IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: | MacLean Law v. Miolla, |
| 2015 BCSC 2109 |
Date: 20151013
Docket: S169066
Registry:
New Westminster
Between:
MacLean Law and
Lorne MacLean
Solicitor
And
Scott Miolla
Client
Before:
District Registrar Nielsen
Oral Reasons for Decision
In
Chambers
Appearing on his own behalf: | S. Miolla |
Appearing on his own behalf and on behalf of MacLean Law: |
L. MacLean |
Place and Dates of Hearing: | Vancouver, B.C. July 8, September 23 |
Place and Date of Decision: | Vancouver, B.C. October 13, 2015 |
[1]
THE
COURT: I have had an opportunity to review my notes and I intend
to give oral reasons. Because they are oral reasons, if a transcript is
requested, I reserve the right to edit them.
[2]
This is a review brought by the client pursuant to the Legal
Profession Act (LPA) of the lawyers bills totalling $21,540.79,
as of July 2, 2015, for work done between December 2014 and March 2015.
[3]
Oral evidence was presented by the lawyer, his articled student, and the
client. Affidavit evidence of the clients girlfriend was also admitted into
evidence.
[4]
The lawyer takes the position that his bills ought not to be reduced as
the client received good value. The client believes he received no value from
the lawyer’s services and seeks the return of his $15,000 retainer.
[5]
The client consulted the lawyer with respect to an appeal of an order
concerning spousal and child support. The clients income had decreased
dramatically following a motor vehicle accident which left him disabled and the
client’s three children had moved in with him, all following the prior court
order relating to spousal and child support.
[6]
The client initially consulted the lawyer in November of 2014. The
client alleges that he was quoted $10,000 to $15,000 as the cost of an appeal
relating to the orders of the chambers judge dated October 22, 2014. On the
basis of the estimate, and the lawyer’s positive opinion concerning the success
of an appeal, the client testified he retained the lawyer.
[7]
The lawyer denies he offered a fixed fee contract or provided an
estimate of fees. The lawyer states his fees were based on hourly rates that
were listed in a signed Retainer Agreement. The lawyer asserts fee estimates
are not possible to provide, given the nature of family law cases.
[8]
The parties signed a Retainer Agreement on December 11, 2014. Paragraph
2 of the Retainer Agreement provides in part:
2. A fee estimate is
impossible given the nature of family cases. We confirm that and except in
cases of an uncontested divorce it is impossible to provide with any degree of
certainty the estimate of the costs involved in your case and we specifically
refrain from providing any such estimate.
[9]
There is no reference in the Retainer Agreement or any documentary
evidence whether by email, letter, or otherwise, prior to the work on the file
commencing that confirmed or suggested a fee estimate or fixed fee contract
price was agreed. Indeed, what documentary evidence exists contradicts this
assertion. In an email dated December 11, 2014 a legal assistant at the law
firm wrote to the client stating:
Thank you for retaining MacLean
Law to assist you with your appeal. Please find attached your Retainer Letter
and Agreement. Please sign and return a copy of the Retainer Agreement as soon
as you can so we can open your file. We also ask that you pay the initial
retainer of $15,000. As the costs involved with a case like yours are unusually
high, we may need to request a further retainer payment at a future date. I
have attached a Credit Card Authorization form.
[10]
Although there is no documentary evidence of a fee estimate for an
appeal in the amount of $15,000, the clients girlfriend gave evidence by affidavit
that she was present during the initial meeting with the lawyer and the lawyer
did indeed advise the client that the cost of handling the clients case
would be in the range of $10,000 to $15,000, after discussing the pros and cons
of pursuing the clients case. The clients girlfriend did not suggest the
retainer was limited to an appeal as alleged by the client, rather the
girlfriend referred to handling the case in her affidavit evidence as well as
making references to an appeal.
[11]
Almost immediately after consulting the lawyer, the client began to have
difficulties with the Family Maintenance Enforcement Program (FMEP). On June
2, 2015, the client emailed the lawyer concerning these legal difficulties and
requested assistance. The lawyer and his articled student immediately began to
deal with FMEP at the clients request. The client advised the lawyer in
writing that he did not want any actions taken by FMEP to jeopardize his credit
rating. This issue was of the utmost importance to the client.
[12]
An appeal of the October 22, 2014 order was in the process of being
prepared, however, a transcript needed to be obtained and the order entered. There
was difficulty with ordering the transcript given the chambers judge had
ordered the file sealed as one of the children had been interviewed during the
course of the October 22, 2014 application. Regretfully, the entire file was
inadvertently sealed.
[13]
An application had been scheduled before the chambers judge on February
3, 2015 to settle the order and to have the file unsealed so a transcript could
be obtained.
[14]
It was decided that an application should be made on February 3, 2015 to
re-open the case, adduce further evidence, and vary the order of the chambers
judge with respect to child and spousal support. The strategy would allow the
Court to take into consideration the clients loss of income due to his
disability caused by the MVA, and the fact that the clients three children
were now living with him. The lawyer testified that completing the evidentiary
record in this regard would be essential to a successful appeal in any event.
[15]
The lawyer was also of the view that the retroactive support payable to
the client’s spouse should be re-assessed. As the children were all living with
the client, paying retroactive support would likely not benefit the children. The
lawyer was of the view that an order might be obtained to have any retroactive
support set aside for the childrens future education needs and it was decided
that an order in this regard would also be sought at the February 3, 2015
hearing.
[16]
Time was of the essence and the lawyer rushed to muster the necessary
evidence for the February 3, 2015 application. The advantage to the client if
the application before the chambers judge was successful would have been that
the need for an appeal would have been disposed of and the client would have
received the remedies he was seeking without the cost of an appeal.
[17]
At the February 3, 2015 hearing, the Court ordered:
1. The
record of the hearing of October 22, 2014 is unsealed, save and except for the
in-camera interview portion with the children;
2. The
Court will produce on an expedited basis a complete transcript of the unsealed
portion of the October 22 hearing at the sole expense of the Court;
3. The
Courts order of October 22, 2014 is varied so that the parties are no longer
required to use the services of Dr. Mary Korpach to obtain an s. 211 Views
of the Children Report, and the parties are instead to obtain a report from
a psychologist to determine, by mutual consent of the parties, that if the
parties are unable to achieve consent, either party may make further
application to the Court, and that the psychologist is to speak to the children
only and not the parents to review only such as other material to the extent
that it is necessary and agreed to by the parties;
4. Either
party may apply at the review currently anticipated for June to have the Court
review the reasonableness and adequacy of the amounts currently paid.
[18]
The Courts order was not the result hoped for, but it did still hold
the possibility of the result sought at the next hearing date before the
chambers judge, in June of 2015.
[19]
A wrinkle in the plan soon appeared. Following the February 3, 2015
hearing, one of the clients three children moved back with their mother. FMEP
wrote to the client on March 17, 2015, demanding payment of the arrears of
support and increased monthly child support payments.
[20]
This appears to be the event that led to the falling out between the
client and the lawyer and resulted in the client dismissing the lawyer by
letter dated March 27, 2015, and requesting the return of his $15,000 retainer.
Legal Principles
[21]
There is no question the lawyer was retained by the client, and once a
retainer is proven, the onus shifts to the client to establish a special
contract limiting fees such as a binding fee estimate or a fee contract (see Conkie
& Co. v. Free Quincy Productions, 2012 BCSC 33, at para. 103). I
find a binding fee estimate or fee cap has not been proven. I find discussions
concerning the costs of an appeal did take place. Those fell short of the
commitment required to impose a fee cap.
[22]
In any event, within a month of the retainer, the client was seeking
assistance with respect to FMEP and in relation to the February 3, 2015
hearing, which was hoped might eliminate the need for an appeal. The litigation
landscape had changed.
[23]
The principles which the Registrar must consider when reviewing a lawyers
bill are set out in s. 71 of the Legal Profession Act which provides:
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,
(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
(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.
[24]
The lawyers task was not complex, difficult or novel. However, the
lawyer did have a plan to deal with the range of issues faced by the client and
put that plan in motion.
[25]
The rates billed by the lawyer and the articled student were reasonable
in my view given their respective experience. The articled student during his
evidence commented that it took him considerably more time to accomplish tasks
due to his lack of experience. Coupled with his inexperience was an obvious and
commendable amount of enthusiasm and concern for the client, however, a
substantial amount of time was invested in dealing with the FMEP and generating
a five-page legal memo which, although necessary and proper to the conduct of
the proceeding, involved in my view an excessive investment of billable hours.
[26]
It should be noted that the time invested had positive results for the
client including the discovery of an $8,000 mathematical error in favour of the
client. Spousal maintenance was reduced from $4,200 a month to $243.00 per
month, enforcement proceedings with respect to the $100,000 in support arrears
was stayed pending the Court application and the payment of $28,000, and the
clients credit was protected. The client was particularly concerned that his
credit not be impacted by the litigation.
[27]
The February 3, 2015 hearing also ordered a copy of the transcript of
the October 22, 2014 chambers hearing be produced at no cost to the client. A
transcript would have been required in the event an appeal was ultimately necessary.
If the case was re-opened, it was hoped that the necessary orders could be
achieved without the need for an appeal.
[28]
The February 3, 2015 hearing did not produce the results sought by the
client, but it did pave the way for a future application in June of 2015 to
achieve the results sought, including settling the evidentiary record to prove
the client’s disability following the motor vehicle accident thereby lowering
any Court order for support, and to reflect the fact that the client was now
the custodial parent. This fact would have been particularly relevant with
respect to arrears. In the circumstances, payment of the arrears would likely
not go for the benefit of the clients three children if it was paid directly
to the former spouse. The lawyers strategy was to seek an order whereby the
support arrears would be set aside for the childrens future education needs.
[29]
In my view, this was a sound strategy, in the clients best interests. The
lawyers had prepared a plan which they put into effect to convince the chambers
judge to vary his prior orders so as to achieve the result sought by the client
without the need for an appeal. Overall, this would have had the result of
reducing the clients litigation costs.
[30]
Although the plan was sound, it was never put into effect given the
change of events. First, the law firm was dismissed so they were unable to
implement the strategy, and second, one of the client’s children moved back
with the clients ex-spouse which changed the financial dynamics and the overall
litigation landscape once again.
[31]
From the clients perspective he was left in a situation where he was
still faced with an appeal, still owed arrears and ongoing support. Essentially,
the client was right back where he started except for the fact he now had a
transcript of the October 22, 2014 proceeding which was necessary for an appeal.
The client is of the view that he received no value for the legal services
provided and seeks an order for the repayment of the $15,000 retainer.
[32]
In my view, the lawyers litigation strategy was sound and it was in the
best interests of the client at the time it was executed. Regretfully, from the
clients perspective, the plan was never realized due to events beyond the
lawyers and the clients control. However, this does not equate with the
client receiving no value. The steps taken by the law firm were reasonably
necessary and proper to the conduct of the proceeding, but the ultimate result
from the clients perspective was negligible.
[33]
Considering the s. 71 factors, in particular the time reasonably
spent and the result obtained, in my view, a reduction in fees as billed is
merited. In my view, a fair fee, taking into account all the circumstances, is
$17,000 inclusive of disbursements. The law firm is also entitled to interest
on the unpaid balance pursuant to s. 73(3) of the LPA at the rate
provided by the Retainer Agreement from February 27, 2015 to present.
[34]
As the bill has been reduced more than one sixth, the client is entitled
to the costs of the hearing pursuant to s. 72(1) of the LPA, which
I summarily assess at $1,500 inclusive of disbursements. If a Certificate is
needed, one can be submitted to the Registry for signature.
[35]
That concludes my reasons.
[36]
MR. MacLEAN: Just to be clear, so $17,000 inclusive of all disbursements
and interest, or
[37]
THE COURT: Inclusive of disbursements and you get interest on top.
[38]
MR. MacLEAN: Yes, all right, and from that I will deduct the $1,500 or
whatever. Thank you.
[39]
THE COURT: The $1,500 is to be credited to Mr. Miolla for costs.
[40]
MR. MacLEAN: My only submission on costs, Your Honour, was the
taxations are never fun. I dont do a lot of them, but to be called a liar and
saw him coming and stole his money, that wasnt proven. Thats the type of
thing that may disentitle a person to costs and it was pretty nasty.
[41]
THE COURT: I have taken that into account.
[42]
MR. MacLEAN: Mm-hmm.
[43]
THE COURT: We are adjourned.
District
Registrar Nielsen