Sackville Car Wash Inc. , Plaintiff, v. Patterson Law, 2023 NBKB 98

Sackville Car Wash Inc. v. Patterson Law , 2023 NBKB 098 IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF MONCTON MC-53-2018 BETWEEN: Sackville Car Wash Inc. , Plaintiff, -and- Patterson Law , Defendant. DECISION Before: Justice Jean-Paul Ouellette Date of Hearing: February 21, 22 and 23, 2023 Date of Decision: May 31, 2023 At: Moncton, New Brunswick Appearances: T homas O'Neil, K.C., and Grace Levy , Esqs., for the Plaintiff; and Peter Rogers, K.C., and Catherine Hirbour , Esqs., for the Defendant OUELLETTE, J.

INTRODUCTION [ 1 ] Sackville Car Wash Inc. (“Sackville”) through its owner and director, Andrew Fraser, alleges that Patterson Law, having its offices in Nova Scotia, was negligent in its representation of Sackville in connection with an expropriation trial and appeal of the trial judge’s decision. [ 2 ] Patterson Law and the lawyer responsible for the Sackville file take the position that Patterson Law diligently and competently accomplished the legal work set out in its retainer agreement with Sackville.

Patterson Law further argues that, while failing to properly represent Sackville in an attempt to appeal the trial judge’s decision, it has not resulted in any loss to Sackville. [ 3 ] For the reasons that follow, the Court rejects the main action against Patterson Law but grants nominal damages on the issue of the appeal. FACTUAL BACKGROUND The Expropriation and Pre-Trial Negotiations [ 4 ] Sackville owned a parcel of land located in Rothesay, New Brunswick. Town counsel for the Town of Rothesay (“Rothesay”) contacted Mr.

Fraser in 2010 to advise him that Rothesay was interested in buying a piece of this property. Negotiations failed and Rothesay decided to expropriate that parcel of land and exercised its right to expropriate the parcel pursuant to the Expropriation Act with an offer to Sackville of $74,000. [ 5 ] In 2011, Sackville retained the legal services of counsel, though not counsel on record nor counsel for the Defendants. [ 6 ] A Claim under the Expropriation Act was filed by Sackville. Rothesay’s counsel filed its defense, and the matter was eventually set down for a trial to be heard on January 19 to 22, 2015.

A pre-trial settlement conference was held in November 2014 with Sackville offering to sell the parcel of land for $370,000. Rothesay was offering substantially less. [ 7 ] A Formal Offer of Settlement was served on Sackville on December 15, 2014, under Form 49A of the Rules of Court, with Rothesay making an offer of $156,000. [ 8 ] Upon receipt of the Formal Offer of Settlement, and upon Sackville concluding that their own offer of $370,000 had not been seriously considered by Rothesay, Mr.

Fraser discussed with his counsel the option of getting a second opinion from a seasoned litigator who had experience in expropriation litigation. Mr. Fraser had read case law on expropriation, had reviewed books of authorities on the law of expropriation, and wanted to further pursue his claim. [ 9 ] Consequently, he navigated the internet and found that Patterson Law was referenced as a seasoned law firm in the domain of expropriation. [ 10 ] In early December 2014, Mr. Fraser communicated with Solicitor R.

Pineo at Patterson Law to gauge his interest in giving an opinion on their possibility of success in the eventuality of a trial and Solicitor Pineo agreed to do so. On December 16, 2014, Mr. Fraser delivered his file to Solicitor Pineo to further that purpose. [ 11 ] In his opinion letter dated December 23, 2014, Solicitor Pineo gave his views on the pros and cons associated with the possible success of Sackville’s claim at trial on the premise of a $74,000 offer made by Rothesay. [ 12 ] Mr.

Fraser and his then counsel, upon receipt of this letter, decided on December 29, 2014, to reject Rothesay’s Formal Offer of Settlement and, in a short correspondence, informed Rothesay’s counsel that Mr. Fraser would be staying with his original position and was asking $370,000 in compensation for the land. [ 13 ] Solicitor Pineo believed, at all times up to the trial judge’s decision contesting the expropriation, that Rothesay had only offered the amount of $74,000 in compensation and had had no discussion whatsoever with Mr.

Fraser on a possible agreement or the settlement offer of $156,000. [ 14 ] While not having been retained on issues other than providing an opinion, Solicitor Pineo offered to assist Sackville’s counsel in its preparation for trial as well as attending the trial in support. The Formal Offer [ 15 ] While the Formal Offer from Rothesay was in the documentation left by Mr. Fraser, and, while it was examined by an associate at Patterson Law, Solicitor Pineo was never made aware of the Formal Offer, nor did he have any discussion with Mr.

Fraser and/or his counsel regarding settlement offers and Solicitor Pineo did not participate in the discussions that led to the rejection of the Offer of $156,000. [ 16 ] Before having rejected the Formal Offer, Sackville requested clarification on the Offer of $156,000. In correspondence from Rothesay, Sackville was informed that the $156,000 offer was for new money to be added to the $74,000 originally paid to Sackville.

The total offer was actually $230,000 for the land and interest from the date of expropriation, plus reasonable costs and disbursements to be determined. [ 17 ] All discussions and all correspondences between Sackville’s then counsel and Mr. Fraser that took place before rejecting the Offer on December 29, 2014, and before Solicitor Pineo was retained on December 30, 2014, and any interactions thereafter have remained confidential and are subject to solicitor-client privilege.

Patterson Law requested that, in the course of the present litigation, the solicitor-client privilege be waived so that they may have access to the opinion given to Mr. Fraser by his counsel before rejecting the offer, however Sackville refused.

[ 18 ] On December 30, 2014, in the retainer letter executed by Sackville, Solicitor Pineo was retained in clear terms to “represent you in the trial of this matter”. [ 19 ] On January 12, 2015, it was made known, by the filing of a Notice of Change of Solicitor, that Patterson Law alone would represent Sackville and that Sackville’s former solicitor was no longer on the file and that Solicitor Pineo would act on behalf of Sackville during the trial. The Trial [ 20 ] In possession of the file, Solicitor Pineo started his preparations for trial and drafted a pre-trial brief which was forwarded to Mr.

Fraser for his perusal and comments. Since January 3, 2015, Mr. Fraser was on a family vacation and only returned to New Brunswick on January 12, 2015. [ 21 ] At their first meeting in the following days, after his return from vacation, Mr. Fraser provided his opinion on the brief to Solicitor Pineo and suggested some changes. Subsequently, Solicitor Pineo informed Mr.

Fraser that after filing and serving his brief on Rothesay’s counsel, and upon him reviewing his brief and appreciating the weaknesses in their position, Solicitor Pineo suggested that it would be an ideal opportunity to try and negotiate a settlement with Rothesay’s counsel. Mr. Fraser’s response was that he had been retained to proceed to trial and he wanted his case to be ruled on by the Court. [ 22 ] At no time did Solicitor Pineo personally review the Formal Offer made by Rothesay nor did he advise Mr. Fraser on the consequences, under

section 52.1 of the Expropriation Act of a court decision for an offer of settlement made thereunder, nor did he speak of its effect on an award for compensation on claims of land expropriated. They proceeded to trial held from January 19 to 22, 2015. [ 23 ] On June 18, 2015, the trial judge rendered its decision and determined compensation for the market value of the land to be $175,913.

On December 2, 2015, with written reasons provided on January 19, 2016, the Court disallowed the fees incurred by Sackville from the date of the Formal Offer to Settle as the Formal Offer from Rothesay was more favourable than the Court’s decision. [ 24 ] At that hearing, Sackville had submitted a Bill of Costs up to the end of the trial totalling $197,585.24 for legal fees incurred by Patterson Law and its former counsel, appraisal fees from Altus Group ($40,428.76) and an entry for Mr. Fraser’s time ($19,057.22).

It was also agreed and concluded by Sackville’s counsel that legal appraisals and Sackville’s time charged up to the time of the Offer was $63,333.29 which amount was approved by the Court plus costs of $750 payable to Sackville for their preparation and attendance at the court hearing . Patterson Law had additional fees and disbursements totalling $24,064.75 for the cost hearing. The Appeal [ 25 ] Patterson Law, through Solicitor Pineo, had had discussions with Mr. Fraser about a possible appeal.

Solicitor Pineo provided his comments and expressed his unfavourable reservations about the possibility of winning an appeal. Notwithstanding his opinion, Mr. Fraser wanted the trial judge’s decision appealed and Solicitor Pineo informed Mr. Fraser that he would do so. [ 26 ] Solicitor Pineo, in his research, misinformed himself about the delays to file an appeal in New Brunswick. He informed Mr. Fraser that the appeal could only be filed after the cost hearing decision was rendered, which happened to be wrong. [ 27 ] Mr.

Fraser, who was in close contact with a friend who was a solicitor, had learned that they only had 30 days to file an appeal following the judge’s decision at trial and so informed Solicitor Pineo in due course who, in turn, rejected this

interpretation in an email sent to Mr. Fraser on July 16, 2015. [ 28 ] On August 24, 2016, the court staff at the New Brunswick Court of Appeal rejected the Notice of Appeal filed by Solicitor Pineo for being filed outside of the proper rules regarding time delays. By email, Solicitor Pineo informed Mr. Fraser that his appeal was being processed, notwithstanding the rejection Patterson Law had received from the Court of Appeal. Solicitor Pineo also did not advise Mr.

Fraser that he was filing a motion to have this rejection set aside. [ 29 ] Solicitor Pineo later filed a Notice of Motion with the Court of Appeal to extend the time for filing a Notice of Appeal and, in a decision dated February 7, 2017, the Court of Appeal dismissed the motion. [ 30 ] Neither Solicitor Pineo nor Patterson Law had informed Mr. Fraser before February 7, 2017, that there were serious procedural issues with the appeal, nor did they give any reason for its rejection. It was therefore too late to appeal the trial judge’s decision.

Legal fees for the appeal were charged to Sackville but were later written off the books before ever getting paid. [ 31 ] After the court’s decision on June 18, 2015, Rothesay sent to Patterson Law, in trust, the excess of monies plus interest owed to Sackville. Patterson Law deducted its legal fees and forwarded the remaining funds to Sackville, though issues with that process were later raised by Sackville. [ 32 ] Immediately after the decision of the court related to the cost assessment, Rothesay forwarded to Patterson Law $63,333.29 plus $750.

Patterson Law deducted their legal fees of $24,064.75 which consisted of additional legal fees but did not immediately forward the remaining funds to Sackville nor did they send Sackville a copy of their receipt for the deduction of the legal fees noted above. The Trust Account [ 33 ] In relation to those legal fees, the retainer agreement signed in December of 2014 set out Solicitor Pineo’s hourly rate of $300 an hour, however, on January 1, 2015, Patterson Law increased their fees by 5% to $315 an hour. Sackville was never made aware of this increase, but they were thereafter charged using this new rate.

[34] While the legal fees paid by Sackville were deducted from the funds received in trust, and Patterson Law and Sackville wereaware that this was a normal practice, Sackville claims, with reason, not to have approved the new hourly rate for Solicitor Pineo.Patterson Law had paid itself. Furthermore, Patterson Law did not immediately provide the remaining funds they held in trust toSackville and as a result, those funds did not accumulate interest. Sackville suggests that had they received these funds, they could haveearned up to 15.77% being the rate that Mr. Fraser gained on his own personal investments.

Sackville has made a claim for those losses. The Claim [35] Sackville, therefore, makes the following claim against Patterson Law: 1. Fees paid as a result of Patterson Law’s negligence and breachof contract for unnecessary fees of $130,863.89 for trial and after-trial fees charged. $130,863.89 2. Appraiser’s fees, paid for attendance at trial Andrew Fraser (court time) Andrew Fraser (expenses to attend trial) $ 17,725.00 $ 3,600.00 $ 1,282.223. Breach of trust $ 20,000.004.

Breach of Fiduciary Duty $ 75,000.00 Total amount claimed plus interest and costs: $248,521.11 ISSUES [36] The Court has been asked to determine the following issues: 1. Was Patterson Law negligent or in breach of its contract in failing to advise Sackville Car Wash Inc. of the risks of going totrial and/or in their conduct at the trial? 2. Was Patterson Law in breach of its fiduciary duty and/or did it endeavour a breach of trust in its appeal process to the Courtof Appeal? If so, did Sackville Car Wash Inc. suffer any loss? 3.

Does Patterson Law and/or Solicitor Pineo’s conduct warrant an award of aggravated or punitive damages in favour ofSackville Car Wash Inc? ANALYSIS AND CONCLUSION [37] Sackville alleges, in its Amended Statement of Claim, that the negligence and/or breach of contract by Patterson Law camefrom their failure to advise Sackville of the following risks in proceeding to trial:

i) failing to determine at the outset of the retainer if any settlement offers had been made; ii) failing to have any discussions with Mr. Fraser as to the risks, uncertainty and cost involved in litigation; iii) failing to consider the merits of the Offer to Settle; iv) failing to consider, discuss and advise Sackville as to the availability and merits of seeking an adjournment of the trial;

v) failing to provide proper advice, or any advice, as to the cost consequences under the Act of failing to accept an offer to settle; vi) failing to provide any assessment or advice as to how much compensation might be reasonably expected in the circumstances; vii) failing to provide any advice to as to the risks, hazards and frailties involved with the existing expert appraisal evidenceavailable to Sackville; viii) failing to provide any advice as to whether it was reasonable and prudent to proceed to trial under the circumstances thenexisting; and ix) failing to file a Notice of Appeal within the prescribed time period [38] In Kitching v Devlin, 2016 ABQB 212 , the court dealt with professional negligence or breach of contract.Discussing the legal obligations of lawyers toward their clients, the Court wrote: [124] However, lawyers are not held to a standard of perfection.

They, like anyone, are fallible. They make difficult judgment calls,often without the benefit of all relevant information and certainly without the benefit of hindsight. The oft-cited passage of TiffinHoldings Ltd v Millican (1965), 49 DLR (2d) at 218-219 (Alta SC), rev’d (1965), (AB CA), 53 DLR (2d) 674, aff’d (SCC), [1967] SCR 183, captures the standard to which lawyers are held: Lawyers are bound to exercise a reasonable degree of care, skill and knowledge in all legal business they undertake. Their liability arisesout of a contract.

The standard of care and skill which can be demanded from a lawyer is that of a reasonably competent and diligentsolicitor. It is not enough to prove that the lawyer has made an error of judgment or shown ignorance of some particular part of the law; itmust be shown that the error or ignorance was such that an ordinarily competent lawyer would not have made or shown it.

It is extremely difficult to define the exact limits by which the skill and diligence which a lawyer undertakes to furnish in the conduct ofa case is bounded, or to trace precisely the dividing line between the reasonable skill and diligence which appears to satisfy his

undertaking. It is a question of degree, and there is a borderland within which it is difficult to say whether a breach of duty has or has notbeen committed... The obligations of a lawyer are, I think, the following:

(1) To be skilful and careful;

(2) To advise his client on all matters relevant to hisretainer, so far as may be reasonably necessary;

(3) To protect the interests of his client;

(4) To carry out his instructions by all propermeans;

(5) To consult with his client on all questions of doubt which do not fall within the express or implied discretion left to him; (6)To keep his client informed to such an extent as may be reasonably necessary, according to the same criteria. [125] Adeshina at para 106 describes the dynamics of the lawyer-client relationship in circumstances similar to this case. Afterreasonable and competent research and diligence, the lawyer should present the client with his or her available options. The client, andnot the lawyer, makes the ultimate decisions as to which option to pursue.

This is because the client knows his or her individual needsand is in the best position to assess his or her interests and select the appropriate course of conduct. The client may place whateverweight he or she wants on the various considerations. In other words, the lawyer advises and the client instructs. [39] In 051766 N.B. Ltd v. Wilbur, 2010 NBQB 34 , dealing with the scope of a lawyer’s duties under a retaineragreement, McNally J. wrote: 33. […] 6 […] Thus, the extent of a solicitor’s duties depends upon the terms of the retainer and any implied duty of care must be relatedto his instructions.

At the same time, the fact that the solicitor's skill and knowledge are being sought by a client means that the solicitormust not allow the client to define the retainer unilaterally, in ignorance of material risks of which the solicitor is or should be awareparticularly when the client is unsophisticated. 6.1 A solicitor who wishes to limit the scope of his or her retainer bears the onus of doing so in unambiguous terms.

Any ambiguityor doubt concerning the scope of retainer will generally be resolved in favour of the client. [40] As for the extent of the duties of counsel beyond the express terms of the retainer, in Strother v. 3464920 Canada Inc., 2007SCC 24 , [2007] 2 SCR 177, Binnie J. wrote: 34 When a lawyer is retained by a client, the scope of the retainer is governed by contract. It is for the parties to determine howmany, or how few, services the lawyer is to perform, and other contractual terms of the engagement.

The solicitor-client relationshipthus created is, however, overlaid with certain fiduciary responsibilities, which are imposed as a matter of law. The Davis factum puts itwell: The source of the duty is not the retainer itself, but all the circumstances (including the retainer) creating a relationship of trust andconfidence from which flow obligations of loyalty and transparency. [para. 95] [41] Sackville relies on the Code of Professional Conduct from the Law Society of New Brunswick which addresses the skill levelthat lawyers must demonstrate within their professional practices.

Sackville also submitted the rules, particularly regarding LimitedScope Retainers, to further its position that Solicitor Pineo’s conduct fell below the ethical standards required such that he should haveadvised Sackville about the consequences on costs if the offer to settle was more generous than the Court’s decision after trial. [42] The scope of a solicitor’s duty toward a client and the appropriate standard of care in relation to that duty might be determinedby referencing the retainer agreement which is a key issue in this case. [43] The extent of Patterson Law’s duty therefore depends upon the terms of the retainer and any implied duty of care must berelated to his or her instructions. [44] Patterson Law was retained for the purpose of preparing and attending the trial as set out in the retainer agreement.

This is thescope of its mandate. There was no ambiguity, nor doubt, concerning the scope of the retainer; Patterson Law was to conduct the trial.Mr. Fraser, at all times, had full knowledge and control of what his counsel was to do under the retainer. [45] For the record, there is no evidence, nor any allegation, that Patterson Law, or Solicitor Pineo who prepared and conductedthe trial, was negligent in that regard. [46] While not being personally aware of the Formal Offer to Settle, for the reasons mentioned above, Solicitor Pineo was notconsulted, nor was he involved, in the negotiations between Mr.

Fraser’s then counsel and Rothesay, nor was he involved with therefusal of the Offer. [47] Mr. Fraser, by his conduct and from his evidence at trial, did not wish to negotiate and was even insulted by Rothesay’sFormal Offer.

His response to Solicitor Pineo’s suggestion to negotiate a settlement after he had submitted their pre-trial brief toRothesay is telling. [48] In the context of this trial, Sackville refused to waive the solicitor-client privilege which Patterson Law submits was a keyissue in bringing a full defense for this action. [49] In the aftermath of the trial with Rothesay, the e-mail correspondence exchanged between Mr. Fraser and Solicitor Pineoclearly indicates that Mr. Fraser had been made aware of the consequences as set out under

section 52.1 of the Expropriation Act beforeSolicitor Pineo had been retained. [50] Furthermore, when Solicitor Pineo suggested to Mr. Fraser that it would be an ideal opportunity to negotiate a settlement,after he had provided his pre-trial brief to Rothesay’s counsel, it was made clear by Mr. Fraser that he wanted his case to be ruled on bythe court. Mr. Fraser categorically refused Solicitor Pineo’s suggestion of settlement negotiations.

[51] All discussions relating to the Formal Offer were with and between Mr. Fraser and his former counsel. The Court canadversely draw the inference, by Mr. Fraser’s refusal to waive the solicitor-client privilege, that Mr. Fraser had knowledge of the law inrelation to costs and that his counsel, at the time, had advised him of the consequences as set out in the Act. [52] Mr. Fraser, on the issue of the Offer from Rothesay, admitted having been informed by Solicitor Pineo that if they beat theOffer at trial, they would be awarded their costs.

He also added that, as long as these costs were reasonable, the Supreme Court had ruledthat the costs would be reimbursed. [53] In The Law of Evidence in Canada by Bryant, Lederman & Sopinka (5th edition) at pages 406-407, while discussing thefailure of a party to testify or to call a material witness on other evidence, it is written: 6.471 […] In the same vein, an adverse inference may be drawn against a party who does not call a material witness over whom he orshe has exclusive control and does not explain it away.

Such failure amounts to an implied admission that the evidence of the absentwitness would be contrary to the party’s case, or at least would not support it. 6.472 An adverse inference should be drawn only after a prima facie case has been established by the party bearing the burden ofproof. [54] Our Court of Appeal, called to discuss adverse inferences in failing to call two expert witnesses in Doiron v.

Haché, 2005NBCA 75 discuss the issue in the following terms: [108] The power to draw an adverse inference when a party fails to call a witness who would have given material evidence isdiscretionary, but the discretion can only be exercised upon the satisfaction of a precondition. As explained by the Ontario Court ofAppeal in Lambert v. Quinn et al. (1994), 68 O.A.C. 353, Lévesque v.

Comeau only stands for the proposition that an adverse inference“may be drawn against a party for failure to call a witness who may give material evidence where that party alone could bring thewitness before the court.” [55] For obvious reasons, only Sackville could call its former counsel to testify and waive its solicitor-client privilege. Worse, Mr.Fraser, testified that due to this solicitor-client privilege he could not be questioned on the key issue of his knowledge regarding section52.1 of the Expropriation Act.

Consequently, the Court should, and will, exercise its discretion on adverse inferences in thesecircumstances. The Court is of the opinion that this evidence from his former counsel would have been devastating for Sackville inpursuing their claim. [56] Sackville did not call its former counsel as a witness during the trial, nor did it waive the solicitor-client privilege whichwould have allowed Patterson Law to bring forth, as part of its defense, Mr.

Fraser’s knowledge about the consequences of a refusal ofan offer more favourable than the decision reached after trial. [57] In this vein of thought on going to trial, Mr. Fraser, during his testimony and to this day, and notwithstanding the Court’sdecision after trial about the value of the parcel of land expropriated, still believes that the said parcel of land expropriated is worthbetween a low $300,000 and a high $450,000. The scope of the retainer signed by Mr. Fraser was, again, “to represent you in the trial ofthis matter” and demonstrates that Mr.

Fraser understood and instructed his lawyer, Patterson Law, to proceed to trial. [58] It would have been inappropriate for Patterson Law, in this context, to devote time, efforts, and fees to negotiate a possiblesettlement in light of these clear instructions. All along, in discussions with Solicitor Pineo, Mr. Fraser was being informed of thepreparations and court proceedings with him sending Solicitor Pineo his notes, citing case law and textbooks, and giving his ownopinions as well as those of his lawyer friend. Mr.

Fraser, while not being a lawyer himself, cannot be characterized as anunsophisticated client. [59] In this case, Sackville has not established liability in negligence or breach of contract on the part of Patterson Law in itsconduct of its mandate under the retainer agreement. Patterson Law did meet its duty of care towards the Plaintiff and had not failed tofulfil or observe the relevant standard of care.

Furthermore, as it relates to the trial, Sackville did not sustain any damage or loss, nor wasthere any damage or loss caused, in fact or in law, by Patterson Law or Solicitor Pineo. [60] In the preparation and conduct of the trial, all of which lasted a period of less than four weeks, Patterson Law and SolicitorPineo, as admitted by Sackville at trial, brought reasonable care, skill, and knowledge to the performance of its professional servicewhich they had undertaken to render. [61] It is clear, given Mr. Fraser’s conduct, that he knew of the risks and uncertainties accompanying the decision to proceed totrial.

Solicitor Pineo’s opinion, provided to Mr. Fraser and his former counsel on December 23, 2014, was reasonable and not negligent.The prospect of a case should not be judged in hindsight. Sackville knew perfectly well the general risks and uncertainties of a trial, andit is adversely presumed, in the context of this matter, that his former counsel met the standard of care and diligence owed to Sackvilleand Mr. Fraser in considering the opinion letter received from Solicitor Pineo.

Accepting this opinion, rendered without the knowledgeof the Formal Offer, which was for new money, before rejecting, without hesitation, what Mr. Fraser considered a “ridiculous” offer,clears Patterson Law and Solicitor Pineo of all responsibility related to this issue. [62] Considering the significant involvement of his former counsel and Sackville’s (Mr. Fraser) sophistication and knowledge ofthe law of expropriation, it was reasonable to proceed to trial as requested. [63] To insinuate that a retainer signed three weeks before trial was more than what was meant by the words used therein isunreasonable.

It was reasonable for Patterson Law to presume, given the time that had passed, the failed pre-trial settlement conferencethat was held and the knowledge that a negotiated settlement was not on the table for discussion, that it was not its role to pursue furthersettlement discussions. [64] In its final argument to counter its failure to waive the solicitor-client privilege, Sackville noted that Patterson Law had not

called as witnesses two counsel who had also participated in the conduct of the trial between Sackville and Rothesay along with Solicitor Pineo.

Both have, since the trial in question, left Patterson Law for other employment and if Sackville wanted their presence in court, they could have subpoenaed them to appear, a possibility which did not exist for Patterson Law towards Sackville’s former counsel. [ 65 ] Based on the hearing of this matter, no evidence, expert, or otherwise, was provided to establish negligence or a breach of contract that could justify the return of the legal fees accumulated during the conduct of the original trial or the cost hearing which took place afterward.

All claims in that regard are denied as Patterson Law only took over the case to conduct the trial and all pre-trial steps had been conducted by Sackville and its previous counsel prior to Patterson Law’s involvement.

APPEAL PROCESS Breach of Trust, Withdrawal of Funds from the Trust Account, and Overcharging of Hourly Rate Fees [ 66 ] Sackville alleges that Patterson Law and Solicitor Pineo were negligent and breached their fiduciary duty in connection with their failure to advise Sackville of the rejection of the Notice of Appeal by the Court of Appeal or their subsequent filing of the motion to extend the appeal deadline.

Sackville also alleges that Patterson Law withdrew monies from their trust account, held in trust for Sackville, for legal fees incurred by Patterson Law and that Patterson Law’s hourly rate was raised and charged to Sackville without its knowledge. [ 67 ] Patterson Law admits that it failed to communicate developments relating to the appeal as contemporaneously as it ought to have done.

In that regard, Patterson Law failed to inform Sackville of the rejection of its Notice of Appeal by the Registrar or the filing of its motion to extend the appeal deadline. [ 68 ] Patterson Law submits that Sackville did not contest the fact, nor did it argue, that the appeal had little chance of success, nor did it have any effect on the outcome of the decision made by the trial judge in the expropriation trial. As emailed to Mr.

Fraser by Patterson Law, “an appeal is well worth looking into, but you do have to keep in mind that the Court of Appeal does not like to interfere and an appeal is by no means a certainty”. This is an accepted conclusion by Sackville. [ 69 ] In reviewing all the facts relating to what transpired during the period in which the appeal was intended, the Court finds that there was a breach of fiduciary duty by Patterson Law.

For Patterson Law, the harm done as a result of this breach only warrants damages on the lower spectrum as there was no resulting financial loss to Sackville. [ 70 ] Sackville’s response is that the breach was deliberate, repeated and occurred over a period of time and a damage award in the higher range is warranted to compensate it for losses and to deter Patterson Law from similar future behaviour as well as setting a precedent for other firms and lawyers who have fiduciary roles to demonstrate that this type of conduct is unacceptable.

Sackville is claiming $75,000 in that regard. [ 71 ] From the moment the parties discussed the appeal, its chance of success was minimal to nonexistent, and Mr. Fraser was made aware of those probabilities. Sackville suffered a minimal loss, that loss being any interest it could have made on the funds held in trust. [ 72 ] While proceeding with the appeal, Solicitor Pineo should have advised Mr.

Fraser that he was late in its filing, but this was concealed even after it was made clear to Solicitor Pineo by the Registrar, that his appeal, for reasons known to him, had been rejected. [ 73 ] Solicitor Pineo tried as best he could to have the Registrar and the Court of Appeal reverse its decision by filing a motion. Mr. Fraser should have been advised and made aware of what was going on in his file. [ 74 ] It is clear that Solicitor Pineo’s conduct in handling this appeal fell below the ethical standards required from legal counsel and as such he breached the fiduciary duty he owed to Mr. Fraser.

The Court has already concluded that the services rendered in relation to the trial and the cost proceeding were within the scope of the retainer executed by the parties and there was no breach of fiduciary duty toward Sackville by Paterson Law in that regard. [ 75 ] As earlier mentioned, there was no financial loss that resulted from the late filing of the appeal and the subsequent filing of the motion. Furthermore, other than concealing that the appeal would go nowhere, Solicitor Pineo’s misconduct was not planned nor deliberate.

Patterson Law and/or Solicitor Pineo did not profit from its misconduct, notwithstanding that both knew, or should have known, that such conduct was wrong. [ 76 ] While an invoice was issued to Sackville in relation to the appeal, it was never paid and was eventually written off by Patterson Law. [ 77 ] While Sackville and Mr. Fraser are not lawyers, Mr. Fraser was knowledgeable about his expropriation matter, more so than an ordinary person. He had read case law and books of authority on the subject matter, and he was also being advised by a lawyer friend.

When the issue of delays relating to the filing of the appeal was brought to Patterson Law’s attention by Mr. Fraser, the issue should have been researched and Patterson Law should have come clean in its response. It is thereafter that Patterson Law failed in its fiduciary duty to Sackville. [ 78 ] Patterson Law had one of its outstanding legal fee accounts with Sackville paid from the monies received in trust from Rothesay.

For the record, again, Patterson Law did invoice Sackville Car Wash Inc. for the fees relating to the appeal but those fees were subsequently written off and Sackville has not been asked to pay this invoice.

[79] Paying an invoice from outstanding trust account monies, when such a practice had already been established during the periodof the trial, is not a mishandling of trust monies. However, Patterson Law did not inform Sackville that it had received the monies in trustfrom Rothesay and considerable time did pass before those funds were paid to the client. This is not an acceptable practice. [80] Patterson Law did not inquire about Solicitor Pineo’s health or mental condition during the conduct of the appeal process normade any inquiries of what was happening with Solicitor Pineo’s files.

Solicitor Pineo informed the Court that he was out of office,working from home, and very rarely showed up for work to his office at Patterson Law. While it could be accepted that Solicitor Pineohad serious ongoing issues, that is not a defense for Patterson Law in abdicating its obligations to Sackville or for having left their clientcompletely in the dark in that regard. [81] Counsel on record, other than Solicitor Pineo at Patterson Law, who had supported Solicitor Pineo in this file knew or ought tohave known that Solicitor Pineo’s attendance at the office was virtually nonexistent.

No one, not even the managing partners in place atPatterson Law, raised any concerns regarding Solicitor Pineo’s conduct. [82] While there seems to be no malicious conduct or intent on Solicitor Pineo’s part, he did explain that he had personal ongoingissues and fell into a depression during this time. It was after having recuperated from this illness that he self-reported to the Nova ScotiaBar Society in light of complaints from numerous clients, not only Mr.

Fraser, regarding his past conduct. [83] It is admitted that the monies in the trust account for Sackville were held for almost a year and were not invested in aninterest-bearing account, which they technically could have. [84] Mr. Fraser also submitted that he was not properly informed of the cost hearing, which was being held at 9:30 and not 1:30, inthe process of the expropriation trial.

Drawn from the evidence at trial on the subject matter by Solicitor Pineo, this seems to have beenan honest mistake. [85] Believing that his office had filed the appeal the previous week, and without any verification, Solicitor Pineo tried to hide hisneglect on the file and informed Sackville that the appeal had in fact been filed the previous week. At this time, Patterson Law hadalready received the letter of refusal from the Court of Appeal to accept the filing. [86] Solicitor Pineo also failed to respond to numerous emails received from Mr. Fraser in a reasonable time.

Again, SolicitorPineo’s explanations were related to his personal health situation, however, Patterson Law must bear some responsibility in that regard. [87] In Whiten v. Pilot Insurance Co., 2002 SCC 18 , [2002] 1 SCR 595, the Supreme Court lists factors to be consideredand taken into account under this heading of blameworthiness. At paragraph 113 the Court wrote: 113 The level of blameworthiness may be influenced by many factors, but some of the factors noted in a selection of Canadiancases include: (1) whether the misconduct was planned and deliberate: Patenaude v. Roy (1994), (QC CA), 123 D.L.R. (4th)78 (Que.

C.A.), at p. 91; […] (3) whether the defendant persisted in the outrageous conduct over a lengthy period of time: Mustaji v. Tjin (1996), (BC CA), 30 C.C.L.T. (2d) 53 (B.C.C.A.), Québec (Curateur public) v. Syndicat national des employés de l’Hôpital St-Ferdinand (1994), (QC CA), 66 Q.A.C. 1, Matusiak v. British Columbia and Yukon Territory Building andConstruction Trades Council, [1999] B.C.J. No. 2416 (QL) (S.C.); (4) whether the defendant concealed or attempted to cover up its misconduct: Gerula v. Flores (1995), (ONCA), 126 D.L.R. (4th) 506 (Ont. C.A.), at p. 525, Walker v.

D’Arcy Moving & Storage Ltd. (1999), (ON CA), 117O.A.C. 367 (C.A.), United Services Funds (Trustees) v. Hennessey, [1994] O.J. No. 1391 (QL) (Gen. Div.), at para. 58; (5) the defendant’s awareness that what he or she was doing was wrong: Williams v. Motorola Ltd. (1998), (ON CA), 38 C.C.E.L. (2d) 76 (Ont. C.A.), and Procor Ltd. v. U.S.W.A. (1990), (ON SC), 71 O.R. (2d) 410 (H.C.), atp. 433; (6) whether the defendant profited from its misconduct: Claiborne Industries Ltd. v.

National Bank of Canada (1989), (ON CA), 69 O.R. (2d) 65 (C.A.); […] [88] While the Court should, and does, denounce this conduct by solicitors, Sackville did not suffer any losses or, if any, very little.This conduct does not warrant aggravated or punitive damages. In such cases, however, it does justify an award of a nominal amount fordamages as a result of Patterson Law’s conduct. [89] In establishing nominal damages, the Court, at bar, considered the breach of trust and that no interest was paid on the trustmoney held over a lengthy period of time.

Also, after the original retainer agreement had been signed, Patterson Law increased SolicitorPineo’s hourly rate from $300 to $315 an hour and charged it to the client, without Sackville’s knowledge. [90] The Court, considering all the circumstances of this case, will grant the amount of $10,000 as a nominal amount for thequestion of damages relating to breach of trust and fiduciary duty in relation with the appeal, the overcharged legal fees, and the otherbreaches as discussed above. COSTS

[ 91 ] Both counsel at trial submitted that costs should only be considered during a subsequent hearing after having heard the parties. [ 92 ] I will refrain from considering costs for the moment and will wait to hear from the parties on this issue when requested. DATED this 31 st day of May 2023. ______________________________________ Jean-Paul Ouellette Justice of the Court of King’s Bench of New Brunswick, Trial Division