A Saskatchewan law firm failed to provide evidence establishing that its clients rather than it were liable for the costs incurred by it in respect of searches, appraisal reports, accident reports, courier costs, transcripts, investigation reports, hospital records, security reports, medical reports and searches and certificates. (Clients were not typically consulted about minor disbursements such as a land title search, a marriage certificate or courier fees and the lawyers generally dealt directly with the third-party suppliers.) Accordingly, the firm was required to collect and remit GST when it made a charge in respect of such disbursements to its clients. Dawson JA stated (at paras. 24-25):
[T]he Judge… made no finding of fact with respect to whether the clients assumed any risk or liability with third-party suppliers. …
As a matter of law it does not follow that, because the solicitor-client relationship is generally one of agency, all financial obligations incurred by a lawyer while providing legal services are incurred as agent of its clients. Indeed, the Judge recognized this by dismissing that portion of the appeal that related to office expenses incurred by the respondent on behalf of clients.