Snowball v Ham Estate, 2021 ABQB 497

Court of Queen’s Bench of Alberta Citation: Snowball v Ham Estate, 2021 ABQB 497 Date: 20210628 Docket: 1901 15713 Registry: Calgary Between: Laura Snowball Plaintiff - and - Gordon Ham and Jill Taylor, Executors of the Estate of Kenneth Hugh Ham Defendants _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice C.M. Jones _______________________________________________________ I. Introduction [ 1 ] Kenneth Hugh Ham practiced law in Calgary for many years prior to his untimely death on October 20, 2019. [ 2 ] Laura Snowball is a lawyer who frequently assisted Mr.

Ham as an independent contractor to his law practice. She assisted him with a matter that was completed prior to his death, but has not been paid for those efforts. [ 3 ] Mr. Ham’s estate (the “Estate”) is insolvent. Unless Ms. Snowball’s claim for unpaid fees can be elevated above those of other creditors of the Estate, she will rank as an unsecured creditor and will not receive full payment. Ms.

Snowball, however, asserts that certain moneys currently held in the trust account of the solicitors for the Estate are impressed with a trust in her favour. [ 4 ] For the reasons which follow, I find that the funds in question are not impressed with a trust in favour of Ms. Snowball and that her claim fails. II. Background

[ 5 ] Mr. Ham carried his law practice under the name “Municipal Counsellors Law Firm” (“MC”). Municipal Counsellors Inc. (“MCI”) appears to have served as a management company for Mr. Ham’s law practice. It was not a professional corporation. [ 6 ] Ms. Snowball periodically worked with Mr. Ham on several of his client files. Her evidence was that she would bill on an hourly basis and would be paid based on invoices she submitted to “Municipal Counsellors (A Law Firm), attention: K. Hugh Ham”. She would be paid by cheque, the payor on which was “Municipal Counsellors Law Firm”. [ 7 ] Ms.

Snowball asserts that there were two exceptions to this hourly billing arrangement. The first involved a matter referred to as the AEC file. Ms. Snowball claims that she and Mr. Ham agreed to split the flat fee of $50,000 that Mr. Ham had negotiated with his client. This arrangement was not reduced to writing, but Ms. Snowball said she trusted Mr. Ham. When Mr. Ham received payment from the client, Ms. Snowball invoiced MC for $25,000 and was paid by cheque from MC. [ 8 ] The second exception, according to Ms. Snowball, was the matter at issue here, referred to as the High Country matter.

It involved an action in this Court commenced by High Country against a municipal district related to a development permit for a gravel mining operation and an arbitration between High Country and the gravel pit landowner. [ 9 ] High Country engaged another lawyer, Mr. Hickerson, and proposed to enter into a contingency agreement with Mr. Hickerson’s Professional Corporation (the “Contingency Agreement”). Under the Contingency Agreement, Mr. Hickerson’s Professional Corporation was to receive, inter alia , 30% of the gross amount of any settlement, judgment or arbitral award (the “Contingency Fee”). [ 10 ] Mr.

Ham was also a party to the Contingency Agreement and signed it in his personal capacity. The Contingency Agreement provided that: …the Firm (Mr. Hickerson’s Professional Corporation) shall retain 60% of the fees provided for in this Agreement and Hugh Ham (“HH”) shall receive 40% of the Fees. [ 11 ] Notably, Ms. Snowball was not a party to the Contingency Agreement, which says nothing about payments to her. [ 12 ] The arbitration proceeded and an award was made to High Country. The amount payable to Mr. Ham under the Contingency Agreement was $137,184.16 (the “Arbitration Funds”). [ 13 ] Ms.

Snowball claims that Mr. Ham agreed to split whatever he received under the Contingency Agreement with her. Ms. Snowball acknowledges that Mr. Ham never specifically stated that the “split” would be 50/50, but says that was her understanding. [ 14 ] Ms. Snowball’s understanding comes from a conversation she alleges took place between her and Mr. Ham in early 2017. She testified as follows: Mr. Ham would then say, Suppose we get this many million dollars for the client, then we apply the-I think it was a 35 percent contingency for the counsel, that takes us to number “X”.

The 35 percent contingency is then divided 40/60 in favour of Mr. Hickerson, so the 40 percent of the of the 35 percent of the – proceeds is “Y”, and of that, he would give a number. So let me just say totally irrationally, but let me pick a number out of the head, if the number he was saying was there’s going to be a million-the 40-the 40 percent is going to be worth $1 million, the he would say, So you get 5 and I get 5. [ 15 ] This understanding was never reduced to writing. [ 16 ] In support of her claim, Ms. Snowball points to various correspondence. In an email to Mr. Hickerson on May 18, 2018, Mr.

Ham stated: I think we need to provide for the allocation between Municipal Counsellors (Hugh and Laura) and yourself. [ 17 ] Ms. Snowball claims this email arose in the context of negotiations between Mr. Ham and Mr. Hickerson leading up to the Contingency Agreement. [ 18 ] On March 7, 2019, Mr. Hickerson emailed Mr. Ham raising certain questions, including: Under the Contingency Agreement, I would write a cheque to you, and it’s my assumption that you would settle up with Laura. Are we on the same page here? [ 19 ] Mr.

Ham responded as follows: Yes, Laura is fully informed that funds are coming and I have agreed to pay her, which I undertake to do. [ 20 ] Mr. Ham’s email also included the following: Glen, See my response outlined in yellow below. I have copied Laura in light of my undertaking to pay her. [ 21 ] Ms. Snowball also points to a letter from High Country to her, Mr. Ham and Mr. Hickerson, which stated in part: …you earned the 30% contingency fee High Country agreed to pay for the arbitration. [ 22 ] Mr. Ham attached this letter to an email he sent on July 25, 2019 to Mr. Hickerson and to Ms. Snowball, saying to Mr.

Hickerson: …I would appreciate yor (sic) forwarding a check for Laura’s and my share of the retainer fees to my office. I will pay Laura what she isdue. [23] Ms. Snowball asserts that Mr. Ham asked Mr. Hickerson to make the Arbitration Funds payable to MCI. They were notreceived by Mr. Ham or MCI prior to his death and Ms. Snowball has not been paid anything in respect of the High Country matter. [24] On October 13, 2019, Ms. Snowball issued an invoice to MC in the amount of $68,592.08, being half of the ArbitrationFunds. This invoice was sent to Linda Phelan, Mr. Ham’s office administrator.

It does not appear to have been provided to Mr. Ham,who was very sick at the time. [25] That portion of the Arbitration Funds to which Ms. Snowball asserts a claim currently resides in the trust account for theEstate’s solicitor. III. Issues [26] Ms. Snowball asserts that Mr. Ham gave an undertaking (the “Undertaking”) to pay her from the Arbitration Funds.

Sheclaims that the Arbitration Funds are impressed with a trust in her favour in two ways: 1. a constructive trust that arises as a direct consequence of the Undertaking; and 2. a remedial constructive trust that, in the circumstances of this case, is necessary to remedy unjust enrichment. [27] This matter comes before me as a trial of an issue, stated as follows: Are the Arbitration Funds impressed with a trust in favour of Laura Snowball, by virtue of the undertaking given by Kenneth Hugh Hamor otherwise, and, if so, what are the terms of that trust, and who holds these funds in trust for the beneficial interest of Laura Snowball? [28] These questions may be stated as follows: 1.

Was there a payment agreement between Mr. Ham and Ms. Snowball and, if so, what were its terms? 2. Does the Undertaking give rise to a trust for Ms. Snowball? [29] In addressing these issues, I must also take account of an evidentiary issue, as discussed below. IV. Analysis A. Corroboration [30] In support of her claim to half of the Arbitration Funds, Ms. Snowball relies on the email communications above and on herconversation with Mr.

Ham in 2017. [31] The Estate points out that this alleged conversation was never reduced to writing and argues that it is significant that Ms.Snowball was engaged in the formalization of the Contingency Agreement but did not commit her own share of the Contingency Fee towriting. [32] The Estate asserts that Ms. Snowball has provided no corroborating evidence to substantiate her claim to 50% of theArbitration Funds and points to

section 11 of the Alberta Evidence Act, RSA 2000, c A-18 (“AEA”) which provides: In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposed or interested partyshall not obtain a verdict, judgment or decision on that party’s own evidence in respect of any matter occurring before the death of thedeceased person, unless the evidence is corroborated by other material evidence. [33] The Estate cites Stephenson v McLean (1977), (AB KB), 4 Alta LR (2d) 197 (QB) at para 45 for what canbe considered corroborating evidence: The corroboration in my opinion required is some testimony, either direct or circumstantial, proving a material point in the testimonywhich is to be corroborated.

It must not be testimony corroborating a point which is not material. [34] Ms. Snowball argues that the requirement for corroboration is not onerous. Citing the same passage from McLean, sheargues that a plaintiff’s testimony about a verbal agreement with a deceased person is sufficiently corroborated if there is direct orcircumstantial evidence tending to show or from which it can be inferred that the plaintiff’s evidence of an agreement is true or probable.She also cites the following guidelines from our Court of Appeal in Stochinsky v Chetner Estate, 2003 ABCA 226: 1.

The AEA does not require independent proof of the plaintiff’s evidence and so the evidence relied on as corroboration need notcompletely prove an agreement or go so far as the plaintiff’s evidence. 2. The statutory prohibition differs from the common law and should not be extended any further than its precise words require.

3. The test for corroboration is whether the evidence in question makes the plaintiff’s evidence more probable or strengthened bysome evidence which appreciably helps the judicial mind to believe one or more of the material statements. 4. It is enough that the testimony produces inferences or probabilities tending to support the truth of the plaintiff’s statement. 5. Corroboration may be circumstantial and fair inference. [35] Ms. Snowball points to judicial consideration of the equivalent Ontario provision, being

section 13 of the Evidence Act, RSO1990, c E 23, in particular Hyrcko v Miller Estate, 2014 ONSC 6676 at paras 43 and 44, citing Bayley v Trusts & Guarantee Co (ON CA), [1931] 1 DLR 500: In order to satisfy the requirement of corroboration, it is not required that the evidence be given certain weight, but only that it strengthenor make more certain the statements of the claimant. As per Bayley, it is not required that these pieces of corroborating evidence be provided by some other person.

All that is required is thatevidence be adduced that tends to “strengthen” or “make more certain” the claims he is making. [36] Ms. Snowball refers to several pieces of evidence that she suggests offer corroboration of her claim. I will address these in myconsideration of the substantive issues infra. B. The Payment Agreement [37] There seems to be no real dispute between the parties that there was an arrangement of some kind between Mr. Ham and Ms.Snowball that she would be paid for her efforts in the High Country matter.

I am satisfied that the correspondence detailed aboveestablishes that there was such an agreement and I so find. [38] The thornier question is the terms of that agreement. Ms. Snowball contends that she was to receive half of the ArbitrationFunds. The Estate takes the position that there is nothing to substantiate that particular split and, indeed, offers contrary evidence. [39] Mr. Ham’s brother, Gordon Ham, testified that he raised Ms. Snowball’s invoice while Mr. Ham was in hospital and that Mr.Ham told him “she is owed something but not 50%”. [40] As noted above, Ms.

Snowball points to several pieces of evidence that she says corroborate her understanding that she was toreceive 50% of the Arbitration Funds. First, she refers to the correspondence set out above, including: 1. Mr. Ham’s May 18, 2018 email suggesting to Mr. Hickerson that the Contingency Agreement contain an express allocation of fees“between Municipal Counsellors (Hugh and Laura) and yourself”; 2. The email correspondence between Mr. Ham and Mr. Hickerson on March 7, 2019; 3. The letter from High Country to Mr. Ham, Mr. Hickerson and Ms.

Snowball confirming that the three of them worked diligentlyand thoroughly and earned the contingency fee; 4. Mr. Ham’s July 25, 2019 email asking Mr. Hickerson to forward a cheque for his and Ms. Snowball’s share and confirming that hewill pay Ms. Snowball what she is due; 5. Mr. Ham’s August 8, 2019 email indicating that “Laura and I would like to have our share of the fees released”; and 6. Ms. Snowball’s September 19, 2019 email to Mr.

Ham about distributing the upcoming payment on the High Country file. [41] In my view, none of this correspondence establishes how the Arbitration Funds were to be divided between Mr. Ham and Ms.Snowball. While several of these communications are indicative of an understanding between Mr. Ham and Ms. Snowball that theywould share the Arbitration Funds, none of them verifies how that sharing was to occur. There is nothing in them to show that apercentage sharing was intended, let alone what the percentages were. Equally, there is nothing to show that the usual hourly billingarrangement was not to apply. [42] Ms.

Snowball also relies on her documented involvement in the discussions between Mr. Ham and Mr. Hickerson leading upto the Contingency Agreement. Unfortunately, this “documentation” does not reflect the nature or quantum of Ms. Snowball’sparticipation in the Arbitration Funds. It does not suggest that she is entitled to receive anything directly from High Country nor does itassist in understanding what specific share of the Arbitration Funds received by Mr. Ham she might expect to receive. [43] Ms. Snowball refers to Mr. Hickerson’s testimony that he knew there was an agreement between Mr. Ham and Ms.

Snowballrelated to her compensation on the High Country file. Mr. Hickerson, however, was unaware of the specifics of that agreement, so histestimony is not of assistance in that regard. [44] Next, Ms. Snowball points to the invoice she rendered prior to Mr. Ham’s death, indicating an equal division of theArbitration Funds and to her October 13, 2019 email to Ms. Phelan, stating that Ms. Phalen would need the invoice as supportingdocumentation to allow her “to release half of the payment to me, which is what Hugh and I agreed”. This evidence is arguably self-serving. Mr.

Ham neither solicited the invoice nor responded to it and died a week after it was submitted. Mr. Hickerson’s spreadsheetattached to Ms. Snowball’s invoice is not of assistance as it refers only to the amount of the Contingency Fee payable to “HH”, not to HHand Ms. Snowball. Ms. Snowball’s email to Ms. Phelan is simply a unilateral declaration of her asserted entitlement. The Estate correctlyasserts that neither of these items can be considered corroborating evidence as they are all produced by Ms. Snowball long after the HighCountry matter was settled and are not themselves corroborated by Mr.

Ham, by any other testimony, or by any written documents.

[ 45 ] Similarly, the letter from Ms. Snowball’s counsel to the Custodian of Mr. Ham’s law practice following Mr. Ham’s death does not add certainty to the terms of the arrangement between Ms. Snowball and Mr. Ham and is arguably self-serving. It does not provide corroboration. [ 46 ] Ms. Snowball asks the Court to place weight on her prior dealings with Mr. Ham in respect of the AEC file. In my view, this does not advance Ms. Snowball’s claim to half of the Arbitration Funds. The AEC file appears to have been an anomaly. In all other matters, Ms.

Snowball’s services were billed on an hourly basis. [ 47 ] The Estate points to Ms. Phelan’s testimony that Mr. Ham instructed her to use the Arbitration Funds to pay off his creditors and personal debts on his credit card. Ms. Phelan testified that normally, she would have expected to be instructed to pay Ms. Snowball, but that Mr. Ham did not at any time instruct her to pay 50% of the Arbitration Funds to Ms. Snowball. [ 48 ] The Estate claims that Mr. Ham was the senior lawyer on the file and that it would have been unusual for him to share the Arbitration Funds 50-50 with a more junior lawyer like Ms.

Snowball. [This argument is speculative and I do not take account of it.] [ 49 ] In the result, I find that Ms. Snowball has failed to establish an agreement that entitles her to 50% of the Arbitration Funds. She has provided no corroborating evidence sufficient to meet the requirements of s 11 of the AEA . [ 50 ] While this is perhaps sufficient to dismiss her claim, I think it appropriate to consider her trust arguments as well. C. Trust Arguments [ 51 ] Ms. Snowball places great reliance on the Undertaking and on Mr. Ham’s use of that term in the correspondence set out above.

She argues that the choice of the word “undertake” imbues Mr. Ham’s agreement to pay her with the gravity of a solicitor’s undertaking. For the following reasons, I reject that argument. [ 52 ] This issue arises because the Estate is insolvent. Therefore, without more, Ms.

Snowball is an unsecured creditor of the Estate entitled only to receive payment pari passu with the Estate’s other creditors pursuant to s 27(1) of the Estate Administration Act , SA 2014 c E-12.5 (“ EAA ”), which provides: Except as otherwise provided in an enactment, if there is a deficiency of assets necessary to satisfy the valid money claims against the estate, the claims against the estate must be paid proportionately and without any preference or priority. [ 53 ] Ms.

Snowball takes the position that the Undertaking impresses the Arbitration Funds with a constructive trust in her favour that grants her priority over other creditors. [ 54 ] Ms. Snowball emphasizes the importance of a lawyer’s undertaking and cites several authorities showing that a lawyer is expected strictly and scrupulously to fulfill any undertakings given in the course of representation of a client. [ 55 ] The Estate argues that the Undertaking cannot form the basis for a constructive trust that would deprive other creditors of access to the Arbitration Funds payable to Mr.

Ham under the Contingency Agreement. The Estate takes the position that a lawyer cannot unilaterally create a priority for one creditor over another merely by undertaking to pay that creditor, especially where the undertaking was not necessary to the transaction. Therefore, Mr. Ham’s Undertaking to pay whatever was payable under his arrangement with Ms. Snowball cannot by itself create a constructive trust that gives Ms. Snowball priority over other creditors. It points out that Ms. Snowball did not request the Undertaking and did not rely on it in choosing to perform the work. It notes that if Ms.

Snowball had followed her usual practice of issuing an invoice for work done, she would not be able to claim a priority over other creditors. [ 56 ] Moreover, the Estate argues that the Undertaking is unenforceable on its own terms, given the lack of evidence regarding the amount payable to Ms. Snowball.

The Estate notes the Commentary on Rule 7.2-14 of the Law Society of Alberta Code of Conduct , which states, in part: Undertakings should be in writing or confirmed in writing and should be absolutely unambiguous in their terms. [ 57 ] The Estate argues that the two references to undertaking in the March 7, 2019 email chain do not confirm the timing or amount of payment. The Estate argues that payment is the substance of the Undertaking and lack of clarity as to quantum is fatal to its enforcement. [ 58 ] There can be no doubt about the seriousness of a solicitor’s undertaking.

A lawyer’s undertaking to other counsel in connection with that lawyer’s representation of a party to a transaction must be strictly enforced by the Courts to ensure the efficient and harmonious functioning of the legal system. [ 59 ] I have some doubt, however, that Mr. Ham intended to give the Undertaking in his professional capacity as a solicitor. Rather, I see it as an acknowledgement of a personal debt, albeit in an unspecified amount. For that reason, I find unhelpful Ms. Snowball’s cited cases examining the nature of a lawyer’s undertaking in the context of client representation. Mr.

Ham’s Undertaking cannot be said to have been given in connection with his representation of one client to counsel for another client. I think it is more properly interpreted as a commitment on Mr. Ham’s part to pay Ms. Snowball some unspecified amount on account of her fees for services. [ 60 ] In my view, elevating the Undertaking to a solicitor’s undertaking brings it uncomfortably close to an improper attempt to elevate Ms.

Snowball over other creditors of the Estate. [ 61 ] Furthermore, even if the Undertaking does constitute a solicitor’s undertaking, I agree with the Estate that it cannot be enforced given the uncertainty in its terms. [ 62 ] The Estate also takes issue with Ms. Snowball’s request for the declaration of a remedial constructive trust. Ms. Snowball

argues that allowing her alleged share of the Arbitration Funds to be paid to MCI or the Estate would constitute unjust enrichment with a corresponding deprivation to her. Alternatively, she argues that it would be unconscionable to deny her the entirety of her alleged share of the Arbitration Funds. [ 63 ] The Estate notes that Ms. Snowball was an independent contractor, not an employee, associate or partner of MC. Mr. Ham did not have fiduciary obligations to her. Mr. Ham was entitled to direct payment of the Arbitration Funds to MCI. [ 64 ] The Estate argues that Ms.

Snowball is not an involuntary creditor of Mr. Ham, in the sense that the debt to her arises from circumstances not of her own creation. She could have modified her arrangement with Mr. Ham to control the payment of some part of the Contingency Fee to her. Instead, she voluntarily accepted an arrangement whereby the Contingency Funds were to be paid directly to Mr. Ham, without mention of her. The Estate argues that Ms. Snowball voluntarily accepted the arrangement that payment would come from Mr. Ham and/or MCI.

In so doing, she ran the risk of either one becoming insolvent. [ 65 ] The Estate argues that the imposition of a remedial constructive trust in circumstances where Ms. Snowball is a voluntary creditor would unfairly prejudice all other creditors of MCI and the Estate and is contrary to the pari passu principle statutorily enshrined in s. 27(1) of the EAA . [ 66 ] The Estate also argues that the arrangement between Ms. Snowball and Mr. Ham has the indicia of a contingency fee agreement in that both the timing and amount of payment to Ms. Snowball were contingent on the resolution of the file.

Rule 10.7 of the Alberta Rules of Court requires that such an arrangement be in writing and state the manner in which the contingency fee is to be calculated. Neither is present here and the Estate argues that this absence means Ms. Snowball should expect to be remunerated only on the basis of work done and should be required to verify her time charges before the Review and Assessment Officer. [ 67 ] The Estate concludes that Ms.

Snowball is an unsecured creditor and that the portion of the Arbitration Funds she claims should be paid to MCI. [ 68 ] I agree that it would be inappropriate to impose a remedial constructive trust in these circumstances where the amount of payment due to Ms. Snowball cannot be ascertained with certainty. V. Conclusion [ 69 ] It is unfortunate that Ms. Snowball finds herself in this position. She no doubt worked hard on the High Country file and contributed to its successful resolution. Mr.

Ham’s untimely death prevented completing the division of the Arbitration Funds in whatever manner they intended. [ 70 ] But this is not a situation in which the Court can imply a contractual term on the basis of the presumed intentions of the parties where necessary to give business efficacy to the contract. Nor is it a situation where the term to be implied need not have been expressed because it is so obvious that it goes without saying: E nergy Fundamentals Group Inc v Veresen Inc , 2015 ONCA 514 . Rather, the manner in which Ms.

Snowball was to be compensated goes to the substance of her understanding with Mr. Ham. That is not a gap this Court can fill. [ 71 ] The facts here do not admit of an obvious candidate for a relative split of the Arbitration Funds. Indeed, they are equally consistent with an arrangement that would see Ms. Snowball paid based on hourly time charges. [ 72 ] The Undertaking does not rise to the level of a lawyer’s undertaking, as that term is contemplated in the Code of Conduct and the cases discussing lawyer’s undertakings.

It does not require or even permit the imposition of a trust that would remove the Arbitration Funds from assets belonging to the Estate or MCI. [ 73 ] As I find there is no trust of the Arbitration Funds in favour of Ms. Snowball, I need not speculate on the terms of such trust or the identity of the trustee. [ 74 ] In the result, Ms. Snowball’s requests for (1) a remedial constructive trust of the Arbitration Funds or (2) a constructive trust arising as a direct consequence of the Undertaking are dismissed.

If the parties cannot agree on costs they may make written submissions to me within thirty days of the date of this decision. Heard on the 31 st day of March, 2021. Dated at the City of Calgary, Alberta this 28 th day of June, 2021. C.M. Jones J.C.Q.B.A. Appearances:

Matthew X. James for the Plaintiff Collin May for the Estate of Kenneth Hugh Ham Jennifer Lamb for Jill Taylor, Executor of the Estate of Kenneth Hugh Ham