



COURT OF APPEAL FOR ONTARIO

CITATION: Miller, Canfield, Paddock and Stone, LLP v. BDO
    Dunwoody LLP, 2016 ONCA 281

DATE: 20160421

DOCKET: C60953

Laskin, Hourigan and Brown JJ.A.

BETWEEN

Miller, Canfield, Paddock and Stone, LLP

Plaintiff (Appellant)

and

BDO Dunwoody LLP

Defendant (Respondent)

Myron W. Shulgan, for the appellant

James P. Thomson, for the respondent

Heard: April 15, 2016

On appeal from the judgment of Justice
Pamela
    L. Hebner
of the Superior Court of Justice, dated August 7, 2015.

ENDORSEMENT

[1]

The appellant law firm, Miller, Canfield, Paddock and Stone LLP, appeals
    from the judgment of Hebner J. dismissing its action against its client, BDO
    Dunwoody, for the payment of fees under the parties April 30, 2007 contingency
    fee retainer agreement. Under the retainer agreement, the Law Firm agreed to
    act on behalf of BDO in any and all proceedings BDO intended to commence
    against certain defendants. The retainer agreement contained a provision
    entitled Termination of Legal Services, which provided that the client, BDO,
    had the right, with or without cause, to cancel the Law Firms services. In
    that event, BDO agreed it would be responsible to protect and pay the value of
    all services to date, and the retainer agreement specified how the value of
    services would be calculated.

[2]

A dispute arose between the parties about whether the Law Firm should
    pay the cost of retaining outside counsel to appeal a decision in the
    proceeding BDO commenced. BDO took the position that the Law Firm's refusal to accept
    responsibility for appeal counsels fees amounted to a repudiation of the
    retainer agreement. On June 19, 2012, BDO wrote the Law Firm to advise that BDO
    accepted the repudiation and directed the Law Firm not to take any further
    steps on behalf of BDO.

[3]

On April 15, 2014, the Law Firm rendered an invoice to BDO in the amount
    of $427,891.57 for the value of the services rendered to the date of
    termination of the retainer agreement. There is no dispute that the invoice
    accurately calculated the value of those services in accordance with the terms
    of the retainer agreement.

[4]

BDO brought a summary judgment motion to dismiss the Law Firms action
    to collect its fees. The Law Firm brought a cross-motion for judgment in the
    amount of the invoice.

[5]

The motion judge held that the Law Firm had breached the retainer
    agreement and the breach amounted to a repudiation of the agreement, but BDOs
    acceptance of the repudiation did not amount to a cancellation of services by
    it.

[6]

Assuming, without deciding, that the Law Firms refusal to pay the fees
    of outside appeal counsel amounted to a repudiation of the retainer agreement,
    in our view the motion judge did not apply the proper principle of law to her
    interpretation of that contract. A repudiatory breach of a contract does not,
    in itself, bring an end to a contract. Rather, it confers upon the innocent
    party, such as BDO, the right of election to treat the contract at an end. As a
    general rule, the party not at fault must make the election and communicate its
    decision to terminate the contract to the repudiating party: John D. McCamus,
The
    Law of Contracts
, 2d ed. (Toronto: Irwin Law, 2012), at p. 641.

[7]

When BDO accepted the Law Firms repudiation of the retainer agreement
    and told it to take no further steps in the proceeding, BDO cancelled the Law
    Firms services within the meaning of the agreements termination provision. In
    accordance with the terms of the retainer agreement, BDO thereupon became
    responsible to pay the Law Firm the value of all services performed to date
    calculated in accordance with the retainer agreement.

[8]

Accordingly, we grant the appeal and set aside the dismissal of the Law
    Firms action. We grant judgment in favour of the Law Firm in the amount of
    $427,891.57, together with pre-judgment interest.

[9]

We award the Law Firm its costs of the appeal fixed in the amount of $10,000,
    inclusive of disbursements and HST, and its costs of the motion below in the
    amount of $20,000, plus disbursements and HST.

John
    Laskin J.A.

C.W.
    Hourigan J.A.

David
    Brown J.A.


