Charging orders available only where solicitor's work leads to funds recovered

Karrys v. Karrys, 2015 ONCA 17:

[13]      Counsel submits that on a proper analysis all the settlement proceeds should be found to be inextricably intertwined with the legal work the solicitors performed. The agreement settled all of the ongoing litigation and that the manner in which the parties to the settlement chose to characterize the payments for their purposes should not be taken into account in interpreting the charging orders. The respondent should not be allowed to avoid the effect of the charging orders by earmarking part of the settlement proceeds as relating only to other litigation.

[14]      The difficulty with the solicitors' argument is that they do not, and on the record cannot, submit that the settlement agreement was intentionally structured to avoid the application of the charging orders. The solicitors did not cross-examine the respondent on his affidavit. The record that was before the motion judge provides ample support for his conclusions. He considered the parties involved in the proceedings, the subject matter, the time at which the proceedings were launched and when the subject events took place. 

[15]      The motion judge did not find, as the solicitors have suggested, that there was no link between their work and the ultimate settlement of the litigation. Rather he found there was no link between the disputed payments and the solicitors' work. The disputed payments are only a portion of the payments provided by settlement agreement. The respondent acknowledges that the remaining payments are subject to the charging orders.