THE SAMSON CREE NATION, v. CHIEF MARVIN YELLOWBIRD,, 2013 ABQB 350

Court of Queen ’ s Bench of Alberta Citation: Samson Cree Nation v. O ’ Reilly & Associés, 2013 ABQB 350 Date: 20130618 Docket: 0903 19534, 0903 19141 Registry: Edmonton Docket: 0903 19534 Between: THE SAMSON CREE NATION, and CHIEF MARVIN YELLOWBIRD, on behalf of himself and all other members of the Samson Cree Nation Applicants - and - O ’ REILLY & ASSOCIÉS Respondent Docket: 0903 19141 And Between: THE SAMSON CREE NATION, and CHIEF MARVIN YELLOWBIRD, on behalf of himself and all other members of the Samson Cree Nation Applicants - and - PARLEE MCLAWS LLP Respondent _______________________________________________________

Reasons for Decision of the Associate Chief Justice J.D. Rooke _______________________________________________________ I. Introduction........................................................................................................................................................................ 3 II. Executive

Summary............................................................................................................................................................ 4 III. Background Facts................................................................................................................................................................ 5 IV. Issues................................................................................................................................................................................... 6 A.

Real Issues........................................................................................................................................................... 6 B. Non-Issues.......................................................................................................................................................... 7 C. Ancillary Issues................................................................................................................................................... 7 V.

Analysis............................................................................................................................................................................... 8 A. Historical Legal Rights and Obligations Relating to Retainers and Accounts................................................... 8 B. Current Legal Rights and Obligations Relating to Retainers and Accounts...................................................... 9 1. Types of Retainers and Accounts are Questions of Fact.................................................................... 9 2.

Types of Retainers, and Taxation Consequences............................................................................ 10 a. End of Cause/Whole (or Entire) Contract........................................................................ 11 b. Natural Breaks.................................................................................................................. 12 c. Continuous....................................................................................................................... 13 d.

Final = Stand Alone........................................................................................................... 14 3. Types of Accounts and Taxation Consequences.............................................................................. 14 4. Types of Retainers and Accounts - Positions, Evidence and Findings............................................. 15 a. Respondents ’ Positions, Evidence and Arguments......................................................... 15 b. Nation ’ s Position, Evidence and Arguments................................................................... 17 c.

Retainer............................................................................................................................ 18 i. Not a Natural Breaks Retainer......................................................................... 19 ii. Not Prima Facie a Whole/Entire Contract Retainer......................................... 20 iii. A Continuous Retainer..................................................................................... 22 5. Preliminary Conclusion Tested by Other Arguments of the Nation............................................... 23 a.

Impact of Ladner ............................................................................................................... 23

b. Impact of Yule Factors...................................................................................................... 26 c. Impact of New Rules......................................................................................................... 28 6. Conclusion as to Findings of Retainers and Accounts..................................................................... 28 C. Limitations Act .................................................................................................................................................. 29 1.

Knowledge of the Law - The Right to Tax........................................................................................ 30 2. Whole/Entire Contract Retainer and Interim Accounts.................................................................. 30 3. Natural Break Retainer and Interim Accounts................................................................................ 31 4. Continuous Retainer and Final Accounts........................................................................................ 32 5.

Conclusion as to Application of the Act ............................................................................................ 32 D. Limitations under the Rules............................................................................................................................. 32 1. Which Rule Applies?......................................................................................................................... 33 2. Inside the Regulation, Without or With Leave?............................................................................... 35 3.

Law Applicable to Leave to Extent the Time to Tax.......................................................................... 37 4. Leave if Not in Time.......................................................................................................................... 38 a. Delay................................................................................................................................. 39 b. Prejudice......................................................................................................................... 43 c.

First Intent to Tax.............................................................................................................. 45 d. Interim Accounts.............................................................................................................. 47 e. Overcharging.................................................................................................................... 47 f. Agreement as to the Amount........................................................................................... 49 g.

Relationship...................................................................................................................... 50 h. Conclusion........................................................................................................................ 51 VI. Conclusion........................................................................................................................................................................ 52 I.

Introduction [ 1 ] This action deals with the taxation/review [1] of legal accounts submitted by the Respondent law firms, O’Reilly and Parlee, to the Applicant Nation.

However, these Reasons do not strive to determine the appropriateness of these accounts, but rather to determine the validity of, and extent to which, the Appointments for Taxation can determine that appropriateness. [ 2 ] The Nation filed Applications for Taxation of its lawyers’ accounts in the Parlee action (Action No. 0903-19141) and the O’Reilly action (Action No. 0903-19534), on December 3 and 10, 2009 respectively, and on December 30, 2009 served Appointments for Taxation on Parlee McLaws LLP (Parlee) and O’Reilly & Associés (O’Reilly) under OR 647. [ 3 ] Counsel for the Respondents raised issues relating to the validity of the Appointments arising from the limitation periods for seeking taxation under the Rules, and as a result the Nation filed these applications to determine the validity of the appointments.

Relating to Parlee, the Nation sought:

1. An order declaring the Appointment for Taxation ... to be good and sufficient to tax the bill of costs of the Respondent, Parlee ... in the matter of The Samson Cree Nation & Band v. Canada [the Litigation]; 2. Alternatively, an Order nunc pro tunc , pursuant to Rules 647, 558 and 548, that the bill of costs of the Respondent in the [the Litigation].... shall be subject to taxation notwithstanding the provisions of Rule 647....; 3.

Alternatively, an Order pursuant to Rules 647 and 548 that the bill of costs of the Respondent in the [underlying action] ... shall be subject to taxation notwithstanding the provisions of Rule 647....” Relating to O’Reilly the Nation sought the same relief as under item 2 and 3 of the Parlee Notice of Motion. [2] II. Executive

Summary [ 4 ] For the reasons that follow, the Nation’s applications are dismissed except that the Nation has the right to continue the taxation of the Parlee accounts, dated from January 9 to October 31, 2009. Costs are awarded to the Respondents, payable forthwith. [ 5 ] In coming to this conclusion, I have found that: 1. The retainers between the Nation and the Respondents were oral, except as confirmed in writing as it relates to Parlee during the term of the retainer; 2.

The retainers were not whole contract or entire contract retainers, and the periodic (usually monthly) accounts rendered were neither interim nor provisional accounts, and therefore contained no right to tax back to the beginning of the retainer based on the last account issued; 3. The retainers were continuous, and the rights of taxation were not impacted by any natural breaks in the underlying action; 4. These continuous retainers expressly provided that the issued periodic accounts were each final as issued; 5. The rights to taxation of these final accounts are determined based on the following: a.

The Limitations Act , RSA 2000, c L-13 ( Act ) provides a 2 year limitation, and therefore no accounts before December 3 and December 10, 2007, respectively for Parlee and O’Reilly, are subject to taxation; b. OR 647, not NR 10.10 of the new Rules, is applicable to determine the regulatory time limitation for taxation based on the date the Appointments were filed and served; c.

Based on OR 647, the common law criteria applicable to obtaining an extension, and the evidence, I find that none of O’Reilly’s accounts fall within the limitation date and cannot be taxed without an extension of the time limitation under OR 647. Based on the applicable law and evidence, however, the Nation is not entitled to such an extension, thus none of O’Reilly’s accounts are eligible for taxation.

d. Under OR 647 and the common law provisions, Parlee’s accounts from January 9 to October 31, 2009 are entitled to be taxed without an extension of the time limitation, but the other accounts require extension. Based on the law and facts, however, the Nation is not entitled to tax any other accounts. e. The Respondents are entitled to costs as may be agreed by Counsel, or, failing agreement, as may be assessed under the new Rules. III. Background Facts [ 6 ] The O’Reilly Brief outlines the many background facts with more precision and detail than necessary for these Reasons.

I accept these outlined background facts, except to the extent I specifically otherwise determine. In making findings of fact here, and in the remainder of these Reasons, I have also relied on transcripts of the hearing, the affidavits of the parties, and cross-examinations on those affidavits. [ 7 ] In

summary, O’Reilly and its principal, James O’Reilly (collectively, O’Reilly), and Edward H. Molstad, Q.C. (Molstad) (in his own firm, and after 1995, in Parlee), were retained in 1988 or 1989, and 1991 or 1992, respectively, as Counsel to the Nation in the Litigation, a breach of trust action (Action No. T-2022-89) in the Federal Court of Canada. That action was filed on September 29, 1989, and two of five phases of the action were tried in Alberta for over 370 days between May 2000 to 2005.

The trial decision, dated December 2, 2005, was released on these two phases only: the General and Historical Facts, and Money Management phases [3] .

The Litigation was authorized by the Nation on March 8, 1989 and was described by Parlee to include: ...aboriginal rights litigation that had been commenced in 1989, involving matters ranging from return of capital monies then held on behalf of [the Nation] by the federal government (hereinafter “Canada”), mismanagement of [the Nation’s] oil and gas resources by Canada, the denial of programs and services, the denial/breach of treaty and other aboriginal rights, duties and obligations, constitutional challenges to various federal legislative provisions, and the illegal taxation of royalties (the “Litigation”).

The Amended Statement of Claim sought more than $1.385 Billion. [ 8 ] After the trial decision on these first two phases, Samson Indian Nation and Band v. Canada, 2005 FC 1622 , 269 F.T.R. 1 [4] , the matter proceeded to the Federal Court of Appeal in Ermineskin Indian Band and Nations v. Canada; Samson Indian Nation and Band v. Canada , 2006 FCA 415 , [2007] 3 FCR 245, decided on December 20, 2006, and to the Supreme Court of Canada in Ermineskin Indian Band and Nation v.

Canada, [2007] SCCA No 86 , leave to appeal granted on August 30, 2007, and finally to the substantive decision of the Supreme Court of Canada in Ermineskin Indian Band and Nation v. Canada , 2009 SCC 9 , [2009] 1 SCR 222, issued on February 13, 2009 (all phases called the “Litigation”). [ 9 ] In December 2009, after the first two of five phases of the Litigation were concluded, the Nation sought taxation of all of Parlee and O’Reilly’s accounts dealing with the Litigation over the whole term of their retainer, dating back as early as 1989.

These accounts had been rendered periodically, predominately monthly, and the most recent were October 31, 2009 (Parlee) and June 19, 2008 (O’Reilly). IV. Issues A. Real Issues [ 10 ] The Nation claimed it brought the Appointments within the two year limitation date under the Act for these last accounts, and that the Appointments entitle it to be able to tax all accounts back to the beginning of the retainers. The Nation acknowledged that its Appointment for O’Reilly was not within the maximum of one year of the last O’Reilly account as required under OR 647, and accordingly it requires leave of the Court to tax.

However, it claimed that Parlee’s last account is within six months of the taxation Appointment, and therefore, no leave is required.

[ 11 ] Parlee and O’Reilly, however, argued that each of their accounts was a final account and the limitation under the Act applied to each. Therefore, they argued, no accounts before December 2007 are taxable. As to the regulatory limitation under either OR 647 or NR10.10, both the Nation and O’Reilly agreed that leave is required. Parlee argues that OR 647 does not apply and that leave of the Court is required for any accounts rendered and dated more than six months before the Appointment (accounts between January and June 30, 2008) under NR10.10.

Alternatively, if OR 647 applies, Parlee argued that accounts dated more than one year before the Appointment for any unpaid accounts (eight from February to December 2008) and dated more than six months before any paid accounts (four from January to June 30, 2008) required leave. [ 12 ] Thus the issues for determination, as framed by the Nation (but modified to reflect other arguments), are: (

a) Is leave pursuant to OR 647 or NR10.10 required in respect of the Appointments? (

b) Should leave to proceed with taxation of the Respondents bills of costs be granted and, if so, should leave to proceed be granted nunc pro tunc or by an Order granting leave to proceed by fresh Appointment? B.

Non-Issues [ 13 ] Many of the parties’ arguments deal with the substantive merits of a taxation: did the Respondents charge a “reasonable amount” for their services in the Litigation? [5] However, these arguments are not generally relevant to these applications, except in one respect. [ 14 ] The Nation argued that the 174 days of evidence on the General and Historical Facts were not useful, as evidenced by the Respondents telling the trial justice to ignore that evidence.

That argument is relevant in this application only to when the Nation first knew, or should have known, that there was an issue with the accounts that might require taxation. That date was November 1, 2004, over five years before the Nation filed the Appointments. [ 15 ] It is clear that the Respondents don’t object to the Nation having, and exercising, a right of taxation, nor do they challenge the right to tax under the retainer agreements, provided that any taxation is within the limitations under the Act and the Rules. [ 16 ] Thus, as I said in argument, “...

I have ... to keep constantly in mind that I am not here to make decisions on the taxation; I am here to make a decision [as to] whether taxation can proceed”. C. Ancillary Issues [ 17 ] Ancillary issues in these proceedings relate to whether, and the extent to which, the New Rules supercede the Old Rules. V. Analysis A. Historical Legal Rights and Obligations Relating to Retainers and Accounts

[18] Legal retainers and accounts have changed over the years[6] - indeed, over the last century and a half, and even more so in thelast few decades. Some of the common law from older cases reflects the traditions of those times, and often, those common lawprinciples have failed to reflect more modern practices. In the litigation field this is because litigation has changed from simple actionsand short trials, to complex actions and long trials (sometimes a “mega trial”, as here).

Parlee cited the following decisions: Sharma v643454 Alberta Ltd, 2006 ABQB 119, at para 39 (Slatter J, as he then was); Abedi v Pennington, [2000] 2 Costs LR 205, 2000 WL281290 (Engl CA), at p 205; and Davidsons v Jones-Fenleigh, [1997] Costs LR 70, 1980 WL 149540 (Engl CA), at pp 2-3 to describe,accurately in my view, the old common law tradition: Historically, actions did not typically remain outstanding for lengthy periods of time, and were comparatively simple matters.

Atcommon law, lawyers were not permitted to terminate their retainer with their client until all of their work pursuant to that retainer wascomplete. In other words, they could not terminate their retainer until the trial judgment of the common law court was obtained. Norcould a lawyer at common law issue a final account until such time.

Although they could and sometimes did issue some interimaccounts, they were not permitted to enforce their accounts until the matter was complete and they had issued a final account.[Emphasis added] [19] The Nation relied upon Ladner Downs v Crowley, (BC SC), [1987] BCJ No. 1394 (S.C.), 41 DLR (4th) 403,[1987] 5 WWR 322 for the statement that, in the past, “at common law the contract between a lawyer and client was ordinarily an ‘entirecontract’ to pursue the action”.

The issue is whether this characterization applies to this case. [20] The Nation’s focus in this application was that, for policy reasons set out in Ladner and numerous other cases, periodicaccounts should not be final and there should be a presumption of an entire agreement retainer until the conclusion of litigation. TheNation argued that the nature of retainers determines whether an account is interim or final.

Further, it argued that all retainers areautomatically “entire contract” retainers, based on the public policy arguments that otherwise the taxation of interim account would runthe risk of “rupturing the solicitor-client relationship.” [21] The consequences of characterizing a retainer as an entire agreement for taxation purposes was that, provided the clientsought taxation within the limitation period pertaining to the final account, all interim and provisional accounts since the beginning ofthe retainer and the final account could be included in the taxation.

Thus, when analysing those old cases and applying the appropriatelaw to more modern cases, it is important to understand this phenomenon. As we will see, old common law principles do not necessarilyrespond to current realities.

This is particularly true in this case, because I have found that many of the arguments were incorrectly basedon old and no longer applicable common law principles that are at odds with the terms of the retainer agreed by the parties. [22] As we will see, there have historically been a number of types of retainers and accounts based on common law assumptions.However, specific agreements (express or implied), often trumped such presumptions at common law. [23] It is now clear in Alberta that those historical common law principles, which previously set retainers, types of account, andtaxation consequences, are no longer the law.

The law has changed to reflect the modern realities of practice, and the terms of retainers,accounts, and their taxation consequences, must now be determined based on the particular facts of the particular retainer and accounts,rather than on antiquated general “rules”.

To follow up (and put to rest) the policy arguments that say the requirement to tax lawyersaccounts within a limitation period in a continuing retainer might be contrary to public policy by “straining, if not rupturing, the solicitor-client relationship before the retainer has ended”, there is an off-setting pubic policy provision that lawyers are not to be subject tosurprise taxation after many years in a complex and lengthy case unless the retainer allows that.

The result is to look at all the facts andcircumstances around the case and determine what, in fact, was the agreement between the parties and then apply the effects of the lawto it. B. Current Legal Rights and Obligations Relating to Retainers and Accounts 1. Types of Retainers and Accounts are Questions of Fact [24] In Sharma, at para 39, Slatter J, referencing a number of older cases, described the old common law and established the newpractice:

It is common practice for a lawyer to issue a series of interim accounts on a file, followed by a final account when the retainer iscomplete. The law has often treated the interim accounts as being provisional only, and not “final” until the final account is rendered:see Raithby v. Fraser & Beatty (2000), (ON SC), 47 O.R. (3d) 245 (Ont. S.C.J.) at para. 16; Enterprise Rent-a-CarCo. v. Shapiro, Cohen, Andrews, Findlayson (1998), (ON CA), 38 O.R. (3d) 257 (Ont. C.A.); Siegel v. Cameron &Cameron, [1996] A.J. No. 757 (Alta. Q.B.); Nathanson, Schachter & Thompson v.

Levitt, 2004 BCSC 1402 (B.C.S.C.); PoundmakersLodge v. Scott & Co., 2002 ABQB 745 (Alta. Q.B.), at para 19. Whether an interim account is final, or merely an advance billingmust be decided in each case: Morin, Grant v. Olsson (1994), 37 C.P.C. (3d) 130 (B.C.S.C. [in Chambers]) at para. 130. [Emphasisand double emphasis added] [25] While recently articulated and given weight by Sharma, there is older authority to support this.

Parlee, relied on Siegel, atpara 9, in which the late Johnstone J emphasized that the nature of an account is a finding of fact in the circumstances of each case, not afinding of law, and that facts found on the issue in other cases do not assist fact finding in a specific case. See also Robertson, Ward,Suderman & Bowes v. B.C. (B.C. Transit), (1987) (BC CA), 19 BCLR (2d) 1, [1988] 1 WWR 649 (CA). Parleecorrectly summarizes this position in its brief: Whether accounts are periodic accounts, or merely interim accounts, is a question of fact to be determined on the evidence adduced in theparticular case at bar.

Periodic accounts can be final accounts, because a “final” account is simply one that will not be changed.

Thequestion is simply this: having regard to the dealings of the parties and the circumstances, can it be concluded that the parties intended the accounts in question to be the law firm’s final account for the work set out and represented in those accounts?[7] [Emphasis added] [26] As to the older authority, in Siegel, the late Johnstone J, at para 9, relied upon Re Romer & Haslam, [1893] 2 QB 286 (CA),at 294 and 298, saying: Whether in a case of a series of bills each bill has been sent in as a final bill, or whether they are mere statements of accountshowing how far the expenses have gone up to the time of sending them in, is a question of fact to be determined on the evidencein each case, and it is a question which cannot be determined in any case upon the finding of the Court in any other case. ...

It must always be a question of fact whether a document is a separate bill of costs .... [Emphasis added] [27] Enterprise Rent-a-Car Co v Shapiro, Cohen, Andrews, Finlayson (1998), (ON CA), 38 OR (3d) 257 (OntCA) at para 13, is further authority that such matters are a question of fact, and that “some periodic bills can be final. A periodic bill canbe final if it was the clear intention of both parties that the bill be final...”. [Emphasis added] To the same effect, see Feldstein &Associates Professional Corporation v. Kermidopulos, (Ont SC - Murray, J), at para 35, relying on Re Fellowes,McNeil v.

Kansa Management Services Inc, (1997) (ON CA), 34 O.R. (3rd) 301 (ON CA). 2. Types of Retainers, and Taxation Consequences [28] There were, and continue to be, a number of different types of retainers for legal services, and accounts rendered pursuant tothose retainers. The nature of the retainer is closely tied to the type of account rendered. The parties’ agreement as to the nature of theaccounts to be rendered may be relevant to a finding of what the parties agreed to in the retainer, and conversely, the nature of theretainer may inform the nature of the accounts. a.

End of Cause/Whole (or Entire) Contract [29] There once was a time when pursuant to common law, and now only by contract, counsel was retained to take a matter to trial- or beyond - and no account was/would be delivered until the trial - at least - was over. At the conclusion one, and only one, account wasdelivered. This is often described as “a whole contract” or “an entire contract”: Abedi, at para. 1. [30] The Nation argued, relying on Ladner, at paras. 116 - 120, that was the nature of the relationship between it and the

Respondents, and that payment of these “interim” accounts does not bar taxation of all the accounts the Respondents rendered. Where accounts are truly interim or provisional, pending a final account, I agree. Here, however, it is not the payment, or lack thereof, that is the crucial determining factor, but whether the accounts were expressly or impliedly truly interim or provisional pending a final account, or, alternatively, were final, in the first place. [ 31 ] The burden of proving that the periodic accounts of lawyers are final is upon the lawyers: Davis & Company v.

Jiwan , 2006 BCSC 658 , para. 73 . [ 32 ] The Nation relies upon Avramenko v. Laurich & Associates , 2006 ABQB 489 (Master Hanebury), at para. 42 for the proposition (relying upon Enterprise ) that to determine whether an account is final, the Court should consider: - whether the accounts relate to one matter or one piece of litigation, or part of a continuum. The accounts at Bar relate to one matter that is continuing as separate phases of litigation; - whether the accounts were marked “final”.

The Nation argued that some accounts were marked “interim”, but I reviewed all the Parlee and O’Reilly accounts from 2005 to 2009 and find that none were marked as “final” or “interim”; - whether adjustments were made to the accounts. There appears to be no such adjustments, except for some possible arithmetic errors; and -whether the client could only appreciate the value at the end of the retainer. This was not applicable, as on the basis of the agreement I find to exist between the parties, there were to be no adjustments at the end of the retainer, regardless of the value perceived to be obtained. b.

Natural Breaks [ 33 ] Parlee, relying on Re Romer, at paras. 293-94 and 301, Siegel , at paras. 8 - 9a and Abedi , at pp. 205 - 7, described the history of the concept of natural breaks, as an exception to the “end of cause or whole/entire contract” retainer and account situation: ... Courts of Equity did not follow the traditional common law rules ..., and applied a more flexible approach.

These courts recognized that suits in equity, which would include suits for breach of trust such as that brought before the federal courts in the Litigation, could become complicated and lengthy, and might be divided into stages, or “phases” to use the terminology employed by the trial judge in this case. Accordingly, the Courts of Equity recognized that, in the course of such lengthy suits, a lawyer may properly send an account to his client from time to time, made out up to a certain date or a certain point that comprises a “natural break” in the progress of the litigation.

This was an important feature of Chancery Practice. This important rule of equity prevailed after the 1873 union of the courts of common law and equity. [ 34 ] Thus, there was a time in equity that there were expected to be natural breaks in litigation and, as an exception to the common law principle of no account until the end of the litigation, it was changed to no account was to be delivered until that natural break occurred. [ 35 ] Originally a natural break was to trial, with an account following decision, and then a new retainer and account to the end of the succeeding appeal or appeals.

As time went on, there were also agreed, or perceived, natural breaks leading to trial, such as close of

pleadings, document production, questioning (as it is now called - then examination for discovery) and trial, as well as natural breaksafter trial (leaves to appeal where required), and the appeal or appeals itself/themselves. [36] Parlee argued, in the alternative to its “final account” arguments, that its retainer came to the end at each of six natural breaksand started a new retainer leading to the next natural break. O’Reilly made the same argument, but relied only on the second, third andsixth breaks and argued that these were three separate retainers.

The six “natural breaks” (although I identify only five as properly naturalbreaks) identified by Parlee are: (1) pre-trial up to the beginning of the trial in 2000;

(2) Federal Court trial judgment - December 2, 2005;

(3) Federal Court of Appeal judgment - December 20, 2006;

(4) Supreme Court of Canada leave decision - August 30, 2007;

(5) Supreme Court stating constitutional questions - November 7, 2007 (really a part of item 4 in my mind, having regard to thetiming and process); and (5/6) Supreme Court decision - February 13, 2009. [37] It appears that the Respondents have argued such “natural break” retainers in the alternative to their arguments of continuousretainer and separate final accounts for strategic reasons to avoid a possible finding of entire contract retainer. [38] While Parlee, also relied upon this provision coming with equity to Alberta under the Judicature Act, R.S.A. 2000, c.

J-2, s.15, it remains in the modern era that the facts of each case, not the common law, will determine whether the retainer ended with a naturalbreak. c.

Continuous [39] Notwithstanding historical traditions, there were also continuous retainers - where one started to act for a party in a litigiouscause and continued until the last appeal or until otherwise instructed (the latter usually on settlement or abandonment of furtherlitigation). [40] The Nation acknowledges this type of retainer in law in its Reply Brief, referencing: Singh v MacRae (1922), (BC CA), 31 BCR 67, 65 DLR 392 (BCCA), at paras 1, 8 and 11; De La Pole (Lady) v Dick, 29 Ch D 351, 54 LJ Ch 940, BCR316; Hett v.

Pun Pong (1890) 1890 CanLII 35 (SCC), CarswellBC 3, 18 SCR 290, at para. 8; Millar v Kanady, [1903] OJ No 90, 5OLR 412 (Ont HCJ), at paras 17 - 21 (Ont HC); Howard v Howard (1957), (MB KB), 22 WWR 619, at para 29 (ManCo Ct), applied in Northwood Oaks Ltd v Winnipeg City Assessor, [1999] 11 WWR 77, , at paras 15 - 16 (Man CA); and Nathanson, Schachter & Thompson v. Levitt, 2004 BCSC 1402, upheld 2008 BCCA 320, 296 DLR (4th) 486.

The Nation alsoappears to have acknowledged this in fact in this case (Nation’s Reply Argument, paras. 40 - 42); they argued the fact that there was anappeal meant only that the appeal was contemplated as part of the single retainer ( TR 11/17 - 26).

[ 41 ] In this type of continuous litigation and continuous retainers, there are often several types of possible account scenarios to which counsel and the client may agree: (1) interim or provisional accounts (by definition, meaning pending the final account), or (2) periodic accounts (not conclusive, absent agreement as to whether or not they were interim or provisional, or final), or (3) final accounts (each starts on its own and stood on its own).

In each of these cases, often the language used did/does not determine the facts, and therefore, when disputes arises/arose, such as here, the facts have/had to be determined. d. Final = Stand Alone [ 42 ] The term “stand alone” is my own. Often in the parties’ briefs, the word “final” was used to mean that it was at this point (and most often only at this point) that the rights to taxation arose. However, often in these contexts, the word “final” was not defined or clear.

Did it mean that each account stood alone and was the subject of taxation, within any applicable limitation periods (statutorily or procedurally)? Or did it merely mean that the account would not change, and as such was “final” in a literal sense, but did not determine a right of taxation or establish a contracting out of the right to taxation (see the discussion in Robertson , at p 657-58 [WWR])? In my view, the term “stand alone” might be a better description to apply to an account which is itself subject to taxation on its own.

It is a clearer term than “final” to mean that the rules of taxation/review apply to it alone. With this discussion, I treat “final” and “stand alone” accounts as synonymous. [ 43 ] I must consider both what type of retainer the parties agreed to and the nature of the accounts that were rendered. Determination of these issues requires findings of fact. Importantly what type of retainer existed is tied in with the question of the type of accounts that were issued under the retainer. Accordingly, I will address my findings on both. 3.

Types of Accounts and Taxation Consequences [ 44 ] Under the various types of retainers, accounts are most often periodic, which means that they are sent out at regular (mostly monthly here) or irregular intervals during the term of the retainer. However, there are no ipso facto taxation consequences. [ 45 ] Periodic accounts may be interim [8] or final. An interim account is one that is not final, but is issued pending a final account, and may be changed directly at any future time or in the end result between the time it is issued and the final account.

It is thus customary that interim accounts are not the subject of taxation individually, but rather only the final account.

When the final account is taxed, all the interim accounts issued leading to the final account are taxable. [ 46 ] Final accounts are ones that conclude all truly interim or provisional accounts before them (in which case, as noted, all the interim accounts are part of that taxation), or are final and taxable in themselves, with no regard to other accounts. [ 47 ] While it may not have always been the case under common law imposed whole/entire contract retainers, I find that the law is clear that individual and periodic accounts can be final or stand alone, if consistent with the retainer applicable between the lawyer and client. [ 48 ] In this regard, Parlee argued:

Periodic accounts can be final accounts, because a “final” account is simply one that will not be changed. The question is simply this: having regard to the dealings of the parties and the circumstances, can it be concluded that the parties intended the accounts in question to be the law firm’s final account for the work set out and represented in those accounts? [ 49 ] There is no issue here that the accounts were rendered periodically, often monthly.

The issue is whether they were interim (which the Nation argued) or final (which the Respondents argued) accounts under the retainers between the Nation and the Respondents. Put another way, findings of facts as to the type of retainer and the type of accounts here are interwoven. 4. Types of Retainers and Accounts - Positions, Evidence and Findings [ 50 ] There were no written retainer agreements signed by the Nation. The closest are retainer letters by the Respondents specifying the arrangements under which they had been , were, and would continue to provide legal services.

The Respondents’ assertion implies that the Nation accepted the terms. The retainer letters that the parties reference are:

(1) O’Reilly’s March 21, 1994 letter to the Nation; and

(2) Molstad’s December 12, 2001 letter to the Nation. [ 51 ] Thus, the nature of the retainer must be determined from the whole of the evidence. a. Respondents ’ Positions, Evidence and Arguments [ 52 ] Parlee asserted, referencing Molstad’s affidavit and questioning thereon, that: Molstad has provided legal services to [the Nation] since 1986 or 1987, prior even to the time Mr. Molstad practised with the Parlee firm. The basis of the original retainer between Mr.

Molstad and [the Nation] was that services would be provided based upon the current hourly rate of the lawyer providing those services plus disbursements, that accounts would be rendered on a regular basis, and that each account was final for the services covered by the account. [ 53 ] “Final”, Parlee asserted, meant “there would be no further fees chargeable for those services.” Molstad was asked in 1991 or 1992 to be part of the Litigation, in conjunction with O’Reilly and others. Parlee further asserted that after Molstad joined Parlee in 1995, the retainer merely continued in the same manner.

Both Respondents asserted that this was confirmed by the Nation’s own admissions. [ 54 ] Molstad, in his affidavit, testified that, while he had been retained by the Nation on other matters before, when his firm was retained in relation to the Litigation, it was: ...on the basis that [legal] services were provided based at the current hourly rate of the lawyer providing those services plus disbursements, that accounts would be rendered on a regular basis and that each account was final for the services covered by the account and there would be no further fee chargeable for those services. [ 55 ] Molstad testified further that, when he continued to provide service to the Nation, through his new firm, Parlee, his firm was retained: ... on the basis that accounts for [legal] services would be rendered monthly, the accounts would be based upon the time spent by each

lawyer at their currently hourly rate ... plus disbursements. It was understood that each account would be final for the services covered by the account and that there would be no additional charges in the future for the services provided. In the covering letter to [the Nation] the Parlee McLaws accounts were in most cases described to be an Interim Statement of Accounts for the month or for a specified period of time. The accounts were final accounts for services provided for the period of time described with the exception of any error which would be corrected.

There was no further fee chargeable for the services performed during each period of time for which an account was rendered. This practice continued... to late 2009 .... The retainer agreement ... was confirmed by my letter ... sent to [the Nation] ... on the 12 th day of December, 2001. [ 56 ] The December 12, 2001 letter sets out “a description of the basis upon which the accounts ... are prepared...”, but is not helpful to the issue of the nature of the retainer or whether the accounts were final. It merely states: ... fees ... are based upon the time spent by lawyers.

The lawyers’ hourly rate is based upon the experience of the lawyer and other factors which assure that the rates are competitive.... The hourly rates are adjusted on an annual basis. [ 57 ] Parlee’s evidence was that it would not be making any adjustments to those accounts in future, and in particular would not claim any bonus or additional fee in the event the action was successful. [ 58 ] O’Reilly pointed out that rather than contradicting the retainer, the Nation instructed Counsel how to detail those accounts, and that was done.

O’Reilly argued that there was no evidence to contradict Counsel’s sworn testimony about the basis of the accounts, the retainer understanding, or that the accounts were final, and rendered in a manner requested by the Nation - a conclusion with which I agree. [ 59 ] O’Reilly’s evidence of retainer and accounts asserted that legal services: ... would be charged on the basis of current hourly rates multiplied by the number of hours worked plus disbursements, and that statements of account would be rendered monthly and would be final. ... all work performed by O’Reilly ... was billed on this basis. [ 60 ] In his affidavit, O’Reilly further testified that “no other amounts would be due” than billed on the accounts.

He went on to say that this was confirmed in writing on a number of occasions and he referred to the March 21, 1994 letter confirming the hourly rate arrangement. Further, in his affidavit he testified that he declined a contingency-based retainer and that he communicated “that our monthly statements of account represented our final account for the services itemized in each statement of account and there would be no adjustment of accounts regardless of the outcome”.

In these submissions, “final” was defined as “no further sum would be due in respect of the services provided”, as identified in an account, and that “there would be no upward adjustment of accounts regardless of the outcome”. O’Reilly was also charged with reviewing the accounts of other law firms providing legal services to the Litigation. b. Nation ’s Position, Evidence and Arguments [ 61 ] The examination of the Nation’s only witness, Jonathan Nash [9] (who was not employed until after the retainers were originally established), not only did not contradict the Respondents’ evidence, but confirmed it.

He stated that the Nation understood that the accounts sent each month were final accounts as to the work performed during the time period covered by the account, and that the charges were due and payable within 30-60 days.

He further stated that he had no personal knowledge of the basis of the retainer. [ 62 ] Parlee asserted in oral argument that the really knowledgeable potential witnesses for the Nation were not put forward and that Nash was someone who came late into the Litigation, was not a member of Council, and "didn't really know as much as the persons they should have put up and they can't now hide behind the fact that they didn't call a knowledgeable deponent". O'Reilly pointed to evidence that Nash was not involved in drafting his affidavit and made only minor changes in the draft.

The affidavit was merely presented to him for his signature and he took no steps to verify its accuracy beyond his own memory. In comparison, O'Reilly argued that the Molstad

and O'Reilly affidavits were based on solid evidence known personally to them. In the result, notwithstanding that the Nation is criticalof the weight to be given to the Respondents’ evidence, the Nation did not provide any evidence to contradict that. [63] Nash merely asserted that the Respondents, and other law firms, submitted “interim accounts based on an hourly rate”, andthat on occasion the cover letter from Molstad described “the account as an interim”, but did not elaborate.

I will address the latter pointlater in these reasons. [64] The Nation’s Brief refers to no evidence on the question of retainers and accounts other than stating that “there is certainly noevidence that Samson agreed that each account would be ‘final’”. Nash was only able to observe what he saw after his employmentstarted. In this regard in para. 7 of his affidavit he said: ... since I became employed at [the Nation], all of the firms involved submitted ... interim accounts based on an hourly rate applied to thelawyers involved plus disbursements. These were typically sent on a monthly basis.

Then, relying on hearsay, he claimed “... the same applied prior to my employment ...”. [65] The Nation argued that none of the written retainer letters said anything about “final accounts” or that the accounts would notbe adjusted.

That is true, but in my view, whether the word “final” was used, or the client was told that accounts would not be adjusted, isnot determinative of what it was in fact the agreement between the parties. [66] The Nation, relying on Ladner, argued that the presence of the factors from Yule v Saskatoon (City), (SKCA), 1955 CarswellSask 61, 17 W.W.R. 296, 1 D.L.R. (2d) 540 (C.A.), and not evidence in this particular case, effectively make it clearthat there can be no final accounts, unless those factors are determined on a taxation. c.

Retainer [67] As noted, retainers can be: whole/entire contract, natural break, continuous, or stand alone. While there may be exceptions inspecific cases by agreement, generally whole/entire contract final retainers and natural break retainers only have a final account at theend of the case, or at the end of the break. However, accounts under continuous retainers can be either provisional or final; and accountsunder a stand-alone retainer are, by definition, final.

Thus, to put it generally, it follows that if the Court finds each account final, theretainer is normally neither a whole/entire contract retainer nor a natural-breaks retainer. In this regard, the question of what was theretainer and whether the accounts are final, is a bit of a “chicken and egg” discussion. Thus, I need to determine which type of retainercan be eliminated from consideration and then look at the nature of the accounts. [68] Under the definition

section of the New Rules, “retainer agreement” is defined as “An express or implied agreement betweena lawyer and a client with respect to the payment by the client of the lawyer’s charges...”. I note that this definition confirms the commonlaw that a retainer agreement may be either express or implied. As noted, there were no written retainers except for letters purporting toconfirm past verbal retainers and continuing. There were no other written agreements at any stage of the Litigation. [69] Mr.

Nash agreed that the Nation understood that each monthly account was due and payable and the Nation reviewed eachaccount to determine whether it would be paid. The Nation further understood that once the amount was paid, there would be no furthercharge for those services. On the basis of this evidence, I conclude that there was an express retainer according to the terms described inthe evidence of Molstad, O’Reilly, and Nash. i. Not a Natural Breaks Retainer [70] I agree with the Nation, relying on Romer, that you cannot create a natural break retainer after the fact, except by way of

specific agreement. [71] While the Nation, by Band Council Resolution dated December 6, 2005, approved an appeal from the trial decision, there isnothing to indicate that a new retainer was commenced by the Nation with either Parlee or O’Reilly, at that time.

This is also the case bythe Band Council Resolution dated January 5, 2007 for the appeal to the Supreme Court of Canada from the Federal Court of Appeal. [72] While the steps to go to the Federal Court of Appeal and the Supreme Court were documented by a resolution of the Nation’sCouncil, which may have been necessary under the Nation’s internal governing procedures and/or authorizations that the Respondentsrequired to proceed, I find that there was, in fact, no evidence of any “new retainer” for those steps. The Nation agrees.

Rather, I find asa fact, from the evidence, that the initial retainer terms continued unchanged and that the resolutions of Council merely confirmed thatthe Litigation would continue, without reference to the retainer. Perhaps such resolutions were also indirect or inferred confirmations thatthe existing retainer would continue. I see no evidence that these resolutions started a new retainer, nor was there a need to do so. [73] Indeed, the Litigation is still continuing to this day, although the Appointments have the effect in law of terminating theRespondents’ retainers.

There are still three phases of the trial that haven’t taken place, and on which, it appears, some considerablework was provided and continued to be provided by the Respondents, after the Supreme Court decision.

The Supreme Court decisionwas rendered on February 13, 2009, and while O’Reilly did not bill any fees after June 19, 2008, Parlee issued nine accounts after thatdate, the last being October 31, 2009. [74] While I find on the evidence that there was no apparent agreement between the parties as to these natural breaks having anyimpact on the continuing rendering of periodic accounts, it is true, and the evidence supports Parlee’s assertion that: Parlee issued accounts capturing all time up to such natural breaks on a very timely basis at or near each such break in the litigationprogress.

At any such time, [the Nation] was in a position to consider and analyze the progress of that particular stage of the litigation,the results achieved, the budgets provided, the accounts rendered, and the work performed.

Given its sophisticated review and approvalsystem for legal expenses, it is submitted that [the Nation] did so. [75] While historically there was no inherent right of appeal of a trial decision and at common law a retainer ended at trial (Welch v The King, (SCC), [1950] SCR 412, at p 428, and Ladner, at p. 7[10]), I find that it is agreement, or the lack of it, notcommon law and not the Nation’s Band resolutions authorizing appeals, that determines whether a retainer ends or continues after trial. [76] Put another way, while the rationale of natural breaks for taxation purposes, as noted in Ladner, at p. 6, may have benefits forboth client and lawyer, it is not, in the modern era, automatic, nor is it a matter of reasonableness.

Rather, it depends on evidence of clearagreement. There is not such evidence here, either explicitly, or even impliedly. Indeed, the very suggestion of that is the antithesis of theevidence that each account was final, because a natural break finding necessarily means that each account was only provisional orinterim until the end of the break. [77] Moreover, the Nation also argued, relying on Abedi, at pp 217 -8 and Romer, that whatever the historical practices in somecases, the natural break phenomena specifically did not apply to the Respondents’ accounts. I agree, because I find no agreement to doso. ii.

Not Prima Facie a Whole/Entire Contract Retainer [78] There is no prima facie evidence to support the Nation’s argument that there was a whole /entire contract retainer between itand the Respondents. Therefore, we need to look further at the accounts to see if determining their nature helps determine the type ofretainer, admittedly a “chicken and egg” analysis. [79] Parlee, relying on: Sharma; Abedi; Fiset v.

Falner, [2005] OJ No 4023, 142 ACWS (3d) 69 (SCJ. - Parell J), at paras. 40-41;and Re Fellowes, at para 8, and Davis), described modern litigation principles applicable to retainers and accounts in a way with which Iagree:

Modern Anglo-Canadian jurisprudence does not go nearly so far [as the old common law cases].... Current legal principles recognize that there can be periodic accounts (final as to the work set out therein) if the agreement between the lawyer and the client permits such accounts. Such an agreement may be express or inferred . Indeed, where the evidence establishes that the retainer was to be based on hourly rates and time spent, and not on results achieved [11] , it will certainly be inferred that the account is periodic and final in relation to the work set out therein .

The mere fact that some subsequent or last account might still be subject to taxation would not render subject to taxation any prior periodic or interim accounts (however they might be labelled) now otherwise out of time. [Emphasis added] [ 80 ] O’Reilly relied upon Robertson as authority that periodic accounts can be final accounts. There the Court held that “an interim account is a provisional or temporary account, whereas a final account ... is one that will not be changed”. The Nation acknowledged this is the effect of Robertson , but attempts to distinguish this case.

However, Roberston is very similar to the one at bar, in that the client expected the law firm’s accounts would be based on an hourly rate for the number of hours for which legal services were provided, without adjustment.

Indeed, as the Nation argued, and as I find was the case here, McLachlin JA (as she then was) concluded that the client “understood that no adjustment could be made for success or the lack thereof.” [ 81 ] Moreover, McLachlin JA went further than the Respondents argue here, or I find, when she said (at p 659 [WWR]): The parties ’ agreement that there would be no alteration of the law firm ’s periodic accounts save for arithmetical error effectively negated the client ’s usual right to put in issue any of the matters ordinarily canvassed on taxation . [Emphasis added] [ 82 ] This effectively removes not only some, but perhaps all, of the Yule factors discussed later in this decision.

Thus, contrary to the Nation’s argument, the Robertson case is not “limited to its special circumstances”, but contains rationale that, mutatis mutandis , applies here. The only differences between this case and Robertson was that in Robertson the client had a lawyer specifically negotiate the retainer for the client, whereas the Nation, while having access to counsel, did not appear to have one specifically negotiating the retainer, and the Respondent’s retainers were initially only oral.

Nevertheless, as we shall see, the Nation certainly had legal advice as to the rights of taxation. [ 83 ] The Nation argues that a letter worded similarly to the two letters here lead to the finding that the periodic accounts were not final in Crispin Norris Law Corp. v. Veloso, [1999] BCJ No 860 (BC Master) . That decision does not bind this Court, as each case is determined on the findings of fact, and my findings here rely on more than just the two letters by the Respondents.

Moreover, in Crispin the retainer letter provided for deductions and adjustments following the conclusion or trial of the matter (at para 8): ... Mr. Morris entered into a contract for legal services and fees in which he provided, under the heading "periodic billings" the following: I will bill you for my services and expenses on a monthly basis or from time to time as work is done.

My bills detail the work done and the expenses I have had to pay... and under the heading "deduction from settlement or judgment" you agree that any money from a settlement or judgment, including costs, will be paid directly to me in trust. I will then deduct any unpaid or final bills, any GST and PST, and any unpaid expenses, and give you the balance. [ 84 ] There is no such language in this case, and in fact, the evidence is the opposite– the accounts would not be adjusted. iii. A Continuous Retainer

[85] After having found neither an entire contract nor a natural break retainer, and having determined that the accounts were eachfinal, I further find that the retainer between the parties was a continuous retainer. Despite the Nation’s policy arguments to the contrary,the agreement of the parties is paramount, and I find that the retainer agreement is clear on these points.

Moreover, there is no legalprinciple (or current enactment in Alberta) that says, as the Nation asserts, that a lawyer has an “obligation to fully advise the client if aproposed agreement will deprive them of their legal rights”, or, indeed to advise them of those rights.

Rather, I find that the Respondentshave demonstrated that the accounts were not provisional, but final and that this was fully understood and agreed to by the client. [86] This finding is notwithstanding that the word “interim” may have been inappropriately used (as noted, I have seen no suchnotations in 2005 or later and none have been brought to my attention) on some of Parlee’s letters enclosing accounts.

I find that using theword “interim” is not determinative of the legal result here, but in this context merely meant “periodic” and was also perhaps sloppilyused, without considering the meaning or consequences. [87] The Nation argued that this was conclusive evidence that the account was not final in the sense that I have found. To theextent that a clerk or assistant erroneously may have placed it in letters or on accounts does not create or constitute an agreement.

Theterminology used is not determinative, but rather it is merely relevant to the question of fact as to whether the account is interim or final:Feldstein, at paras. 55 - 6, relying on Fellowes. [88] This is much different than Nathanson (at para. 26, BCSC) where there was a consistent use of the term “interim”, and whichwas in accordance with the agreement for an entire contract found between the parties. Authority for my conclusion is found in Sharma,as Parlee points out, where Slatter J. held (para 39), that an account styled or referred to as “interim” can clearly be, in fact and insubstance, a final account.

That is what I find to be the case here. [89] Accordingly, and to be patently clear, I do not find, as the Nation argued, that the accounts were interim (as in “provisional”)accounts, pending some final account at the end of the Litigation. Indeed, the logic of this argument is wanting, because it is clear thatthe Nation did not expect any further account for these past periods and acknowledged that there were to be no adjustments or changes.Thus, I find that by taking that position, they acknowledged each account was final.

Similarly, I further find that the natural breaks in thelitigation have no bearing on the question of time limits and taxation; simply put, the accounts were each final, unaffected by any naturalbreaks. Finally, I find that this was not a whole/entire contract retainer. 5. Preliminary Conclusion Tested by Other Arguments of the Nation [90] These conclusions, however, must be examined in the context of other arguments advanced by the Nation. a.

Impact of Ladner [91] The Nation relied upon Ladner to the effect that, in the past, “at common law the contract between a lawyer and client wasordinarily an ‘entire contract’ to pursue the action”. However, the Nation went further in its analysis and also pointed out that the Courtof Appeal in Bull, Housser & Tupper v. Mr. T.

International Agencies Ltd. (1999), 1999 BCCA 427 , 69 BCLR (3d) 391, 126BCCA 229, at para 21, interpreted the Ladner decision by Southin J (as she then was) to also mean something additional, namely, that, during an entire contract retainer, “agreements to render final bills during the course of the retainer are enforceable only if the lawyershave advised the clients fully and fairly about the terms to be agreed upon and the effect the agreement will have on the operation ofthe limitation periods." [Emphasis in original; double emphasis added]. [92] The Nation also relied on the dissent of Justice Lambert in Ace Asphalt & Maintenance Ltd. v.

Goodfellow MacKenzie(1984), (BC CA), 56 BCLR 169 (BCCA), at paras 16 and 17, to the same effect. Over and above that, Bull is merelyan authority advocating the return to the common law rule, as an apparent matter of policy in favour of good solicitor-client relationsduring litigation (for more policy analysis on this, see: Feldstein, at paras. 57 - 60, relying on Enterprise and Price v. Sonsini, (ON CA), [2002] O.J. No. 2607 (Ont. C.A.)). [93] This same point from Ladner is effectively made in Lysyk, Dodek, Hoskins, Barristers & Solicitors in Practice (LexisNexis),at para.13.49, relying on Ladner and Enterprise:

Only with their clients’ agreement can lawyers deliver final bills from time to time in the course of an entire contract. Those agreements are enforceable only if the lawyers have advised their clients fully and fairly about the terms to be agreed upon and about the effect the agreement will have on the operation of limitation periods. [Emphasis added] [ 94 ] These decisions and authority are contrary to the law in Alberta, which, I find, required the Court to determine what was, in fact, the contract. Moreover, I find that there is a strong policy basis for the position in Alberta.

Good solicitor-client relations require an open and honest relationship. Clients, particularly sophisticated clients in complex and lengthy litigation, should not stand back, keeping their concerns about billings to themselves until many years have passed.

Rather, the Courts should encourage clients to engage their solicitor in discussions about billing concerns early on, and not “lie in the weeds.” Open discussions raising concerns about the progress of litigation and the costs should not damage solicitor-client relationships, but should instead foster understanding and ensure good communication. [ 95 ] Further, a closer look should be taken of Ladner , as compared to the case at bar.

What Ladner found, on the facts there, was, as per the headnote, that “A contract of retainer for a single transaction is an entire contract , and the solicitor is not entitled to be paid until he has performed his part” (emphasis added).

That finding is much different than my finding that the retainers were not entire contract retainers and therefore the words used in the Ladner decision must be understood accordingly and it is thus distinguished in this case. [ 96 ] The Court in Ladner found that the client, apparently being unsophisticated in such matters, had not been told of the right to taxation or the effect of lapse of time from accounts. [ 97 ] Para. 111 of Ladner merely (and correctly) acknowledges that the relationship is contractual, which means, in a taxation situation, one must determine the terms of the contract.

That is consistent with the theory in Sharma . [ 98 ] Paras. 113 - 114 of Ladner state: Because the solicitor, when he accepts a retainer, is contracting with his own client, he has a duty to advise the client fully and fairly concerning the terms of that contract ... There is nothing new about this principle. (Emphasis added) [ 99 ] That means, implicitly, that the lawyer is going to provide the legal service for which the retainer was engaged, and the client agrees to pay on a certain basis.

In such a situation, the client needs to know what services the lawyer is going to perform, how the lawyer is going to charge for those services, and what are the terms of payment. Under current law there is no duty (absent a contingency agreement (see OR 616 or NR10.7(7)) to discuss taxation. Most frequently at such time, neither the lawyer nor the client is considering the need for the client to challenge the basis of the retainer, nor the need for the lawyer to enforce it. Rather, both parties are expected to perform their side of the contract.

Thus, absent questions from the client, no discussions about the right to tax or limitations in doing so are usually in the contemplation of the parties. Moreover, no Alberta authority was provided to support a duty to disclose a right to tax absent a rule to this effect. [ 100 ] Different from a broad duty to advise of the right to tax, Southin J in a long passage in Ladner (paras. 116 - 120), appears to deal, as did the case she referenced ( Re Romer ) , with a situation where an entire contract retainer was changed to a final account retainer in the midst of the subject litigation.

In the end, I do not disagree with Southin J in the result; namely that, if in the middle of a clear entire contract retainer (that is open to taxation from the beginning to the final account, as a matter of law), the lawyer tries to change the retainer to one where each account is final and taxable only on its own, the resulting change of rights may well need to be brought to the client’s attention. However, that is not the case here.

I find it is not an entire contract and, more importantly, there was neither a change in the type of account or any evidence of an intent or action to change the right to taxation. [ 101 ] Indeed, McLachlin JA, as she then was, said this very thing in Robertson , at p 649 [WWR]: ... the facts and issues in [ Ladner ] were quite different than those in the case at bar. In [ Ladner ] the client initially had a clear right to tax [back at the beginning of the retainer] and the question was whether he had waived it...

[ 102 ] Moreover, I find no evidence here that the Respondents “intended ... to preclude the ... clients from exercising their right to tax”. This is similar to the findings in Nathanson (para 28, BCSC) where, after quoting Southin J in Ladner , the Registrar said, relevant to an argument of deprivation or an attempt to deprive: “that was not shown in the case before me”.

I say the same. [ 103 ] In paras. 117 - 120 of Ladner , the emphasis is similarly on depriving, or attempting to deprive, the client of rights under an agreement for entire contract retainer, by, instead, imposing a final or stand-alone contract. Here, as noted, I have found there never was an entire contract retainer, but only a continuous retainer with accounts being final.

And further that was made very clear to the client by the Respondents. [ 104 ] The Nation argued that there can, in effect, be final accounts that are final for the services rendered “ for that month ”, but an entire contract retainer with a right to tax until the last account. That is, indeed, possible by specific agreement.

However, I find that no such contract was agreed to here - indeed, I find no entire contract retainer here at all, only a continuous retainer in which each account is final, such that there is no right to tax all accounts based on the last account. [ 105 ] Thus, contrary to the Nation argument that “the onus is on the lawyer to demonstrate that [the] client was advised fully and fairly that each account was to be final and the effect that would have on the client’s normal rights of review”, the Ladner and Robertson decisions merely look at what the agreement actually was and, if the retainer was initially an entire contract that then, and only then , is there such an onus on the lawyer, if the lawyer is going to change the nature of the retainer.

To elaborate, I find that the Nation was “advised fully and fairly that each account was to be final”. Absent questions as to the right to tax (of which I find there was none), there is no current duty [12] to advise of the effect of final accounts as to taxation. b. Impact of Yule Factors [ 106 ] Rule 10.2(1) provides: “Except to the extent that a retainer agreement otherwise provides , a lawyer is entitled to be paid a reasonable amount for the services the lawyer performs for a client considering : (

a) the nature, importance and urgency of the matter; (

b) the client’s circumstances; (

c) the ... fund, if any, out of which the lawyer’s charges are to be paid; (

d) the manner in which the services are performed; (

e) the skill, work and responsibility involved; and (

f) any other factor that is appropriate to consider in the circumstances. [Emphasis added] [ 107 ] This is a modern regulatory version of the common law or inherent jurisdiction factors set out in Yule and other cases. The factors under OR 613 were virtually identical, except OR 613 did not contain the exception: “Except to the extent that a retainer agreement otherwise provides...”. However, OR 615 provided that a lawyer could enter into a wide range of agreements with a client for

the amount and manner of payment. [108] The Nation argued that: Only where the Courts have found that the monthly bills were truly final bills which were intended to preclude the client’s ultimate rightto taxation under the Yule factors ... [are limitation issues really relevant]. [109] The Nation further argued there was no evidence that the Nation agreed, intended, or understood that it was waiving its right toultimately have a taxation on the Yule factors.

There are two issues here - the presence or the absence of the Yule factors under theretainer agreement and the right to tax. [110] I have emphasized the opening words of NR10.2(1) because most of the Yule factors are not a consideration of the reviewofficer, if the retainer agreement “otherwise provides”, both under the New Rules and at common law under Yule.

In Yule, the Courtcited Re Solicitors (1915) (MB CA), 7 WWR 1019, 30 WLR 360, 25 Man R 173 (CA), in which Perdue JA noted (at1021): “... a counsel fee, in the absence of an agreement fixing the amount, must be just, proper and reasonable, all the circumstancesbeing taken into account.” [Emphasis added] [111] Here I find that there is clear evidence that the retainer agreement “otherwise provides” because both the Nation and theRespondents agree that the fees in the retainers are based on agreed hourly rates times the number of hours. In other words, none of the: (

a) nature of the matter; (

b) the client’s circumstances; (

c) the fund from which accounts were paid; or ... (

e) the skill or responsibility. were to apply to determine the amount of the account. The Nation essentially acknowledges this result, if there is found to be anagreement that the accounts are final, as I do find. This is a key consideration throughout this case, and the underlying reason why therewould be no need for the Respondents to advise the Nation on taxation under the majority of the Yule factors, because most are notapplicable. [112] That having been said, if: (

d) the services were performed in an unreasonable “manner”, as being excessive, etc. (which is the real issue argument sought to beadvanced by the Nation at any taxation), or if the client was charged for more than the work involved (no arguments were advanced bythe Nation in this regard); or . . . (

f) there was any other factor that is appropriate to consider in the circumstances;

those matters can be taxed, within applicable limitation period.

In this regard, to be clear, NR10.9 (OR 614 to the same effect; see also Oilexco , at para 22) gives that right specifically “in accordance with these rules”. [ 113 ] OR 615, Yule , and R10.5 all contemplate that a lawyer and client may enter an agreement for fees to be determined in some other way than those factors, and that the amount payable may be “at the same or at a greater or lesser rate, than the rate at which he would otherwise be entitled to be remunerated” (OR 615) or “at the same or at a greater or lesser rate than the rate to which the lawyer would be entitled under Rule 10.2 if no retainer agreement were entered into” (NR10.5).

I find there was an agreement that the legal services would not be provided on the basis of the factors set out in Yule , OR 613, or NR10.2(1). That is, the only factor the parties agreed to were the hourly rates for the hours expended, and there would be no additional charges and no future adjustment.

It is only the latter (no additional charges and no future adjustments) that leads to the determination that the periodic (mainly monthly) accounts were not interim (that is, “provisional”, pending a final account) entitling taxation back to the first interim account, but rather were final accounts, limiting taxation under the Act and Rules. [ 114 ] The same issue arose again in oral argument where the Nation submitted (TR 47/28 - 48/11), in an exchange with the Court, in part: Mr. Andrychuk: ... how do you tax a monthly account? Someone spent 10 hours on the case in a month.

Honestly, how do you apply the Yule factors.... I don’t know what the review officer would do. “Did you spend the time? [Yes]. At the agreed rate? [Yes]. ... The Court: But I don’t hear you making any complaints about the hourly rate or about the number of hours, ... in a sense that the hours were actually spent. ... Mr. Andrychuk: And the taxation process is this global kind of quantum meruit look at the accounts.

I mean, honestly, how could I quarrel with the hours spent?... [ 115 ] The answer is clear, namely that the parties agreed that remuneration would be based solely on the hourly rate for services performed. Neither the rates or the hours billed are challenged, and therefore most of the Yule factors do not apply, to the extent that hourly rates and time takes some of the Yule factors out of consideration. Moreover, the Nation acknowledges, supported by Davis (at para 220) “that fee reviews aren’t an audit with every minute justified only with a connected result”. c.

Impact of New Rules [ 116 ] The Nation argued that Parlee’s argument says the New Rules make accounts that were formerly interim or provisional accounts, final accounts. That was not Parlee’s argument, as I understand it, nor the law. On the contrary, whether an account is final or not is based on the facts found from the evidence, not the common law customs of the past, nor the casual labelling of the account, nor the New Rules.

Moreover, the New Rules are broad enough to apply to any type of retainer, and do not determine the type of retainer to which the parties have agreed. [ 117 ] In this case, I find that the agreements between the parties, and the circumstances, come to no other conclusion than that each account was final in fact and in law. Moreover, contrary to the allegations of the Nation, I find no evidence that the Respondents here “attempt[ed] to frustrate” the assessment process. 6.

Conclusion as to Findings of Retainers and Accounts [ 118 ] Thus, based on the evidence and having considered all the arguments, I find that the retainers were neither whole/entire contracts, nor were they natural break retainers. Rather, they were continuous retainers for which the periodic accounts were final in each instance. Moreover, I find that the accounts, while periodic, were neither provisional nor interim, but rather, by agreement, final in each case.

[ 119 ] I also find that these conclusions are not adversely effected by the Ladner decision, the Yule factors, NR10.2(1) (except that factors (

d) and (

f) will continue to apply to any accounts that are taxable), or the New Rules more generally. C. Limitations Act [ 120 ] It is clear the accounts are treated/characterized the same for taxation as for limitations. In Sharma , at para 39 , Slatter J stated: Whether an interim account is final, or merely an advance billing must be decided in each case. ... Lawyer ’ accounts should be treated the same way for all purposes, and so the limitations should run from the final account when the interim accounts are provisional only.

It is neither sensible no fair to have the interim accounts be provisional for the purpose of taxation, but final for the purpose of limitations. ... Thus, unless there is a clear break in the retainer, or clearly two retainers, or some particular agreement between the lawyer and the client that the “interim” account is “final”, the limitation should run from the final account. [Emphasis added] [ 121 ] In my view, the corollary is also true, namely that the limitation should run from each account when each is, in fact, a final account.

That is, final accounts should be final for both purposes of taxation and limitations, notwithstanding that the Nation attempts to separate the two issues. [ 122 ] I said in starting the oral part of this proceeding that the Nation “has not responded to” the Limitations Act argument in anything I have seen.

That remains substantially the case - perhaps because the Act provides no limits under the Nation’s theory of interim accounts. [ 123 ] It is clear that the Act applies to the taxation and review of legal accounts, in that an Appointment for Taxation is a remedial order, for the sound policy reasons justifying the limitation: Sharma , at paras. 35 - 36 . [ 124 ] While the taxation in Sharma was at the instigation of the lawyer, there is no principled reason why it should be different, and there is persuasive authority to support that it is the same, if the taxation is by the client: Parkinson v.

Davis , 2009 ABQB 727 (Master Breitkreutz) [13] . See also Lappoehn v.

Kambeitz , 2003 ABQB 497 (Master Laycock), at paras. 11-13 , where the taxation was by the client and the Act was found to apply to the final account. [ 125 ] In either case, the decision of a review officer can now be ordered by the Court to become a judgment under the New Rules: NR10.20. [ 126 ] It is clear that the Act has a two year limitation: s. 3(1) . [ 127 ] Thus, subject to knowledge (s. 3(1)(a)), the proceedings to tax, review, or otherwise challenge (or, if brought by the lawyer, to enforce) an account or accounts must be brought within two years of the final account. 1.

Knowledge of the Law - The Right to Tax [ 128 ] Section 3(1) (

a) of the Act provides that a claim must be brought within “2 years after the date on which the claimant first knew , or in the circumstance ought to have known , (

i) that the injury for which the claimant seeks a remedial order has occurred ...”. [Emphasis added] In this case the “injury” relates to a claim that the accounts are excessive having regard to the time spent on the General and Historical Facts issues. The taxation was brought in December 2009, but I find, on the evidence, that the Nation knew of the “injury” as early as the trial decision of December 2005, when the usefulness of the General and Historical Facts issues evidence was

discussed, and certainly by December 2007, when the appeal decision in the Federal Court of Appeal was rendered. I do not accept the Nation’s argument that it neither

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