Tallcree First Nation v Rath & Co, 2021 ABQB 440

Court of Queen’s Bench of Alberta Citation: Tallcree First Nation v Rath & Co, 2021 ABQB 440 Date: 20210609 Docket: 1803 05262 Registry: Edmonton Between: Tallcree First Nation Appellant - and - Rath & Co and Jeffrey R W Rath Respondents _______________________________________________________ Memorandum of Decision – Reasonable Apprehension of Bias of the Honourable Mr. Justice Donald Lee _______________________________________________________ Table of Contents Background . 2 Legal Test for Recusal 5 Rath’s Grounds for Finding Bias Analysed . 9 A.

Rath’s Ability to Undertake Complex Treaty Claims Litigation . 9 B. Professional Litigant 17 C. Rath Argues that The Court Required Him to be a Clairvoyant 17 Why is this Important? . 18 D. Rath alleges that the Court ignored the fact findings of the Review Officer, improperly substituted them with his own and raised and considered new issues that were not before the Review Officer or the Court, without giving the Applicants the opportunity to respond and restricting the Applicants’ ability to tender evidence in relation thereto. 19 E. Standard of Review .. 23

F. Rusk Factors . 23 G. The Federal Court Action and the “Negotiations” . 24 H. Circumstances at the Time of the CFA .. 27 I. The Court’s Use of Different Terminology When Referring to the Parties Submissions . 27 J. The Fresh Evidence Ruling . 28 K. The Obligation of Rath and the Risks Undertaken in the CFA .. 28 L. Rath’s Time Records . 29 M. Supreme Court of Canada’s Recent Authority . 31 N. Comparators Used . 32 O. Rath’s Supplemental Record . 32 P. Findings of the Court 32 Q. Rath’s Misleading Argument with Respect to the Band Administrator Cardinal’s Evidence . 33 R. CFA and Vulnerable Individuals . 34 S.

Tallcree’s 2018 Financial Statements . 35 Conclusion . 35 Background [ 1 ] This Memorandum of Decision deals with a multifaceted application by Rath & Co and Jeffrey R W Rath (“Rath”) filed on April 9, 2021, that my written decision issued in March 2021 reported at 2021 ABQB 234 (“Second Reasons”) give rise to a reasonable apprehension and bias on numerous grounds, and a recusal application should therefore be granted. [ 2 ] By way of background, this matter is an appeal from the decision of the Review Officer (“RO”) that the Court heard on February 20 and 21, 2020 with respect to Rath’s Contingency Fee Agreement (“CFA”) with Tallcree First Nations (“Tallcree”) Agricultural Benefits Claim under Treaty 8 against the Government of Canada (“Federal government”).

The Court concluded that the CFA was unreasonable in a Decision reported at 2020 ABQB 592 issued in October 2020 (“First Decision”). Before the First Decision was issued, counsel were invited to deal, through supplemental written submissions in July 2020, with the question as to whether the then recent Supreme Court of Canada’s decision concerning unconscionable transactions had any application to the appeal.

Both counsel filed additional written materials in August 2020. [ 3 ] After the First Decision was issued in October 2020, counsel were given another opportunity to file written materials with respect to Rath’s final fee award. In addition to requesting more time to file additional written materials, Rath requested an opportunity to further make oral submissions with respect to what the final amount of his award should be.

The Court granted both these applications, and further written submissions were to be filed no later than November 20, 2020 and oral arguments were heard on November 27, 2020. [ 4 ] Rath appealed my First Decision to the Alberta Court of Appeal. In Khullar JA’s written decision in Tallcree First Nation v Rath & Company , 2020 ABCA 433 , she described the Background Facts and my First Decision as follows: I. Background Facts . . . [2] In October 2015, Tallcree First Nation (Tallcree) entered into a contingency fee agreement with the applicants, Rath & Company and Jeffrey Rath.

The applicants were retained to settle certain agricultural benefits claims under Treaty 8 made by Tallcree against the federal government. The initial contingency fee agreed to was 20%. [3] The applicants resolved the agricultural claims quickly, although Tallcree did not receive the payment of $57,590,375 from the federal government until February 2018.

The 20% contingency amounted to $11,518,075. [4] On February 16, 2018, the applicants issued a brief statement of account to Tallcree which referred to the settlement amount, the contingency fee and the sum payable. [5] In March 2018, Tallcree applied for a review of the contingency fee agreement under r 10.13 of the Alberta Rules of Court, AR 124/2010 .

The Review Officer was asked to determine whether the 20% contingency fee was reasonable under r 10.9. [6] In response to the Review Officer’s requests, the applicants submitted an “estimate” of their time records (since they did not keep contemporaneous time records on this matter). The time records, at the stated hourly billing rates, came to $391,900. That is approximately 3% of the amount the applicants would be entitled to under the contingency fee agreement if it is valid. It appears that all

the applicants did on this matter was file a formal claim, send a three-page settlement letter, and engage in “minor negotiations”. [7] In September 2018, the Review Officer issued an oral decision finding the 20% contingency fee reasonable. He found that theapplicants did less work to obtain the fee than either party was expecting and that the 20% contingency would result in an extremely highfee.

Nevertheless, the Review Officer found that the contingency fee was “not … clearly unreasonable” and that 20% was at the low endof the range for contingency fee agreements, based on a comparison with personal injury lawsuits in which a 20% contingency fee iscommonly charged in clear cases where liability is not in issue. II.

Decision of the Chambers Judge [8] Tallcree appealed the Review Officer’s decision to the chambers judge: Tallcree First Nation v Rath & Company, 2020 ABQB 592.The chambers judge noted that the reasonableness of the contingency fee agreement depends on the circumstances in existence when theparties entered into it. [9] The circumstances included: (1) that Tallcree was in economically dire straits and needed money from the federal governmenturgently;

(2) Tallcree was aware of the 20% contingency fee that could apply to a range of recovery between $50,000,000 and$80,000,000 but believed that the settlement process might take years (whereas it only took 18 months);

(3) Tallcree was dissatisfiedwith its previous lawyers;

(4) Tallcree had a draft of the proposed contingency fee agreement for a year before executing it but did nothave the agreement reviewed by independent legal counsel;

(5) Tallcree was unaware of how strong their claims to agricultural benefitswere, whereas the applicants knew that there was a strong chance that if the federal government changed following a general election,the new administration would respond positively to agricultural benefits claims. [10] The chambers judge revoked the Review Officer’s decision because the Review Officer applied the wrong test (“clearlyunreasonable” as opposed to “reasonable”).

Further, the Review Officer’s finding that the 20% contingency was the minimum percentagefor cases taken on a contingency basis was unsupported by evidence or authority and failed to account for other considerations relevantto the reasonableness of the contingency fee – such as the actual amount of time taken and how quickly and easily settlement wasachieved. [11] Having revoked the Review Officer’s decision, the chambers judge asked for further written submissions on what the applicant’srecoverable fees should be.

A further hearing took place before the chambers judge on November 27, 2020, and the chambers judge hasreserved his decision. [5] The Court notes that notwithstanding extensive written Reasons in the First Decision; over three scheduled days of oralhearings on two occasions on February 20 to 21, 2020 and November 27, 2020; and in Rath’s December 2020 appeal to the Court ofAppeal, no complaint or allegation was made with respect to bias. Indeed, after the Second Reasons were issued, Rath’s initialsubmissions dealt only with the possible publication of the CFA as a

Schedule to the Second Reasons, which the Court advised would nothappen, and which issue Rath has not revisited. Bias was only ever raised by Rath in the current application filed on April 12, 2021,heard on April 30, 2021.

While the Court might have hoped that the Bias Application and Brief in support of that Application would havecorrected a number of misstatements and contradictions contained therein by the time the matter was argued orally several weeks later,such was not the case, and these misstatements and contradictions are identified here in this Memorandum of Decision. [6] The Court’s two sets of Reasons issued in October 2020 and March 2021 essentially cover the same ground, the only majordifference being the second set of Reasons concludes by determining that a $3 million dollar final award would be issued to Rath.Accordingly, it is noteworthy that notwithstanding three prior scheduled days of hearings and three earlier sets of written submissions,Rath never raised the issue of a reasonable apprehension of bias to this Court until his legal fees were reduced by over $8.5 milliondollars. [7] The law is clear that bias must be raised at the first opportunity, and that one cannot secretly nurse a reasonableapprehension of bias for the purpose of raising it in the event of an adverse result, as was stated in Bassila v Canada, 2003 FCA 276 atparas 10 and 11.

In any event, the law is clear that bias must be raised at the first opportunity. A party who believes that the presiding judge has created areasonable apprehension of bias must make that position known at the first opportunity. One cannot secretly nurse a reasonableapprehension of bias for the purpose of raising it in the event of an adverse result.

On this point see In re the jurisdiction of a Humanrights tribunal, (FCA), [1986] 1 F.C. 103 (F.C.A.), where the following appears: However, even apart from this express waiver, AECL's whole course - of conduct before the Tribunal constituted an implied waiver ofany assertion of a reasonable apprehension of bias on the part of the Tribunal. The only reasonable course of conduct for a partyreasonably apprehensive of bias would be to allege a violation of natural justice at the earliest practicable opportunity.

Here, AECLcalled witnesses, cross-examined the witnesses called by the Commission, made many submissions to the Tribunal, and took proceedingsbefore both the Trial Division and this Court, all without challenge to the independence of the Commission. In short, it participated fullyin the hearing, and must therefore be taken impliedly to have waived its right to object. For these reasons, the application for judicial review will be dismissed with costs.

Legal Test for Recusal [8] Zak v Zak, 2021 ABQB 360, recently dealt with the legal test for recusal, which is the same test for reasonable apprehensionof bias, as follows at paras 43 and 44: [43] Justice Slatter in Alberta Health Services v Wang, 2018 ABCA 104 succinctly stated the test for recusal at paragraph 4 as follows:

... A recusal should occur if a reasonable person, properly informed, viewing the matter realistically and practically, and having thoughtthe matter through, would think it more likely than not that the judge, whether consciously or unconsciously, would not decide fairly. Inother words, if there is an objectively reasonable apprehension of bias the judge should recuse him or herself. [44] The legal test for recusal is the same as the test for reasonable apprehension of bias.

I set out the test at paragraphs 10-12 of mydecision in the first recusal application, and for ease of reference, I repeat it here: The test for a reasonable apprehension of bias is well settled and undisputed.

As was noted by the Supreme Court in Yukon FrancophoneSchool Board, Education Area #23 v Yukon (Attorney General), 2015 SCC 25 at para 20, [2015] 2 SCR 282, the established test forreasonable apprehension of bias is: "...what would an informed person, viewing the matter realistically and practically - and having thought the matter through - conclude.Would he think that it is more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly...[citation omitted]" In Feeney v Simon, 2020 ABQB 641, Rooke ACJ succinctly summarized the legal principles with respect to bias at paras 15 to 21, thekey aspects of which are as follows: A simple allegation of bias or misconduct is not a basis for judges to remove themselves from a matter.

The strong presumption of judicial impartiality is not easily displaced. Appeal courts do not impute bias lightly; judges are presumed to act impartially. An unfavourable result or conclusion by a judge in relation to a party is not in itself a basis to conclude there has been bias or prejudice. Repeated unfavourable results also are not evidence of bias, particularly in the context of case management. Associate Chief Justice Rooke then quoted a useful

summary of the relevant legal principles that guide how a court evaluates allegationsof judicial bias taken from the New Brunswick Court of Appeal’s decision in Bossé c LaVigne, 2015 NBCA 54 at para 7, at para 21 ofhis own reasons: The elements of this objective test are that (1) the person considering the alleged bias must be a reasonable person, not one who is verysensitive or scrupulous, but rather one who is right-minded; (2) the person be a well informed person, with knowledge of all the relevantcircumstances; (3) the apprehension of bias itself must be reasonable in the circumstances of the case; (4) the situation must be fullyexamined, not just the face of it; and, the examination must be one that is both realistic and practical; (5) the inquiry begins with a strongpresumption of judicial impartiality and looks to determine whether it has been displaced such that there is a real likelihood orprobability of apprehension that the judge would not decide the case fairly on the merits; ... [Underlining emphasis in original.] [9] Rath’s current Brief alleging bias at para 26 notes: The reasons for judgment issued by a judge constitute one of the relevant aspects of proceedings that may give rise to a reasonableapprehension of bias.

In Sawridge Band v R, the Federal Court of Appeal noted that, the alleged reasonable apprehension of bias wasbased on the “mode of expression of the judge’s reasons when considered against the background of the trial.” [10] The Sawridge Band v Canada, (FCA), [1997] 3 FC 580 decision referenced by Rath is noteworthybecause the Federal Court of Appeal discussed the high bar for finding bias, in the context of the direct relationship between the trial andthe reasons for judgment at paras 12 to 22: Analysis It is first important to underline that no actual bias has been alleged on the part of the Trial Judge, nor does this Court find such bias.

It should also be observed that, when faced with an appeal based in part on reasonable apprehension of bias in the Trial Judge, anappellate court must approach such assertions with great caution. It is not uncommon for unsuccessful litigants, in reflecting on theirloss, to attribute it to bias or an appearance of bias on the part of the trial judge. An appeal court, without very good justification, mustnot use the route of apprehended bias to nullify decisions of a trial judge which it could not otherwise review.

A wide margin ofdiscretion must be left to a trial judge in his conduct of a case, and his procedural decisions should not be interfered with unless there is aclear error of principle. Findings of fact should not be set aside in the absence of "palpable and overriding" error. It must further be keptin mind that in a trial of this length, many comments will be made in a variety of contexts which, when isolated, may appear to betendentious. Some judges will engage in Socratic dialogue which may seem to the uninitiated to reveal a predisposition.

It must also be observed in respect of this case that there were few if any instances brought to our attention where counsel made anyobjection during the trial, on the basis of apprehended bias, to the Judge's interventions or his conduct of the case. It is also fair toobserve, however, that many of the complaints of apparent bias are based on the mode of expression of the Judge's reasons whenconsidered against the background of the trial. The reasons were not, of course, available to counsel for comment prior to judgment.

According to the jurisprudence, a reasonable apprehension of bias may be said to exist where there is a reasonable apprehension "that thejudge might not act in an entirely impartial manner".7 What is required is not a "possible" apprehension but a "reasonable" apprehension;that is, the opinion that a reasonably well informed person, viewing the matter realistically and practically, might form of the situation.

Using this test and reading many of the Judge's interventions in context we do not suppose that a reasonable observer would haveunderstood the learned Trial Judge to harbour negative views about Aboriginal people as such. Indeed, as noted earlier, the disputebefore him involved in reality conflicting claims among various segments of the Aboriginal community to control or to claim

membership in Indian bands. Critical comments must also be read in association with his many expressions of respect for Indian witnesses and culture. We do think, however, that a reasonable observer would have formed the impression that the Trial Judge was strongly opposed to a special regime for some or all Aboriginal peoples different from the system of rights and responsibilities applying to other Canadians.

If this apprehension were formed, it could have led such an observer to think that the Trial Judge was thereby influenced in his conclusion that no Aboriginal right had existed for the plaintiff bands to control their own membership or if it had, the right had been extinguished prior to the adoption of

section 35 of the Constitution Act, 1982 . Such an oberver might well have reflected on the fact that, ever since the adoption of the Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.),

Schedule to the Constitution Act, 1982 , Item 1) [R.S.C., 1985, Appendix II, No. 5]], section 91(24) thereof has given Parliament the power and responsibility to make special laws for Indians in distinction from other persons. This power and responsibility, of necessity, has always required some criteria for defining Indians in order to distinguish them from other Canadians as subjects of legislation. He would further recall that other constitutional documents, treaties and court decisions have distinguished between Aboriginal peoples and others, and

section 35 of the Constitution Act, 1982 has now guaranteed existing Aboriginal rights as rights pertaining to Indians, Inuit, and Métis. The existence of special status for Aboriginal peoples is, therefore, enshrined in our Constitution. It was not for the Trial Judge to dispute this aspect of Canada's constitutional law. Regrettably, there are a number of passages in the trial transcript and in the Judge's reasons which convey a very negative view of Aboriginal rights or special status for all or some Aboriginal peoples.

A cause for reasonable apprehension of bias is perhaps most vividly raised by the Judge's use of terms such as "racism" and "apartheid" in association with references to any claims"at least, legally supported claims"to distinctiveness or exclusiveness on the part of Indians. For example, while Mr. Roan, a Cree, was testifying on behalf of the Ermineskin Band concerning the traditions and attitudes of the Cree, the Trial Judge observed: There is another way of looking at what he is saying. He can be advocating racism and apartheid, as well as what he is saying from his testimony.

And I just want to say that that's another way of looking at it. It's not a very happy way, but it's another way of looking at what Mr. Roan's testimony has been all about. (Underlining added) [ 11 ] The Federal Court of Appeal in the Sawridge Band case clearly associated the decision reasons with misconduct during the trial. This connection between alleged trial misconduct is also clearly evident in most bias cases (see for example Yukon Francophone School Board, Education Area #23 v Yukon (Attorney General) , 2015 SCC 25 ).

In Rath’s present matter, the Court only received written submissions and heard oral submissions in Chambers, and clearly there was no misconduct, alleged or otherwise, present during the Chambers hearings. [ 12 ] What follows is a discussion of Rath’s multiple grounds for finding bias, and my general response. Most of what Rath says is bias, consists of repeating his previous arguments and rearguing them again, which has little or nothing to do with the standard of review the Court applied, my findings of fact, the ratio decisis of my decisions, or with the functional and contextual reasons that were issued.

During the course of Rath’s myriad of grounds for finding bias (

i) Rath has ignored that the CFA was actually signed and ratified by Tallcree after the October 2015 Federal election (see

Section C); (ii) Rath has alleged the Court found he had committed fraud, which the Court never considered (see para 18 below); and (iii) Rath misquoted some of the Band Administrator Mr. Cardinal’s (“Cardinal”) evidence before the RO resulting in a misleading submission about Rath’s openness to renegotiate the 20% contingency fee, which openness according to Cardinal did not exist (see

Section P). [ 13 ] Many of the same considerations argued by Rath currently, were previously before the RO, and were considered again in my two sets of Reasons. Instead, Rath has chosen to scrutinize my Second Reasons, finely parsing sentences, in a seemingly never-ending technical search for bias. Ultimately, Rath’s bias application is really nothing more than a collateral attack on my decision. Rath’s Grounds for Finding Bias Analysed A.

Rath’s Ability to Undertake Complex Treaty Claims Litigation [ 14 ] One ground of bias takes issue with para 48 of my Second Reasons which deals with my observation that there appears to be an absence of any specific record of Rath ever having undertaken complex proceedings in relationship to treaty claims litigation which can take many years if not decades to complete. [ 15 ] Currently, even after the third opportunity in which Rath has had to clarify this point, his evidence in this regard is essentially based on his own testimony before the RO that he is regarded as “being one of the leading treaty and aboriginal rights lawyers in Canada” having argued cases as every level of Court in Canada with respect to treaty and aboriginal rights, and his CV.

Rath’s CV lists a number of articles and lectures on these issues, as well as a list of his trials and hearings supporting First Nations rights, however, much of what is contained in Rath’s evidence on this point consists of his own assertions. [ 16 ] In both sets of written Reasons, specifically at para 35 of the First Decision, and paras 29 and 48 of the Second Reasons, the Court recognized and accepted that Rath has a specialized knowledge in this area and settled Tallcree’s claim quickly, notwithstanding this type of litigation can be very complex and can take many years or even decades to complete. [ 17 ] It was also very unhelpful for Rath in his current argument at pg 12, para 34, footnote 43, of his Brief to simply refer to 103 unrelated results from a Westlaw Next database, which the Court could not open in any event.

Ultimately, Rath’s litigation record on unrelated matters is really of little importance.

[ 18 ] Furthermore, it was completely unwarranted for Rath to then in the following para 35 of his current Brief, to accuse the Court of finding that Rath had committed fraud in this matter, as a result of these impugned remarks. There was never any reference or inference with respect to fraud in any of my decisions with respect to Rath and his CFA. [ 19 ] Also, no evidence was presented about the nature and the complexity of the argued cases and litigation that Rath now says he undertook in other matters.

The Court had previously noted that no expert opinion evidence was ever presented about the quality and complexity of the Statement of Claim Rath filed in this matter only a few weeks after the CFA, as was stated in paras 27 and 28 of the Second Reasons: [27] Tallcree’s agricultural settlements negotiation had been undertaken by several previous law firms without success for over a decade.

Rath now notes that his efforts on Tallcree’s behalf included issuing a lengthy Statement of Claim, and other formal steps Rath took eventually brought this matter to a final resolution after more than a decade of delay. [28] I do note however that no expert evidence was ever presented about the quality and complexity of the pleadings and legal proceedings Rath initiated for Tallcree. [ 20 ] One can reasonably inquire about the amount of time and expertise that was involved in producing a 51-page Statement of Claim in a few weeks after being retained in a multimillion-dollar treaty litigation land claim matter in a decade’s old litigation.

Rath’s evidence before the RO under questioning from his lawyer, Mr. Molstad, stated at pg 63, lns 24 and 25 of the Transcript, was that it was not a generic Statement of Claim.

His own time records found at pg 173 of the Supplementary Record show he spent 14.5 hours on the Statement of Claim for a total of $5800, all recorded a few days before Rath issued it on December 9, 2015. [ 21 ] Rath’s Statement of Claim referred to some matters from hundreds of years ago that many lawyers/experts and the Court would generally be non-conversant with, especially since many of the references seem generic and seem to have limited or no specific relevance to Tallcree’s claim against the Federal government.

Rath should have realized this and provided some context to his efforts and achievements in the area of treaty and aboriginal rights generally, and specifically on behalf of Tallcree, if he expected the Court to fully appreciate them.

This is particularly important given that the context of my impugned comments was whether or not Rath has actually undertaken such complex proceedings which took years if not decades to complete, not whether he had undertaken any proceedings in his acknowledged area of expertise, which the Court had already recognized at para 35 of the First Decision and paras 27 and 28 of the Second Reasons. [ 22 ] Furthermore, the Court made no finding as to Rath’s ability or inability to undertake such complex proceedings.

The Court simply pointed out that the submissions did not appear to confirm that Rath had ever undertaken such complex proceedings, and that the reported cases that the Court was referred to during oral argument by counsel did involve fee disputes with other First Nations. [ 23 ] If there was a failure to fully appreciate Rath’s abilities and accomplishments, it is Rath’s failure to effectively communicate the complex proceedings he had undertaken. [ 24 ] A good example of how Rath could have made his point clear to the Court involves his own counsel, Mr.

Molstad, who during the course of the first two-day oral argument referred to his own experience as counsel in complex First Nations proceedings that took approximately a decade to complete. When this was supplemented with a case reference that showed that Mr. Molstad had been involved for many years in such a complex proceeding, it was clear of that which he spoke. [ 25 ] It should be open to the Court to point out the evidence, or lack there of, with respect to any relevant, or potentially relevant, point.

In any event, what is important with respect to Rath’s claim on behalf of Tallcree’s behalf in this matter against the Federal government is that Rath did not conduct any complex proceedings lasting many years or even decades. Indeed, Rath issued a Statement of Claim a few weeks after the CFA on December 9, 2015, and invited dismissal of the Statement of Claim without personal appearance before a Federal Court prothonotary without costs on July 10, 2017.

It appears no material steps to advance that Statement of Claim were ever taken. [ 26 ] Additionally, the ratio decisis of my decision in this appeal as found in my October 8, 2020 First Decision and in the Second Reasons has nothing to do with Rath’s complex proceeding experience nor indeed with any of his previous dealings with other First Nations.

The ratio decisis of the First Decision is found at paras 45 – 51: [45] The standard of review herein is such that I can vary or revoke the RO’s decision if the RO made a “palpable and overriding error” with respect to a question of mixed fact and law; and “correctness” with respect to an extricable error of law or principle, or with respect to the $11.5 million-dollar fee award that betrays such error in principle. [46] In my analysis, the reasons and decision of the RO are reversible for “correctness”, and also contain “palpable and overriding errors” of mixed fact and law. [47] Firstly, Rule 10.9 mandates a review based on whether the CFA is “reasonable”, not whether it is “clearly unreasonable”: 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. [48] Requiring that the CFA be shown to be “clearly unreasonable”, is definitely a lower standard for Rath to meet.

Determining the “reasonableness” of the CFA is not the same as the RO’s decision that the resulting fee of $11,518,075 was not “unexpectedly unfair” or “clearly unreasonable” on the facts in this case. [49] The RO’s decision that the CFA was reasonable because of the resulting fee “was not unexpectedly unfair” or “clearly unreasonable” on the facts in this case is not the same as determining the “reasonableness” of a retainer agreement pursuant to Rule 10.9. This decision by the RO represents a reversible error of law.

[50] Secondly, it was also a palpable and overriding error for the RO on the facts as he found them to set a 20% contingency feeessentially as a minimum. Setting a 20% contingency as a reasonable low-end minimum percentage without question and without anycaselaw precedent, automatically justified the $11.5 million-dollar legal fee in the RO’s mind, as of course it was a simply mathematicalcalculation (20% x Amount Recovered).

However, accepting 20% as a minimal contingency fee ignored other factors critical in thedetermination of the reasonableness of the CFA, for example, the actual time Rath spent on the file, and how quickly and how easily thesettlement was reached. I note as well that Rath was a small six-lawyer law firm practicing in Priddis, Alberta, at all material timesherein, and I have found that most of the work product found in the Record are actually simple emails created and signed by hisparalegal. [51] I conclude that both of the RO’s decision on these two issues constitute reversible errors.

There is no proper legal basis orfoundation for the RO to have limited or fixed his low-end minimum contingency fee amount at 20% of any amount recovered, which iswhy the RO’s decision resulted in an incredibly high legal fee that even he had never seen before, as he stated.

Furthermore, the RO’sstandard of “clearly unreasonable” is not the “correct” legal standard with which to review the CFA. [27] Similarly, the decision in the Second Reasons reads at para 63 – 83: [63] There are also numerous authorities in this Court with respect to determining a fair and reasonable contingency fee: see forexample MS v DM, 2014 ABQB 702; Downes v Botan, 2018 ABQB 341; Athwal v Mather, 2019 ABQB 801. What these cases andothers describe is a process in which the Court exercises its “discretion” according to certain parameters in determining a fair andreasonable contingency fee. H.

Determining a Fair and Reasonable Contingency Fee [64] The authority given in the previous R 619(4) to vary, modify or disallow the agreement is now found in R 10.18(3)(

b) of theRules of Court which reads as follows:

(3) On considering a question referred to it, the Court may make any order it considers appropriate in the circumstances, including . . . (

b) with respect to a review of the terms of a retainer agreement, an order approving the agreement or varying or disallowing theagreement in whole or in part. [65] Having found that the CFA in question is unreasonable, a reasonable fee can now be determined pursuant to R 10.27(1), whichfactors include: 10.2(1) Except to the extent that a retainer agreement otherwise provides, a lawyer is entitled to be paid a reasonable amount for theservices the lawyer performs for a client considering (

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

b) the client’s circumstances, (

c) the trust, estate or 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. [66] Similarly, one could apply the factors as stated at paras 38 through 40 from Rusk v Medicine Hat (City of), 2001 ABQB 1020: [38] Whether, and to what extent, a contingency agreement produces a result which is unreasonable has most often been determinedaccording to the factors set out in Yule v.

Saskatoon (1955), (SK QB), 16 W.W.R. (N.S.) 305 (Sask.Q.B.) at 313, asfollows: The circumstances to be considered in arriving at the proper amount are the extent and character of the services rendered; the labour,time and trouble involved; the character and importance of the litigation in which the services were rendered; the amount of money or thevalue of the property to be affected; the professional skill and experience called for; the character and standing in his profession of thecounsel; the results secured, and to some extent at least the ability of the client to pay. [citations omitted] [39] Essentially those same factors govern all fee accounts of lawyers in Alberta by reason of Rule 613 of the Rules of Court whichprovides: 613.

Barristers and solicitors are entitled to such compensation as may appear to be a reasonable amount to be paid by the client for theservices performed having regard to (

a) the nature, importance and urgency of the matters involved, (

b) the circumstances and interest of the person by whom the costs are payable, (

c) the fund out of which they are payable,

(

d) the general conduct and costs of the proceedings, (

e) the skill, labour and responsibility involved, and (

f) all other circumstances, including, to the extent hereinafter authorized, the contingencies involved. [40] In

summary, a fair and reasonable legal fee in achieved on a case by case basis. The factors and considerations outlined in theauthorities reviewed above guide me in terms of methodology. I must reach a reasonable fee based on all the circumstances of this case.According to case law, I must express reasonable fees in a dollar amount and not a percentage. [67] Having reviewed these R. 10.21 and Rusk factors, I find that these factors are not material considerations in this matter becausethey apply when dealing with lawyers acting as legal counsel in a typical adversarial case, which is not the case here.

The over $11.5million dollars in legal fees that Rath received as a result of the CFA as found by an experienced RO, was a high fee that he had neverpreviously seen before.

This is because unlike all the previous cases that the RO was dealing with, this CFA was substantially differentfrom any motor vehicle accident CFA and settlement, which is typically what RO’s deal with on a day-to-day basis, year in and year out. [68] Firstly, there are virtually no $58.5 million dollar settlements arising out of a motor vehicle accident. [69] Secondly, the CFA was a legal document meant to deal with legal services performed by lawyers, which is basically not whatRath did in substance, because his success in this CFA was largely based on political representations including to the top political leaderof the Country, who happened to be the main decisionmaker of the Defendant Government of Canada in this case. [70] Thirdly, not only as the RO stated in his decision was liability not an issue in this CFA, Rath could actually quote from theDefendant Canada itself the Prime Minister’s statement that as government policy, claims like Tallcree’s had to settled for historical andmoral reasons.

Accordingly not only was liability acknowledged, it was indeed mandated by the Defendant itself as a matter of policyand conscience. [71] Fourthly, unlike virtually all defendants, the Defendant Canada had unlimited financial resources to work with to settle claimslike Tallcree’s. [72] Fifthly, the Record in this appeal is striking in that there was virtually no typical “negotiations” that take place in typical lawsuitsand litigation, just fortuitous circumstances and discussions at the highest levels of the Defendant Canada, including meetings with thePrime Minster and his staff. I.

Some Comparators [73] As previously described, the parties were given a chance to assist the Court in determining Rath’s final award. In this regard, theparties did not provide the Court with any comparators, other than Rath submitting that his fee should remain as previously determinedof over $11.5 million dollars, and Tallcree’s acknowledging that a one to two million dollar contingency fee would be fair to Tallcree. [74] However I conclude that in order to determine the final award to Rath, one can go beyond just determining a fair and reasonableamount.

I can consider how lawyers are typically remunerated on an annual basis, particularly given the unique nature and size of thefinal Tallcree settlement, and given how the matter was resolved so quickly. In order to determine the final award to Rath, it is alsohelpful to compare how non-lawyers are compensated based on commissions earned and payable for large sized transactions. i. Commissions payable [75] I will firstly apply a comparator to what Realtors/Brokers earn as middlemen or facilitators as a typical percentage commission orfinders fee.

The Law of Evidence in Canada Fifth Edition, Sopinka, Lederman and Bryant, at §19.28, pg 1397 describes how businessand trade practices notorious generally or in the community are a recognized category of facts which do not require formal proof thereofand which can be judicially noticeable: 19.28 Another recognized category is that of business and trade practices notorious generally or in the community. In Sutherland v Bell,Beck J pointed out that: It is a matter of common experience . . .

We are not to decline to make use of our own knowledge of such ordinary methods of businessas are matter of common experience. [(1911), (AB CA), 3 Alta. L.R. 497, at 498, 18 W.L.R. 521 (Alta.C.A.). See also Davey v. Harrow Corp., [1957] 2 AllE.R. 305, [1958] 1 Q.B. 60 (C.A.) Gollan v. Edmonton Credit Co., (AB KB), [1938] 1 W.W.R.670, [1938] A.J. No. 4(Alta. Dist. Ct.); Poole v Smith’s Car Sales (Balham) Ltd., [1962] 2 All E. R. 482, at 486, [1962] 1 W.L.R. 744 (C.A.); R v Pinno, (SKDC), [1925] 1 W.W.R. 737, [1925] S.J. No. 4 (Sask. Dist.

Ct.).] [76] Similarly, Real Estate commissions are well known by anyone who has ever bought or sold a property, and those commissionspayable upon closing usually average around 5%. In this comparable, I am dealing with a $58.5 million dollar settlement, and given thatthere are relatively few $58.5 million dollar real estate transactions, a 5% award would seem quite reasonable, since higher value realestate transactions usually attract a lower percentage commission.

Applying a 5% total award on a $58.5 million dollar transaction wouldresult in a fee payable of approximately $3 million dollars in this particular case. [77] A $3 million dollar award to Rath is still substantially more that Rath’s after the fact estimated time records of under $400,000. Itwould also result in a $300,000 a month retainer if you consider the 10-month period over which most of this single file was settled over,and close to a $400,000 a month retainer if you consider it was essentially completed within eight months. ii. Lawyer and Judges Salaries

[78] Additionally, the Court could apply another measure based on what top producing lawyers at the height of their careers earn to determine Rath’s final CFA award. These top producing lawyer’s salaries are also used to determine Judges compensation.

At the time of the CFA in October 2015, Judges in Canada were earning approximately $300,000 a year; and the top producing lawyers at the 75th percentile of Canadian lawyer’s earnings were estimated to be receiving $400,000 a year in salary: See paras 66 and 73 of the Report of the 5th Quadrennial Judicial Compensation and Benefits Commission established by the federal Minister of Justice on December 18, 2015 (“Report”). [79] This Commission was established at virtually the same time Rath wrote to the same Minister of Justice on Tallcree’s behalf in December 2015.

The Commission’s Report was completed within the same approximate nine-month period that Rath essentially completed his negotiations on Tallcree’s behalf. Accordingly, the salary and benefits analysis found in the Report is roughly concurrent in time to the CFA and to Rath’s negotiations on Tallcree’s behalf. [80] Rath’s $11.5 million dollar account would be the equivalent of the total earnings of a Judge and top earning lawyer over his/her entire combined working career of between 30 to 40 years.

A $3 million dollar fee payable to Rath would amount to approximately eight years of total annual compensation paid to a top producing 75th percentile Canadian lawyer, or 10 years of total compensation paid to a Federally appointed judge. By comparison, Tallcree’s single file took approximately eight to 10 months essentially to settle. [81] In comparing Rath’s fee payable to the salaries of judges and top producing lawyers in the 75th percentile in Canada, no provision has been made for Rath’s overhead expenses.

Since Rath practices in a small six-person firm in Priddis, Alberta, it can be safely assumed that his overhead expenses would not be significant. [82] Even if it was close to the 50% overhead factor incurred by large law firms in major metropolitan areas, this expense factor would be more than offset by the fact that Rath received his $11.5 million dollar fee in this matter in early 2018. Therefore no provision has been provided for the earnings that Rath would have received during the past two or three years on his $11.5 million dollar fee.

During the past three years, Rath’s pre-tax income on the $11.5 million dollar fee could amount to over a million dollars a year, assuming an annual 10% rate of return.

Over the three year period since Rath banked his $11.5 million dollar fee, this additional income could amount to $3 million dollars pre tax. [83] Additionally, Rath operates through a professional corporation, so there would be additional tax advantages available to him which are not available to salaried lawyers in larger firms and not available to judges, reducing both his overhead factor and his taxable income. [ 28 ] Therefore, my decisions in both written Reasons were clearly based on a number of factors that had nothing to do with whether Rath did or did not, or could have or could not have undertaken major complex proceedings, nor was it based on fee disputes that Rath had with other parties in other cases. [ 29 ] In several sections of Rath’s Bias Brief, Rath asserts that the Court damaged his reputation, and even made defamatory remarks about him.

The Court was not interested in damaging or enhancing Rath’s reputation.

However on balance, it was more likely than not that the Court’s decisions in these matters enhanced Rath’s reputation given that he was able to achieve an $58.5 million dollar settlement from the Federal government within a short period of time with respect to a long standing treaty claim virtually without resorting to any litigation, essentially by engaging in direct contact with the political advisors of the Federal government and indeed the Prime Minster of Canada himself, that same Prime Minister still being in office almost six years later, leading a government that will remain in power for the foreseeable future.

B. Professional Litigant [ 30 ] The next complaint is that Rath was inaccurately and unfairly criticized as being a “professional litigant”. Firstly, it is important to recognize that this comment was made when the Court wrote to counsel on October 29, 2020 about the upcoming scheduled November 30, 2020 hearing day, in response to Rath’s request with respect to scheduling the second Oral Hearing. Rath’s repeatedly objected to being limited in the scope of new evidence that he could present as part of the second hearing that was contained in the First Decision.

During the course of Rath’s repeated objections to be limited in the scope of new evidence that he could present as part of the second Hearing, the term “professional litigant” appears. [ 31 ] In that context, and in that context only, the Court pointed out that Rath being a professional (that is, a lawyer), and being a litigant (that is, being the other party in this matter), Rath knew that he was obligated to put his best foot forward initially before the RO, and because the litigation directly involved his own file, there was nothing that Court could see was prejudicial in restricting his ability to bring fresh evidence.

Furthermore as the Court observed, being both a professional and a litigant, Rath would know how to bring an application to admit fresh evidence if there was such prejudice. Rath’s filed Record in this matter already consisted of three volumes of filed materials totalling 753 pages, as well as hundreds of pages of written argument, and had three days of oral submissions reserved before me. [ 32 ] The Court has broad powers to conduct and manage its proceedings, and in the course of exercising these broad powers, made the relevant reference to Rath only in the context of my Ruling with respect to fresh evidence.

In this context, the Court knows of no reason why Rath takes such great exception to the term “professional litigant”, save and except for his own sensitivity. The term has no pejorative meaning that the Court is aware of other than to accurately portray Rath as a professional, who is also a litigant in this matter. C. Rath Argues that The Court Required Him to be a Clairvoyant [ 33 ] Rath’s fourth grounds for finding bias reads: The Chambers Judge attributed to Mr. Rath knowledge of the outcome of a Federal Election when there is nothing on the Record to support this finding and when it was impossible for Mr.

Rath to have this knowledge.

[ 34 ] Rath has repeatedly ridiculed the Court’s observations concerning his knowledge of major Federal political developments which occurred at the time of the CFA.

This requirement that Rath be a clairvoyant is again repeated as a grounds of bias at para 55 of Rath’s current Brief which reads: To suggest that the Applicants were clairvoyant and could have predicted the outcome of the federal election before it took place is improper and clearly demonstrative of a reasonable apprehension of bias. [ 35 ] This is notwithstanding that the Record clearly indicates that the result of the federal election was known before the CFA was ratified and signed by Tallcree’s Band Council. [ 36 ] For months before the CFA, the body politic of the country would have been acutely aware of the election, if only as a result of the duty and responsibility of every Canadian to meaningfully participate in the election campaign that officially began in July.

This would have been particularly important to Rath, who possessed obvious and demonstrated political acumen. Although Rath filed at pgs 18, 27, 36 and 45 of his Supplemental Record a fully executed CFA dated October 14, 2015, initialled by one person (See

Schedule A herein), the CFA was not actually fully executed and passed by Band Council until October 23, 2015, four days after the October 19, 2015 election. Rath’s own copy of the Band Council Resolution tendered in his Supplemental Record at pg 17 shows that multiple Councillors only authorized the CFA on October 23, 2015 (See

Schedule B herein). The CFA attached as Appendix A to the Band Council Resolution at pg 26 of the Supplemental Record shows the same Band Council signatories accepted and agreed to Rath’s CFA on October 23, 2015 (See

Schedule C herein). [ 37 ] It is trite law that Tallcree is not a “person” in the law, but rather a First Nation that had to authorize the CFA through a Band Council Resolution. Rath’s lawyer, Mr. Molstad, at pg 32, ln 18 of his submission to the RO, stated that the Band Council Resolution approving the CFA was dated October 23, 2015, which is obviously after the October 19, 2015 federal election. Why is this Important? [ 38 ]

Schedule B to my decision herein shows the Band Council Resolution of October 23, 2015 has a stamp November 6, 2015 which appears in the bottom right corner. This could be important because November 6, 2015 is likely the date Rath received the Resolution back from Band Council. November 6, 2015 is also several days after the entire Federal Cabinet had been appointed by Order In Council, and one day after the entire Cabinet had been sworn in on November 5, 2015.

Therefore, not only did Rath have actual knowledge of the election results at the time of the CFA, he may have also known who his political ministers and their political advisors were by the time the fully executed CFA was returned to him.

The importance of this knowledge is illustrated by paras 44 – 49 herein where Rath outlines to the RO the various lobbying efforts he made to political advisors and indeed to the Prime Minister of Canada himself within a few months of his first term after the election. [ 39 ] A fundamental component in determining the “reasonableness” of the CFA was “the circumstances that existed when the CFA was entered into” on October 23, 2015 (See r 10.19(2)).

The best evidence of these circumstances is established by Rath’s own words when he wrote to the political Ministers on December 10, 2015, a few weeks after the CFA, and a month after the Ministers were appointed, when he quoted extensively from the Prime Minister himself, criticized the previous Harper government, and pointed out the dire emergent circumstances of Tallcree: Pursuant to Prime Minister Trudeau’s statement on December 8, 2015 that “(i)t is time for a renewed, nation-to-nation relationship with First Nations peoples, one that understands that the constitutionally guaranteed rights of First Nations in Canada are not an inconvenience but rather a sacred obligation”, our client’s view is that it would be not only immoral and in bad faith, but in breach of the Honour or the Crown and the Crown’s Constitutional and fiduciary duties for the Government of Canada to continue to withhold monies that it has acknowledged for over 10 years are owing.

In continuing to do so, the Government would continue along the path of its predecessor in creating an unfair advantage in settlement negotiations by withholding funds from some of Canada’s poorest citizens as a means of extracting an unfair or unreasonable settlement on the basis of poverty that Canada itself has created and supported through its previous refusals to honour its “sacred obligations”. . . . Our clients are in dire economic circumstances due to the rampant unemployment related to the collapse of the Alberta Oil & Gas Exploration Industry.

Tall Cree First Nation requires this money urgently on an emergency basis. It is the respectful view of our clients that a failure to immediately undertake payment of this amount would be nothing more than a continuation of the immoral and unlawful conduct of the previous 10 years of failed First Nations policy. . . . On behalf of Tallcree First Nation, we request your most immediate response to this letter. (Underlying added) D.

Rath alleges that the Court ignored the fact findings of the Review Officer, improperly substituted them with his own and raised and considered new issues that were not before the Review Officer or the Court, without giving the Applicants the opportunity to respond and restricting the Applicants’ ability to tender evidence in relation thereto.

[40] How Rath dealt with Tallcree’s claim and earned his $11.5 million dollar fee that he claims to be entitled to were equally andfully available to both the RO and to the Court. The RO received evidence concerning the timeline and political representations that werebeing made in this matter. The RO had evidence that there was a Statement of Claim issued by Rath, then the political meetings andletters, then Canada’s offer to settle.

The RO raised the question early on in the proceedings at Transcript pg 26, lns 1 – 4, that there wasan interesting point being made as to whether the Contingency Fee applied when the wording of the Contingency portion of theAgreement seemed all to relate to litigation, and there was not really any litigation.

The RO again noted the issue concerning the lack ofany litigation at Transcript pg 33, lns 15 – 34 when he noted that there was the issuance of a Statement of Claim, a negotiation processand then the resolution. [41] The RO also referred to several aspects from Morrison v Rod Pantony Professional Corporation, 2008 ABCA 145 at paras12 and 25-27, in commenting on Rath’s CFA: [12] With respect to contingency fee agreements, the court has a dual jurisdiction: (

a) It has its normal jurisdiction to interpret and enforce contracts; and (

b) It has an exceptional jurisdiction under R. 619(4) to “vary, modify or disallow the agreement”. The power to vary a contract found in the Rule is not one available to the court at common law. . . . [25] Retainer agreements are obviously in a special category. The client is negotiating an agreement with a person (the solicitor) thatthe client would usually look to for advice on such matters. In negotiating the agreement the parties are adverse in interest, contrary tothe normal state of affairs where the solicitor is bound to represent the client’s interest.

There is also an imbalance of information andknowledge, because the solicitor will be more familiar with the terms and operations of the retainer agreement than the client. It isundoubtedly for those reasons that solicitor-client contracts are reviewed by the court, whereas the court will not conduct that sort ofanalysis of ordinary contracts. The courts will obviously not tolerate any sharp practice by the solicitor, or any patent unfairness. [26] That being said, the courts should not set aside agreements between solicitors and clients without good cause.

Contingency feeagreements are an important device for providing access to justice to impecunious clients: Re Cogan (2007), (ONSC), 88 O.R. (3d) 38 at paras. 37, 59-62. The Rules of Court require that contingency agreements be in writing, and that they be executedwith a significant degree of formality. This is obviously designed to eliminate uncertainty and disputes over the exact provisions of theretainer agreement. In order to promote certainty, the terms of the written retainer agreement should be given effect, unless those termsare manifestly unfair or confusing.

In conducting the fairness analysis, rhetorical language about “heavy burdens” on solicitors is notparticularly helpful. [27] The Rules do not provide a test for determining whether the court should “vary, modify or disallow the agreement”. There is noclosed list of factors that should be considered. The following considerations will often arise: (

a) As of the date the agreement was signed, was the agreement unfair or oppressive in its business terms, having regard to the risks,facts and prospects known to the parties at that time? (

b) Did the lawyer run an unusually high or low risk of not being paid anything for his or her services? (

c) Even if the agreement was fair when signed, did the file evolve in unexpected ways, so that the eventual application of theformula in the agreement results in an unexpectedly unfair fee? Merely because a large fee results will not show unfairness, because areward for the risks undertaken by the solicitor is the basis on which these agreements operate: Re Cogan at paras. 54, 55, 57, 65, 74. (

d) Did the client understand how the agreement would operate to generate the fee? Of relevance here will be the length of theagreement, the technicality of the language used, the education and abilities of the client, indications by the client that he or sheunderstands the arrangement, and other similar factors. The key is that the client should understand how the fee will be calculated inpractical terms, and not necessarily that the client have or be given a technical explanation of how litigation is conducted under theRules. (

e) Was there any unreasonable conduct by either party? (

f) In appropriate circumstances regard may be had to the factors mentioned in R. 613 that are used to assess solicitors’ accounts,although some of these factors will be subsumed in the terms of the contingency agreement and any settlement achieved, and R. 613should not effectively be allowed to displace the agreement.

In assessing “fairness”, the Taxing Officer or judge should remember that fairness is a two-way street, and that the coven[a]nts betweenthe client and the lawyer should be given a meaningful amount of weight during the fairness analysis. (Underlining added) [42] Indeed, the RO discussed a number of aspects of Morrison in his ultimate decision, noting in particular at pg 138, lns 17 – 25of the Transcript, that there was cause to pause if the circumstances changed which might make a reasonable CFA at the time result in anunfavourable fee.

The RO goes on to state in this paragraph that he paused because the amount here was high and although work was putin in getting the result, it was probably not the amount of work that was contemplated by either side, and furthermore while the objectivewas to get things done as quickly as possible, it seemed that Rath’s fee was extremely high. [43] Therefore, the Court did not raise any new issues that were not before the RO.

[ 44 ] Similarly, the RO also had evidence from Rath himself as to the political leverage that he used in these “negotiations” that the court referred to in coming to its decision. [ 45 ] Specifically on pg 76 of the RO’s Hearing, Rath testified that he met with the Canadian negotiating team in Ottawa on March 10, 2016, and then met with the Special Advisor, Bonnie Leask, on June 6, 2016. Rath testified at pg 76, lns 32 to 35 about that June 6, 2016 meeting as follows: Yeah, and that was - - and that was a very keen meeting.

She was a special advisor to the Minister of Indian Affairs and we were using the political leverage we had through our office to obtain that meeting and to achieve the objectives we were attempting to obtain on behalf of the client. (Emphasis added) [ 46 ] After Rath testified about using the political leverage he had with respect to the special advisor to the Minister of Indian Affairs, he then testified before the RO at pg 76, lns 37 to 41, continuing on to pg 77, lns 1 and 2 about his meeting with the Prime Minister himself and his Director of Issues Management, Zita Astravas, on July 15, 2016: Question: And on June - - or July 15, sorry, you met with the Prime Minister?

Answer: That’s correct. Question: That’s July 15, 2016, and what was that meeting for?

Answer: While again it was to ensure that Tallcree’s interests were served by getting them the offer that we were seeking to obtain for them and get them settled - - you know, get them on the same settlement track as our other clients being First Nation. [ 47 ] The next document that the RO is referred to is on pg 77 of the Transcript, lns 4 – 10, was a letter dated August 8, 2016, a few weeks after the meeting with the Prime Minister that notes that the Specific Claims Branch (“SCB”) has decided that they are prepared to negotiate. [ 48 ] The Transcript of the Hearing before the RO then shows Rath’s Report letter to Chief Mineen of Tallcree four days later on August 12, 2016 in which Rath indicates that an offer would be made along certain parameters and that the matter would be resolved within a specific period of time, which essentially it was.

Accordingly, it is clear from this time line that within a few weeks after Rath’s meeting with the Prime Minister personally, the intent to negotiate was stated formally by the SCB in writing, and four days after that Rath confidently predicted a final outcome and timeline to Chief Mineen, which transpired as Rath predicted. [ 49 ] When the matter is resolved but settlement monies are slow in forthcoming, Rath then testified before the RO at pg 90 of the Transcript concerning a letter dated July 18, 2017 he wrote, the reason for which letter Rath says at lns 33 to 35: Well, again, we were using up every political favour we had with the Prime Minister’s office and other senior contacts that we had within the Government of Canada to expedite the payment of funds out to Tallcree - - Tallcree First Nation. (Emphasis added) [ 50 ] Accordingly, the argument that this Court simply raised issues that were never before the RO, without giving Rath the opportunity to respond, is simply not accurate.

There was clear evidence of the political lobbying and strategy used by Rath before the RO and before the Court. [ 51 ] Cardinal also testified that Rath believed he had considerable influence with the Federal government (at pg 120, lns 39 – 41): Mr. Cardinal: The whole government does.

Your client sitting there went over there and snapped his finger and bullied the government – bullied the government into making -- [ 52 ] At paras 59, 60 and 61 of Rath’s Brief, he also takes exception to the proposition that he himself raised in the letter to the Ministers in December 2015 that the previous Harper government was essentially impossible to deal with for the decade they were in office. In essence, Rath is now contradicting his own letter to the political Ministers in December 2015, by now raising issues that he had not raised previously with the Court. E.

Standard of Review [ 53 ] This Court ultimately revoked the RO’s decision because the RO applied the wrong test (“clearly unreasonable” as opposed to “reasonable”), and further, the RO’s finding that the 20% contingency fee was the minimum percentage for cases taken on a contingency basis was unsupported by the evidence or authority, and failed to take into account other relevant considerations as to the reasonableness of the contingency fee, such as how quickly and easily the settlement was achieved. [ 54 ] The standard of review that the Court applied with respect to the RO’s decision was recently referenced with approval by the Court of Appeal in another lawyer account taxation review at para 13 of Betser-Zilevitch v Prowse Chowne LLP , 2021 ABCA 129 as being the proper standard of review to be used: A review officer’s decision is entitled to deference on appeal, given the specialized knowledge and experience of review officers in assessing the reasonableness of lawyers’ accounts: Rocks v Ian Savage Professional Corporation , 2015 ABCA 77 at para 15 .

The standard of review is otherwise governed by the framework established in Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 SCR 235: Extricable errors of law and errors in principle are subject to review on a correctness standard. To the extent that the decision requires an

interpretation of the rules of court and such

interpretation is an extricable error of law, it is subject to review on a correctness standard.

Where the question is one of fact, or mixed fact and law, the standard of review is “palpable and overriding error”: see Tallcree First Nation v Rath & Company , 2020 ABQB 592 . (Underlining added) F. Rusk Factors [ 55 ] In paras 63 and 64 of Rath’s current bias Brief, Rath argues that the Court’s review or lack of review of the RO’s decision with respect to the Rusk factors somehow constitute grounds for bias. The Court’s second set of reasons clearly spelled out the concerns it had with the RO’s analysis of the applicability of the Rusk factors.

This is stated at paras 67 – 72 of my Second Reasons, which reads as follows: [67] Having reviewed these R. 10.21 and Rusk factors, I find that these factors are not material considerations in this matter because they apply when dealing with lawyers acting as legal counsel in a typical adversarial case, which is not the case here. The over $11.5 million dollars in legal fees that Rath received as a result of the CFA as found by an experienced RO, was a high fee that he had never previously seen before.

This is because unlike all the previous cases that the RO was dealing with, this CFA was substantially different from any motor vehicle accident CFA and settlement, which is typically what RO’s deal with on a day-to-day basis, year in and year out. [68] Firstly, there are virtually no $58.5 million dollar settlements arising out of a motor vehicle accident. [69] Secondly, the CFA was a legal document meant to deal with legal services performed by lawyers, which is basically not what Rath did in substance, because his success in this CFA was largely based on political representations including to the top political leader of the Country, who happened to be the main decisionmaker of the Defendant Government of Canada in this case. [70] Thirdly, not only as the RO stated in his decision was liability not an issue in this CFA, Rath could actually quote from the Defendant Canada itself the Prime Minister’s statement that as government policy, claims like Tallcree’s had to settled for historical and moral reasons.

Accordingly not only was liability acknowledged, it was indeed mandated by the Defendant itself as a matter of policy and conscience. [71] Fourthly, unlike virtually all defendants, the Defendant Canada had unlimited financial resources to work with to settle claims like Tallcree’s. [72] Fifthly, the Record in this appeal is striking in that there was virtually no typical “negotiations” that take place in typical lawsuits and litigation, just fortuitous circumstances and discussions at the highest levels of the Defendant Canada, including meetings with the Prime Minster and his staff. [ 56 ] While Rath disagrees with this analysis, it is certainly not grounds for bias. [ 57 ] Furthermore, contained in Rath’s current argument at para 64 of his Brief is a reference to a recent new case from my colleague Woolley J who, according to Rath, applied the Rusk factors in determining the reasonableness of a contingency fee agreement.

The Court is not familiar with my colleague’s decision, but the Court has never suggested that the Rusk factors cannot be applied to determining the reasonableness of CFAs. In any event, the Court does not understand how its comments with respect to the RO’s application of the Rusk factors are in the words of Rath “improper and demonstrative of a reasonable apprehension of bias” as he states at the end of para 64 of his Brief. G.

The Federal Court Action and the “Negotiations” [ 58 ] At para 65 of his current Brief, Rath again refers to commencing an action in Federal Court, which the Court acknowledges is litigation in the regular sense. However as the Court pointed out in its Second Reasons at para 28, there is no indication as to the quality or complexity of his Statement of Claim issued shortly after the CFA on December 8, 2015 from the Hamlet of Priddis, Alberta (see pg 106 of the Supplemental Record).

The time commitment Rath spent in issuing this Statement of Claim in his non-contemporaneous time records was $5,800, all of which was recorded in the days leading up to its issuance.

The Statement of Claim was never proceeded with, and before it was discontinued, no material steps were taken to advance that action except through the political representations. [ 59 ] As for the “negotiations” that Rath undertook in this matter, the Second Reasons at paras 33 to 41 outline how Rath non- litigiously settled the claim: [33] These political connections with the new federal Liberal government soon become quite clear, and were in my view critical to Rath’s success.

In a letter dated August 9, 2016 to Tallcree’s Chief Rupert Mineen, Rath’s paralegal reports on Rath’s efforts beginning in February 2016. The letter describes Rath’s negotiations and Canada’s settlement offer weeks into the new Government, culminating with the July 15, 2016 personal meeting with the Prime Minister and the Prime Minister’s Issues Manager. [34] This letter, which is page 19 of the filed material in the Record, specifically includes the following report by Rath’s paralegal to Tallcree: Mr.

Rath has attended on government officials numerous times this year, primarily to discuss agricultural benefits claims, and Canada’s settlement offer to certain Treaty 8 First Nations on February 8, 2016, including: March 10, 2016 – meeting with Canada’s negotiating team in Ottawa; June 6, 2016 – meeting with Bonnie Leask, Special Advisor, working out of the Office of the Minister of Indigenous & Northern Affairs; July 15, 2016 – meeting with Prime Minster Trudeau and Zita Astravas, Director of Issues Management, followed up with further

correspondence directly to Ms. Astravas. In addition to meetings with Federal Government officials, Rath & Company has met with Provincial representatives and members of the current government to discuss the economic impact of timely and honourable agricultural benefits claims with Alberta’s Treaty 8 First Nations, in an effort to have the Province apply pressure on the Canada. [35] It is clear from these passages that although Rath is the law firm retained pursuant to a CFA, Jeffrey Rath is conducting these negotiations with the opposing party in a non-typical manner.

Rath is personally meeting with the Defendant Federal government representatives within a short period of time very early in the new government’s mandate, and meeting personally with the Prime Minister of Canada and his political advisors. [36] Less than one month after Rath’s meeting with the Prime Minister, Rath himself writes at Page 21 of the Record on August 12, 2016, that the Government of Canada will be making an offer “within the next several weeks”, and “there is a very good likelihood that this claim will be fully settled and paid out prior to March 2017, which means payout will occur within the next eight months”. [Presumably the delay from August 2016 to the projected payout eight months later was a result of Rath taking into account the Federal government bureaucratic approval requirements documentation, and the ratification process that would have to take place within Tallcree by its members.

This meant that the entire process took approximately 18 months to complete from the time of the CFA]. [37] It is my finding of fact that the essence of Rath’s involvement leading to the eventual Settlement took place over a ten-month period between the execution of the CFA by Tallcree in mid October 2015, and the conclusion of the negotiations as reported by Rath to Tallcree occurred on August 12, 2016.

If one excludes the period of time it took to formally install the new government after the October 19, 2015 election, I find that Rath’s direct involvement in the settlement process covers the period from the December 10, 2015 letter to the two ministers in charge through to his August 12, 2016 report of success, an eight-month period. [38] This eight-month period included Rath issuing a Statement of Claim and filing some official notices, which efforts were discontinued in 2017 when this matter was finally resolved to everyone’s satisfaction.

Tallcree passed a Band Council resolution at the end of August 2016 accepting the settlement in principle, and eventually Tallcree’s general membership overwhelmingly accepted the Settlement. F.

The CFA’s Risk to Rath [39] Rath’s current submissions also include that he undertook significant risk by taking on Tallcree’s claim on a contingency basis pursuant to the CFA because Rath was binding himself to an arrangement that could take years or even decades of complex litigation to resolve. [40] However, I note that substantially all of Rath’s efforts were non-legal in nature, which involved little or no litigation risk or involvement of Rath.

Rath’s rapid resolution of the matter logically establishes this, especially Rath’s meeting with the Prime Minister and his advisors in person, who notably are the Defendant Canada’s main decisionmakers. [41] How much legal risk is Rath undertaking when in less than two months of the CFA, he can quote in his December 10, 2015 letter to the same Prime Minister, Canada’s announced policy to settle claims like Tallcree’s as follows: Pursuant to Prime Minister Trudeau’s statement on December 8, 2015 that “(i)t is time for a renewed, nation-to-nation relationship with First Nations peoples, one that understands that the constitutionally guaranteed rights of First Nations in Canada are not an inconvenience but rather a sacred obligation”, our client’s view is that it would be not only immoral and in bad faith, but in breach of the Honour of the Crown and the Crown’s Constitutional and fiduciary duties for the Government of Canada to continue to withhold monies that it has acknowledged for over 10 years are owing.

In continuing to do so, the Government would continue along the path of its predecessor in creating an unfair advantage in settlement negotiations by withholding funds from some of Canada’s poorest citizens as a means of extracting an unfair or unreasonable settlement on the basis of poverty that Canada itself has created and supported through its previous refusals to honour its “sacred obligations”. H.

Circumstances at the Time of the CFA [ 60 ] At para 66 of Rath’s current bias Brief, Rath takes exception to my reference to the political Minister’s letter that he wrote on December 10, 2015 as being a circumstance that existed at the time the CFA was entered into a few weeks before. In this regard, it is difficult to understand how Rath’s arguments in his December 10, 2015 letter does not detail the circumstances that existed at the time the CFA was entered into a few weeks prior.

It is Rath himself in his December 10, 2015 letter that talks about the emergency and desperate circumstances that his client’s face, which was obviously the same situation that existed a few weeks earlier at the time the CFA was entered into on October 23, 2015. In any event, this current line of attack by Rath has nothing to do with bias because the Court was simply referencing Rath’s own words and actions in its analysis. [ 61 ] Similarly, the same observation can be made of Rath’s arguments contained in paras 67 through 70 in which he alleges the Court considered irrelevant and prejudicial matters.

With respect to these paragraphs, the over arching political overtones of Rath’s approach as outlined both in these sets of reasons, clearly forms the basis of my conclusion with respect to Rath’s lack of litigation risk in this matter, and the speed and manner by which it was settled all matters. Rath must have understood that these were issues that could have been considered important in assessing a fair and reasonable fee, after the Court determined that the CFA was unreasonable in the First Decision.

If Rath did not understand this, it was nevertheless not evidence of bias. [ 62 ] This same response is fitting with respect to the next

section of Rath’s bias application contained at paras 71 through 74. Once the Court made a determination as to the unreasonableness of the Retainer Agreement at the time it was entered into, it was open to the Court to apply various considerations with respect to determining what was a fair and proper final award. Rule 10.27 (1)(

a) provides that the Court can “vary, modify or disallow the agreement”; Rule 10.27 (

b) says the Court can revoke the RO’s decision and substitute its decision; and Rule 10.27 (

d) allows the Court to make any order it considers appropriate. There is no closed list of factors that should be

considered in determining whether the CFA was unreasonable under r 10.9, or under r 10.27. Mr. Molstad, Rath’s counsel, pointed this out before the RO at pg 26, lns 9 -13. The Court was under no binding authority, and the Court simply exercised its discretion transparently as other QB judges do routinely in determining what is a fair and proper final award. I.

The Court’s Use of Different Terminology When Referring to the Parties Submissions [ 63 ] Rath also argues at paras 75 and 76 of his Brief in support of a finding of reasonable apprehension of bias, the minor difference between the Court’s reference to “ Rath attempting to convince the Court ” that his fee should remain at over $11.5 million, as opposed to “ Tallcree arguing ”. The impugned remarks were stated in para 51 of the Second Reasons which read: [51] Tallcree submits that a one to two million dollar final award would be appropriate based on a 5% contingency fee.

However, Tallcree’s math is wrong because a 5% contingency fee on a $58.5 million dollar settlement represents an approximately $3 million dollar fee. Rath argues that if the Court has jurisdiction in this matter, his final fee award should remain at $11,518,075.00. [ 64 ] However, it is clear that this minor difference in wording has nothing to do with anything, let alone bias.

Notwithstanding that Rath was given a full opportunity, his position was that he was not going to participate meaningfully in assisting the Court to determine the final award to him because first of all, he did not believe the Court had jurisdiction, which is incorrect; and second of all, because in Rath’s view the final fee billing could only be the original amount of over $11.5 million dollars. Any other determination by the Court, according to Rath, is apparently evidence of his bias. However given this background, it is inconceivable that any of these arguments constitute a reasonable basis for bias. J.

The Fresh Evidence Ruling [ 65 ] In Rath’s current bias application argument at paras 80 and 81, Rath continues to argue that somehow not allowing new evidence or fresh evidence that does not comply with the Palmer v The Queen test as somehow representing bias. All the Court said with respect to new evidence was that Rath had been required to put his best case forward before the RO, and since it was his file the RO was dealing with, there would be nothing seemingly that he would not have produced as he is the lawyer as well as a litigant in this matter.

Rath had also filed a three volume Supplemental Record consisting of 758 pages. If there was truly prejudice wit

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