J. 1996 SN No. 101470 IN THE SUPREME COURT OF NOVA SCOTIA Between: JOSH FRANCIS COSTELLO, an infant by his Litigation Guardian/Trustee, DENNIS RICHARD COSTELLO APPLICANT/PLAINTIFF and WILLIAM BRIAN MACKENZIE and THE CAPE BRETON DISTRICT SCHOOL BOARD DECISION Heard before: The Honourable Justice Simon J. MacDonald Place heard: Sydney, Nova Scotia Date heard: December 16, 1996 Decision released: January 13, 1997 Counsel: Sheldon Nathanson, for the Applicant/Plaintiff MACDONALD, J: This is a Chambers Application wherein the Applicant seeks approval of the Court for a settlement reached on behalf of the infant plaintiff in this matter. The matter was set down for hearing on December 16, 1996 and the Court was presented with the application and affidavits of Dennis Richard Costello and Sheldon Nathanson as the applicant's counsel. brief summary of the facts as supplied by counsel reveal as follows: On or about the first day of December, 1992, Josh Francis Costello was waiting for school bus to pick him up outside the Balls Creek Elementary School. Josh Francis Costello was attending the Balls Creek Elementary School which is within the district of the Cape Breton District School Board, in the County of Cape Breton, Province of Nova Scotia. As the bus driven by William Brian MacKenzie came into sight, Josh Costello and the other children approached the usual boarding sight. The bus pulled up to the boarding sight and stopped. As Josh Costello and several others were waiting at the entrance to the bus, the bus pulled away suddenly causing some of the children to lose their balance. Josh Costello fell to the ground and immediately felt the bus run over the lower half of his right leg. His parents were notified of the accident by the school principal and he was then transported to the Northside Harbourview Hospital. The medical reports on file indicate that the infant plaintiff suffered crush injury to the right leg below the knee. No surgery was required and the infant has now been advised to return to his pre-accident activities. In support of this, medical reports were supplied by Vascular Surgeon, Dr. R.S. Dunn and Orthopaedic Surgeon, Dr. J.C. Hyndman, along with the infant plaintiff's family physician. In essence, they reveal that there does not appear to be any objective medical evidence to suggest that the infant's injuries would cause any permanent discomfort or disability. After reading the affidavits submitted at the application, counsel was advised that the matter would be adjourned for one week pending receipt of Memorandum of Law outlining the basis for the acceptance of the sum of Seventeen Thousand ($17,000) Dollars in full and final payment, which is the sum being asked for approval. Counsel were also instructed to present, to the Court, an appropriate bond in this matter which had not been submitted. This has now been done and the Court agrees the $17,000.00 is reasonable settlement on the facts of this case. It also approves of the Bond now presented. In their brief and supporting material, Mr. Nathanson and his associate, Ms. Doyle advised that the settlement proposed to the Court for approval was the sum of $17,000.00, all inclusive of costs. Attached to Mr. Nathanson's affidavit is Contingency Fee Agreement between his firm and the infant plaintiff and his parents. The proposed Contingency Fee Agreement provides for the payment of 30% of the sum settled upon, plus disbursements. The proposed Order presented to the Court reveals that the total fees and disbursements amount to $5,753.50. The balance of the $17,000.00 settlement in the amount of $11,256.50 is to be paid over to the parents as Trustees and dealt with under the terms of the Bond and pursuant to the Court Order. Paragraph 10, and the two subsequent paragraphs, each numbered 11 in Mr. Nathanson's affidavit, state as follows: 10. THAT in connection with my professional services rendered in relation to this matter, provided an account to the Infant Plaintiff, by his Litigation Guardian, Richard Costello, dated November 13, 1996, copy of which is attached hereto and marked as Exhibit "J" to this Affidavit. This account provided for total fees of Five Thousand, One Hundred ($5,100.00) Dollars, being thirty (30%) percent of the all-inclusive settlement of Seventeen Thousand ($17,000.00) Dollars as provided for in the Contingency Fee Agreement, together with taxable disbursements of One Hundred and Sixty Dollars and Twenty-Eight Cents ($160.28), Goods and Services Tax of Three Hundred and Sixty Eight Dollars and Twenty-Two ($368.22) and non-taxable disbursements of Seventy Five ($75.00) Dollars for total of Five Thousand, Seven Hundred and Three Dollars and Fifty Cents ($5,703.50). 11. THAT arranged to have this account taxed by the Taxing Master, Michael Whalley, at our offices on November 14, 1996 and advised both Mr. Richard and Mrs. Darlene Costello of this taxation. Richard Costello, father of the Infant Plaintiff, advised that he would be making no representations on behalf of the Infant Plaintiff with respect to the account as rendered. 11. THAT on November 14, 1996, Mr. Michael Whalley, Taxing Master, attended at our offices to review our account of November 13, 1996 and provided the account as taxed and included his taxing costs of Fifty ($50.00) Dollars for total account of Five Thousand, Seven Hundred and Fifty Three Dollars and Fifty Cents ($5,753.50), which amount is included in the Order put before this Honourable Court for approval. Chambers Judge has an onus to review the documentation on file prior to signing an Order of this nature. Civil Procedure Rule 63 dealing with Contingency Fee Agreements must be followed. Rule 63.19(1) of the Civil Procedure Rules requires the filing of Contingency Fee Agreement and it states as follows: "63.19 (1) Within ten days after it is signed, copy of an agreement referred to in rule 63.17 shall be filed with the Prothonotary of the county where the solicitor practices, and the Prothonotary shall file the agreement separately from any proceeding, and, unless the court otherwise orders, the agreement is not available for inspection by, or its contents shall not be communicated to any person, other than the client, solicitor, or taxing officer engaged in the taxation. (2) Where an agreement as mentioned in rule 63.17 does not comply with rule 63.18, or is not properly filed as provided in paragraph (1), the solicitor is, upon the successful disposition of the subject matter, entitled only to the compensation as would have been payable in the absence of any contingency arrangement and without regard to the contingency. It is these subsections of the rule dealing with the Contingency Fee Agreements which poses difficulty in this particular case. As said the Court has an obligation dealing with Contingency Fee Agreements to ensure the Rule is adhered to. As it turns out, upon review, the Court found that there is no record of the Contingency Fee Agreement ever being filed with the Prothonotary within the required ten days or at all. At the Court's request Mr. Nathanson has advised that he did not register the Contingency Fee Agreement with the Prothonotary's Office as required. The wording in Civil Procedure 63.19(1) requires that the filing of the Agreement with the Prothonotary is mandatory because of the use of the word "shall". This was not done in this case. As the Agreement does not comply with Civil Procedure Rule 63.19(1) and thus under subsection 2 of rule 63.19, the solicitor is therefore only entitled to compensation "as would have been payable in the absence of any contingency arrangement and without regard to the contingency." This means the Contingency Fee Agreement is out. The rules with regard to Contingency Fee Agreements as set out must be adhered to to ensure fairness to all the parties concerned. am prepared to receive and review properly prepared account as provided for in the Rules. hasten to point out the Court is not prepared to allow the Taxing Master's account of $50.00 in any event. It appears the Taxing Master did not check to see if the Contingency Fee Agreement met the requirements of the Civil Procedure Rule governing it. That was task that was placed upon the Taxing Master when he was asked to have the account taxed. As this was not done, the Court is not prepared to allow any fee payable to the Taxing Master. Sydney, N. S. January 13, 1997
The applicant sought approval of the Court for a settlement reached on behalf of the infant plaintiff, who had been injured in an automobile accident. Part of the order sought provided for the payment of solicitor fees by way of a contingency fee agreement negotiated with the applicant. The contingency fee agreement was never filed with the prothonotary. Granting the order relating to the settlement amount, but setting aside the contingency fee agreement, that Civil Procedure Rule 63.19(1) requires that all contingency fee agreements be filed with the prothonotary. As this was not done, the applicant's solicitor is only entitled to compensation as would have been payable in the absence of the contingency agreement.