COURT OF APPEAL FOR ONTARIO

CITATION: Hodge v. Neinstein, 2017 ONCA 494

DATE: 20170615

DOCKET: C62074

Hoy A.C.J.O., Gillese and Brown JJ.A.

BETWEEN

Cassie Hodge

Applicant (Respondent/Appellant in Cross-Appeal)

and

Gary Neinstein and Neinstein & Associates LLP

Respondents (Appellants/Respondents in Cross-Appeal)

Chris G. Paliare, Odette Soriano and Denise Cooney, for the appellant

Peter I. Waldmann and Andrew Stein, for the respondents

Paul J. Pape, Shantona Chaudhury and Andrea M. Bolieiro, for the intervener, the Ontario Trial Lawyers’ Association

Heard: March 8 and 9, 2017

On appeal from the order of the Divisional Court (Justices Edward F. Then, Anne M. Molloy and Thomas R. Lederer concurring) dated December 9, 2015, with reasons reported at 2015 ONSC 7345, reversing the orders of Justice Paul M. Perell dated July 29, 2014 and November 4, 2014, with reasons reported at 2014 ONSC 4503, 58 C.P.C. (7th) 37 and 2014 ONSC 6366, 59 C.P.C. (7th) 248.

Hoy A.C.J.O.:

[1] At issue on this appeal is whether solicitors who have allegedly violated the Solicitors Act, R.S.O. 1990, c. S. 15 (the “Act”), are immune from a class proceeding brought on behalf of their former and current clients.

[2] The appellants, personal injury lawyer Gary Neinstein and his firm Neinstein & Associates LLP (collectively the “Firm”), challenge the Divisional Court’s decision certifying an application, which was brought by representative plaintiff Cassie Hodge against the Firm, under the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the “CPA”).

[3] The Divisional Court certified 19 common issues. These include common issues relying on a breach of s. 28.1(8) of the Act. Section 28.1(8) states that a contingency fee agreement (“CFA”) shall not include in the fee payable to the lawyer any amount arising as a result of an award of costs or costs obtained as part of a settlement in addition to a percentage fee unless certain conditions are met. The certified common issues also include whether the Firm charged interest contrary to s. 33 of the Act, and whether that amounted to a breach of contract or breach of fiduciary duty.

[4] The Firm argues that the application brought by Ms. Hodge, who is a former client of the Firm, should not have been certified as it fails to disclose a cause of action, fundamentally lacks in commonality and fails the preferable procedure requirement. In particular, the Firm argues that ss. 23-25 of the Act preclude the possibility of a class proceeding against the Firm as they form a “complete code” and require individual assessments of client accounts. The Firm says, even if that is not the case, the solicitor-client privilege of its former and current clients shields the Firm from the class proceeding intended to benefit those former and current clients who signed a CFA with the Firm.

[5] Ms. Hodge cross-appeals, arguing that the Divisional Court erred by denying her leave to amend her Amended Notice of Application to plead the tort of conversion and failing to certify further common issues.

[6] For the following reasons, I would dismiss the appeal and allow the cross- appeal in part. While I would dismiss the appeal, I conclude the Divisional Court erred in certifying one issue (common issue 3) as a common issue and would vary the certification order by deleting that common issue.

A. BACKGROUND

[7] Before turning to my analysis of the issues on the appeal and cross-appeal, I will provide the necessary background, including the relevant statutory provisions as they are key to understanding my analysis of the issues. For ease of reference, all relevant statutory provisions are included in the attached Schedule A.

(1) Solicitors Act

[8] Historically, lawyers in Ontario were prohibited from charging their clients a fee based on a percentage of damages recovered by their clients. Eventually, the legislature recognized that CFAs can provide access to justice to people of limited means. The Act was amended in 2002 to authorize contingency fees in certain circumstances and to provide certain protections for clients.

[9] Section 28.1 sets out the circumstances in which a lawyer is permitted to enter into a CFA. Central to this appeal are ss. 28.1(8) and (9), as it is alleged that the Firm entered into CFAs that did not comply with s. 28.1(8) with the result that they were unenforceable pursuant to s. 28.1(9):

28.1(8) A contingency fee agreement shall not include in the fee payable to the solicitor, in addition to the fee payable under the agreement, any amount arising as a result of an award of costs or costs obtained as part of a settlement, unless,

(a) the solicitor and client jointly apply to a judge of the Superior Court of Justice for approval to include the costs or a proportion of the costs in the contingency fee agreement because of exceptional circumstances; and

(b) the judge is satisfied that exceptional circumstances apply and approves the inclusion of the costs or a proportion of them.

(9) A contingency fee agreement that is subject to approval under subsection (6) or (8) is not enforceable unless it is so approved.

[10] Sections 23-25 of the Act are also central to this appeal, as the Firm argues that they form a “complete code” and thus provide the only avenue through which Ms. Hodge’s claims may be pursued:

23. No action shall be brought upon any such agreement, but every question respecting the validity or effect of it may be examined and determined, and it may be enforced or set aside without action on the application of any person who is a party to the agreement or who is or is alleged to be liable to pay or who is or claims to be entitled to be paid the costs, fees, charges or disbursements, in respect of which the agreement is made, by the court, not being the Small Claims Court, in which the business or any part of it was done or a judge thereof, or, if the business was not done in any court, by the Superior Court of Justice.

24. Upon any such application, if it appears to the court that the agreement is in all respects fair and reasonable between the parties, it may be enforced by the court by order in such manner and subject to such conditions as to the costs of the application as the court thinks fit, but, if the terms of the agreement are deemed by the court not to be fair and reasonable, the agreement may be declared void, and the court may order it to be cancelled and may direct the costs, fees, charges and disbursements incurred or chargeable in respect of the matters included therein to be assessed in the ordinary manner.

25. Where the amount agreed under any such agreement has been paid by or on behalf of the client or by any person chargeable with or entitled to pay it, the Superior Court of Justice may, upon the application of the person who has paid it if it appears to the court that the special circumstances of the case require the agreement to be reopened, reopen it and order the costs, fees, charges and disbursements to be assessed, and may also order the whole or any part of the amount received by the solicitor to be repaid by him or her on such terms and conditions as to the court seems just.

[11] Section 33(1) of the Act is also at issue on this appeal. While a solicitor may charge interest on unpaid disbursements, s. 33(1) of the Act provides that a solicitor may only charge interest from a date that is one month after the bill is delivered.

[12] It can fairly be said that the language in the Act has created difficulties for lawyers and clients for many years: see, for e.g., Ontario Law Reform Commission, Report on the Solicitors Act (Ministry of the Attorney General, 1973). Courts have also struggled with the language, since much in the Act is not clear: see, for e.g. Gilbert’s LLP v. David Dixon Inc., 2017 ONSC 1345, [2017] O.J. No. 1037 (Div. Ct.). The case before this court represents another struggle to make sense of the Act.

(2) Facts

[13] Ms. Hodge was injured in a motor vehicle accident in 2002. She retained the Firm, which specializes in personal injury litigation. Most of its retainer agreements are on a contingency fee basis.

[14] Ms. Hodge signed a CFA with the Firm. It provided that the Firm’s legal fees would be equal to 25 per cent of the damages recovered on her behalf, plus partial indemnity costs (which would be no more than 40 per cent of the total recovery), plus disbursements.

[15] In November 2006, Ms. Hodge’s claim for statutory accident benefits was settled for a total of $85,000. Greg Neinstein’s evidence was that she received $66,089.49 in hand from this settlement and that the Firm deferred $11,250 of the fees it was entitled to be paid from the settlement because Ms. Hodge was in financial difficulty. The remainder was to be paid out of the tort settlement or judgment.

[16] In April 2010, an “all-in” settlement of $150,000 was reached in Ms. Hodge’s tort action. She received $41,906.41 of that amount.

[17] Gary Neinstein determined what portion of the settlement would be allocated to costs. The final account rendered to Ms. Hodge indicated that she was charged $60,326.49 for legal fees, of which $30,000 was said to be the party-and-party costs portion of the settlement, and $30,326.49 was the legal fee plus GST, and $48,924.37 for disbursements. Among other things, the disbursements included: $4,008.27 for photocopies; $2,791.20 for laser copies; $1,280.70 for scanned documents; $1,372.33 for “Interest Recovery”; and $200.00 for “Miscellaneous Expenses/File Closing Charges”. According to the evidence, “Interest Recovery” is interest, compounded monthly, on disbursements that were incurred by the Firm, calculated from the date that they were incurred.

[18] There appears to be no dispute that the CFA and the amount the Firm charged violated the Act in two key respects.

[19] Most significantly, there appears to be no dispute that, contrary to s. 28.1(8) of the Act, the Firm did not obtain approval of a judge of the Superior Court of Justice to include in its fee the costs obtained as part of Ms. Hodge’s settlement.

[20] Secondly, seemingly contrary to s. 33(1), the Firm charged interest from the date the disbursements were incurred, and not from a date one month after its bill was delivered.

[21] Ms. Hodge brought a motion to certify a class proceeding against the Firm on behalf of all its contingency fee clients since October 2004. In her Amended Notice of Application, she seeks, among other relief, a declaration that the Firm is in violation of the Act and breached its fiduciary duty to and its contracts with the class members, and an order that the Firm repay any amounts taken for costs in addition to a percentage of damages. She also alleges that the Firm charged disbursements that were excessive or improper.

[22] On the certification motion, she requested that the court certify 37 common issues.

(3) Decisions Below

(a) The certification judge’s reasons

[23] The certification judge concluded that Ms. Hodge failed to satisfy the five-part test for certification under s. 5(1) of the CPA:

5. (1) The court shall certify a class proceeding on a motion under section 2, 3 or 4 if,

(a) the pleadings or the notice of application discloses a cause of action;

(b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant;

(c) the claims or defences of the class members raise common issues;

(d) a class proceeding would be the preferable procedure for the resolution of the common issues; and

(e) there is a representative plaintiff or defendant who,

(i) would fairly and adequately represent the interests of the class,

(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members.

[24] In brief, the certification judge concluded that Ms. Hodge’s Amended Notice of Application satisfied the “cause of action” requirement in s. 5(1)(a). While he was clear that, in his view, there was no “free-standing strict liability civil wrong for breach of sections 28.1(8) and 28.1(9) of the Act” (para. 95), he was satisfied that the Amended Notice of Application disclosed a cause of action under s. 23 and 25 of the Act, and for breach of fiduciary duty and breach of contract.

[25] While the certification judge found the class definition proposed by Ms. Hodge overly broad, he identified an alternative class definition and concluded Ms. Hodge had satisfied the “identifiable class” criterion in s. 5(1)(b) of the CPA. That class definition, subsequently accepted by the Divisional Court and set out in para. 4 of its order, is reproduced in the attached Schedule B.

[26] However, the certification judge concluded that the “common issues” requirement in s. 5(1)(c) of the CPA was not satisfied, and Ms. Hodge’s motion accordingly failed. In his view, none of the 37 proposed common issues satisfied the common issues criterion, even though he acknowledged that it presented a low bar. He found that the proposed class proceeding would inevitably lead to individual assessments of each class member’s claim, which could not be done at a common issues trial. He noted even if a breach of s. 28.1 could be said to be a free-standing strict liability civil wrong, that would not overcome the common issues problem.

[27] He also concluded that Ms. Hodge’s application did not satisfy the “preferable procedure” criterion in s. 5(1)(d). Individual applications under ss. 23 and 24 of the Act or by way of assessment were the preferable procedure; a class action was unsuitable because the class members’ claims were inherently individualistic; and a class proceeding would be unmanageable and inefficient.

[28] The certification judge rejected the Firm’s argument that another reason a class proceeding was not the preferable procedure was that it would result in a breach of the solicitor-client privilege held by thousands of clients and former clients of the Firm.

[29] He found that solicitor-client privilege was not an “insurmountable obstacle” if the proceeding were otherwise certifiable (para. 176). He indicated that if Ms. Hodge’s application had been certifiable, he would have made an order requiring proof of personal service of a notice of certification on class members making clear that class members who did not opt out of the class proceeding would be deemed to have waived their solicitor-client privilege. Along with the notice of certification he would have also required a special notice advising class members to obtain independent legal advice about the notice of certification.

[30] Finally, the certification judge concluded that if the other certification criteria had been satisfied, Ms. Hodge would have been a suitable representative plaintiff.

[31] Subsequently, he ordered Ms. Hodge to pay the Firm’s costs in the amount of $300,000, plus HST, plus disbursements of $28,758.45.

(b) The Divisional Court’s reasons

[32] Ms. Hodge appealed the certification decision to the Divisional Court. She also sought leave to appeal the costs decision. At the outset of the appeal, she requested leave to amend her Amended Notice of Application to plead the tort of conversion.

[33] The Divisional Court allowed her appeal. Molloy J. wrote for the majority with Lederer J. concurring.

[34] The issues on appeal involved ss. 5.1(a) (cause of action), (c) (common issues) and (d) (preferable procedure) of the CPA.

[35] Molloy J. concluded that the cause of action criterion was met. She agreed with the certification judge that Ms. Hodge had met the test for showing causes of action in breach of fiduciary duty and contract. Contrary to the certification judge, however, she concluded that a proceeding depending solely on s. 28.1 of the Act could succeed as it was arguable that ss. 23-25 of the Act do not apply where there is a breach of the Act that brings s. 28.1(9) into play. At para. 95, she stated: “[A]n application under ss. 23 and 24 of the [Act] is not available to review the validity of the [CFAs] at issue here.”

[36] Molloy J. also determined the common issues requirement was satisfied.

[37] She disagreed with the certification judge’s conclusion that, even if a breach of ss. 28.1(8) and (9) were a free-standing wrong, it would not avoid the need for individualized inquiries. She concluded that whether the Firm complied with s. 28.1(8) and whether the CFAs were unenforceable under s. 28.1(9) were questions common to all members of the class. She posited that a common remedy might flow from a declaration that such CFAs are unenforceable. For example, the Firm might be disentitled to retain the costs portion of the fee paid to it.

[38] She identified eight common issues arising out of the alleged violation of s. 28.1(8) of the Act. They are common issues 1-8 in Schedule C attached.

[39] She also found that whether the Firm charged class members for interest contrary to s. 33 of the Act, whether doing so amounted to a breach of contract or fiduciary duty, and whether interest charged contrary to s. 33 should be disgorged or the Firm should be otherwise ordered to repay any amounts taken on account of interest were common issues. These common issues are set out as common issues 9-13 in Schedule C attached.

[40] Finally, she found that whether disbursements for computer legal research, closing fees and storage fees allegedly charged by the Firm to its clients as a matter of general practice were improper because they were part of office overhead, and whether the rates the Firm charged its clients for photocopying and scanning documents were excessive, were common issues. Rates would be common for all clients. These common issues are set out as common issues 14-19 in Schedule C.

[41] I would note that while Molloy J. was in general disagreement with the certification judge on the common issues requirement, she did agree with him in one narrow respect. She agreed that an assessment under ss. 23-25 of the Act would be so individualized that no meaningful common issues would emerge, although on her view arguably those provisions did not apply where an agreement was deemed to be unenforceable under s. 28.1(9).

[42] Turning finally to the preferability requirement, Molloy J. concluded that it too was satisfied. Fundamental to her preferability analysis were her conclusions that (1) the certification judge erred in failing to find it was arguable a proceeding that relies on a breach of s. 28.1 of the Act could succeed and (2) there were issues that were common to the class.

[43] She agreed with the certification judge that the solicitor-client privilege issue was not an obstacle to a class proceeding. She accepted that the procedure suggested by the certification judge was one way to avoid the problem although there may be others. She indicated that she would leave the specific manner of dealing with the problem to the case management judge. As there was at least one way to avoid the problem, it was not a basis for refusing certification.

[44] In her view, there were considerable barriers to access to justice for the class members and little ability for them to address them other than through a class proceeding. Judicial economy also favoured a class proceeding. Another advantage of a class proceeding was behavior modification: a class proceeding would serve as a reminder to all lawyers in Ontario that the requirements in the Act for CFAs must be followed.

[45] She dismissed Ms. Hodge’s motion to amend her Amended Notice of Application to plead the tort of conversion. She concluded that it “adds nothing of substance to the proceeding as currently drafted” and so it was unnecessary to consider it: at para. 112.

[46] Because she determined that Ms. Hodge had satisfied the test for certification, she set aside the certification judge’s costs order.

[47] In concurring reasons, Lederer J. agreed with Molloy J. as to the outcome. Like her, he concluded that it is not plain and obvious that a cause of action relying on a breach of s. 28.1 of the Act could not succeed and, accordingly, that it should be certified. Also like her, he agreed that decisions made pursuant to ss. 23 and 24 of the Act would be inherently individualistic. However, he made clear he did not agree with all of Molloy J.’s reasoning, noting at para. 118: “I do not accept that the interpretation by the [certification] judge of the applicable sections of the [Act] is necessarily wrong and Molloy J. necessarily correct. She may be.”

B. analysis OF ISSUES ON APPEAL

[48] The Firm challenges the Divisional Court’s findings on all the requirements for certification under s. 5(1) of the CPA except for the “identifiable class” requirement in s. 5(1)(b).

(1) Clause 5.1(a) – cause of action requirement

[49] The crux of the Firm’s argument is that Ms. Hodge’s application – whether framed as a breach of the Act, breach of contract or breach of fiduciary duty –pertains solely to the validity, effect and enforceability of her CFA. As such, it falls squarely within the complete code of the Act, which precludes any common law action for breach of statute and requires individual assessments of client accounts.

[50] As I explain, the Divisional Court correctly concluded that it is not plain and obvious a cause of action relying on s. 28.1 cannot succeed. And like Lederer J. and the certification judge, I conclude that it is not plain and obvious that an application under ss. 23-25 of the Act is not available to review the CFAs at issue in this application. I also agree with the certification judge and the Divisional Court that Ms. Hodge’s Amended Notice of Application discloses a cause of action for breach of fiduciary duty and contract.

(a) Section 5(1)(a) test and standard of review

[51] The test under s. 5(1)(a) of the CPA is the same as the test on a motion to strike for no reasonable cause of action: Pro-Sys Consulting Ltd. v. Microsoft Corp., 2013 SCC 57, [2013] 3 S.C.R. 477, at para. 63. The test is whether, assuming the facts pleaded to be true, it is plain and obvious that the claim has no reasonable prospect of success: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 17.

[52] Whether the cause of action requirement is met is reviewable on a correctness standard of review: Attis v. Canada (Minister of Health), 2008 ONCA 660, 93 O.R. (3d) 35, at para. 23, leave to appeal S.C.C. ref’d, [2008] S.C.C.A. No. 491; Kang v. Sun Life Assurance Co. of Canada, 2013 ONCA 118, 303 O.A.C. 64, at para. 27.

(b) Cause of action relying on s. 28.1

[53] On my reading of the case law and the relevant statutory provisions, it is not plain and obvious that a cause of action relying on s. 28.1 has no reasonable prospect of success. I agree with Lederer J. that the "plain and obvious” bar is met.

[54] In support of the Firm’s argument that ss. 23-25 preclude any action founded on s. 28.1. or, indeed, any other cause of action, the Firm cites the following cases: Seneca College v. Bhadauria, [1981] 2 S.C.R. 181; Frame v. Smith, [1987] 2 S.C.R. 99; Canadian Alliance of Pipeline Landowners’ Assn. v. Enbridge Pipelines Inc., 2008 ONCA 227, 237 O.A.C. 200, which cites Canada v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205.

[55] In each of Seneca College, Frame and Canadian Alliance, the court reviewed the legislation in question and determined that it created a complete code or comprehensive scheme.

[56] In Seneca College, the Supreme Court considered Ontario’s Human Rights Code, R.S.O. 1970, c. 318, and concluded that it foreclosed any civil action based directly upon a breach of its terms or the invocation of any public policy expressed in the Code.

[57] In Frame, the Supreme Court similarly concluded that permitting a father to sue the mother and her present husband for frustrating court-ordered access, either by creating a tort or recognizing a fiduciary duty arising out of a court order, “may well do violence to the comprehensive statutory scheme [of the Children’s Law Reform Act ] provided by the Legislature”: at p. 114.

[58] In Canadian Alliance, the question was whether s. 75 of the National Energy Board Act, R.S.C. 1985, c. N-7 (“NEBA”), created a civil cause of action. It provides:

A company shall, in the exercise of the powers granted by this Act or a Special Act, do as little damage as possible, and shall make full compensation in the manner provided in this Act and in a Special Act, to all persons interested, for all damage sustained by them by reason of the exercise of those powers. [Emphasis added.]

[59] This court concluded the answer was no. Writing for the court, O’Connor A.C.J.O. noted, at paras. 31 and 32, that there is no nominate tort of statutory breach in Canada. Relying on Saskatchewan Wheat Pool, he explained that since there is no nominate tort of statutory breach, a breach of statutory obligation cannot give rise to a civil cause of action unless the statute establishing the obligation expressly provides for a right of action. In the particular case, the NEBA created a complete code for the compensation of all persons who sustained damages from the exercise of a pipeline company’s statutory powers.

[60] In my view, Seneca College, Frame and Canadian Alliance are arguably distinguishable for two reasons.

[61] First, s. 28.1 is unique in one important respect: s. 28.1(9) specifically provides that a CFA that is subject to approval under subsection (8) is not enforceable unless it is so approved. Section 28.1(9) provides a consequence for the statutory breach. Much of the relief Ms. Hodge seeks flows from that provision - the statutorily-prescribed consequence of the breach - and not the breach itself. The claimants in Seneca College, Frame and Canadian Alliance did not seek relief based on a statutorily-provided consequence of a breach of statute.

[62] Second, as Molloy J. highlights, at para. 57, the declaration that Ms. Hodge seeks is in respect of rights under an agreement. Arguably, it is different from an action based on breach of a statutory term, as in Seneca College.

[63] If a CFA that is subject to approval under subsection (8) is not enforceable unless it is so approved, then, arguably, is there any need for an application under s. 23 to determine its validity or effect? Arguably, has s. 28.1(9) already answered that question? And is it necessary to have the agreement declared “void” under s. 24, when s. 28.1(9) specifically provides that the agreement is unenforceable? In my view, the answers to these questions are not plain and obvious.

[64] That said, I acknowledge that the Act does not expressly provide that a client may pursue civil remedies where a CFA that is subject to approval under subsection (8) is “not enforceable unless it is so approved”. In my view, however, it is arguable whether express language is necessarily required despite comments in Canadian Alliance that might be read as suggesting otherwise.

[65] In Canadian Alliance, O’Connor A.C.J.O. approached the question of whether s. 75 created a cause of action as a matter of statutory interpretation. As set out above, s. 75 provides that a company “shall make full compensation in the manner provided in [the NEBA]”, which this court agreed referred to the comprehensive scheme for dispute resolution in ss. 88 to 103 of the NEBA. The wording of s. 75 was to be contrasted with other provisions in the NEBA that expressly created civil causes of action for landowners. It was in that context O’Connor A.C.J.O. stated that express language was necessary to create a cause of action based on a breach of s. 75.

[66] As I have explained, s. 28.1 is unique. Not only is it unique but it arises in a very different statutory context than in Canadian Alliance. In contrast with the NEBA, the Solicitors Act does not expressly authorize actions but rather expressly places specific limits on when and how certain types of actions may be brought and, in the case of s. 23, whether an action, as opposed to an application, may be brought.

[67] For example, s. 2(1) dictates when a solicitor may sue on an unpaid bill (“[n]o action shall be brought … until one month after a bill… has been delivered…”). Section 8 provides an exception to that rule, permitting an action to be brought “although one month has not expired since the delivery of the bill” with leave of the court. Section 6(4) imposes a leave requirement where a matter has been referred to assessment. And, s. 23, which is at the heart of this appeal, says that “[n]o action shall be brought upon any such agreement” but rather questions respecting the validity or effect of an agreement may be determined on an application.

[68] Reading s. 28.1 in context of these provisions and the Act as a whole, I am not persuaded it is plain and obvious that the mere absence of express language permitting a claim based on s. 28.1 is fatal.

[69] I also agree with Molloy J. that the line of cases relied on by the certification judge do not support his conclusion as to the lack of viability of a claim based on s. 28.1 of the Act.

[70] On the certification judge’s reading, decisions of this court such as Henricks-Hunter (Litigation Guardian of) v. 814888 Ontario Inc. (c.o.b. Phoenix Concert Theatre), 2012 ONCA 496, 294 O.A.C. 333, make clear that ss. 23-25 of the Act constitute a complete code and a CFA can only be disregarded when the court determines, under s. 24, that the agreement is not fair and reasonable.

[71] In Henricks-Hunter, the Public Guardian and Trustee entered into a CFA with a law firm on behalf of Stephanie Henricks-Hunter who suffered serious personal injuries, including a severe traumatic brain injury, in an accident. The CFA provided that the firm would be paid fees of 25 per cent of any judgment or settlement up to $2.5 million and 20 per cent of any judgment or settlement in excess of that amount. Any costs recovered would be excluded from the CFA. In other words, there was no s. 28.1 issue.

[72] The motion judge disregarded the CFA in fixing the fees payable to the firm. His only mention of the CFA was his statement that it did not bind either Ms. Henricks-Hunter or the court.

[73] This court concluded that the motion judge had erred in failing to consider whether the CFA should be enforced and by determining the amount of fees without regard to the CFA. The court stated that a CFA “can only be declared void, or be cancelled and disregarded, where the court determines that it is either unfair or unreasonable” (para. 13).

[74] But, as Molloy J. notes, Henricks-Hunter and the other cases referred to by the certification judge do not involve situations where a breach of s. 28.1(8) was said to render the agreement unenforceable under s. 28.1(9).

[75] The only case where non-compliance with s. 28.1(8) was at issue is Séguin v. Van Dyke, 2013 ONSC 6576. The certification judge concluded that it did not assist Ms. Hodge while Molloy J. found that Séguin favoured Ms. Hodge’s case. I agree with Molloy J.

[76] In Séguin, the plaintiff brought an application for a declaration that the CFA with her counsel was unenforceable pursuant to s. 28.1(9) of the Act and an order for the immediate repayment, with interest, of the 33.3 per cent contingency fee. She also applied for an assessment of the balance of her account under s. 28.1(11)(b), which, in the case of a CFA to which 28.1(8) applies, permits a client to apply for an assessment within six months after the delivery of the bill.

[77] Counsel in Séguin consented to, and Lalonde J. ordered, the repayment sought by the plaintiff. He declared the CFA void and unenforceable. He ordered that the reasonableness of the fees charged by counsel be determined in the tort action, which the plaintiff and other family members had commenced against counsel. He distinguished Henricks-Hunter on the basis that it was not concerned with an agreement that breaches the Act. He wrote, at para. 24:

I also find that in deciding the issue in this case, s. 24 must be read in conjunction with s. 28; otherwise why would s. 28 form part of the legislation? ...I do not believe, in a case such as the present one, that s. 24 dictates that the proper forum to deal with the CFA is before a Superior Court Judge who will assess the Defendant’s work. The breach here is fundamental.

[78] I take from Séguin that it is at least arguable that an assessment under s. 24 is not the only remedy available where a CFA is unenforceable pursuant to s. 28.1(9).

[79] Finally, it is arguable that this court’s inherent jurisdiction in matters relating to the regulation of lawyers’ accounts suggests that ss. 23-25 of the Act may not constitute a complete code. This court has held that courts have remedial authority beyond the four corners of the Act, drawing on inherent jurisdiction, in matters relating to the regulation of lawyers’ accounts: Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377, 131 O.R. (3d) 511, at paras. 77-79.

[80] For these reasons, it is not plain and obvious that, to the extent the relief Ms. Hodge seeks in her application relies on non-compliance with s. 28.1(8), ss. 23-25 of the Act are a “complete code” and her claim cannot succeed.

[81] I would, however, note that in reaching that conclusion I do not rely on Molloy J.’s reasoning that an agreement that is not compliant with s. 28.1(8) is not a “contingency fee agreement” as defined in the Act and therefore not an “agreement” within the meaning of that term in ss. 23 and 24 of the Act.

[82] Instead I agree with the certification judge and Lederer J. that it is not plain and obvious that ss. 23-25 of the Act are unavailable to review the CFAs at issue.

[83] Section 16(2) of the Act defines “agreement” for the purposes of, among other sections, ss. 23-25 of the Act:

“agreement” includes a contingency fee agreement.

[84] Section 15 defines a “contingency fee agreement” for purposes of, among other sections, ss. 23-25:

“contingency fee agreement” means an agreement referred to in section 28.1;

[85] And s. 28.1(1) provides that a solicitor may enter into a “contingency fee agreement” with a client in accordance with s. 28.1.

[86] Molloy J. interpreted the words “an agreement referred to in section 28.1” in s. 15 as meaning “an agreement in compliance with s. 28.1”. In my view, she was arguably in error.

[87] However, even if a non-compliant CFA is not a “contingency fee agreement” as defined in s. 15, arguably it is nonetheless an “agreement”, and arguably a client can avail herself of ss. 23-25 in the event of non-compliance with s. 28.1.

[88] In conclusion, I agree with the Divisional Court that it is not plain and obvious that a claim relying on s. 28.1 of the Act is barred by ss. 23 – 24 even though I reach that conclusion by a different route.

[89] Further, whether the Act permits a client to bring a claim for declaratory and other relief founded on non-compliance with s. 28.1 or, instead, requires the client to avail herself of ss. 23-25 in the event of non-compliance with s. 28.1, the client can ask the Superior Court of Justice to review the enforceability and effect of a CFA and grant a remedy. On that basis alone, it is not plain and obvious that a cause of action founded on non-compliance with s. 28.1 cannot succeed. The Firm’s argument that an application under ss. 23-25 of the Act requires individual assessments of client accounts relates to the common issues and preferable procedure requirements in ss. 5(1)(c) and (d), and not the existence of a cause of action.

(c) Breach of fiduciary duty claim

[90] The Divisional Court certified the breach of fiduciary duty claim with respect to the interest recovery charges. Common issue 11 asks whether, if it is determined that the Firm charged the class members for interest contrary to s. 33 of the Act, the violation amounts to a breach of the Firm’s fiduciary duty.

[91] The Firm submits that Ms. Hodge failed to plead the fiduciary duty, the alleged breach and resulting damage. And, in addition to arguing these claims are precluded by the complete code in ss. 23-25, the Firm argues a lawyer does not owe any duty to a prospective client when negotiating a retainer.

[92] I do not agree that Ms. Hodge’s claim has no reasonable prospect of success on these bases.

[93] First, reading the Amended Notice of Application generously, I am satisfied that Ms. Hodge has adequately pleaded her claim for breach of fiduciary duty.

[94] Second, I am not satisfied that it is plain and obvious the fiduciary claim falls within the scope of ss. 23-25. In my view, it is arguable that a claim that the Firm has breached its fiduciary duty is not a “question respecting the validity or effect” of the CFA. A fiduciary duty claim looks at the relationship between the parties and the alleged fiduciary’s conduct.

[95] Third, common issue 11 asks whether the Firm “charging” the class members interest contrary to s. 33 amounts to a breach of fiduciary duty. At the time the amounts are “charged”, a class member is no longer a prospective client.

[96] Thus, I agree with the certification judge and the Divisional Court that it is not plain and obvious that Ms. Hodge’s breach of fiduciary duty claim cannot succeed.

[97] I would, however, flag one procedural issue. If the breach of fiduciary duty claim does not fall within the scope of an application under ss. 23-25 of the Act, there is a question as to the basis upon which the claim could be brought by way of application and, if there is no basis, what should be the consequence.

[98] Rule 14.05 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, states that a proceeding may be brought by application where authorized by a statute or by the Rules. Rule 14.05(3), in turn, lists nine specific circumstances in which an application may be brought.

[99] Rule 2.01(2), however, provides that a court shall not set aside an original process because the proceeding should have commenced by a different originating process.

[100] While I flag this issue here, in my view it is a question best dealt with by the case management judge if and when necessary to do so.

(d) Breach of contract claim

[101] The Divisional Court certified the breach of contract claim with respect to the interest recovery charges. Common issue 10 asks whether, if it is determined that the Firm charged the class members for interest contrary to s. 33 of the Act, the violation amounts to a breach of contract.

[102] The Firm’s primary argument is that the certification judge and Molloy J. erred in concluding, without any meaningful analysis, that Ms. Hodge’s application satisfies s. 5(1)(a) for breach of contract even though the pleading does not allege which provision(s) of the contract were breached, a particular act or omission by the Firm that breached any specific contractual term, or any damages arising from any breach. The Firm also submits that, even if properly pleaded, a breach of contract claim is caught by ss. 23-25.

[103] I agree the Divisional Court erred in finding that Ms. Hodge has met the test for showing a cause of action in breach of contract given the deficiency in the pleading.

[104] In Brown v. Canada (Attorney General), 2013 ONCA 18, 114 O.R. (3d) 355, this court held that the case management judge erred in conditionally certifying the class proceeding in the absence of a statement of claim that disclosed a cause of action. Here, the Divisional Court found that Ms. Hodge had met the test for showing a cause of action in breach of contract and certified common issue 10 in the absence of a pleading that the substance of s. 33 was a term of the CFA and that term was breached.

[105] That said, I would grant Ms. Hodge leave to amend her Amended Notice of Application to plead breach of contract as I do not see how granting leave to amend at this stage of the proceeding would result in non-compensable prejudice.

[106] As to the complete code argument, I am not convinced that the proposed breach of contract claim would necessarily be precluded and covered by ss. 23 – 25, as it arguably would not deal with the “validity” of the CFA or even possibly its “effect”. I agree with the certification judge that while the Firm may have a strong argument that a contract claim would be caught by ss. 23-25, the argument is not so strong that it is plain and obvious.

(2) Clause 5(1)(c) – Common Issues

[107] The Divisional Court certified 19 common issues. They are set out in the attached Schedule C.

[108] The Firm takes issue with virtually all of the certified common issues under s. 5(1)(c). Among other things, it argues that Ms. Hodge has failed to establish that there is some basis in fact that the questions are common to all class members and can be determined on a class-wide basis.

[109] I am not persuaded that there is any basis to interfere with the Divisional Court’s conclusion that the claims of the class members raise common issues or, with the exception of common issue 3, its identification of those issues. The 18 remaining issues in my view are necessary to the resolution of the claims of each class member and their resolution would appear to advance the claims of the entire class.

[110] I am also satisfied that Ms. Hodge established that there is some basis in fact that those questions are common to all the class members.

(a) Common Issues Test and Standard of Review

[111] The underlying commonality question is whether allowing a proceeding to continue as a class proceeding will avoid duplication of fact-finding or legal analysis: Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534, at para. 39; Pro-Sys, at para. 108.

[112] The court went on at para. 108 of Pro-Sys to list the balance of the instructions found at paras. 39-40 of Dutton as to how to approach the common issues inquiry:

(1) The commonality question should be approached purposively.

(2) An issue will be “common” only where its resolution is necessary to the resolution of each class member’s claim.

(3) It is not essential that the class members be identically situated vis-à-vis the opposing party.

(4) It not necessary that common issues predominate over non-common issues. However, the class members’ claims must share a substantial common ingredient to justify a class action. The court will examine the significance of the common issues in relation to individual issues.

(5) Success for one class member must mean success for all. All members of the class must benefit from the successful prosecution of the action, although not necessarily to the same extent.

[113] At the certification stage, the factual evidence goes only to establishing whether the questions are common to all the class members: Pro-Sys, at para. 110. While there must be “some basis in fact” that the issues are common, the test “does not require that the court resolve conflicting facts and evidence at the certification stage”, which the court is ill equipped to do at that stage: Pro‑Sys, at para. 102.

[114] Even a significant level of difference among the class members does not preclude a finding of commonality. If material differences do emerge, the court can deal with them at that time: Pro‑Sys, at para. 112; Dutton, at para. 54.

[115] An appellate court owes considerable deference to a certification judge’s commonality analysis, and “should restrict its intervention to matters of general principle”: Markson v. MBNA Canada Bank, 2007 ONCA 334, 85 O.R. (3d) 321, at para. 33.

(b) Common Issues in this Case

Common issues 1-8: Violations of the Act involving costs

[116] Common issue 1 considers whether the Firm’s CFAs violate the Act by including some share of costs awarded as part of its fee, in addition to a percentage of the award or settlement.

[117] The Firm submits that common issue 1 will require a detailed and individualized file review to determine which clients were party to a CFA containing the impugned clause and it is therefore not a common issue.

[118] I reject this argument.

[119] Class members are restricted to persons who signed CFAs. Based on the sampling of CFAs in the record, and Gary Neinstein’s evidence that he is not aware of any contingency fee retainers that do not include costs in addition to the percentage fee, there is some basis in fact that this question is common to all class members.

[120] Common issue 4 considers whether the Firm obtained approval under s. 28.1(8) of the Act to obtain as part of its fees any part of the costs arising from an award or settlement.

[121] The Firm argues that, properly interpreted, court approval is required under s. 28.1(8) only if the solicitor will actually receive a fee that includes any amount arising as a result of an award of costs or costs obtained as part of a settlement. They refer to Greg Neinstein’s evidence that the Firm often waives or discounts fees when rendering its accounts. For example, he deposed, while a particular CFA might include a provision for the payment of party-and-party costs, at the end of the case the Firm might not charge the client that portion of the compensation. Therefore, the Firm says, before answering question 4, an individualized inquiry as to what each class member actually paid the Firm will be necessary.

[122] I reject this argument.

[123] Common issue 4 will involve an interpretation of s. 28.1(8) to determine whether court approval is required before a solicitor can enter into a CFA providing for the payment of a fee that includes any amount arising as a result of a costs award or costs obtained as part of a settlement. The determination of this issue of law is necessary to the resolution of the claims of each class member and would appear to advance the claims of the entire class. Moreover, there also appears to be a common issue of fact: there is some basis in fact that it was not the Firm’s practice to obtain approval under s. 28.1(8), at any stage. Even if the Firm’s interpretation of s. 28.1(8) prevails, common issue 4 may not entail an individualized inquiry.

[124] Common issue 3 asks whether the Firm has taken amounts arising from costs in an award or settlement from the class members contrary to the Act. Common issue 7 asks whether the Firm should be asked to disgorge all fees collected under any CFAs found to be unenforceable. And common issue 8 asks, in the alternative, whether the Firm should be ordered to repay to the class any amounts taken for costs in addition to their percentage fee, together with interest pursuant to s. 33(2) of the Act.

[125] The Firm argues that common issues 3, 7 and 8 have embedded in them the individual issue of what the Firm actually took in payment of its account. It again refers to Greg Neinstein’s evidence that while a CFA might include a provision for the payment of party-and-party costs, at the end of the case the Firm might not charge the client that portion of the compensation. It characterizes these as individual fact-driven inquiries not capable of extrapolation from one class member to another.

[126] Further, it argues that Molloy J. erred in law because she made no reference to the extensive and well-settled jurisprudence under the common issue requirement of the CPA. Rather, it submits, in paras. 78-82 she strayed into an irrelevant merits-based analysis.

[127] In my view, common issues 7 and 8 are proper common issues. Common issue 7 considers whether a particular remedy should flow from a declaration that a CFA is unenforceable under s. 28.1(9). It does not entail a determination of the fees paid by each class member. It asks whether whatever fees were paid should be disgorged. Similarly, common issue 8 considers whether an alternative remedy should apply to all class members whose CFAs are declared unenforceable under s. 28.1(9).

[128] I would not characterize Molloy J. as having strayed into an improper merits-based analysis in concluding that these are common issues. Rather, she provided a foundation for her determination that the certification judge fell into reversible error in failing to find these were common issues.

[129] However, I agree with the Firm that common issue 3 is not a proper common issue. While the record on appeal is replete with examples of final accounts showing party-and-party costs were payable to the firm, in addition to a percentage of the award or settlement, it also includes a Proposal for Distribution of Settlement Funds in relation to a claim for injuries arising out of an accident involving a lawyer’s son, together with an affidavit from the lawyer, who was his son’s litigation guardian. The Proposal shows the Firm did not take amounts arising from costs in addition to a percentage of the award or settlement: it accepted the party and party costs as its fee and waived its entitlement to a percentage of the amount recovered. Although the lawyer’s affidavit makes clear that he will opt-out of the class proceeding on behalf of his minor son, and, therefore, his son will not be a member of the class, I would not discount this evidence in considering whether common issue 3 is a proper common issue. In my view, whether the Firm actually took amounts arising from costs in an award or settlement contrary to the Act should be characterized as an individual issue.

[130] But this does not affect my conclusion that the Divisional Court was correct in certifying this proceeding. The remaining common issues would be sufficient to meet the certification criteria. If class members are entitled to a declaration that the Firm’s CFAs are unenforceable (common issue 5) or if the provision in the CFAs providing for the taking of costs, in addition to a percentage fee, is severable (common issue 6), and if, as a result, any amounts taken by the Firm for costs in addition to a percentage fee should be repaid (common issue 8), then arguably all that remains is for a class member is to establish that the Firm in fact took such costs from him or her. That would be a simple matter.

[131] Finally, there is, in my view, another basis for concluding that issues 1, 2 and 4 – 8 are common issues.

[132] As noted above, the certification judge and the Divisional Court shared the view that determinations under ss. 24-25 were inherently individualistic. Their conclusion flows from an interpretation of ss. 24 and 25 that may be overly narrow. In my view, it is not plain and obvious that a determination under s. 24 of whether the agreements are “in all respects fair and reasonable between the parties” requires an individualized assessment of the relationship between the parties and the work performed by the Firm or that the only relief that a Superior Court judge can order is an individual assessment, “in the ordinary manner”.

[133] Whether an agreement is “fair” is assessed as of the date the parties entered into the agreement: Henricks-Hunter, at para. 13. It is not plain and obvious to me that a court could not determine that a CFA that does not comply with s. 28.1(8) is not “in all respects fair”. Arguably, this would trigger the court’s ability to order a remedy under s. 24 without an individualized assessment of the reasonableness of the fee charged.

[134] And arguably s. 24 does not restrict a court to ordering the fees “to be assessed in the ordinary manner”. It provides that if the agreement is not in all respects fair and reasonable, the court “may” (not “shall”) direct the fees to be assessed in the ordinary manner. Séguin, discussed above, is an example of the court ordering a remedy other than an assessment in the ordinary manner.

[135] Further, as I have indicated above, this court has held that courts have remedial authority beyond the four corners of the Act, drawing on inherent jurisdiction: Clatney, at paras. 77-79. Arguably, under a liberal interpretation of its remedial authority under s. 24 or, if insufficient, under its inherent jurisdiction, the court could order that any portion of the fees paid to the Firm based on costs be repaid.

[136] Similar questions arise with respect to s. 25.

[137] Under s. 25, even if the client has already paid the fees charged by the solicitor, the court may take various steps “if it appears to the court that the special circumstances of the case require the agreement to be reopened”. This court has recently held that “special circumstances” in s. 25 should be read broadly to include any circumstances in which “the importance of protecting the interests of the client and/or public confidence in the administration of justice, demand an assessment”, as measured by a non-exhaustive list of factors: Clatney, at para. 86.

[138] It is arguable non-compliance with the Act could amount to “special circumstances” requiring the reopening off all the agreements tainted by non-compliance and the court could conclude that any portion of the fees paid to the Firm based on costs be repaid.

[139] In conclusion, it is not plain and obvious that decisions made under ss. 24-25 would necessarily be inherently individualistic, which provides another basis for common issues 1, 2 and 4-8.

Common issues 9-13: violations of the Act involving interest recovery charges

[140] Common issue 9 asks whether the Firm charged class members interest on disbursements, contrary to s. 33 of the Act.

[141] The Firm argues that this and the subsequent related common issues assume that clients pay all the charges on their accounts. They say determining whether the class members paid the interest charges requires an individual assessment. They point to Czeslaw Kupnicki, a former client. After retaining counsel in relation to the Firm’s account, Mr. Kupnicki negotiated a settlement that involved not paying the interest and certain other disbursements the Firm had charged him. Accordingly, the Firm argues that common issues 9 – 13 are not proper common issues.

[142] I reject the Firm’s argument. Common issues 9 – 11 are carefully framed to refer to the “charging”, in the sense of demanding the payment, of interest on disbursements contrary to s. 33 of the Act.

[143] Common issues 12 and 13 ask whether disgorgement – in whole or in part – is an appropriate remedy if one or more of common issues 9 – 11 is answered in the affirmative. They are similar to common issues 7 and 8.

[144] The class definition excludes clients who have settled any claim with respect to his or her account and therefore excludes Mr. Kupnicki. The evidence of proposed class members Ms. Hodge and Ryszard Kolbuc is that they paid interest recovery charges. Given that the class definition excludes clients who have settled claims with respect to their accounts and the evidence of Ms. Hodge and Ryszard Kolbuc, there is some basis in fact that the inquiries in common issues 9 –13 are proper common issues.

[145] If one or more of common issues 9 – 11 are answered in the affirmative, and disgorgement – in whole or in part – is found to be an appropriate remedy, then all that remains is for a class member to establish that he or she in fact paid those charges. Again, that would be a simple matter.

Common issues 14-19: other improper charges and photocopying /scanning fees

[146] The Firm argues that common issues 14 –19 dealing with other improper charges and photocopying/scanning fees suffer from the same problem as the interest issue: determining whether the client actually paid the common charges requires a review of each client’s file.

[147] For similar reasons to those I have articulated in relation to the issues regarding costs and interest recovery, in my view the Divisional Court was correct to certify these common issues.

(3) Clause 5(1)(d) – Preferable Procedure

[148] In the context of the preferability requirement, the representative plaintiff must show some basis in fact (1) that a class proceeding would be a fair, efficient and manageable method of advancing the claim, and (2) that it would be preferable to any other reasonably available means of resolving the class members’ claims: AIC, at para. 48. The preferability requirement is to be conducted through the lens of the three principal goals of class actions, namely judicial economy, behavior modification, and access to justice: AIC, at para. 22; Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158, at para. 27.

[149] A certification judge’s preferability analysis is entitled to considerable deference on appeal. A reviewing court should intervene only where the certification judge has made a palpable and overriding error of fact or otherwise erred in principle: Pearson v. Inco Ltd. (2005), 205 O.A.C. 30 (C.A.), at para. 43.

[150] The Firm argues that the Divisional Court committed four errors in its s. 5(1)(d) analysis. I will address each in turn. I am not persuaded that these four arguments provide any basis to interfere with the Divisional Court’s decision.

(a) Solicitor-client privilege is not a bar to certification

[151] The Firm argues that that the Divisional Court erred in concluding that the class members’ solicitor-client privilege was not a bar to certification.

[152] Solicitor-client privilege applies to confidential communications between a client and his or her solicitor: Blank v. Canada (Minister of Justice), 2006 SCC 39, [2006] 2 S.C.R. 319, at para. 28. It has evolved from being treated as a rule of evidence to being considered a rule of substantive law and principle of fundamental justice: Minister of National Revenue v. Thompson, 2016 SCC 21, [2016] 1 S.C.R. 381, at para. 17. It recognizes that a confidential relationship between solicitor and client is a necessary and essential condition of our legal system: a lawyer cannot discharge his or her duty to advance a client’s cause effectively unless the client may consult with the lawyer in confidence: see Blank, at para. 26; Thompson, at para. 17.

[153] While not everything that happens in a solicitor-client relationship is privileged communication, facts connected with that relationship (such as bills of account) must be presumed to be privileged absent evidence to the contrary: Thompson, at para. 19. The privilege applies, regardless of the context in which it is invoked: Thompson, at para. 19.

[154] In this case, the Firm’s principal argument is that the Divisional Court erred in concluding “there is at least one way to avoid the problem” of solicitor-client privilege and leaving the specific manner of dealing with the problem to the case management judge. They say because solicitor-client privilege is a substantive rule of law, the Divisional Court’s failure to say precisely how class members’ substantive rights would be protected is a reversible error.

[155] Further, the Firm argues there is no efficient and manageable way of protecting class members’ solicitor-client privilege when, in the context of the preferability requirement, a party seeking certification must show some basis in fact that a class proceeding would be a fair, efficient and manageable method of advancing the claim: AIC, at para. 48; Hollick, at paras. 25, 28.

[156] It says the Firm’s files going back to 2004 would have to be reviewed to determine whether an individual is within the definition of the class and such a review would, in and of itself, require a breach of privilege. Then, contact information for class members would have to be found and personal service attempted on thousands of class members. Moreover, it says there is no basis to conclude that personal service can be effected on all class members. In summary, the Firm argues the process envisaged by the certification judge is inefficient and unmanageable and, accordingly, a class proceeding is not the preferable procedure.

[157] I do not understand the Firm to take issue with the certification judge’s conclusion that a class member’s decision not to opt out of a class proceeding can, in certain circumstances, amount to an implied waiver of his or her solicitor-client privilege.

[158] I agree with the Divisional Court and the certification judge that the solicitor-client privilege issue is not a basis for refusing certification.

[159] First, it was not a reversible error for the Divisional Court to identify one way in which the problem could be avoided – it accepted the solution proposed by the certification judge – and indicate that there may be other ways of addressing the problem. In the ordinary course, the certification judge is the case management judge. It is clear from the certification judge’s detailed reasons that he is alive to the issue. In my view, tying the parties to the precise procedure he posited in his reasons – possibly without detailed input from the parties – with no possibility of refinement or modification during the case management process would have been unwise. In my view, the procedure will inevitably need to be fleshed out.

[160] If, in the end, solicitor-client privilege issues relating to notice result in an unmanageable proceeding, the court retains the power under s. 10(1) of the CPA, on a motion, to decertify the class proceeding where it appears to the court the certification criteria are no longer satisfied.

[161] Second, an inquiry into whether a class proceeding is a fair, efficient and manageable method of advancing the claim considers more than the manner of giving notice of certification. It considers the entire plan for advancing class members’ claims. The inquiry also takes into account the importance of the common issues in relation to the claim as a whole: Cloud v. Canada (2004), 73 O.R. (3d) 401 (C.A.), at para. 74, leave to appeal to SCC ref’d, [2001] 1 S.C.R. vi. The contemplated manner of giving notice of certification to class members is undoubtedly more cumbersome and costly than usual. But that is only one factor in the overall assessment of whether a class proceeding is a fair, efficient and manageable method of advancing the claims.

[162] While the certification judge did not go into this detail, if the Firm itself reviewed its files to compile the list of class members, utilizing an agreed upon procedure, the identification of the class members would not entail a breach of those class members’ solicitor-client privilege. Similarly, it may be possible to resolve the common issues without breaching class members’ solicitor-client privilege. For example, class members’ names and other identifying information could be redacted from accounts and each account could be identified numerically. Further disclosure might only be required at the individual issues stage. There may be no need to require personal service on each class member.

[163] On the Firm’s argument, the solicitor-client privilege of a solicitor’s clients and former clients shields the solicitor from a class proceeding, intended for the benefit of those clients, alleging misconduct on the solicitor’s part – even when a class proceeding is the clients’ only realistic opportunity to advance their claims. In my view, that cannot be so.

(b) The only realistic opportunity for the class to advance their claims

[164] The Firm submits that the Divisional Court erred in concluding that individual assessments were beyond the reach of the class and a class proceeding was the only realistic opportunity for the class members to advance their claims. The Firm says that conclusion was not supported by the evidence.

[165] I reject the Firm’s argument.

[166] The certification judge did not address the evidence of Ms. Hodge and Mr. Kolbuc that they could not pursue individual assessments. The Divisional Court was correct in determining this evidence properly factored into the preferable procedure analysis, and the Divisional Court made no error in its assessment of this evidence.

(c) The Divisional Court’s concern about behavior modification

[167] The certification judge did not expressly consider the goal of behavior modification. The Divisional Court, however, considered behavior modification to be a significant advantage of a class proceeding. It concluded, at para. 108, that “[i]f individual clients are left to their own devices to right these wrongs, there will be little financial incentive for lawyers to follow the procedures demanded by the legislation”.

[168] The Firm says this reflects an unfair and unfounded assumption that the Firm (and lawyers generally) will violate their statutory duties and manipulate the system for personal advantage, and this unfounded assumption skewed its s. 5(1)(d) analysis. The Firm characterizes its alleged violations of the Act as technical, and not for personal advantage. It submits that the overriding question under the Act is whether its fees were reasonable, and say this litigation will establish that its fees were reasonable.

[169] In my view, the Divisional Court made no error.

[170] Whether or not the Firm’s fees were reasonable, it is alleged that it was not complying with the procedures stipulated in the Act for the protection of contingency fee clients. Moreover, from the submissions of the intervener, the Ontario Trial Lawyers’ Association, which characterizes the restriction in the Act on allocating any portion of the costs awarded to the solicitor as “unworkable in practice”, it appears that non-compliance with the Act is widespread.

(d) The nature and scope of the individual inquiries

[171] The Firm submits the Divisional Court erred in finding that a class proceeding was the preferable procedure, despite the nature and scope of the individual inquiries that it says are necessary to resolve each class member’s claim.

[172] In Cloud, at para. 74, this court explained “that the determination of whether a proposed class action is a fair, efficient and manageable method of advancing the claim requires an examination of the common issues in their context. The inquiry must take into account the importance of the common issues in relation to the claim as a whole.” And, at para. 76, it noted that “the critical question is whether, viewing the common issues in the context of the entire claim, their resolution will significantly advance the action.”

[173] The Divisional Court considered the common issues in relation to the claim as a whole. At para. 105, Molloy J. wrote that “[o]nce the common issues were settled, all that would remain would be for the solicitors to establish what would be a reasonable fee in all the circumstances” and that “this might require individual assessments, but if so, the burden would be on the solicitors to establish the fairness of their fees.” It would be up to the Firm to initiate individual assessments.

[174] The Firm argues that the resolution of the common issues will not significantly advance the litigation and the Divisional Court accordingly erred in concluding that a class proceeding is the preferable procedure. It says there are remaining individual issues – whether each class member’s claim is limitation-barred and the fees the Firm charged him or her were reasonable – that will dwarf the common issues.

[175] As I have said, I agree that a class proceeding is the preferable procedure.

[176] I am not persuaded that the individual limitation issues should be a bar to certification in this case. The Firm did not expand upon its submission that a class proceeding is not the preferable procedure because of individual limitation issues. Neither the certification judge nor the Divisional Court refer to this issue in their reasons, and it is not clear whether it was argued below. In any event, this court has upheld the certification of class proceedings notwithstanding that there might ultimately be individual limitations issues: Lipson v. Cassels Brock & Blackwell LLP, 2013 ONCA 165, 114 O.R. (3d) 481; Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572, 337 O.A.C. 315.

[177] Further, as I have explained above, I am not convinced that the claims advanced on behalf of class members will necessarily require individual assessments of the reasonableness of the fees charged to each class member. And even if the Firm advanced a counterclaim in quantum meruit in response, whether in the circumstances the Firm is entitled to quantum meruit recovery might well itself be a common issue.

[178] Finally, as I have also explained above, in my view a class proceeding is the preferable procedure even if common issue 3 is characterized as an individual issue.

(4) Clause 5(1)(e) – representative plaintiff

[179] In its factum, the Firm argues the Divisional Court incorrectly stated it did not challenge the certification judge’s finding that, if the other tests for certification were met, Ms. Hodge would be an appropriate representative plaintiff. However, it does not expand upon this submission. I see no basis to interfere with the certification judge’s and the Divisional Court’s conclusion that Ms. Hodge is an appropriate representative plaintiff.

C. ANALYSIS OF ISSUES ON THE CROSS-APPEAL

[180] In her cross-appeal, Ms. Hodge argues that the Divisional Court erred by:

1. failing to grant her leave to amend her Amended Notice of Application to plead the tort of conversion and amend her Notice of Motion to add conversion as a proposed common issue and to certify as a common issue whether the Firm’s taking of costs without the prior approval of the court under s. 28.1(8) of the Act amounts to the tort of conversion of the class members’ monies; and

2. failing to certify two further common issues in her Notice of Motion, in substance as follows:

a. whether by failing to disclose information required by the Act and the Regulation[] and by taking as part of their fees amounts arising from awards or settlements for costs, the Firm was in breach of fiduciary duties and obligations to class members (the “fiduciary duty/costs common issue”); and

b. whether the conduct of the Firm warrants an award of punitive damages to class members (the “punitive damages common issue”).

[181] I will address these alleged errors in turn.

(1) Denial of leave to amend – tort of conversion

(a) Background

[182] The Divisional Court dismissed Ms. Hodge’s motion to amend her Amended Notice of Application to plead the tort of conversion. At para. 112, Molloy J. wrote:

[I]t adds nothing of substance to the proceeding as currently drafted. Whether the conduct is characterized as breach of fiduciary duty, breach of contract or conversion, the same factual matrix applies. Further, the same bottom line emerges: whether the clients are entitled to declaration that an agreement is unenforceable, pursuant to s. 28.1(9) of the [Act]. It was not necessary for our analysis to consider this additional cause of action, and we did not do so.

[183] Ms. Hodge argues that the Divisional Court erred in principle by considering whether the proposed amendment added something “of substance to the proceeding as currently drafted” and failing to apply r. 26.01 of the Rules of Civil Procedure, which provides as follows:

26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[184] Ms. Hodge submits that she seeks to rely only on the material facts already pleaded in her Amended Notice of Application and there was nothing before the Divisional Court that indicated that any prejudice would flow from the requested amendment.

[185] The Firm notes that Ms. Hodge is unable to direct the court to any case where the court has permitted a proposed representative plaintiff to amend its pleading to add a new cause of action on appeal from dismissal of a certification motion. It argues that a proposed representative plaintiff should not be permitted to add a new cause of action and have it certified, for the first time, on appeal. Moreover, it argues, the facts pleaded do not give rise to the tort of conversion. It says the Divisional Court was correct in not permitting Ms. Hodge to amend her Amended Notice of Application.

(b) Analysis

[186] Molloy J.’s reasons for dismissing Ms. Hodge’s motion to amend would have justified declining to consider her proposed amendment on appeal, but were not a basis for dismissing Ms. Hodge’s motion without making clear that she was free to bring her motion before the case management judge. In my view, the Divisional Court erred in principle by dismissing the motion without focusing on whether the Firm was afforded procedural fairness and whether the proposed amendment would cause prejudice to the Firm.

[187] I agree with Ms. Hodge that r. 26.01 applies. The applicable test is not whether the amendment will add something of substance to the proceeding. The guiding principle is whether prejudice would result. However, further considerations arise when the motion to amend is brought on appeal from an unsuccessful certification motion.

[188] In Keatley Surveying Ltd. v. Terranet Inc., 2015 ONCA 248, 125 O.R. (3d) 447, at para. 45, this court made clear that it does not endorse the practice of recasting certification motions on appeal. Doing so undermines the way that certification motions should proceed through the courts. It deprives appellate courts of the expertise of the judges who have been assigned to hear these cases and requires three judges to determine issues that could and should have been heard by a single judge.

[189] Nonetheless, at para. 24, this court accepted that there must be some latitude for consideration of issues not raised at first instance provided that the other party is afforded procedural fairness and is not prejudiced. It concluded that the Divisional Court did not err in permitting the proposed representative plaintiff to present a revised class definition and revised common issues. The change in the class definition did not deprive the defendant of an opportunity to respond and did not cause prejudice arising from lack of evidence or a proper record. And the defendant was not at any disadvantage in presenting arguments to the Divisional Court on the refined common issues. The conceptual core of the case was unchanged and the refined issues were substantially similar to those before the certification judge.

[190] The class definition is usually set out in the pleadings. I take this court in Keatley to have permitted an amendment to the pleadings on the appeal of the dismissal of a certification motion, albeit not to add a cause of action.

[191] But the Firm correctly argues the cause of action requirement is fundamental to a certification motion: Brown, at para. 44. As Rosenberg J.A. wrote for the court: “It is impossible for the defendant to meaningfully respond to an application for certification without knowing the cause of action. The definition of the class and the common issues depend upon the nature of the cause of action.”

[192] The court made these statements in concluding the case management judge erred in conditionally certifying the class proceeding in the absence of a statement of claim that disclosed a cause of action. It did not make them in the context of a motion by a representative plaintiff to amend its pleading on appeal to add a cause of action. They are nonetheless instructive in evaluating whether a defendant will be prejudiced if a plaintiff pleads an additional cause of action on appeal.

[193] Further, this is not a case where the amendment was sought to recast the proceeding more narrowly to make it more susceptible to certification. It is different from Keatley. Rather, Ms. Hodge seeks to broaden the scope of the proceeding by adding a cause of action on appeal. As the Divisional Court recognized, the amendment was not essential to the issue to be determined on appeal, namely whether the certification judge erred in denying certification. In Keatley, this court signaled its reluctance to consider issues on appeal of certification motions that were not raised at first instance.

[194] In my view, in these circumstances, it was open to the Divisional Court to decline to consider the proposed amendment to add a cause of action. However, if it declined to consider the proposed amendment on its merits, it should have made clear that its decision did not bar Ms. Hodge from bringing her motion to amend before the case management judge.

[195] While Ms. Hodge urges this court to determine the issue, I would decline to address it. Neither party provided extensive submissions in this court regarding the viability of Ms. Hodge’s putative conversion claim, and this court does not have the benefit of reasons below considering the issue in detail. Consequently, this court is not well-positioned to address whether it is plain and obvious the claim cannot succeed. Unlike the Divisional Court, however, I would note that my decision is without prejudice to Ms. Hodge’s ability to raise the issue in the court below. Should Ms. Hodge wish to amend her pleading to include the tort of conversion, she may bring a motion before the case management judge.

(2) Failure to certify two additional common issues

[196] The Divisional Court did not explain why it did not certify the two additional common issues that Ms. Hodge argues should have been certified, and its reasoning is not clear to me. I would certify those two additional issues.

(a) The fiduciary duty/costs common issue

[197] The first additional common issue asks whether the conduct of the Firm – allegedly failing to disclose information required by the Act and the Regulation in its CFAs and taking as part of their fees amounts arising from awards or settlements for costs – breached fiduciary duties to class members.

[198] As I have said above, I am not satisfied that it is plain and obvious that ss. 23-25 of the Act are a comprehensive code and preclude a claim against a solicitor for breach of fiduciary duty arising out of a CFA.

[199] However, the Firm again argues that it is plain and obvious that it did not owe a fiduciary duty to class members to include the prescribed language in its CFAs because they were only prospective clients until the agreements were signed. The Firm submits that a lawyer does not owe a fiduciary duty to prospective clients.

[200] I disagree with how the Firm characterizes this issue. The failure to ensure that the CFAs included the prescribed language is only one aspect of the Firm’s conduct considered in the proposed common issue. The disclosure part of the proposed common issue raises the question of whether the Firm was required to disclose the non-compliance after the class member became a client. In my view, it is not plain and obvious that a claim for breach of fiduciary duty based on the failure to disclose and the taking of costs has no reasonable prospect of success.

[201] I am also satisfied that there is a common legal issue – whether, as a matter of law, failing to disclose that a CFA signed did not include the prescribed language and the taking of costs contrary to the Act amount to a breach of fiduciary duty. In my view, there is some basis in fact for asking whether the taking of costs contrary to the Act constituted a breach of fiduciary duty by the Firm, such that this is a proper common issue. As I have indicated above, the record on appeal is replete with examples of final accounts showing party-and-party costs payable to the Firm, in addition to a percentage of the award or settlement, and the only evidence of the Firm not taking such costs is that of someone who it appears will opt out of the class proceeding.

[202] That said, consistent with my reasoning on the “taking issue” above, I agree with the Firm that whether the Firm actually took amounts arising from costs in an award or settlement contrary to the Act should be characterized as an individual issue.

(b) The punitive damages common issue

[203] Punitive damages are available for breach of fiduciary duty: Waxman v. Waxman (2004), 186 O.A.C. 201 (C.A.), at para. 586. Here, the remedy sought for the alleged breach is disgorgement, rather than damages. There may in many cases be a strong argument against awarding punitive damages where disgorgement is ordered. However, in my view, it is not plain and obvious that, in principle, punitive damages could not be awarded in addition to disgorgement where, in the court’s view, the fiduciary’s behaviour was malicious, high-handed or reprehensible and this misconduct would otherwise go unpunished.

[204] Entitlement to punitive damages can be certified as a common issue in a proper case. Whether a defendant has breached a fiduciary duty engages the same kind of fact-finding that will be necessary to determine whether punitive damages are justified: Rumley v. British Columbia, 2001 SCC 69, [2001] 3 S.C.R. 184, at para. 34. Here, the alleged wrongdoing is towards the class as a group and a common class-wide remedy (disgorgement) is sought. If it were found that the Firm breached its fiduciary duty to its clients, and disgorgement – in whole or in part – were ordered, it would be open to the trial judge to consider whether he or she is in a position to determine entitlement to and the quantum of punitive damages, consistent with the principles in Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, or, if the Firm successfully advances a quantum meruit claim, whether this could be determined only after individual quantum meruit assessments.

[205] For these reasons, it is appropriate to certify the entitlement to punitive damages as a common issue.

D. disposition and costs

[206] For all of these reasons, I would dismiss the appeal and allow, in part, the cross-appeal. While I would dismiss the appeal, I conclude the Divisional Court erred in certifying one issue (common issue 3) as a common issue and would vary the certification order by deleting that common issue.

[207] Ms. Hodge was the successful party in this court and the court below. If the parties are unable to agree on costs, Ms. Hodge may make brief costs submissions not to exceed five pages, double-spaced, excluding any bill of costs or costs outline, to be filed within 14 days of the release of these reasons; the Firm may then respond with submissions of the same maximum length within 10 days. There will be no reply submissions.

Released: “AH” “JUN 15 2017”

“Alexandra Hoy A.C.J.O.”

I agree E.E. Gillese J.A.”

“I agree D.M. Brown J.A.”

SCHEDULE A: RELEVANT STATUTORY PROVISIONS

Solicitors Act, R.S.O. 1990, c. S. 15

15. In this section and in sections 16 to 33,

“client” includes a person who, as a principal or on behalf of another person, retains or employs or is about to retain or employ a solicitor, and a person who is or may be liable to pay the bill of a solicitor for any services;

“contingency fee agreement” means an agreement referred to in section 28.1;

“services” includes fees, costs, charges and disbursements.

…

16. For purposes of this section and sections 20 to 32,

“agreement” includes a contingency fee agreement.

…

23. No action shall be brought upon any such agreement, but every question respecting the validity or effect of it may be examined and determined, and it may be enforced or set aside without action on the application of any person who is a party to the agreement or who is or is alleged to be liable to pay or who is or claims to be entitled to be paid the costs, fees, charges or disbursements, in respect of which the agreement is made, by the court, not being the Small Claims Court, in which the business or any part of it was done or a judge thereof, or, if the business was not done in any court, by the Superior Court of Justice.

24. Upon any such application, if it appears to the court that the agreement is in all respects fair and reasonable between the parties, it may be enforced by the court by order in such manner and subject to such conditions as to the costs of the application as the court thinks fit, but, if the terms of the agreement are deemed by the court not to be fair and reasonable, the agreement may be declared void, and the court may order it to be cancelled and may direct the costs, fees, charges and disbursements incurred or chargeable in respect of the matters included therein to be assessed in the ordinary manner.

25. Where the amount agreed under any such agreement has been paid by or on behalf of the client or by any person chargeable with or entitled to pay it, the Superior Court of Justice may, upon the application of the person who has paid it if it appears to the court that the special circumstances of the case require the agreement to be reopened, reopen it and order the costs, fees, charges and disbursements to be assessed, and may also order the whole or any part of the amount received by the solicitor to be repaid by him or her on such terms and conditions as to the court seems just.

…

28.1 (1) A solicitor may enter into a contingency fee agreement with a client in accordance with this section

…

28.1 (8) A contingency fee agreement shall not include in the fee payable to the solicitor, in addition to the fee payable under the agreement, any amount arising as a result of an award of costs or costs obtained as part of a settlement, unless,

(a) the solicitor and client jointly apply to a judge of the Superior Court of Justice for approval to include the costs or a proportion of the costs in the contingency fee agreement because of exceptional circumstances; and

(b) the judge is satisfied that exceptional circumstances apply and approves the inclusion of the costs or a proportion of them.

(9) A contingency fee agreement that is subject to approval under subsection (6) or (8) is not enforceable unless it is so approved.

…

(11) For purposes of assessment, if a contingency fee agreement,

(a) is not one to which subsection (6) or (8) applies, the client may apply to the Superior Court of Justice for an assessment of the solicitor’s bill within 30 days after its delivery or within one year after its payment;

(b) is one to which subsection (6) or (8) applies, the client or the solicitor may apply to the Superior Court of Justice for an assessment within the time prescribed by regulation made under this section

…

33. (1) A solicitor may charge interest on unpaid fees, charges or disbursements, calculated from a date that is one month after the bill is delivered under section 2. R.S.O. 1990, c. S.15, s. 33 (1).

Class Proceedings Act, 1992, S.O. 1992, c. 6:

5 (1) The court shall certify a class proceeding on a motion under section 2, 3 or 4 if,

(a) the pleadings or the notice of application discloses a cause of action;

(b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant;

(c) the claims or defences of the class members raise common issues;

(d) a class proceeding would be the preferable procedure for the resolution of the common issues; and

(e) there is a representative plaintiff or defendant who,

(i) would fairly and adequately represent the interests of the class,

(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members. 1992, c. 6, s. 5 (1).

SCHEDULE B: CLASS DEFINTION

A client of Neinstein & Associates LLP and Gary Neinstein Q.C. (the Firm) that:

(a) signed or amended a contingency fee agreement or arrangement after October 1, 2004, and

(b) who has paid before the date of certification the Firm for their legal services on the completion of the matter in respect of which services were provided,

(c) except a client:

(i) for whom the court has approved the Firm’s fee;

(ii) for whom the court has assessed the Firm’s account; or

(iii) that have signed a release or settled any claim with respect to his or her contingency fee agreement or arrangement.

SCHEDULE C: CERTIFIED COMMON ISSUES

VIOLATIONS OF THE SOLICITORS ACT INVOLVING COSTS

1. Did the Firm’s contingency fee agreements violate the Solicitors Act by including, as the Firm’s fees, amounts arising from costs in an award or settlement in addition to a percentage of the award or settlement?

2. Were the Firm’s contingency fee agreements made in accordance with s. 28.1(1) of the Solicitors Act?

3. Did the Firm take amounts arising from costs in an award or settlement from the Class Members contrary to the Solicitors Act?

4. As required by s. 28.1(8) of the Solicitors Act, did the Firm obtain approval from the Class Members to obtain as part of their fees any part of the costs arising from an award or settlement?

5. Are the Class Members entitled to a declaration that the Firm’s contingency fee agreements are unenforceable under s. 28.1(9) of the Solicitors Act?

6. Can the provision in the contingency fee agreements that takes, in addition to the Firm’s fees, all or a portion of the costs arising from an award or settlement, be severable?

7. Should the Firm be ordered to disgorge all fees collected under any contingency fee agreements that are found to be unenforceable?

8. If it is determined that fees collected under unenforceable contingency fee agreements should not be disgorged, should the Firm be otherwise ordered to repay to the Class Members any amounts taken for costs in addition to their percentage fee, together with interest pursuant to s. 33(2) of the Solicitors Act?

VIOLATIONS OF THE SOLICITORS ACT INVOLVING INTEREST CHARGES

9. Did the Firm charge the Class Members for interest contrary to s. 33 of the Solicitors Act, including the Interest Recovery charges shown in their accounts for disbursements to Class Members?

10. If it is determined that the Firm charged the Class Members for interest contrary to s. 33 of the Solicitrs Act, does this violation amount to a breach of contract? Solicitors Act

11. If it is determined that the Firm charged the Class Members for interest contrary to s. 33 of the , does this violation amount to a breach of the Firm’s fiduciary duty?

12. Should the Firm be ordered to disgorge all interest charged in violation of s. 33 of the Solicitors Act?

13. If it is determined that interest collected in violation of s. 33 of the Solicitors Act should not be disgorged, should the Firm be otherwise ordered to repay to the Class Members any amounts taken on account of interest charged by the Firm?

OTHER IMPROPER CHARGES AND PHOTOCOPYING/SCANNING FEES

14. Did the Firm charge the Class Members for Other Improper Charges without disclosing or obtaining agreement from the Class Members?

15. Did the Firm charge the Class Members excessive rates for photocopying and scanning documents?

16. If it is determined that the Firm charged the Class Members for Other Improper Charges without disclosing or Firm agreement from the Class Members, should the Firm be ordered to disgorge these funds?

17. If it is determined that the Other Improper Charges should not be disgorged, should the Firm be otherwise ordered to repay to the Class Members any amounts taken on account of the Other Improper Charges?

18. If it is determined that the Firm charged the Class Members excessive rates for photocopying and scanning documents, should the Firm be ordered to disgorge these funds?

19. If it is determined that the excessive photocopying and scanning fees should not be disgorged, should the Firm be otherwise ordered to repay to the Class Members any amounts taken on account of these excessive fees?