Thistle v. Stringam Denecky LLP, 2013 ABQB 372

Court of Queen ’ s Bench of Alberta Citation: Thistle v. Stringam Denecky LLP, 2013 ABQB 372 Date: 20130703 Docket: 1313 00003 Registry: Ft. McMurray Between: Tanya Thistle Applicant - and - Stringam Denecky LLP Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice B.R. Burrows _______________________________________________________ [ 1 ] Tanya Thistle applies pursuant to Rule 13.5(2) for an order extending the time limit created by Rule 10.10 concerning review of a retainer agreement or a lawyer’s account. Rule 10:10 reads:

(1) A retainer agreement may not be reviewed if 6 months has passed after the date on which the retainer agreement terminated.

(2) A lawyer’s charges may not be reviewed if 6 months has passed after the date on which the account was sent to the client.

[ 2 ] Ms. Thistle retained Stringam Denecky in November 2011 to represent her in relation to the dissolution of her relationship with her then partner and issues concerning the parties’ child. The Stringam Denecky lawyer who acted for her was Kurt Schlachter. Ms. Thistle signed a retainer agreement in a form prepared by the firm on November 8. [ 3 ] The services provided by the law firm were in relation to: - representing Ms. Thistle at a Family Law Chambers application on November 15, 2011; - representing Ms.

Thistle at an application for a stay of the order granted November 15 pending appeal on November 17, 2011 (the appeal, though filed, was discontinued); - commencing an action by Statement of Claim; - representing Ms. Thistle at a Special Chambers application on December 16, 2011; and - representing Ms. Thistle in negotiations (apparently conducted by written correspondence) with opposing counsel which resulted in a settlement documented by opposing counsel. [ 4 ] The law firm rendered 6 accounts to Ms. Thistle during the period that these services were provided.

The first was dated December 8, 2011, the last was dated May 1, 2012. The total charged in these accounts was $50,273. In all but one instance Ms. Thistle paid the account rendered before the next account was rendered. The total amount owing as at the date of the final account was paid by trust transfer. [ 5 ] In October 2012 issues concerning access to the child by the father arose. Ms. Thistle decided to represent herself in relation to that matter. The firm filed a notice of ceasing to act. Issues arising in that context were adjourned to a Special Chambers hearing set for December 2012. Ms.

Thistle changed her mind and again retained the law firm to represent her. She signed a new retainer agreement on October 20, 2012. [ 6 ] The services provided by the law firm pursuant to this second retainer agreement involved preparations for the Special Chambers application. On November 30, 2012 the firm rendered an account of $15,106.46 for services provided to that date. Ms. Thistle’s negative reaction to the amount of that account resulted in the firm ceasing to act for her.

A final account of $830.81 was rendered on December 11, 2012. [ 7 ] The total amount of the accounts rendered is $66,210.27. [ 8 ] On January 4, 2013 Ms. Thistle filed an application seeking review of the accounts. [ 9 ] As the first 6 accounts were rendered as interim accounts prior to the completion of the retainer undertaken in November 2011, the 6-month limitation created by Rule 10.10 commenced, at the earliest, on the date of the last account rendered under that first retainer agreement, May 1, 2012. Ms. Thistle had until November 1, 2012 to seek review of the accounts.

She was therefore 2 months passed the deadline when she brought her application. [ 10 ] The issue before me is not whether the accounts were excessive or appropriate. The question is whether I should extend the

time during which Ms. Thistle should be allowed to seek that review by 2 months. [ 11 ] Counsel have referred me to a few authorities which discuss the factors that should be considered in determining whether to allow such an extension. These include Poundmakers Lodge v. Scott & Co. 2002 ABQB 745 ; Prophet River First Nation v. Rath & Co. 2011 ABQB 408 ; and BA Capital Inc. v. Focused Money Solutions Inc . 2012 ABQB 379 . [ 12 ] I consider the following factors to be of most significance to the determination I must make: 1.

Did the 2-month delay cause the lawyers any prejudice? [ 13 ] The firm submits that the delay prejudiced it in 2 ways. [ 14 ] First it claims it was prejudiced because Ms. Thistle waited until after the second retainer to seek her review. The firm says that if she had sought the review before the second retainer, the firm would have had the opportunity to consider that fact in deciding whether to represent her on the second retainer. Further the firm submits that by retaining the firm a second time, Ms. Thistle mislead the firm into thinking she did not dispute the accounts rendered under the first retainer.

The resulting prejudice to the firm, it is submitted, is that it agreed to act for her the second time. [ 15 ] Second the firm submits that the attention of the local media has been drawn to this dispute. A local columnist has published a few columns in which he is critical of the firm’s accounts and their resistance to the extension Ms. Thistle seeks in this application. The firm has provided copies of the columns in the materials filed on this application. [ 16 ] There is nothing in these submissions that amounts to the type of prejudice that is relevant to the decision I am to make.

The question is whether because of the 2-month delay, the firm is less able to address the merits of the accounts it rendered before the reviewing officer. There is no evidence of such prejudice before me. Indeed it is doubtful whether the matters raised by the firm, especially the first, is a prejudice at all. The second has nothing to do with Ms. Thistle. 2. Why did Ms. Thistle fail to make her application before the expiration of the 6-month deadline? [ 17 ] The materials filed by Ms. Thistle are silent on this point.

It is easy to speculate as to what the reason might be: she did not know of the deadline; she thought the deadline, if she knew of it, had not begun to run until the end of the second retainer; she was too preoccupied with the dispute with her partner at the time the 6 months was running. However such speculation is of no use since there is no evidence as to what the reason actually was. [ 18 ] In BA Capital Inc. Master Laycock appears to have held that failure to provide an explanation for missing the deadline is fatal to an application for an extension.

He held that if there is no explanation for the delay, there is no need for the respondent to establish prejudice. [ 19 ] I do not agree with that analysis. It may be that in some cases where the delay has been long and there are no other considerations which justify an extension, the absence of an explanation would tip the balance against an extension. But an explanation or the absence of one is only one factor to be taken into account. In a case, such as this, where the delay has been short, the absence of an explanation is of much less significance than the absence of evidence of prejudice.

3. Did Ms. Thistle communicate dissatisfaction with the amount of the accounts to the law firm before the limitation period lapsed? [ 20 ] In the authorities cited to me the judges considered whether the client expressed an intention to tax the account (that is have the account reviewed) before the limitation lapsed. In my view the question I have just posed is more to the point. The client and the lawyer are not on the same level when it comes to knowing the rights of a client who is dissatisfied with the lawyer’s account.

A lawyer whose client says they are dissatisfied with the amount of the account should ensure the client is aware of the review process and the time limit on invoking it. [ 21 ] Ms. Thistle’s affidavit states that she expressed dissatisfaction with the cost of the legal services to the lawyer at the time the services were being provided. She swears that she felt the accounts were excessive and requested that a different lawyer in the firm work on her case. She swears that her request was deflected. She was unable to find another lawyer in Fort McMurray available to take on her case.

She asked the firm to “keep it simple to lower fees”. [ 22 ] The evidence may not support the conclusion that she had formed the intent to seek a review but it does support the conclusion that she communicated concern about the amount of the accounts to the firm. There is no evidence that in response to that expressed concern the firm advised her of her right to seek a review or, more to the point, of the time limit for doing so. 4. What did the retainer agreement say about the right of review? [ 23 ] The retainer agreement itself spoke to Ms. Thistle’s right to seek a review.

It said (on the third page in para. 19): The client and the Firm agree that this Agreement is reviewable by the Court or its Taxation Officer at the request of either party. [ 24 ] It is significant in my view that this provision contained no reference to the time limit provided by the Rules. The failure to refer to the limitation period in this provision - which was drafted by the lawyers - could well have lead Ms.

Thistle to think that there was no time limitation on her right. [ 25 ] Further, it is arguable that by including this provision in the agreement, by agreeing to a right of review that was not expressed to be time limited, the firm was contracting out of the benefit of the time limitation contained in Rule 10.10. Otherwise the provision had no legal purpose whatsoever. The parties did not need to agree to a right of review of the same scope as that provided by the Rules. It is arguably appropriate to interpret the agreement as granting Ms.

Thistle a right of review greater in scope than the right given her by the Rules: a right to review without a time limitation. 5. Does there appear to be possible merit to Ms. Thistle ’s position that the accounts were excessive? [ 26 ] As mentioned, it is not my role on this application to assess whether the accounts are reasonable or excessive. But in my view it is relevant to the question of whether time should be extended to consider whether Ms. Thistle’s complaint arguably has sufficient merit to justify the accounts being reviewed. [ 27 ] I am satisfied that Ms. Thistle’s complaint meets this test.

The amount of the accounts were determined largely by multiplying recorded time by hourly rates. The diligence of the lawyers and their support staff in recording each moment that attention was given to Ms. Thistle’s matter is impressive. Each time an e-mail message was received or sent, at least 6 minutes of time was charged to Ms. Thistle. Such diligence can have the undesirable consequence of causing the resulting account to have little relation to the value of the services provided. [ 28 ] There is some indication on the accounts that these lawyers recognize that undesirable consequence.

On two accounts the fee

was discounted - by a total of $3653.11. But in my view there is a distinct possibility that this adjustment was insufficient. A review, in my view, is clearly justified. 6. Is the extension request for a significant amount of time? [ 29 ] Where a client seeks to have an account reviewed many months after it was rendered the application should be viewed differently than where the required extension is small. The smaller the sought extension, the easier it should be to obtain it. This is undoubtedly related to the prejudice point previously discussed.

Prejudice to the firm’s ability to defend the accounts at the review is likely to be minimal if the delay is short. [ 30 ] Here the sought extension is 2 months. That is short. [ 31 ] Having taken these matters into consideration, I conclude that the extension sought by Ms. Thistle should be granted. [ 32 ] In Prophet River First Nation v. Rath , Macleod J. observed: (para. 19) . . . it serves public confidence that legal accounts should be subject to the scrutiny of taxing officers and the Court. [ 33 ] In my view public confidence in our system of civil justice would be severely jeopardized if a client in Ms.

Thistle’s position was not granted the extension she seeks so that she can have the lawyer’s accounts reviewed. Indeed in my view the firm’s resistance to this application is against its interests. One would think they would be anxious, given the negative local publicity which they have brought to the Court’s attention, to establish before the review officer that their accounts are reasonable. [ 34 ] I grant Ms. Thistle the extension she requires. Her application for review may proceed notwithstanding Rule 10.10. Heard on the 27 th day of June 2013. Dated at the City of Ft.

McMurray, Alberta this 27 th day of June 2013. B.R. Burrows J.C.Q.B.A. Appearances: Rockey Yoo for the Applicant

Mark Baril for the Respondent