chambers Judge had purported to rely on equitable jurisdiction to grant a conditional charging Order pending receipt of proof that Rule 10.4(2)(a) had been met.
The Majority considered the wording of Rule 10.4(2), which states that a charging Order “may only be made if” certain requirements are met - implying that the conditions of the Rule must be satisfied in advance and not imposed as a condition of making an interim Order final. It then compared Rule 10.4(2) to Rule 1.4(2)(e) which permits the Court to impose terms, conditions, and time limits on Orders, and Rule 9.18(1) which provides that Orders may be conditional.
The Majority noted that there appears to be a conflict between Rules 10.4(2), and Rules 1.4(1) and 9.18(1) because the latter permit conditional Orders. The Majority then reviewed the history of Rule 10.4(2), and applied the principles of statutory interpretation to resolve the ambiguity. The Majority found that the legislative purpose behind Rule 10.4(2) includes the desirability of having lawyers agree to represent those who cannot afford to pay in advance or through a retainer. In order for that purpose to be achieved, “the rule must work in such a manner as to allow an unpaid lawyer a reasonable opportunity to obtain security”. The Majority concluded that requiring “an applicant to have all its ducks in a row in relation to alternative collection attempts prior to bringing an application for a charge order” would, practically speaking, defeat the purpose of the Order. As such, the Majority held that the Chambers Judge had discretion to grant the conditional Order.
Next, the Majority considered the Appellant’s argument that even if the Chambers Judge had jurisdiction to grant the conditional Order, it should not have been done because Rule 10.4(5) says: “An order must not be made under this rule if in all the circumstances that the Court considers that to make the order would be unfair”. The Majority rejected this argument after reviewing the principles of statutory interpretation.
In dissent, Antonio J.A. emphasized that Rule 10.4(2) explicitly states that a charging Order may only be made if two prerequisites are met. Antonio J.A. determined that the mandatory wording of Rule 10.4(2) could not be altered by other Rules, and that while Rule 9.18 “contemplates the existence of conditional [O]rders”, it does not “authorize the conversion of prerequisites into conditions that can be satisfied after the fact”. In doing so, Antonio J.A. noted that the threshold to be met for Rule 10.4(2) to apply is akin to that for a Security for Costs Order made pursuant to Rule 4.22(a). Her Ladyship therefore would have held that “no principle of statutory interpretation, no other rule of court, and no “equitable jurisdiction” empowers the court to grant a charging order contrary to the intent and wording of the rule.”View CanLII Details