COURT FILE NO.: CV-14-516242
ONTARIO
SUPERIOR COURT OF JUSTICE
Counsel: Greg M. Frenette and Jessica Lam, for the Applicant Andrew J. MacDonald, for the Respondents
HEARD: July 21, 2015
M. D. FAIETA, J.
REASONS FOR JUDGMENT
INTRODUCTION
1This unusual case demonstrates the problems that can result when a lawyer provides services without a written retainer agreement.
2The parties agree that the Applicant John retained the Respondent Andrew to represent him in a veterinary malpractice action following the death of his dog. There is no written retainer. John is on a public disability pension and does not have the ability to pay for legal services. John thought that Andrew was providing his services on a pro bono basis. The malpractice action was settled on February 10, 2014, for an amount which cannot be disclosed by the terms of the Settlement Agreement. John was shocked to receive a “pre-bill” account dated February 13, 2014, from Andrew in the amount of $65,978.98. Andrew submits that he was to be paid for his time at the rate of $350 per hour if John received money from the defendants.
3On April 14, 2014, Andrew reduced the amount of his pre-bill and issued a final invoice for his services to John in the amount of $34,000.00. On May 7, 2014, John obtained an order for assessment under section 3 of the Solicitors Act, R.S.O. 1990, c. S.15. On July 7, 2014, the Assessment Officer heard the application for assessment and declined to make a determination because he found that John’s dispute regarding the quantum of the account was really a dispute about the terms of the retainer and thus beyond his jurisdiction to determine.
4As a result, this Application is brought by John under section 23 of the Solicitors Act for a declaration that: (1) the legal services provided by the Respondents were rendered on a pro bono basis; (2) the Applicant is not liable to pay the account for legal services rendered by the Respondents on or about April 14, 2014, except to the extent of unpaid disbursements; (3) he is entitled to the return of $9,991.19 previously paid to the Respondents in respect of two invoices, dated October 14, 2010, and March 30, 2011, for fees contrary to the terms of the retainer; and (4) he is entitled to the return of a portion of the settlement funds held by the Respondents in their trust account other than funds required to pay any unpaid disbursements incurred prior to February 13, 2014.
5The central question is whether Andrew’s services were provided on a pro bono or contingency basis. For the reasons described below, I find that Andrew’s services were provided on a pro bono basis. Accordingly, I grant the relief sought by the Applicant.
ANALYSIS
6Section 23 of the Solicitors Act provides:
- No action shall be brought upon any such agreement, but every question respecting the validity or effect of it may be examined and determined, and it may be enforced or set aside without action on the application of any person who is a party to the agreement or who is or is alleged to be liable to pay or who is or claims to be entitled to be paid the costs, fees, charges or disbursements, in respect of which the agreement is made, by the court, not being the Small Claims Court, in which the business or any part of it was done or a judge thereof, or, if the business was not done in any court, by the Superior Court of Justice. [Emphasis added.]
7In Plazavest Financial Corp. v. National Bank of Canada (2000), 2000 CanLII 5704 (ON CA), 47 O.R. (3d) 641, at para. 23, the Ontario Court of Appeal stated that “[s]ections 15 to 33 of the Act speak to situations in which there is a written agreement between the lawyer and the ‘client’ respecting the manner and amount of payment of the lawyer’s fees.” Accordingly, section 23 of the Solicitors Act only applies to written retainer agreements.
8Notwithstanding this gap in the Solicitors Act, a judge of Superior Court has the inherent jurisdiction to decide a dispute regarding the terms of an oral retainer agreement.
Inherent Jurisdiction
9This Court has a supervisory role over disputes related to a solicitor-client retainer. The basis for this supervisory role was explained in Plazavest Financial Corp., at para. 14, as follows:
The rendering of legal services and the determination of appropriate compensation for those services is not solely a private matter to be left entirely to the parties. There is a public interest component relating to the performance of legal services and the compensation paid for them. The public interest component requires that the court maintain a supervisory role over disputes relating to the payment of lawyers’ fees.
10In Price v. Sonsini (2002), 2002 CanLII 41996 (ON CA), 60 O.R. (3d) 257, at para. 19, the Ontario Court of Appeal further explained the basis for the Court’s supervisory role:
Public confidence in the administration of justice requires the court to intervene where necessary to protect a client’s right to a fair procedure for the assessment of a solicitor’s bill…The court has an inherent jurisdiction to control the conduct of solicitors and its own procedures. This inherent jurisdiction may be applied to ensure that a client’s request for an assessment is dealt with fairly and equitably despite procedural gaps or irregularities.
The Need for a Written Retainer
11The commentary to Rule 3.6 of the Law Society of Upper Canada’s Rules of Professional Conduct, effective October 1, 2014, states:
A lawyer should provide to the client in writing, before or within a reasonable time after commencing a representation, as much information regarding fees and disbursements, and interest, as is reasonable and practical in the circumstances, including the basis on which fees will be determined. [Emphasis added.]
12In Nova Scotia a lawyer’s retainer must be in writing. In Ross, Barrett and Scott v. Simanic et al. (1997), 1997 CanLII 2931 (NS SC), 163 N.S.R. (2d) 61, aff’d (1998), 1998 NSCA 45, 165 N.S.R. (2d) 211 (N.S.C.A.), the Nova Scotia Supreme Court stated, at para. 25:
Lawyers have a duty to establish their retainers with clarity and to reduce the contract to writing. A rule has developed because of that duty: where there is no written retainer, and there is a conflict in the evidence of the lawyer and the client as to a term of the retention, weight must be given to the version advanced by the client rather than that of the lawyer.
13As the cases below will show there is also a presumption in Ontario that an oral retainer is made on the terms advanced by the client.
The Risks of an Oral Retainer
14In upholding a client’s understanding regarding the terms of a retainer, the Ontario Court of Appeal in Plater v. Arenson (1999), 1999 CanLII 2382 (ON CA), 175 DLR (4th) 102, at para. 5, adopted the following statement:
The Solicitors’ Act and the common law are founded on the premise that the client should be protected. It is also well settled law that when there is any doubt or ambiguity, it is to be resolved in favour of the client.
15Given the fiduciary nature of the solicitor-client relationship, the imbalance of legal knowledge between solicitor and client, and the fact that a solicitor knows, or should know, the risks involved, the courts have given more weight to a client’s understanding of the terms of an oral retainer rather than that of the solicitor.
16Lord Denning in Griffiths v. Evans, [1953] 1 W.L.R. 1424 (C.A), at 1428, explained this principle and its rationale as follows:
On this question of retainer, I would observe that where there is a difference between a solicitor and his client upon it, the courts have said, for the last 100 years or more, that the word of the client is to be preferred to the word of the solicitor, or, at any rate, more weight is to be given to it…The reason is plain. It is because the client is ignorant and the solicitor is, or should be, learned. If the solicitor does not take the precaution of getting a written retainer, he has only himself to thank for being at variance with his client over it and must take the consequences. [Emphasis added.]
17Griffiths remains good law in England. See Fladgate LLP v. Harrison, [2012] EWHC 67 (Q.B.) where the Court stated, at para. 55:
The Defendant submitted that, where a dispute arises between a solicitor and a client over the nature of an oral retainer, the client’s version of the retainer should prevail, citing…Griffiths v. Evans…However, that principle does not preclude me from finding against the client, where his case is clearly contradicted by other documentary and witness evidence. [Emphasis added.]
18In Ontario, this principle is well-established. In Re Eccles (1868), 1 Ch. Cham. 263, at 264 the Court stated:
It is the practice of this court that where a retainer is asserted by a solicitor and denied by the alleged client, to give weight to the denial of the client as against the solicitor. It is very careless of solicitors not to take a written retainer from clients, as they render themselves liable at any moment to have their claim for costs disputed, especially where the party sought to be charged is not the party to the suit; if solicitors are so incautious as not to take a written retainer, they must submit to the loss. [Emphasis added.]
19More recently, the Ontario Court of Appeal adopted this principle in Rye and Partners v. 1041977 Ontario Inc., [2004] O.J. No. 2480, at para. 2:
…when a solicitor fails to reduce to writing the terms of his or her retainer and a dispute arises, there is a heavy onus on the solicitor to establish a retainer. [Emphasis added.]
20Similarly, in Ellyn Barristers v. Stone, [2006] O.J. No. 1242, aff’d 2007 ONCA 565, [2007] O.J. No. 3114 (C.A.), this Court, at para. 18, adopted Griffiths as trite law for the principle:
…where a solicitor fails to reduce his or her retainer to writing, and a dispute arises, there is a heavy onus on the solicitor to satisfy the court that his/her version of its scope ought to be preferred. [Emphasis added.]
21I now turn to consider whether Andrew has discharged the “heavy onus” necessary to show that his retainer was not pro bono but in fact was a contingency fee retainer.
ISSUE: WAS ANDREW’S RETAINER A CONTINGENCY FEE RETAINER OR A PRO BONO RETAINER?
22The determination of whether Andrew has demonstrated that he was retained on a contingency fee basis rather than on a pro bono basis requires the weighing of each party’s recollection of events.
23In the summer of 2006, John’s dog of seven years, Ben, died in the care of a veterinarian. After reviewing his veterinarian’s records, John felt that Ben’s death was the result of being negligently given an excessive amount of sedative. He wanted to commence a civil action against his veterinarian. He wanted justice for Ben, but John could not afford a lawyer.
First Meeting – August 2006
24In August 2006 John met Andrew through mutual friends. Andrew states that John told him that he had schizophrenia, receives benefits under the Ontario Disability Support Program and could not afford a lawyer.
25John states that Andrew agreed to take his case on a pro bono basis. Andrew told him that this meant he would be “charity work”. John states that Andrew was clear in telling him that he would not be charging John for his services.
26On the other hand, Andrew states that he “…was prepared to help him out and create access to justice for him”. Andrew states that he told John:
…that I would get paid for my time if we received money from the other side and that my hourly rate was $350.00 plus GST. I told him I would be paid out of the proceeds of any settlement or judgment based on my time and hourly rate plus disbursements.
There was never a discussion of a percentage of proceeds as a basis that I was requiring to be paid and it was not a contingency agreement in that typical sense.
It was really a deferred payment arrangement, with an initial agreement which I also made clear in our first meeting that I would not charge him for my fees unless we recovered something from the defendants. As for disbursements, [John] said he would use his best efforts to raise some money for disbursements.
I did not ask for a monetary retainer and said I would proceed in this deferred fee arrangement to help him out and we would take it in stages and re-evaluate the situation as we went. [Emphasis added]
27Andrew’s description of a deferred payment arrangement of legal fees, contingent upon recovery of money from the defendant, is typically more simply referred to as a contingency fee retainer.
28John denies Andrew’s recollection of events. He states:
There was no discussion of any hourly rate. Our only discussion of fees at that time was the fact that I had no money to pay and there was no discussion of him being paid out of any subsequent settlement amount. There was no discussion of paying for disbursements either, and this topic was only raised at a later date.
There was no discussion of a deferred payment arrangement…
Events Prior to the Commencement of the Action
29John states that he met with Andrew on several occasions during late 2006 in the company of John’s mother, sister or friend, and they expressed their gratitude to Andrew for his having taken on this case on a pro bono basis. John states that Andrew accepted their thanks and never once suggested that John or the others were mistaken.
30Throughout the balance of 2006, all of 2007 and the first half of 2008 there were discussions with insurers for the defendants, preparation of pleadings and other activities. During this period John states that any discussions regarding fees were consistent with the gratitude expressed by John and his friends and family to Andrew for agreeing to represent John.
31Andrew states that John acknowledged that Andrew was working on a contingency basis when he sent the following email to Dr. Eddie Clutton, an expert in veterinary anesthesia, located in Scotland. John’s email, dated September 14, 2007, states:
The trial date could be up to a year away. Since Andrew is working on a contingency we will need some time to do a fundraiser for your fee with my friends and supporters because I am on a disability. I look forward to hear from you. Thank you again for all you have done so far. We all believe there will be justice in this case for Ben and then I will finally have peace. [Emphasis added.]
32When cross-examined by Andrew, John suggested that Andrew dictated this email to Dr. Clutton:
Q: Okay. So you write to Mr. Clutton in September 2007 and you used the words, “Mr. Andrew MacDonald, is working on a contingency,” right? Why didn’t you say he was working pro bono?
A: Well, you … because I was in your office and you told me to write that. I said, “What do I write in this letter?” …
Q: We did … you just got behind the desk and sat at my computer and …
A: We did a number of emails on your computer with my Hotmail.
[Emphasis added.]
33Andrew has not provided any evidence to dispute the claim that he dictated this email.
Commencement of the Action
34John commenced an action against the veterinary clinic in July 2008.
35John states that in the summer of 2008, Andrew told him that he was incurring out of pocket expenses such as search fees and filing fees in connection with the lawsuit. John agreed that he would try to reimburse Andrew for his out of pocket fees because John was grateful that Andrew was providing his services on a pro bono basis and felt that Andrew should not have to pay for the expenses associated with the lawsuit.
36Examinations for discovery were held in April and May 2009.
37Andrew sent the following email on May 7, 2009 to John which suggested that Andrew expected to be paid for his services from the proceeds of any recovery:
The highest award in the U.S. for vet malpractice is $39,000! …
That is probably what the legal fees are at right now.
We have to be practical going forward about what this will cost versus what we will all get out of it. Please be realistic. [Emphasis added.]
38John states that he understood the above email and other subsequent messages or discussions regarding the amount of Andrew’s legal fees as follows:
I understood these discussions to be an attempt by Mr. MacDonald to explain to me how much “free advice” he had provided to me by taking this case on a pro bono basis and an indication that there were limits to how much he could do going forward. In particular, while I had hoped to have the matter go to trial as a matter of principle and to obtain an acknowledgement that the actions of the veterinarian and the veterinary clinic had been wrong and negligent, a large part of my motivation in accepting a monetary settlement without going to trial was my concern that Mr. MacDonald had already put in a large amount of time and effort to assist me and I understood his reluctance to go forward with a long trial.
Payment of Disbursements
39Andrew sought money from John to cover his disbursements by email dated August 21, 2009. He stated:
Is there no way you can seek help from your family??? Just to cover disbursements. Otherwise I need to pay for the transcripts myself. The package has been sent to Clutton so his expert fee will be another expense. Let’s talk at your convenience. I am still waiting to go ahead with the file – but I can’t go bankrupt in the process!!! We’ll figure something out – but we need to do it soon. [Emphasis added.]
40Several family members and friends donated money to help assist John with reimbursing Andrew for his out of pocket expenses. John states that he also held a fundraising concert that Andrew attended.
41John states that, in general, the donated funds were paid to Andrew to be held in trust to pay off invoices for disbursements issued by Andrew.
42The following chart shows the invoices that were issued by Andrew as well as the funds that were paid to him:
| Date | Invoice Number & Amount | Amount Paid & Source |
|---|---|---|
| August 1, 2008 | # 806 - $564.28 | $500.00 (John) |
| May 29, 2009 | # 884 - $135.72 | |
| June 1, 2009 | $200.00 (John) | |
| November 3, 2009 | $1,000.00 (Bill Bissett) | |
| December 14, 2009 | $1,000.00 (Bill Bissett) | |
| December 14, 2009 | #922 - $2,027.03 | |
| May 31, 2010 | $1,500.00 (The Secret Handshake) | |
| June 2, 2010 | #962 - $1,521.26 | |
| October 12, 2010 | $2,051.79 (John’s father) | |
| October 14, 2010 | #985 - $2,051.79 | |
| November 4, 2010 | $1,000.00 (John) | |
| November 15, 2010 | #992 - $371.45 | |
| March 10, 2011 | $8,000.00 (John) | |
| March 30, 2011 | #1017 - $7,939.40 | |
| July 20, 2011 | #1044 - $252.56 | |
| December 2, 2013 | $500.00 (John) | |
| February 7, 2014 | #1360 - $885.94 | |
| February 13, 2014 | Pre-bill - $65,978.98 | |
| April 14, 2014 | #1377 - $34,000.00 |
43With two exceptions, all of the above invoices from Andrew prior to the “pre-bill” invoice were only in respect of disbursements. Despite the alleged contingency fee retainer, Andrew billed John for his fees on October 14, 2010, and March 30, 2011.
44In March 2014, John discovered that the October 14, 2010, invoice for $2,051.79 was entirely for fees of $1,815.74 plus HST even though the covering email, and the invoice itself, stated that the invoice was for “contribution towards disbursements”. There is no explanation in the invoice how the fee was calculated or for which period of time it covers.
45In August 2010 Andrew states that John:
…insisted that he wanted to go to trial unless the Defendants paid $500,000.00. He also said he would split the $500,000.00 with me 50/50.
I explained to him that I was not prepared to act for him and not get paid if he was going to maintain an unreasonable position in terms of the prospect of settlement. I explained how much money I was putting into the case in terms of my hours, that I was not going to bankrupt my firm to pursue an unreasonable and unrealistic objective.
46A mediation was held on November 5, 2010. Andrew states that John refused to instruct him to accept any offer lower than $500,000.00.
47Dr. Clutton prepared an expert’s report. He inquired about whether to send an invoice then or at the case’s conclusion. He received the following reply email from Andrew on January 12, 2011:
…[John] is on government assistance so the conclusion of the case would be best if you can wait. I have not billed for fees. I have billed for disbursements. So if there are some out of pocket expenses we can cover or an interim payment that would be of assistance on an interim bill would be fine at this point. If an attendance is necessary here in Canada we will make arrangements at our expense from here in advance. … [Emphasis added.]
48Mr. Clutton replied that he was happy to wait to send his invoice.
49On February 11, 2011, Andrew sent John an email asking, “Any progress on funding?” John responded by email that same day and advised Andrew that his mom had been told that a cheque was coming that month.
50On February 28, 2011, Andrew sent John another email asking about money: “Just checking in on the funds situation given it’s the end of Feb.” John responded that his mother would call them tomorrow. About ten days later $8,000.00 was delivered by John’s mother to Andrew.
51The invoice dated March 30, 2011, for $7,939.40 billed John for services provided by Andrew from August 3, 2006, to January 8, 2007. John states that this invoice was paid using funds that his mother had delivered to Andrew as a result of a tax refund that she had received and that such funds had been delivered to pay for the anticipated cost of having an expert veterinary anesthesiologist from the United Kingdom testify at trial. After receiving the email John responded by email to Andrew’s legal assistant and stated:
Thank you Samantha. There is more coming. Please tell Andrew more money is coming soon. …
52Andrew recalls the reason for the $8,000.00 payment differently:
The only exception to our deferred payment arrangement came in January 2011 in the lead up to a one day special appointment before Master Hawkins for a refusals motion scheduled for April 6, 2011. [John] told me in January of 2011 that he had money coming to him from a tax credit that was being paid to his mother and that he wanted to pay it to me. He delivered $8,000.00 to me in March 2011 from his mother which he told me was part of the tax refund she received. I billed this amount towards fees [incurred] by [John] in March 2011 in part recognition by [John] of the extra work I was having to do as a result of his refusals at his examination. …
53John’s action was set down for trial on June 30, 2011.
54On July 21, 2011, John received an invoice in the amount of $252.56 reflecting his share of the costs of hiring a mediator. John responded that same day by email to Andrew’s legal assistant:
Thanks Samantha. You 2 rock! will be finding more money for you guys soon. Be patient. …
55John states that he does not remember receiving any of the above invoices; however he does not deny that they were sent to him. He states that he never discussed any of the invoices with Andrew. Andrew’s legal assistant confirms that John never questioned her about the accounts that she sent him. Andrew sent the following email to John on December 17, 2013:
Legals are at $51,000 and climbing. There is some negotiation on this. Unbilled disbursements are at about $3,000.00 and also climbing with gearing up for trial preparation. Clutton’s travel needs to be secured as well … [Emphasis added.]
First Pre-Trial Conference – December 16, 2013
56Two pre-trial conferences were held before Justice Archibald.
57The first pre-trial conference was held on December 16, 2013.
58Andrew admits telling opposing counsel and the Court that he was providing his services pro bono for the trial. He claims that this statement was made for strategic reasons:
In the course of the first pre-trial, the lawyers met with Justice Archibald without clients present. In that session I explained to counsel for VEC and Dr. Pettifer that I would be doing the trial pro bono. I meant three things by that. First, I believed that the case was for the public good. Second, I was not going to be getting paid fees to do the trial from [John’s]and I would not get paid if we lost or if no damages or costs were awarded. Third, this was not a case in which I was working on a percentage of the damages amount. … I wanted to convey to the lawyers for the defendants that the driving factor for me was not getting a percentage of a high award (normal contingency) – but rather my commitment to the justice of [John’s] case and his right to have his case heard at trial.
I told [John] that I had said this in that session with the Judge and the lawyers for the other side and the reason I said it in terms of the overall strategy of the negotiation.
Second Pre-Trial Conference & Settlement – February 10, 2014 – Agreement to Split the Net Proceeds?
59The second pre-trial conference was held on February 10, 2014. The lawsuit settled at the second pre-trial conference on the eve of a scheduled three-week jury trial.
60Andrew states that at the second pre-trial conference John agreed that, after expenses were paid, “…the balance would be split between [John] and I. This was based on a reduction of my fee at an hourly rate of $350.00 per hour. This was discussed and agreed to by [John] in the presence of [John]’s friend, Bill Bissett.”
61Both John and Bill Bissett deny that any such agreement was made.
62John states:
This was never discussed and agreed to. In fact, there was no discussion of payment of any fee to Mr. MacDonald either at that time or at any other time. We did have numerous discussions about reimbursement of Mr. MacDonald’s out-of-pocket expenses.
63Mr. Bissett states:
I was indeed present at part of the second pretrial but at no time did I witness any such discussions much less any agreement made by [John] that any net balance of the settlement amount of [$ XX] would be split between [John] and Mr. MacDonald. To the contrary, to my understanding there was no discussion of amounts to be paid to Mr. MacDonald for his fees but only for unpaid disbursements. I also heard Mr. MacDonald say very clearly to Judge Archibald at the pre-trial that he was acting on a pro bono basis.
64However, John does state that he offered to split the balance of proceeds if a much higher amount of money was recovered by settlement. He states:
The one and only time we ever had such a discussion [to pay Andrew half of any proceeds of settlement] was at the second pre-trial. Mr. MacDonald was pressing me to accept an offer of [redacted] or so and explained that he could not afford to go forward for a three week trial, considering all the time he had already put in. I was feeling pressured and worried that Mr. MacDonald was losing motivation at the 11th hour. I did say at some point that if he could get the offer up to [redacted] we would split it. There was no agreement on this point. I believe that Mr. MacDonald did not think that there was any change of obtaining a [redacted] settlement.
65John states that Andrew raises with him the possibility of splitting the settlement amount in some fashion at around the time of the pre-trial when settlement amounts were first discussed. John thought that Andrew might be talking about some type of voluntary payment and he did not engage Andrew in these discussions as he was focused on negotiations surrounding the possible settlement.
The Pre-Bill – February 13, 2014
66On February 13, 2014, shortly after the settlement, John received an email from Andrew which attached a “pre-bill showing what our account currently looks like”. The pre-bill showed a balance of $65,978.98 owing for fees and disbursements. John states that this was the first time that he understood that Andrew intended to charge him for his services.
Account – April 14, 2014 - $34,000
67Andrew delivered to John an account, dated April 14, 2014, for $34,000.00 inclusive of HST and disbursements. Andrew states that he applied a discount of $35,730.96 based on actual time spent on the file.
“Wanted me to be Paid for Every Minute”
68Andrew states that:
I engaged in cost benefit analysis discussions throughout the time I represented him based on what the fees would be as of a certain point in time if I was to render a bill at that point in time. He understood the value of the time I was devoting to his case and he told me on countless occasions that he wanted me to be paid for every minute I spent on the file at my hourly rate. [emphasis added]
69John denies making any such statement:
At no time did I ever tell Mr. MacDonald that I wanted him to be paid for every minute he spent on my file at his hourly rate. In fact, our discussions throughout this time period reflected my gratitude for what I thought to be an exemplary action on his part in taking this case on as matter of principle and without expectation of payment.
70Andrew states that John’s position changed after the settlement. He states that it was then, for the first time, that John took the position that Andrew was retained on a pro bono basis.
Reaction to the Accont
71On April 17, 2014 the following email was sent by John’s friend, Mehernaz Letin, to Andrew:
I’ve been filming in Northern Ontario for the past few months and just returned to the news of [John’s] settlement.
I am deeply saddened to hear that you are now charging for your time hence expecting some of this settlement after the years of suffering and anguish that he’s endured.
My understanding when we spoke and throughout these years, was that you were working pro bono for your services.
In appreciation of your work for [John], I supported your music by putting together a VideoFact proposal for you, which I still have. This was time-consuming and done free of charge. It involved writing a creative treatment, promotional package and budget, not to mention securing my resources and contracts to deliver over $25,000 of in-kind services toward the video. Although, we weren’t successful in getting the grant, I gave you my time and effort out of gratitude because I was impressed that you took on [John’s] case. I believed in you and thought you to be a man of genuine compassion and integrity.
You know he [John] is meticulous in his documentation and research in finding the right experts to lend credibility, which in turn, helped you build this case…you know that he worked long and hard and did whatever he could to assist you. I was aware of the countless hours he spent in your board room combing thru legal and medical documents and the days he spent in medical libraries doing research for you. He was respectful of your efforts and knew that you had limited time and resources.
We were all grateful. We were all under the impression that you were working pro bono. There was never any misunderstanding of this at any time.
I hope that you can reconsider your position on this matter and keep to your original intention. He needs closure on this. He has suffered enough.
72On April 23, 2014, John’s mother, Barbara, sent the following email to Andrew:
During the painful period after Ben’s death, [John] stayed with me. To see and feel his suffering regarding his loss was heart rending and painful. When I sat in your boardroom with you and [John], I was impressed with your generosity of spirit. I felt that here was a person with integrity and a love for animals. In addition, a genuine caring for my son and his situation. Offering your services pro bono was a great relief to him. We were all so grateful. I understand now that is no longer true. I am not going to express my real feelings about this change of heart on your part because it would be pointless.
My question to you now is regarding the $8,000 cheque you received from me in March, 2013 which was actually a tax refund for [John]. At that time you said you needed money for disbursements and to pay for the expert’s report. I also remember our conversation in December 2013 when I asked if you would take the money still needed to pay Dr. Clutton from the cheque that I gave you. You said no. It was evident to me that you were annoyed by my request. Our conversation was brief and I left it at that.
I have since discovered from [John] that after he looked into the statement you sent him, you had actually paid yourself from the money we all gave you. That was never what it was intended for. Why didn’t you pay Dr. Clutton from the money we gave you in 2011? Now you are wanting part of the settlement. How can you even ask for a cent of this money? You know how much [John] has suffered and what he is dealing with daily. What kind of person are you? I cannot express how disappointed I am.
Assessment of Account – May 7, 2014
73On May 7, 2014, John commenced an assessment of all of the bills delivered by Andrew.
74On July 7, 2014, John and Andrew attended the assessment hearing. The Assessment Officer adjourned the hearing to permit John to bring this application to challenge the retainer because it appeared that the objection related to the nature of the retainer rather than the quantum of the retainer. Consequently, this application was filed by John on November 17, 2014.
75On the cross-examination of John, held on January 15, 2015, the following exchange occurred between John and Andrew, at questions 85-91:
Q: …I haven’t found one email from you to me, to Mr. Clutton, to anyone, in which you say “Andrew is working pro bono”. Where are the … why wouldn’t you write to Mr. Clutton saying “Andrew is working pro bono. He’s doing it for free, why don’t you do it for free.” Why wouldn’t you have said that to Mr. Clutton?
A: Actually, I did. Several times on the phone. We talked several times on the phone, at least 30 times on the phone. Maybe 40 or 50 about this case. He knew very well you were working pro bono. He was actually shocked when he found out about what you were doing.
Q: Well, you can’t give evidence about what he thought or his reaction.
A: Well, I’m explaining that he knew very well … our conversations through our emails were medical. Passing back and forth medical information for review, they weren’t talking about that other kind of stuff.
Q: So did you ask Mr. Clutton to work pro bono?
A: No. No. But he did offer at the end, actually.
Q: You had an expectation … at the end of what?
A: After he realized what you were doing. You know, he said, “If this is going to become such a problem, you know, don’t worry about it, [John]”. I said, “No, no, no. You know, we made an agreement and I’ll stick to it.”
Q: And the agreement was to pay him at the conclusion of the case?
A: No. The agreement was to pay … why do you keep saying that? The agreement was to pay him for his work, that’s what the agreement was.
Q: So you didn’t ask Mr. Clutton to work pro bono?
A: No.
Q: And you thought he should be paid for what he did to contribute to the case?
A: Right up front, he explained that there was a fee. It was clear right from the beginning. I understood that he was going to be … he’s going to have to be paid. And we were fine with that, as long as I raised the money, which I did.
[Emphasis added.]
CONCLUSION
76In my view, John’s assertion that Andrew was retained on a pro bono basis is supported not only by his own statements but also by the statements of others, including Andrew.
77John’s mother states that she thanked him for representing John on a pro bono basis. John’s friend, Mehernaz Letin, gratuitously provided $25,000.00 of filmmaking services to Andrew because she was moved that Andrew was working pro bono for John. If their impression was wrong, there is no evidence that Andrew tried to correct it.
78Finally, and most importantly, Andrew admits that he advised the Court, opposing counsel and John at one of the pre-trial conferences that he was working pro bono at trial for John. Andrew states “pro bono” meant: 1) the case was for the public good; 2) he would not get paid if no damages were awarded and that John would not be obligated to pay him for his work at trial; and 3) he would not be recovering a percentage of the recovery if successful. Implicit in his statement is the proposition that Andrew would get paid if damages were awarded to John. Andrew’s suggested meaning of “pro bono” bears no resemblance to its normal meaning – namely, to provide services gratuitously to a client regardless of the outcome. Andrew’s explanation of the arrangement between himself and John better describes a contingency fee retainer.
79The Ontario Court of Appeal in 1465778 Ontario Inc. v. 1122077 Ontario Ltd. (2006), 2006 CanLII 35819 (ON CA), 82 O.R. (3d) 757, at para.13, adopted the following explanation of pro bono retainers:
It has long been part of the duty and tradition of the legal profession to provide services gratuitously for those who require them but cannot afford them. The profession, recognizing its commitment to the larger principle of justice, has traditionally not let such cases go unanswered merely because the individual is impecunious. Instead, the profession has collectively accepted the burden of such cases, thereby championing the cause of justice while at the same time, sharing the costs that such cases entail. This is a tradition which dates to the very inception of the profession in medieval Europe in the thirteenth century. [Emphasis added.]
80Andrew submits that the evidence shows that both John and Andrew expected that Andrew would be paid.
81First, Andrew submits that the payment of $7,939.80 on March 10, 2011, to himself in trust by John’s mother is evidence that this was a payment for his fees. Although Andrew used those funds three weeks later to pay for his work since 2006, there is no indication that those funds were delivered for that purpose. If Andrew was retained on a contingency fee basis, then it does not make sense that the monies were paid on account of work that Andrew had undertaken to date, nor does it make sense that he would have used that money to bill his fees. The explanation offered by John for the payment of $7,939.40 is that he was depositing money to pay for anticipated disbursements in this action, including the anticipated witness attendance costs of Dr. Clutton. The evidence shows that Andrew asked John for payment of disbursements in summer of 2008 and by email in May 2009.
82Second, Andrew submits that John’s failure to object to the account, dated March 10, 2011, as well as the account for fees on October 14, 2010, of $2,051.79 shows that John agreed to pay for his fees. John explained that he paid no attention to these invoices and the other seven invoices that he received from Andrew prior to the settlement of the action. He trusted that Andrew was using these funds to pay for disbursements. In addition, the language used on the October 14, 2010, account suggests it was for disbursements not fees. The covering email for the account dated October 14, 2010 stated that the account was for disbursements and the account itself states that the charge was for “contributions toward disbursements incurred in the course of the litigation” without specifying those disbursements.
83Third, Andrew submits that the email sent by John on September 4, 2007 to Dr. Clutton, which states that Andrew was working on contingency, is evidence that John knew that the retainer was in fact a deferred fee arrangement rather than pro bono. John’s explanation is simple and not rebutted: Andrew dictated the email that John sent. John also states that he told Dr. Clutton by telephone on more than one occasion that Andrew was working pro bono.
84Finally, although John acknowledges that Andrew asked him to split equally the net proceeds of settlement at the second pre-trial conference, it is my view that such a request does not mean that the retainer was a contingency fee arrangement. It supports the opposite conclusion. Had there been a contingency fee relationship at the outset of this relationship, there would not have been any need for Andrew to ask this question.
85In my view, Andrew has not discharged the “heavy onus” on him to satisfy this Court that his version of the terms of the retainer should be accepted over that of his client.
86Misunderstandings about the terms of a retainer not only have consequences for the solicitor and his client, but also reflect poorly on the legal profession. Such a misunderstanding in this case was entirely avoidable had Andrew followed the Law Society’s guidance and reduced the terms of the retainer to writing. This is especially so where a lawyer seeks to enter a contingency fee arrangement given the various requirements of section 28.1 of the Solicitors Act, including the requirement for such an agreement to be made in writing.
78For the reasons given, I grant the relief sought in the Notice of Application.
87Both John and Andrew seek their costs of this Application on a partial indemnity basis in the amount of $1,684.57, which is a modest amount in the circumstances. Given the result, I order that Andrew pay costs of $1,684.57 to John.
Mr. Justice M. D. Faieta
Released: August 10, 2015
COURT FILE NO.: CV-14-516242
DATE: 20150810
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOHN DOE2
Applicant
– and –
ANDREW MACDONALD and THE BARRISTERS GROUP
Respondents
REASONS FOR JUDGMENT
Mr. Justice M. D. Faieta
Released: August 10, 2015
Footnotes
- In order to keep confidential the terms of the settlement referenced in this Application I have not, upon the suggestion of the parties: (1) referred to the Applicant by his actual name; (2) mentioned the names of the defendants who settled the action commenced by John; and (3) mentioned the amount of the settlement nor any other figures that might reveal the amount of the settlement.
- In order to keep confidential the terms of the settlement referenced in this Application I have not, upon the suggestion of the parties: (1) referred to the Applicant by his actual name; (2) mentioned the names of the defendants who settled the action commenced by John; and (3) mentioned the amount of the settlement nor any other figures that might reveal the amount of the settlement.