Individual appellant, not his company, should pay legal fees under retainer agreement: Ont. CA

Appeal court rejected claim that use of individual’s name in retainer agreement was typo

Individual appellant, not his company, should pay legal fees under retainer agreement: Ont. CA

A man could not claim that a retainer agreement was only with his company and not him when the plain wording stated that he was a party to it and he was responsible for paying legal fees, the Ontario Court of Appeal has ruled.

In November 2015, the appellant signed an engagement agreement with the respondent, MBM Intellectual Property Law LLP. After the termination of the retainer, MBM sought payment of outstanding legal fees of about $50,000.

At an assessment of accounts, the appellant argued that his company, GlycoBiosciences Inc. (Glyco), was responsible for paying any outstanding fees since Glyco was a party to the retainer agreement. The assessment officer referred the matter to the Ontario Superior Court of Justice for determination.

In December 2021, application judge Justice Adriana Doyle of the Ontario Superior Court determined, primarily based on her interpretation of the retainer agreement’s terms, that the appellant was a party to the agreement. The application judge found the appellant’s affidavit evidence unhelpful and decided not to rely on MBM’s evidence, which consisted of an affidavit sworn by a paralegal who was not at the firm at the time of the agreement’s formation. The paralegal had no firsthand knowledge of the file, she explained.

Retainer agreement unambiguous

In MBM Intellectual Property Law LLP v. Drizen, 2022 ONCA 766, the Court of Appeal dismissed the appeal.

First, the appellant argued that the retainer agreement was not with him but with Glyco. The appellate court disagreed and saw no error in the application judge’s finding

that the appellant was a party to the agreement. The agreement was, on its face, between the appellant and MBM, explicitly stated that the appellant was responsible for paying all fees, and made no reference to Glyco.

Second, the appellant contended that the legal work that MBM performed was for Glyco’s benefit. The Court of Appeal responded that, even if that was true, that did not prevent the parties from entering into a retainer agreement that required the appellant to pay the legal fees.

Third, the appellant asserted that the use of his name and not Glyco’s in the retainer agreement was a typo. The appellate court ruled that this could not be deemed a typo since the parties’ identity was an essential term of the agreement.

Fourth, the appellant claimed that MBM’s evidence was deficient and that the judge should have accepted his evidence instead. The Court of Appeal held that the fact that MBM’s evidence on the contract’s formation was inadmissible did not detract from the agreement’s plain wording, which unambiguously stated that the appellant was a party to the agreement and was responsible for paying legal fees.

Lastly, the appellant asked for a stay of the assessment since the assessment officer was allegedly biased. The appellate court, echoing the judge’s ruling on this matter, said that the appellant should have raised this issue with the assessment officer if he believed that there was an apprehension of bias.

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