IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120605

Docket: S110853

Registry:
Vancouver

Between:

Slater Vecchio LLP

Solicitors

And

Fred Cashman

Client

Before:
Master Taylor

Reasons for Judgment

Brief Summary of Facts and Introduction

[1]            
While riding his bike on July 26, 2005, Mr. Cashman (“Cashman”) collided
with a vehicle and suffered a head injury such that he was unable to practice
law thereafter. After attempting to represent himself and then briefly being
represented by another lawyer, Cashman sought the assistance of Mr. Deering
(“Deering”) at the law firm of Brown Benson. Somewhat later, Mr. Cashman became
disenchanted with Mr. Deering and his colleagues for a number of reasons and
then retained the services of Slater Vecchio, LLP. He signed a retainer
agreement dated January 13, 2009 wherein he agreed to pay a 33.3% contingency
fee “for damages incurred as a result of personal injuries and other losses
arising out of a motor vehicle accident….”  The file materials had been sent
over to Slater Vecchio from Brown Benson on Mr. Cashman’s instructions. He was
told by Mr. Slater (“Slater”) that but for the necessity of having to protect
Mr. Deering’s fees that the contingency fees would likely have been less.

[2]            
Slater Vecchio filed a Notice of Appointment or Change of Solicitor in
both the tort action against the defendants, Kim and Son, and the Part 7 action
against the Insurance Corporation of British Columbia. Both notices were filed
and date stamped December 18, 2008.

[3]            
Ultimately, Messrs Slater Vecchio were able to obtain the policy limits
of $1m for Mr. Cashman. Unfortunately, there was a fee dispute between Brown
Benson and Slater Vecchio as to what their respective fees should be. Cashman
retained the services of Gordon Turriff, Q.C. (“Turriff”) to represent him as
against Brown Benson in the fee dispute. Cashman did not want Deering and Brown
Benson to obtain as large a fee as they wanted from a split of fees from the
33.3% contingency and was prepared to tax their fee component at the end of the
day.

[4]            
The fee dispute was finally settled when Slater Vecchio agreed to take
$20,000.00 less than Mr. Cashman had suggested but they did so as a business
decision. The agreement was to be final in that Mr. Cashman would not tax the
accounts of Brown Benson.

[5]            
On November 10, 2010 an agreement was reached between Slater Vecchio, Deering
and Cashman who, at the time, was represented by Mr. Turriff.

[6]            
Sometime later following the Settlement Agreement, Mr. Cashman contacted
Messrs Slater Vecchio to find out what was happening with his Part 7 claim. Shortly
thereafter he received an email from Patrick Gordon (“Gordon”) of that firm
which indicated the firm was not prepared to act further for Mr. Cashman
regarding the Part 7 claim given a number of difficulties with it. The email finished
by saying, “…we do not believe the case is worth pursuing”.

[7]            
Mr. Cashman sent a return email in which he said:

“[i]t is not proper that you
cherry pick the claim and when the easy part is done then decide to give up the
claim without a fight. I object to your withdrawal and do not consent to this
breach of contract … The fee agreement was to do everything and not just that
which you believed was worth pursuing. The contract is a Whole contract and has
yet to be completed”.

[8]            
On the same day, Gordon responded, advising that Slater Vecchio was
terminating the agreement, and that the firm had received and sought no
compensation for its work on the Part 7 action. Gordon wrote, “[i]f you believe
that you have a good claim against ICBC under Part 7, you will have no
difficulty obtaining counsel to pursue it on your behalf”.

[9]            
On February 1, 2011, counsel for Cashman, wrote to Gordon advising that
in unilaterally withdrawing its services, Slater Vecchio had repudiated the
agreement with Cashman, and Cashman accepted the repudiation. Counsel for
Cashman demanded payment of the sum of $201,600, representing repayment of all
the fees and taxes on fees paid to Slater Vecchio.

[10]        
This matter comes before the court pursuant to s. 70 of the Legal
Profession Act to review the bill of the solicitors, Slater Vecchio LLP,
dated November 12, 2010. The central issue in this review is not the quantum of
the bill, but rather whether the retainer agreement to prosecute two actions
was an “entire contract” such that the refusal of Slater Vecchio to continue
with the second Part 7 action requires it to disgorge the fee billed and paid
by agreement based on the result obtained in the first action. Counsel agree it
is an all or nothing proposition – either the Solicitors disgorge the fee or
they keep the fee. There is no intermediate position available.

Agreed Statement of Issues

[11]        
The parties have agreed to the issues to be determined by the court. They
are set out below:

Issue 1:           Was the retainer agreement between the
Solicitors and the Client (the “Agreement”) an entire contract by which the
solicitors were obligated to prosecute both the Client’s tort action and his
Part 7 action to their respective conclusions in order to be entitled to any
fee?

Issue 2:           If so, then did the Solicitors and the
Client, in or about early November of 2010, either

 (a)        make a new agreement and discharge the
Agreement; or

 (b)        amend the Agreement;

such that the Solicitors were no longer required to prosecute
both the Client’s tort action and his Part 7 action to their respective
conclusions in order to be entitled to any fee?

Issue 3:           If not, then by virtue of dealings in or
about early November 2010 is the Client estopped from recovering the fee paid
to the Solicitors?

Issue 4:           if not, then
did the Solicitors breach the Agreement by withdrawing their services without
cause prior to prosecuting the Client’s Part 7 action to its conclusion such
that the Solicitors are not entitled to any fee?

Detailed Facts

[12]        
The facts in this matter are not in dispute. Accordingly, I have
borrowed extensively from counsels’ submissions in setting out the detailed
facts below.

[13]        
On July 26, 2005, Mr. Cashman was riding his bicycle when he was struck
by a motor vehicle owned and operated by Heen Jung Kim (“Kim”) and Kwan Jin Son
(“Son”). He suffered injuries, the most serious of which was a traumatic brain
injury resulting in headaches, memory and concentration problems. Another
symptom resulting from the head injury was that he would go off on tangents,
get very angry due to the fact he had difficulty controlling and regulating his
mood, all resulting from his head injury.

[14]        
As a result of the injuries suffered in the accident of July 26, 2005,
and, in particular, his head injuries, Mr. Cashman has not been able to
practice law since.

[15]        
Mr. Cashman commenced two actions arising out of his accident. He
commenced an action in tort against Kim and Son (the “tort action”) and an
action for first party insurance benefits under Part 7 of the Regulation to the
Insurance (Motor Vehicle) Act, B.C. Reg. 447/83 (the “Part 7 action”). The
Part 7 action is against the Insurance Corporation of British Columbia (“ICBC”).

[16]        
In the actions, Cashman was represented by a succession of counsel. He
initially acted for himself, followed by James Butler of Butler & Company;
Bob Deering (“Deering”) and John Hutchinson (“Hutchinson”) of Brown Benson and
then finally Michael Slater, Q.C. (“Slater”) and Patrick Gordon (“Gordon”) of
Slater Vecchio LLP.

[17]        
In late 2009, Mr. Cashman decided to retain Slater Vecchio in place of
Brown Benson since ICBC had refused to offer the defendants’ $1 million policy
limits in the tort action and Cashman wanted to proceed to trial, obtain a
judgment in excess of that amount and pursue a bad faith claim against ICBC. Because
the law firm of Brown Benson, and Mr. Deering in particular, also acted for
ICBC on certain defence matters, their contract with ICBC precluded them from acting
for a client in a bad faith claim against ICBC.

[18]        
Mr. Cashman was also dissatisfied that Mr. Deering had not used his
relationships with ICBC as promised to go above the head of the adjuster on his
file to try and get the policy limits, which was the main reason why Cashman
retained Deering in the first place.

[19]        
At the time of the file transfer from Brown Benson to Slater Vecchio,
LLP, a substantial amount of work had been done on the tort action by Mr.
Deering; the pleadings were closed, the defendant had been examined for
discovery, some expert reports had been obtained and a trial date had been set.

[20]        
There had been an unsuccessful mediation. Mr. Cashman wanted the $1
million policy limits and the highest the defendants were prepared to offer was
$400,000. By contrast, in the Part 7 action, apart from a statement of claim
and an appearance and two notices of change of solicitor by ICBC, nothing had
been done. There was no statement of defence and no examinations for discovery had
been held, although discoveries had been scheduled and then adjourned. As well,
internally, John Hutchinson of Brown Benson had spent time reviewing Cashman’s
Part 7 claim and made extensive notes on the file.

The Slater Vecchio agreement

[21]        
In December 2008, Cashman instructed Brown Benson to send their file on
the tort and Part 7 actions to Slater Vecchio. On December 5, 2008, Mr. Hutchinson
of Brown Benson wrote to Slater Vecchio, enclosing the file on the basis that
on resolution of Cashman’s claims, Slater Vecchio would “protect the funds, and
then contact us regarding a pro rata apportionment of legal fees, and payment
of our disbursements”. On December 10, 2008, Mr. Slater wrote to Mr. Cashman
saying, “The agreement will be 33 1/3%. We will work out the allocation of fees
with John [Hutchinson]’s firm at the conclusion of the litigation”.

[22]        
On December 16, 2008, Slater Vecchio filed Notices of Change of
Solicitor in the tort and Part 7 actions.

[23]        
On January 13, 2009, Mr. Cashman met with Mr. Gordon of Slater Vecchio. Mr.
Cashman executed a written contingency fee agreement, which provided that
Cashman authorised Slater Vecchio to act as his solicitors “…with respect to
my claim for damages incurred as a result of personal injuries and other losses
arising out of a motor vehicle accident on July 26, 2005”. Cashman agreed to
pay Slater Vecchio legal fees of 33-1/3 % of the amount recovered by settlement
or at trial, as well as disbursements and taxes. At the same time, Cashman and
Gordon made a collateral oral agreement that Slater Vecchio “would be taking
care of Brown Benson’s fee” with the result that the total fees payable by Mr.
Cashman would be effectively capped at 33 1/3% of any recovery. Slater Vecchio
reached an understanding with Brown Benson that they would “work out what their
fee was once the matter was resolved and it would be paid from” the fee that
was billed to Mr. Cashman”.

[24]        
The 33 1/3% contingency was higher than the fee normally charged by
Slater Vecchio because the firm had to satisfy Brown Benson’s fee from that
amount. In fact, Mr. Cashman was told that were it not for the necessity of
having to cover the fee account of Brown Benson, Slater Vecchio’s account to
Mr. Cashman would likely be in the range of 20% to 25%.

The settlement of the tort action

[25]        
In June 2010, after several proposals from October 2009 onward by Slater
Vecchio on behalf of their client, Mr. Cashman, to settle the tort action in
exchange for the $1 million limits of the defendants’ insurance policy, ICBC
finally agreed to make the policy limits available. This resulted in a
settlement of the tort action. The defendants agreed to pay Cashman $1,003,638
(the “Settlement Funds”) plus taxable costs and disbursements for a total of
$1,051,138.00. The Settlement Funds were paid to Slater Vecchio in trust. The
Part 7 action did not form part of the settlement and was not released.

The fee dispute

[26]        
In late June 2010, around the time the tort action was settled, Mr. Cashman
spoke to Mr. Slater about his dissatisfaction with Mr. Deering’s failure to
follow his instructions. Mr. Cashman said he would be fine with paying a global
fee to both firms of $250,000 but not the $333,333 due under the agreement he
had with Slater Vecchio . Alternatively, he said that if Slater Vecchio could
reach an agreement with Deering on the basis of a 60/40 split of the 33 1/3%
fee, he would fight with Mr. Deering over Brown Benson’s 40% share which
amounted to $133,333.00. Mr. Cashman also told Slater that he had received
advice from Turriff that Deering was not entitled to any fee. Mr. Cashman told Mr.
Slater that if there was going to be a resolution, he wanted the money by
Friday, July 2, 2010 as he was going away. Unfortunately, this did not occur.

[27]        
On July 5, 2010, Mr. Turriff advised Slater Vecchio that he had been
retained by Mr. Cashman in relation to Brown Benson’s entitlement to a fee. Turriff
made it clear to Slater that he was not acting for Cashman in respect of Slater
Vecchio’s fee, although Mr. Turriff took the position that Cashman reserved the
right to argue that Brown Benson should receive no fee at all.

[28]        
In early September 2010, Mr. Gordon of Slater Vecchio spoke to Mr. Cashman,
who was, at that time, vacationing on his boat. Mr. Cashman gave instructions
that Slater Vecchio should propose a 60/40 split of the contingency fee in
Slater Vecchio’s favour and that Mr. Cashman reserved his right to challenge
Deering’s entitlement to fees and the reasonableness of his disbursements. In a
letter dated September 3, 2010, Slater Vecchio proposed this to Mr. Deering.

[29]        
On September 22, 2010, Mr. Deering, now practising at DuMoulin Boskovich
LLP, responded, rejected the proposal “as it does not bring the matter to a
conclusion”. Deering continued:

Unless the matter can be resolved quickly we will require
from you a complete breakdown of time spent and steps taken and rates charged
by your firm in the handling of this matter.

I suspect that the entire matter
will have to be dealt with either by way of Mediation, an agreed Arbitration or
a hearing before a Master/Registrar.

[30]        
Mr. Gordon understood that Deering’s reference to a proceeding was to a
proceeding involving not just Brown Benson and Slater Vecchio, but Cashman as
well. While Mr. Turriff said he regarded the matters as separate, both Gordon
and Deering referred to the subsequent discussions among the three parties as a
“three way dispute”, “three way discussion” or as “attempts to reach a three
party agreement”.

[31]        
In his October 28, 2010 e-mail to Mr. Gordon, Mr. Deering summarised his
position:  “[a]t present we have a dispute with Slater Vecchio in the future we
may have a dispute with Mr. Cashman” . On the same day, Mr. Turriff told Mr. Slater,
“Deering cannot avoid the fight with Cashman”.

[32]        
Throughout the discussions, it became apparent to Gordon that while Mr. Cashman
expressed concerns about Brown Benson’s work and therefore the amount they were
entitled to, “it just came down to how much money was going to be put in … Mr.
Cashman’s pocket”. Cashman had said maximising his net position was “a
motivation” but not the driving motivation, and that what he cared about was
Mr. Deering not profiting from his breach of promise.

[33]        
On November 4, 2010, Mr. Turriff wrote to both Mr. Gordon and Mr. Deering,
summarising the circumstances from his perspective:

We know two things for sure at this time. First that Fred and
Bob are at odds and, second, that Bob can’t bill SV because SV was never his
client.

In those circumstances, practically speaking the starting
point has to be agreement on the split between SV and Bob. Unless the split is
agreed, neither Bob nor SV can know what to bill Fred.

I suppose that SV could bill Fred the whole contingent fee
but if it did it couldn’t safely pay itself until it knew what fee Fred would
owe Bob. Bob’s fee would only be determinable as between Fred and Bob. The
determination of Bob’s fee could only be made after Bob billed Fred but Bob couldn’t
bill Fred because SV already had. Bob (I guess) would have to sue for a
declaration that he is entitled to a share of the SV fee and for a reference to
the registrar for a recommendation about what the share should be. That
proceeding could only be between Bob and SV. There would be no lis with Fred on
the split. Presumably the declaration and the reference would go by consent. Then
there would be a hearing. Bob and SV would make their best cases for their
respective contributions to the result. That seems like a lot of unnecessary
effort. It would be better for Bob and SV just to agree.

If the starting point were
thought to be an agreement on Bob’s fee as between him and Fred, the matter
would immediately bog down. Bob and Fred are not likely to agree and their
difference could only be resolved if Bob billed Fred. But Bob couldn’t bill
Fred because Bob wouldn’t know, as between himself and SV, what his share of
the contingent fee would be. I suppose Bob could bill Fred what he thinks his
share should be but if he did that he would be at odds with SV as well as Fred.
That would make no sense. Bob (or, I suppose SV) would have to sue for a
declaration … (see above). Presumably the suit for the declaration would have
to be joined with whatever proceeding might have to be commenced as between Bob
and Fred. That seems like a lot of unnecessary effort … (see above).

[34]        
Mr. Gordon’s reaction to this was that Turriff “had overly complicated
matters, and this was going to be hard to resolve through litigation. We were
either going to all compromise and settle or we weren’t going to get paid for
months, or even years”. Gordon wrote, saying that Slater Vecchio still wanted
to meet the next day to “see if we can get this done all at once. We can go
round in circles for months otherwise”. Deering agreed to meet.

[35]        
On November 5, 2010, Mr. Gordon, Mr. Deering and Mr. Turriff, on behalf
of Mr. Cashman, met at the offices of Slater Vecchio in an attempt to reach an
agreement to resolve the fee dispute. Mr. Gordon explained that the position of
Slater Vecchio was that if the parties did not reach agreement, Slater Vecchio
could bill the entire one-third contingency and that if Deering’s fee was zero,
as Cashman suggested, any reduction would be to Slater Vecchio’s account and
not Mr. Cashman’s. Mr. Turriff reiterated that he was not involved in any fee
dispute between Slater Vecchio and Cashman. Then, during the meeting, It
appeared an agreement had been reached. Mr. Turriff left to speak to Mr. Cashman,
but then returned saying he had misunderstood his instructions and that in fact
they did not have an agreement. The meeting then broke up.

[36]        
Turriff subsequently communicated with Deering about the instructions he
had misapprehended: “I was supposed to have said this morning that Mr.
Cashman’s position is that Slater Vecchio should get $200,000 and you $50,000. Those
were my instructions”. Turriff told Gordon that his “only instructions this
morning were to propose $200,000 to Slater Vecchio and $50,000 for Deering” . In
respect of this proposal, Cashman was in agreement that the payment to Brown
Benson was to be absolutely final with no review of their fee.

[37]        
In addition to conveying a proposal in respect of a reduced Slater
Vecchio fee, Mr. Turriff also obtained an agreement from Slater Vecchio to
forestall the firm from delivering an account to Cashman. Mr. Turriff
acknowledged that he did so to avoid crystallising Cashman’s obligation to pay
the maximum 33 1/3% fee and instead, to leave space for the parties to reach an
agreement on a lower amount, without having to do a review of the Slater
Vecchio bill.

[38]        
Prior to November 5, 2010, the previous settlement offer had been
$271,500, with $180,000 to Slater Vecchio and $91,500 to Deering. Not
surprisingly, this was unacceptable to Deering.

[39]        
Matters finally came to a head on November 8 and 9, 2010. On behalf of
Mr. Cashman, Mr. Turriff formally requested that Deering deliver a bill
addressed to Cashman, failing which he would apply to court. Slater Vecchio
took the position that they would simply deliver an account for their full
entitlement under the contingency fee agreement . Slater and Gordon told
Turriff that they had told Deering “we were back to Square One, which would
mean what we can do under our [contingency agreement]”. Slater said that
Cashman’s risk was that he had to pay the full $333,333. Slater asked if there
was any way of resolving the matter quickly. Turriff assured him that there
was, and that Cashman “does know that you are
giving something up …” [emphasis in the original].      [emphasis added]

[40]        
Later that day, Turriff e-mailed Slater and Gordon, stating in part:

Fred has asked me to assure you that he is not playing you. He
wants you to receive your proper entitlement as soon as possible.

Fred has also asked me to remind you that he had told you
before he signed your contingent fee agreement that he intended to call for a
review of Bob’s charges.

Would it not make sense for you
and Bob to deliver bills in the amounts that reflect Friday’s proposed split?

[41]        
Gordon’s evidence was that the reference to Cashman’s “assurance … that
he is not playing you” was to the suggestions of Slater Vecchio  “that this was
all an unjustified ploy by Mr. Cashman to reduce the fee he had contracted to
pay” to Slater Vecchio.

[42]        
On November 10, 2010, Slater Vecchio, Brown Benson and Mr. Cashman,
through his counsel, Mr. Turriff, reached an agreement to resolve the Fee
dispute (the “Settlement Agreement”). The Settlement Agreement provided that
Cashman agreed to pay $71,800 plus taxes to Brown Benson in settlement of Brown
Benson’s entitlement to a fee and a further $180,000 plus taxes to Slater
Vecchio in settlement of Slater Vecchio’s entitlement to a fee for the tort
action. Turriff confirmed this in an e-mail of the same date.

[43]        
Gordon offered a suggestion as to the mechanics of billing and paying
out Slater Vecchio and Brown Benson’s respective fees pursuant to the
Settlement Agreement. Turriff responded, with instructions as to the mechanics
of payment and with a request for “an overall accounting”. He calculated that
when all fees and taxes were paid, the total cost to Cashman was $282,016.00.

[44]        
Pursuant to the Settlement Agreement:

(a)      Brown Benson delivered an account to Slater Vecchio
for a fee of $71,800 plus taxes, described as “To all professional services
rendered pursuant to settlement agreement between the parties”;

(b)      Slater Vecchio delivered an account to Cashman, care
of Turriff, for a fee of $251,800 plus taxes. This amount included the Brown
Benson fee;

(c)      Slater Vecchio paid Brown Benson’s account and its
own account from the Settlement Funds it held in trust;

(d)      Slater Vecchio delivered a cheque to Turriff in
trust for Cashman in the amount of $90,747.08, representing payment of the
balance of settlement           proceeds; and

(e)      Slater Vecchio also provided Cashman with copies of
the accounts and a reconciliation of monies received and disbursed.

[45]        
Some two months after the settlement agreement, Cashman left Gordon a
voicemail inquiring about the status of the Part 7 action. On January 19, 2011,
Gordon responded by email saying:

Hi, Fred,

We received your message about the status of your Part 7
action. No steps have been taken since the settlement of the tort claim

Mike [Slater] and I have
reviewed the Part 7 claim and we have decided that we are not prepared to act
further for you on it. Our opinion is that the claim has little chance of
success based on representations made by you, or on your behalf, that you were
not advancing a claim for Part 7 and your subsequent refusal to co-operate with
ICBC. I know that we have discussed this and you do not agree with that
characterization of the evidence. However, considering the amount involved and
ICBC’s position that it will not pay you any money on the claim, we do not believe
that the case is worth pursuing.

[46]        
On January 20, 2011, Cashman responded by e-mail to Gordon, saying,

Gentlemen:  That is not how I
read the contract. It does not say that you only get to do what you deem to be
the easy stuff, but that you will act “with respect to my claim for damages
incurred as a result of personal injuries and other losses arising out of a
motor…”  In short it is not proper that you cherry pick the claim and when
the easy part is done then decide to give up on the claim without a fight. I
object to your withdrawal and do not consent to this breach of contract. I did
not say that I was not advancing a claim for Part 7 nor did I refuse to
cooperate with ICBC. They offered help with rehab which I did not need as I was
getting lots of help. They never asked for any cooperation nor did they
complain that I was not cooperating. The fee agreement was to do everything and
not just that which you believed was worth pursuing. The contract is Whole
contract and has yet to be completed.

[47]        
On the same day, Gordon responded, advising that Slater Vecchio was
terminating the agreement, and that the firm had received and sought no
compensation for its work on the Part 7 action. Gordon wrote:

With respect, we disagree. We are under no compulsion to continue
to act. Any party can terminate the contract and we are doing so at this time.

Our withdrawal at this time cause no harm or prejudice to you.
There are no pending trial or discovery dates.

We have received no compensation and seek no compensation for
legal work on the Part 7 claim.

If you believe that you have a
good claim against ICBC under Part 7, you will have no difficulty obtaining
counsel to pursue it on your behalf.

[48]        
On February 1, 2011, Mr. Palm, counsel for Cashman, wrote to Gordon
advising that in unilaterally withdrawing its services, Slater Vecchio had
repudiated the agreement with Cashman, and Cashman accepted the repudiation. Palm
demanded repayment of the sum of $201,600, representing repayment of all the
fees and taxes on fees paid to Slater Vecchio.

[49]        
On February 9, 2011, Cashman commenced this proceeding for a review of
Slater Vecchio’s bill dated November 12, 2010.

Issue 1:        Was the
retainer agreement between the Solicitors and the Client (the “Agreement”) an entire contract by
which the solicitors were obligated to prosecute both the Client’s tort action
and his Part 7 action to their respective conclusions in order to be entitled
to any fee?

[50]        
Mr. Cashman submits that an objective reading of
the retainer agreement he made with the Solicitors, and considering the
circumstances at the time it was made, it is clear that the agreement was a
single contract for the prosecution of two actions, not separate contracts. Alternatively,
Mr. Cashman submits that the agreement is at least ambiguous in that regard and
that any such ambiguity must be resolved against the Solicitors, especially
since they drew the contract.

[51]        
Mr. Cashman’s evidence was that he spoke with
Mr. Slater in December 2008 and that Mr. Slater agreed that Slater Vecchio
would take on both matters and would charge a fee of 33-1/3% of the amount
recovered (which percentage was higher than what Mr. Slater told Mr. Cashman
the Solicitors would have charged because the fee would have to be split with
the Solicitors’ predecessors, Robert Deering and Brown Benson). No mention was
made at the time that there should be two separate retainers.

[52]        
The Solicitors then received a letter from Brown
Benson dated December 5, 2008 indicating that Brown Benson had been “instructed
to deliver Mr. Cashman’s entire Tort and Part VII file materials” for the
Solicitors’ use. The Solicitors then prepared (on December 9, 2008) and filed
(on December 16, 2008) Notices of Change of Solicitor in each of the Tort and
the Part 7 Actions.

[53]        
On December 10, 2008, Mr. Slater sent Mr.
Cashman an email confirming receipt of the files from Brown Benson and that the
agreement between them would be for 33 1/3%. Again, there was no mention that
the Tort Action and the Part 7 Action amounted to separate retainers.

[54]        
It was in those circumstances that the
Solicitors and Mr. Cashman entered into a written agreement entitled
Contingency Agreement dated January 13, 2009 (the “Agreement”). The Agreement
was drafted by the Solicitors. It provides at its outset:

I, Frederick
Cashman, authorize the law firm of Slater Vecchio LLP to act as my solicitors
with respect to my claim for damages incurred as a result of personal injuries
and other losses arising out of a motor vehicle accident on July 26, 2005.

and goes on to provide that Mr. Cashman
would pay the Solicitors 33 1/3% of the amount recovered, all disbursements
incurred in prosecuting his case, and taxes applicable to the fee.

[55]        
Mr. Cashman submits the Agreement refers to a
single claim consisting of both damages incurred as a result of personal
injuries and other losses. The obviously stated intention is that this was a
single matter. There is nothing in the Agreement that would indicate to a
client that the “claim” might actually be treated by the Solicitors as multiple
claims and that the Agreement might therefore be divisible into multiple
separate contracts.

[56]        
As well, the Agreement provides that Mr. Cashman
would pay to the Solicitors all disbursements incurred in prosecuting his case.
Again, the singular is used to describe what the Solicitors had undertaken,
clearly indicating an intention that all of what the Solicitors had been hired
to do was part and parcel of a single matter.

[57]        
So, too, submits the client, the Agreement
provides that the firm would be entitled to fees of 33 1/3% of the amount
recovered. It does not provide that the fees would be on each amount recovered
or even on the amounts recovered. The obvious intention from reading the
Agreement, it is submitted, was that, even if received in tranches, the fee
would be assessed on the one, overall amount recovered. That is further
confirmation, submits the client, that the parties intended this to be a single
claim, at the end of which there would be an amount that Mr. Cashman had
recovered. The one amount contemplated would only be known when the Solicitors
had completed the entirety of the work.

[58]        
The Agreement also provides that Mr. Cashman
would pay taxes applicable to the fee, not each fee or even the fees. That
reference to a single fee is consistent, Cashman maintains, with an intention
that the work for which the Solicitors had been retained was part and parcel of
a single claim – for which there would be one overall fee. That is not to say
that the fee might not be paid in installments as funds came in if the parties
so agreed along the way, but only that the Agreement contemplates a single fee,
and thus one single contract.

[59]        
Finally, the Client submits, the Agreement
expressly provides that it would not apply to any appeal and that a lawyer and
client could make a separate fee agreement with respect to an appeal. The
implication, therefore, is that matters that were to be the subject of separate
retainers would be set out separately, and thus the Agreement was a single
agreement consisting of the prosecution of the matters for which the Solicitors
were being hired at the time it was made.

[60]        
The Solicitors submit it is important to situate the lawyer’s agreement
within the principles that apply to all “entire contracts”. They submit a
contract is said to be “entire” when complete performance is required before
any duty to pay, usually a lump sum, arises. For this reason, these agreements
are also sometimes referred to as “lump sum contracts”. So, for example, the
estate of a seaman who agreed to perform services on a voyage in exchange for a
lump sum on completion was not entitled to recover his wages pro tanto
when he died part way through the journey because it was an “entire contract”. Similarly,
at common law, a builder who agreed to construct a house under a lump sum
contract but who did not complete it was not entitled to recover for the work
actually completed. “The refusal of pro rata payment is based on the
inability of the court, as a matter of construction, to add such a provision to
the contract, and also upon the rule that the mere acceptance of acts of part
performance under an express contract cannot, taken alone, justify the
imposition of a restitutionary obligation to pay on a quantum meruit basis”. Chitty
on Contracts, 30^th ed. (London:  Thomson Reuters, 2008), pp.
1417-1420.

[61]        
The Solicitors further submit that whether the obligation is entire or
divisible is a matter of construction of the parties’ agreement in light of all
of the circumstances. If the obligation is divisible or severable, “there is an
express or implied agreement that payment will be made in proportion to the
extent of performance”. Chitty, supra, p. 1423.

[62]        
The application of these principles, say the Solicitors, leads to the
conclusion that the agreement was not an “entire contract”.

[63]        
First, submit the Solicitors, Nathanson Schachter and Thompson v.
Inmet Mining Corp. and Ladner Downs v. Crowley speak in terms of an
action singular:  what is “entire” is the lawyer’s obligation to do everything
necessary to prosecute a single action to completion. “A contract of retainer
for a single action, e.g. a common law action, is an entire contract”. Ladner
Downs v. Crowley, supra. The authorities do not stand for the
proposition that Cashman urges, say the Solicitors, which is that where a
lawyer is engaged to prosecute more than one action, performance requires him
to prosecute all to completion, failing which he is entitled to a fee for none,
as stated in Cordery’s Law Relating to Solicitors (8^th ed., 1988):

[a] retainer may be said to be
an ‘entire contract’ where the client cannot receive the benefit of the
consideration until the contract is completed ,

 then an agreement to prosecute multiple actions will not be
“entire”, because the client derives the benefit of the consideration on the
completion of one of the actions, whether by judgment or settlement.

[64]        
The Solicitors maintain that contracts are “entire” where the
obligations are indivisible, the consideration is usually a lump sum and if
only part of the agreement is performed, the court could not assign a partial
right to compensation to the part performance without re-writing the parties’
agreement. Here, they say, there are two lump sums, not one; they are the
product of entirely independent contingencies (success in the two separate
actions); and the obligations are divisible because the lawyer can prosecute
one action to conclusion without doing so for the other.

[65]        
In Mr. Cashman’s submission, the only objective
interpretation that can be put on the Agreement looking at its terms and the
circumstances in which it was made

was one contract requiring the prosecution
by the Solicitors of both actions, which would then entitle them to a fee for
the case as a whole.

I am inclined to the view that in the circumstances of this
case, the contract entered into by the Solicitors and the Client on January 13,
2009 was an entire contract and intended as such by which the Solicitors were
obligated to prosecute both the Client’s tort action and his Part 7 action to
their respective conclusions in order to be entitled to any fee. There can be
no other interpretation, in my opinion, as there was no discussion between
solicitor and client about any other form of contract or that there was
intended to be two separate contracts. As well, Slater Vecchio purported to
terminate the contract on January 20, 2011 in its email to Cashman, which
suggests that at that time the Solicitors were of the view there was only one
contract.

Issue 2:           If so, then did the Solicitors and the
Client, in or about early November of 2010, either

(a)        make a new agreement
and discharge the Agreement; or

(b)       amend the Agreement;

[66]        
On this point, the Solicitors submit that if the court finds that Slater
Vecchio’s agreement with Cashman was an “entire contract”, Cashman still must
account for the effect of the Settlement Agreement. Whether the Settlement
Agreement is treated as conduct which is evidence of the proper interpretation
of the original agreement between Slater Vecchio and Cashman, as amending the
parties’ original agreement; or as a new agreement, the result on this point is
the same:  Cashman agreed that Slater Vecchio could bill and be paid based for
its work on the tort action prior to and independently of what occurred with
the Part 7 action.

[67]        
Mr. Cashman says that there was no settlement of
a dispute between himself and the Solicitors because there was no dispute. Mr.
Cashman says that it was not a term of any agreement that he made that the
Solicitors would be discharged of their obligation to conduct the Part 7 Action
to its conclusion and still retain the amount, and that if that was the
Solicitors’ intention, that ought to have been clearly conveyed to him.

[68]        
In response the Solicitors ask whether the Settlement Agreement,
properly construed, reflects a common intention to finally resolve the question
of the entitlement to and amount of fees by Slater Vecchio and Brown Benson?  They
say that it did. The Settlement Agreement may be interpreted in light of its
object and purpose. The fee dispute, say the Solicitors, supplies the factual
matrix of the Settlement Agreement and explains why it was made. Its purpose
was to avoid the complexities of the fee dispute and “months, if not longer, of
litigation” that would have ensued, with the attendant legal fees and delay in
payment to all parties.

[69]        
Finally, the Client says, in short, there was no
dispute between the Solicitors and himself. The only dispute involving the
Solicitors was with Brown Benson, who would not commit to a split of fees,
which the Solicitors had undertaken to achieve at the outset of the
relationship with Mr. Cashman. The only dispute involving Mr. Cashman was also
with Brown Benson and was about what portion of the split that was worked out
that firm was going to get to keep.

[70]        
Thus, in the absence of a dispute, it cannot be
said that there was a settlement, nor therefore, a release of obligations.

[71]        
As well, in my view, neither of the parties turned their minds to
whether or not they were about to either make a new Agreement or amend the
Agreement. Accordingly, in the absence of some evidence of actual intent to
alter or amend the Agreement rather than by implication, I find neither
occurred.

Issue 3:           If not,
then by virtue of dealings in or about early November 2010 is the Client
estopped from recovering the fee paid to the Solicitors?

[72]        
The Solicitors maintain that even though the court has reached these
decisions at this point in the reasons, Cashman is nevertheless precluded from
seeking to recover the fee paid to Slater Vecchio in connection with the tort
action by reason of the doctrine of estoppel.

[73]        
Estoppel requires (a) a representation or conduct amounting to a representation
intended to induce a course of conduct on the part of the person to whom the
representation is made; (b) an act or omission resulting from the
representation, whether actual or by conduct, by the person to whom the
representation is made (that is, reliance); and (c) detriment as a consequence
of the act or omission. Costco Wholesale Canada Inc. v. Cazalet 2008
BCSC 952, (2008), 86 B.C.L.R. (4^th) 159 (S.C.), (BOA, Tab 3) citing Canadian
Superior Oil Ltd. v. Paddon-Hughes Development Co. [1970] S.C.R. 932. The
representor’s intention is satisfied if his conduct, viewed through the eyes of
the representee, was such as would reasonably lead that person to rely on it: 
“[t]he underlying concept is that of unfairness or injustice”. Costco, supra
at p. 169, citing Williston v. Canada (Minister of Indian Affairs &
Northern Development) 2005 FC 829, affirmed 2006 FCCA 316, 354 N.R. 180
(F.C.A.).

[74]        
The Client submits that in order for the
Solicitors’ argument under this head to succeed it must, in effect, be that Mr.
Cashman impliedly represented not only that he would not later challenge the
fee, but also that he would condone and waive later, as-yet unknown and not
contemplated breaches of the Agreement by the Solicitors, and it was on the
strength of that representation that the Solicitors acted. That says the client,
is entirely contrary to the nature of a solicitor-client relationship.

[75]        
Indeed, the client suggests that, in fact, he
can make a more compelling argument in equity than can the Solicitors. He says
that by not raising with him the fact that the Solicitors hoped he would just
give up on the Part 7 Action, by not advising him that they would not act on
their now alleged assertion of cause when that supposed cause allegedly arose,
and by not advising him that the acceptance of a reduced fee would mean the
Solicitors were under no compulsion to act further on the Part 7 Action, the
Solicitors represented clearly to Mr. Cashman that they would continue to act
in respect of that action. Mr. Cashman further submits that he relied on that
representation to his detriment when agreeing to pay monies on account of fees
to the Solicitors at a time when they were not technically entitled to them
because they had not performed the whole of their obligations under the
Agreement.

[76]        
 In fact, the client relies on his evidence that
he would not have agreed to any payment to the Solicitors in November 2010 had
he any reason to believe the Solicitors would withdraw their services on the
Part 7 Action.

[77]        
The solicitors suggest in the face of Cashman’s assertion that he was
unrepresented vis-a-vis the Solicitors when the settlement agreement was
arrived at, that he was represented by Turriff, and even though Turriff said he
wasn’t representing Cashman against Slater Vecchio, it matters not what Turriff
said but what he did. According to the Solicitors, if anyone ought to have
explained to Cashman the effect of agreeing to pay both firms before the Part 7
action was completed, it was Turriff.

[78]        
I find this a difficult submission to accept for three reasons. One,
Turriff told Slater that he wasn’t acting against them in the settlement
negotiations; two, Slater thanked Turriff for not acting against them once the Settlement
Agreement had been reached; and three, no one knew at that point that the
Solicitors were going to repudiate the contract.

[79]        
Rather, I find the submission of the Client more compelling in
that it is submitted by the Client that the equities simply
cannot favour the Solicitors here. They had the duty to advise, they had the
duty to do so fairly, they were the fiduciaries, and they knew what steps might
or might not be taken by them in the future in respect of their continuing to
act. For them to allege that they are the victims of an alleged representation
when that representation – if it was even made – was made in circumstances
where they had not fully and fairly advised their own client who could not
possibly know that they would later fundamentally breach their contract and
never even considered that possibility, is the antithesis of an argument in
equity. It appears to be an attempt to use their own failure to be frank with
their client as the basis of an estoppel argument.

[80]        
Accordingly, my answer to issue 3 is that the client is not estopped
from recovering the fee paid to the Solicitors.

Issue 4:           if not,
then did the Solicitors breach the Agreement by withdrawing their services
without cause prior to prosecuting the Client’s Part 7 action to its conclusion
such that the Solicitors are not entitled to any fee?

[81]        
The main point made by the Solicitors in their submissions regarding the
fourth issue is that they properly had regard to not only the merits but to the
risk of costs and Cashman’s psychological health, as demonstrated by his
irrational anger toward ICBC. Slater Vecchio maintains they treated Cashman
fairly. They did not seek any fee for the work they did on the Part 7 action. In
his evidence, Gordon made the observation that if the case was meritorious, as
Cashman believed, he would have no difficulty obtaining other counsel to pursue
it.

[82]        
In support of this position they point out that Cashman insisted on
advancing a claim to all of the TTD benefits in the Part 7 action, however,
part of the claim – that related to the first two years of benefits – was
wholly without merit. This was not insignificant:  it amounted to approximately
$44,000, or 40% of Cashman’s Part 7 claim. In support of this submission they
rely on Richard Buxton v. Mills-Owens [2010] 1 WLR 1997, [2010] EWCA
Civ. 122 (C.A.) at para. 41 per Dyson L.J. where it was held that “reasonable
grounds” are not susceptible to a comprehensive definition, since “whether
there is a good reason to terminate is a fact-sensitive question”. The Court of
Appeal held the law firm was entitled to terminate the retainer where the
client insisted on advancing arguments that were “hopeless” in law, and “not
properly arguable”.

[83]        
The same principles, the Solicitors submit, apply in Canada. “There is
an affirmative duty … to check useless litigation”, and where a solicitor
reasonably forms the view that proceedings are hopeless or unnecessary, then
not only should he not continue but he will be deprived of his entitlement to
remuneration if he does so. Orkin, Legal Ethics:  A Study of Professional
Conduct (Toronto:  Cartwright & Sons, 1957), pp. 78-80 (BOA, Tab 20).

[84]        
Not surprisingly, the Client takes the opposite view and distinguishes Richard
Buxton v. Mills-Owens (supra).

[85]        
The suggestion that Mr. Cashman had insisted on the
pursuit of part of his claim when the Solicitors viewed that part as not
properly arguable, it is submitted by the Client, played absolutely no role in
the Solicitors’ decision to withdraw. It is alleged by them to be cause for
withdrawal only in argument.

[86]        
 As well, another difference has to do with the
complete lack of any advice from the lawyer to the client as to the existence
of a part of a claim that was not properly arguable. In Richard Buxton,
the client submits, the court found that the advice given by the lawyers to
their client was that three of the four grounds that the client wished to
advance were hopeless, but that the client had insisted that those points be
taken anyway. Such is not a fact in the case at bar.

[87]        
Another difference between this case and Richard
Buxton v. Mills-Owens says the client, is the nature of the client’s
instructions in light of the advice given. In that case, the client
specifically instructed the lawyers to take positions that he had been advised
were not properly arguable. Here, not only was Mr. Cashman not given advice
that a claim for TTDs in the first 104 weeks was doomed to fail, there was also
no evidence that he specifically instructed the Solicitors to continue on in
that claim notwithstanding its supposed futility.

[88]        
What the evidence shows is that all Mr. Cashman
did in January, 2011, was call Mr. Gordon to find out what was happening on the
Part 7 Action. In response to that inquiry, the Solicitors simply quit. The
taking of that step in response to a simple inquiry as to the status of the
matter is, in my view, unfortunate.

[89]        
In my view, the least the Solicitors could have
done was to prepare an opinion for the Client setting out in some detail the
weaknesses of his case and recommending that he not pursue the Part 7 action,
and, as well, setting out the risks of pursuing the claim, thus discharging
their duty not to unreasonably expose the client to costs. Thereafter, it might
be that the client may or may not wish to proceed knowing all the facts and
having had an opportunity to consider them.

[90]        
Accordingly, I determine that the Solicitors in the case at bar did not
have cause to withdraw.

[91]        
I, therefore, determine that a Certificate of Fees issue that provides
for the refund to the Client of $180,000 in fees paid, and taxes thereon of
$21,600 for a total of $201,600.00. As well, the Client is entitled to be paid
interest pursuant to the Court Order Interest Act from November 12, 2010
to the present.

[92]        
I am indebted to counsel for their very thorough written submissions and
their consummate professionalism in dealing with this very difficult matter.

“Master Taylor”