Appellants seek cut of settlements or awards in over 130 lawsuits referred
In an action alleging that a personal injury lawyer failed to pay referral fees, the Ontario Court of Appeal dismissed an appeal challenging the summary dismissal of claims for damages relating to lawsuits that settled before a specified date.
In Scanga v. Balena, 2025 ONCA 727, the appellants – an individual and her corporation – brought an action seeking damages from the respondent, a personal injury lawyer.
The appellants alleged that:
The respondent moved to dismiss the action summarily. He argued that the supposed contract was nonexistent and illegal. He also asserted limitation defences.
The respondent acknowledged that he paid the appellants numerous times for their referrals. However, he said he had the sole discretion to make those payments.
On June 28, 2024, Justice William S. Chalmers of the Ontario Superior Court of Justice granted partial summary judgment. He saw genuine issues requiring a trial concerning the contract’s existence and legality.
However, the motion judge summarily dismissed the appellants’ claims for damages regarding all suits that settled before Dec. 10, 2017, in line with the ultimate and basic limitation periods in ss. 15 and 4, respectively, of Ontario’s Limitations Act, 2002.
The judge pointed out that the appellants admitted they knew the settlement dates of the referred suits. He rejected their argument that the limitation period only started to run when the relationship ended in 2018.
The judge noted that the appellants believed they had a continuing contract for the respondent to pay the revolving amount owed, with him occasionally making interim payments not associated with any specific referrals.
The judge concluded that the cause of action arose when the respondent settled each referred claim and failed to pay the referral fee because the appellants knew at that point about the material facts of their cause of action, including the respondent’s omission that resulted in their claimed losses.
The appellants challenged the summary dismissal of the claims concerning lawsuits that settled before Dec. 10, 2017. They alleged an error in the judge’s failure to acknowledge evidence that the referral agreement was an ongoing contract or recognize that the cause of action only arose after the relationship ended.
The Court of Appeal for Ontario dismissed the appeal and ordered the appellants to pay $15,000 in costs, including the applicable taxes and disbursements.
First, the appellants argued that the motion judge wrongly characterized the contract because no evidence supported his findings that:
The appeal court disagreed, noting that the respondent’s counsel gave ample evidence, including from the appellants, to support the judge’s findings.
Second, the appellants said the evidence demonstrated a pattern of payments not connected to specific referrals. They claimed they did not know the settlement amounts, when they would be paid, and which referrals were linked to the payments.
The appeal court accepted that these questions might pose challenges to the appellants at trial on the issue of which referrals remained outstanding after the expiry of the limitation period.
However, the appeal court saw no basis to deny the limitation defences and no error in the judge’s finding that the cause of action accrued when the parties settled each referred claim and the respondent failed to pay the referral fee, even if a contract did exist.
