The Sea to Sky Law Corporation v. Bensley Date:, 2011 BCPC 162

Citation: The Sea to Sky Law Corporation v. Bensley Date: 20110608 2011 BCPC 0162 File No: 09-21238 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: THE SEA TO SKY LAW CORPORATION CLAIMANT AND: DOUGLAS BENSLEY DEFENDANT EXCERPTS FROM PROCEEDINGS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE C. BAIRD ELLAN Counsel for the Claimant: A. Liggett, an officer of the company Appearing on their own behalf: Douglas Bensley Place of Hearing: North Vancouver , B.C. Date of Judgment: June 8, 2011 [ 1 ] THE COURT: The claimant law corporation seeks payment on a promissory note.

The defendant says he signed the note under duress and never intended to pay on it. He says he did not owe the claimant any money at the time he signed it, and he did not acknowledge that he did so. Evidence [ 2 ] Andrew Liggett testified as the principal of the corporation. He is a lawyer. He filed a copy of the retainer agreement with the defendant, and a copy of the $18,000 promissory note signed on October 29th, 2003. He said the defendant signed the note because it represented a compromise for a larger amount he had billed the defendant which the defendant refused to pay. [ 3 ] Mr.

Liggett also filed a letter he wrote to Mr. Bensley confirming that he paid $1,000 toward the note at the time when he signed. Mr. Liggett said that Mr. Bensley made no further payments after that date, which was October 29, 2003. Mr. Liggett also pointed to an email in which he said Mr. Bensley acknowledged the debt some time later. It was filed as an exhibit to his affidavit and was dated November 7th, 2008. That has been referred to in court most recently by Mr.

Bensley and it commences, "I will not pay you for incompetence as I have repeatedly told you." [ 4 ] There was an ongoing state of antagonism between the two after Mr. Liggett ceased to be Mr. Bensley's counsel, from what I glean from the materials before me. [ 5 ] Mr. Liggett had given his whole file to Mr. Bensley, he said in his testimony, and did not keep a copy of the original invoice that he rendered to Mr. Bensley for his fee. Mr. Liggett did not recall the amount of the original bill or whether he had added interest to it in reaching the compromised figure with Mr.

Bensley of $18,000, i.e., whether that figure included some interest or not. Mr. Liggett also did not remember the total amounts he was paid by Mr. Bensley over the period of time when he was his counsel. He no longer had the

records pertaining to any of these accounts. [ 6 ] He recalled that he had put a lot of time and effort into the file. He acknowledged that Mr. Bensley had concerns about how Mr. Liggett conducted his litigation, but said those were accounted for in the compromised amount of $18,000. He agreed that Mr. Bensley could have already paid him over $25,000 in fees. He said he would not have kept any of his related accounting records because they were not relevant in light of the note that Mr. Bensley had subsequently signed. [ 7 ] Mr.

Bensley had originally brought his file pertaining to a custody and access dispute to Mr. Liggett to ask him to consider it. Mr. Liggett agreed that it could have been three boxes worth of materials and that he had returned all of them to Mr. Bensley when he signed the note. Mr. Liggett had prepared an initial draft of the promissory note which Mr. Bensley had revised and sent back to his office and then attended there to sign it. [ 8 ] Mr. Bensley testified that he brought his Supreme Court file to Mr. Liggett after it was transferred back to the Provincial Court.

The file had been started in 1993, I think he said. The matter went to court, but Mr. Liggett spent more time, Mr. Bensley said, than Mr. Bensley expected and did half of what Mr. Bensley expected him to do. Mr. Bensley ended up representing himself in the trial of the proceedings which proceeded after the retainer agreement was ended in 2003. [ 9 ] Judge McKinnon in Provincial Court had asked Mr. Liggett to organize the file and prepare a chronology. Mr. Bensley brought some of the records of the North Vancouver portion of the proceedings, but not the Richmond ones. When Mr.

Liggett next appeared before Judge McKinnon, Mr. Bensley says, Mr. Liggett had not prepared the chronology and organized the file and Judge McKinnon was angry, Mr. Bensley said. [ 10 ] Mr. Bensley ended up doing that work that he had expected Mr. Liggett to do. Mr. Bensley said he was ordered by the judge to produce the file. From his perspective, the case involved the safety and well-being of his daughter and he said he would have told Mr. Liggett anything to ensure her safety. [ 11 ] He had no intention of paying on the promissory note. He just signed it in order to obtain his file.

He agreed with the suggestion that he crossed his fingers when he signed it. He did not have that much money to pay Mr. Liggett. He gave him $1,000 when he signed it which he said he paid in good faith. Mr. Bensley said that Mr. Liggett bullied him and tried to put a mortgage on his house. I think there were some cross-allegations in that respect. [ 12 ] Mr. Bensley had requested that the Richmond court file which had since been transferred to Kelowna be delivered to North Vancouver for the last trial date before me.

Judge Gedye made that order to that effect at the settlement conference, but the file had not been requested. The trial was adjourned so that Mr. Bensley could again request the file which I did on his behalf. [ 13 ] It has since been delivered to the Registry and Mr. Bensley was afforded access to it. He has obtained the transcript of the proceedings and the record of proceedings that were filed as evidence before me today. In that transcript, there is an order by Judge Moon with respect to preparing a

summary and timeline and something similar for the assistance of the court. Ultimately, Mr. Bensley said, Mr. Liggett did not do that work and he did incur the disapprobation of the court. [ 14 ] Mr. Bensley reiterated this was about the safety of his daughter given that his ex-wife was using drugs and alcohol. He did ultimately obtain custody of his child. [ 15 ] Mr. Bensley asked for continual accountings from Mr. Liggett, but he said Mr. Liggett stopped providing those after he had paid about $5,000 or almost up to the $5,000 retainer that he had originally provided. [ 16 ] Mr. Liggett conceded that Mr.

Bensley may have paid him over $25,000. By Mr. Bensley's accounting, then, it means that Mr. Liggett tried to bill him close to $50,000 for what was essentially, he says, three days in court, perhaps some preparation work, short appearances and, as well, attendance at the case conference which he said was also very short. He said that given Mr. Liggett's professed hourly rate of $195 per hour without any assistance from associates or legal assistants that would represent something in the range of eight weeks of work. [ 17 ] Mr.

Bensley also says there is no accountability for what the additional $18,000 represents. The $25,000 should have covered it, the whole of the account. Mr. Liggett was only involved in the tip of the iceberg, he says, and there was not enough billable time to support even the $18,000, let alone whatever the original bill was, which Mr. Liggett cannot provide. [ 18 ] The file originated with Mr. Bensley in the Supreme Court. He brought it to Mr. Liggett and Mr. Bensley points out that Mr. Liggett did not organize it at all or create the binders that Mr. Bensley ultimately did, nor create a chronology. What Mr.

Bensley says is Mr. Liggett did not even use the file and then held it ransom when Mr. Bensley asked for it back. [ 19 ] Judge McKinnon came from Richmond to North Vancouver to hear the case because of conflicts and it was here that she instructed Mr. Liggett to do the chronology. In fact, I think it was Judge Moss that ordered that, as I have noted, and then the file moved back to Richmond to follow her and must have continued sometime, I would assume, after October 29th, 2003, because that is the date on which Mr. Bensley attended to obtain his file in order to continue before her.

That is conceded, as I understand it, by Mr. Liggett. [ 20 ] There was a further order that the materials be organized and binders prepared, but as Mr. Bensley has pointed out, he ultimately ended up doing that himself. It was somewhere in the midst of the proceedings in 2002 and perhaps a later proceeding before Judge McKinnon that Mr. Liggett ceased to be counsel for Mr. Bensley. [ 21 ] Mr. Bensley explained their falling out as him having perceived that the judge was agitated with Mr. Liggett and that Mr. Bensley at that point could not afford to continue with him.

He said he had not budgeted for any further amount. He had paid $25,000 to that point. He only received bills until he reached his retainer, then he just paid lump sums, he said, as guesstimates. [ 22 ] Every month or so, he asked for an accounting. When he got a rough estimate of the amount, he found it exorbitant, challenged

Mr. Liggett's amount, and said it did not add up. For instance, he was billing for a particular day in the beginning of June, something like 20 hours, Mr. Bensley thought. Bensley said at this point he became aware he was being over-billed and asked for a breakdown of the account or an accounting. He was, he said, shocked to find that there was any more owing at that point, but he did make this further payment in good faith. [ 23 ] Mr. Liggett has not been able to produce an accounting, he said, originally, because it was in the file. According to Mr. Bensley, in the affidavit, Exhibit C, Mr.

Liggett says something different, which is that he gave the rest of the file except the accounting to Mr. Bensley. So there is some conflict on the evidence, he says, there. [ 24 ] He also challenges Mr. Liggett's statement that he did not receive more on account after the $1,000. Mr. Bensley produced a receipt for $500 paid in October 2004, which he said he paid to Mr. Liggett to get him to leave him alone, as a peace offering, and hoping and expecting that Mr. Liggett would not go any further with respect to enforcing the promissory note. [ 25 ] Mr.

Bensley said he was under the gun to get the file as requested by the judge which is supported by the request for the timeline and the binders that were prepared by him. Judge McKinnon had already asked for all of this and, if Mr. Liggett had given it to her in June of 2002, Mr. Bensley would not have been in the position he was in. It was imperative that they go forward at the time when he required the file. He was in a jam and needed the documents from the file. [ 26 ] He also said he was angry and baffled at how Mr. Liggett was trying to get more money when he had not done the work.

The math did not add up, that he could charge something like 300 hours at that point when he had not really even started. The $25,000 should have sufficed. [ 27 ] Mr. Bensley did change the wording of the draft, he said, out of spite. He changed "with" to "without" with respect to the interest as, he said, a touché gesture. He never thought the matter would even be revisited and did not think that Mr. Liggett would even notice the change. He said it was done in anger. He said he did not even know what he owed and pulled a number, that is, Mr. Liggett pulled a number, out of the air. [ 28 ] Mr.

Bensley filed a copy of the mortgage he says Mr. Liggett prepared to file against his house. He says it was done behind his back. There was an application at the Land Office Title Office against his residence and he pointed to some notes on the document. Not a lot turns on that, in my view. [ 29 ] Mr. Bensley said he received the file back from Mr. Liggett, then, at the time he signed this promissory note. Mr. Bensley agreed with Mr.

Liggett's question in cross-examination that there was to have been a seven to eight-day trial, but he denied that there was a huge amount of work necessary to prepare for the trial, as in, that Mr. Liggett had to do that. He denied that Mr. Liggett had to do a lot of work to prepare for the trial or that he even did prepare for it. In fact, it appears it was somewhat later. [ 30 ] Mr. Liggett suggested that the judge wanted the timeline from Mr. Bensley, but Mr. Bensley disagreed with that. He said, in his view, his retainer was up to date at that point and that was not the reason that Mr.

Liggett did not do the work. Mr. Bensley denied he had reduced the amount of the note. He said that Mr. Liggett must have done that himself. He said he did, in his evidence, but no bigger number or bill was ever provided to Mr. Bensley than the $18,000 that Mr. Liggett said was a compromise. [ 31 ] Specifically, Mr. Bensley denied he got an accounting or an account that stated an amount higher than the $18,000 prior to his entering into that promissory note. He did not agree with the amount, except under duress.

He only received bills, as I have said, a couple times, up to the amount of about $4,400 against the retainer. [ 32 ] Mr. Liggett suggested that he had received time records or registers after that, though. He denied that that had occurred, though he said he had asked repeatedly for them. He said Mr. Liggett violated the rules of the Law Society by not sending bills for the $21,000 that Mr. Bensley had paid over and above the $5,000 in the retainer. He said Mr. Liggett just verbally asked him to top up the retainer. [ 33 ] Mr. Bensley denied that he attended Mr. Liggett's office repeatedly.

He went there to drop off money and the morning he came to get the file. His wife was there as she witnessed the signing of the note. It was signed there, but Mr. Liggett was not present. The file was ready for pick-up at that time. [ 34 ] Mr. Bensley acknowledged that the further $500 payment he made was probably in response to a request from Mr. Liggett's office for payment on the note. He denied that the sole reason they fell out, or that the contract was breached, was because Mr. Bensley was in default on his fee. Analysis [ 35 ] Mr. Liggett, in submissions, says that Mr.

Bensley admitted that they were in mid-proceedings and the file was active at the time that Mr. Liggett withheld the file. He says he was entitled to do that. [ 36 ] The conduct of the legal proceedings, he says, is not relevant to enforcement on the promissory note. It was signed, he says, without any indication of duress and is enforceable by this court on that basis without inquiring into any of the dispute between the two parties regarding the conduct of the file in the proceedings. For that reason, Mr.

Liggett says, it is not incumbent on him to establish anything by way of prior accountings or fees charged to Mr. Bensley. He is entitled simply to enforcement of the promissory note which he says has been acknowledged both by the email and by the subsequent payment in October 2004 on account of the note. [ 37 ] The case of Walker v. Grewal , 2010 BCSC 575 , sets out the process by which a client may obtain a file that is held by a solicitor. Mr. Liggett points out that Mr. Bensley did not follow that process here nor did he review or challenge Mr. Liggett's account until about six years later, when Mr.

Liggett started a collection action on the note. He could, Mr. Liggett says, have commenced a taxation.

[ 38 ] Mr. Bensley says he had the documents for the taxation. They discussed it, but he made the point that Mr. Liggett waited until after the limitation period for the taxation had expired until he commenced to enforce his account. Therefore, it was not open to Mr. Bensley to take a taxation at that time when the note was signed. [ 39 ] I have referred both parties as well to the case of Doran v. Tiwana , 2007 BCSC 36 , with respect to the issue of solicitors’ liens.

The cases point out, in addition to the fact that there is a process for the client to enforce or tax the bill, that it is open to the lawyer, and perhaps the better practice, to seek taxation of his accounts as was done by the solicitor in Walker v. Grewal . In the meantime, he can produce the file to the client so the client is not prejudiced in the conduct of the further proceedings. The court in one or the other of these cases points out that a lawyer should not withdraw or refuse to act in a manner that prejudices his client in his ability to proceed. [ 40 ] The issue of whether Mr.

Bensley signed the note under duress, or indeed whether this court should enforce it, turns in my view to some extent on whether Mr. Liggett's claim of a lien on the file was a legitimate one. As I understand the right to a lien on a client's file, it relates to the lawyer's work product. Mr. Bensley says there was no work, or not enough of it, but more importantly, that the file consisted mainly of materials that he had provided to Mr. Liggett and had been generated in the Supreme Court proceedings. [ 41 ] There is some dispute on the evidence as to whether it included Mr.

Liggett's accounting documents when he turned it over, but Mr. Bensley points to inconsistent statements by Mr. Liggett about that. He could have retained those, but it is not relevant at this point because he has no documentation to support the assertion that he rendered an account to Mr. Bensley after Mr. Bensley said he stopped doing so. [ 42 ] If Mr. Liggett did not render accounts, but simply asked Mr. Bensley to top up his retainer from time to time without giving accounts, he was not entitled to a solicitor's lien on the file. Mr.

Bensley says he did not receive bills and he has produced a copy of a receipt relating to one payment he made, which I must observe, is more than Mr. Liggett was able to do. [ 43 ] The question is, in the situation where Mr. Liggett does not appear to have had a right to retain the file and essentially held it ransom for a payment that he has not been able to support with a copy of an account which the client denies he rendered; the question is whether the court should enforce the payment on the promissory note.

It is my view that the note should not be enforced by the court in the circumstances. [ 44 ] The situation with a lay litigant, an imminent child custody issue, a dispute between the lawyer and the client, and the wrongful withholding of the file, in my view, amounts to duress, established on the civil standard, in this case. Alternatively, equitable principles demand that the claim be dismissed and therefore I do so. [ 45 ] It will be dismissed without costs. That is, you do not get the costs for your reply back, Mr. Bensley, but I am not going to enforce the note. [ 46 ] Thank you.

We are adjourned. [REASONS FOR JUDGMENT CONCLUDED]