23. QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2008 SKQB 210 Date: 2008 05 09 Docket: Q.B.G. No. 182/2008 Judicial Centre: Saskatoon BETWEEN: STANLEY R. POSTNIKOFF and JAMES A. MORRISON Counsel: Stanley R. Postnikoff appearing on his own behalf Richard W. Danyliuk, Q.C. for the respondent FIAT DAWSON, J. MAY 9, 2008 [1] The applicant, Stanley Postnikoff, seeks an order pursuant to s. 67(1) of The Legal Profession Act, 1990, S.S. 1990-91, c.L-10.1, as am. 2005, c.38 (“The Legal Profession Act) for an assessment of his legal bills for services rendered to him by the respondent, James A. Morrison. [2] The Legal Profession Act establishes that registrar may assess any bill for legal services, provided an application is filed within 30 days of its receipt. Under that Act, judge has the discretion to extend the period allowable for assessment of bill provided it is in the interests of justice to do so. The issue before the court is whether the applicant’s two bills fall within the period of time allowable for an assessment by the registrar, and if not, the issue is whether it is in the interests of justice to abridge the time allowing for an assessment of the legal bills by the registrar. [3] The relevant provisions of The Legal Profession Act are 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; ... (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 [4] The Legal Profession Act was amended in 2005, with two notable changes to s. 67. These amendments were addressed by Popescul J. in Doig v. Mazinke, 2007 SKQB (CanLII); (2007), 291 Sask. R. 221 (Sask. Q.B.), at paras. [8] Therefore, there have been two notable changes to the section. The first change could be described as “cosmetic” in that the traditional term “taxation” has been replaced with the more modern term “assessment”. Secondly, and more importantly to the issues involved in this application, the criteria to determine whether or not taxation should be allowed after 30 days from the date that the client received the bill is now, “... if the court is satisfied that it is in the interest of justice to do so” as opposed to, “... the person can prove to the satisfaction of the court that special circumstances exist”. [9] The phrase, “... if the person can prove to the satisfaction of the court that special circumstances exist” was exhaustively dealt with by Klebuc, J. (as he then was), in Thorstad Danyliuk v. Isley, 1993 CanLII 8892 (SK QB), [1993] W.W.R. 181; 110 Sask. R. 100 (Q.B.). [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. [5] Here, Mr. Postnikoff hired Mr. Morrison to act as his legal counsel for two separate matters. [6] Mr. Morrison began representing Mr. Postnikoff in the first matter, an action dealing with Back-Track Investigations (“Back-Track”), in October 2004. Mr. Morrison began representing Mr. Postnikoff in the second matter, an action against BASF Canada Ltd. (“BASF”) in April 2005. Mr. Postnikoff paid Mr. Morrison an initial retainer of $1,000.00. [7] In the Back-Track matter, Mr. Morrison rendered interim accounts to Mr. Postnikoff on October 25, 2004, November 24, 2004 and January 28, 2005. These invoices were paid out of the initial $1,000.00 retainer. [8] In the BASF matter, Mr. Morrison rendered interim accounts on April 25, 2005, June 27, 2006 and October 28, 2005. These invoices were also paid from monies held in trust. [9] According to the affidavit of Mr. Morrison, the last bill rendered to Mr. Postnikoff on the Back-Track matter was on September 27, 2006 after three day trial and receipt of the trial judgment. Mr. Postnikoff did not pay this account, but told Mr. Morrison it would be paid or that it would be paid out of the settlement proceeds he expected to receive on the BASF matter. [10] According to the affidavit of Mr. Morrison, his office prepared its last bill on the BASF matter on May 29, 2007. However, the bill was not provided to Mr. Postnikoff until after July 16, 2007. The BASF matter was settled, although the evidence does not indicate when it was settled. Mr. Morrison received the settlement proceeds of $15,000.00 on June 25, 2007. [11] On July 10, 2007 Mr. Morrison wrote to Mr. Postnikoff advising him of receipt of the settlement proceeds. That letter also stated: ... Further to our meeting of July 10th, 2007 understand that you having an opportunity to review summary of the outstanding statements of account regarding this matter and the Back-Track matter you will be contacting me directly to discuss those matters and an arrangement for payment of the accounts. [12] On July 16, 2007 Mr. Morrison wrote to Mr. Postnikoff, stating: Re: Back-Track Investigations Special Services Ltd. BASF Canada As requested in your email of Wednesday, July 11th, 2007, copy of which received by registered mail, enclose herewith for your reference the following: 1. Billing History for the Back-Track Investigations Special Services Ltd. matter and the BASF Canada matter. 2. have also provided you with copies of all out statements of account on each of these files which, of course, we had provided to you previously, when such accounts were rendered. The last account of May 29th, 2007 is on our file and had not been previously forwarded to you. enclose herewith copy of that account as it had been held on our file for me to provide to you when we next met. trust that this is the information that you require. Please advise as to whether you are available to meet on Monday, July 23rd, 2007 at 2:00 p.m. If this does not work for you would you please email me as to proposed date and time on the 23rd, 24th, or 25th of July, 2007 that you would more convenient for you to meet and will attempt to make myself available if possible at that time or contact you to suggest an alternate time that we could meet. [Emphasis Added] [13] On July 24, 2007 Mr. Postnikoff met with Mr. Morrison. Mr. Postnikoff asked Mr. Morrison if the total amount shown on the billing history was the amount that he was expected to pay. Mr. Morrison told Mr. Postnikoff, as he had shortly after the Back-Track trial, that he would be willing to accept $7,500.00 as full payment of the Back-Track account. That would reduce the Back-Track account from $11,773.01 (for fees, disbursements and taxes) to $7,500.00. [14] On the same date, July 24, 2007, Mr. Morrison told Mr. Postnikoff, on the BASF matter, that he was prepared to write off legal fees of $1,800.00, which would reduce that account to $7,000.00. [15] Mr. Morrison also said on July 24, 2007 that he would recommend to his managing partner further reduction in the bills. Mr. Postnikoff did not respond, but rather complained to Mr. Morrison about Mr. Morrison’s work. Mr. Morrison said he would advise Mr. Postnikoff after he (Mr. Morrison) returned from holidays on August 20, 2007 whether his managing partner would approve any further reduction in the accounts. [16] On August 28, 2007, Mr. Postnikoff sent Mr. Morrison an e-mail asking why Mr. Morrison had not presented him with final bill. On the same day, Mr. Morrison sent letter to Mr. Postnikoff, stating that his office would be prepared to reduce the accounts by further 25% and that he would accept $11,000.00 (a further reduction of $91.42 after the 25%) as full payment for both outstanding matters. [17] Neither side contacted the other after this time, until December 6, 2007, when Mr. Morrison sent letter to Mr. Postnikoff informing him that the period to apply for taxation (assessment) of his accounts had expired. This letter also stated that the total outstanding amount on both accounts would be paid from the monies held in trust. [18] On December 31, 2007 Mr. Morrison deducted $11,000.00 from the money he held in trust and paid the accounts. [19] On January 21, 2008 Mr. Morrison wrote Mr. Postnikoff advising him that he had paid his accounts ($11,000.00) from the monies in trust. Mr. Morrison asked Mr. Postnikoff to provide him with instructions with respect to the remaining $4,000.00 held in trust. On February 5, 2008 Mr. Postnikoff filed his motion for an assessment of his legal bills. Mr. Postnikoff also sent letter, on that same date, to Mr. Morrison, asking Mr. Morrison to return the balance of monies being held in trust. On February 8th Mr. Morrison returned the remaining monies held in trust to Mr. Postnikoff. [20] Mr. Morrison takes the position that the last bill rendered for Back-Track was on September 27, 2006 and the last bill rendered for BASF was on May 29, 2007. It is of note that neither party to this application filed any of the accounts. All the court has before it is “Trust History” showing the monies in trust and the amounts paid out, and document entitled “Billing History”, which shows the total amount of fees, disbursements and taxes charged on particular days. There were no accounts which broke down the work done and hours worked. It is unclear if such type of accounts were given to Mr. Postnikoff, but presume they were. [21] The evidence before the court is that the Back-Track matter and BASF matter were separate actions. The last Back-Track bill was rendered September 27, 2006. There is nothing in the evidence which would indicate that the Back-Track September 27, 2006 bill was intended to be an interim bill. The evidence indicates that Mr. Postnikoff advised Mr. Morrison that the bill would be paid in full. Mr. Postnikoff did not question the bill at the time it was rendered. The first time the amount was disputed was after the second matter, the BASF matter was completed. There was considerable period of time between the Back-Track final bill and the BASF settlement. If Mr. Postnikoff had genuine concern respecting the cost of the services provided by Mr. Morrison on the Back-Track matter, he had a lengthy opportunity to raise the issue or hire alternate counsel, but he did not do so. [22] I am not satisfied that it is in the interests of justice to extend the time for an application for an assessment of the Back-Track account. The account of $5,625.00 on the Back-Track matter shall not be subject to assessment. [23] The circumstances involving the BASF matter are somewhat different. First, Mr. Postnikoff disputed the amount of the services, putting Mr. Morrison on notice when he received the billing document. The May 29, 2007 account (which was not given to Mr. Postnikoff until after July 16, 2007) may not have been final bill. Mr. Morrison did not state that the bill was final, but rather stated that it could be subject to further adjustments. The outstanding amount on the BASF account was $9,088.56. On July 24, 2007 Mr. Morrison indicated he would reduce that account by $1,800.00 to the amount of $7,288.56 and that he would discuss with his managing partner whether the bill could be reduced further. On August 28, 2007 Mr. Morrison said he would further reduce the account by further 25% to $5,466.42, and, then reduced both accounts by further $91.42.Mr. Morrison was unavailable to discuss further changes until after the expiration of the 30 day period. [24] I am not convinced that the billing document sent to Mr. Postnikoff on July 16, 2007 was a final bill, as evidenced both by parties discussions on July 24, 2007, and further evidenced by Mr. Morrison’s letter dated on August 28, 2007. The British Columbia court in De Cotiis v. Owen Bird, (1998), 1998 CanLII 3821 (BC SC), 51 B.C.L.R. (3d) 272; [1998] B.C.J. No. 274 (QL) (B.C.S.C.) outlines two important factors when court is determining if bill is final bill. First, final account need not be last account. Second, a final account will not be subject to change, and will cover all professional services performed within a certain time. Mr. Morrison sent his correspondence on August 28, 2007, without prejudice. Had Mr. Postnikoff been able to use this letter as his final bill, and apply for assessment under the legislation, it may have amounted to final bill. However, since the privilege was held by Mr. Morrison and only waived when he filed his affidavit on February 26, 2008 (as he attached the bill), I am not satisfied it was a final bill. On December 6, 2007 Mr. Morrison sent letter to Mr. Postnikoff indicating he intended to transfer money from trust to pay the BASF account. On December 31, 2007 Mr. Morrison transferred the monies. On February 5, 2008 Mr. Postnikoff applied for an order for assessment. [25] In this case, there has been no lawsuit commenced for the collection of the account. Mr. Morrison has been paid from monies in trust. The time being abridged is relatively short. There were discussions between Mr. Postnikoff and Mr. Morrison concerning the appropriateness of the account at the time the account was rendered, and for period of time thereafter. Neither party has alleged or established that any prejudice would result from the abridgement of time. I am satisfied that it is in the interests of justice to abridge the time and order the assessment. [26] In referring this matter for assessment, am not suggesting that the bill rendered by Mr. Morrison in this case was inappropriate and/or excessive. What has been found is that the bill was rendered; that the client took exception to the bill; that client has requested assessment, such request coming outside of the 30 day window provided in the Act; and that have determined that it is fair and appropriate to expand the time. [27] As result, there shall be an order pursuant to s. 67 of The Legal Profession Act, 1990, supra, as amended: (1) that Mr. Morrison’s bill be assessed by the local registrar of the Court of Queen’s Bench at the Judicial Centre of Saskatoon, or his deputy, at time and place to be fixed by him; (2) the local registrar of the Court of the Queen’s Bench at the Judicial Centre of Saskatoon or his deputy, is hereby directed to, (a) assess the costs (b) certify the amount that the local registrar, or his deputy, may determine to be due from each party with respect to the bill and the costs of the assessment. [28] There shall be no costs of this application. J. C. L. Dawson
Applicant seeks an order for an assessment of his legal bill. A Registrar may assess any bill for legal services, provided that the application is filed within 30 days or more if a judge makes a discretionary order to extend the period for assessment if it is in the interests of justice to do so. The issue if whether the applicant's two bills fall with the said 30 days or if this is a case where it is appropriate to abridge the time for allowing an assessment. HELD: It is in the interest of justice to order an assessment. The bills were issued in two separate matters. In the first matter, the final bill was rendered and the applicant had a lengthy opportunity to raise the issue. There will be no extension of time for the first bill. The second bill is different in that the applicant disputed the amount of the bill when he first received it. He was advised that the bill would be adjusted. An initial adjustment was made and when still not satisfied, ongoing discussions about the bill continued. The Court held that the last document received by the applicant was not the final bill as it was still subject to change. In this case, the lawyer has been paid from monies held in trust for the client, the time being abridged is relatively short and neither party has alleged that any prejudice would result.