Vancouver law firm loses bid to collect payment to Canada Revenue Agency on behalf of client

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A B.C. Supreme Court judge has stymied a law firm's attempt to collect a client's debt from money about to be paid to the taxman.

On July 24, Justice Shelley C. Fitzpatrick dismissed a petition by Jenkins Marzban Logan LLP to force the Canada Revenue Agency to pay it funds that will be remitted by the client's former employer.

The client, Vito Nardulli, hired Jenkins Marzban Logan LLP to represent him in a wrongful-dismissal suit against his former employer, C-W Agencies Inc.

In 2012, Nardulli won a huge victory in B.C. Supreme Court: $1.3 million in profit-sharing and a wrongful-dismissal award of $262,000.

Unfortunately for him, the B.C. Court of Appeal overturned the profit-sharing bonanza, leaving him with damages of $262,000 plus interest.

According to Fitzpatrick's ruling, Nardulli's application for leave to appeal to the Supreme Court of Canada was dismissed.

The decision notes that he owed the law firm $714,000. Even after deductions from the damages award and from mortgage security he provided, Nardulli still owes Jenkins Marzban Logan $41,500.

In the meantime, Fitzpatrick wrote, his employer is required to remit $52,500 from the wrongful-dismissal award to the Canada Revenue Agency.

"Payment of the Remittance has not occurred yet, but is anticipated to happen shortly," Fitzpatrick wrote.

She noted that no one disputed that the law firm was owed the money. The legal question concerned whether it should be paid from funds that would be forwarded to the Canada Revenue Agency.

In the end, Fitzpatrick concluded that under the Income Tax Act, the law firm was entitled to enforce its solicitor's lien against Nardulli's interest in any tax refund and nothing more.

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