nan QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2015 SKQB 412 Date: 2015 10 06 Docket: QBG 309 of 2015 Judicial Centre: Regina BETWEEN: COWESSESS INDIAN BAND NO. 73 and BRABANT AND COMPANY LAW OFFICE Counsel: Nathan Phillips for the plaintiff T. Joshua Morrison for the defendants FIAT BROWN J. OCTOBER 6, 2015 Introduction [1] The applicant, Cowessess Indian Band No. 73 [Cowessess], applies pursuant to s. 67 of The Legal Profession Act, 1990, SS 1990-91, L-10.1 [Act] for an assessment of all bills for legal services that Brabant and Company Law Office [Brabant] rendered to Cowessess within six years of the date of the application. The application proceeded on March 12, 2015. [2] For the reasons that follow, I dismiss the application. [3] Brabant is in essence Alan Brabant, sole practitioner, who provided legal services to Cowessess over 23 year period, beginning in 1992. The services were in relation to various matters of concern to Cowessess and could be described as being both the provision of general counsel advice and specific legal services on discrete files of corporate, commercial or litigation nature. Cowessess was involved in broad range of activities and Brabant’s services were provided on employment issues, various lawsuits, land claim negotiations and implementation, land acquisition, trust administration, natural resource development, corporate registrations as well as Band governance and development of bylaws and policies to mention few. [4] No formal written retainer was executed between Brabant and Cowessess, rather the relationship proceeded on verbal terms and mutual understanding. Services were requested and provided, bills for those services were rendered periodically and were in due course paid by Cowessess, at least until somewhat more recently. [5] The period of non-payment of some of the bills rendered by Brabant occurred few months before and following change in the Chief and Council of Cowessess on April 27, 2013, following Band election. With the new Band Council making decisions for Cowessess, Brabant’s services, while utilized initially, were eventually no longer sought. Phillips Co. became legal counsel for Cowessess at some point after the April 2013 election. [6] The situation is further complicated by the fact that political turmoil followed the Band election. One of the issues still being litigated is whether the current Chief is lawfully entitled to the position. On June 13, 2014 decision of the Federal Court removed him. The matter was appealed and on July 9, 2014 the Federal Court of Appeal granted stay of that decision. There are other matters stemming from this turmoil including banking institution refusing to recognize the Chief as entitled to the position and resulting refusal to recognize the trustees of the Treaty Land Entitlement Trust appointed by the Chief and recently elected Band Council. [7] In February 2015 Cowessess first passed resolution seeking to have Brabant’s legal services assessed. This in turn led to this application which Brabant opposes. Brabant has not been paid in full for several bills submitted from January 2013 to October 2014 totaling $53,059.71 exclusive of interest. [8] The entirety of the time period for which Cowessess seeks to have Brabant’s bills assessed is outside of the 30 day time period provided by ss. 67(1)(a)(i) of the Act which establishes an assessment as matter of right. [9] Section 67 of the Act reads as follows: 67(1) bill of fees or disbursements with respect to services performed by member may be assessed: (a) on application to the court: (i) by the person charged with the bill, within 30 days after the day on which the person received the bill; (ii) by the member, if no application is made pursuant to subclause (i); or (iii) by the person charged with the bill, after the expiration of the time set out in subclause (i), if the court is satisfied that it is in the interests of justice to do so; or (b) on application to the local registrar described in subsection (2), at the request of both the member and the person charged with the bill, at any time. (2) An application pursuant to clause (1)(a) shall be referred by the court to the local registrar of the court at the judicial centre nearest to which the member who performed the services carries on the member’s practice. (3) The court may restrain the bringing of an action with respect to that bill pending reference pursuant to subsection (2). (4) On an assessment of bill pursuant to this Act, the local registrar may order any further particulars or details of the services for which the bill was ordered. [10] In Doig Mazinke, 2007 SKQB (CanLII), 291 Sask 221, [Doig] Justice Popescul, as he then was, considered s. 67 of the Act: 10 The criteria which court must now utilize when considering whether or not to allow an assessment of lawyer's bill beyond 30 days from the day on which the person received the bill is considerably less stringent in the present legislation than it was in the replaced legislation. While the old Act contemplated "special circumstances" which suggested positive obligation on the applicant to set forth factors that establish the existence of circumstances that are out of the ordinary, the new legislation simply provides the court with the discretion to abridge the time if satisfied that, "... it is in the interest of justice to do so". interpret this to mean that the time can be abridged if the court is of the view that it would be fair to do so. [11] In Machula Kuse, 2011 SKQB 370 (CanLII), 384 Sask 86 [Machula] Ryan-Froslie J., as she then was, pointed out the criteria to be considered pursuant to s. 67 of the Act: nan review of the recent case law highlights number of factors that judges have used to determine whether to abridge the time for applications to assess legal bills. The list is not exhaustive and may be summarized as follows: (i) Any agreement between the solicitor and his client with respect to fees and/or their payment (see: Greba v. Merchant Law Firm, 2010 SKQB 300 (CanLII), 360 Sask. R. 271 at para. 26; Ryan v. Watson, 2011 SKQB 278 (CanLII), [2011] S.J. 448 (QL) at para. 17); (ii) Whether the bill was final bill or an interim bill subject to adjustment (see: Postnikoff v. Morrison, 2008 SKQB 210 (CanLII), [2008] S.J. No. 297 (QL) at paras. 23 and 24); (iii) The nature of the work performed and the amount of the bill submitted (i.e. was there prima facie an overvaluing or undervaluing of services) (see: Greba v. Merchant Law Firm, supra, at para. 20(f) and Ryan v. Watson, supra, at para. 19); (iv) Whether law suit has been commenced for the collection of the account (see: Doig v. Mazinke, supra, at para. 11, Greba v. Merchant Law Firm, supra, at para. 20(d) and Postnikoff v. Morrison, supra, at para. 25); (v) The length of time being abridged (see: Doig v. Mazinke, supra, at para. 11, Greba v. Merchant Law Firm, supra, at para. 20, Postnikoff v. Morrison, supra, at para. 21); (vi) Whether the client ever complained about the services rendered and/or the bills and the timing of those complaints (see: Doig v. Mazinke, supra, at para. 11, Postnikoff v. Morrison, supra, at paras. 21 and 23 and Agioritis v. Merchant Law Group LLP, 2009 SKQB 425 (CanLII), 344 Sask. R. 283, at paras. 13 and 16); (vii) Whether either party would be prejudiced by the abridgment of time (see: Doig v. Mazinke, supra, at para. 11, Greba v. Merchant Law Firm, supra, at para. 20, Postnikoff v. Morrison, supra, at para. 25); (viii) Whether the accounts were paid and, if so, the circumstances of that payment (i.e. from trust, from settlement proceeds, by the client, etc.) (see: Postnikoff v. Morrison, supra, at para. 25, Agioritis v. Merchant Law Group LLP, supra, at para. 14); and (ix) Any misrepresentation, fraud or dereliction of duty by the solicitor. (see: Agioritis v. Merchant Law Group LLP, supra, at paras. 12 and 15). [12] Justice Ryan-Froslie went on to observe that these considerations were the same as those set out by Klebuc J. (as he then was) in Isley Thorstad Danyliuk (1993), 1993 CanLII 8892 (SK QB), 110 Sask 100 (QB) [Isley], even though Isley dealt with an application for “taxation” pursuant to the earlier emanation of s. 67 of the Act. She noted that the section had been amended and the grounds for extending the time for such applications was changed from one of “special circumstances” to situations where it is “in the interests of justice” to do so. Nonetheless: 10 In considering an application under the current section, court may consider the same type of factors as set out in Isley v. Thorstad and Danyliuk, supra but as pointed out by Popescul J. in Doig v. Mazinke, supra at para. 10, the test is less stringent and is based on fairness. [13] Several cases since Machula have considered the question of how achieving the interests of justice by way of fairness is accomplished. In Salyne Walen, 2012 SKQB 139 (CanLII), 395 Sask 229 [Salyne], Justice Smith addressed the question in the context of how the amount of time that has elapsed after payment of the bills, and without complaint, factors into the matter. Some 20 accounts had been rendered and paid over the course of four years. Smith J. indicated at para. 11 that fairness requires client to raise any concerns they have with the account within reasonable time. Having not done so, it was not in the interests of justice to extend the time beyond the 30 days for an assessment of the accounts. [14] In Litzenberger Cook, 2014 SKQB 365 (CanLII), Justice Dufour found that the list of factors to consider as set out in Machula are non-exhaustive (see paras. 14-15). He also recognized that fairness applies in respect of both the applicant/client and the lawyer (see para. 4). Evidentiary Requirement [15] In Isley Klebuc J. recognized evidentiary requirements that properly apply to client seeking to have bill assessed. He noted that the basis for the taxation ought to be clearly identified. As well, where certain concerns with the bill are alleged, full particulars ought to be provided. At p. 111 he said: 3. Where gross inefficiency, fraud or other dereliction of duty by the solicitor is alleged, all of the facts on which the applicant is relying must be set forth; 4. Where overcharging is alleged, the full particulars of the alleged overcharging must be set out, including specific reference as to what charges in the solicitor's bill are excessive or in breach of the terms of the solicitor's retainer; Application [16] As with Salyne, will apply the relevant criteria here in order to ascertain whether Cowessess’ request is fair and whether the extension of the 30 day time period in which to order the assessment that they request is in the interests of justice. (i) Any agreement between the solicitor and his client with respect to fees and/or their payment [17] While the retainer was verbal, and there is good reason to reduce retainers to writing, that is not to say verbal retainers are unenforceable or must be by necessity treated with great suspicion. As pointed out by the Alberta Court of Appeal in Samson Cree Nation O’Reilly Associés, 2014 ABCA 268 (CanLII), 375 DLR (4th) 663, where the agreement is clear, it is not subject to being impugned, even if oral in nature. The existence of an oral agreement, while potentially more difficult to prove, is nonetheless valid contract. While care is appropriately advised when dealing with such agreements there is no strict requirement that there be written retainer. [18] Beginning in 1992 Brabant had an arrangement with Cowessess in which he would be asked to provide legal services, he would provide them and he would render bill to Cowessess. This arrangement went along without controversy until the new leadership at Cowessess altered it. [19] For in excess of two decades and through many different emanations of the Chief and Council, the arrangement was satisfactory to both Cowessess and Brabant. The affidavits provided by at least two Chiefs as well as Council members with direct and long-term experience with Brabant confirm their confidence in him and his legal services. The arrangement only came into question in 2015, subsequent to the election of new Council. [20] Even after the 2013 change of leadership the agreement with Cowessess carried on for some time. Brabant’s services were utilized and there was part payment of the bills that were provided. Valerie Tanner indicated to Brabant in April 2014 that lateness of the Cowessess audit had put financial strain on Cowessess but they were looking at paying bills in short order. [21] In addition, there were discussions and meetings with representative from the Band, Glenn Saganace, Cowessess’ Operations Manager, leading to what Brabant reasonably believed was an agreement in early December 2014 regarding full payment of the outstanding amounts. (ii) Whether the bill was final bill or an interim bill subject to adjustment [22] There is no indication in the evidence that any of the bills were not final in nature. While there will always exist the possibility of an assessment or renegotiation of bill once rendered, nothing put forward here indicated that the bills were intended to be merely interim with final or total billing coming at some point down the road. The bills were final in nature. (iii) The nature of the work performed and the amount of the bill submitted (i.e. was there prima facie an overvaluing or undervaluing of services); [23] There is nothing in the evidence that indicates there was prima facie overvaluing or undervaluing of the services provided prior to January 2013. The general complaint from Cowessess centers around their belief in an overall amount of billings over lengthy period, this application covering 2009 2015, with specific attention being given to 2011 2013. [24] Ms. Tanner sought to provide some detail regarding few particular matters which indicated she was suspect of either the timing or amount of work remaining. However, her affidavit is not based on personal knowledge. Responding affidavits from former Chiefs and Council members with personal knowledge establish the facts in this regard. [25] In addition, while not set out in the affidavits but raised in argument, the complaint expanded with respect to some entries in some of the bills themselves regarding what was described as “block billing”. “Block billing” is an amount of time for which fees were charged but which Cowessess complains did not have sufficient details provided for the activity undertaken. [26] Brabant points out that the internal accounting document Cowessess created and put forward for the amount they believe was billed and forms the basis for Cowessess’ concerns is vague, general in nature and inaccurate. He notes that the information Cowessess relies on is lacking; it does not contain any record of the dates when accounts were submitted by Brabant; it is purportedly for 2011-2013 but contains an entry shown as “August October 27, 2010”; it duplicates entries and therefore involves some element of double counting; it includes disbursements and at least one trust payment which are not legal fees at all. Thus the information put forward by Cowessess does not represent what Cowessess says it does and cannot be relied upon in making the determination herein. [27] I agree that the information put forward here on which to direct an assessment of six years of legal services covering a multitude of issues on a substantial number of files should be much more specific. While different considerations might well apply if single file were the subject of request for an assessment, that is not the case here. Nor is this either an unsophisticated client or one with communication challenges such as language barrier, factors that have been of some consequence in other applications for assessments outside of the 30 days. It is not sufficient to make general complaint that the services seem to represent large sum and expect six years of complex ongoing relationship to thereafter be scrutinized in detail. [28] This conclusion is supported by the affidavit evidence provided by the Chiefs and Council members from the time when services were provided. They indicate that they were pleased with the services Brabant provided and take no issue with the amounts charged for such services. To prefer general statements of concern related to time period many years earlier over the evidence of those who were actually receiving the advice and who indicate they were both pleased with it and had no issue regarding the cost is not fair approach. [29] While the affidavit of Ms. Tanner was filed late, in contravention of Justice Kovach’s timetable, even if it is considered it adds little value. She was not Council member at the relevant time and relies on hearsay from current legal counsel and others. The information she presents is not from her own direct observations and conflicts with the evidence provided from sources who had the opportunity to directly observe. It is therefore not sufficient to require Brabant to retrace and justify six years of billings on the plethora of legal matters he was involved in with Cowessess. [30] Nor would it be fair to allow counsel to fill in the gaps in the evidence through argument. The notion of “block billings” arising in argument and not being based on concerns expressed by the applicant is problematic. However, even if considered, the “block billings” complained of during argument are not numerous. Nor are the ones identified sufficient to add the requisite detail to the otherwise general approach taken here. In looking at the entries specifically identified by applicant’s counsel they appear to be straightforward and, when shown in an amount of several hours, are noted as “preparation for and attendance at band information meeting”, whether it be in Calgary, Edmonton, Saskatoon, Winnipeg or elsewhere. They do not add the information necessary to justify going back six years in the circumstances here. (iv) Whether law suit has been commenced for the collection of the account [31] No lawsuit has been commenced by Brabant in relation to the bills, including the unpaid ones. With respect to the more recent bills that remain unpaid, Brabant has utilized various means at his disposal to attempt to prompt payment. As indicated, Ms. Tanner indicated this by email in April 2014. Brabant was assured that payment would be forthcoming through their Operations Manager, Mr. Saganace. No affidavit contradicting this was provided by Mr. Saganace. (v) The length of time being abridged [32] This is substantial concern in this matter. Even the most recent bills which have not been fully paid are not particularly current, being no more recent than October 2014. The bills which have been paid range from being six years prior to the application to being over two years prior to the application. [33] This length of time is highly unusual and, if there is to be requirement that Brabant attend for an assessment, should be accompanied by clearly outlined reasons justifying going back six years. Evidence must establish the appropriateness of doing so. This is additionally important where it is not single file that is at issue but multitude of files, multitude of consultations covering wide variety of subjects over lengthy time period. It attempts, in essence, to assess an ongoing relationship rather than the provision of services on particular matter. [34] The requisite evidence and accompanying reasons which must exist to require the rather far reaching relief sought in this matter, even when measured on the less stringent, fairness-based standard recognized by Justice Ryan-Froslie in Machula, have not been provided. There are general observations and concerns expressed, however these do not provide the type of information required so as to create the obligation for Brabant to unearth the extensive information with respect to legal services covering such broad range of matters dating back six years. This relationship is that of general legal counsel and long-term client as opposed to the retention of counsel on discrete file. This brings with it corresponding considerations when evaluating fairness. [35] very high level of disruption to Brabant is being proposed long after the events have occurred. The circumstances do not warrant this. As observed by Smith J. in Salyne there ought to have been some indication of desire to assess his billings at much earlier time. Having not taken that opportunity, it is now not appropriate to go back six years in an attempt to assess each piece of legal advice and interaction with view to the relative value provided given the amount charged. (vi) Whether the client ever complained about the services rendered and/or the bills and the timing of those complaints [36] With respect to the bills that were paid there is no indication of complaints. Evidence of satisfaction from previous Chiefs and Council members was presented by Brabant. The bills rendered during the first 21 years of the relationship were paid in timely fashion, confirming satisfaction with the legal services provided at the rate charged. [37] After October 2012 different situation arose. Payment was not made on timely basis. While part payment occurred, $53,059.71 was outstanding by October 2014. The new Band Council did ultimately seek to stop utilizing Brabant and changed counsel. [38] Inquiry into Brabant’s accounts suggesting to him potential concern with the accounts themselves began in late 2014. While there had been turmoil at Cowessess there were no expressions of discontent with his work or his bills. It is reasonable to conclude the issue was internal and not service or amount related. [39] It is not established that there were complaints made to Brabant by Cowessess, even during the post-election period. On December 11, 2014 request was made by Mr. Phillips for Brabant to provide six years of accounts. This was not complaint in and of itself. Even so, on December 8, 2014, several months after the last bill was rendered, Cowessess’ Operations Manager informed Brabant the Band was intent on paying the outstanding bills and Brabant understood that an agreement was reached in that regard. Cowessess made decision to seek an assessment in February 2015. [40] As such, even noting that there is potential difference in the two time periods based on full payment, no complaint as to the services or the bills was provided within reasonable period of time after they were rendered. (vii) Whether either party would be prejudiced by the abridgment of time [41] While counsel for Cowessess argued strenuously that the lawyer’s interests are not to be given any particular concern here, that is not what the law provides. Mr. Phillips relied heavily during argument on Vo Phillips Legal Professional Corp., 2014 SKQB 149 (CanLII) [Vo]. At para. 15 Justice Ball indicates that: ... Any determination of what is “just” requires balance to be struck between what is fair for the client, and what is fair for the lawyer. [42] It is clear that Brabant would be prejudiced if time was abridged as Cowessess requests. He would be required to attempt to piece together six years of billings on literally hundreds of different attendances and consultations. Again, this is not with respect to single file or even small group of significant files but rather it relates to great many activities from the very small to the very significant. He is still sole practitioner. It would mean putting his practice on hold for significant period of time to gather the information and refresh his memory on the multitude of different files, attendances and services. [43] Nor was Brabant notified he may be required to explain all of his bills within reasonable time after rendering them. There is no complaint in relation to particular file, rather it is general complaint based on the totality of legal fees and it is complaint brought forward very late in the day. As indicated previously, this is after the Operations Manager of Cowessess advised Brabant in December 2014 that they were intent on paying the outstanding accounts in the amount of $53,059.71. [44] While the applicant filed an affidavit of Ms. Tanner seeking to put the contents of that meeting in issue, her hearsay repetition of what Mr. Saganace purportedly told her is not proper evidence. If it was desired to put forward Mr. Saganace’s evidence he could easily have provided an affidavit. [45] The attempt to put the billings for certain files in issue as they purportedly were closed or inactive through Ms. Tanner’s affidavit is also flawed. In addition to being filed beyond the time required by Justice Kovach, she relies on information from legal counsel and others for her information. [46] Grady Lerat, on the other hand, was Chief of Cowessess from 2010 through 2013, and confirms the ongoing nature of the work Brabant provided including the files disputed by Ms. Tanner. He further confirms that Ms. Tanner, Edward Aisaican and Ernest Delorme were not part of Band Council during the 2011 to 2013 period nor were they directly involved in the files they say were not ongoing at the requisite time. The affidavit of Walter Pelletier is in essence repetition of the generality of the application; the amount of fees the Cowessess accounting system suggests seems very significant so Brabant should have to explain the past six years. The evidence put forward here is not sufficient to require the assessment sought. [47] There is prejudice to Brabant both as an individual and as lawyer. This is as a result of the request itself and it is not fair. It cannot be presumed that Brabant could effectively gather together the information on all of the matters he provided legal services in relation to so as to explain each item in an assessment as requested by Cowessess. (viii) Whether the accounts were paid and, if so, the circumstances of that payment (i.e. from trust, from settlement proceeds, by the client, etc.) [48] It appears that payment of the accounts which were paid were accomplished by cheque after bill was rendered as opposed to payment from trust or from settlement proceeds. There are accounts outstanding that have not been paid in full, as indicated, totaling $53,059.71. (ix) Any misrepresentation, fraud or dereliction of duty by the solicitor [49] As indicated by Klebuc J. in Isley, this type of allegation must be supported by full particulars. This is so even with the now less stringent fairness based standard referenced in Doig and Machula. While there are complaints by Cowessess about the amount of the fees charged, the threshold set by Klebuc J. and still, in essence, applicable given the content of the allegation, is lacking here. I do not find any properly supported allegations of misrepresentation, fraud or dereliction of duty by Brabant. There are, however, a number of affidavits from former Chiefs and Council members confirming the quality and effectiveness of Brabant’s legal services during the time they worked with him as Cowessess’ legal counsel. (x) Other Considerations [50] Mr. Phillips placed heavy reliance on Vo as creating additional reasons for requiring this assessment to be ordered. The distinctions between this situation and Vo, however, abound: Thao Vo could not speak English and required an interpreter for all communications with Mr. Phillips; there was no agreement on the hourly rate Mr. Phillips or his employees were going to charge; the representation was in essence for one family law matter. The severance of the relationship between Thao Vo and Mr. Phillips was attested to as being due to Mr. Phillips’ ongoing unwillingness to take instructions to settle the matter. [51] In relation to Phu Vo, Mr. Phillips was retained to appeal letter from the High Commission of Canada and bill of approximately $10,000 was rendered, thus it was essentially single file issue. In addition, only one bill was ever produced for Phu Vo, that being at the end of the relationship. Here we are dealing with multiple attendances, multiple files, multiple ongoing bills and an attempt to reach back six years. [52] In December 2014 Mr. Phillips requested invoices for the six year period from Brabant. However, few days earlier, Mr. Saganace advised Brabant his bills were going to be paid forthwith, albeit with 50% of the interest that was owed. This may be in part due to the uncertain state of affairs at the Cowessess Band level, but regardless, creates an obvious unfairness for Brabant. [53] In Salyne, Justice Smith indicated at para. 11 that fairness requires client to raise any concerns they have with the account within reasonable time. In Isley, Justice Klebuc indicated at para. 39 that the impact of an order such as this must take into account the impact on the solicitor. In Vo, Justice Ball indicated at para. 15 that concluding what is just requires balance between what is fair for the client and what is fair for the lawyer. [54] Here Cowessess’ request is not fair to Brabant. The negative impact would be out of all proportion to the evidence provided on which the request is made. While request on one file or single lawsuit might well be approached differently, here Cowessess seeks to assess six years of general counsel advice on wide spectrum of issues involving many different matters. To justify that kind of intrusion to sole practitioner in lengthy, extensive and ongoing relationship with sophisticated client, specific, clearly defined and reliable evidence is required. In the circumstances here, including the turmoil the Band is currently embroiled in, this is not an appropriate situation in which to order the assessment requested. It would not be fair nor in the interests of justice. The application is therefore dismissed. [55] Brabant is entitled to his costs in this matter which fix at $2,500.
HELD: The application was dismissed. The court held that the request for an assessment was not fair to the defendant and would not be in the interests of justice. The court reviewed the factors set out in Machula v. Kuse and found that the applicant had failed to provide the specific information required to direct an assessment of six years of legal services covering a multitude of issues on a substantial number of files. The court distinguished the applicant from the case of Vo v. Phillips Legal Profession Corp. because the defendant was not an unsophisticated client. The length of time was unusual, which would further support the need for clearly outlined reasons to justify going back six years. Further, the applicant had not made any complaints to the defendant even during the post-election period and had assured him that he would be paid. The defendant would be severely prejudiced by the assessment requested because of the time that it would take him from his practice to review six years of billings on hundreds of attendances. The applicant had not provided any properly supported allegations of misrepresentation, fraud or dereliction of duty by the defendant, whereas there was plenty of evidence that his legal services were effective and appreciated.