Schiller Coutts Weiler & Pulver v. Desrochers

2003 BCSC 1889

IN THE SUPREME COURT OF BRITISH COLUMBIA Re: The Legal Profession Act Re: Statements of Account Rendered by Schiller Coutts Weiler & Pulver (formerly known as Schiller Coutts Weiler & Gibson) Citation: Schiller Coutts Weiler & Pulver v. Desrochers, 2003 BCSC 1889 Date: 20031215 Docket: 33050 Registry: Vernon Between: Schiller Coutts Weiler & Pulver (formerly known as Schiller Coutts Weiler & Gibson) Plaintiffs And Robert Desrochers Defendant Before: Master Hyslop as Registrar Reasons for Judgment Counsel for the plaintiffs V.M. Ukrainetz Robert Desrochers appeared on his own behalf Date and Place of Trial/Hearing: October 8 & 21, 2003 Vernon, B.C. [1] The law firm of Schiller Coutts Weiler & Pulver (formerly known as Schiller Coutts Weiler & Gibson) (the "law firm") took out an appointment pursuant to s.70 of the Legal Professions Act, S.B.C. c.9 and amendments thereto ("LPA"), to review their accounts dated February 1, 2003, March 1, 2003 and May 1, 2003. These accounts were rendered to Robert Desrochers (the "client"). These accounts totalled $24,245.88. This total was reduced by $1,030.50 as a result of a fee reduction by the law firm, and further by $1,000.00 as a result of a transfer of client trust funds being applied as payment. [2] The law firm rendered other accounts to the client prior to the accounts under review. Those accounts have been paid and total $16,371.36.

Those accounts are not under review as the client did not take out an appointment to review the accounts. He was made aware of his right to do so by a letter directed to him dated April 8, 2003 (exhibit "1") from the law firm which amongst other matters said: For your information, you are entitled to have our account reviewed (even after it is paid) under s.70 of the Legal Profession Act and Rule 32 of the Supreme Court Rules. [3] Veronica M. Ukrainetz (the "lawyer"), an employee of the law firm gave evidence on behalf of the law firm. She stated that since her call to the bar, she has been practising in the area of labour and employment law. The lawyer says that she practises employment litigation, labour law and human rights. She stated that most of the employment litigation is done by summary trial. She was the lawyer who provided the legal services to the client. The client gave evidence, as did his wife and a friend. RETAINER: [4] On May 14, 2002, the client met Mr. Schiller, the senior law partner of the law firm, who approximately two years previously had provided legal advice to the client. Mr. Schiller referred the client to the lawyer. On May 15, 2002, the lawyer met with the client and his wife. As a result of that meeting, the lawyer became aware that the client claimed that he had been wrongfully dismissed by his employer of some 28 years. His employer, Shaw

Cablesystems Ltd. ("Shaw"), had offered the client approximately 12 months pay in lieu of notice in a letter directed to the client and dated May 15, 2002. [5] On May 23, 2003, the client, his wife and the lawyer met. At that meeting, the lawyer took particulars from the client relating to his employment with Shaw. The lawyer concluded the client had been wrongfully dismissed. The lawyer received instructions from the client to send a letter to Shaw seeking 24 months pay in lieu of notice, potential salary increases, monies towards benefits and "$1,000.00 towards legal fees". In addition, a claim was made for vacation pay arrears. The lawyer told the client that his claim was straightforward, save the claim for vacation arrears. [6] At this meeting, the client alleges that the lawyer stated that the cost of taking legal action against Shaw would cost approximately $15,000.00 to $20,000.00. The lawyer does not recall making this statement, nor does she deny it. The lawyer put in evidence her notes (exhibit "32") of this meeting. Exhibit 32 contains notes of instruction by the client to the lawyer to send a letter to Shaw setting out the client's claim. There are no notes concerning fees. The lawyer's evidence is that a claim such as the client's claim, which she considered straightforward, litigated by summary trial, would cost between $20,000.00 to $25,000.00. [7] The law firm

and the client entered into an agreement where the law firm was to provide legal services to the client. This written offer prepared by the law firm is dated May 23, 2002 and accepted by the client on June 3, 2002, consists of three pages (exhibit "4"). The relevant parts of exhibit "4", are as follows: Our fees will generally be based on the time spent by us on your behalf. Records of that time are kept, and interim accounts will be sent to you on a regular basis, providing an outline of the services performed. At present, our hourly rates are as follows: Thomas D. Schiller, Joe Coutts, Michael J. Weiler and Colin G.M. Gibson - $280.00; Linda P. Thayer - $250.00 per hour; Paul M. Pulver and Veronica M. Ukrainetz - $205.00 per hour; Clare B. Hauer - $165.00 per hour; Neelu K. Chauhan - $130.00 per hour; and Calla Nestibo - $125.00 per hour. We reserve the right to modify these rates from time to time without notice. Our final account to you may also reflect such factors as the character and importance of the services rendered, the amount of money involved, and the results achieved. [8] The rest of exhibit "4" refers to disbursements, which were not in contention at this hearing, and other matters not in dispute or related to this review. The lawyer gave evidence that she did the vast majority of the work on this file, and the law firm's client inquiry-time (by date) documents

(exhibits "3" and "18") confirms this. These exhibits covered all the work and time spent by the law firm's lawyers on behalf of the client, not only for the accounts under review, but also the time for the accounts that had been paid by the client and not being reviewed. The lawyer stated that none of the other lawyers' hourly rate changed save and except hers, which changed from $205.00 an hour to $225.00 an hour. This change came into effect in October of 2002. LITIGATION: [9] The lawyer sent an offer of settlement to Shaw which did not lead to a settlement. The lawyer, on behalf of the client, issued a writ and statement of claim on June 27, 2002. On that date an offer to settle pursuant to Rule 37 was also served on Shaw. A demand for discovery of documents was issued on July 16, 2002, and Shaw filed a statement of defence on August 13, 2002. The statement of defence put in issue the client's position with its employer, pled that an offer had been made to the client, that the client had failed to mitigate his damages, denied that the client's wife's daycare was a hindrance to relocation and pled: multiple positions exist within and outside the cable industry which the Plaintiff would be able to assume without retraining. [10] The client responded to Shaw's demand for a list of documents, which list of documents consisted of 31 entries. Some of those entries consisted of

multiple documents. The lawyer stated that the client had volumes of documents and evidence that he had accumulated during his many years of working for Shaw. As time went on, there were supplemental lists of documents exchanged between the client and Shaw's counsel. At about the time the lawyer issued the writ and statement claim, the lawyer with the assistance of a junior lawyer in the law firm, commenced drafting affidavits in preparation for a summary trial. By November 5, 2002 the lawyer had prepared the client's notice of motion for that purpose. Accompanying the notice of motion were four affidavits. Two of these affidavits were relatively short. The client's wife's affidavit consisted of a description of her daycare, its history and the renovations made to their home for purposes of the daycare, and documents relating to the earnings of the daycare. The client's affidavit was 52 paragraphs with 156 pages of exhibits. [11] The lawyer described the client as "high maintenance". In order to reduce the telephone calls, the lawyer suggested to the client that he use e-mail to communicate with her. The client had made it clear to the lawyer that he wanted this litigation to move along. [12] The client asked the lawyer questions about the summary trial process. The lawyer responded to the client in a letter dated October 17, 2002 (exhibit "6"). In exhibit "6", the lawyer

explained each step that must be taken under the summary trial provisions of the Supreme Court Rules, including the preparation of the binder to be filed in court two days prior to the hearing of the summary trial. Exhibit "6" dealt with practical matters such as co-ordinating availability of dates of the lawyer and defence counsel. [13] On November 21, 2002, the client e-mailed the lawyer the following (exhibit "7"): Hi Veronica, I am loosing confidence. We talk tough but I am getting my ass kicked around the block by Levitt. I'm not sure that we can win now. He seems very sharp and is getting his own way with everything that he wants. At first I was assured that this was a slam dunk 18A case and should get 16 to 19 months of pay and benefits. I have $14,000.00 in bills and no real trial date in sight as Levitt is still able to make up some lame excuse and have this date postponed. He seems very confident that he can squash the 18A/51A also. What's wrong with Dec. 16? Bob [14] The lawyer responded to the client in an e-mail on the same date, and made the following statements to the client: as I have repeatedly stated, it is standard to have to go back and forth to get dates which work for everyone. I have also repeatedly stated that the Defendant will do what it can to move the matter from Summary Trial to a Full Trial and/or to delay the matter as much as possible and rack up

your costs. Howard is doing no more and no less than I would do if I was in his shoes. I have at no time assured you of any "slam dunks" either as to getting this done via Rule 18A or the ultimate award. I have given you the severance ranges provided by the courts in similar circumstances and explained the 18A process to you. [15] The lawyer then confirms with the client that the trial date is reserved for February 3, 2003, and that both counsel are available on that date. She goes on to say: As I have also repeatedly explained to you, if I refused to agree to move the hearing to a date opposing counsel is available, Howard could simply go to Court to have the date moved. You would likely be liable for his costs, as a Court would have to find we behaved unreasonably. The Defendant is entitled to be represented by the lawyer of its choosing, failing that lawyer's complete unavailability for a significant period of time. The merits of your case are not affected by this standard jousting around dates. Our assessment of your case remains the same. You have a good shot at a severance in the range set out in the Notice Chart, based on your earnings as of the date of dismissal. Your vacation pay claim uncertain, but certainly worth seeking. If the Defendant's affidavit material changes our assessment or raises any arrears of concern, we will discuss that. As for your legal costs, also

as explained to you, in the 18A process all of the work is done up front. In a trial there would be the necessary preparation costs, but your evidence would be given over the course of a 3 - 5 day trial. So the bulk of your costs would be incurred over the course of the trial. Because the 18A process requires that all the work be done in advance, you will incur the greater proportion of your legal costs in advance of the 18A. We have been extremely accommodating with respect to your legal fees. I have written off a portion Neelu's which has reduced your fees. We have also not requested payment to date. Nor have we charged interest. The lawyer then asks that their account be paid in full by the end of December 2002. She then goes on to say: Bob, it is your choice whether or not to continue to be represented by our firm. It concerns me that you are losing confidence when everything which has happened is in the normal course and when we have had numerous discussions with respect to the conduct of your case. It also concerns me that you are putting words in my mouth. I have said to you and say to you again, we are going into this 18A in a good position. But nothing in the legal system is a "slam dunk" or "guaranteed". If my assessment changes, and it may upon receipt of the affidavit material or following your examination for discovery (on January 30), I will advise of any areas of

concern. [16] Some time between May 23, 2002 and the date when the statement of defence was filed on behalf of Shaw, the client told the lawyer that Shaw was not "a nice employer" as he had experience with Shaw management. During this time, the lawyer told the client that she had previously dealt with Shaw and Shaw's counsel, Mr. Levitt. In her evidence, the lawyer said that from her past experience, she found the company "stubborn" and in for the "good fight". She further stated that the defence counsel, Mr. Levitt, would leave "no stone unturned". [17] On November 26, 2002, Shaw filed an amended statement of defence and its response affidavits; five in total. Some of these affidavits addressed the amendment. The amendment made on behalf of Shaw was that the client was aware that his job was in jeopardy and that he would not be employed for long. On December 16, 2002, the lawyer received a draft of a further amended statement of defence. It was eventually filed and dated January 13, 2003. The further amended statement of defence alleged that the client was dismissed for cause. [18] The amendments to the statement of defence required the lawyer to prepare, on two different occasions, an affidavit of the client responding to each new amendment. Besides these affidavits, a further six more affidavits were filed on behalf of the client to meet the new allegations which were

contained in 19 affidavits filed on behalf of Shaw. In addition to these affidavits, the client filed a second supplementary list of documents, the notice of motion had to be re-drafted and further legal research was conducted by the lawyer to meet the new defences. [19] To further complicate matters, the law firm representing Shaw was a Canada-wide firm, whose Vancouver lawyer dealt with dates and the exchange of documents. The lawyer, Levitt, who was handling the case was resident in Toronto. The lawyer described the communication as poor. In December of 2002, an examination for discovery of the client was scheduled on January 30, 2003. It was scheduled for a day. Shaw's counsel gave notice to the lawyer that he would not be there until noon. The lawyer described the examination for discovery as "five hard hours". Shaw's counsel wanted to continue the following Saturday, but the court reporter refused. The examination for discovery was not completed and was adjourned. Just prior to the examination for discovery Shaw's counsel said that he wanted to cross-examine some of the witnesses on their affidavits. The lawyer ignored that suggestion and it was not pursued. [20] The summary trial was heard before Madam Justice Beames on the 3rd and 4th of February, 2003. The lawyer stated that Beames J. could not conclude the plaintiff's action was unsuitable for a summary trial, but was

not prepared to rule that it could be, particularly as further evidence would be coming before the court. Beames J. adjourned the summary trial generally with liberty for the client's case to be returned to the trial list after May 1, 2003, giving Shaw an opportunity to complete the examination for discovery and further investigate the issue of cause. [21] The lawyer wrote to the client reviewing his options as it related to his litigation (attached to exhibit "8"). The lawyer was able to secure a proposed contingency fee agreement for the client's ongoing legal fees with the law firm. This contingency agreement was never discussed between the client and the lawyer, and was never signed. [22] The lawyer continued to work on the file, particularly relating to the allegations of "cause". On February 24, 2003 (exhibit "11"), the client wrote to Mr. Schiller: I am greatly concerned after reviewing the events that have occurred in this matter. I want to set out the following facts: 1. On May 14, 2002 I met with you at your office and expressed my concern about the employer's conduct and it's effect on me.

2. You advised that I consider seeing a doctor.

3. On May 15th, the following day, I was terminated from my job and offered a $58,000.00 severance cheque.

4. This was a complete surprise and I immediately attended at your office, but because you were not in, I was redirected to one of your subordinates, Veronica.

5. I was advised that I was entitled to at least double the offer and the legal costs would be $20,000.00.

6. Your firm submitted a claim for three times the amount Shaw had offered. I now find myself in an impossible situation where the crippling legal fees have been run-up to over $40,000.00 and the January 17th, 2003 $77,000.00 offer has been withdrawn by Shaw. Obviously, another approach has to be taken. Therefore, without prejudice, I will accept $53,000.00 net after all legal expense. It is my desire for us to co-operatively work together and achieve a quick and equitable solution. I hereby request a mutually agreeable meeting with you as soon as possible after March 3rd. The objective is to settle this matter within the next 30 days. I await your telephone call to confirm a meeting date or alternatively that you have achieved a $53,000.00 net settlement. At the time that this was written by the client to Mr. Schiller, the lawyer was on holiday. She returned from her vacation on March 3, 2003. On March 5, 2003, the lawyer suffered a serious health problem (detached retina) which required two surgeries. [23] The client wrote another letter to the law firm, to the attention of Mr. Schiller, dated March 12, 2003 (exhibit "11"): As you know I wrote you February 24th. You have indicated Veronica is not at work for medical reasons and her return date is unsure at this time. Considering the above and the circumstances I set out for you in my February 24th letter I need to have your

confirmation that you as Senior Counsel will immediately take control of this file. It is obvious that a junior lawyer is not a match for a Mr. Levitt and the history of this file shows it. Time is of the essence and I await your reply. [24] Mr. Schiller then responded to the client in an e-mail dated March 18, 2003 (exhibit "13"): Bob: Veronica is now back, trying to work noon to 4 p.m., or however long her vision permits without causing migraines, etc. Unfortunately, I had to talk to her about your March 12 letter which, given the extraordinary efforts she has made on your behalf, is quite offensive. I will not be taking "control" of this file. I can assure you that seniority of years would not make me a "match" for the tactics utilized by Mr. Levitt on this file. As you were told from the beginning, plaintiff's counsel can only control the process of litigation (and the associated costs) to the degree that the Rules permit. Before we first started down this road, we proposed that you give serious consideration to settlement because of the cost and time factors, notwithstanding the good merits, in our opinion, of your claim. You decided, not necessarily wrongly, to fight the matter on principle. Veronica has done a better job on the matter than I would have done, perhaps because she has more patience than either you or me. About three weeks ago, Veronica brought to me a

proposal for a contingency fee, arising from a request you made to her. We are sympathetic to any client whose finances are suffering from the costs involved in trying to litigate against a defendant to whom costs don't seem to be much of a factor. I have okayed the contingency fee proposal. If you are interested in pursuing that response to what you asked, please contact Veronica. If this reply is unsatisfactory, and you wish to have the file transferred to another firm, please let us know. We certainly do not recommend that you do so, given the further costs and consequential delays which such a step would cause. [25] The lawyer gave evidence that in order to pursue the settlement of "$53,000.00 net after all legal expenses" she needed further instructions from the client and, further clarification as to what net meant. [26] The client then ignored all communication from the lawyer and the law firm. The lawyer said she was ethically bound to continue to work a minimum on the file. By March 18, 2003, the lawyer secured June 6, 2003 as the date for the continuation of the summary trial before Madam Justice Beames. [27] On March 27, 2003, the client, together with a man called Jim, appeared at the law office to see Mr. Schiller. Neither Jim nor the client was prepared to give Jim's last name. When asked it was refused. The lawyer was present for this exchange. The client wanted

to meet with Mr. Schiller, but Mr. Schiller was not prepared to meet with the client and Jim as he wanted to know Jim's last name. This meeting took place in the outer part of the law firm's office. It ended abruptly and there was no rescheduling. The client claims that at the end of the meeting Jim gave his last name. Obviously, if he did, it was not heard by either the lawyer or Mr. Schiller. I assume, although it was not given in evidence, that the purpose of Jim's attendance was to be a witness to the anticipated conversation between Mr. Schiller and the client. [28] On April 7, 2003, the client wrote to the law firm and advised that he had made a settlement with Shaw. [29] In his evidence, the client claimed that he went to see his former employers who were happy to see him. They had a handshake and within five minutes an entire settlement was negotiated. The client, in his evidence, stated that he had agreed to confidentiality as to the amount he received and cannot disclose it. CLIENT'S COMPLAINTS: The Case would Cost between $15,000.00 and $20,000.00 [30] According to the client, this quote was made on May 23, 2003. The client signed a retainer on June 3, 2003, and no limitations as to fees are contained in this agreement. Both the client and the lawyer knew early on in the client's litigation that it was likely that Shaw would be stubborn, and Shaw's lawyer would leave

"no stone unturned". These predictions proved true and caused the client's fees to escalate. In giving his evidence at this hearing, the client said "You can't ask me to be responsible for Shaw", yet he knew from early on in his action against Shaw that this case would be hard fought. [31] In the client's e-mail to the lawyer dated November 21, 2002 (exhibit "7"), the client said: I have $14,000.00 in bills and no real trial date in sight as Levitt is still able to make up some lame excuse and have this date posponed (sic). In this e-mail, the client did not mention the limit to his legal fees despite the fact that the limit was quickly approaching, and the summary trial had yet to be heard. When this e-mail was sent by the client to the lawyer, the two amendments had not yet been made. [32] I have concluded that the law firm did not confine their legal fees to between $15,000.00 and $20,000.00 as alleged by the client. Lawyer Doing Unnecessary Work on Behalf of Client [33] The client continued to ask verbally and in writing of the lawyer as to whether she could handle Shaw's lawyer. The lawyer assured him she could. The client said at the hearing of this matter "Levitt was kicking her ass around the block". Obviously, what the client thought was appropriate behaviour, and what the lawyer thought was appropriate behaviour, are different. Shaw's counsel was also referred to in

Mr. Schiller's e-mail to the client dated March 18, 2003 (exhibit "13") when Mr. Schiller stated: I can assure you that seniority of years would not make me a match for the tactics utilized by Mr. Levitt on this file. Later in the e-mail he says of the lawyer Veronica has done a better job on this matter than I could have done, perhaps because she has more patience than either you or me. The law firm did not use the tactics of Shaw. Had they done so, the client would have been billed for such tactics. These tactics would have done nothing to assist the final resolution of the client's case. [34] The client, in his evidence, was of the view that Shaw's amendments ought to have been ignored. The client stated that his case should not have been heard by summary trial, and could have been heard by the court in one day. This view held by the client is unrealistic and has no basis. When the client's case was initially ready for summary trial, the notice of motion referred to the four affidavits to which I have already referred. It was the amendments occurring on two different occasions, and the affidavits necessary to meet these allegations, that increased the legal fees. The client claimed that his wife ought not to have had to swear affidavits. Her initial affidavit was important to meet the issue of mitigation. On reviewing exhibits 3 and 18, and the accounts under review, and in

particular those of February 1 and March 1, 2003, the fees relate to most of the work needed to meet the allegations contained in the amendments. [35] I find that the fees of the lawyer were reasonable, necessary and proper to conduct the proceeding of the client's case pursuant to s.71(2) and (3) of the LPA. The Client Seeks Rebate of Fees [36] In his submissions, the client stated he wished a rebate of fees that he had already paid. In his submissions, the client said that the total of the fees ought to be $10,308.71. As I have stated, the client did not take out an appointment to review past bills that he has paid, despite being told by the lawyer that he could do so. As a result, I will not rule on past accounts, other than to say that I heard no evidence to suggest that the lawyer did not spend the time she recorded on the client's case or that the time she spent was unnecessary for the proper conduct of the client's case. [37] It appears not to have occurred to the client that the direct settlement he made with Shaw in all likelihood is a result of the work done on his behalf by the law firm and the lawyer. When he concluded the settlement with Shaw, Shaw would have been required to spend further money on legal fees proving just cause for the client's dismissal at the summary trial. I can only be suspicious that Shaw could not provide this proof, and it was for this

reason that the settlement was concluded. The Lawyer's Fees [38] The client ought to be able to assess the cost of his legal work when it is based on an hourly fee to which he has agreed. The client was not able to do this as the lawyer in the retainer fee agreement stated "we reserve the right to modify these rates from time to time without notice". The lawyer did this in October of 2002. A lawyer ought not to be able to increase his or her legal fees unilaterally after the client agrees to a set rate without agreement from the client. The client did not raise this issue as I have. In his submissions, he attempted to calculate his legal fees, I assume, based on the $205.00 per hour, based as to what in the client's view, was necessary. [39] I reviewed the law firm's inquiry (date) sheets (exhibits 3 and 18) and extrapolated the additional $20.00 per hour that the law firm and the lawyer charged the client for the period that these accounts are under review. I have concluded the following: Feb 1/03 Account Billed Fees/PST/GST Fee/PST/GST Reduction Disbursements incl. GST/PST Total Allowed: Hours/ Fees 58.346 @$225/hr $13,128.00 1,903.56 15,031.56 $1,166.92 169.20 (1,336.12) $449.35 $14,144.79 Mar 1/03 27.8 @ $225/hr 6,255.00 906.98 7,161.98 $556.00 80.62 (636.62) $402.24 $6,927.60 May 1/03 4.3 @ 225/hr $967.50 140.29 1,107.79 $86.00 12.47 (98.47) $92.96 $1,102.28 TOTAL OF ALL

ALLOWED ACCOUNTS: LESS LAW FIRM REDUCTION: LESS CLIENT TRUST PAYMENT: TOTAL OWING: $22,174.67 (1,030.50) (1,000.00) $20,144.17 [40] I have reduced the law firm's legal fees and as a result the GST and PST, by a total of $2,071.21. I find that the total of fees, disbursements, PST and GST owing by the client to the law firm is $21,051.21. The law firm will have their costs of this assessment. This assessment took one and a half days. [41] I heard no submissions from either the law firm or the client relating to interest. No calculations of interest were presented. As a result, I have not considered interest in these reasons, nor attempted to determine whether 18% percent per annum, as called for in exhibit "4", as being reasonable at the time, when the client entered into the agreement for the payment of fees. "Master H. Hyslop as Registrar"