Cite as: MacDonald v. Shafie, 1991 NSCO 11 ' PROVINCE OP NOVA SCOTIA COUNTY OP ANTIGONISB I N T B E C 0 OP DISTRICT NUMBER SIX BETWEEN: RICHARD - RUBOLLAB SBAFIE and NAHID SBAFIE ' Duncan J. Chisholm, Esq., Counsel for the Plaintiff. Peter McLellan, Esq., Counsel for the Defendants. 1991, January 31st, Anderson, A.J.C.C.: PACTS: 1. In May of 1988, the Shafies retained the services of Duncan Chisholm to act with certain proceedings which by Shell Canada. William solicitor for the Shafies transpired that he was a discussions. The Shafies were by William Meehan. 2. At the time the was established there was C.At. No.: 2387 U N T Y C 0 U R T & MACDONALD Plaintiff and -Defendants on their behalf in connection had already been commenced Meehan had originally been the but had to withdraw as it witness to certain material introduced to Mr. Chisholm solicitor-client relationship no discussion regarding methods
' - of billing, amounts to be charged or the like. did not have any practice billing or how accounts would be prepared. 3. There was an initial of 1988 which was paid, $2,000.00 and the balance being paid account was rendered on August on August 5th, 1988. 4. There was some correspondence to the Shafies regarding accounts. misunderstanding about the having been returned by the an error on the part of Mr. Chisholm. ' 5. The Shaf ies were regarding the future costs Shell Canada because of situation. The Trial was Shafie was even giving consideration solicitor or attempting to Legal Aid. On the advice advised to meet with Mr. "cap" a "lid" or an "upper limit" the proceedings. 6. Mr. Shafie met with declined to give any such with Mr. Chisholm and emphasized information to him. Mr. Chisholm additional costs in the proceedings of $6,000.00 to $7,000.00. 2 Mr. Chisholm of confirming any methods of account rendered in July coming from a retainer on January 23, 1989. A second 2, 1988, and this was paid from Mr. Chisholm There was an apparent initial retainer of $2,000.00 Bank but that was, in fact, becoming concerned themselves of the legal proceedings with their own precarious financial less than a month away and Mr. to going without a have the matter dealt with by of Mr. Meehan, Mr. Shafie was Chisholm and have him place a on the future costs of Mr. Chisholm who initially figure. Mr. Shafie met again the importance of this then indicated that the would be a maximum
' - 7. Shortly after giving this information, Mr. Chisholm sent to the Shafies an account for $3,227.45. related to services performed prior to January of 1989. 8. Mr. Shafie then Mr. Chisholm again confirmed not exceed $7,000.00 and that in total it would not exceed $10,000.00, including the Mr. Chisholm required mortgage and the figure he suggested properties owned by the Defendants. 9. The Defendants fulfilled ' obligation by providing the paid cash of $900.32 with the balance of the extra $2,000.00 requested. 10. Following the Trial additional account for legal 1989. This new account was that there were then "outstanding" two accounts: (a) January 6, 1989 (b) February 15, 1989 TOTAL 11. The Shafies paid agreed to pay. This was paid out of the three properties and at that unwilling to pro-rate the monies over the three properties in question. 3 -It apparently met again with Mr. Chisholm. that the future costs would account dated January 6, 1989. security for legal costs was $10, 000. 000 on the three their part of the mortgage for $10,000.00 and Mr. Chishom not pressing for the Shafies received an services dated February 15, for $16,402.95. This meant $3,227.45 $16,402.95 $19,630.40 the $10,000.00 which they had the sale of one of time the Plaintiff was
- INTRODUCTION: This is a classic perils inherent in a solicitor-client communication lines are not clear and uncertainty prevails. In short, both Mr. Chisholm and their discussions of January 1989 with different impressions. Mr. Shafie believed that the legal services he was getting would go no higher than the other hand, believed that his legal fees would probably not go over $10, 000. 00, but that the possibility that they would remained open and understood by both sides. The role for the decide on the facts, and case law governing the determination it has developed over the ' given direction by the Code governed Mr. Chisholm's throughout the course of their relationship. The Case Law and the Code - In Alexander v. McKenzie ( 19 8 4 ) Ct.), Judge Jewers speaking to the one at bar, held~ at p. 264: "In my view solicitors careful about giving clients. The clients of what time might or would be involved in court proceedings, dependent upon their advice in this should make it clear that the time estimates for a proceeding is only an estimate well be exceeded, 4 -case which illustrates the relationship when Mr. Shafie came away from $10,000.00. Mr. Chisholm, on court, in this dispute, is to to apply thereto the relevant of fee estimates as years. Further, the court is of Professional Conduct which relationship with Mr. Shafie Duty Upon the Lawyer. 2 9 Man. R. ( 2d) 2 6 3 (Co. an issue very similar to must be very estimates to have no idea and are utterly solicitors for regard. A solicitor to their clients and might very and further, a
- solicitor should clients are kept abreast of proceedings and any anticipated in the original time estimate. added] The importance of keeping adjustments to estimates given by solicitors for services is further found to be a duty upon solicitor and barrister in Re: Murphy, Murphy, and Mollins and MacEachern's Estates (1980), 32 N.B.R. (2d) 281 v. Atkinson and Hughes (1983), at p. 101. Further in Carwood v. R. 428 (Sask. Dist. Co.), Professional Conduct, Rule in supporting this duty upon lawyers, at p. 432-433. ' " misunderstandings fees and financial legal profession reflect adversely administration of should try to avoid his client with he should be ready to explain the basis for his charges client is unsophisticated or uninformed as to the proper basis and measurements for fees). He should a fair estimate disbursements, uncertainties involved, client may be able decisions. When or unforeseen substantially affect the fee, the lawyer misunderstandings explanations to his client.• The Ontario Appeal Kealey ( 1985), 10 O.A.C. 344 5 ensure that their or likely change [emphasis clients advised of possible (N.B.Q.B.) at p. 283; Leslie 49 N.B.R. (2d) 97 (N.B.Q.B.) Mirza (1981), 13 Sask Wimmer, J. quotes the Code of 3, Chapter Xl respecting fees respecting matters bring the into disrepute and upon the general justice. The lawyer controversy with respect to fees, and (especially if the give the client of fees and pointing out any so that the to make informed something unusual occurs which may the amount of should forestall or disputes by Court decision in Cohen v. (C.A.), is directly on point
- with the case at bar in that it deals with the issue of "maximums" in estimates and their importance. law above found that lawyers have as cost estimates change, the in costs is even heavier when lawyers quote "maximum" amounts to clients. In Cohen the solicitor wrote the client and gave the following estimate for his legal services. have told you that the total expenses that for legal fees and disbursements accountant and real estate exceed $10,000.00 and may be as high as $50,000.00." solicitor later sued to collect the agreement or undertaking for Robins, J.A.: " ••• He did not, fully appreciate the understanding reached by the parties on the basis of was hired or attached sufficient weight to that understanding. the understanding as an estimate rather than a firm understanding maximum fee he was depending on the proceedings. Even estimate, a solicitor advise the client any developments increase the fee and that was not [Emphasis added] THE UNDERTAKING OF MR. CHISHOLM - Based on the evidence clear that Mr. Chisholm provided ceiling to the plaintiff. transcript, Mr. Chisholm to questions as follows: 6 As the case a duty to advise clients duty to advise of changes " ••• I you may incur including chartered appraiser fees will certainly The $76, 202. 00. In upholding a ceiling of $50,000.00, however, appear to the significance of which the solicitor He treated as to the entitled to charge success of the in the case of an is obliged to without delay of that are likely to beyond the estimate done in this case. FORMING AN AGREEMENT before the court, it is both an estimate and a At page 27 of the hearing responded in cross-examination
' - "Q. But he had a Mr. Chisholm, that wanted to know at it was going to cost him to go to trial. A. He did ask me well what I would estimation. Q. Alright, he much it would be giving him then the figure of to $7,000.00? A. Yes. Q. And ••• A. Excuse me, I estimate of six I didn't think it was $10,000.00." [Emphasis added] ' In doing so Mr. Chisholm clearly provided both an estimate of $6,000.00 $7,000.00 This is a reading a reasonable undertaking. This is also as to be the fee structure. Mr. Shafie agreed to proceed, part of the basis for his services of Mr. Chisholm. THE FAILURE TO UPDATE THE ESTIMATE At p. 32 of the hearing transcript, responding in cross-examination to take steps to update his estimate or his ceiling. ' 7 - concern, did he not, he [Mr. Shafie] some stage how much that. He asked for term to be an wanted to know how and do you recall $6,000.00 gave him a figure •• an to seven thousand. going to exceed and a ceiling of $10,000.00. person would give that what the plaintiff understood Based on this understanding, or at a minimum, it formed argeeing to proceed with the Mr. Chisholm, admitted that he failed
' - "Q. Would you also time from either or the 11th of January of January did you and tell him that no longer be relied upon? A. No, I never never did from that time on." CONCLUSION: This case is not defendant, it comes down to evaluating the concrete actions in -an objective manner from the perspective of the client. Unlike Toulany v. Mclnnes Cooper N.S.R. (2d} 256, the truth is not at issue, instead, what was said gave legitimacy defendant that there was a cap placed on the fees chargeable by Mr. Chisholm. Consequently, the dismissed and costs awarded to the defendant. An Additional Judge of the County Court of District Number Six 8 - agree that at no the 6th of January or the 23rd go to Mr. Shafie the estimate could told him that .•• I about the credibility of the & Robertson (1989), 90 of the defendants' evidence objective analysis of exactly to the assertions of the plaintiffs' action should be
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