Date: 19981124 Docket: A981638 Small Claims Registry No.: 95-20844 Registry: Vancouver IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: PETER KENDALL, Barrister and Solicitor, and PETER M. KENDALL, Personal Law Corporation and the said PETER M. KENDALL PERSONAL LAW CORPORATION APPELLANTS AND: HARRY RANKIN, BRUCE YORKE, COMMITTEE OF PROGRESSIVE ELECTORS RESPONDENTS REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE DROSSOS Counsel for the Appellants: Peter M. Kendall Counsel for the Respondents, Harry Rankin and Bruce Yorke: A.C. Peeling and Manuel Azevedo Date and Place of Hearing: November 5, 1998 Vancouver, B.C. [1] This appeal under the Small Claims Act arises from the decision by the trial judge in Provincial Court dismissing the appellants' claim against the respondents, Harry Rankin (Mr. Rankin), Bruce Yorke (Mr. Yorke), and Committee of Progressive Electors (COPE) for the payment of the appellants' legal account for services rendered. The services relate to an appeal by way of stated case to the Supreme Court of British Columbia from the decision of the Province of British Columbia Assessment Appeal Board in a property tax matter before the Board on November 19 and 20, 1991, refusing an application for intervenor status for Yorke and COPE. [2] At the hearing of the intervenor application, the appellants' articled law student, Mr. M.A. Azevedo, appeared as counsel and advised the Appeal Board that the appellants' law firm had been retained by Mr. Rankin, Mr. Yorke, and COPE. Although Mr. Azevedo was then an articled law student in British Columbia, he was a qualified lawyer in the Province of Ontario and held a Master's Degree in law and had experience in administrative law. [3] Pursuant to the Appeal Board's decision refusing the intervenor application, Mr. Yorke and Mr. Rankin instructed the appellants to undertake a stated case appeal of the decision to the Supreme Court of British Columbia. Shortly after the initial instructions, Mr. Yorke fell ill. He was hospitalized and had no further dealings with the appellants or Mr. Azevedo concerning the appeal. Mr. Azevedo advised the appellant Peter M. Kendall (Mr. Kendall) that the respondents Rankin and Yorke were on the executive of COPE and that they wished to appeal and that COPE was paying. [4] After Mr. Yorke's illness, any future instructions to the appellants' firm concerning the stated case appeal were given by Mr. Rankin. The requisite material for the stated case was prepared primarily by Mr. Azevedo with Mr. Kendall to act as counsel, together with the assistance of Mr. Azevedo, on the hearing of the case by the Court. However, in late January or early February, 1992, Mr. Rankin intervened and gave instructions that Mr. Kendall was to stand aside as counsel and that he, Mr. Rankin, would act as counsel at the hearing. In this respect, Mr. Rankin, Q.C. is a lawyer qualified to practice law in British Columbia and a Notice of Change of Solicitor was filed on February 7, 1992, giving notice that Harry Rankin, Q.C. had been appointed to act as the solicitor for the appellants Bruce Yorke and Committee of Progressive Electors, in the place of Peter M. Kendall. [5] On April 24, 1992, Mr. Rankin, Q.C., appeared before the Court, together with the assistance of Mr. Azevedo, to present the appeal. On May 27, 1992, the Court rendered its decision dismissing the appeal. [6] The firm of the appellants presented its account for payment, but each of the respondents denied any liability and refused payment. The appellants then sued in Small Claims Court for the payment of the account, but were unsuccessful. The claim was dismissed by the Provincial Court on May 7, 1998. [7] The court dismissed the claim on the grounds that no clear or sufficient instructions were obtained by the appellant, Mr. Kendall, or his firm, from Mr. Yorke or Mr. Rankin or from some authorized person on behalf of COPE to obligate them, or any of them, to pay the account of $3,414.37 for the legal work done on the appeal by way of stated case to the Supreme Court. Further, that Mr. Kendall is not entitled to judgment for any amount against Mr. Yorke because of his illness during this period, i.e. during the period of the appeal. In brief, Mr. Kendall had failed to satisfy the court on a balance of probabilities that there was sufficient certainty to find an agreement to pay him for any of the legal work done for the appeal. [8] The appellants now appeal on the basis that: (1) The learned trial judge erred in finding there could be no judgment against the respondent Yorke because of his illness during "this period"; (2) The learned trial judge erred in finding that there could be no judgment against the respondent Rankin since there was no contract between the appellants and the respondent Rankin, and in the alternative, erred in failing to consider, although pleaded, the appellants' claim for restitution in quantum meruit against the respondents Harry Rankin and Bruce Yorke. [9] It should be noted that the appellants abandoned their appeal against COPE. [10] Under ground (1), the extent to which the trial court found, or depended upon, that Mr. Yorke could not be liable during "this period" because of illness, the court erred in law since illness in itself is no defence in law unless at the time the contracting party lacked the mental capacity to contract. The evidence fails to establish any lack of mental capacity on the part of Mr. Yorke to contract. [11] On turning to the second ground of appeal, Mr. Kendall concedes that the appellants have no case against COPE since it neither gave instructions nor authorized anyone on its behalf to undertake the appeal. In this respect, Dr. Pauline Johnson, who was a witness for the defence and a member of the COPE executive, testified that the executive was not aware after Mr. Kendall's first account for services on appearing before the Assessment Appeal Board that he was doing any further work on the assessment. And further, that there was no action taken by the executive to approve any additional work through Mr. Kendall. Mr. Kendall accepts that COPE was not aware that an appeal was being taken. [12] In his reasons for judgment, the learned trial judge stated at pages 2 and 5 reading, in part: Page 2 Specifically, Mr. Rankin says that he never hired Mr. Kendall's firm to do any legal work in respect of this stated case in the Supreme Court and that he personally was the counsel presenting this stated case for which he did not receive any remuneration from COPE or Mr. Yorke. Page 5 The denial by each of the defendants, Rankin and COPE, appeared to me to be honestly made to the effect that they never instructed his firm to do legal work for the Supreme Court appeal. [13] Although the statements by the trial court are understandable in respect to COPE because of Dr. Pauline Weinstein's testimony, the same cannot be said of Mr. Yorke and Mr. Rankin. Neither Mr. Yorke nor Mr. Rankin appeared as witnesses before the trial court to give evidence, albeit Mr. Rankin appeared as counsel for Mr. York and on his own behalf. Accordingly, in the absence of sworn testimony, or admissions on the record of which there are none, the extent to which the trial judge depended upon the above quoted statements concerning Mr. Yorke and Mr. Rankin, he erred in law. This places this court in a much stronger position to review the testimony and other evidence and to draw conclusions and inferences therefrom in relation to Mr. Rankin and Mr. Yorke on findings of fact that this court sitting in appeal would otherwise be most reluctant to do. Regardless, I am satisfied on the entirety of the evidence and material before me that the appellants' dealings with Mr. Yorke and Mr. Rankin were not sufficiently clear and certain to give rise to a binding contract for legal services rendered, and in this respect, I accept the trial court's finding. However, even though pleaded, the trial court did not go on to consider and determine the issue of the appellants' claim in quantum meruit against the respondents. [14] On the appellants' appeal in quantum meruit against the respondents Rankin and Yorke both parties rely on Peel (Reg. Municipality) v. Canada; Peel (Reg. Municipality) v. Ontario, [1992] 3 S.C.R. 762 (S.C.C.). The respondents Rankin and Yorke point, inter alia, to what was said by McLachlin, J. when speaking for six of the seven judges of the court at pages 794 and 795 reading in part: To allow recovery because a defendant has been incontrovertibly benefited is to accept that he must make restitution even though he did not request or freely accept the benefit. In the past, the principle embodied in Bowen L.J.'s well known dictum in Falcke's case, that "liabilities are not to be forced on people behind their backs any more than you can confer a benefit upon a man against his will," has been regarded as paramount. Free choice must be preserved inviolate. To accept the principle of incontrovertible benefit is to admit a limited and, in our view, desirable exception. The burden will always be on the plaintiff to show that he did not act officiously, that the particular defendant has gained a demonstrable financial benefit or has been saved an inevitable expense and that it will not be a hardship to the defendant, in the circumstances of the case, to make restitution. [Emphasis added.] [15] The appellants look to the principle of which quantum meruit is a category that although there is no contract, this does not in itself relieve a party from any further obligation where the party receives an enrichment with a corresponding deprivation to the other person in the absence of any juristic reason for the enrichment. In support, the appellants refer to Peter v. Beblow (1993), 150 N.R. (1) at 43 (S.C.C.), Friesen (P.H.) Ltd. v. Cypress Farms Ltd. et al (1993), 87 Man.R. (2d) 250 (Q.B.), Pettkus v. Becker, [1980] 2 S.C.R. 834 (S.C.C.), and the article Breach of Contract and Unjust Enrichment (1990) 12 ADV.Q.1. [16] In the present case on appeal, it is evident that the trial judge erred in overlooking to deal with the appellants' claim in quantum meruit. It is also, in my opinion, apparent from the entire material that at least insofar as Mr. Rankin is concerned, Mr. Kendall's firm did not act officiously in rendering its services for the stated case appeal, but to the contrary did so on the instructions throughout of Mr. Rankin. He was in control and replaced by his decision Mr. Kendall as counsel at the hearing. Mr. Rankin appeared as counsel at the hearing and undoubtedly took the benefit of the work done by Mr. Kendall's firm in preparation for the appeal and of the assistance and services of Mr. Kendall's articled student during the course of the hearing. Mr. Rankin incontrovertibly benefitted from such services which were developed through his instructions and freely accepted. It is not a situation of a benefit conferred or received that was not requested or freely accepted, thereby distinguishing it from what was said in Peel (supra). [17] As regards to Mr. Rankin being in charge and giving instructions throughout, the following testimony of Mr. Azevedo at page 61, lines 31 to 46 are relevant and significant, and in the context of the whole of the other evidence, I accept as valid: Q But he was no longer able to participate in giving instructions? [My note - he - refers to Mr. Yorke.] A Oh, no. Q When he was in the hospital? A He hadn't, no. He was in the hospital, yeah. Q And it was at some point after that that Mr. Rankin told you that he was going to argue the case? A I assume so, yeah. Q Okay. Now, Mr. Rankin was involved in the conduct of this particular case from the very beginning, wasn't he? A Yeah, he was aware of it and participated, yes. Q And you told me Rankin wants to argue the case? A It sounds logical. I probably did, yeah. Q Now, in your mind who was giving instructions at that time? Q Well, I was dealing with Mr. Rankin. [18] Since the appellants were at no time requested to give their services gratis and never indicated that they were doing so, but to the contrary expected compensation, Mr. Rankin's motives or the fact that he contributed his services as counsel on the hearing gratis to COPE is irrelevant. He took the benefit and use of the appellants' services at the expense of the appellants in the absence of any juristic reason for the appellants to have provided the benefit of its legal services to Mr. Rankin at no cost. Mr. Rankin received a demonstrable benefit and a saved expense from the appellants' work. I accordingly find the civil onus of proof met and the equities in the circumstances of this case dictate that Mr. Rankin is liable in quantum meruit for the respondents' legal account of $3,414.37 for which the appellants shall have judgment. Pre-judgment interest shall run thereon from the date of rendering the account to date of judgment at the rate imposed from time to time during that period by District Registrars on default judgments. [19] Insofar as the respondent Yorke is concerned, it is evident that outside of the early initial instruction, he played no further active part concerning the stated case appeal in relation to the appellants' firm and did not take the benefit or use the work done and services rendered by the appellants as did Mr. Rankin. [20] The appellants shall have the costs of the appeal against the respondent Harry Rankin. "Drossos, J." Drossos, J.