Ginther v. Rossum Date:, 2012 BCPC 51

Citation: Ginther v. Rossum Date: 20120130 2012 BCPC 0051 File No: S66408 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: JAMES LORNE GINTHER CLAIMANT AND: GREGORY NELSON ROSSUM and DEBORAH LEAH ROSSUM DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE K.W. BALL Appearing in person: James Ginther Appearing on their own behalf: Gregory Rossum and Deborah Rossum Place of Hearing: Surrey , B.C. Dates of Hearing: June 13, October 4, 2011 Date of Judgment: January 30, 2012 Introduction [ 1 ] This case revolves around a claim for legal services. The Claimant, Mr.

Ginther, is a practicing lawyer who alleges that his former clients, the Defendants, entered into a contract wherein they agreed to pay him $250.00 per hour for legal services in relation to an action which he commenced on their behalf at the British Columbia Supreme Court (“the Supreme Court Action”). The existence of the contract is not in dispute. While Mr. Ginther was counsel for the Defendants, no trial was held on the Supreme Court Action. [ 2 ] Mr.

Ginther rendered legal accounts, in relation to the Supreme Court Action, to the Defendants for a total of $40,304.84, of which $4,106.39 was paid by the Defendants. The balance of the claim in the amount of $36,198.45 represents a single legal bill. The amount of the claim was reduced to $25,000.00 to bring the claim within the monetary jurisdiction of this Court. [ 3 ] The Defendants were not represented by legal counsel during this trial. Scope of the Present Action [ 4 ] It is important to note that this action is not a review of a lawyer’s bill (or bills) pursuant to the provisions of

Part 8 of the Legal Professions Act , and in particular, Sections 69, 70 and 71 of that Act , which provides for proceedings in the sole jurisdiction of the Supreme Court of British Columbia. The provisions of Section 71(4) of the Legal Professions Act have no application to this action as this action was not conducted before a Registrar of the Supreme Court. Mr. Ginther chose to proceed in the Provincial Court. [ 5 ] The Claimant has alleged a contract for legal services where his remuneration was to be based on $250.00 for each hour

expended providing legal services. The Claimant did not advance any claim based on “ quantum meruit ” in the Notice of Claim. [ 6 ] In order to prove his claim, the Claimant must call admissible evidence to prove, on a balance of probabilities, the elements of the contract and the performance of the contract, which he alleged in his Notice of Claim. History of this Action in this Court [ 7 ] On May 27, 2010, the parties attended a Settlement Conference required by Rule 7 of the Small Claims Rules .

At that conference, the Honourable Judge Dohm made a “Document Exchange Order,” requiring the parties to disclose to each other all documents relevant to the action. The Claimant did not, pursuant to the Document Exchange Order, disclose any time records, which might have recorded the time allegedly spent by the Claimant on the Supreme Court Action on behalf of the Defendants. [ 8 ] On October 18, 2010, this action came before the Honourable Judge Cohen for trial. No evidence was heard on that date and the trial was eventually adjourned. A transcript of the proceedings before Judge Cohen was obtained.

On October 18, 2010, the parties had discussed the contract for legal services for $250.00 per hour, which was agreed between the parties. Of the two previous bills rendered by Mr. Ginther, amounting to the $4,106.39 already paid, the amounts were “never itemized by way of hourly breakdown” (Transcript October 18, 2010, Page 25, lines 1 and 2).

In advance of granting the adjournment application sought by the Claimant, the fact that no time records had been produced by the Claimant was mentioned several times during the course of discussions which took place before Judge Cohen. [ 9 ] When the trial began before me, the Claimant produced three large black binders containing what were said to be relevant documents, beginning with the Statement of Claim issued in the Supreme Court Action. It was quickly noted that the documents in the binders were not numbered and that the various pages were not in the same order in each of the binders.

An attempt was made to re- organize the documents over the lunch hour on day one of this trial. This proved unsuccessful and Mr. Ginther sought an adjournment so that he could number the pages and re-organize the documents. The adjournment was granted on the condition that Mr. Ginther pay $750.00 for time thrown away by the Defendants, before the trial was rescheduled.

The $750.00 was paid and the action was rescheduled for trial. [ 10 ] As the Claimant, a practising lawyer of long standing, is seeking to enforce an alleged contract based on legal fees supplied at a specified hourly rate, $250.00 per hour, his time records, which were the basis for the lawyer’s remuneration under the alleged contract, were, beyond any doubt, relevant documents. [ 11 ] The Claimant did not disclose any time records to the Defendants, pursuant to the Document Exchange Order, or at all.

At the completion of his testimony in the trial before this Court, the Court asked the Claimant, if, in the eight hundred and sixty-three pages of documents he put forward in the trial as Exhibits 5, 6, and 7, there were any of the records of the hours he claims to have spent on legal services for the Defendants. He responded that there were no time records contained in the documents which he had disclosed to the Defendants, nor in the contents of Exhibits 5, 6, and 7. [ 12 ] The Court then asked him if he had kept time records.

He said “yes” and pulled a sheaf of documents out of the pile of papers he had taken into the witness box with him. The Court then asked if he had previously disclosed these records to the Defendants. Mr. Ginther replied that he had not disclosed any time records to his former clients, the Defendants. The Defendants agreed that no time records had been disclosed by Mr. Ginther. [ 13 ] On both October 18, 2010, and June 13, 2011, the trial in this Court was adjourned at the request of the Claimant to allow him to present documents in an orderly fashion.

He did not include any time records in the three volumes of documents which were subsequently presented to the Court by Mr. Ginther. Time Records in Evidence [ 14 ] The Claimant produced the time records for the first time in this action after his evidence in chief was concluded. If today, the Claimant were permitted to use these time records then in fairness, the Defendants would be entitled to an adjournment to permit a reasonable opportunity to receive and review the time records which Mr. Ginther may have kept. The failure of Mr.

Ginther to produce time records in a timely fashion, which are essential to his case, would be the sole cause of any further adjournment. The Defendants did not want nor apply for any further adjournment.

A further adjournment would be inconsistent with Rule 2(1) of the Small Claims Act, which requires that actions in this Court be resolved in “a just, speedy, inexpensive and simple manner.” [ 15 ] In particular, the action, which commenced on November 5, 2009, relating to a legal bill rendered on February 27, 2008, for alleged legal services provided between January 2004, and February 2007, would be adjourned for a third time because of the conduct of the Claimant.

This third adjournment, if granted, would increase the delay in this action, increase the cost of this action and render the proceedings against the Defendants unjust, particularly due to the personal stress this case has caused them, about which Mr. Rossum has testified. [ 16 ] Rule 7(15) of the Rules of the Small Claims Court states: If a party does not comply with an order under subrule (14) (f), (g), (

h) or (j), a judge may at any time do one or more of the following: (

a) adjourn a settlement conference or trial and order that party to pay all the reasonable expenses incurred by any other parties as a result of the adjournment; (

b) order a trial to proceed without permitting that party to produce as evidence any information, document or records withheld as a result of the non-compliance;

(

c) dismiss the claim, counterclaim, reply or third party notice. [17] This trial was adjourned on June 13, 2011, pursuant to Rule 7(15)(a), to allow Mr. Ginther time to present his file documents inan orderly fashion. He is now seeking to introduce time records as relevant documents, which he failed to disclose in violation of theDocument Disclosure Order. I find it would have been grossly unfair to the Defendants and the trial process to allow whatever timerecords Mr.

Ginther possesses to become part of the evidence at the trial. [18] Based on the finding made above and applying Rule 7(15)(b), I ordered that the trial would proceed without permitting theClaimant to produce into evidence whatever time records he may possess. Drawing an Adverse Inference [19] Given the very clearly defined duty by a lawyer to provide his clients with the evidentiary support for rendering accounts toclients, I am also satisfied that this Court should draw an adverse inference against the Claimant.

The Claimant had a duty to provide hisclients with hourly records for the work he claimed to have performed. He had sole control over those time records, assuming he keptthem. Mr. Ginther, an experienced lawyer, did not comply with the Document Disclosure Order. [20] The law with respect to the drawing of an adverse inference is set forth in Vieczorek et al v. Piersma et al, (ON CA), [1987] O.J.

No 124, a decision of the Ontario Court of Appeal at Paragraph 17 where it is stated: “It is perfectly appropriate for a jury to infer, although they are not obliged to do so, that the failure to call material evidence which wasparticularly and uniquely available to the Vieczoreks was an indication that such evidence would not have been favourable to them. It isa common sense conclusion that may be reached by any trier of fact. There are no authorities which cast any doubt upon theproposition.” [21] Vieczorek et al. v.

Piersma et al, op. cit., was followed with approval by the British Columbia Court of Appeal in Cahoon v.Brideaux, 2010 B.C.J. No. 853. Based on the state of the evidence before me, I find that the reason the Claimant failed to produce timerecords was because the time records would not support the case for the Claimant. [22] The onus of proof lies on the Claimant to prove his case, which is that a certain number of hours were expended by the Claimantto provide legal services to the Defendants.

As a result of the failure of the Claimant to introduce any time records into evidence, theclaim that he provided legal fees billed on an hourly basis must fail for want of any factual support. It would not be permissible for theCourt to speculate as to the number of hours that Mr. Ginther may have spent working on this file. In the B.C. Court of Appeal decisionof Fontaine v. B.C. (Office Administrator), (BC CA), [1996] B.C.J. No. 845, [affirmed at the Supreme Court ofCanada in Fontaine v. B.C. (Office Administrator), (SCC), [1997] S.C.J. 100], the Honourable Mr.

Justice Gibbsstated at paragraph 9 that “speculation does not discharge the burden of proof on a plaintiff.” In the course of giving his evidence, Mr.Ginther did not provide any particulars as to the length of time he devoted to any particular activity, which he testified to conducting inrelation to the Supreme Court Action. The “common sense” inference that should be drawn is that the time records, which he may have,would not support his billings to the Defendants at the rate of $250.00 per hour. I find as a fact that is the reason why he failed toproduce time records.

Quantum Meruit [23] In response to advice from the Court, that his claim could not succeed because of his failure to produce proof of hours actuallyspent, Mr. Ginther submitted that the Court should judge this case on the basis of a claim in “quantum meruit.” There was no mention ofquantum meruit in the Notice of Claim, and the Claimant did not properly file an application to amend the Notice of Claim to add a newor different cause of action, quantum meruit. As such, the Defendants have had no prior notice of this new basis of a claim.

It is worthyto note that this Claim before the Court was brought by a lawyer with many years of experience and not by a lay person, uneducated inthe law. [24] In the case at bar, allowing a new claim in quantum meruit by the Claimant to be made at the close of the case would, ifsuccessful, result in the Defendants being defeated on a cause of action that was not pleaded by experienced legal counsel, and for whichthey had no notice or opportunity to prepare.

The Defendants would suffer extreme and obvious prejudice if a claim in quantum meruitwere used as a basis for finding liability against them at this late stage of proceedings. [25] Quantum meruit claims are typically distinguished into two types: contractual or restitutionary. The B.C. Court of Appeal inInfinity Steel Inc. v. B. & C Steel Erectors Inc., [2011] B.C.J. No. 774 at paragraph 12, adopted with approval the decision ofSaskatchewan Court of Appeal in CH2M Hill Energy Canada Ltd. v.

Consumers’ Co-Operative Refineries Ltd. that contractualquantum meruit is an appropriate cause of action where a valid contract exists between the parties for the provision of goods or servicesbut the terms of remuneration have not been provided. As such, contractual quantum meruit has been described as a principle ofcontract construction or

interpretation. By contrast, restitutionary quantum meruit operates in the absence of a contract where goods orservices are delivered or rendered at the request, encouragement, or acquiescence of one party in circumstances that would render itunjust for that party to retain the benefit conferred.

For an unjust enrichment claim to be made out, the plaintiff must establish that therewas an enrichment of, or a benefit to the defendant, a corresponding deprivation of the plaintiff, and the absence of a juristic reason forthe enrichment. [26] If the court chose to make an award for restitutionary quantum meruit, the Court has the discretion to make the award based onfactors appropriate in the particular circumstances of the case.

Commonly considered factors include any estimates obtained, the courseof dealings between the parties, the scope of the work done, the market value of the work done, the value of the work to the defendant,and the costs incurred by the claimant. [27] The difficulty for the Claimant in this action is that a contract with fixed remuneration was proved and I accept that Mr. Ginther

agreed with his clients to work for $250.00 per hour. He has not proved the number of hours that he worked. Hence, a claim for contractual quantum meruit cannot apply because the parties had agreed on remuneration. Secondly, the restitutional quantum meruit has no application as there was a contract between the parties.

In the result, even if I did allow an amendment to include a claim for quantum meruit in the Notice of Claim, that claim could not succeed for the reasons given above. [ 28 ] In relation to a claim based on restitutional quantum meruit , the remedy is based on the premise that the Defendants have received a benefit or were somehow enriched unjustifiably from the conduct of the Claimant. In the case at bar, there were no facts in evidence from which this Court could draw a ready conclusion that the interests of the Defendants were advanced in any way by the conduct of the Claimant.

Time Spent on File [ 29 ] I make the following findings of facts based on the evidence which I heard in the trial and review of the contents of Exhibits 5, 6, and 7. A Supreme Court Action was commenced with inadequate, inconsistent and erroneous allegations of material facts in the originating document, which later required amendment. There were some dealings with witnesses and some examinations for discovery, but what benefit the Defendants received from this activity was not clear.

In February of 2006, the Claimant was directly instructed by the Defendants to obtain certain telephone records of the principal Defendant in the Supreme Court Action for the period from July 1 to July 15, 1999. The Defendants repeatedly warned the Claimant thereafter that the records would be expunged by the telephone company on or about July 1, 2006. The telephone company told the Claimant that it required an Entered Order before releasing the telephone records. The Claimant did not make this application to the Court until June 30, 2006 and then failed to obtain an Entered Order until mid-October of that year.

The Order misstated the location of the Defendants as Kansas City in the State of Kansas as opposed to Kansas City in the State of Missouri, where the Defendants resided at the material time. The relevant telephone records were not obtained. [ 30 ] An urgent order made in Supreme Court Chambers can easily be entered within minutes of the pronouncement of the order by the Court, and the staff of the Supreme Court Registry are always ready to cooperate with counsel in relation to urgent matters.

There appears to be no clear reason for the delay in entering the Order. [ 31 ] The Defendants, in testimony before this Court, were clearly disappointed by the failure of Mr. Ginther to obtain the telephone records, which the Defendants viewed as evidence that would seriously undermine the credibility of the principal Defendant in the Supreme Court Action. [ 32 ] The evidence of the Claimant and the Defendants was completely in conflict over what the Claimant described as preparation for examination for discovery, written questions for witnesses, and preparation for trial.

Where the evidence of the Claimant and the Defendants conflicts, I prefer the evidence of Defendants. I do not accept, for instance, the Claimant’s assertion that he spent a week preparing the Defendants for the Supreme Court trial. That time expenditure was flatly denied by the Defendants. [ 33 ] A date for the Supreme Court trial was scheduled to be heard commencing on February 12, 2007.

The trial date was adjourned and the Defendants were upset by that occurrence. [ 34 ] Another lawyer took over the prosecution of the Supreme Court proceeding and eventually settled the case for a total of $30,000.00 comprised of $27,000.00 in damage to trees, as defined in an expert arborist’s report, and $3,000.00 paid for that report. Mr. Ginther told the Court that the new lawyer was not given access to his file because he had not been paid. It is difficult, and would be no more than rank speculation for this Court to find that the Defendants received a benefit produced by the work performed by Mr.

Ginther. [ 35 ] For the foregoing reasons, I decline to amend the Notice of Claim and will not proceed in time to decide the case on the basis of a new claim by the Claimant in quantum meruit . Disbursements [ 36 ] There was no organized presentation of evidence concerning the disbursements claimed by the Claimant. I have reviewed all of the documents in Exhibits 5, 6, and 7 and found no documents to support most of the disbursements advanced.

For instance, there are no bills or other ledgers of expenses for government fees, postage, fax charges, long distance charges, photocopy charges, agent fees, courier fees, or, for that matter, fees for court reporters. A bald statement contained in a bill without a supporting invoice, where such invoices are commonly maintained by law firms, is not sufficient to prove the payment was made on this file. [ 37 ] The Claimant has made a claim for $300.00 to reimburse for conduct money for witnesses for the trial that was scheduled to begin on February 12, 2007.

Between February 2 nd and 5 th inclusive, cheques were issued to seven witnesses at $50.00 each and apparently served on the witnesses. None of these witnesses ever travelled to a courthouse or appeared at the trial because it was adjourned. There is no evidence before this Court that any of these cheques were actually cashed or otherwise negotiated by proposed witnesses. There is no proof before this Court that Mr.

Ginther is out of pocket the sums claimed to cover the conduct money for witnesses. [ 38 ] Lawyers and law firms have very strict accounting rules and are required to maintain accounting ledgers and supporting records for all business or expenditures made on behalf of clients. Those records, which would prove the disbursements claimed in the bill that is the subject of these proceedings, are available to Mr. Ginther and have not been introduced into evidence by him. He has not produced records that would have proved those disbursements, and that part of his claim must therefore be dismissed. Conclusion

[ 39 ] For the reasons set forth above, the Claim of Mr. Ginther against the Defendants is dismissed in its entirety. Notwithstanding the Defendants have been wholly successful in the circumstances of this case, each party shall bear their own costs. No evidence was called in support of the counterclaim. I dismiss the counterclaim. ___________________________________ The Honourable Judge K.W. Ball Provincial Court of British Columbia