Zipchen v. Bainbridge et al., 2008 SKCA 87

• Judge: Richards, Smith and Wilkinson, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: September 17, 2007
• Jurisdiction: Saskatchewan
• Citations: 2008 SKCA 87;(2008), 311 Sask.R. 90 (CA)

Zipchen v. Bainbridge (2008), 311 Sask.R. 90 (CA);

      428 W.A.C. 90

MLB headnote and full text

Temp. Cite: [2008] Sask.R. TBEd. JL.004

Patricia J. Zipchen (appellant) v. Gary L. Bainbridge and Woloshyn & Company (respondent)

(No. 1153)

Gary L. Bainbridge and Woloshyn & Company (appellant) v. Patricia J. Zipchen (respondent)

(No. 1156; 2008 SKCA 87)

Indexed As: Zipchen v. Bainbridge et al.

Saskatchewan Court of Appeal

Richards, Smith and Wilkinson, JJ.A.

July 2, 2008.

Summary:

Zipchen entered into a contingency fee agreement with a solicitor in order to have him pursue a personal injury claim on her behalf. Zipchen's claim was settled for $450,000. Zipchen applied pursuant to s. 64(3) of the Legal Profession Act for a determination of whether the contingency fee agreement was fair and reasonable.

The Saskatchewan Court of Queen's Bench, in a decision reported at 265 Sask.R. 243, found that there was unfairness in the making of the contingency fee agreement and that the agreement was therefore not fair within the meaning of s. 64(3). The court reduced the solicitor's fee of $107,500 to $65,000, which was determined on a quantum meruit basis. The solicitor appealed, arguing that the trial judge erred in concluding that the contingency agreement was unfair. The solicitor also raised the issue of whether the trial judge exceeded his jurisdiction by declaring the contingency agreement void ab initio, and conducting a quantum meruit assessment. Zipchen appealed, seeking to have the quantum meruit award reduced.

The Saskatchewan Court of Appeal dismissed the appeals.

Administrative Law - Topic 2402

Natural justice - Procedure - General - Duty of fairness - [See first Barristers and Solicitors - Topic 3304 ].

Administrative Law - Topic 2493

Natural justice - Procedure - At hearing - Right to make submissions - [See first Barristers and Solicitors - Topic 3304 ].

Barristers and Solicitors - Topic 3044

Compensation - Agreements - General - Requirement that agreement be fair and reasonable - Zipchen entered into a contingency fee agreement with a solicitor in order to have him pursue a personal injury claim on her behalf - Zipchen's claim was settled - Zipchen applied pursuant to s. 64(3) of the Legal Profession Act for a determination of whether the contingency fee agreement was fair and reasonable - The trial judge found that there was unfairness in the making of the contingency fee agreement and the agreement was therefore not fair within the meaning of s. 64(3) - The Saskatchewan Court of Appeal found no tenable basis to interfere with the trial judge's finding - The trial judge emphasized the weakness of the solicitor's rationale for requiring a contingency agreement simply on the ground that it was his firm's policy - The trial judge also considered that the solicitor had expressly indicated to Zipchen that there was a process by which the court would substitute an hourly rate if the agreement was deemed unfair - The solicitor also should have explained the meaning of the terms "future loss of income" and "taxable costs" to Zipchen - Full understanding and appreciation of the agreement was lacking and an undue advantage was taken as a result - See paragraphs 55 to 66.

Barristers and Solicitors - Topic 3132

Compensation - Agreements - Contingent fees - Modification or cancellation or departure from agreement (incl. premiums) - After Zipchen's personal injury claim was settled, she applied pursuant to s. 64(3) of the Legal Profession Act for a determination of whether the contingency fee agreement which she had entered into with her solicitor was fair and reasonable - The trial judge found that the agreement was unfair and assessed the solicitor's fee on a quantum meruit basis - The solicitor appealed, arguing that the trial judge exceeded his jurisdiction by declaring the contingency agreement void ab initio and conducting a quantum meruit assessment - The Saskatchewan Court of Appeal rejected the argument - The Court of Queen's Bench possessed an inherent jurisdiction over lawyers, and lawyers' accounts, that had not been ousted by the Act - The court stated that "The preferable view is that the remedies in these matters are flexible, as they must be when governed entirely by equitable principles. Accordingly, there is no exclusive remedy, or prescribed outcome, following a finding of unfairness in the making of a contingency agreement ... A fee agreement is capable of being enforced in whole or in part, varied or rectified, or declared entirely null and void ... as the equities of the situation dictate" - No issue could be taken with the trial judge's approach - He addressed the relevant factors and arrived at a quantum meruit award within a range of reasonable outcomes predicted by the case law and reasonably supported by the evidence - See paragraphs 67 to 93.

Barristers and Solicitors - Topic 3137

Compensation - Agreements - Contingent fees - Duty to client - [See Barristers and Solicitors - Topic 3044 ].

Barristers and Solicitors - Topic 3304

Compensation - Measure of compensation - Quantum meruit - Reasonable charges - Zipchen entered into a contingency fee agreement with a solicitor in order to have him pursue a personal injury claim on her behalf - Zipchen's claim was settled for $450,000 - Zipchen applied pursuant to s. 64(3) of the Legal Profession Act for a determination of whether the contingency fee agreement was fair and reasonable - The trial judge found that the contingency agreement was unfair - The trial judge reduced the solicitor's fee of $107,500 to $65,000, which was determined on a quantum meruit basis - The solicitor appealed, arguing that there was procedural unfairness in the process adopted by the trial judge - The solicitor equated the quantum meruit assessment with a taxation, and the essence of his complaint was that he was taken by surprise and denied a full and fair opportunity to address the quantum of the fee - The Saskatchewan Court of Appeal rejected the ground of appeal - The assertion of prejudice was speculative at best - It had not been suggested that any of the factors relevant to a quantum meruit assessment were insufficiently addressed in evidence due to the way the proceedings unfolded - See paragraphs 99 to 109.

Barristers and Solicitors - Topic 3304

Compensation - Measure of compensation - Quantum meruit - Reasonable charges - Zipchen entered into a contingency fee agreement with a solicitor in order to have him pursue a personal injury claim on her behalf - Zipchen's claim was settled for $450,000 - Zipchen applied pursuant to s. 64(3) of the Legal Profession Act for a determination of whether the contingency fee agreement was fair and reasonable - The trial judge found that the contingency agreement was unfair - The trial judge reduced the solicitor's fee of $107,500 to $65,000, which was determined on a quantum meruit basis - Zipchen appealed, arguing that the quantum meruit award should have been discounted due to the solicitor's failure to advise her that he was also acting for Saskatchewan Health-Care Association (SAHO) with respect to its subrogated claim - The Saskatchewan Court of Appeal rejected this ground of appeal - The trial judge had noted that Zipchen's complaints about the handling of the SAHO account were, in substance, a claim for damages and a claim of that nature could not be determined in a summary process confined to the issue of fee determination - Zipchen's complaints, which were founded in negligence, breach of fiduciary duty and misrepresentation, required the formality of an action so that the solicitor would have an opportunity to respond directly in the appropriate forum - See paragraphs 94 to 98.

Barristers and Solicitors - Topic 3313

Compensation - Measure of compensation - Effect of conflict of interest - [See second Barristers and Solicitors - Topic 3304 ].

Barristers and Solicitors - Topic 3313.1

Compensation - Measure of compensation - Effect of negligence, breach of contract or fiduciary duty - [See second Barristers and Solicitors - Topic 3304 ].

Courts - Topic 2004

Jurisdiction - General principles - Inherent jurisdiction - [See Barristers and Solicitors - Topic 3132 ].

Cases Noticed:

Speers v. Hagemeister (1974), 52 D.L.R.(3d) 109 (Sask. C.A.), refd to. [para. 41].

Simard v. Tapp (1998), 170 Sask.R. 312 (Q.B.), refd to. [para. 49].

Dear v. McLennan Ross (2008), 429 A.R. 75; 421 W.A.C. 75; 2008 ABCA 137, refd to. [para. 49].

Smigarowski v. Mugliston, [1951] 3 D.L.R. 287 (Sask. C.A.), refd to. [para. 52].

Stuart, Re; Ex parte Cathcart, [1893] 2 Q.B. 201 (C.A.), refd to. [para. 55].

Solicitor, Re, [1961] Ch. 491, refd to. [para. 71].

Gola v. Philion, [1920] 3 W.W.R. 348 (Sask. K.B.), refd to. [para. 73].

Vanin v. Noble, Johnston & Associates (1994), 119 Sask.R. 262 (Q.B.), refd to. [para. 75].

Harrison et al. v. Tew, [1990] 1 All E.R. 321 (H.L.), refd to. [para. 76].

MacLeod v. Harrington (1995), 69 B.C.A.C. 1; 113 W.A.C. 1 (C.A.), refd to. [para. 78].

Peel Terminal Warehouses Ltd. v. Wootten, Rinaldo & Rosenfeld (1978), 21 O.R.(2d) 857 (C.A.), refd to. [para. 79].

Mealey v. Godin et al. (1999), 221 N.B.R.(2d) 372; 567 A.P.R. 372 (C.A.), refd to. [para. 80].

Abel v. Burke (2000), 138 B.C.A.C. 105; 226 W.A.C. 105; 2000 BCCA 284, refd to. [para. 83].

Waldock v. Bissett (1992), 13 B.C.A.C. 203; 24 W.A.C. 203; 92 D.L.R.(4th) 532 (C.A.), refd to. [para. 83].

Koliniotis v. Tri Level Claims Consultants Ltd. (2005), 201 O.A.C. 282 (C.A.), refd to. [para. 88].

Re Solicitors, [1972] 3 O.R. 433 (T.O.), refd to. [para. 90].

Yule v. Saskatoon (City) (No. 4) (1955), 16 W.W.R.(N.S.) 305 (Sask. C.A.), refd to. [para. 90].

Sandstrom & Scott and United Chemicals Ltd., Re (1989), 74 Sask.R. 59 (C.A.), refd to. [para. 90].

Statutes Noticed:

Legal Profession Act, S.S. 1990-91, c. L-10.1, sect. 64(1), sect. 64(3), sect. 64(4) [para. 51].

Authors and Works Noticed:

Orkin, Mark M., The Law of Costs (2nd Ed.), generally [para. 81].

Counsel:

Patricia J. Zipchen, in person;

Robert G. Kennedy, Q.C., for Gary L. Bainbridge and Woloshyn & Company.

These appeals were heard on September 17, 2007, before Richards, Smith and Wilkinson, JJ.A., of the Saskatchewan Court of Appeal. The following judgment of the Court of Appeal was delivered by Wilkinson, J.A., on July 2, 2008.