KA-CHING! JUDGE UPHOLDS SEVEN-FIGURE LEGAL BILL

Man owes firm more than $1.4 million after decade of fighting family over business

A legal bill in excess of $1.4 million in a dispute reminiscent of the Thirty Years War has been upheld by the B.C. Supreme Court, even though the lawyer took annual pay hikes beyond the retainer’s range.

In reasons for judgment a decade ago, on May 2, 2008, now-retired Justice Elizabeth Arnold-Bailey wrote “this matter has a somewhat protracted history before the court.”

“Nine and a half years later, that protracted history continues,” Master Robert McDiarmid said in a ruling published Tuesday.

Still, when Zora Grewal and his wife Harinderpal received a consolidated legal bill last year from Jenkins Marzban Logan LLP and lawyer Guy Holeksa, they were shocked.

Zora, who doesn’t speak English and used a mark rather than a signature, was one of eight children in a family of Punjabi immigrants who came to Canada in the 1980s and established several businesses and bought property together.

The law firm was retained in March 2008 in connection with litigation resulting from a bitter family fight. On Aug. 31, 2008, the firm rendered two bills totalling $105,286.38.

“Nothing has been paid on those bills, the entire amount of the certificate remains outstanding,” McDiarmid said, though the law firm and client have apparently agreed about those invoices.

The family also paid $181,829.94 rendered in an interim bill.

Still, McDiarmid was reviewing five separate invoices submitted last year for work performed between February 2009 and June 26, 2017, totalling $1,508,794.86 — one for $1,214,293.30 for matters relating to Zora’s brother Harbans, $7,543.68 on a Canada Revenue Agency file, $225,309.63 for matters relating to disputes with Zora’s brother Harminder, $23,915.45 for a foreclosure by the Bank of Montreal and $37,732.80 for a foreclosure by Farm Credit Canada.

After the 2008 bills went unpaid, the law firm and Grewals agreed to a retainer that stated their legal bills would be submitted when the Grewals had the ability to pay.

With deductions for inadvertent duplication and a minor reduction of some charges in the actions involving the brothers, McDiarmid approved $1,419,191.93.

A veteran lawyer who did the bulk of the work, Holeksa testified that at times the effort required was complex, novel and difficult.

He had to slog through banking records and unravel complicated money shuffles — detailed, grinding work that was needed to determine the facts in a case riddled with inconsistencies.

The retainer agreement said: “Hourly rates are adjusted annually on or about January 1 of each year. You will be charged at the hourly rates from time to time in effect. The annual increases are generally between 0 and 5%.”

Holeksa’s hourly rate started at $375, went to $400 in 2010, $435 in 2011, $450 in 2012, $465 in 2013, $480 in 2014, $490 in 2015, $515 in 2016, and $525 in 2017.

“I charge regular hourly rate for my travel time,” he added. “This is standard of course, because if I wasn’t travelling, I would be working on other matters.”

The Grewals deposed that they did “not agree” they signed the retainer letter on or about Feb. 19, 2009 but that the signatures “looked like” their signatures.

McDiarmid dismissed that as “cute;” he did not believe them and found Holeksa to be the more credible witness.

“I am satisfied that the law firm, through Mr. Holeksa, fully and fairly advised the clients regarding the terms of the retainer, including giving the clients full opportunity to discuss the retainer,” he said.

Still, McDiarmid had some “difficulty” with how Holeksa had proceeded.

“Although the average of all annual increases was less than 5%, in Mr. Holeksa’s reply submissions he concedes that the increases were 6.7% from 2009 to 2010, 8.7% from 2010 to 2011, and 5.1% from 2015 to 2016,” the master wrote.

“In hindsight, it would have been preferable for the law firm to render interim accounts, even if they were not payable, at the conclusion of each year. It would have been preferable to advise the clients of the new fee rate.”

McDiarmid explained that travel time was usually charged at half the usual rate because “here is a limited amount of time a lawyer can productively put in during a day.”

Still, he concluded “all of the work done was reasonably necessary and proper.”

There was no bonus billing, McDiarmid emphasized.

“Most significantly, this was also not a case where the law firm attempted to charge any interest, even though under the terms of the retainer agreement it might have been able to do so. It carried the entire cost of the litigation throughout.”

Making some adjustments for inadvertent duplication, and adding applicable taxes, he said the law firm’s bill for the work on Harbans’ matters should have been rendered as $1,150,000.00.

As for the invoice for matters related to Harminder, presented at $225,309.63: “That is not justified given the amount in issue. However, the work was done and success achieved. I allow that bill at $200,000.”

McDiarmid allowed the bills as presented for the Canada Revenue Agency, the Bank of Montreal and Farm Credit work.

Nothing has been paid on those bills, the entire amount of the certificate remains outstanding.