



COURT OF
APPEAL FOR BRITISH COLUMBIA




Citation:



Nathanson,
  Schachter & Thompson LLP v. Boss Power Corp.,









2016 BCCA 1




Date: 20160104

Docket: CA42816

Between:

Nathanson, Schachter & Thompson
LLP

Respondent

(Lawyers)

And

Boss Power Corp. and Blizzard Uranium
Corp.

Appellants

(Clients)




Before:



The
  Honourable Mr. Justice Donald

The
  Honourable Mr. Justice Chiasson

The
  Honourable Mr. Justice Goepel




On appeal from:  An order of the Supreme Court of British
Columbia, dated
May 1, 2015 (
Nathanson, Schachter & Thompson LLP v. Boss Power
Corp.
,
2015 BCSC 702, Vancouver Docket S148084).




Counsel for
  the Appellants:



D.B. Kirkham, Q.C. and P.A. Brackstone





Counsel for
  the Respondent:



I.G. Nathanson, Q.C. and J.K.
  Lockhart





Place and
  Date of Hearing:



Vancouver, British Columbia

October 6, 2015





Place and
  Date of Judgment:



Vancouver, British Columbia

January 4, 2016









Written
  Reasons by:





The
  Honourable Mr. Justice Chiasson





Concurred
  in by:





The
  Honourable Mr. Justice Donald

The
  Honourable Mr. Justice Goepel








Summary:

The appellants included mineral claims owned beneficially
by a shareholder in the settlement of litigation with the Province of British
Columbia.  The appellant shareholder and his associates (the Beruschi Group)
took the position that the respondent, which acted for the appellants,
improperly included the claims.  This resulted in a lengthy and protracted
dispute, the resolution of which included the assignment to the Beruschi Group
of all of the appellants rights against the respondent, including the right to
seek a review of its accounts.  The application for a review was made out of
time.  An application to extend time was made by the Beruschi Group.  The
chambers judge held that the assignment was champertous.  The appellants
challenge this finding on appeal.  An issue arose whether the right to seek a
review is assignable.  The respondent asserts that the Beruschi Group does not
have standing to pursue a review and that the assignment was champertous.  It
also contends that there are no special circumstances that would warrant
extending the time for a review.  Held: appeal allowed.  The Legal
Profession Act does not oust the inherent jurisdiction of the court to review
the accounts of lawyers.  It is an implied term of the retainer contract that
accounts can be reviewed.  The right to a review is a chose in action that is
assignable.  The Beruschi Group has standing to seek a review.  The assignment
was not champertous because the Beruschi Group had a pre-existing commercial
interest in seeking a review.  In the circumstances of this case, there are
special circumstances that warrant an extension of time.

Reasons for Judgment of the Honourable
Mr. Justice Chiasson:

Introduction

[1]

This appeal
concerns provisions of the
Legal Profession Act
, S.B.C. 1998, c. 9 [the
Act
], the inherent jurisdiction of the court to review the accounts of
lawyers and the assignability of the right to have an account reviewed.  The
relevant provisions of the
Act
are:

70
(1)   Subject to subsection (11),
the person charged or a person who has agreed to indemnify that person may
obtain an appointment to have a bill reviewed before

(a)  12 months after the
bill was delivered under section 69, or

(b)  3 months after the
bill was paid,

whichever
occurs first.

[Under the
definitions in s. 64,
person charged
includes a person who has
agreed to pay for legal services, whether or not the services were provided on
the persons behalf.]



(5) 
The following people may obtain an appointment on behalf of a lawyer to have a
bill reviewed:



(c) 
the lawyers assignee;



(11)  In
either of the following circumstances, the lawyers bill must not be reviewed
unless the court finds that special circumstances justify a review of the bill
and orders that the bill be reviewed by the registrar:

(a)
 the lawyer has sued and obtained judgment for the amount of the bill;

(b)  application
for the review was not made within the time allowed in subsection (1).

Background

[2]

The appellant,
Blizzard Uranium Corp., is a wholly owned subsidiary of the appellant Boss Power
Corp. (Boss).  Mr. Anthony Beruschi owned approximately 33 per cent
of the shares of Boss.  I shall refer to him and his companies as the Beruschi
Group.

[3]

Boss and Blizzard
Uranium owned various uranium claims in the Province of British Columbia.  In
2008, the Province established a mineral reserve for uranium which effectively
expropriated the appellants claims.

[4]

In October 2008,
the appellants retained the respondent law firm to sue the Province.  In March
2011, acting on instructions from the president and chief executive officer of
Boss, counsel amended the appellants notice of civil claim to include B Claims. 
These claims were held by Blizzard Uranium in trust for the Beruschi Group.  It
is counsels position that he did not know this.  The Beruschi Group asserts
that it did not consent to the inclusion of the B Claims and did not know
they were included.

[5]

In October 2011,
counsel negotiated a settlement with the Province whereby the appellants would
transfer all of the claims referred to in the notice of civil claim to the
Province on payment of $30 million.  On learning this, the Beruschi Group
objected and refused to authorize transfer of the B Claims.  The
appellants were unable to complete the settlement transaction.

[6]

The Beruschi Group
took the position that the respondent had acted negligently by including the B Claims
in the litigation.  It also asserted that the majority of the board of
directors of Boss were in breach of fiduciary duty.  A lengthy and protracted
battle ensued which included arbitration, a contested proxy dispute, court
applications in connection with that dispute, and other court applications. 
The respondent acted for the appellant with respect to matters concerning the
Province and other issues.  The Beruschi Group objected to this.

[7]

The appellants and
the Beruschi group reached a settlement which was reflected in a letter
agreement dated March 28, 2014.  It contained a number of provisions
relevant to this appeal:

1.       the Beruschi Group would
transfer the B Claims to the Province and would receive $3,600,000 as an
initial payment;

2.       Boss would receive
$2,500,000 with the balance of the Provinces settlement funds deposited in
escrow;

3.       a new subsidiary of Boss,
which became Blizzard Finance Corp., would be incorporated;

4.       Boss would be reorganized
pursuant to a plan of arrangement under the
Business Corporations Act
,
S.B.C. 2002, c. 57;

5.       Boss was to assign any and
all of Bosss potential causes of action against, and rights to, claim
compensation of any kind whatsoever from the respondent to Blizzard Finance;
Blizzard Finance also was assigned Bosss rights to dispute and recover
payments made by Boss on [the respondents] accounts;

6.       Boss
was to pay the respondents accounts issued in connection with the prosecution
and settlement of the action against the Province.

[8]

It was envisioned
that the steps and documents required to effect the settlement would be taken
soon after March 2014, but there was delay.

[9]

The parties
entered into an Arrangement Agreement dated November 21, 2014.  It recited
the agreement to assign Bosss rights against the respondent and attached a
plan of arrangement and assignment.  The plan of arrangement was approved by
the Court on January 22, 2015.  In Article 2, the plan stated that it
was made pursuant to, is subject to the provisions of and forms part of, the
Arrangement Agreement  The assignment was dated January 23, 2015.  It
referred to the March 2014 letter agreement.

[10]

An issue arose at
the hearing of the appeal concerning the timing of the assignment relative to
the approval of the plan of arrangement.  Having reviewed the documents, I am
satisfied that nothing turns on this point.

[11]

On March 27,
2014, a draft of the letter agreement was sent to the respondent.  Its final
bill was sent on May 30, 2014 and was paid from the settlement proceeds on
June 3, 2014.  It is common ground that the management of Boss did not
dispute the amount of the respondents accounts.

[12]

In September 2014,
after the three-month period specified for seeking a review, the Beruschi Group
became aware that the respondents bill had been paid and asked Boss to take
out an appointment to review the respondents accounts pursuant to the
provisions of the March 2014 letter agreement.  The appellants did so.

[13]

The respondent
took the position that the appointment was out of time.  Although the plan of
arrangement had not yet been approved, on December 30, 2014, the Registrar
directed that Blizzard Finance apply for an extension of time pursuant to
s. 70(11) of the
Act
.  It did so.

[14]

On May 1,
2015, Mr. Justice McEwan dismissed the application to extend time.

Trial Reasons

[15]

The judge began by
setting out ss. 70(1) and (11).  He then discussed the background of
the dispute between the appellants and the Beruschi Group which culminated in the
March 2014 letter agreement.  He stated:

[11]      Something
called a letter agreement dated March 28, 2014 was sent to the lawyers.  It
stated an
intention
that Boss Power would assign to the new company
(Blizzard) any of its right to claim compensation against the lawyers in
negligence, breach of contract, breach of fiduciary duty, and breach of trust.

[16]

Boss was obliged
to pay the respondents accounts.

[17]

The judge
described the initiation of the review proceedings as follows:

[14]      On
September 4, 2014, a lawyer named Paul Brackstone, counsel for Mr. Beruschi,
an anticipated shareholder of Blizzard, asked whether the lawyers had billed
Boss Power and whether the bill had been paid. On October 30, 2014 an
appointment to review the bill was filed by Boss Power.

[15]      Blizzard
took an assignment of the rights under the appointment on January 23, 2015,
when its agreement with Boss Power concluded.

[18]

The judge referred
to a number of authorities addressing the special circumstances requirement in
s. 70(11).  He stated:

[18]      There
are a number of judicial pronouncements to the effect that the threshold is not
high (see:
Bull Housser & Tupper v. GPF Holdings Corp.
, [1998]
B.C.J. No. 2773 (S.C.) at para. 15), and that the determination of
proof of special circumstances requires a balancing of the degrees of
prejudice to either party, leading, in the end, to a question of whether it is right
and reasonable to make the order. In
Thornett v. Bull, Housser & Tupper
(1998), 34 C.P.C. 4th 180 (B.C.S.C.), this court, per Hutchinson J.
observed:

[7]        There
is no formula established by the case law to determine when special
circumstances arise. Each case must stand on its own circumstances and the
court must decide in each case whether the circumstances are such that it is
right and reasonable that the bill should be taxed, even though it has been
paid and the time for taxing the bill has elapsed [authorities omitted].

[19]

The judge observed
at para. 20 that the size of the bill may be a special circumstance.  He
recapitulated the position of Blizzard Finance:

[21]      Blizzard
submits, in summary, that if no special circumstances order is made, it will be
prejudiced because it will have lost a right to review a bill it had no
capacity to challenge within the time limit stipulated in s. 70(1) of the
Legal
Profession Act
. It submits that, on the other hand, the lawyers will not be
prejudiced if a special circumstances order is made, because they knew an
assignment was intended and were in a position to prepare themselves for
Blizzards challenge.

[20]

The respondent
relied on the payment of the accounts without protest by the appellants.  It
asserted that Blizzard Finance had no standing to pursue a review and that the
assignment was champertous.  The judge turned to the law of champerty, stating:

[27]      Champerty
is a species of maintenance. In
Thomson v. Wishart
(1910) 16 C.C.C. 447
the Manitoba Court of Appeal defined maintenance as follows:

Maintenance,
which includes champerty, is defined as the act of assisting the plaintiff in
any legal proceeding in which the person giving the assistance has no valuable
interest, or in which he acts from any improper motive: Stephen Dig.,
art. 141.

* * *

Although
maintenance and champerty were once crimes, and are still sometimes classed as
such, they are now obsolete as crimes and are only invoked in respect of the
invalidity or illegality of contracts that may involve one or other of them.

[28]      In
Silverado
Oilfield Ventures Ltd. v. Davidson
, [2014] 6 W.W.R. 295 (ABQB) [
Silverado
],
the court observed:

25        As
noted in
McIntyre Estate v. Ontario (Attorney General)
(2002), 61 OR
(3d) 257 (CA) at para 32, the fundamental aim of the law of champerty and
maintenance is the protection of the administration of justice from abuse. It
is a principle of public policy.

26        Maintenance
is directed against those who become involved with the litigation of others in
which the maintainer has no interest and for an improper motive, which may
include but is not limited to officious intermeddling or stirring up strife.
Champerty is an egregious form of maintenance where the maintainer shares in
the profits of the litigation. Without maintenance, there can be no champerty.
There is no maintenance if the alleged maintainer has a justifying motive or
excuse:
McIntyre Estate
at paras 26, 27, 28 and 34.

27
Fredrickson
v. Insurance Corp of British Columbia
(1986), 3 BCLR (2d) 145 (CA), affd
[1988] 1 SCR 1089 [
Fredrickson
], remains the leading case in Canada with
respect to the rule against champerty and maintenance. Justice McLachlin (as
she then was) referred to the general rule that a bare cause of action in tort
is not assignable, noting that the exact ambit of the rule is elusive. She
commented at para 23 that the rule is subject to a number of exceptions,
and in each case:

...
the court must ask itself whether the assignment can fairly be seen as prompted
by a desire to advance the cause of justice rather than as intermeddling for
some collateral reason ...

[29]      In
Fredrickson
, referred to in
Silverado
, a party who was found liable
for damages in excess of the limits of his automobile insurance assigned his
right to sue the insurer to the plaintiff to recover the excess. McLachlin J.A.
(as she then was) noted:

While
the entire transaction must be looked to, the essential question to be
considered in determining whether the assignment smacks of maintenance or
champerty is whether the assignee possessed the requisite financial interest at
the time of the assignment. In my view, the fact that at some earlier date the
interests of the assignee and the assignor were opposed, does not negate the
fact that when the assignment here in question was made, Miss Nielsen had
a very real financial interest in obtaining it. She had a judgment. The cause
of action of which she took an assignment represented her only means of
obtaining satisfaction of that judgment. Her interest in the cause of action
assigned is not created by the assignment, in which case it might well be
champertous, but antedated and existed independently of the assignment. The
assignee, in pursuing the assigned cause of action, does not seek to make a
profit, but only to recover the amount of her judgment. Moreover, she is not a
stranger to the action assigned. She was involved in the proceedings which give
rise to it.

[30]      McLachlin J.A.
also noted that the rule was similar for contract cases:

The rule
precluding the assignment of mere rights of action in contract is based on the
rule against maintenance and champerty. As in the case of causes of action in
tort, where the assignee possesses a sufficient pre-existing interest in the
cause of action assigned, the suggestion of maintenance is negated and the
assignment is valid.

[21]

The judge commented
on the assignment agreement:

[33]      The
assignment agreement purports to assign to Blizzard any rights Boss Power may
have had against the lawyers for their part in the inclusion of the B claims
in the original settlement. Since at least March 28, 2014 the
intention
of Boss Power and Blizzard to conclude an agreement assigning Blizzard the
right to claim compensation against the lawyers for negligence, breach of
trust, breach of contracts, and breach of fiduciary duty was known to the
lawyers. The effect of the assignment, from Blizzards perspective, is that it
acquired the right to sue the lawyers for Boss Powers loss of the $3.6 million
paid to Mr. Beruschi, and to tax their fees. [Emphasis in original.]

[34]      Blizzards
claim is that its dissident position within Boss Power, followed by the
assignment, gives it a sufficient interest to bring the matter to the attention
of the court. They submit furthermore that the amount of the bill relative to
the hourly value of the work is on its face so disproportionate that the courts
supervisory jurisdiction under the
Legal Profession Act
ought to be
engaged, and that the court ought to find that special circumstances have
been established.

[22]

The judge rejected
this contention.  He stated:

[35]       that
dissent within Boss Power as to the value of the lawyers services is not a financial
interest as described in the case law. Collective entities like corporations
deal with other entities and individuals through authorized representatives.
The lawyers were not obliged to poll dissenting members to satisfy themselves
that they were dealing with the entity lawfully. In this case the evidence is,
at most, that the lawyers had been made aware that there was dissatisfaction
within
Boss Power respecting the settlement. There is nothing that undermines the
normal inference that the lawyers, in discussing their account and the
disbursement of funds with Boss Power, dealt with representatives authorized to
deal with them, nor is there anything to suggest that the passage of three
months without protest by those representatives was indicative of anything
other than that Boss Power was satisfied with the account. Had the dissidents
become the authorized representatives of the company before three months had
elapsed, matters might have been different, but they never acquired that
standing.

[36]      The
effect of Blizzards submission is that an interest they were unable to advance
within the company by gaining control of Boss Power, and with it, the authority
to deal directly with Boss Powers lawyers, may be asserted from outside by
means of an assignment to an entity that did not exist until several months
after Boss Power had paid the bill. That is to argue that a financial interest
the Blizzard dissidents could not assert within Boss Power, owing to the manner
in which corporate entities operate at law, materialized upon assignment to a
corporate entity they did control. This clearly offends the rule that for such
an assignment to be valid, the assignee must possess a sufficient pre-existing
interest in the cause of action assigned. Here, the interest only came about,
if at all, upon the assignment. The transaction therefore offends the rule
against maintenance.

[37]      If
I am wrong about that, or if the issue remains in doubt, the question, in any
event, is what interest, relative to the bill, was actually assigned. Boss
Power assigned an interest it did not assert in time, and had no apparent
interest in pursuing on its own behalf. At most Boss Power assigned the
opportunity to a legal stranger to assert the chance afforded by s. 20(11)
of the
Legal Profession Act
to persuade the court that special
circumstances justified a review.

[23]

The judge
continued:

[39]       Boss
Power never complained about the bill. All it has done is facilitate Blizzards
opportunity to advance a claim if it can, as an incident of extricating itself
from an unhappy internal dispute. Blizzard had no pre-existing financial
interest: all it had was the prospect of making a grievance out of something
that was not a grievance to the party who paid the bill.

[40]      The
foundation of that grievance is principally that the size of the bill,
particularly when compared to the hourly rate value of the work, should be a
matter of interest to the court as it was in
Doig
[
Doig v. Davidson
Muir
, 48 B.C.L.R. (3d) 53 (C.A.)]. Were this a case as between the lawyers
and a client, or between the lawyers and a person who had actually paid the
lawyers bill, this might be more persuasive. As I have noted, however,
Blizzard was neither a person charged nor a person who had agreed to
indemnify Boss Power and thus falls outside the class of entities who may
apply to tax a lawyers bill before three months has elapsed.



[42]      The
Blizzard dissidents unhappiness with the settlement was not a pre‑existing
interest in the requisite legal sense, and the purported assignment is,
accordingly, a species of maintenance.

[43]      It
is also offensive on the grounds that the assignment is an attempt to assert an
interest in the bill not shared by the assignor. Boss Power had no interest in
challenging the bill, except as a bargaining chip in its dealing with the
Blizzard dissidents. This is surely improper.

[24]

The judge
considered that the assignment was of an abstract grievance because the
appellants did not dispute the respondents accounts.  He added that the size
of the bill alone would not have moved him to find special circumstances.

Positions of the Parties

[25]

The appellants
assert that the judge erred in finding that the assignment was champertous and in
suggesting that there were not special circumstances justifying an extension
of time to review the account.

[26]

The respondent contends
that Blizzard Finance does not have standing to pursue a review of its
accounts.  It states that the judge correctly concluded that the assignment was
champertous and that the assertions of the appellants are not special
circumstances as required by s. 70(11) of the
Act
.

Discussion

Assignment

[27]

In their factum,
the appellants state:

51.       The
right of a client to require the assessment of the account of a lawyer is a
chose in action and is assignable.

[28]

In support of this
assertion, they rely on
Cem Ali (Re)
, 2011 BCSC 822, where Mr. Justice
Burnyeat observed at para. 40:

The
right of a client to require the assessment of the account of a lawyer is a
chose [in] action arising either by way of the contract between the client and
lawyer or by way of the statutory provisions created by the
Legal Profession
Act
.

Consideration
of the provisions of the
Act
engages the issue of standing, but the
first issue is the assignability of the right to an assessment as an implied contractual
term.

[29]

The
Act
does
not provide for the assignment of a clients right to an assessment.  In the
absence of an express contractual provision providing for assignment, the right
to assign the right to an assessment must be an implied contractual term.  It
is said to flow from the courts inherent jurisdiction to review lawyers
accounts.

[30]

In their reply
factum at para. 24, the appellants assert:

There is no reason in public policy or
otherwise why an assignment of a right to review should be treated any
differently than the assignment of a cause of action in negligence.

The
difference may be s. 70 of the
Act
.

[31]

Causes of action
against lawyers for negligence are not dealt with in the
Act
.  The
common law or contractual right to do so is not affected by the legislation.  The
assessment of lawyers bills is addressed in the legislation.  The question is
whether the
Act
provides a code for dealing with assessments so as to
exclude the inherent jurisdiction of the court to do so.

[32]

In
Harrington
(Guardian ad litem of) v. Royal Inland Hospital
(1995), 14 B.C.L.R. (3d)
201 (C.A.),

writing for a majority of this Court, Mr. Justice Hinds
observed:

[192]    In
my view there is no distinction between the inherent jurisdiction of a judge of
a superior court to review a solicitors bill of costs and the inherent
jurisdiction to review the reasonableness of a solicitors fee arising out of a
contingency fee agreement. That prevails whether or not the contingency fee
agreement has been approved in principle by a previous court order, or whether
or not the contingency fee agreement involves an infant.

[33]

Hinds J.A.
set out the relevant provisions of the
Act
and then stated:

[196]    In my
view, the inherent jurisdiction of the court was not curtailed by the statutory
enactments contained in s. 71(1), (2), (3) and (4) and s. 78(8) and (9)
of the
Legal Profession Act
.

[197]    The
second basis for jurisdiction in the circumstances of this case is the parens
patriae inherent jurisdiction of the court to protect the welfare of infants.

[198]    In
Deans
v. Armstrong
[(1983), 46 B.C.L.R. 273 (S.C.)] the Chief Justice had
directed that a substantial contingency fee sought by a solicitor who had
negotiated a large structured settlement for an infant plaintiff be referred to
the registrar for taxation. On taxation the Master (acting on behalf of the
registrar) reduced the amount of the fee. The solicitor appealed the taxation
and in the course of his decision with respect to the appeal McKenzie J.
considered the jurisdictional basis for the reference by the Chief Justice. At
pp. 278-279 he said this:

By
what authority did the Chief Justice refer this matter to the district
registrar for taxation...

I
do not think there is any mystery about the authority to refer, and I infer
that the reference was made under this courts inherent jurisdiction.
Wallace J. examined this jurisdiction in relation to legal bills in
Ladner
Downs v. Thauberger
, [1983] 5 W.W.R. 522 (B.C.S.C.). At p. 532 he
said:



He
also adopted the statement of I.H. Jacob in his work The Inherent
Jurisdiction of the Court (1970), at p. 23:

The
inherent jurisdiction of the court may be invoked in an apparently
inexhaustible variety of circumstances and may be exercised in different ways.

One
such way is, of course, the parens patriae inherent jurisdiction of the court
to guard the welfare of infants as expounded in
Wellesley v. Beaufort (Duke)
(1827), 2 Russ. 1 at 18, 38 E.R. 236, affirmed by the House of Lords
in 2 Bli. N.S. 124, 4 E.R. 1078.

My
conclusions up to this point are that the Chief Justice referred this matter to
the registrar for taxation for two basic reasons  because the fee was
extraordinarily large, and because an infant was involved. He did so under the
courts inherent jurisdiction.

[199]    I
conclude that because the plaintiff in this case was an infant the court had,
under its parens patriae inherent jurisdiction, the right to review the
contingency fee agreement. Moreover, it had jurisdiction to determine the
reasonableness of the contingency fee and the amount thereof to which the
solicitor was entitled.

[34]

Mr. Justice Finch
(as he then was) agreed with the reasoning of Hinds J.A.

[35]

In
Barnard,
Robertson, Heisterman & Tait (Re)
(1926), 37 B.C.R. 161, [1926] 3
D.L.R. 113 (C.A.) [
Barnard, Robertson
], two of five members of this
Court suggested that a limitation provision in the
Legal Professions Act
,
R.S.B.C. 1924, c. 136, barred an application for the delivery of a
solicitors bill of costs for taxation.  The other judge who was considered to
be in the majority did not comment on the issue.  The relevant sections of the
legislation stated:

100.     Notwithstanding
any law or usage to the contrary, any barrister or solicitor in the Province
may contract, either under seal or otherwise, with any person as to the
remuneration to be paid him for services rendered or to be rendered to such
person in lieu of or in addition to the costs which are allowed to said
barrister or solicitor, and the contract entered into may provide that the
barrister or solicitor is to receive a portion of the proceeds of the
subject-matter of the action or suit in which the barrister or solicitor is or
is to be employed, or a portion of the moneys or property as to which the
barrister or solicitor may be retained whether an action or suit is brought for
the same or a defence entered or not, and such remuneration may also be in the
way of commission or percentage on the amount recovered or defended against, or
on the value of property about which any action, suit, or transaction is
concerned.

101.     At
any time within three months after the making of the contract, the person who
has so contracted with a barrister or solicitor, or the representative of such
person, may apply by motion or petition to a Judge of the Supreme Court; and if
the Judge does not consider the contract fair and reasonable, he shall have
power either to modify the contract or to order the contract to be cancelled,
and the costs, fees, charges, and disbursements in respect of the business done
to be taxed in the same manner as if no such contract had been made.

[36]

Referring to
Barnard,
Robertson
in
Monteith v. Calladine
(1964), 47 D.L.R. (2d) 332
at 336, 49 W.W.R. 641 (B.C.C.A.), Davey J.A. stated:

Under
Re Solicitors
[
Barnard, Robertson
], the failure to move within
the stipulated time bars not only the statutory right of review but also the
inherent jurisdiction of the Court, although if the matter had been at large, I
should have preferred the conclusion of Martin and Galliher, JJ.A., that
the limitation does not touch the inherent jurisdiction of the Court.

[37]

Neither of these
cases was referred to in
Harrington
, but it would appear that from at
least 1926 it has been considered that the law in this Province is that a limitation
provision in the
Act
does oust the inherent jurisdiction of the court to
review contracts between clients and lawyers providing for the remuneration to
be paid to the lawyer.  In my view, while that does not resolve the question
whether s. 70 has ousted the courts inherent jurisdiction to assess lawyers
accounts, it provides an example of the possible effect of legislation on the
inherent jurisdiction of the court.

[38]

Both
Barnard,
Robertson
and
Monteith
concerned the review of agreements, which were
dealt with then and in the present legislation separate from provisions dealing
with taxing lawyers accounts.  It also is instructive to consider what was
addressed by the members of this Court in
Barnard, Robertson
.

[39]

The headnote of
the case in the British Columbia Reports states:

Per
MACDONALD, C.J.A., McPHILLIPS
and MACDONALD JJ.A.: That the application for an order for delivery of a
bill for taxation should be dismissed not only on the ground that the
application was not made within three months as required by section 101 of
the Legal Professions Act but also on the general law applicable to the facts
disclosed even if the section should not be regarded as a bar.

[40]

The Chief Justice
allowed the appeal because the proceeding was not taken within the delay
mentioned in section 101 of the Legal Professions Act.  He did not refer
to the judgment of Mr. Justice MacDonald.  Mr. Justice McPhillips
stated simply that he allowed the appeal.  Mr. Justice Martin, with whom
Mr. Justice Galliher agreed, also allowed the appeal, largely relying on
the inherent jurisdiction of the court to review the accounts of lawyers.

[41]

MacDonald J.A.
stated at 178:

on the facts disclosed in the material filed, this section [s. 101], once
the agreement is produced, effectively bars the application.

He continued:

As,
however, two of my brothers take a contrary view in respect to section 101
creating a bar and the matters involved are of some importance I will deal with
the question on the merits apart altogether from the view expressed in regard
to the limitations imposed by said section.

[42]

MacDonald J.A.
did so and rejected the clients position on the merits.  He concluded at 183:

the application for an order for the delivery of a bill and for taxation should
have been dismissed, not only on the ground that the application was not made
within the three months referred to in section 101 of our Legal Professions
Act, but also on the general law applicable to the facts disclosed even if said
section should not be regarded as a bar.
Pro forma
the appeal should be
allowed as, with deference, the proper course was not pursued below.

[43]

Harrington
concerned the approval of an infant
settlement.  In dissenting reasons, Madam Justice Southin observed that the
application that led to the orders under appeal was not to determine the fees
but simply to authorize payment in accordance with the agreement which had
received the approval of the court.

[44]

In
Harrington
,
Southin J.A. relied on
Harrison v. Tew
, [1990] 2 A.C. 523, [1990] 1
All E.R. 321 (H.L.), and distinguished the analysis of Wallace J. in
Ladner
Downs
on the basis that it had been overtaken by
Harrison
.  She
concluded that:

[143]    
the sections of the
Legal Profession Act
now in force clearly provide a
code by which legal fees are to be assessed.  There is no longer an inherent
jurisdiction.

[45]

The majority in
Harrington
clearly was aware of the analysis undertaken by Southin J.A.  It preferred
the approach of Wallace J. and specifically held that the inherent
jurisdiction of the court to assess a lawyers bill was not ousted by the
legislation.

[46]

The applicable
legislation in
Harrington
is analogous to the legislation applicable to
the present appeal.  Although the circumstances in
Harrington
differ
from those in the present case, both Southin J.A. and the majority were
considering whether the legislation was a complete code that ousted the
inherent jurisdiction of the court.  The majority held that it did not.  In my
view, it is not open to a division of this Court to reach a contrary conclusion.

[47]

There being an
inherent jurisdiction in the court to order the review of a lawyers account,
subject perhaps to express contractual terms excluding such review, a term not
contained in the agreement in issue on this appeal, it is an implied term of
retainer contracts that they are subject to the courts inherent review
jurisdiction.  That jurisdiction has not been taken away by the
Act
.  I accept
that the right to review is a
chose in action
and is assignable.

Standing

[48]

The respondent contends
that the appellants do not have standing to seek an assessment because they
were not charged with paying the account.  They rely on the wording of s. 70(1)
that gives the right of review to the person charged.  As noted, pursuant to
s. 64, person charged includes a person who has agreed to pay for legal
services, whether or not the services were provided on the persons behalf.

[49]

The appellants note
that the definition is inclusive.  That is, person charged is greater than
stated in the definition.  I see merit in this contention.  The definition
first appeared in the
Legal Profession Act
, S.B.C. 1987, c. 25,
s. 69.  It was almost identical to the definition provided in the 1998
statute.

[50]

Clearly, the
appellants were persons charged.  They had a right of review.  I have held
that the assignment of that right was valid based on an implied term in the
retainer contract flowing from the inherent jurisdiction to assess all retainer
contracts, perhaps subject only to an agreed, enforceable contractual provision
to the contrary.

[51]

In the absence of
language expressly excluding that implied right to assign, I am not
prepared to conclude that the omission of assignees in ss. 70(1)
and 64 of the
Act
, excludes assignees.  I am aware that the lawyers
assignee is included in the entities that can seek a review on behalf of a
lawyer provided in s. 70(5), but I do not consider that to affect the
reach of s. 70(1).

[52]

As the respondents
assert, the limitation on assigning the right to assess a lawyers account is
champerty.  I now turn to that issue.

Champerty

[53]

I state at the
outset that this appeal does not concern the merits of the dispute between the Beruschi
Group and the respondent.  The issue is whether the assignment to the Beruschi
Group of the appellants rights to seek a review was champertous.

[54]

In my view, the
judge correctly dealt with the law of champerty.  The law does not countenance
trading in causes of action.  The assignee must have a commercial interest in
the cause of action.  The commercial interest must pre‑exist the
assignment.

[55]

At the core of the
analysis in this appeal is whether the Beruschi Group had a pre‑existing
commercial interest in the right of the appellants to seek a review of the
respondents accounts.  In my view it did.

[56]

The judge and the
respondent focus on the internal management of Boss and the fact that it did
not contest the respondents accounts.  At one level, the dispute was between
the majority shareholders, who controlled Boss, and the minority Beruschi
Group.  Some of the lengthy battle after the settlement of the action against the
Province was fought on the corporate battlefield, but the underlying dispute involved
the inclusion of the B Claims in the settlement and the respondents
involvement in that process.

[57]

The corporate
maneuvers served the objectives of the Beruschi Group in pursuance of that
dispute, but they were merely part of the battle.  Mr. Beruschi gave
examples of the proceedings that were taken over the years.  They included an
application by Boss for an order imposing aspects of the settlement on the Beruschi
Group, an application by the Province to interplead the settlement funds, and
to require the abandonment of the B Claims or rescission of the settlement.

[58]

In my opinion, the
judge and the respondent understate the import of the letter agreement.  It
reflected the resolution of a long, protracted battle between the appellants
and the Beruschi Group.  Part of that battle concerned the unhappiness of the Beruschi
Group with the inclusion by the respondent of the B Claims in the
pleadings.

[59]

The letter
agreement was sent to the Beruschi Group.  It stated:

the
parties agree this letter agreementsets out their agreement on the terms and
conditions upon which, and the manner in which, Boss and the Beruschi Parties
will settle the Disputes.

Representatives
of Boss and the Beruschi Group signed the letter agreement signifying their acceptance
of the terms contained herein

[60]

Those terms
included: payment to the Beruschi Group of $3,600,000; payment to Boss of
$2,500,000; the incorporation of Blizzard Finance; negotiating and entering
into a plan of arrangement agreement; court approval of a plan of arrangement;
and the formal assignment of the appellants rights against the respondent. 
All of these terms were fulfilled.  In my view, the fact that fulfillment took
place over a number of months does not undermine the substance of the
settlement and the fact that assignment of the appellants rights against the
respondent was an integral part of it.

[61]

Of specific note
in the context of this appeal was the specific assignment of Bosss rights to
dispute and recover payments made by Boss on [the respondents] accounts.  The
letter agreement also assigned the right to make claim[s] Boss may have against
[the respondent] in connection with [the respondents] representation of Boss,
including the inclusion of the B Claims in the Blizzard Settlement.

[62]

In my view, the
letter agreement did not merely express an
intention
that Boss Power
would assign.  It was an agreement to do so; an agreement with consideration,
signed by the parties that reflected the settlement of a long and protracted
dispute.

[63]

The respondents
position does not take into account the longstanding position of the Beruschi
Group that the appellants should not have included the B Claims in the
settlement with the Province and its contention that the respondent was
complicit in this.  It long objected to the respondent continuing to act for
the appellants in the matter.  The alleged conduct of the respondent was
wrapped into the overall dispute the Beruschi Group had with the appellants. 
In my view, the Beruschi Group had a pre-existing commercial interest in having
the accounts of the respondent reviewed.

[64]

I conclude that
the obligation of Boss to pay the respondents accounts as expressed in the
letter agreement to be of no moment.  That simply set the stage for a review. 
The appellants had no quarrel with the respondent, but they knew that the Beruschi
Group clearly did so.  The settlement letter left the Beruschi Group to deal
with the issue.

Special Circumstances

[65]

The fact that the
respondents accounts were paid by the appellants without protest is not a
determining factor.  Boss was obliged to do so by the terms of the settlement letter.

[66]

The Beruschi Group
did not know that the respondents account was paid until September 2014.  On
September 4, 2014, a lawyer acting for the group asked whether the
respondent has issued accounts for its services and whether those accounts
have been paid.  He repeated the inquiry on September 19, 2014.  On
September 22, 2014, he was informed that accounts had been issued and
paid.  On September 23, 2014, the lawyer asked when the accounts had been
paid and on September 24, 2014, he was informed that the accounts were
paid on June 9, 2014 (in fact, the accounts had been paid on June 3, 2014). 
By this time, the three-month period specified for seeking a review had
expired.

[67]

On September 26,
2014, Mr. Beruschi told the appellants to take out an appointment to
review the accounts and that an extension of time would be sought on the basis
of special circumstances.  He stated that in due course Blizzard Finance would
take over conduct of the review proceeding.

[68]

An exchange
between lawyers representing the appellants and the Beruschi Group followed, concerning
the form and content of the appointment.  It was filed on October 20,
2014.

[69]

In large part,
this accounted for the failure of the review application to be filed in time. 
The respondent contends that the Beruschi Group should have included a
provision in the letter agreement requiring the appellants to advise it if the
accounts were paid.  I question this.  The appellants knew they were
obliged to pay the accounts and knew that the Beruschi Group intended to
challenge them.  Arguably, they should have advised the Beruschi Group when the
accounts were paid so as not to jeopardize the effectiveness of the assignment
to which they agreed.

[70]

In my view, it is
of some significance that the respondent knew of the assignment of Bosss right
to challenge its accounts as of March 27, 2014.  The respondents account
was sent to Boss on May 30, 2014 and paid from trust funds held by the
respondent on June 3, 2014.  The Beruschi Group did not know this until the
latter part of September 2014.  It then acted.  The delay by the Beruschi Group
is explained.  There is no legal prejudice to the respondent.

[71]

The judge noted
that if the issue were between the appellants and the respondent, the size of
the bill might be more persuasive as a special circumstance.  The bill for fees
was $800,000; unbilled time was approximately $320,000.  In my view, the size
of the account is a relevant factor.

[72]

The respondent
contends that the court can look to only the circumstances of the appellants
when considering whether special circumstances exist.  In my view, this is too
narrow an approach on the facts of this case.  It risks putting form over
substance.

[73]

The party of
interest is the Beruschi Group.  Because of the failure of the appellants to
advise that the respondent had issued an account, and the account was paid,
until after the required three-month period had elapsed, the Beruschi Group is
deprived of the right assigned to it unless the time is extended.  The Beruschi
Group did not delay once it knew the true state of affairs.  In my view, on the
facts of this case, there are special circumstances that warrant extending the
time.

Conclusion

[74]

In my view, the
court retains inherent jurisdiction to direct the review of lawyers accounts. 
It is an implied term of the retainer contract that accounts can be reviewed. 
The right to a review is a
chose in action
that is assignable.

[75]

The Beruschi Group
had a financial interest in the conduct and accounts of the respondent that pre-existed
the settlement letter.  By that letter, the appellants contracted to assign
their right to review the respondents accounts to Blizzard Finance.  Those
rights ultimately were assigned to Blizzard Finance.

[76]

Blizzard Finance has
standing as assignee to seek a review of the respondents accounts.

[77]

The assignment of
the appellants right to seek a review of the respondents accounts was not
champertous.

[78]

Special
circumstances exist to extend the time for bringing an application to review
the accounts.

[79]

I would allow this
appeal and direct that the Registrar review the respondents accounts.

[80]

The appellants ask
that this Court order that the review be postponed pending a determination of
the claim of negligence against the respondent.  I would not make that
order and leave it to the Registrar to proceed as is considered appropriate in
the circumstances.

The Honourable Mr. Justice Chiasson

I agree:

The Honourable Mr. Justice
Donald

I agree:

The Honourable Mr. Justice
Goepel


