Eryn B Logie Family Law v West, 2017 ABQB 0339

Court of Queen’s Bench of Alberta Citation: Eryn B Logie Family Law v West, 2017 ABQB 0339 Date: 20170524 Docket: 1601 12580 Registry: Calgary Between: Eryn B Logie Family Law also known as Eryn B. Logie Professional Corporation Appellant - and - Aaron Jay West Respondent _____________________________________________________ Endorsement of the Honourable Mr. Justice W.P. Sullivan _______________________________________________________ Appeal from the Order by A.R. Robertson, Q.C., Master in Chambers Dated the 22 nd day of September, 2016 Introduction

[ 1 ] This is an appeal of a Master’s Fiat granting an extension of time to allow for review of accounts sent to the client more than six months prior to the filing of an Appointment for Review. Background Facts [ 2 ] The Respondent, Aaron Jay West, was represented by Eryn B. Logie in a highly contested, even highly conflicted, divorce and separation process. In particular the divorce proceedings involved contentious issues related to their two children. The trial of this matter spanned 16 days, spread out over a five month period, from November 3, 2014 to March 10, 2015.

Justice Nixon in the end granted a parenting Order on May 7, 2015. [ 3 ] Mr. West initially retained Ms. Logie in May of 2013 when Ms. Logie was an employee at Resolve Legal Group. Mr. West transferred his file to Eryn B. Logie Family Law when Ms. Logie opened her own practice. On August 21, 2013, Mr. West executed Eryn B. Logie Family Law’s standard retainer agreement (the “Retainer Agreement”). This divorce proceeding quickly became acrimonious and, according to the brief of Ms. Logie, extremely high conflict. [ 4 ] From time to time, from the date of signing the Retainer Agreement, Ms.

Logie sent accounts to Mr. West. The first account under the Retainer Agreement was sent to Mr. West on August 30, 2013. Three years later, on August 19, 2016, Ms. Logie terminated the Retainer Agreement upon service of a Notice of Withdrawal of Lawyer of Record. On August 29, 2016, the final account was rendered. A total of 56 accounts were sent to Mr. West under the Retainer Agreement. In the end, Mr. West was billed $309,668.47 by Resolve Legal Group and Eryn B. Logie Family Law, of which $305,042.98 has been paid. Mr. West now wishes to have a review of all accounts. Mr. West alleges: (

a) That there are some trust account discrepancies; (

b) That instructions were not followed; and (

c) Other matters including excess communications, demands for payment, overbilling and not spending billed time by moving the action forward to resolution. [ 5 ] On September 22, 2016, Mr. West appeared as a self-represented litigant before Master Robertson and was granted a Fiat for extension for review of all accounts dated from April 30, 2013 to August 26, 2016 (the “Master’s Fiat”) pursuant to Rules 10.10(2) and 13.5(2) (

a) of the Alberta Rules of Court , Alta Reg 124/2010 (“ ARC ”). Ms. Logie was not given notice of Mr. West’s application. That same day, Mr. West filed a Notice of Appointment for Review of Retainer Agreement/Lawyer’s Charges (the “Appointment for Review”) for the accounts of Eryn B. Logie Family Law. It is noted that Mr. West only filed the Appointment for Review for the accounts of Eryn B. Logie Family Law and notwithstanding the blanket Master’s Fiat, the Appointment for Review does not include the accounts of Resolve Legal Group. [ 6 ] On September 30, 2016, Eryn B.

Logie Family Law filed a Notice of Appeal of the Master’s Fiat. [ 7 ] The parties have each filed affidavit evidence in support of their positions on this appeal. Issue [ 8 ] Whether the Court ought to exercise its discretion to allow a review of accounts sent to Mr. West more than six months prior to the filing of the Appointment for Review. Standard of Review [ 9 ] The standard of review on an appeal from a Master's decision is correctness: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 . Where new evidence is filed on an appeal of a Master’s decision, the matter is heard de novo .

Law [ 10 ] Rule 10.9 of the ARC makes it clear that the reasonableness of a retainer agreement and the reasonableness of a lawyer’s charges are subject to review: 10.9 The reasonableness of a retainer agreement and the reasonableness of a lawyer’s charges are subject to review by a review officer in accordance with these rules, despite any agreement to the contrary. [ 11 ] This review, however, is subject to time limitations set out in Rule 10.10: 10.10

(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, whether at the request of the lawyer or the client, if 6 months has passed after the date on which the account was sent to the client. [ 12 ] The time limits in Rule 10.10 may be extended or shortened pursuant to Rule 13.5(2):

13.5(2) The Court may, unless a rule otherwise provides, stay, extend or shorten a time period that is (

a) specified in these rules, (

b) specified in an order or judgment, or (

c) agreed on by the parties. [ 13 ] Rule 13.38(1) empowers a Master to grant a fiat directing the review officer to review a lawyer’s account that is more than six months old: 13.38(1) A judge or a master may authorize, direct or give permission to a court officer to do

an act, and a note signed by the judge or master is sufficient authority to carry out the act. [ 14 ] Chief Justice Wittmann dealt with the issue of extending time periods for taxation of a lawyer’s file in Attila Dogan Construction and Installation Co Inc v Bennett Jones LLP , 2015 ABQB 407 . The learned Chief Justice first addressed the issue of whether the retainer agreement could properly be interpreted such that monthly accounts sent by the law firm to their client were periodic final accounts or periodic interim accounts.

Citing Samson Cree Nation v O’Reilly & Associés , 2014 ABCA 268 , the Chief Justice concluded that all of the monthly accounts were periodic final accounts because the retainer did not allow for any adjustment to the accounts pending the end result of the trial, good or bad (at para 27). [ 15 ] The Chief Justice then dealt with the issue of whether to grant leave for review of the periodic final accounts that were sent to the client by the law firm more than six months prior to the filing of the Appointment for Review.

Noting that the decision to grant leave to extend the time period was discretionary, the Chief Justice considered the factors set out in Samson Cree Nation v O’Reilly & Associés , 2013 ABQB 350 ( Attila at para 33): i. delay, ii. prejudice, iii. first intent to tax (assess the accounts), iv. evidence of overcharging, v. agreement as to amount, and vi. the relationship between lawyer and client. [ 16 ] The Chief Justice ultimately chose not to exercise his discretion to allow a review of the law firm’s accounts beyond the period six months prior to the filing of the Appointment for Review.

In coming to this conclusion, the Learned Chief Justice took into account the client’s delayed filing of an Appointment for Review (at para 43) and the prejudice to the law firm resulting from opening up their accounts for review (at paras 44 - 45). He also considered two additional factors not set out in Samson Cree (QB): the sophistication of the client (at para 36), and that the law firm voluntarily reduced a number of accounts for an overall fee reduction. (at paras 27 and 48). [ 17 ] There are reasons why an account may be reduced other than unreasonable billing.

For example the maintenance of a personal relationship with the client, client retention, simple goodwill and accommodation as appeared to be the case in Attila. [ 18 ] The Court of Appeal endorsed the list of relevant criteria set out in Samson Cree (QB), however, as noted by the Chief Justice, the Court of Appeal indicated that the criteria “were not necessarily exhaustive and not complying with any one of them was not a precondition, but they were to be weighed together in context as a whole” ( Attila at para 35). Analysis

a) Periodic Final or Periodic Interim Accounts [ 19 ] Dealing first with the issue of whether the 56 accounts were periodic final accounts or periodic interim accounts, the reasoning of the Chief Justice applies here - these are periodic final accounts. The reality is that this was not a success-based litigation with respect to fees. There was to be no bonus for success or diminishing of account for lack of success. This was a highly conflicted, lengthy family law matter involving children, which, in my opinion, leaves little room for a discussion of “success”.

According to the terms of the Retainer Agreement, there was to be no adjustment to the fees pending the result of the litigation. The Retainer Agreement provided for a time-based fee where charges were based on the amount of time spent on the matter. The 56 accounts are periodic final accounts. To quote the Chief Justice: “That was the deal. That was the written agreement.” ( Attila at para 27). [ 20 ] Having found that the accounts are periodic final accounts, the Limitations Act , RSA 2000, c L-12 bars any review of Eryn B.

Logie Family Law accounts prior to September 22, 2014: Attila at paras 23, 29-30 citing Samson Cree (CA) at paras 169 and 179.

b) What is the test for granting leave to extend time limits for taxation of a lawyer’s account? [ 21 ] As noted by the Court of Appeal, the six criteria listed in Samson Cree (QB) are not rigid preconditions. In determining

whether to extend a time period, this Court has authority to make a discretionary decision on the facts of each case. [ 22 ] In general, there is good reason to allow for the taxation of a lawyers account from the perspective of both the client and of the lawyer: see Prophet River First Nation v Rath & Company , 2011 ABQB 408 at para 19 . From the client’s perspective, taxation provides the client with independent confirmation that fees are reasonable: Twinn v Sawridge Band , 2012 ABQB 44 at para 36 .

From the lawyer’s perspective, they are given the opportunity to justify their fees before an impartial adjudicator with expertise in the taxation of lawyer’s accounts and the relevant Rules of Court. [ 23 ] The taxation process is effectively a modified trial process. Parties are heard, evidence is tendered, and a decision is made by an unbiased party. The taxation process is a release valve that serves both the legal profession and the community.

Matters that would otherwise burden an over-worked judicial system are funneled directly to an expert adjudicator, doing away with the need for a protracted trial process at the superior courts. Further, it often prevents lawyers from being reported to the Law Society. It is a tool with tangible benefits for clients, lawyers, and the community. [ 24 ] The discretion to extend the time limits for taxation set out in the ARC must take into account the particular client making the request for taxation. Often, once litigation begins, clients have no way of knowing how long the litigation process is going to take.

They rely on their lawyers to advise them. Indeed lawyers often promise to take all steps to avoid costly litigation. To say to a client that they should have questioned their lawyer earlier or put an end to the solicitor-client relationship once the fees began to accumulate is not practical. Requiring this of clients who possess no legal training and who do not have the benefit of internal legal counsel to negotiate reduced fees, would only disrupt an already under-resourced judicial system by causing the number of delays to increase.

Moen J. referred to the principal of “rupturing” the solicitor-client relationship in Van Brabant Estate (Re) , 2013 ABQB 547 at para 70 : The relationship between client and lawyer is one of trust. The lawyer holds knowledge that is mysterious to most lay people. Lay persons do not know the "cut and thrust" of the law and rely completely on their lawyers to succeed in a law suit. [...] It must be very difficult for a client to challenge their lawyer's account when they are in the middle of litigation such as the Applicants are in this case.

Therefore, a lay person could reasonably believe that a challenge to his lawyer on any matter, especially what the lawyer is charging, could damage or rupture their relationship [ 25 ] In my view, where the Court is asked to exercise its discretion to extend a time period to allow for a broader review of a lawyer’s file, the Court may do so where there is some evidence that the account should be reviewed. This is a low threshold.

Affidavit evidence or oral submissions on the record are sufficient. [ 26 ] When a client seeks an explanation for their legal fees, and the ARC provide for a process that does exactly that, this Court should not stand in the client’s way except in the clearest of cases, for example where vexatious litigants advance baseless claims. As long as there is some evidence that a client, in good faith, seeks an independent review of their legal fees, the fiat ought to be granted. [ 27 ] To be clear, the taxation process should not be used as a weapon against a lawyer.

It cannot be used arbitrarily, nor can it be used to harass lawyers. There must be some justification.

c) Should leave be granted for taxation prior to March 22, 2016? [ 28 ] In the circumstances of this case, there is good reason to allow for a review of the accounts prior to March 22, 2016. [ 29 ] This case is distinguishable from Attila . This was a divorce and separation process where children were involved. This was not the case of a corporation with its own internal legal counsel contesting legal fees incurred by their external counsel. To my knowledge Mr. West has no legal training, he trusted Ms. Logie to assist him in navigating the judicial system.

The context of this litigation weighs heavily in favour of granting an extension of the review period. Second, there were no discussions between Mr. West and Ms. Logie regarding reducing the accounts. Rather, the fees inflated beyond what was originally agreed to. Unlike Atilla , Mr. West did not have the benefit of legal counsel to negotiate his legal fees on his behalf. He paid when he was asked because he trusted his counsel. [ 30 ] Mr. West filed affidavit evidence outlining the reasons why he seeks a review of the accounts. The issue before me is not the reasonableness of Ms.

Logie’s accounts, the issue is very narrow: whether a review ought to occur in the first place. [ 31 ] On August 14, 2014, Ms. Logie represented that a three week trial would cost $85,000. Mr. West was billed $173,400 from September 2014 to May 2015, when a parenting Order was granted. In total, Mr. West has paid $305,042.98. The disparity between the agreed upon amount and the final bill favours a review by a review officer. Similarly, the procedure card tendered as evidence on this application is 14 pages long, that in and of itself is not evidence of overcharging but is a factor in favour of finding that Mr.

West is entitled to a review process for which the ARC expressly provide. [ 32 ] Ms. Logie argues that she will be prejudiced if a review officer reviewed the accounts. She argues that her practice and well- being would be in jeopardy because she has relied on the funds paid to date. This is similar to the reasoning in Attila (at para 45): Where a series of periodic final accounts have been paid by a client, the firm must be taken to know that a review could take place, going back six months prior to an Appointment for Review.

But beyond that, absent leave being granted for the prior 18 months, the law firm is entitled to the certainty that that revenue will not be disturbed. Lawyers have overhead. Bennett Jones likely has extensive non-legal staff. Infrastructure costs for offices and maintaining them are significant for any law firm. So there is some prejudice, although not quantifiable, on the record before me visited by the simple fact of potentially disturbing collected revenue. [ 33 ] A law firm is entitled to the certainty of honestly earned revenue. Conclusion

[ 34 ] Based on the evidence before me, I am satisfied that this Court should exercise its discretion and extend the time for a review of the accounts beyond the period of time stipulated in the ARC up to and including September 22, 2014. Heard on the 13 th day of April, 2017. Dated at the City of Calgary, Alberta this 24 th day of May, 2017. W.P. Sullivan J.C.Q.B.A. Appearances: Diann P. Castle for the Appellant Kent W. Jesse for the Respondent