Lising v Smith, 2018 ABQB 1061

Court of Queen’s Bench of Alberta Citation: Lising v Smith, 2018 ABQB 1061 Date: 20181221 Docket: 1803 13042 Registry: Edmonton Between: Rusela Lising and Maebelle Ruth Lising Respondents - and - Shane Smith and Smith Law Group Appellants _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice D.L.

Shelley _______________________________________________________ Matter before the Court [ 1 ] This matter comes before the Court as an appeal of a Review Officer’s decision (the “Decision”), which in turn arose out of the Respondents’ decision to submit the Retainer Agreement between them and Mr. Smith (the “Retainer Agreement”), as well as charges imposed by Mr. Smith, to the Review Officer for review. [ 2 ] As a result of his review, the Review Officer reduced Mr. Smith’s fees from the $2500 charged to $800, which the Review Officer concluded was a reasonable fee for the services rendered.

In addition, the Review Officer reduced disbursements charged of $500 to the sum of $30. The Review Officer also awarded the Respondents $100 in costs of the review. Having found that the Respondents

had paid a total retainer of $6850, the Review Officer directed that Mr. Smith repay the amount overcharged, the unused portion of the retainer, and the costs “as soon as is practical”. Position of the Parties [ 3 ] Mr. Smith advanced the following arguments: 1. The Review Officer ought not to have reviewed his account because more than six months had passed between the date he sent the account to the Respondents and the date the Appointment for Review was filed. 2. The Review Officer failed to give effect to the terms of the Retainer Agreement.

Having agreed to the fees set out in the Retainer Agreement (which he contended were within market rates for the services to be provided) the Respondents ought not to be permitted to avoid payment, since he had completed most of the work contemplated under the Agreement. 3. The Review Officer did not have sufficient evidence or knowledge of the immigration process. Furthermore, he did not give enough weight to Mr. Smith’s explanation as to his lawyer/client relationship with the Respondents and, in doing so, erred in his review of the fees charged by him. [ 4 ] Mr.

Smith acknowledged that he had not paid the full amount directed by the Review Officer to the Respondents because he did not agree with the Decision. However, he maintained that he had forwarded a bank draft to the Respondents in the amount of $3700, being the amount that he felt was payable to them. [ 5 ] Ms. Rusela Lising appeared on behalf of both Respondents. She took the position that the Decision was correct. She denied having received any funds from Mr. Smith following issuance of the Decision. Events Post Application [ 6 ] As a result of the disagreement over whether or not Mr.

Smith had returned some funds to the Respondents, I directed that Mr. Smith provide me with a copy of the bank draft, including the signature of anyone who may have cashed it. [ 7 ] Mr. Smith provided me with a copy of a bank draft in the amount of $3700, issued in the name of Rusela Lising on July 26, 2018. Accompanying this document was a copy of an email sent by a customer service representative of the bank branch that had issued the bank draft. Her letter confirmed that the draft had not been negotiated and she requested that Mr.

Smith advise her of his bank account number so that the funds could be returned to his account. [ 8 ] Attempts to have the parties return before me to receive my decision in this matter were unsuccessful in that, although Ms. Rusela Lising responded to my assistant’s telephone and/or email messages, Mr. Smith did not do so. Relevant Background Information [ 9 ] The Respondents had approached Mr. Smith sometime in July 2017 for the purposes of retaining him to assist in an immigration matter. Mr. Smith says he advised them in August of the anticipated fees and disbursements.

The Respondents requested an invoice as a condition of allowing release of any funds to him. He therefore sent a Retainer Agreement and a Statement of Account on October 3, 2017. Mr. Smith received funds in mid- November and began working on the file around that time. He received additional funds in January 2018, which he referred to as a “second and final deposit”. Mr. Smith and Ms. Rusela Lising met in January 2018. [ 10 ] Mr.

Smith confirmed to the Review Officer that, as a result of being suspended by the Law Society, he ceased practising law in June 2018. [ 11 ] Between approximately mid-November 2017 and when he ceased practising, Mr. Smith obtained various information from the Respondents and inserted it on application documents. The application was not submitted before he ceased practising and the partially completed application form and other materials were returned to the Respondents. [ 12 ] Mr. Smith disagrees with the Review Officer’s determination of the extent of the work performed prior to ceasing to act.

A greater area of disagreement is the value of that work. Applicable Legislation [ 13 ] Rule 10.10 (1) of the Rules of Court provides that a retainer agreement may not be reviewed if six months has passed after the date on which the retainer agreement terminated.

Rule 10.10 (2) provides that a lawyer’s charges may not be reviewed if six months have passed after the date on which the account was sent to the client. [ 14 ] Rule 10.24 (1) provides that, if a lawyer ceases to be a client’s lawyer, a client may make an appointment with a Review Officer for the purposes of determining the amount of the lawyer’s charges payable by the client.

I note that this provision falls under a heading that references “incomplete services”. [ 15 ] Rule 3.6 of the Code of Conduct of the Law Society of Alberta provides that a lawyer must not charge or accept a fee or disbursement unless it is fair and reasonable and has been disclosed in a timely fashion. The commentary under this Rule sets out a list of

factors that may be considered when determining whether a fee or disbursement is fair and reasonable. An agreement between the lawyer and the client and a client’s prior consent to a fee are two of the several factors listed in the commentary. The commentary to Rule 3.6-3 provides that a final account should be rendered within a reasonable time after completion of the services, subject to any special agreement with the client.

When a lawyer withdraws from representing a client, Rule 3.7-7 requires that a lawyer must account for all funds of a client then held or previously dealt with, including the refunding of any remuneration not earned during the representation. Analysis [ 16 ] There are two types of arguments advanced by Mr. Smith in relation to this appeal. The first is that the Review Officer did not fully appreciate the extent of the work done, and that he did not properly value it. Mr.

Smith suggests that the reason for this is that the Review Officer did not have a sufficient understanding of immigration law and the nature of the services that Mr. Smith was to provide to the Respondents. I am satisfied that the Review Officer had sufficient information to allow him to review the account, which itself was not detailed. Up to the time that Mr. Smith was suspended from the practice of law and therefore unable to continue his representation of the Respondents, Mr.

Smith had requested information from the Respondents in order to complete some blanks in what the Review Officer described as a “generic application form for Canada”. The Review Officer observed that the form itself contained some but not a lot of information. In addition, a supplementary form had also been partially completed. The Review Officer observed that most of the materials had been supplied by the Respondents. [ 17 ] Mr. Smith argues that the Review Officer failed to take into account the Retainer Agreement. The Review Officer had pointed out to Mr.

Smith at the Review Hearing that the Notice of Appointment for Review, which had been served on him, contained a direction that he was required to file a copy of the signed account and any Retainer Agreement, whether or not he intended to rely on them at the Review Hearing. The warning set out on the Appointment Notice went on to state that “if you do not comply with this Rule, you forfeit your right to payment of the charges in the account that are the subject of review, unless the Review Officer otherwise directs.” Mr.

Smith’s response was that he hadn’t read the Notice fully and therefore had failed to comply with the requirements set out in the Notice, including the obligation to either appear in person or to send a lawyer in his stead (which he did not do, choosing instead to appear by telephone). Notwithstanding this, it is clear that the Review Officer was aware of the Retainer Agreement and knew it was something that attracted deference.

Although the Review Officer did not have the Retainer Agreement before him, he was clear that, even if it said that the Respondents would pay $2500 (or $5000), that did not oust his jurisdiction to review the amount charged. Even if the fee was in compliance with the Retainer Agreement, he could conclude that it was not reasonable for the services rendered. I agree.

It is clear that an agreement with a client concerning fees is but one factor to be considered in these cases. [ 18 ] I agree with the Review Officer’s conclusion that the value of the work product in this case did not justify the $2500 in fees charged by Mr. Smith.

Nor was the Review Officer in error in reducing the disbursement amount, given that there was no supporting material in relation to the disbursements and the evidence suggested that the only disbursement incurred was one local courier charge, which would not justify the $500 charged on the Statement of Account. [ 19 ] This leads into the second argument advanced by Mr. Smith – that the Review Officer did not have jurisdiction to review the account because it had been sent to the Respondents more than six months before the date the Respondents issued the Appointment for Review. Mr.

Smith relies on the plain meaning of the words used in Rule 10.10(2). To accept Mr. Smith’s argument would be to fail to give effect to Rule 10.24, a more specific rule which clearly applies here, since Mr. Smith did not complete the services contemplated in the Retainer Agreement. He was suspended, the result of which is that he ceased to be capable of completing the services because he could no longer be the Respondents’ lawyer.

To accept his argument would also be to ignore the obvious purpose of the review process established in Subdivision 4 of the Rules. [ 20 ] I note also that the Rules provide a process for a client to challenge a lawyer’s fees and disbursements separate from the complaint process that would arise from a breach of the rules established in the Law Society’s Code of Conduct . These rules clearly have application to this case and can be used to assist in the

interpretation of the review process Rules. [ 21 ] In advancing this argument, Mr. Smith relies on a Statement of Account that was issued before the services had commenced. It was issued at the request of the Respondents to facilitate their access to funds so that they could provide him with the retainer requested by him. Although the invoice was sent on October 3, 2017, there was a delay before Mr. Smith began providing any services. The Review Officer concluded, and I agree, that the services then provided, before Mr.

Smith was suspended from the practice of law and failed to conclude the services contemplated in the Retainer Agreement, were of minimal value. To give effect to Mr. Smith’s argument that the date on the Statement of Account precluded review by the Review Officer, would be incompatible with the intention of Rule 10.10, which I interpret as contemplating that a lawyer will not bill for services not rendered.

More importantly, Rule 10.24 is a separate Rule specific to this circumstance and does not contain any limitation on a client’s right to have a lawyer’s charges reviewed where, for any of the reasons set out in that Rule, a lawyer is unable to complete the services for which the lawyer was retained. [ 22 ] I therefore reject Mr.

Smith’s argument that the Review Officer should not have reviewed the October 3, 2017 invoice on the basis that he was precluded from doing so by virtue of Rule 10.10(2). [ 23 ] Although this is sufficient for me to dispose of the appeal, I take this opportunity to make two further comments. It is concerning to me that Mr. Smith did not respond to my assistant’s attempts to have him return for the purposes of receiving my decision.

He was aware that this decision was pending and if he changed his phone number, email address or was otherwise unable to access the communication sources provided to the Court for the purpose of contacting him, he ought to have contacted the Court to provide new contact information. [ 24 ] The inability to contact Mr. Smith and to have him return to Court also prevented me from determining what happened in relation to the $3700 he contended he had sent to Mr. Rusela Lising.

The information he provided, at my request in light of his assertion that he had repaid the $3700, makes it clear that the bank draft obtained by him was not cashed. I do not know the reason for that. More importantly, I do not know if, following receipt of the advice from the bank that the bank draft had not been cashed, he then arranged for

the funds to be deposited to his bank account (as suggested by the bank employee), or whether he then arranged for at least that amount to be sent to Ms. Lising. Even if he did so, that amount would not be sufficient to comply with the Review Officer’s direction. Mr. Smith did not, to my knowledge, apply for or obtain a stay of the Review Officer’s Decision. He was therefore obligated to return the sum of $5978.50 plus $100 in costs. This obligation was clearly communicated by the Review Officer to Mr.

Smith on July 12, 2018, with the Review Officer’s reminder that the Code of Conduct required repayment of the amount “as soon as practical”. Conclusion [ 25 ] For the above reasons, I conclude that: 1. The appeal of the Decision is dismissed; and 2. The Respondents are entitled to costs of this appeal in the amount of $2500. Heard on the 7 th day of September, 2018. Dated at the City of Edmonton, Alberta this 21st day of December, 2018. D.L. Shelley J.C.Q.B.A. Appearances: Mr. S. Smith for the Appellants Ms. R. Lising for the Respondents