Bayshore Law Group v. Bogoch

2006 BCSC 1443 Bayshore Law Group v. Bogoch

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Bayshore Law Group v. Bogoch, 2006 BCSC 1443 Date: 20060928 Docket: L052980 Registry: Vancouver Between: Bayshore Law Group Solicitors And David Mathew Bogoch Client Before: Registrar Blok Reasons for Decision Counsel for the Solicitor S. N. Mansfield Counsel for the Client G. H. Dabbs Date of Hearing: July 4, 2006 Written Submissions Received: July 21 and August 4, 2006 Place of Hearing: Vancouver, B.C. A. Introduction [1] This is a review conducted under the provisions of the Legal Profession Act, S.B.C. 1998, c. 9, of certain accounts rendered by the solicitors in this matter. While four accounts were appended to the amended appointment, in submissions the solicitors reported that, due to a re-examination of their records, only the final two accounts were in issue. [2] The two accounts, one dated November 29, 2004 and the other dated October 27, 2005 are in the amounts of $36,318.63 and $1,521.23 respectively. However, in the course of this hearing counsel indicated that they had come to an agreement that the total sum at issue was $35,809.57. [3] The fees charged in the two accounts total $31,734.00. [4] The issue in this proceeding is one of agency; at a certain point in the underlying litigation the original client, David Bogoch, retreated from the fray and left matters to be conducted on instructions from his father,

Abraham Bogoch ("Dr. Bogoch"). The specific issue, as articulated by counsel, is whether David Bogoch is responsible for fees calculated at $300 per hour, which was the hourly rate quoted to Dr. Bogoch at the time he became directly involved in the litigation, or whether the solicitors are restricted to the hourly rate of $175 agreed to by David Bogoch in the original retainer agreement. B. Facts [5] The underlying litigation was matrimonial litigation stemming from the breakdown of an eight-year marriage. Originally, the issues in question were those typical of family law proceedings, being custody of the sole child of the marriage, spousal and child support and the identification and valuation of family assets. [6] David Bogoch (who, for convenience, I will occasionally refer to as "David") retained the solicitors to represent him on these issues in November, 1998. At that time there was a retainer letter sent to him in which the stated hourly rate was $175, a rate which was stated to be subject to change on notice. [7] In the spring of 2001 the wife retained new counsel, who took aim at David Bogoch's interest in a family trust that had been set up by his father, Dr. Bogoch, claiming that it was a family asset that was subject to division. David Bogoch had only chequered earnings from a personal fitness business that he owned and operated, but the couple had lived a

relatively comfortable lifestyle due to discretionary payments received from the family trust. Following the separation, David Bogoch's business lost money, his financial situation deteriorated and ultimately he made an assignment in bankruptcy. [8] Mr. Mansfield said that the claim against David Bogoch's interest in the trust "changed the landscape" of the litigation. David, however, could not afford further litigation and he wanted out of it. Moreover, David no longer had any ability to settle the litigation given the claims made against the trust. [9] Mr. Mansfield brought in his partner, Ken Oliver, to assist him in the case after opposing counsel raised claims against the family trust. Faced with an impending Rule 18A application, Mr. Oliver attempted to elicit a response from the trust as to whether the claims against it were going to be defended and the initial message conveyed through David was that his father did not intend to fight. [10] On February 5, 2002 Mr. Mansfield wrote to Clark, Wilson, the solicitors for Dr. Bogoch and the trust, stating as follows: Our client does not have the resources (or presently the inclination) to vigorously oppose the Plaintiff's claim, nor are we instructed or retained to do so. Put another way, the way things stand now, the Plaintiff's application will proceed unopposed. [11] Mr. Oliver's letter resulted in a change in Dr. Bogoch's

position and he made the decision to oppose the claims against the trust. [12] According to Mr. Oliver, David Bogoch said "I don't want this fight and I don't want to know about it. Dad will have to look after your fees because I can't". David told Mr. Mansfield that Mr. Mansfield should deal with his father on all financial and litigation matters from that point on. [13] Dr. Bogoch agreed to provide the necessary funds for the litigation and no further monies came from David. From that point on, all of the solicitors' financial dealings were with Dr. Bogoch, all instructions concerning the conduct of the litigation came from Dr. Bogoch, the solicitors coordinated strategy with Dr. Bogoch's counsel and the solicitors looked to Dr. Bogoch for payment of their accounts. [14] The last account that David Bogoch paid was in February, 2000. No accounts were rendered in 2001 and Dr. Bogoch took over the payment of the accounts in 2002. [15] From 2002 onward the accounts rendered by the solicitors were addressed to either or both of Dr. Bogoch and his company, Bogoch Enterprises, as requested by Dr. Bogoch. Each of the accounts rendered by the solicitors was vetted by Dr. Bogoch's counsel at Clark, Wilson, as required by Dr. Bogoch. These accounts were paid by Dr. Bogoch until his death in mid-2004. [16] Mr. Mansfield said that they worked closely with Clark, Wilson and Dr. Bogoch in

the period from 2001 to 2003. There were a number of meetings with Dr. Bogoch and his lawyers at Clark, Wilson in order to discuss and plan the litigation. David Bogoch did not attend any of these meetings, although he was apparently made aware of them. David was also copied with all accounts and correspondence. [17] Dr. Bogoch was very punctilious and wanted to know what to expect in the way of fees. Mr. Oliver said that they told him that the litigation would be expensive, and they regularly canvassed with Dr. Bogoch the possibility of settlement and the cost of settlement as compared to the cost of proceeding. Mr. Oliver told Dr. Bogoch that it was impossible to give precise estimates but general estimates for the various stages of litigation were given, all expressly based on rates of $300 per hour. [18] The litigation proceeded. There was a Rule 18A application in 2002, a nine-day trial before Mr. Justice Bauman in September 2003, reasons for judgment pronounced on February 4, 2004, a further three-day hearing before Mr. Justice Bauman in October 2004 concerning issues of relief against the family trust and special costs, and the filing and preparation of an appeal. Dr. Bogoch died before the appeal hearing was to have taken place. [19] The two accounts rendered after the death of Dr. Bogoch, which are the two accounts in issue, were addressed jointly to David Bogoch and

the estate of Dr. Abraham Bogoch. The representatives of the estate declined to honour the bills and directed the solicitors to look to David Bogoch for payment. [20] David Bogoch testified that the solicitors never discussed with him any change to the hourly rate of $175. He never knew that there was an hourly rate issue until he was served with the Legal Profession Act appointment. [21] David Bogoch said that his interest in the matter was to get a divorce, resolution of the custody issue and division of the family assets. Once that was accomplished he had no further interest in the matter. He said that he was aware of meetings taking place with Dr. Bogoch, the solicitors at Clark, Wilson and the solicitors at Bayshore Law Group but he said he did not attend because Mr. Mansfield told him that the subject-matter did not involve him. C. Positions of the Parties [22] The solicitors maintain that Dr. Bogoch was the agent of his son David in the litigation, that notice to the father of the increased hourly rate was therefore notice to the son, and thus David is bound by this increased hourly rate. They maintain that David ceded to his father complete authority and control over the litigation, including full authority to deal with Bayshore's legal accounts. Thus, according to the solicitors, Dr. Bogoch was expressly authorized to act as David's agent in all relevant matters. [23]

Alternatively, the solicitors maintain that the role Dr. Bogoch played in the litigation, as authorized by his son, conferred on him the implied authority to receive the notice of change in the hourly rate on David's behalf. The solicitors also argue that David Bogoch is estopped from denying any agency because he represented to the solicitors that Dr. Bogoch had full authority to conduct the litigation. [24] The position of David Bogoch is that Dr. Bogoch engaged the solicitors as principal, not as his agent. David's position was that the claim against the family trust was a dispute that he was neither willing nor financially capable of taking on and that it was only because Dr. Bogoch stepped in that this litigation could take place at all, which was done to benefit Dr. Bogoch and his interest in protecting the assets of the family trust. The accounts were sent to Dr. Bogoch, the solicitors looked to Dr. Bogoch for payment, the accounts were reviewed on Dr. Bogoch's behalf by his own solicitors and he paid all of the accounts. In all, the facts show that the solicitors' primary relationship was with Dr. Bogoch and not with David. D. Discussion [25] It is trite to say that the solicitors have the burden of proving the terms of their retainer. Here, the solicitors have not discharged the burden of showing that their retainer on the trust litigation involved a principal-agent

relationship between Dr. Bogoch and David Bogoch. On the contrary, it is clear that Dr. Bogoch entered into a new retainer with the solicitors and thus he instructed the solicitors as principal and not as an agent on behalf of his son. That David allowed Dr. Bogoch to conduct and pay for the litigation against the trust, though it was David who was the named party in the case, does not of necessity make Dr. Bogoch the agent of his son. [26] David had neither the means nor the interest in pursuing or defending the litigation any further and, but for the intervention of Dr. Bogoch, that would have been the effective end of the litigation at that point. Dr. Bogoch entered into a new financial arrangement with the solicitors based on a rate of $300 per hour, Dr. Bogoch provided all instructions to the solicitors, the billing arrangements were changed, the reporting structure changed such that reports were directed to Dr. Bogoch or his solicitors, the solicitors now looked to Dr. Bogoch for payment and Dr. Bogoch paid all the accounts. [27] As the solicitors themselves said in their letter of February 5, 2002, they were neither instructed nor retained by David to defend the claims against the trust. That retainer, I find, came from Dr. Bogoch. I am reinforced in this conclusion by the fact that the two accounts issued for the trust litigation prior to Dr. Bogoch's death were directed to Dr. Bogoch's company at Dr. Bogoch's request. On the face of their own accounts the solicitors did not maintain that there was any sort of agency relationship. E. Conclusion [28] For the reasons detailed above this review is dismissed with costs to David Bogoch. "District Registrar M. Blok"