2016 QCCQ 8862, 2016 QCCQ 8862

Peizler & Vani Attorneys, s.a. c. 9067-1421 Québec inc. (Laserworld) 2016 QCCQ 8862 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-140164-130 DATE: July 27, 2016 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ PEIZLER & VANI ATTORNEYS S.A.

Plaintiff v. 9067-1421 QUÉBEC INC. (LASERWORLD) Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, Peizler & Vani Attorneys S.A. (“Peizler & Vani”), sue a former client, the Defendant 9067-1421 Québec Inc., doing business under the name Laserworld (“Laserworld”), for a balance of account for professional services rendered in the period October to July 2013. [ 2 ] The services relate to the work of Maître Georges Peizler in legal proceedings instituted on behalf of Laserworld against a former commission salesman in Court of Quebec case number 500-22-194461-128. [ 3 ] In its Contestation, Laserworld states that it would agree to pay part of the invoice, provided that Peizler & Vani compensates it for fees subsequently incurred by its new attorney. [ 4 ] Laserworld’s allegation, made by its president, William Lazar, is that Maître Peizler’s mandate was not revoked as Maître Peizler alleges, rather Maître Peizler resigned from the file, just prior to an examination.

This required Laserworld to hire another attorney. Laserworld also alleges that when Maître Peizler resigned from the mandate he was not adequately prepared for the examination, because he did not understand the Cross-demand that the Defendant was making against Laserworld in that case. [ 5 ] The Clerk of the Small Claims Division treated the allegation as a Cross-demand, for the difference between the amount of the fees Laserworld alleges it incurred with another attorney minus the amount that it stated that it would willing to pay toward the invoice. That difference is $ 1,200.10.

ISSUES [ 6 ] To resolve this dispute, the Court must answer the following questions: 1. Is Peizler & Vani entitled to recover in whole or in part the fees it is claiming? 2.

Is Laserworld well founded in its assertion that Peizler & Vani must reimburse it for the fees it incurred with another firm, subsequently to the resiliation of the contract of professional services with Peizler & Vani? [ 7 ] The fee account, on which the action is based, begins with the attendance at Court on October 15, 2012, for the presentation of the Introductory Motion and setting up the Timetable. [ 8 ] The Introductory Motion had been prepared and served by Maître Peizler, based on instructions received from Laserworld through its president, William Lazar. This was accounted for in a previous billing.

The bill covers the preparation of Mr Lazar’s examination before plea, the preparation of undertakings subsequent to that examination, the amendment of the Introductory Motion, and the preparation of the examination after defence of the Defendant in that case. [ 9 ] The time charges that are interesting for the present controversy begin on December 21, 2012, through to January 7, 2013, the date of the last of three phone calls relating to the preparation of the examination of the Defendant.

It was during this telephone conversation of January 7 that the mandate terminated, according to Maître Peizler, Mr Lazar revoked his mandate when it became

impossible for them to agree upon the relevance of an issue of insurance that the Defendant had allegedly placed on an automobile that was being leased for him by Laserworld. [ 10 ] Mr Lazar allegedly asked him “for the 10 000 th time” to try to understand why the question was important. [ 11 ] This led to Maître Peizler seeking the collaboration of his opposing counsel to postpone the examination to enable Mr Lazar (P- 3) to find substitute attorneys for Laserworld.

On January 7, Maître Peizler wrote an email to Mr Lazar with a copy to an attorney at a competing firm, who was proposed as an attorney to substitute. Maître Peizler writes: As requested by you, I’ve left word with Me.

Marchand that the examination for tomorrow has been cancelled in view of the revocation of my mandate. […] [ 12 ] The email goes on to speak of the attorneys who may or may not agree to take up the file. [ 13 ] The email that Maître Peizler wrote to attorney Marchand, at 5:34:14 p.m., confirms to him that Maître Peizler’s mandate has been revoked and that Mr Lazar is in the process of finding substitute counsel, apologizing for the necessity of the postponement of the examination of the Defendant.

Just after the phone call, William Lazar had written at 4:41 p.m. : Hi George, would you like to move past the issue of the insurance on the vehicle and see if we can continue working together. I feel that it is a good idea to cancel the examination until we are both comfortable with moving forward with the examination at a later date. Please call me at […] so we can talk and perhaps discuss the possibility of working together once we both cool down and let our level headedness and respect for each other prevail.

Thanks William Lazar [ 14 ] Just prior to that however, at 4:22 p.m., Mr Lazar had written: Hi George, Can you kindly cancel the examination tomorrow on the grounds that I will be changing councel [sic]. Please contact Mr. Marchand as soon as possible. I’m sorry that we couldn’t see eye to eye on certain issues and I still think you are a good man. Please email me as soon as this is done and the examination scheduled for tomorrow at 10AM is cancelled.

Thank You Sincerely William Lazar [ 15 ] On the face of it then, there is simply an inability for an attorney and his client to agree upon how the professional services should be carried out, and a very gentlemanly though abrupt termination of the mandate. [ 16 ] Once the final bill was issued, there was some correspondence where Mr Lazar, facing requests for payment on June 28, 2013 (P- 5), and on July 24, 2013 (P-6).

On July 25, Mr Lazar asks for an itemized copy of the invoice (P-7): Hi George, Can you kindly email me an itemized copy of your invoice so I can take a look at it and make arrangements to settle up with you. [ 17 ] Me Peizler complies with this request, and follows up with answers on specific questions on particular time charges as well a disbursement. He also complies with the request for a copy of previous invoice, and discussion ensues on July 26, by exchanges of email about the duration of phone calls.

This leads to Maître Peizler sending copies of phone bills and, went asked for originals, offering Mr Lazare the opportunity of coming and examining them at the office. [ 18 ] After a certain number of exchanges about the phone charges, Maître Peizler proposed to settle the difference by deleting one hour of time. He confirms this in a fax (P-15), coversheet to an amended account for a total, including taxes and disbursements of $ 2,922.79.

He writes: As agreed, payment of the outstanding balance $ 2,922.79, will be considered as full and final payment of all legal fees and disbursements owing by Laserworld to our offices. As also agreed, Laserworld will send us the appropriate remittance over the course of the next couple of weeks. I am happy to put this matter behind us and wish you the best of luck in the future. [ 19 ] A follow-up is made by Maître Peizler on August 27 (P-16), requesting payment.

On August 27 (P-17), Mr Lazar, for the first time, claims compensation for approximately $ 2,500 paid to the new attorney making the allegation that any time spent on the case after November 6, was wasted time and useless time: […] “because in my opinion, you did not adequately familiarise yourself with the cross demand and actually in fact, quit on me 18 hours before the examination”. [ 20 ] Mr Lazar makes much of the fact that a tape recording that he has of the 52-minute conversation that occurred on January 7, will demonstrate that Maître Peizler did not have his contract of services terminated, he, in fact, withdrew or quit and that Maître Peizler was

not ready for the examination, having not understood the Cross-demand, and his preparation for the examination was, therefore, faulty. [ 21 ] The significance of the cut-off date of November 6, after which Mr Lazar refuses to pay for fees, is that this was the date of the examination of Mr Lazar before plea. Some of the time, however, after that date relates to the undertakings Mr Lazar had to provide, and modifications made to the claim.

There are, however, approximately three and one-half hours of billable time that relate to the Plea and Cross-demand and the preparation for the examination after Plea of the Defendant. [ 22 ] Apart from the phone call of January 7, the evidence also includes a lot of written materials sent by Mr Lazar to Maître Peizler, not only explaining Mr Lazar’s position, but also suggesting, in great detail, the questions that he should ask at the examination. [ 23 ] The Court listened to the entire conversation which, during the first approximately 37 minutes, deals with questions Maître Peizler has about the principal action relating to loans, charge-backs and car payments that were deducted from the Defendant’s remuneration.

There a conscientious attempt by Maître Peizler to understand not only the factual issues, but the evidence that he will able to adduce to establish that position. [ 24 ] From about 37 minutes onward, the discussion turns to the questions concerning the Cross-demand.

From the outset, Maître Peizler is mentioning that not all the questions that have been listed by Mr Lazar are relevant, and that he will not necessarily ask all of them. [ 25 ] Mr Lazar wants to go through each question that is on his detailed list, dealing with the periods during which the Defendant was employed, especially issues relating to the Audi automobile. [ 26 ] From around 46 minutes, the tone of the conversation begins shifting; Mr Lazare is reiterating the questions that are listed in his document.

Maître Peizler is essentially listening and acknowledging that he will ask the questions. [ 27 ] From about 49 minutes, Maître Peizler is asking for explanations why Mr Lazar considers relevant the questions about payments made by the Defendant for the Audi, including insurance and traffic tickets.

The discussion on this point becomes somewhat strained, because Mr Lazar is unable to establish to Maître Peizler’s satisfaction that these questions are relevant. [ 28 ] The conversation comes to an abrupt end when Maître Peizler reacts to Mr Lazar’s statement: “I am going to tell you for the 10 000 th time […]”. [ 29 ] At that point, Maître Peizler says words to the effect that he will not be doing the examination the next day, and Mr Lazar should find himself another lawyer.

Mr Lazar responds in the affirmative, that he will get himself another lawyer. [ 30 ] In a subsequent conversation just thereafter, Mr Lazar is happy to learn that the examination has been postponed, because: “we weren’t ready for the examination”.

Maître Peizler disagrees saying that he was ready for the examination, but that he was not willing to ask questions that he considers to be irrelevant. [ 31 ] Then, the discussion turns to the modalities of the transferring of the file to another attorney, and the mechanics of the Timetable. [ 32 ] In subsequent telephone conversations during the time when the fee dispute has developed, Maître Peizler and Mr Lazar disagree on the issue whether, as Mr Lazar puts it, “You quit on me” or in Maître Peizler’s estimation, Mr Lazar disagreed with his approach and did not think he understood the file, and therefore revoked the mandate.

ANALYSIS [ 33 ] In the Court’s analysis of this matter, it is not really of great importance to determine whether the mandate was terminated by Maître Peizler’s initiative or by that of Mr Lazar. [ 34 ] During the telephone conversation of January 7, Maître Peizler is diligently seeking confirmation of his client’s position, grasping to understand the evidentiary strength of his own case and making sure his knowledge of the file is sufficient before facing his opponent on an examination.

When he is satisfied with the answers received, he goes on to discuss why he is not in agreement with certain questions that he is being asked to concentrate on in the examination and then, he expresses his intention not to continue in the file, to which Mr Lazar immediately acquiesces and confirms that he will find a new attorney.

This meeting of the minds takes place in a couple of seconds. [ 35 ] On a literal reading of the discussion, it was Maître Peizler who took the initiative to terminate the mandate but he did so after he was confronted with a client who was expressing frustration that he (Maître Peizler) simply could not understand why a certain issue was of capital importance. [ 36 ] In the Court’s view, this exchange demonstrates two points that are essential to the case.

Firstly, Maître Peizler was ready and prepared to conduct the examination, so long as his client had confidence in his judgment in treating certain questions as relevant and others as irrelevant. Secondly, the client is at a point of frustration because he has become convinced that his lawyer is unable to understand what seems self-evident to him, that certain questions concerning the car insurance are critical to proving that his opponent is a liar. [ 37 ] The ethical duties of an attorney compel him to always have his client’s confidence if he is to continue acting on his behalf in a file.

This is partly subjective and depends upon affinities between clients and attorneys, but it is also objective. [ 38 ] Taking a step back from the situation, the Court sees a circumstance where the lawyer’s serenity has been upset on the eve of a critical procedural and evidentiary step, that of the examination after plea, and the lawyer has become convinced that the client does not have his confidence and will therefore not feel that he has been properly represented.

[ 39 ] Mr Lazar confirms this, in a way, when he argues later that Maître Peizler did not understand the file well enough to do the examination, and therefore, did the right thing by postponing it, but that he should be held responsible for the consequences of this postponement and the need to instruct new counsel because he did not understand the file. [ 40 ] Inherent in this statement is that Maître Peizler did not and could not understand why his client was insisting upon him asking questions that he did not feel were relevant. [ 41 ] The tone of the conversation became heated and the client said things to the lawyer that were insulting to him, and undermined his confidence that he had his client’s trust in his handling of the matter.

He chose to withdraw from the file and the client agreed. [ 42 ] Laserworld has not established that the lawyer withdrew because of a lack of comprehension of the file itself, as opposed to a comprehension of Laserworld’s opinion about how the file should be handled. [ 43 ] The evidence shows a mutual decision to terminate the mandate, as opposed to a revocation of the mandate.

This mutual termination was arrived at very suddenly, but the conflict between the lawyer and the client had been building up for some time and had only became intolerable in that precise moment. [ 44 ] While Laserworld would have wanted Maître Peizler to review the matter and to change his mind, Maître Peizler had already taken steps to postpone the examination because of the termination of his mandate and it would not have been in the client’s best interest for him to lose credibility by returning to the file later. [ 45 ] Besides, at this point his bills were not being paid and he would have felt a lack of confidence in the client, who had put him through the steps of negotiating a small reduction to the bill, and then, had refused to pay it. [ 46 ] The Court, having concluded that Peizler & Vani was well founded to treat the contract of professional services as resiliated, finds that Laserworld’s claim for compensation for the fees it incurred with its new attorney is ill-founded. [ 47 ] All the fees up until the arrangements to transfer the file should be paid without reduction.

FOR THESE REASONS, THE COURT: CONDEMNS the Defendant to pay the Plaintiff the amount of $ 2,922.79, plus interest at the annual rate of 5%, and the additional indemnity provided for by

article 1619 of the Civil Code of Québec , as of July 29, 2013; DISMISSES the Cross-demand; CONDEMNS Laserworld to pay the Plaintiff’s legal consisting of the Court stamp of $ 156. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: May 3, 2016