IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Reed v. Burke Law Corporation, |
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2003 BCSC 1652 |
Date: 20031030
Docket: 34818
Registry: Kamloops
Between:
Janet Reed
Client
And
Burke Law Corporation
Solicitor
Before: Master Hyslop
Reasons for Judgment
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Janet Reed appeared on her own behalf
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Rein Burke appeared on behalf of Burke Law Corporation
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Date and Place of Trial/Hearing: |
August 13 & 14 2003 and October 2, 2003 |
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Kamloops, B.C. |
[1] Burke Law Corporation (“lawyer”) took out an appointment to review five accounts that the lawyer rendered to Janet Reed (“client”). These accounts are dated October 30, 2001, November 27, 2001, July 26, 2002, January 20, 2003 and April 29, 2003. The total amount of the five accounts is $44,984.95. Of that amount $24,041.90 is paid, and there remains outstanding $20,943.05. The fees total $34,237.50, disbursements $5,482.11 and tax $5,265.34.
[2] The client has not disputed the disbursements that the lawyer included in his accounts. The client did not understand what agency fees were. At the conclusion of the hearing, I asked the lawyer to break down those agency fees, giving an explanation in an affidavit as for what they were incurred. The lawyer did this. The lawyer was to serve the client with that affidavit. The client was to have until September 8, 2003 to comment on that affidavit. If she wished to make further submissions regarding the agency fees, she could do so and this matter could be dealt with by way of a telephone conference. I did not hear from the client, and I assume the explanation in the affidavit to be satisfactory.
[3] The review is pursuant to s.70(3) of the Legal Professions Act, RSBC 1998, c.9 (“LPA”) which says as follows:
Subject to subsection (11), a lawyer may obtain an appointment to have a bill reviewed 30 days or more after the bill was delivered under section 69.
[4] Those matters that I must consider are set out in s.71:
(1) This section applies to a review or examination under section 68(7), 70, 77(3), 78(2) or 79(3).
(2) Subject to subsections (4) and (5), the registrar must allow fees, charges and disbursements for the following services:
(a) those reasonably necessary and proper to conduct the proceeding or business to which they relate;
(b) those authorized by the client or subsequently approved by the client, whether or not the services were reasonably necessary and proper to conduct the proceeding or business to which they relate.
(3) Subject to subsections (4) and (5), the registrar may allow fees, charges and disbursements for the following services, even if unnecessary for the proper conduct of the proceeding or business to which they relate:
(a) those reasonably intended by the lawyer to advance the interests of the client at the time the services were provided;
(b) those requested by the client after being informed by the lawyer that they were unnecessary and not likely to advance the interests of the client.
(4) At a review of a lawyer’s bill, the registrar must consider all of the circumstances, including
(a) the complexity, difficulty or novelty of the issues involved,
(b) the skill, specialized knowledge and responsibility required of the lawyer,
(c) the lawyer’s character and standing in the profession,
(d) the amount involved,
(e) the time reasonably spent,
(f) if there has been an agreement that sets a fee rate that is based on an amount per unit of time spent by the lawyer, whether the rate was reasonable,
(g) the importance of the matter to the client whose bill is being reviewed, and
(h) the result obtained.
(5) The discretion of the registrar under subsection (4) is not limited by the terms of an agreement between the lawyer and the lawyer’s client.
[5] The client’s position is that the lawyer agreed to do her case for $40,000.00. The client’s position is that the lawyer should cancel the outstanding balance on the account and return her file to her. The client did hire the lawyer to do legal work. The lawyer says that date was November 2, 2001, and the client says that it was in October of 2001.
FACTS
[6] The client was referred to the lawyer by a land appraiser by the name of Danny Grant. The client resided in the lower mainland, and the lawyer in the interior of British Columbia. Country Park Village (“Country Park”) is located on leased land. The client and other Country Park residents held sub-leases. The head lease had been granted by Her Majesty in the Right of Canada pursuant to the Indian Act, R.S.C. 1970, c.1.
[7] The client and other tenants of Country Park expected to pay a monthly rental fee, common area maintenance, sewer charges and management fees. The rent fee was not to change, except with the increase of real estate values within Country Park. The rent fees were in fact increased. The client and some of the other tenants were disputing this increase.
[8] The client, in September of 2001, sent to the lawyer documents relating to the issue of rent review. The client made it known that she was a spokesperson for a group of residents in Country Park. Further, the lawyer learned that this association had already hired a lawyer who had gone to the British Columbia Supreme Court over the rent review issue, only to have the court refuse to deal with the matter due to lack of jurisdiction.
[9] On September 26, 2001, the lawyer wrote to the client and said:
“Dear Ms. Reed:
Re: Country Park Village Properties (“Mainland”) Ltd.
We acknowledge receipt of the lease and sub-lease. These were received from Greyhound on September 26th, 2001.
I will review these materials during the week of October 15th, 2001 and be in a position to provide an opinion to you at that time.
In the meantime I would ask that your association provide a retainer to us in the amount of $2500 to cover our fees and expenses. My usual hourly rate is $275 per hour and I propose to charge that rate to your association.
Yours sincerely,
BURKE LAW CORPORATION”
[10] On October 1, 2001, the client wrote to Mr. Burke and said:
“I have requested residents to postpone setting action in Federal Court until you could have time to view and give us an opion (sic).”
She goes on to state in that letter:
“I know you have many matters at hand and that you are not available to actually take our case (or mine) on at the present time. I am prepared to wait until you can, but would appreciate a comment from you if it looks OK for the future.”
[11] On October 10, 2001, the client wrote the lawyer and said:
“It seems that the residents were so relieved that they were finally going to have their case heard in Federal Court that they decided to go ahead with it. I am very disappointed. I wished to wait for your opinion. However, I am hopeful you may be able to defend me personally. I was simply the spokesman but uncovered many discrepancies in our leases, some through privacy act from DIAND.”
She further states:
“I enclose list of items regarding slander.”
[12] In that letter, the client lists a number of documents under the heading “EVIDENCE” which she states should be in “JR file “SLANDER”.” At this time the client had other matters she wished the lawyer to address other than the rent review for Country Park. The client wrote to the lawyer on October 1, 2001 and stated:
“WE THINK WE MAY HAVE SOME KIND OF CASE FOR NEGLIGENCE and we are hopeful you will think that too.”
“In any case, there are many more problems than just the rent review and injunction and I would still like to see if you could represent me in the other aspects such as:”
[13] In response to the lawyer’s letter of September 26, 2001, the client gave the lawyer a retainer on October 16, 2001. On October 16, 2001, the lawyer gave advice to the client regarding a small claims action, and letters from the landlord’s lawyer threatening litigation against the client.
[14] On October 25, 2001 the lawyer went to a meeting in Chilliwack attended by some of the residents of Country Park. At this meeting, the lawyer talked to the residents about the jurisdiction of Federal Court and the British Columbia Supreme Court as it relates to the matter of the rent review. Individual cases were then talked about generally. What the lawyer said is best described in paragraph 17 on page 5 of his outline of submissions:
a. if he has been retained by 2 or 3 dozen residents to act for them in claims against the Vendor similar to Reeds; and,
b. if Reed’s claim can be adjudicated by way of a summary trial; then,
c. the summary trial could be heard in Kamloops;
d. the application for a summary trial would likely be heard within months of the action being commenced; and
e. the estimated costs to the completion of the summary trial to establish the Vendor’s liability would be approximately $40,000.00.
[15] The lawyer, on October 30, 2001, wrote a letter to the client which said:
“Dear Ms. Reed:
Re: Country Park Village Properties (Mainland) Ltd.
This will confirm that as requested by you, we have reviewed the materials which you provided to us and we have provided our opinion on the various issues that arise to the group of residents. We thank you for your hospitality during our visit to Chilliwack on October 25th, 2001.
The next step for each of the residents would be to meet with me to discuss their individual claims and the costs associated with proceeding with a lawsuit.
We herewith enclose our statement of account for our time spent on your behalf to October 30th, 2001. We trust you will find the account in order.
Yours sincerely,
BURKE LAW CORPORATION”
[16] At this hearing the lawyer stated that the account that he rendered to the client is dated October 30, 2001 for $4,455.00 in fees, and disbursements in the amount of $289.75, the latter of which consisted mainly of the lawyer’s travelling expenses. The lawyer was not asked, nor did he do any further legal work for the residents as a group, of which the client was the spokesperson.
[17] The client decided she wished to hire the lawyer to address legal problems as a result of her purchase of a duplex in Country Park. On November 2, 2001, she met the lawyer in Vancouver for a considerable period of time. The lawyer took instructions from the client and agreed to act on her behalf. On November 3, 2001, the client wrote the lawyer a letter (Exhibit 6 at this hearing) and said:
“Thank you for the interview yesterday. I feel relieved of much of the tension from the past couple of years.”
The client, in that letter, went on to recall other events that she obviously thought were important to communicate to the lawyer. At the end of her letter, the client put in a P.S:
“…also, regarding slander or intimidation… at times I WAS in fear.”
[18] None of the other tenants at Country Park hired the lawyer.
[19] The lawyer wrote the client on November 14, 2001 stating he had reviewed the various documents that she had provided to him to date relating to her purchase of the duplex at Country Park in Chilliwack.
[20] On November 19, 2001, the lawyer sent a draft writ of summons and statement of claim asking for the client’s input. Further amendments were made to the writ and statement of claim, and a further draft of the writ of summons and statement of claim was sent to the client on November 20, 2001. In a letter dated November 27, 2001, the lawyer reported to the client the he had filed in the Supreme Court registry at Kamloops on November 22, 2001 a writ and statement of claim, and enclosing a copy of them. The lawyer then sent to the client an account dated November 27, 2001 in the amount of $7,622.50, plus disbursements and taxes for a total of $9,051.69. This account is found at tab 5 of Exhibit 1.
[21] The writ and statement of claim named three corporate defendants, three individuals and a law partnership. The statement of claim was 16 pages alleging facts against each of the defendants separately, and setting out separately what the plaintiff is seeking from each of the defendants or group of defendants. These claims are for breach of contract and negligence, for which damages are sought. In addition, there are claims for recision, a claim under the Real Estate Act, return of monies paid under the sub-lease, an alternate claim seeking an order granting a sub-lease in the form in accordance with a contract, mental distress, as well as costs.
[22] The lawyer, in January of 2003, amended the writ and statement of claim to correct a typographical error in the description of one of the corporate defendants, and changed the place of trial to Chilliwack.
[23] All of the defendants filed a statement of defence, save and except Sharon Graystone, a real estate agent against whom default judgment was taken for damages to be assessed.
[24] On June 10, 2002, the lawyer successfully defended a motion brought on by one of the defendants to have the place of trial moved to Vancouver. The client wanted to have this matter heard in Kamloops as there had been some media publicity in the Chilliwack area. The lawyer was of the view that Chilliwack was the proper place to have this matter heard as he stated that ninety percent of the witnesses lived in the Chilliwack area. The lawyer was of the opinion that had they sought the place of trial as Kamloops, they would not have successfully defended the motion. In addition, the lawyer had to take out an appointment to settle the order.
[25] During the month of June, 2002, the lawyer prepared for the examination of Patricia Brown, one of the defendants in the action, and on June 21, 2002, travelled to Abbotsford for the discovery of Ms. Brown, to find that she did not attend.
[26] In July of 2002, the lawyer brought on an application to strike out one of the individuals, and one of the corporate defendant’s statement of defence, which was successful, and for which judgment was entered against those defendants, with damages to be assessed.
[27] On July 26, 2002, the lawyer rendered an account to the client for $10,610.00 in fees, and disbursements of $1,942.75, and taxes, for a total amount of $13,609.66. This account is shown in exhibit 1 at tab 6.
[28] On August 20, 2002, the lawyer examined one of the defendants, Andrew Purdy. The following day, August 21, 2002, the client was examined. The account for which these examinations for discoveries were billed is dated January 20, 2003, found at exhibit 1, tab 7.
[29] At the hearing of this matter, and as a result of cross-examination by the client of the lawyer, the lawyer could not remember when the preparation for the client took place, but thought it had taken place at the court reporter’s office, after the examination for discovery of Mr. Purdy. The client disagreed with this. The lawyer had difficulty remembering. The account for which the examinations for discovery were billed is dated January 20, 2003, found at exhibit 1 at tab 7. The client was billed eight hours for her discovery.
[30] The next and last account that the lawyer rendered to the client was dated April 29, 2003, and that was for a small amount of disbursements which amounted to $54.92, at which time the balance owing on the client’s account was $20,943.05.
[31] The lawyer further stated at this hearing that when travelling on behalf of a client, besides his out-of-pocket expenses, he charges half of his hourly rate. This was not set out in writing to the client, nor was it questioned by the client at the hearing. The lawyer, in his account, itemizes what he did for the client. In addition, there is a pre-billing report with each account which sets out the lawyer’s time and the cost of each service rendered to the client by the lawyer.
[32] The lawyer had, in letters dated June 24, 2002 and June 26, 2002, set out the measure of damages that the client might expect in this lawsuit. On November 27, 2002, the lawyer, at the request of the client, in a letter, outlined certain costs that the client would have to incur in order to have this case ready for trial.
[33] This lawsuit has not been completed. The lawyer has withdrawn from the case, and did so in about June of 2003. At this hearing, the lawyer stated that he withdrew from the case because his fees were not paid, though promised to be paid by the client. The lawyer was concerned about the client’s ability to pay ongoing legal fees. On February 17, 2003, in a letter, the lawyer told the client:
“We do not propose to take further steps in this lawsuit while our accounts remain outstanding.”
LAWYER’S BILLINGS
[34] The lawyer expected the client to pay him an hourly fee based on the work he did on behalf of the client. This was stated in a letter directed to the client by the lawyer dated November 27, 2001. (exhibit 1, tab 2) The lawyer stated:
We wish to also once again confirm that we have agreed to prosecute this action on your behalf on the basis of charging our usual hourly charge-out rates. For Mr. Burke his time will be charged at $275 per hour and for our Ms. McBain will be charged at $150 per hour.
DISCUSSION
[35] The client did not question the lawyer about the accounts and the time he spent doing the client’s work. The only issue that involved time, to which I have already referred, is the preparation of the client for her examination for discovery. The account, which is found at tab 7, seems to be in contradiction to what the evidence was given by the lawyer. I am not suggesting there is any dishonesty on the part of the lawyer; he simply could not remember.
[36] The client had a number of complaints of which she gave evidence, and these are set out in her affidavit sworn August 11, 2003 and filed August 13, 2003. I will deal with each paragraph of the client’s affidavit:
Paragraph #2:
The client says at paragraph #2:
“I and 120 residents in my neighbourhood are involved in a dispute with our Landlord. We agreed that I will commence a lawsuit against our Landlord and other parties involved. Depending on how my case turns out, the other residents may follow suit.
This is not quite accurate. The client, on behalf of a group of people, hired the lawyer to give them an opinion on the rent review as it related to their sub-lease and the head lease, and that was all the lawyer was initially asked to do. When he met with the residents on October 25, 2001, he went prepared to talk about the rent review. The lawyer then became involved in a discussion about the individual claims that each of the residents had. The lawyer stated that each of them would have to hire him individually. None of them did. The lawyer was not aware, nor did he take the client’s case on the basis that depending how her case turned out, the other residents individually would then commence legal actions. The lawyer acted for only the client. He was not acting on behalf of other residents of Country Park.
Paragraph #3 and #4:
The lawyer did not claim on behalf of the client punitive damages or damages for slander. When the lawyer took the client’s case on November 2, 2003, the lawyer told the client that she did not have a case for slander and punitive damages. This is referred to in the lawyer’s letters to the client dated June 26, 2002 (exhibit 3, tab A), September 4, 2002 (exhibit 1, tab 12) and February 17, 2003. The lawyer did not believe that the client had a good case for these claims, and expressed concern about the cost of litigating the slander case. The client claims that the lawyer, in June of 2002, reassured her damages could be claimed for the “slanderous attacks by the defendant landlord” and refers to the lawyer’s letters of June 26, 2002 and May 21, 2003 in support. They do just the opposite. I note in passing, that the statement of claim does make a claim for mental distress, but not in the context of punitive damages, nor slander.
The lawyer wrote to the client letters dated June 24 and June 26, 2002 setting out what he believed the client’s damages were (tab 12 of exhibit 1). The lawyer has known since before the client retained him that the client wished to sue for slander prior to being retained by the client. In addition the client wished to seek punitive damages. Since the client retained the lawyer, the lawyer has always been of the view, and advised the client that these claims for which she would not be successful. The lawyer, on September 24, 2002, wrote a letter to the client reviewing the matters of slander and punitive damages. In this three-page letter at tab 12 of exhibit 1, the lawyer writes at page 2 as follows:
“Our advice to you in November of 2001 and our advice to you now is that no claim for defamation should be made by you. The reasons are:
1. The written comments by the landlord, in our view, likely are not defamatory.
2. If the comments are defamatory, there is little doubt that the residents would not believe the landlord’s comments. You continue to act as the residents’ spokesperson. The result is that the damages to which you would be entitled would be minimal.
3. By suing the landlord, you would be opening up a separate can of worms whereby the landlord would be counterclaiming against you for substantially more monies than your claim in damages. The risks of litigating the issue are simply too large for you to take.
4. The costs of litigating a defamation action would exceed any compensation that could be recovered.”
On May 21, 2003 (exhibit 3, tab B), the lawyer wrote the client once again reviewing the history of the lawyer’s opinion on those particular claims.
Paragraph #5:
The lawyer denies specifically dealing with the client’s case at the meeting of October 25, 2001 as he had yet to be retained by the client, and further, he stated would have been inappropriate. It is clear that some of the residents pressed the lawyer to talk about their claims because they believed them to be similar to the client’s, and there might be some savings in legal fees in doing this. The lawyer told the meeting that he charged for his time at the rate $275.00 per hour, that they did not have a class action, and that they would have to hire him individually.
At the meeting of the residents, the contingency fee agreement came up. The lawyer stated that he told the residents that he does not even consider a contingency fee agreement until the discoveries are completed. In the case of the client, a contingency fee agreement came up only on November 2, 2001, and the lawyer restated his position to the client as he did to the residents on October 25, 2001. The issue of a contingency fee agreement never came up again between the client and the lawyer.
The client called two witnesses, Faith Sproule and Allen Bossert. Mrs. Sproule gave evidence that she was helping with the rent review of the entire trailer park and was the client’s helper for this hearing. She confirmed that Country Park had not paid any money to the lawyer. She also said she had never seen the letter of September 26, 2001 (Exhibit 1, tab 1). She sent documents to the lawyer only because the client had requested she do so. She further stated she had not discussed the problems outlined in the client’s letter to the lawyer of October 1, 2001. She further stated that she was unaware that the client was asking the lawyer to take the residents’ case for the rent review.
Mr. Bossert gave evidence that he attended the meeting of October 25, 2001. He stated that the lawyer said how he would handle each of the residents’ case, and that if it was heard in Kamloops, it would go a lot faster. There was also a discussion about the statute of limitations. Mr. Bossert claims that the lawyer said he would do the client’s case for $40,000.00, and each of the other residents for something less. He acknowledged he had not spoken to the lawyer prior to October 25, 2001. He also stated that the lawyer described that there were two kinds of trials, those which had witnesses and those which were conducted by affidavit. He had no recollection of hearing the words summary trial. He acknowledged that the lawyer stated that each of the residents would have to hire the lawyer individually for their case. He stated that the client’s case would be a precedent which would result in the cost to the others being a lot less. He stated he did not hire the lawyer. Mr. Bossert further explained that the rent review committee was separate from the committee and the board for the whole of Country Park. He further stated that each of the owners were paying $35.00 per month to pursue their claim in Federal Court.
There is no evidence that the lawyer was aware that the other residents were depending on the client’s case to determine whether they were to pursue their case. Nor is there any evidence that the lawyer was to handle the client’s case “within the agreed time frame, with the other residents losing their right to sue due to the statute of limitations.” This was not the basis on which the lawyer took on the client’s case.
Paragraph #6:
The client asked to review her file and went to the lawyer’s office for that purpose. She found a letter from a law firm representing two of the defendants. That letter is set out in exhibit 3, tab I. There is no evidence that the defendants, whose statement of defence was struck out, were not properly served. The lawyer who was complaining of his office not being served was acting for other defendants who had filed statement of defences, and whose statement of defences were not in issue. He merely speculates that the lawyer ought to have done so, and that the proceedings may be set aside. No steps were taken to set that proceeding aside.
HomeLife Glenayre Realty Co. Ltd. wrote the lawyer a letter (exhibit 1, tab M), saying that his lawyer, Ian McKinnon, will be representing that company. Ian McKinnon is the lawyer representing the residents in the rent review in the Federal Court. There is no evidence that Mr. McKinnon tried to act on behalf of Home Life Glenayre Realty Co. Ltd.
The lawyer viewed the letter as “ludicrous.” Neither of these letters were important.
Paragraph #7:
The cost of doing this trial in Kamloops would have been far greater due to the witnesses having to travel. It would appear that the lawyer exercised good judgment.
Paragraph #8:
The lawyer was willing to set this matter down, but he was not being paid for his services.
Paragraph #10:
The client did not claim that the services rendered by the lawyer were improper and not authorized. I do not find that the lawyer misled the client on legal fees. He was very clear his hourly rate was $275.00 per hour (exhibit 1, tab 2). Exhibit 3, tab N, a letter from the lawyer to the client dated November 27, 2002, is not a revised estimate, but states what further costs the client will have to incur before the action would be ready for trial.
Paragraph #11:
I have reviewed Exhibit 1, tab 6, and there appears to be no telephone call between the lawyer and the client. The client in her evidence on cross-examination acknowledged that she told the lawyer that she was going to be selling some jewellery, but that she did not give him a date as to when the jewellery would be sold. The issue of this jewellery being sold related to the payment to the lawyer’s account.
DECISION
[37] The client did not cross-examine the lawyer on the work that he did or the time spent doing that work, other than the preparation for the client for her examination for discovery. Because I am unable to determine how many hours were spent preparing the client for the examination for discovery, and when it took place, and for that matter, if it took place, I delete five hours from the account dated August 19, 2002. I am doing so because the lawyer cannot remember, and the client’s evidence, by law, must be preferred. I, therefore, deduct the sum of five hours at $275.00 per hour, which totals $1,375.00.
[38] The client took no objection as to the time the lawyer spent on the file, nor did she suggest that the work done by the lawyer was unnecessary. Mr. Justice Davies in a case of Re Legal Professions Act Schlecter v. Ruhr (1957), 25 WWR said at p. 180:
In my opinion, the duty and authority of the registrar to disallow upon a solicitor-and-client taxation such costs unnecessarily incurred is inherent in the taxation process. But that is not to say that he is bound to examine on that ground charges against which that objection is not taken.
[39] I find that the lawyer proved the fees, charges and disbursements that were reasonably necessary and proper to conduct the proceedings or business of the client, and that they were authorized by the client. I, therefore, find that the lawyer’s account is justified in the amount of $44,984.94, less $1,375.00 in fees, with the appropriate adjustment for P.S.T. and G.S.T., and the amount owing, taking into consideration all the payments made is $19,367.60. The lawyer shall have the costs of this hearing pursuant to s.72(1)(b) which I summarily fix pursuant to s.73(2)(b) of the LPA, SBC
[40] 1998, c.9. I fix that amount at $500.00 inclusive of disbursements.
“Master H. Hyslop”
