Lawyer wins $2.8M in unpaid fees from client in business dispute

An Ontario Superior Court judge has awarded a suspended lawyer nearly $2.9 million in a summary judgment against his former client, adding another chapter to a complex and protracted legal dispute rooted in a family business partnership on the Mohawks of the Bay of Quinte territory¹. The decision, delivered by Justice Robert Mew on April 4, 2024, addresses a series of motions in the decade-long conflict between Andrew Clifford Miracle, his son Andrew Clifford Maracle III, and the professionals who assisted the elder Miracle in securing a multi-million-dollar arbitration award against his son.

The saga began over a decade ago with a dispute between father and son over the ownership and profits of an on-reserve business known as “Smokin’ Joe’s.” Both men are members of the Mohawks of the Bay of Quinte. The elder Miracle, referred to as “Senior” in court documents, launched a legal action against his son, “Andy,” seeking an accounting of the business’s finances and damages for breach of contract and conversion.

In 2016, the parties agreed to resolve their differences through a binding mediation-arbitration process. Senior was represented by lawyer Glenn Bogue, under a contingency fee agreement that stipulated Mr. Bogue would receive 25 percent of any amount awarded by the arbitrator. Senior also engaged the services of Rod Gram, a Chartered Professional Accountant, who claims his work uncovering financial irregularities was crucial to the legal action.

The arbitration concluded with a decisive victory for Senior. The arbitrator awarded him $11,486,238, representing his share of the undistributed profits from the partnership. The arbitrator also ordered the dissolution of the partnership and initiated a buy-sell mechanism. When Andy failed to submit a bid, Senior acquired his son’s interest in the business and the land it occupies for just one dollar. An appeal of the arbitrator’s award was dismissed by the Superior Court in 2017, and the Court of Appeal for Ontario denied leave to appeal further in 2018.

Despite the monumental award on paper, Senior has not collected any of the money from his son. The collection process was severely complicated when Andy made an assignment in bankruptcy on September 23, 2019. The bankruptcy trustee, Schwartz Levitsky Feldman Inc., was able to realize a dividend of $1,458,725.16 from Andy’s estate. As the largest creditor, Senior’s share of that dividend amounts to $1,345,636.84. This pool of money, held by the trustee, has become the central prize in the ongoing litigation.

Mr. Bogue, claiming he is owed over $2.8 million in fees, and Mr. Gram, claiming he is owed over $729,000, have both been trying to get paid for their services. In 2019, Mr. Bogue successfully applied to have a receiver appointed over the assets of Senior, Andy, and their businesses. Senior appealed this receivership order, arguing that sections of the federal Indian Act prohibit the seizure of assets of an Indigenous person located on a reserve by a non-Indigenous creditor.

The Court of Appeal for Ontario addressed the issue in a 2022 decision. It sided with Senior, ruling that the receiver, acting on behalf of Mr. Bogue, could not recoup profits from Senior’s on-reserve businesses. However, the appellate court noted that the Indian Act does not protect Mr. Miracle’s off-reserve assets from seizure, leaving the door open for the receiver to pursue other property.

This complex history set the stage for the recent hearing before Justice Mew in Belleville, which consolidated five motions and an application. The judge was tasked with untangling the competing claims to the limited funds held by the bankruptcy trustee.

One of the key motions was brought by Senior, who sought to have Mr. Bogue declared a vexatious litigant under the Courts of Justice Act. Senior’s application pointed to Mr. Bogue’s indefinite suspension by the Law Society of Ontario in 2020 and his involvement in other proceedings deemed frivolous by other courts. Justice Mew dismissed the application, finding that within the context of the current case, Mr. Bogue was pursuing the valid objective of getting paid for the legal services that were instrumental in securing the arbitration award for Senior. The judge also dismissed Senior’s motion for security for costs.

The most significant part of the decision dealt with Mr. Bogue’s motion for summary judgment to secure his unpaid legal fees. Mr. Bogue argued that an earlier judge, Justice Kershman, had already found that Senior acknowledged the debt of $2,871,000 in a subsequent assignment agreement, overcoming any technical deficiencies in the original contingency fee agreement. Senior contended the agreement was non-compliant with the Solicitors Act and that no fee was payable because no money had actually been “recovered.”

Justice Mew granted summary judgment in favour of Mr. Bogue. The judge found he was bound by Justice Kershman’s earlier findings that Senior had acknowledged the debt. He concluded that the term “recovered” in the context of the agreement referred to obtaining the judgment, not necessarily collecting the full amount. He awarded Mr. Bogue the outstanding balance of $2,858,500. The judge also granted Mr. Bogue’s request for a “solicitor’s lien,” a declaration that gives him a security interest over Senior’s share of the bankruptcy proceeds.

The outcome was different for the accountant, Rod Gram. He also moved for summary judgment based on what he claimed was a verbal contingency fee agreement for five percent of the recovered amount. Senior denied the existence of such an agreement. Justice Mew dismissed Mr. Gram’s motion, finding there were too many triable issues. The judge noted the vagueness of the alleged oral agreement and a question of whether the claim should have been brought by Mr. Gram personally or his company. Mr. Gram’s claim for payment will now have to proceed to a full trial.

Justice Mew also dismissed a counterclaim filed by Senior against both Mr. Bogue and Mr. Gram, finding it was devoid of merit.

Finally, the judge addressed Senior’s request to have the $1.34 million in bankruptcy funds paid out to him immediately. Senior argued that under the Indian Act, only another Indigenous person could make a claim against the funds. Justice Mew dismissed this motion for the time being, agreeing with the bankruptcy trustee that the money should remain frozen until all the competing claims and the complex jurisdictional issues involving the Indian Act are finally resolved.

The decision resolves some key issues but ensures the litigation will continue. Mr. Bogue now holds a judgment for nearly $2.9 million against his former client, but the question of whether his lien can be enforced against the bankruptcy dividend, in light of the Indian Act, remains to be determined in a future hearing. Mr. Gram, meanwhile, must proceed to trial to prove his entitlement to any payment. The funds from the son’s bankruptcy remain in trust, the final object in a prolonged and costly legal war.