Rath and Company Barristers & Solicitors v Sturgeon Lake Cree Nation, 2019 ABQB 949

Court of Queen’s Bench of Alberta Citation: Rath and Company Barristers & Solicitors v Sturgeon Lake Cree Nation, 2019 ABQB 949 Date: 20191212 Docket: 1801 11136 Registry: Calgary Between: Rath and Company Barristers and Solicitors Applicant - and - Sturgeon Lake Cree Nation Respondent _______________________________________________________ Endorsement of J.T.

Prowse , Master in Chambers _______________________________________________________ [ 1 ] This is an application by Rath and Company Barristers and Solicitors (“Rath Law”) to set aside an appointment obtained by its client, Sturgeon Lake Cree Nation (“SLCN”), for a review of the retainer agreement, and accounts for services rendered, of Rath Law. [ 2 ] Rath Law asserts that the appointment was outside of the six month limit prescribed by rule 10.10 which states:

(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. [ 3 ] The final account of Rath Law was rendered on February 16, 2018 in the amount of $28,577,607.80 .

Rath Law’s position is that it should have been served with an appointment for review within 6 months, which would have been August 16, 2018. [ 4 ] SLNC obtained an appointment from the review officer on August 7, 2018 (within the 6 months) for a review to occur on January 3, 2019. [ 5 ] Unfortunately, rather than serving the appointment right away, SLCN served it on Rath Law on December 24, 2018, just 10 days prior to the hearing date.

[6] Sub rule 10.13(4) states:

(4) The client or the lawyer who obtains an appointment date for review must serve copies of the documents ... 10 days or more beforethe appointment date, or within any other period specified by a review officer. (emphasis added) [7] However, simply serving 10 days prior to the review date does not address the 6 month requirement in sub-rule 10.10,quoted at the outset of these reasons. [8] Counsel for SLCN interprets sub-rule 10.13(4) as some kind of a specific override to the more general 6 month limitation inrule 10.10. With respect, it is not.

Taking his argument to the extreme, could a lawyer approach the review officer for an appointment 2years after an account was rendered and say “don’t worry about the timing – I’ll make sure I serve the appointment 10 days before thehearing”? Obviously not. [9] SNLC apparently has sought an extension of the 6 month time period pursuant to rule 13.5(2), which states:

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

a) specified in these rules ...

(3) The order to extend or shorten a time period may be made whether or not the period has expired. [10] Counsel between them agreed to adjourn SNLC’s application for an extension of time until the outcome of this application isknown. Possible

interpretations of the 6 month limitation [11] There are three possible

interpretations of the 6 month period contained in rule 10.10: (

i) Obtained, served and held: The appointment must be obtained and served and the review hearing held within 6 monthsafter the date on which the account was sent to the client. (ii) Obtained and served: The appointment must be obtained and served within 6 months after the date on which the accountwas sent to the client, but the hearing can be held outside of the 6 month period. (iii) Obtained: The appointment must be obtained within the 6 month period, but the appointment can be served, and the hearingheld, more than 6 months after the date on which the account was sent to the client. [12] For the reasons which follow it is my conclusion that

interpretation (ii) should be adopted. In other words, the appointmentmust be obtained and served within the 6 month period. Accordingly, since the appointment obtained by SLCN falls under category (iii),I set aside that appointment, subject to SLCN’s (presently adjourned) application under rule 13.5 to extend the 6 month period. Choosing between the three possible

interpretations [13] Where a statutory provision, including one of the Rules of Court (such as rule 10.10) may be interpreted in more than oneway, one should look to the purpose of the provision and interpret it in such a way as to achieve that purpose. [14] This is confirmed in Canadian Natural Resources Ltd v ShawCor Ltd, 2014 ABCA 289, 2014 CarswellAlta 1582, atparagraph 30, where the Court, in considering other provisions of the rules of court, observed: The Rules have a status comparable to a statute: Judicature Act, RSA 2000, c J-2, s. 28.1, s. 63.

Therefore, the relevant Rules ... must,like a provision in a statute, be read in their entire context, and in their grammatical and ordinary sense, harmoniously with the overallscheme of the legislation, its objects and the intention of the legislature: Rizzo & Rizzo Shoes Ltd, (SCC), [1998] 1S.C.R. 27 (S.C.C.) at para 21. (emphasis added) [15] The following cases were cited to me concerning the purposes of rule 10.10: – Twinn v Sawridge Band, 2012 ABQB 44, 2012 CarswellAlta 104 – Lewis Estates Communities Inc v Brownlee LLP, 2013 ABQB 508, 2013 CarswellAlta 1704, – Samson Cree Nation v O’Reilly & Associes, 2013 ABQB 350, 2013 CarswellAlta 1065, affirmed 2014 ABCA 268, 2014 CarswellAlta1415 – West v Logie Family Law, 2018 ABCA 255, 2018 CarswellAlta 1411 [16] After reviewing these cases I conclude that the purposes of rule 10.10 are as follows: • give the client a fair opportunity to challenge a retainer agreement and/or accounts; • put lawyers on notice that a client has concerns in case they have an ongoing relationship; • encourage clients to voice concerns close to the date they arise, which allows both parties to retain records and make notesrelevant to the concerns, and helps prevent the difficulty of assessing complaints years after difficulties may have occurred; • allow lawyers to anticipate uncollectible receivables, or to know that collected accounts may have to be returned, within a

reasonable period of time; • allow lawyers to have finality of accounts. [ 17 ]

Interpretation (i) – Obtained, served and heard within 6 months - does not achieve all of these goals. A client could seek an appointment from a review officer within 3 months and serve it right away, but if the backlog in the review officer’s calendar was 4 months, this might well result in a hearing 7 months after the date on which the account was sent to the client. Interpreting rule 10.10 to prevent a review in these circumstances would not give a client a fair opportunity to have the retainer or accounts reviewed. Rath Law acknowledges that, provided notice of the review is obtained and served within 6 months, rule 10.10 should be treated as being satisfied. [ 18 ]

Interpretation (ii), - Obtained and served within 6 months - does fulfill the purpose of rule 10.10. Even though the review hearing is not held within 6 months, the lawyer is put on notice within 6 months that its retainer or accounts are being challenged, it can retain records and make notes to assist in memory, and it knows it cannot necessarily count on collecting its receivables or that its collected accounts might have to be returned. [ 19 ]

Interpretation (iii) – Obtained within 6 months - does not fulfill the purposes of rule 10.10. The lawyer, at the end of 6 months, has no idea that its retainer or accounts may be challenged in the future. Requiring lawyers to do a search at the courthouse every six months after accounts have been rendered, in order to ascertain whether an application for review has been filed but not yet served on them is, with respect, a ridiculous suggestion. Lack of flexibility [ 20 ] Some may find this decision harsh and lacking in flexibility. [ 21 ] There is no flexibility in rule 10.10.

It states that 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. The Rules of Court Committee determined that these goals would be met if the lawyer was notified of the challenge to its retainer or accounts within 6 months. It is not my position to determine that, to suit the case before me, 10 months would suffice. [ 22 ] There is flexibility in rule 13.5, which states that the Court may extend the 6 month time limit contained in rule 10.10, but that topic was not placed before me on this application.

It remains an outstanding application. [ 23 ] When the rule 13.5 application is brought forward then the Court can address the relative fairness and prejudice which would result in this case if the 6 months was extended to 10 months pursuant to rule 13.5. Costs [ 24 ] If the parties cannot agree on the costs of this application they may seek a ruling from me in that regard. Heard on the 11 th day of December, 2019. Dated at the City of Calgary, Alberta this 12 th day of December, 2019. J.T. Prowse M.C.C.Q.B.A. Appearances: Edward H. Molstad, Q.C./Allie Larson Parlee McLaws LLP for Rath Law T.

Joshua Morrison/Sonia Eggerman MLT Aikins LLP for SLCN