Foco v. Strathcona Law Group, 2011 ABQB 67

Court of Queen ’ s Bench of Alberta Citation: Foco v. Strathcona Law Group, 2011 ABQB 67 Date: 20110222 Docket: 1003 15474 Registry: Edmonton Between: Anka (Ann) Foco Applicant - and - Strathcona Law Group Respondent _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [ 1 ] Pursuant to Rule 10.18(1), the Edmonton costs review officer refers to the court for decision the following question: “Which hourly rate is Mr. King entitled to charge Ms. Foco: $275.00/hour or $425.00/hour?”. [ 2 ] The court concludes that Mr. King was entitled to charge Ms. Foco $275.00 per hour. The client is therefore entitled to a total reimbursement of $1,822,90. [ 3 ] The lawyer proceeded to perform legal services for the client not only without having a signed retainer from the client but

[3] The lawyer proceeded to perform legal services for the client not only without having a signed retainer from the client butafter providing to the client a printed retainer agreement containing a reference to $275.00 per hour as the lawyer’s fee. The firstnotification in writing to the client about the lawyer’s hourly fee was sent to the client after the client complained about the feescharged. In those circumstances, even though the lawyer was not acting with any deliberate intent to mislead the client, the lawyer isonly entitled to charge the amount of which the client had written notice.

Cases and authority cited: [4] By the court: Cooper (c.o.p. Cooper, Peach and Gullberg) v England (NWT SC), [1994] N.W.T.J.No. 25 (Sup.Ct.); Nicholas C. Tibollo Professional Corp. v Sanval Management Inc. [2010] O.J. No. 4259; Plater v Arenson (ON CA), [1999] O.J. No. 2352 (C.A.); Blaney McMurtry LLP v First Elnor Holdings Ltd. [2005] O.J. No. 4419, at paras26 to 28 1. Background [5] As part of his reference to the court, the review officer provided the following

summary of facts and issues to the court andto the parties: 1. The law firm rendered two (2) fee accounts to the client relative to her matrimonial file. The total fees (exclusive of othercharges, disbursements and GST) charged in that file come to $4,825.00. 2. It is understood that all of the billed time was Mr. King’s and was billed at $425.00 per hour; 11.35 hours. 3. Ms. Foco contends that she was quoted an hourly rate fee for matrimonial matters of $275.00 per hour, which would result in feesfor the matrimonial matters of (11.35 x 275.00) $3,121.25. 4.

Both parties acknowledge that “Terms of retainer” provided to the client stipulated the following: a. For providing these legal services, our firm charges clients by the hour for the time spent on the matter. b. The current hourly rate for certain of the lawyers who may be working with you, including Barry King . . . is $275.00. c. These rates may change from time to time and new rates will apply from the date we provide notice in writing to you of thechange. 5. Mr. King submits that, a. in his firm meeting with Ms.

Foco and in any subsequent discussions of legal fees he represented his hourly rate as being $425.00per hour, and b. the “Terms of retainer” sent to Ms. Foco was an outdated version of a standard form document which mistakenly listed his hourlyrate as being $275.00 per hour.

6. Ms. Foco denies ever being aware of any hourly rate other than $275.00 per hour. [ 6 ] Having received the review officer’s

summary, Mr. King added the following: - he has been practising law for 30 years and it has invariably been his practice to discuss his hourly rate with any new client of the firm at the initial meeting; - although his usual practice is to provide an unsigned form of retainer agreement to any new client at the initial meeting so that they can review the terms and return a signed copy to the law firm if they find the terms acceptable, in Ms. Foco’s case, only an unsigned copy was provided to Ms. Foco, which was never returned or countersigned by Mr. King on behalf of the firm.

He states “as the form of retainer provided to Ms. Foco was not returned, the incorrect hourly rate could not be identified and corrected”; - at our initial meeting, [June 5, 2010] the terms of our retainer, including my hourly rate of 4425.00, was discussed with Ms. Foco; - Ms.

Foco expressed her surprise at the hourly rate of $425.00, but nonetheless retained our services as the matter was very urgent due to her husband’s imminent departure for Bosnia for an extended period.; - although I had inadvertently provided an outdated retainer agreement to her during our first meeting, which occurred on a weekend when no support staff were in the office, it was never signed, and Ms. Foco was subsequently made aware of my error in providing this document to her; - on more than one occasion following our initial meeting, we again discussed my hourly rate of $425.00.

It was not even raised as an issue by Ms. Foco until we advised her that we would no longer be acting for her. [ 7 ] Ms.

Foco added the following: - in the “Terms of Retainer”, the law firm stated, “The time records for services rendered to you are recorded in our accounting system, and where appropriate, or if you request, we can provide that record with the invoices sent to you.”; - she received accounts from the law firm on July 6 and August 3, 2010, but those accounts did not contain a reference to the hourly rate; - on August 3, 2010, she also received a letter from the law firm indicating that it required payment in full of the balance of the account, together with an additional retainer of $2,000.00 in order to continue to represent her, and, if the firm had not received payment by August 17, 2010, it would file and serve a Notice of Ceasing to Act and proceed to enforce their accounts.

Attached to the letter was a Reminder Notice which summarized the account; - she returned the Reminder Notice to the law firm asking for an accounting of the $1,500.00 retainer she had paid, and asking for a list of records of time spent on services rendered to her; - on August 10, 2010, she received a response from the law firm which stated, in part: We apologize for the error in our letter which sets out an erroneous balance due. . . . Attached are the requested time records.

Please note that the time which was billed to you does not reflect the numerous lengthy telephone conferences with [an employee of the law firm].

The time records enclosed with the firm’s letter of August 10, 2010, showed Mr. King’s time being billed at $425.00/hour. That was the first time that the hourly rate was shown in writing. [ 8 ] In addition to providing the

summary set out above, the review officer has provided the following additional information: - the law firm acknowledged that $33.32 in disbursements should not have been billed to the client and that $0.64 in payments from trust could not be explained and should be returned to the client; - if the court should conclude that the retainer agreement was that the client be billed at $425.00 per hour, the remaining charges and expenses of $5,755.95 are reviewed and allowed in full; - if the court should conclude that the retainer agreement was that the client be billed at $275.00 per hour, the remaining charges and expenses of $5,755.95 are reviewed and allowed at $3,967.01. [ 9 ] Ms Foco has, in fact, paid the law firm a little over $6,000.00. 2.

Where, as here, there is ambiguity in a contract to provide legal services, more weight must be given to the client’s position than to the lawyer’s [ 10 ] I have concluded that there was a misunderstanding between the lawyer and his client about the cost of legal services and that the hourly fee for service which Mr. King charged in June 2010 was not made clear to Ms. Foco. [ 11 ] Although Mr.

King is certain that he discussed the specific fee of $425.00 because of his recollection of the client’s expressed horror at the amount, it may just as well be that the client expressed horror at an amount of $275.00. [ 12 ] The first meeting between Mr .King and Ms. Foco occurred on a week-end; indeed, it should be noted that Mr. King accommodated Ms. Foco by meeting with her on an urgent basis. The fact that the meeting took place outside of normal office hours is probably the core of the problem here; nevertheless, the evidence is clear that the first written notification to Ms. Foco of Mr.

King’s hourly fee occurred after Ms. Foco had complained about the fee. [ 13 ] In resolving this conflict, the court must favour the client. As the court noted in Cooper : 45 In disputes over solicitor's accounts, the courts have always placed the onus on the solicitor to justify the account. Any doubt or ambiguity is always resolved in favour of the client. Lord Denning, in Griffiths v.

Evans, [1953] 2 All E.R. 1364 (C.A.) said (at page 1369) : On this question of retainer, I would observe that where there is a difference between a solicitor and his client on it, the courts have said for the last hundred years or more that the word of the client is to he preferred to the word of the solicitor, or, at any rate, more weight is to be given to it: see Crossley v. Crowther (7), per SIR GEORGE J. TURNER, V.-C.: Re Paine (9) per WARRINGTON, J. The reason is plain. It is because the client is ignorant and the solicitor is, or should he, learned.

If the solicitor does not take the precaution of getting a written retainer, he has only himself to thank for being at variance with his client over it and must take the consequences. [ 14 ] It was not Ms. Foco’s responsibility to clarify the terms of engagement; when he did not receive a signed copy of the retainer agreement, Mr. King had the responsibility of following up the matter with his client and ensuring that she was aware of the hourly rate that he was charging.

[ 15 ] The comments in Cooper are representative of a long line of jurisprudence which continues to be valid today and which includes such decisions as Tibollo and Plater . Those cases, and countless others of the same type, repeat that lawyers bear the responsibility of making the terms of their retainer clear to their clients. Blaney McMurtry LLP is one of the decisions which illustrates the continuing problem where no retainer is signed. [ 16 ] It must be noted that the review officer, who is very experienced, has essentially taxed Mr.

King’s account in full; in other words, the review officer is satisfied that the time spent on Ms. Foco’s file is accurately reflected in the accounts, and that the amounts charged were appropriate given the type of work that Mr. King had been asked to undertake. The only problem with Mr. King’s account is, therefore, the ambiguity in the fee and not the quality of the work undertaken. 3. Costs [ 17 ] If the parties are not agreed on costs of this reference, I may be spoken to within 30 days of the release of this decision. Heard on the 7 th day of February, 2011.

Dated at the City of Edmonton, Alberta this 18 th day of February, 2011. J.B. Veit J.C.Q.B.A. Appearances: A. Focco on her own behalf Barry M. King for the law firm, Strathcona Law Group