55 QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2011 SKQB 100 Date: 2011 03 04 Docket: Q.B.G. No. 1865 of 1991 Judicial Centre: Saskatoon BETWEEN: AGRICULTURAL CREDIT CORPORATION OF SASKATCHEWAN and V. JENSEN SONS CO-OPERATIVE STOCKFARM LIMITED and BARRY JENSEN Counsel: Ashley M.M. Smith for Agricultural Credit Corporation of Saskatchewan (ACS) (applicant) Peter V. Abrametz for Eggum, Abrametz and Eggum (respondent) FIAT GOLDENBERG J. March 4, 2011 [1] ACS seeks an order from this court requiring the legal office of Eggum, Abrametz and Eggum to produce to the sheriff of the Judicial Centre of Prince Albert, the shares owned by Barry Jensen in Jen-Sim Cattle Co. Ltd., pursuant to the June 5, 2001 writ of execution ACS has against Barry Jensen, within seven days of service of the order compelling production of the shares. [2] The facts are as follows: a. Judgment in pursuance of an order was granted June 5, 2001 to ACS to recover $72,877.26 plus interest at a rate of 5% per annum from March 22, 2001, against V. Jensen & Sons Co-operative Stockfarm Limited and Barry Jensen (the “Judgment”). b. Writ of execution was issued on June 5, 2001 pursuant to a judgment in the Judicial Centre of Prince Albert (the “ACS Writ”). c. As of September 16, 2010, the balance owing on the judgment was $28,163.97 plus interest. d. On August 11, 2010, ACS performed corporate search at the Saskatchewan Corporations Branch which indicated that Barry Jensen owned all 37 Common shares in Jen-Sim Cattle Co. Ltd. and was the only director and voting shareholder for the corporation. e. From the corporate search ACS determined that the mailing address for the corporation was the legal office of Eggum, Abrametz and Eggum in Prince Albert, Saskatchewan. Based on that information, on September 16, 2010, ACS provided instructions to its solicitors to instruct the sheriff at the Judicial Centre of Prince Albert to immediately seize the Class shares in the name of Barry Jensen from the law office of Eggum, Abrametz and Eggum. f. On September 28, 2010, the sheriff was instructed to seize and sell the shares that Barry Jensen owned in Jen-Sim Cattle Co. Ltd. g. On November 30, 2010, correspondence was received from the sheriff indicating that on November 8, 2010, Eggum, Abrametz and Eggum had been served with seizure schedule and Eggum, Abrametz and Eggum refused to produce and/or allow the sheriff access to the shares. h. Attached to the sheriff’s correspondence was November 29, 2010 letter from Mr. Peter V. Abrametz. The letter indicated that Mr. Abrametz was claiming solicitor’s lien against the shares owned by Barry Jensen in Jen-Sim Cattle Co. Ltd. for the indebtedness of Mr. Jensen and Jen-Sim Cattle Co. Ltd. to the firm of Eggum, Abrametz and Eggum. The letter in part is as follows: Please accept this letter as our advice that we hold Solicitor’s Lien against the shares of Barry Jensen held in Jen-Sim Cattle Co. Ltd., for the indebtedness of Barry Jensen and the Corporation to our firm. Our offices are further of the view that Section 20 of The Saskatchewan Farm Security Act applies, and that the Execution Creditor must first get leave of the court to make an application to seize and sell the shares of Barry Jensen as they relate to farmland, and accordingly any application to seizure the shares is nullity without leave of threat of the court. i. On December 13, 2010, ACS’s solicitors wrote to Mr. Abrametz and requested that the shares be produced to the sheriff. j. Mr. Abrametz replied by letter dated December 22, 2010 indicating an unwillingness to produce the shares to the sheriff. The letter in part is as follows: Thank you for your correspondence of December 13th, 2010. This letter will confirm that our offices claim possessory lien pursuant to the common law against the shares of Barry Jensen held in Jen-Sim Cattle Co. Ltd. We enclose herewith summary of all accounts owing by Barry Jensen and/or Jen-Sim Cattle Co. Ltd. to our firm. We consider our representation of Barry Jensen, and Jen-Sim Cattle Co. Ltd. as single solicitor-client relationship. ... SUMMARY OF ACCOUNTS OWING BY BARRY JENSEN AND/OR JEN-SIM CATTLE CO. LTD. TO PETER V. ABRAMETZ Account #10187 $3,000.00 Account #02415 537.08 September 29th, 2004 October 13th, 2005 189.80 June 11, 2007 188.40 September 27, 2007 188.40 October 10, 2008 187.00 November 24, 2009 252.86 TOTAL $4,543.54 k. Mr. Abrametz was provided with several opportunities to produce the shares, and notice that the non-production of the shares would result in court application by ACS for their production. [3] There is also the uncontroverted affidavit of Barry Jensen. In part it is as follows: a. He is the President of Jen-Sim Cattle Co. Ltd. b. That Peter V. Abrametz has performed legal services on behalf of Jen-Sim Cattle Co. Ltd. and himself for approximately the last 10 years, and that the corporate indebtedness, and his indebtedness to November of 2010 was $4,543.54. c. That Jen-Sim Cattle Co. Ltd. is farming corporation. That its sole asset is lands held for farming purposes. That the income produced by the corporation was in excess of $5,000.00 in the past year. d. He owns all 37 Class “A” voting/participating shares. There are also issued 185 Class “B” non voting, participating shares. There are five children that have an interest with him and have majority interest in the corporation. e. He knows of no legal obligation between himself and the plaintiff whereby he is required to deliver up to the plaintiff his Class “A” Common, voting shares in Jen-Sim Cattle Co. Ltd. He has not pledged, hypothecated, sold or in any way encumbered the said share certificate which would require them to be delivered to any third party in accordance with any obligations, or encumbrances he may have placed against the same. f. The only claim against his shares within Jen-Sim Cattle Co. Ltd. is the plaintiff’s claim, as creditor. It is as creditor that the plaintiff instructed the sheriff, Judicial Centre of Prince Albert, to make seizure of his shares in Jen-Sim Cattle Co. Ltd. g. There is no outstanding obligation against the shares of Jen-Sim Cattle Co. Ltd., excepting only the solicitor’s lien of Peter V. Abrametz, for legal services provided unto the Jen-Sim Cattle Co. Ltd., and himself, Barry Jensen, the shareholder, and for which he holds his said share certificate as security. Issues (a) Can the legal office of Eggum, Abrametz and Eggum refuse to hand over the shares in Jen-Sim Cattle Co. Ltd. to the sheriff pursuant to a solicitor’s lien? (b) Are the shares in Jen-Sim Cattle Co. Ltd. exempt from seizure pursuant to The Saskatchewan Farm Security Act, S.S. 1988-89, c. S-17.1? Law and Determinations (a) Can the legal office of Eggum, Abrametz and Eggum refuse to hand over the shares in Jen-Sim Cattle Co. Ltd. to the sheriff pursuant to solicitor’s lien? [4] The solicitor’s lien herein arises out of s. 66(3) of The Legal Profession Act, 1990, S.S. 1990-91, c. L-10.1. In his correspondence set out above, Mr. Abrametz claimed common law possessory lien. On argument, Mr. Abrametz acknowledged that his claimed common law lien was the same as lien pursuant to s. 66(3) and further went on to claim solicitor’s lien pursuant to s. 66(3). As Justice Pritchard pointed out in Maduik v. Wasylyshen (1999), 1999 CanLII 12590 (SK QB), 178 Sask. R. 241 at 244 (Q.B.), para. [8] In Tkach, Duchin Bayda v. Wood and Fairhurst (1992), 1992 CanLII 7935 (SK QB), 99 Sask. R. 256 (Q.B.), Madam Justice Hunter reviewed the development of the law relating to solicitors’ liens in Saskatchewan and determined that s. 66(3) of the Act codifies the general law with respect to liens that result from possession and is governed by cases of possessory liens ... [5] Section 66(3) and (4) of the Act is as follows: (3) member has lien or charge for the member’s proper fees and expenses in relation to all legal services performed by the member for client against any property owned by the client that is in the member’s possession. (4) Nothing in subsection (3) overrides the exceptions to solicitor’s lien at common law. [6] consider the decision of Imperial Developments (Canada) Ltd. (Receiver of) v. Field Field (1988), 1988 ABCA 154 (CanLII), 68 C.B.R. (N.S.) 164 (Alta. C.A.) to be instructive. In Imperial the issue on appeal was whether the court-appointed receiver of the respondent companies could demand production and delivery of the files of those companies notwithstanding they were subject to valid solicitor’s lien. [7] At pages 167-68, Lieberman J.A. said: The receiver is an officer of the court deriving authority from the court’s order. His appointment is for the benefit of “all” parties, including the debtor and all creditors. The client cannot refuse production and delivery to the receiver. conclude, therefore, that since the solicitor’s right to refuse production and delivery based on lien is no higher than that of his client, he cannot refuse production and delivery to the receiver in this case. In these circumstances, the argument that the receiver cannot have rights greater than those of the client vis-à-vis the solicitor cannot be sustained. [Emphasis added] And at pages 168-69: In my view, therefore, the general rule that solicitor’s lien can be raised against all persons claiming through the client must be qualified by consideration of against whom the rights accruing from the lien are claimed. solicitor has no better right to retain documents than his client would have if still in possession of them. Consequently, if the client is bound to produce documents to receiver, the solicitor is similarly bound. This exception to the general rule has been recognized in Canada and applied in favour of trustee in bankruptcy. Re Motherwell (1921), 20 O.W.N. 306, C.B.R. 497, affirmed 1921 CanLII 487 (ON SC), 21 O.W.N. 108, C.B.R. 128, 62 D.L.R. 130 (S.C.); Re Walkerville Fuel Supply Co. (1932), 13 C.B.R. 447 (Ont. S.C.); Re Fundy Forest Indust. (1972), 21 C.B.R. (N.S.) 170, N.B.R. (2d) 344 (Q.B.). In Northland Bank v. L.G. Lands Ltd., 1983 CanLII 467 (BC SC), [1983] W.W.R. 86, 44 B.C.L.R. 237, 47 C.B.R. (N.S.) 305 (S.C.), Legg J. held that the receiver is court-appointed official appointed to discharge certain duties and that to permit solicitor’s lien to prevail against the receiver would afford the solicitor greater right than his clients to withhold documents from the receiver. Two Alberta decisions arrive at the same result: Alta. Treasury Branches v. Invictus Fin. Corp. (1984), 1984 CanLII 1351 (AB QB), 55 C.B.R. (N.S.) 174 (Q.B.); Alta. Treasury Branches v. Invictus Fin. Corp. (1985), 1985 CanLII 1182 (AB QB), 38 Alta. L.R. (2d) 36, 56 C.B.R. (N.S.) 239, 63 A.R. (Q.B.). [8] There is also the decision of Kramer Ltd. v. Dallas Contracting Ltd., 2007 SKQB 24 (CanLII), 47 C.P.C. (6th) 332. In this case production of documents were sought for purposes of ongoing litigation. Commencing at page 334, para. 7, Currie J. said: solicitor’s retaining, or possessory, lien arises from the common law. The lien entitles the lawyer to keep the client’s property or documents from the client. As between the client and the lawyer, the client may not recover the property or documents until the lawyer is paid: Hawkes, Re, [1898] Ch. (Eng. C.A.), at 6-7; Barratt v. Gough-Thomas, [1950] All E.R. 1048 (Eng. C.A.), at 1053; Northland Bank v. L.G. Lands Ltd., 1983 CanLII 467 (BC SC), [1983] W.W.R. 86, [1983] B.C.J. No. 1716 (B.C.S.C.) at para. 8; Imperial Developments (Can.) Ltd. (Receiver of) v. Field Field (1988), 1988 ABCA 154 (CanLII), 51 D.L.R. (4th) 700 (Alta. C.A.) at 702. The lawyer’s right to retain the property or documents can be limited, however, when other parties become involved. In the context of litigation involving the client, the lawyer’s right to retain documents is no greater than is the client’s when faced with the right of third party to require production of the documents. Lindley M.R. said at pages 6-7 in In re Hawkes: ... solicitor’s lien is simply right to retain his client’s documents as against the client and persons representing him. As between the solicitor and third parties, the solicitor has no greater right to refuse production of documents on which he has lien than his client would have if he had the documents in his own possession. This principle is as applicable at law as it is in equity. Accordingly, it has been long settled that if solicitor is required by his client to produce documents under subpoena duces tecum the solicitor can refuse to do so if he has lien on them; but that the lien is no answer to demand for their production by third party: see Hope v. Liddell [7 D. M. G. 331]; Hunter v. Leathley [(1830) 10 B. C. 858]. This doctrine is not confined to production under the exigency of subpoena duces tecum. The same principle applies to other applications for production by solicitors who are acting for their clients in litigation: see, at law, Ley v. Barlow [(1848) Ex. 800] and, in equity, Furlong v. Howard [(1804) Sch. Lef. 115]. Nothing can be clearer than Lord Redesdale’s judgment in this last case: “Though solicitor may have lien on deed for his costs, yet if his client is bound to produce it for the benefit of third person, so also must the solicitor. know this is not so understood in general; but the common opinion, that the solicitor may withhold it from all parties, in such case is erroneous. The right is only as between his client and him.” It is on this principle that Courts of Equity order solicitors acting for clients who are parties to actions to produce documents on which the solicitors have lien, if their production is necessary for the purpose of doing justice to other persons besides their respective clients.... Thus, in court action client may be required by law to produce, to another party to that action, documents in the client’s possession. If the documents are in the possession of the client’s former lawyer, who asserts retaining solicitor’s lien, the lawyer must produce the documents. This is the case whether the documents are required under subpoena or under the rules for document production. do note that at page 335, para. 14, Currie J. went on to say: 14 ... not every case of solicitor’s lien involves litigation requiring production of document that is subject to the lien. In many cases, there will be no such circumstance to interfere with the lawyer retaining documents.... [9] do not consider the above obiter statement of Currie J. to be binding on me. (R. v. Wolverine, 1987 CanLII 4603 (SK QB), [1987] W.W.R. 475 (Sask. Q.B.)) In any event consider the circumstances before me to be such as to warrant an interference with the lawyer retaining the documents. In this case writ of execution issued from this court. The sheriff has been unable to enforce the writ due to the position taken by Eggum, Abrametz and Eggum. The process of the court has been thwarted. [10] Mr. Abrametz refers me to the decision of Mariani v. Bergstein, [1995] O.J. No. 3007 (Ct. J. (Gen. Div.)) (QL), Court File No. RE 5751/95, October 13, 1995, decision of Somers J., in support of the proposition that if the shares are required to be handed over, then the funds received by ACS should be firstly used to pay out the solicitor’s lien. think not. Mariani has no application to the matter before me. The parties therein were the debtor and the lawyer holding solicitor’s lien over the debtor’s property. There was no third party. Also the debtor refused to pay his solicitor’s bills, so while the court granted the transfer of the files, the debtor was still required to pay his outstanding legal fees. [11] Based on the foregoing, the right of Eggum, Abrametz and Eggum to refuse to produce and deliver up shares to the sheriff has not been made out. [12] Should be found to be in error as above, will now proceed to determine if the lien in question is valid one. [13] Mr. Abrametz refers me to Kingswood Explorations 1985 Ltd. v. Elkind, [1988] O.J. No. 955 (S.C. (H.C.J.)) (QL), Court File No. 27134/88, July 5, 1988, decision of Granger J., and says that Barry Jensen’s shares are part of the records of Jen-Sim Cattle Co. Ltd. and as such they are subject to solicitor’s lien for legal work done for the company. consider Kingswood to have no application to the matter before me. There is nothing before me that even remotely suggests that Barry Jensen is not the owner of the shares in question. Thus he owns the shares. They are his and his alone. They cannot be subsumed to the company and thus become liable to solicitor’s lien as being part of the records of the company. The claim for lien is not made out. [14] Further, the summary provided by Mr. Abrametz does not allow me to determine the amount owing by Barry Jensen for legal work done for him. The summary provided by Mr. Abrametz does not allow me to determine the amount owing by Jen-Sim Cattle Co. Ltd. for legal work done for it. The claim for lien is not made out. [15] From the evidence before me, it cannot be said that Barry Jensen guaranteed or in any way indicated that he would be personally responsible for payment of the legal work done for Jen-Sim Cattle Co. Ltd. If that was the case, it would have been simple matter to say so in his affidavit. consider Barry Jensen’s affidavit to be glaringly silent in that regard. [16] Given the totality of what is before me, I do not consider a valid solicitor’s lien to have been made out. (b) Are the shares in Jen-Sim Cattle Co. Ltd. exempt from seizure pursuant to The Saskatchewan Farm Security Act? [17] The sheriff has the power to seize shares pursuant to The Executions Act, R.S.S. 1978, c. E-12, particularly ss. 17-17.2. Upon seizure, the sheriff has the power to sell the shares in order to collect the outstanding debt. [18] Mr. Abrametz submits that s. 21(1) of The Saskatchewan Farm Security Act has application. The subsection is as follows: ... no farm land shall be sold by the sheriff under writ of execution against the lands unless, on application by the execution creditor, the court orders that this subsection does not apply. [19] Mr. Abrametz’s submission is that the end result of the seizure and sale of Barry Jensen’s shares will be sale of farm lands. That leave of the court must be first obtained. think not. If Mr. Abrametz’s interpretation was correct, no shares of an agricultural company could be seized at all, pending leave, as they would all have some form of farm land as part of the company. There is no such restriction in The Executions Act nor in The Saskatchewan Farm Security Act. There is a difference between the seizure and sale of shares in a company and the seizure and sale of a piece of farm land. [20] I order the law firm of Eggum, Abrametz and Eggum to produce and deliver up to the sheriff of the Judicial Centre of Prince Albert the shares of Barry Jensen in Jen-Sim Cattle Co. Ltd. ACS shall have it costs of this application as against the law firm of Eggum, Abrametz and Eggum which I fix at $750.00.
A judgment issued from the Court along with a writ of execution. The plaintiff discovered that one of the defendants had shares being held at the defendants' solicitor's office and instructions were given to the sheriff to seize and sell the shares. The sheriff attended to seize the shares but the defendants' lawyer objected. At issue was whether the legal office could refuse to hand over the shares to the sheriff pursuant to a solicitor's lien and whether the shares were exempt from seizure pursuant to the Saskatchewan Farm Security Act. HELD: The law firm was ordered to produce and deliver to the sheriff the shares of the defendant in the third corporation; costs were fixed at $750. 1) The right of the law office to refuse to produce and deliver the shares to the sheriff had not been made out and court process was thwarted. There was no evidence to determine the amount owing from the defendant or the third corporation for legal work; a valid solicitor's lien was not demonstrated. 2) There is a difference between the seizure and sale of shares in a company and the seizure and sale of a piece of farmland and the argument that the Executions Act or the Saskatchewan Farm Security Act restricts the seizure fails.