Executive Summary: Key Legal and Evidentiary Issues

• Central dispute concerns a solicitor's bill of $16,687.96 for legal services rendered between August 16 and October 4, 2018, which the client refused to pay

• MWP failed to file a proper hearing record or serve required document indexes despite multiple peremptory orders, leading to dismissal of its appointment

• Client alleged the retainer was limited to "local agent" assistance only, but this was not reflected in the retainer agreement, nor was any such written instruction provided

• Assertions of overbilling, task duplication, and fee churning by the law firm were unsupported by evidence and rejected by the registrar

• Interest on trust funds was governed by statute directing such interest to the Law Foundation of BC, though the firm had an obligation to advise the client of the availability of a segregated account

• The registrar found the hourly rates charged were significantly discounted from normal rates and the time spent was reasonable

Background and nature of the dispute

Bernard LLP, a Vancouver law firm, was retained by Michael Wilson & Partners, Ltd. (MWP), described in the Wilson Affidavit as "a significant law firm of substance and repute," pursuant to a retainer agreement dated October 23, 2013. The retainer related to collection proceedings against Desiree Resources Inc. and Robin Dow for unpaid fees amounting to USD $584,399.31 plus contractual interest. The underlying matter involved MWP's engagement by a hedge fund in relation to a large hydrocarbon block located in South Kazakhstan. The hedge fund withdrew, and Desiree and Dow, who were in Vancouver, took over and engaged MWP to further the development and financing of the hydrocarbon block. Desiree and Dow allegedly defaulted on their obligations to MWP, and Bernard was retained and sued them on behalf of MWP.

The contested invoice and work performed

The specific invoice under review, dated October 11, 2018, totaled $16,687.96, comprising $12,421.05 in fees, $3,315.15 in disbursements, $44.70 for scanning, and $907.06 in taxes. The work was performed by David Jarrett, a partner with the law firm, and Anne Amos-Stewart, an associate, between August 16, 2018 and October 4, 2018. Both lawyers charged discounted hourly rates—Mr. Jarrett at $230 per hour when his normal rate was $335 per hour, and Ms. Amos-Stewart at $200 per hour when her normal rate at the relevant time was $260 per hour—with a further 15% reduction applied to each account. The activities reflected in the account were an unsuccessful mediation, an examination for discovery that could not be completed due to the defendants' document application, and a document application that could not be completed due to the defendants' cross-application requiring an adjournment.

The client's objections

Michael Wilson attended the hearing via audio conference only from Kazakhstan as a representative of MWP. He was the instructing mind for MWP and the main contact with Bernard throughout the underlying litigation. MWP took the position that the retainer of Bernard was a limited one, that they were retained as local agents only to deal with issues arising in the jurisdiction, such as proper formatting of documents, filings, and other things, and that MWP itself would do the legal work required. Mr. Wilson argued, without evidence, that MWP did not ask for the work covered on the invoice to be performed, that the work was of no value, that it was unnecessary, that the mediation failed, and that the document application revealed no new documents. MWP's position was that it did not ask Mr. Jarrett to replace Mr. Swanson or approve of Mr. Jarrett acting, that MWP did not approve of two partners from Bernard being involved, nor did it agree to the involvement of Ms. Amos-Stewart. Mr. Wilson also argued that the invoice for the period in question had inadequate narrative, that what was included was short, cryptic, and meaningless, and that the invoice provided no meaningful information to the client of the work done. Additionally, MWP took the position that it should be credited for interest on $50,000 being held in trust by Bernard, arguing the interest should have accrued at 5% per year for 13 years.

Procedural history and hearing complications

The fee assessment proceedings experienced significant delays, with the registrar noting the assessment was already more than six years old. Bernard filed its appointment on September 23, 2019, and MWP filed an appointment on October 3, 2019 to review all the bills of Bernard and to examine the agreement between MWP and Bernard. Multiple hearing dates were scheduled but adjourned due to COVID-19 pandemic travel restrictions, Mr. Wilson having been afflicted with pneumonia, and no registrar being available on one occasion. On October 31, 2019, Master Baker ordered that any hearing date would be peremptory on MWP. When the November 24, 2025 hearing proceeded, MWP did not file a hearing record for its appointment as required by Rule 23-6(3.1) of the Supreme Court Civil Rules, nor did it serve the required index on Bernard by October 31, 2025 as required by order. Four binders of materials were provided at 2 p.m. on the hearing day, but there were no affidavits and hence no evidence from MWP in support of its position. Bernard submitted that the materials provided did not comply with the rule, they were essentially a document dump, and that this was an attempt at hearing by ambush. As the hearing was peremptory on MWP, the registrar dismissed its appointment.

The retainer agreement provisions

The retainer agreement, by way of a letter addressed from Peter Swanson, a partner at Bernard, to Mr. Wilson, stated that Mr. Swanson would be the lawyer primarily responsible to see that the legal work is carried out, and that Paul Mooney, an associate with the firm, would also be working on the matter. The agreement expressly provided that other lawyers in the firm would be assigned if in the firm's judgment that became necessary or desirable, and that some of the work, including any necessary legal research, may be delegated where appropriate in the firm's judgment to one or more other lawyers, articled students and legal assistants. The retainer agreement also provided for interest at 12% per annum on overdue accounts.

The registrar's analysis and findings

Associate Judge Muir, sitting as Registrar, applied the factors set out in section 71 of the Legal Profession Act, S.B.C. 1998, Ch. 9. The registrar found that the matters covered by the invoice were not complex, difficult, or novel, and that there was no specialized knowledge required for these procedures. Based on the registrar's experience on fee reviews, the time spent was reasonable. MWP alleged significant duplication of effort; in the registrar's view, that allegation was not borne out on a review of the account, and even if there was some duplication, that would be captured by the reduction in hourly rates by both counsel and the overall fee reduction of 15%. The registrar rejected the assertion that Mr. Jarrett or others at Bernard were driven by avarice or personal considerations to overbill, take work from MWP for themselves, or otherwise attempt to churn fees, finding the suggestion that they did so knowing that the courts in this jurisdiction would be biased in their favour was simply unfounded.

The registrar accepted the evidence of Mr. Jarrett and Ms. Amos-Stewart as to the work performed, noting it was confirmed in important details by emails referenced in evidence. The failure to complete the examination for discovery and document applications was due to two factors: delay on the part of MWP in producing documents, as admitted in Mr. Wilson's email of January 17, 2019, and the refusal of MWP to pay Bernard's account rendered in October 2018.

Ruling and outcome

Bernard LLP prevailed substantially in this fee assessment. The registrar found no reason to reduce the fees presented, as sought, or at all. The only disbursement for which there was no support was the scanning charge of $44.70 plus $5.37 in taxes (12%), which was ordered deducted from the account. Bernard was awarded interest on the outstanding amount from the date of the invoice to the date of the reasons at the rate of 12% per annum, as agreed to in the retainer agreement.

MWP was credited with pre-judgment interest on the $20,000 retainer from the date of each payment of $10,000 to the date of the reasons, as provided for in, and calculated in accordance with, the Court Order Interest Act, R.S.B.C. 1996, c. 79. The registrar noted that a law firm has an obligation to a client, where funds are held in trust for any length of time, to advise the client of the availability of a segregated account under section 62(5) of the Legal Profession Act. The issue of interest on the $30,000 being held by Bernard as security for costs in the underlying action was not before the registrar and no order was made about those funds.

The issue of costs was reserved for a further hearing, with the registrar noting that under section 72 of the Legal Profession Act, costs of a review must be paid by the person charged if less than 1/6 of the total amount of the bill is subtracted from it. The parties were given liberty to seek a date from Supreme Court Scheduling to have a hearing on the costs matter set before the registrar.