The Court held that where a law firm partnership dissolves and a client signs an authority directing transfer of their file and trust monies to the successor firm, this can constitute an implied tripartite novation of the original costs agreement, substituting the new firm for the old. However, the Court further held that novation involves the termination of the original contract and creation of a new one, and does not of itself operate to vest accrued rights and obligations (including unpaid fees for work already performed under the original agreement) in the parties to the substituted contract; an express or implied agreement to transfer those accrued liabilities is required and was not established on the facts. The successor firm was therefore not entitled to recover from the client costs incurred by the dissolved partnership prior to the novation.
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