Introduction
In KMH Lawyers v. Kasanda, 2025 ONCA 694, the Ontario Court of Appeal upheld a decision finding that lawyers had met the test for establishing a solicitor-client relationship, even though they failed to reduce the terms of the retainer to writing. This finding supported an order for the assessment of unpaid legal accounts. The Court confirmed that the evidentiary record contained sufficient indicia of solicitor-client relationship and rejected the appellants’ attempt to frame the dispute as a purely contractual matter.
The Court emphasized that where a written retainer is absent, a “heavy onus” rests on counsel to demonstrate the existence of a solicitor-client relationship. In this case, that burden was met.
Background
The respondents represented the appellants in a legal matter arising from an estate dispute involving the father of one of the appellants. While the other two appellants were not formal parties to the estate litigation, there were factual indicators suggesting they may had also been clients of the respondents.
The proceedings arose from a claim for unpaid legal fees. The respondents obtained an order for assessment under section 3 of the Solicitors Act, which authorizes the court to direct an assessment of a solicitor’s bill. Following this order, the appellants brought a motion to remove the individual appellant from the assessment process, arguing that no solicitor-client relationship existed with that person and that legal services had been provided solely to the corporate appellant.
The motion judge dismissed the motion, concluding that the record supported a finding that a solicitor-client relationship existed with the individual appellant and that the assessment should proceed against both appellants.
Motion Judge’s Findings
The motion judge, citing the test set out in Trillium Motor World Ltd. v. General Motors of Canada Limited, 2015 ONSC 3824, noted that the proper legal test for establishing the existence of a solicitor-client relationship is a factual inquiry focused on whether a reasonable person in the party’s position would believe the lawyer was acting on their behalf.
Relying on Capital Sports Management Inc. v. Trinity Development Group Inc., 2022 ONSC 2657, the motion judge canvassed a non-exhaustive list of 14 indicia relevant to the existence of such a relationship, including:
- a contract or retainer;
- a file opened by the lawyer;
- meetings between the lawyer and the party;
- correspondence between the lawyer and the party;
- a bill rendered by the lawyer to the party;
- a bill paid by the party;
- instructions given by the party to the lawyer;
- the lawyer acting on instructions given;
- statements made by the lawyer that the lawyer is acting for the party;
- a reasonable expectation by the party about the lawyer’s role;
- legal advice given;
- any legal documents created for the party;
- the party’s vested interest in the outcome of the proceeding; and
- the belief of other parties to the litigation that the party was represented by the lawyer.
The judge emphasized that where there is no written retainer, lawyers bear a heavy onus to establish the relationship, citing Rye and Partners v. 1041977 Ontario Inc., 188 O.A.C. 158.
Several reinforcing factors supported the finding of a solicitor-client relationship with the individual appellant:
- Referral and engagement communications: The legal engagement was initiated through a referral email identifying the individual appellant.
- Intake documentation: A completed intake form included the individual appellant’s name, the scope of services, and contact/conflict-check details.
- Retainer agreement: Although ultimately issued in the corporate appellant’s name, the original retainer had named the individual appellant. Evidence showed that changes were made at the request of the individual appellant.
- Evidence of legal advice and instructions: The record demonstrated that the individual appellant received legal advice and gave instructions through emails, phone calls, and other communications. The judge found that the individual appellant’s active participation reflected an understanding that the firm was acting on their behalf—not solely on behalf of the corporation.
Taken together, these findings satisfied the legal test that a solicitor-client relationship may be established by conduct and context, even where a party later denies it. The judge concluded that both appellants were properly subject to the assessment process.
Appeal and Court of Appeal’s Reasoning
On appeal, the individual appellant argued that the motion judge erred by focusing on whether a solicitor-client relationship existed rather than conducting a strict contractual analysis. According to the appellant, a binding written agreement was required, and in the absence of one, no relationship could be found.
The Court of Appeal rejected this argument. It affirmed that the motion judge had applied the correct legal principles, reiterating that a solicitor-client relationship may arise not only from a formal contract but also from the conduct of the parties and the surrounding circumstances.
The Court of Appeal concluded that the motion judge had correctly applied the governing legal standards and properly declined to remove the individual appellant from the assessment process.
Implications for Practitioners
- Substance over form in client formation: A solicitor-client relationship can be established through conduct. Courts will assess the totality of the relationship, including engagement communications, intake documentation, instructions, and legal advice—even where a formal retainer is absent.
- Importance of written retainers: A clear, signed retainer that names all clients and defines their obligations remains the best tool for avoiding disputes about client status and fee responsibility.
- Intake process discipline: Ensure intake forms and conflict checks align with the terms of the retainer and accurately reflect the parties involved.
- Communications management: Maintain detailed records of who sought and received legal advice, who gave instructions, and how work was authorized. Email and message logs are often critical to resolving later disputes.
- Multi-party representations: When acting for both individuals and entities, be explicit in retainer agreements about the identity of each client, scope of representation, confidentiality between co-clients, authority for instructions, and financial responsibility.
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