Executive Summary: Key Legal and Evidentiary Issues

• At the heart of this case is whether a departed lawyer paid on contingency commission is entitled to post-termination fees for work he performed but that was billed and collected only after his employment ended.
• Contractual interpretation was central, specifically whether the oral employment agreement — which did not explicitly address departing lawyers — could support an implied obligation to pay post-termination remuneration.
• Unjust enrichment on a quantum meruit basis was raised as an alternative ground for compensation, requiring the court to assess whether the contract already governed the services in question.
• Patrick Poupore's alleged breach of his duty of good faith was disputed, with Wallbridge claiming his pre-termination dealings with Diamond & Diamond constituted disloyalty.
• Wallbridge sought $3 million in damages against Mr. Poupore on the basis that, had it known of his contract with Diamond, it would have terminated him earlier.
• Three distinct categories of disputed fees were identified, each requiring separate analysis as to whether a contractual entitlement to payment survived termination.

Facts of the case

Patrick Poupore is a personal injury lawyer who worked at Wallbridge, Wallbridge ("Wallbridge") in Sudbury for 18 years. He represented clients under contingency fee agreements and was paid on a commission basis, meaning he received no compensation unless a file was successfully resolved. In February 2021, while still employed at Wallbridge, Mr. Poupore began discussions with Diamond & Diamond ("Diamond") about establishing a competing office in Sudbury. On June 15, 2021, he signed a contract with Diamond committing to commence employment with them on October 18, 2021. During this interim period, his only service to Diamond was assisting in finding suitable office space. He notified Wallbridge of his plans on October 1, 2021, and Wallbridge immediately terminated his employment that same day.

Upon termination, Wallbridge sent Mr. Poupore a letter demanding the return of his keys, advising him that his access to the firm's data server had been cut off, and threatening litigation. A dispute followed over their respective professional obligations to clients, with Wallbridge being uncooperative in allowing Mr. Poupore to fulfill his obligations under the Rules of Professional Conduct — which required that clients be informed of his departure and given the option to follow him to his new firm. Wallbridge subsequently commenced an action for damages, seeking $3 million against Mr. Poupore, $3 million against Diamond, and $100,000 each against Mr. Poupore's assistant and law clerk, both of whom followed him to Diamond. Wallbridge eventually discontinued the latter three claims. Mr. Poupore brought a counterclaim for breach of contract and, in the alternative, unjust enrichment. Both parties sought punitive damages.

Employment agreement and terms in dispute

Mr. Poupore first joined Wallbridge as a salaried employee in 2003 without a written contract. In 2006, he transitioned to a commission and bonus structure based on a percentage of fees billed and collected, confirmed by Wallbridge in a memorandum entitled "Re: Overhead and Profit Sharing." In March 2017, Wallbridge unilaterally adjusted the compensation structure to allow the firm to charge unbilled disbursements of five years and older against commissions payable to the responsible lawyer. Critically, the employment agreement did not explicitly address the compensation entitlements of departing lawyers, and Wallbridge had no written policy on the matter. The fees in dispute fell into three categories: fees billed and collected by Wallbridge in the month before termination; fees billed and collected post-termination on files Mr. Poupore had carried before they were transferred to other lawyers; and fees from three settlements Mr. Poupore had negotiated at Wallbridge but which were billed and collected after the relevant clients followed him to Diamond.

Court's reasoning and analysis

The motion judge found an oral agreement obligating Wallbridge to pay Mr. Poupore in accordance with agreed percentages once a file realized settlement or judgment proceeds, and that entitlement to payment did not crystallize until fees were billed and collected. On that basis, she held that Mr. Poupore was entitled to compensation across all three categories. She further found, in the alternative, that Wallbridge's retention of the benefit of his work without payment would constitute unjust enrichment. On the breach of contract issue, the motion judge found that Mr. Poupore had not breached any duty to Wallbridge — his assistance to Diamond amounted to nothing more than planning his departure, and he had not induced the two Wallbridge employees who followed him to Diamond.

On appeal, the Court of Appeal allowed the appeal in part. The court held that while the oral contract obligated Wallbridge to pay commissions on files successfully resolved during Mr. Poupore's employment, the contract made no provision for remuneration for work on files that were subsequently brought to resolution by others after his departure. The court reasoned that, under a contingency model, remuneration is tied entirely to the resolution of a claim in a finalized judgment or settlement — not to hours worked or tasks completed. Accordingly, the Rowen principle (that a principal who benefits from an agent's work must pay for it in the absence of an agreement to the contrary) was displaced by the contingency nature of the contract itself, which the court found constituted "an agreement to the contrary" with respect to unbilled work in progress at termination. The unjust enrichment claim also failed because the services fell within the scope of the contract, which already governed how those services would be remunerated. The court upheld the motion judge's finding that Mr. Poupore did not breach his duty of good faith, and that Wallbridge's claim for damages therefore had no foundation.

Ruling and overall outcome

The Court of Appeal allowed the appeal in part, vacating paragraph 5 of the motion judge's judgment — the provision awarding Mr. Poupore commissions on unbilled work in progress that was subsequently resolved by other lawyers after his departure. Mr. Poupore's entitlement to his commission for September 2021 (50% of fees billed and collected, amounting to $21,000) was undisturbed, as Wallbridge did not contest that aspect on appeal. His entitlement to commissions on the three files he had settled prior to termination — where clients later followed him to Diamond — was also preserved. While success on the appeal was divided, the court determined that Mr. Poupore had achieved the greater overall success and awarded him costs of the appeal in the amount of $25,000, all inclusive.