During the course of a divorce Action, a total of $125,328.00 was paid into Court, and $12,956.13 remained. Three individuals claimed a right to the funds: (1) the Defendant, Koepke; (2) the lawyer who acted for the Defendant, Thomas Plupek (“Plupek”); and (3) June Koska (“Koska”), a former lawyer who acted as Plupek’s agent in the Action. The parties each applied to have the funds held in Court paid to them.

Macklin J. considered Rule 10.4, noting that it is the new version of former Rule 625, and reviewed the leading authorities relating to charging liens and charging orders. Macklin J. observed that charging liens are a creation of the common law, while charging orders are essentially a codification of a charging lien. Charging orders are therefore governed by Rule 10.4. His Lordship stated that charging liens have three requirements: (1) a likelihood that the client will be unable to pay the lawyer’s costs; (2) the lawyer has conducted some legal work for the client; and (3) property must have been recovered or preserved through the lawyer’s efforts. The Court retains the discretion to decline recognize a charging lien or charging order, and may do so where granting the lien or order would be unfair.

Macklin J. concluded that although Plupek met the requirements necessary to establish either a charging Lien or a charging Order, Plupek was not entitled to such a Lien or Order over the entirety of the remaining funds. Plupek did not represent the Plaintiff throughout the Action and had not recovered or preserved the majority of the funds held in Court. Granting a charging Lien or Order to Plupek over the entirety of the remaining funds would be unfair. Plupek’s charging Lien or Order was therefore restricted to the property that he had recovered or preserved; the balance of the amounts held in Court belonged to the Defendant. Koska’s Application for payment of the funds was dismissed.