Salloum v. Smith, 2023 BCCA 412

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Salloum v. Smith, 2023 BCCA 412 Date: 20231030 Docket: CA 48328 Between: Nuha Salloum, Ryan Dean, and CICC College of Immigration and Citizenship Consultants Corp. Appellants (Plaintiffs) And Paul Smith c.o.b.a. Smiths IP and Paul Raymond Smith d.b.a. Smiths IP, Barristers & Solicitors, Patent Trademark Agents, and Andy Chow and Karen Chow Respondents (Defendants) Corrected Judgment: The title page of the judgment was corrected on December 8, 2023. Before: The Honourable Mr. Justice Fitch The Honourable Mr.

Justice Grauer The Honourable Justice Skolrood On appeal from: An order of the Supreme Court of British Columbia, dated May 9, 2022 ( Salloum v. Smiths IP , Vancouver Dockets S219121; S2111281). Oral Reasons for Judgment The Appellant, appearing in person and on behalf of CICC College of Immigration and Citizenship Consultants Corp.: N. Salloum Counsel for the Respondents: P. Smith K. Chow Place and Date of Hearing: Vancouver, British Columbia October 30, 2023 Place and Date of Judgment: Vancouver, British Columbia October 30, 2023

Summary: The appellants appeal a finding that no special circumstances exist to justify a review of paid solicitors’ bills under the Legal Profession Act outside of the applicable limitation period. The appellants also bring an application to adduce fresh evidence in support of the appeal. Held: Appeal and application to adduce fresh evidence dismissed. The appellants failed to establish any reviewable error. Among others, their arguments concerning an error in relation to the date of last payment of the bills, the existence of special circumstances, and an unfair hearing are unsupported by the evidence.

The materials the appellants seek to adduce in their fresh evidence application do not satisfy the Palmer criteria. [ 1 ] GRAUER J.A. : This is an appeal by clients from a finding that no special circumstances exist that would permit a review under

section 70 of the Legal Profession Act , SBC 1998, c 9 [ LPA ] of 10 of the 14 bills rendered to the clients by the respondent solicitors. In the result, the clients were barred from seeking a review of those 10 bills, but were at liberty to proceed with a review of the final four bills. [ 2 ] This followed from sections 70(1) and 70(11) (

b) of the LPA :

(1) Subject to subsection (11), the person charged or a person who has agreed to indemnify that person may obtain an appointment to have a bill reviewed before (a) 12 months after the bill was delivered under

section 69, or (b) 3 months after the bill was paid , whichever occurs first. …

(11) In either of the following circumstances, the lawyer's bill must not be reviewed unless the court finds that special circumstances justify a review of the bill and orders that the bill be reviewed by the registrar: (a) … (

b) application for the review was not made within the time allowed in subsection (1) . [Emphasis added.] [ 3 ] The 10 bills in question were rendered between November 15, 2020, and May 18, 2021. They were paid in full, with the last payment being made on July 5, 2021, more than three months before the clients took out their initial appointment for review on October 22, 2021. The last four bills were invoiced between June 21, 2021 and July 20, 2021, totaling $24,878.94.

The judge found that they had not been paid so that the 12-month time limit applied, as opposed to the three-month time limit for bills that had been paid. The appellants maintain that the judge erred in his finding, because those four bills were in fact paid. The evidence does not support that contention, but rather shows at most only partial payment. In any event, on the view I have taken of this case, it makes no difference.

The clients remain at liberty to pursue a review of those four accounts. [ 4 ] The services were rendered in relation to ongoing litigation in the Federal Court of Canada and the Federal Court of Appeal, in which the clients were involved as defendants. The respondents were never retained as solicitors of record, or to represent the clients generally in the litigation. Their initial retainer was to assist the clients in preparing for cross-examination on affidavits in relation to an application by the plaintiffs in the litigation for an interim injunction.

The first two accounts were rendered under this retainer agreement. The judge found (at paras 39–42), and it was not contested, that a formal retainer ceased to exist thereafter. The next eight invoices were based on “unbundled legal services”. As Ms. Salloum, the principal of the appellants, put it before the judge, Mr. Andy Chow of the respondents told them after December 9, 2020: “I’m going to go month on a month [ sic ] basis.

If you request a job from me, then I will provide you either with legal advice or prepare some document, like a paralegal would, and then you file it, but we are not going to go on the record.” Ms. Salloum went on: So that the engagement of November 2nd is no longer exist [ sic ]. It was--it was disengaged on December 9, 2020. So, for the next nine months, we agreed whatever we asked for, there was no based [ sic ] on any retainer.

If I require the service, they provide it, I pay the invoice, and that was the method we followed for the next nine months. [ 5 ] In these circumstances, the judge considered the two invoices rendered under the original retainer, amounting to approximately $12,100, and the eight invoices rendered after December 9, 2020. These eight were rendered from January 18 to May 18, 2021, and totalled $18,248.22. He then observed that all 10 of those bills were paid more than three months before the appointment, so that special circumstances must exist before the Registrar can review those bills.

He went on to describe the test and the relevant facts: [24] In considering special circumstances, the court has to consider what the case law tells me about the test and has to review the facts against that test in order to come to a determination. The leading case in regards to what a determination of special circumstances is, is the case of Dakota Ridge Builders Ltd. v. Niemela , 2015 BCSC 1245 , a decision of Mr. Justice Sigurdson. The test is long, but worth repeating for the purposes of this decision. [25] The test, as found at para. 11, is as follows: 1. Each case must be determined on its own facts. 2.

The onus of proving that a special circumstance exists rests on the applicant seeking to review the legal accounts. 3. Reasonable explanation for the delay in filing the appointment is critical. The longer the delay, the more important the reasons become. 4. Ignorance of the existence of the limitation period by itself is not sufficient to establish a special circumstance. 5. The very size of accounts when considered with the nature of the work can be taken into account as a special circumstance. 6. A number of factors, none of which individually would amount to special circumstances, in combination may be so. 7.

Charging for work that was not performed is a special circumstance. 8. Pressuring the client to pay without giving him the opportunity to review the account may be a special circumstance; for example, threatening to abandon a client the day before his trial if the bill rendered that day is not paid.

9. Rendering an account far in excess of an estimate for fees might be a special circumstance. 10. If the account document itself does not set out sufficient detail to determine how many hours were charged for what by whom, that may be a special circumstance. 11. The court will consider prejudice to both parties. When the lawyer received actual notice of the intention to review [the account] may be a factor in determining prejudice. [26] That is the test.

In terms of my comments on the test, again I am viewing this case on its own facts and I am aware, in the second aspect of the test, that it is the client that bears the burden to satisfy me, on a balance of probabilities, that special circumstance exists. [27] The third aspect of the test, the reasonable explanation for the delay in filing the appointment, is critical. The longer the delay, the more important the reasons must be. I note here the client's assertion that almost immediately in July 2021, they were informed by their new counsel about concerns with the lawyers' bills and were told not to pay them.

That is what the client has advised the court. They knew by August 25 that those concerns were sufficiently paramount that they commenced an action for negligence, and yet it was not until October 23, 2021 that the LPA appointment was in fact taken out. [28] In terms of the paid invoices, what that means is that for the first invoice rendered on November 15, by the time the LPA matter was taken out, that invoice had been paid for 11 months. A number of the invoices were paid on January 8, 2021, that is nine and a half months before the appointment.

A number of the invoices were paid on January 18, 2021, nine months before the appointment was taken out.

A number of invoices were paid on March 2, 2021, that is seven and a half months before the appointment was taken out, and a number of the invoices were paid on July 5, 2021, three and a half months before the appointment was taken out. [ 6 ] The judge went on to apply the test to the facts before him: [30] In analyzing the third aspect of the test, it is fair to say that there has not been an inordinate delay, in the sense that we are not talking about years, but there is still a significant delay in light of what was in the client's mind on the date that the relationship terminated and certainly in the client's mind by August 25. [31] In regards to the fourth aspect of the test, ignorance of the existence of a limitation period, by itself, is not sufficient to establish a special circumstance.

I am assuming that the client did not act because they were not aware of the legal limitation requirement. [32] In regards to the fifth aspect of the test, the very size of the account when considered with the nature of the work can be taken into account as a special circumstance. I have had an opportunity to review the bills with some detail over the lunch hour, and this is not one of those cases where the accounts are unduly large, considering the nature of the work described in the invoices, though clearly clients and lawyers may have a different view on that.

Again, the total amount of the invoices over this period of time was $55,000. There exists a jurisdiction to review, as a matter of right, $24,878 of those accounts, leaving approximately $31,000 in dispute for which special circumstance determination is required. On the large scale of matters, that is not a huge amount of legal fees and, as such, the very size of the account is not a factor. [33] In regards to the sixth aspect of the test, a number of factors, none of which would amount to special circumstances, in combination may be so.

I am aware of that. [34] In regards to the seventh aspect of the test, charges for work that is not performed, is a special circumstance. There is nothing advanced to me to suggest that the lawyer has billed for work which they did not do.

It is the quality of the work and perhaps the time spent that is of concern. [35] In regards to the eighth aspect of the test, pressuring the client to pay without giving an opportunity to review the account, may be a special circumstance. [36] The client purported to say to me that there were a number of periods of time during the continued retainer when she continued to pay the accounts, that she expressed concern to the lawyer about the bills.

Without seeing documents, and only for the sake of argument, I am prepared to accept that that is what the client did, expressed some modest concern about the amount of the bills, but in my view there was nothing advanced to suggest that the client was pressured to pay those bills without being given an opportunity to review them.

That may only be true in regards to the last work done, which seemed to have been done in a very time-sensitive way and the last work done is covered off, in my view, by the last four invoices which, whatever I rule on special circumstance, will still be before the registrar. [37] In regards to the tenth aspect of the test, if the account document itself does not set out sufficient detail to determine how many hours were charged, that may be special circumstances. Again, these accounts are, from my review, detailed.

They seem to have tracked minutes spent in a very significant way, in the sense that there are numerous modest entries for very few minutes spent, so clearly this is not a case of a large omnibus account without details of time being sent out. These are very detailed time-based bills and there has been, on some of the accounts, a reduction. [38] The last consideration, the court will consider prejudice to both parties. When the lawyer received actual notice of intention to review his or her account may be a factor in determining prejudice. In that regard, I note two things of significance in terms of prejudice.

First off, the lawyer had notice prior to the October 22 appointment, that the client was concerned about the bill, in that the client commenced an action in negligence. Equally true, no matter what I determine today, the client has an opportunity to pursue the negligence action which they have commenced, and it would appear to me that their true dispute is this: that after they had paid a number of the invoices, a new lawyer has told them that the work they paid for was negligent.

They still have that remedy. [ 7 ] The judge then concluded as follows: [44] In terms of an analysis of special circumstances and the test, the best thing that can be said, in my view, from the client's perspective, is what I have just said; that they are out of time, but they are not far out of time.

[45] This is not a case of a client who is inexperienced with legal retainers. The client, in her presentation to court, is articulate andadvised the court that over the course of her business career of several decades, she has paid upwards of $1 million in legal fees. This isnot someone who is unsophisticated in dealing with lawyers. [46] She was advised as early as mid-July that she should not pay any more invoices and she was advised so by a lawyer that shetrusted.

Certainly by the middle of July, having made a determination not to pay any more invoices, she had determined clearly in herown mind that the legal services were not satisfactory. Additionally, she started a negligence action on August 23 or 25, 2021, but she didnot start a LPA action until October. [47] I am not satisfied that the client has established special circumstances and the onus is on the client to do so.

Though it is truethat, in regards to some of the paid invoices, she has missed the window by only a few weeks, it is still a missed window of opportunityand, I note that in considering special circumstances and the prejudice to both parties, that the client has a negligence action.

She is nodoubt advocating in that action that the work that the lawyer has done was sub-par, was negligent and, therefore, she should either nothave to pay the lawyer or the lawyers, and/or that she should be reimbursed for some or all of her legal fees as a result of the negligentadvice and action that she alleged the lawyer has provided her. [48] At core, her dispute is that the lawyers were negligent in the advice they gave her. The client has an opportunity to pursue thatcompletely in the Small Claims Court of British Columbia.

In my view, one would have a very difficult time establishing specialcircumstances and waiving the statutorily-imposed limitation periods of s. 70 when one has an alternate remedy and that alternateremedy is the negligence action. [49] I have determined, in regards to the notice of application, that it is not appropriate to allow a LPA review on anything other thanthe last four invoices in the appointment.

I am not satisfied that the client has shown, on a balance of probabilities, that there are specialcircumstances. [50] The hearing of the LPA is stayed until such time as the negligence action is determined in Provincial Court (paragraph 1 of thenotice of application). [8] In pursuing their appeal of this matter, the clients have persisted in taking unsustainable positions and have raised seriousallegations that the evidence simply does not support, including bias and corruption on the part of court officials.

They sought to includea large number of irrelevant documents in their appeal book, including documents that they maintained were necessary to establish thatthey should have been awarded default judgment by the Chambers judge because the respondents were one day late in filing theirapplication response. In fact, as Justice Frankel pointed out in Court of Appeal Chambers, the solicitor’s response was not out of time.The clients sought a review from a division, and were told once again that this was not a viable ground of appeal: 2023 BCCA 175.

Theclients continue to seek to adduce the evidence in question, together with much other irrelevant evidence, through what in my view is amisguided application to admit fresh evidence. [9] I have reviewed Ms. Salloum’s affidavit in support of her application to adduce fresh evidence, and have found nothing in it thatwould satisfy the Palmer criteria for admissibility (Palmer v. The Queen, [1980] 1 S.C.R. 759, ).

Much of the evidence ismischaracterized and lacking in credibility; nearly all of it was available at the time of the initial hearing; most of it is irrelevant; andnone of it would appear to be material to the result. Taken as a whole, this evidence does not, in my view, establish “specialcircumstances” ignored by the judge. [10] By way of example, Ms. Salloum refers in her affidavit to a ledger from the respondents showing transactions on January 18,2021. Ms.

Salloum complains that retainer money was taken from one file (for the Federal Court advice) and used in part to pay aninvoice on the second file (Federal Court of Appeal advice), and appends what she says is a second copy of the ledger with two of thetransactions purposely deleted, calling this a clear attempt to deliberately mislead the court. She describes this as a “specialcircumstance”. She is wrong. The two pages are from two different ledgers, representing two different files.

There is nothing sinisterabout them, nor do the trust account rules of the Law Society cover this situation. [11] Similarly, she includes an order from the Provincial Court pronounced by Judge St. Pierre, and the transcript of a hearing beforehim, maintaining that his order has been improperly overridden by the judge here. But neither the order nor the transcript supportMs. Salloum’s position.

Most of these documents, indeed all of those appended to her affidavit had been, in the court below, in binderswhich, as the Registrar noted, (2023 BCCA 21 at para 13), comprised largely unsworn documents and included materials related to otherproceedings altogether—hence their exclusion from the approved appeal book. As noted, Ms.

Salloum unsuccessfully appealed theRegistrar’s decision to a Justice of this Court, then unsuccessfully sought a review of that decision from a division of this Court. [12] In my view, the interests of justice would be poorly served if this evidence were admitted and I would therefore dismiss theapplication. [13] I now turn to the appeal itself. [14] The starting point under the legislation was that, in relation to the 10 bills at issue, they must not be reviewed because they hadbeen paid more than three months before the application for review, subject to the “special circumstances” exception.

Accordingly, thequestions the judge had to decide were whether, notwithstanding the delay, there existed (1) special circumstances that (2) justified areview. This involved an assessment of the facts, reviewable on the basis of palpable and overriding error, and the exercise of discretion,for which the standard of review is deference. This court may interfere only if the decision was wrong in law or principle, or based upona clear misapprehension as to relevant considerations.

The onus of establishing a reviewable error is on the appellants. [15] The appellants argued that the judge erred in relation to the calculation of date, time and last payment. In particular, they say thata last payment was applied from trust towards the bill of July 20, 2021. That, of course, is irrelevant to the status of the 10 previous billsthat were at issue. It has not been suggested that the bills of July 20, 2021 cannot be reviewed, nor does the status of their payment affectthe judge’s findings in relation to the first 10.

[ 16 ] The appellant continued to maintain that the decision of Justice Frankel and that of the division reviewing his decision resulted in a miscarriage of justice because of the failure to issue a default judgment against the solicitors for the late filing of their response. For some reason, Ms. Salloum is unable or unwilling to understand how time is calculated for the filing of a response, and under what circumstances default judgment can be taken. [ 17 ] The appellants maintain that they were denied a fair hearing. Ms.

Salloum says that she was ill at the time and was not accommodated—although she was permitted to attend by video. Ms. Salloum told the judge that she was not appearing in person because she had shingles. But at no time did she asked the judge for an adjournment. [ 18 ] Ms. Salloum then complains that the judge heard first from the representative of the respondents, notwithstanding that it was the clients’ application, leaving them with little time. She says that the judge did not understand whose application it was, a proposition clearly belied by the transcript.

I observe that it is common practice for a judge to hear first from a party represented by counsel, in order to get some grasp of the background, before hearing from a party acting in person. The transcript indicates that the introductory remarks from the respondent’s representative occupied nine pages, followed by submissions from Ms. Salloum that occupied 26 pages. The respondent’s representatives then made submissions for 20 pages, followed by 15 pages from Ms. Salloum in reply.

I do not accept that the appellants were denied a proper hearing. [ 19 ] The appellants contend that the judge declined to vacate the order of Registrar Nielson because the respondents’ representative “came up with strange new Rule that Salloum did not appeal registrar order within 14 days which [the judge] never heard of this Rule.… Credibility and fabricated information should not be ignored”.

There is nothing particularly strange or new about Rule 23-6(8.1) of the Supreme Court Civil Rules , which requires an appeal from an order or decision of a registrar to be brought within 14 days after the order or decision is made. Nothing in the transcript supports the appellants’ assertion that the judge had never heard of this rule. [ 20 ] The appellants argue that the judge based his decision on a balance of probabilities when a decision of such “gravity” should have been made on a beyond reasonable doubt basis.

There is, of course, no merit to this argument. [ 21 ] The appellants further seek to overturn the judge’s order staying the hearing of their application for a review under the LPA of the last four accounts until such time as their negligence action has been determined in Provincial Court. They argue that this overrides the order discussed above made by Judge St. Pierre of the Provincial Court. According to Ms. Salloum, Judge St. Pierre directed that their negligence action be stayed pending a review of the bills.

But while the judge dealt with scheduling, he did not order a stay of anything. [ 22 ] The appellant now points to new evidence indicating that the Provincial Court negligence action and counterclaim to the fee action have been transferred to the Supreme Court by order dated October 6, 2023. We agreed to receive the evidence, but I would not change the order except to delete the words “by the Provincial Court” so that the review of the Solicitors’ bills is stayed until such time as the Clients’ negligence action is determined.

The appellants have not shown any proper basis for interfering with the chambers judge’s exercise of discretion in issuing a stay. [ 23 ] In general, the appellants maintain that the judge failed to give proper attention to all of their evidence, considering only that part of the evidence that he thought important. For this reason, they maintain that it is essential that all of the evidence be reviewed in detail by this court. As the examples cited above indicate, the difficulty is that most of the evidence upon which the appellants rely is irrelevant, lacking in credibility, or mischaracterized.

It was open to the judge to rely on the evidence he considered relevant. [ 24 ] Notwithstanding their voluminous arguments, the appellants have failed to establish reviewable error, but rather have sought to reargue the entire matter. That is not what an appeal is for. In all of the circumstances, I would dismiss the appeal. [ 25 ] The respondents have sought an order setting their costs. They maintain that it would be a much easier process than having to go through all of the different procedures in this matter before the Registrar.

In my view, there is nothing about this case that should take it out the normal course. While the respondents are entitled to their costs, the proper process for determining the amount to which the respondents are entitled is an assessment before the Registrar. [ 26 ] FITCH J.A. : I agree. [ 27 ] SKOLROOD J.A. : I agree. [ 28 ] FITCH J.A. : The appeal is dismissed. The respondents are entitled to costs and the quantum of the respondent’s costs are referred to the Registrar to be assessed in the usual course. “The Honourable Mr. Justice Grauer”