Background
Patrick Poupore spent 18 years as a personal injury lawyer at the Sudbury firm Wallbridge, Wallbridge, where he was paid on a commission basis — a percentage of fees billed and collected on files he brought to successful resolution under contingency fee agreements. In February 2021, while still employed at Wallbridge, he began planning a move to the competing firm Diamond & Diamond and signed an employment contract with Diamond in June 2021. He continued working at Wallbridge until October 1, 2021, when he first disclosed his plans, at which point Wallbridge immediately terminated him. His only service to Diamond during this overlap period was helping identify office space in Sudbury.
A dispute arose over three categories of fees: (1) fees billed by Poupore and collected by Wallbridge in the month before his termination; (2) fees billed and collected by Wallbridge post-termination on files Poupore had been handling before they were reassigned to other lawyers; and (3) fees collected on three files Poupore had settled before his termination, where the clients followed him to Diamond. Wallbridge also sought $3 million in damages against Poupore, alleging breach of his duty of good faith. The parties proceeded by summary judgment motion to resolve the entitlement questions, with damages to be quantified separately.
The motion judge found in Poupore’s favour on all three fee categories — both on a contractual basis and, in the alternative, on a quantum meruit / unjust enrichment basis — and dismissed Wallbridge’s damages claim. Wallbridge appealed.
The Court’s Holding
The Court of Appeal allowed the appeal in part. Writing for a unanimous panel, Miller J.A. held that the employment contract, though oral and sparse, constituted an agreement under which Poupore would only be compensated upon successful resolution of a claim resulting in a damages award while he was at the firm. Because the contingency model meant that not all work would be remunerated, the contract effectively excluded payment for work-in-progress files that remained at Wallbridge and were settled after Poupore’s departure by other lawyers. The court vacated paragraph 5 of the lower court judgment, which had ordered Wallbridge to pay Poupore his commission on post-termination WIP files taken over by other lawyers.
However, the court affirmed that Wallbridge’s obligation to pay Poupore for files he had personally settled before his departure survived termination, relying on the principle from Charles P. Rowen & Associates Inc. v. Ciba-Geigy Canada Inc. (1994) that where a principal accepts and benefits from work performed on its behalf, it must pay for it absent a contrary agreement. This entitled Poupore to his commission on the three pre-termination settlements, whether the fees were ultimately collected by Wallbridge or by Diamond. The court also rejected Poupore’s quantum meruit / unjust enrichment claim for the WIP files, holding that unjust enrichment does not apply where the services fall within the scope of the contract and the contract addresses how those services are to be remunerated.
The court upheld the motion judge’s finding that Poupore did not breach his duty of good faith. His activities during the notice period — maintaining his billings and doing no more than helping Diamond find office space — amounted only to planning his departure, not active competition or undermining of Wallbridge. Because there was no breach, Wallbridge’s claim for damages also failed. Poupore was awarded costs of the appeal of $25,000 inclusive, reflecting his greater overall success.
Key Takeaways
- A contingency-fee compensation structure can itself constitute an implied “agreement to the contrary” barring post-termination payment for work-in-progress files completed by others after the lawyer’s departure — even in the absence of an explicit termination clause.
- The Rowen principle (obligation to pay for pre-termination completed work survives the end of employment) applies to personal injury lawyers on contingency: if a file was settled before departure, the lawyer is entitled to the commission regardless of when fees are collected or whether the client moves to a new firm.
- Quantum meruit / unjust enrichment is unavailable where the parties’ contract addresses remuneration for the work in question, even if the contract does not expressly contemplate every scenario that might arise on departure.
- A lawyer who secretly signs with a competitor but continues to work productively for the original employer, doing nothing more than helping the new firm find office space, does not breach the duty of good faith during the notice period.
Why It Matters
This decision provides important guidance for law firms and lawyers in Ontario navigating the often-contentious question of post-departure compensation under contingency-fee arrangements. It clarifies that the nature of the contingency model — where remuneration is tied to file resolution, not hours worked — can operate as a built-in limit on post-termination entitlements for WIP files, without requiring any explicit termination clause. Firms relying on this model should nonetheless consider formalizing their policies in writing, as the court’s analysis turned heavily on the specific oral agreement and the absence of any contrary implied term or established practice.
For departing lawyers, the ruling confirms that commissions on files they personally settled before leaving are protected and will survive termination, but contributions to files completed by successors after departure will generally not be compensable — whether in contract or equity — under a pure contingency structure. The decision also offers some reassurance on the good-faith obligations front: careful, non-disruptive pre-departure planning, without active competition or employee solicitation, is unlikely to attract liability.