Mikisew Cree First Nation v Rath, 2023 ABKB 321

Court of King’s Bench of Alberta Citation: Mikisew Cree First Nation v Rath, 2023 ABKB 321 Date: 20230530 Docket: 2203 03568 Registry: Edmonton Between: Mikisew Cree First Nation Applicant - and - Rath & Company, Jeffrey Rath Professional Corporation and Jeffrey R. W. Rath Respondents Corrected judgment: A corrigendum was issued on September 21, 2023; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Decision of the Honourable Justice Robert A. Graesser _______________________________________________________

Introduction [ 1 ] In this special chambers application, Mikisew Cree First Nation (“Mikisew”) seeks declaratory relief to the effect that two contingency fee agreements between Mikisew and the Respondents (collectively “Rath”) are void. Background Procedural history [ 2 ] Jeffery R. W. Rath is an Alberta lawyer who practices Indigenous law through his professional corporation in the law firm Rath & Company.

In 2019 and 2020, Rath entered into contingency fee agreements (“CFA” or “CFAs”) with Mikisew with respect to alleged non-payment of annuities and indexation of annuities to inflation by the Government of Canada (“Canada”) under Treaty 8, and with respect to obligations of Canada to provide education under Treaty 8. [ 3 ] On March 7, 2022, Mikisew filed a review of these contingency fee agreements, challenging “all retainer agreements between the client(

s) and the lawyer/law firm which are required to be provided by the lawyer/law firm to the Review Officer under Rule 10.41(1) and (2). A notice of appointment was served on Rath on March 15. [ 4 ] Appointments were held with the Review Officer on April 26, 2022 and June 21, 2022. Mikisew took issue with the enforceability of the CFAs under Rules 10.7 and 10.8. [ 5 ] The Review Officer referred the following issues to the Court, pursuant to Rule 10.18: a. Is the review of the CFAs out of time, and if so, is Mikisew entitled to an extension of time; b. Is Mikisew’s request for a review of the CFAs premature; c.

Do the CFAs sufficiently particularize the nature of the claim and contingent event as required by subrule s 10.7(1)(

c) and (d); d. Do the CRAs comply with subrule 10.7(3); e. Do the CFAs comply with subrule 10.7(4); and f. Were the CFAs signed by the parties as required by subrule 10.7(1)(

b) and pursuant to a validly enacted BCR. Bases for Complaint [ 6 ] Mikisew advances a number of complaints over the execution and terms of the two CFAs. Some of them relate to the negotiation and execution of the agreements. Others relate to the breadth and lack of detail in the agreements themselves. [ 7 ] The issues are dealt with in the affidavit of Roxanne Marcel, current acting Chief for Mikisew.

Her affidavit provides a number of details: • Quorum for a meeting is 4 members; a majority of the quorum is required for “legally binding decisions”: • On October 17, 2019 Council approved BCRs for the Education CFA and the Annuities CFA and sent them to Rath; • The two CFAs were executed by the Chief and 3 Councillors and were attached to the BCRs; • George Poitras witnessed the execution of the two CFAs on June 18, 2020; • A flood at the Band Office resulted in the loss of many of Mikisew’s documents and correspondence; • The CFAs were terminated by Mikisew on September 14, 2021. [ 8 ] The first CFA is dated October 17, 2019.

It deals with claims related to annuities under Treaty 8. Mikisew refers to it as the “Annuities CFA”. Mikisew challenges the execution of that agreement for a number of reasons. Firstly, they say that 3 of the 6 counsellors were not invited to that meeting. Secondly, they say the meeting lasted only 18 minutes and there is no evidence that Mr. Rath was present or explained the effect of the agreement to the Councillors present. [ 9 ] Mikisew says that “multiple CFAs were allegedly approved by 4 Councillors”.

Only 4 members of Council signed the agreement. [ 10 ] Mikisew also complains about the process by which the necessary Band Council Resolution (“BCR”) was completed. It notes that the BCR does not authorize the Chief to execute the agreement. Apparently, a draft BCR was prepared by a paralegal in Rath & Company. The Chief’s executive assistant only sent it to the Chief and 3 Councillors. [ 11 ] It notes that on October 17, Doreen Cardinal-Somers was Mikisew’s Chief Executive Officer. She was present at the October 17 meeting.

However, the agreement itself names George Poitras as the authorized representative of Mikisew, although he was not CEO until March 2020.

[ 12 ] There are also concerns over the execution of the agreement.

While Rath has a copy executed by both parties, Mikisew does not have a fully signed copy at the Band Office. [ 13 ] Mikisew notes that there is no evidence that the agreement was ever served on Mikisew. [ 14 ] With respect to the Education CFA, the BCR states that Councillor Darren Mercredi abstained, but he was not at the meeting itself, having sent his regrets. [ 15 ] Mikisew does not have an affidavit of execution for the Education CFA in the copy they have on file. [ 16 ] Specifically with respect to the Annuities CFA, Mikisew says that the BCR produced by Rath is different from the one they have in their records.

The one Mikisew has bears a different date and number from the one produced by Rath, and the one he produced is described as “VOID” in Mikisew’s records. [ 17 ] Mikisew points to irregularities regarding the affidavit of execution of the CFA, which is only signed by Chief Waquan, and notes that it was sworn only 2 days before the Band election was to have been held (although it was actually postponed to August 2020 because of Covid). [ 18 ] Essentially, Mikisew says that the CFAs and BCRs were not approved by Council at a duly convened Council meeting and were thus not properly passed.

They say that Rath has not proven that the requirements of Rule 10.7. They also say that the CFAs are uncertain as they do not contain sufficient details as to when the contingent events will arise. Mikisew also says they are overbroad and should not be enforced. [ 19 ] Rath replies to the various allegations by putting in evidence an affidavit from Mr.

Rath’s legal assistant confirming that she sent correspondence to the Chief and Council on September 3, 2020, enclosing copies of BCRs relating to: • Non-payment of annuities and indexation of annuities to inflation by Canada under Treaty 8; • Obligations of Canada to provide education under Treaty 8; • Federal Court Action T-544-20 and the postponement of the election due to Covid-19; and • Court of Queen’s Bench of Alberta Action No. 1801 17693 and Federal Court Action No T-66-19. [ 20 ] Rath’s position is that the CFAs and BCRs were properly authorized and executed; the Rules regarding contingency fee agreements were followed; Mikisew is out of time to review the CFAs; and in any event the application is premature because there is nothing yet that appears to have triggered the contingency provisions in the CFAs.

Analysis [ 21 ] I will deal with the last of the referred issues first in this decision, as if Mikisew succeeds on this fundamental issue, consideration of the Rules of Court would be moot.

Validly enacted BCRs [ 22 ] The Applicant’s arguments suggest that there was something untoward about the manner in which the two CFAs were negotiated and signed, and about the preparation and execution of the BCRs for each agreement. [ 23 ] In all of this, the Applicant is at a disadvantage, as none of the Band’s Chief and Council members involved with the CFAs and BCRs in 2019 and 2020 are still on Council, and the Band CEO at the time has since been replaced.

It also appears that office staff has been replaced, as records normally expected to be found in the Band Office have not been located by the new staff. [ 24 ] This is a situation where for whatever reason the new Chief and Council want to undo things put in place by their predecessors. [ 25 ] Mikisew cites several cases in support of their position that the CFAs and BCRs here were not properly authorized: • McKenzie v Mikisew Cree First Nation , 2020 FC 1184 ; • Rath & Company v Stoney First Nation , 2013 ABQB 255 ; • Key First Nation v Lavallee , 2021 FCA 123 ; and • Kehewin Cree Nation v Kehew Construction Ltd , 2022 ABCA 78 . [ 26 ] In Rath v Stoney First Nation , there was no resolution of the Tribal Council, which Hawco, J held Mr.

Rath knew was required before he could be validly retained by the Nation. [ 27 ] McKenzie v Mikisew , dated December 23, 2020, set aside the suspension of Councillors McKenzie and Shirley. They had been suspended before the CFAs were signed by 4 of the remaining councillors in October 2019. That decision also dealt with the argument about prematurity. The Chief and remaining councillors argued that the applicants had not exhausted their remedies before seeking judicial review. That argument was rejected by the Federal Court at para 38.

[28] Mikisew cites para 75 of Key First Nation v Lavallee. In that case, Key First Nation sought judicial review of a bandresolution authorizing a retainer agreement. The Federal Court of Appeal allowed the appeal from dismissal of the application on thebasis that the application was not made within 20 days from the resolution. The judge dismissing the application had concluded thatthere was “no reason to believe that the band was unaware of the BCR and the retainer agreements when they were made” (para 19).

Hewas not concerned that 2 councillors provided evidence that they were not aware of these acts at the time, and that the judicial reviewapplication was brought within 20 days from them learning of the documents. The Federal Court of Appeal stated at para 75: [75] SWL argues that it does not have access to the band records and therefore cannot defend itself against the allegations made againstit. This argument reflects a continuing failure to understand that SWL’s interest is separate and apart from that of the band.

WhetherSWL was entitled to rely on the authority of the Chief is for the Saskatchewan Court of Queen’s Bench to determine. It is a separatequestion from whether the BCR and payments were properly authorized. Insofar as access to documents is an issue, this is a concernwhich presumably would be remedied in discovery. [29] As for alleged deficiencies in the proper authorization, completion and execution of the two CFAs and BCRs, whatimmediately comes to mind is the indoor management rule.

Rath cites Blankenship v Jenks-Cochrane Properties Ltd, 2016 ABQB 461,in support of use of the indoor management Rule here and its presumption of regularity. [30] However, the indoor management Rule does not apply to municipal corporations and Indian Bands and other unincorporatedbodies.

Strict compliance with statutory requirements is necessary and is not presumed. [31] That places parties contracting with such bodies at a disadvantage as they may be faced with the difficulty of proving that thepersons they dealt with had authority to bind the entity. [32] Telecom Leasing Canada (TLC) v Enoch Indian Band, (ABQB) deals with this issue, and that caseappears to be accepted law.

There, Wachowich, J (as he then was) considered whether band council had the power to give a guarantee.He stated at paras 7-9: [7] The more significant question is whether the band council had the power to enter into such an agreement on behalf of the band. Thedefendant submits that it did not. The defendant argues that the band council derives its powers solely from statute, and entering into acontract of guarantee is not among the powers enumerated in the Indian Act. Rather, the defendant argues, approval of the band as awhole and not just the council was needed. [8] I disagree.

Although the band council is clearly a creature of statute, deriving its authority solely from the Indian Act (Paul Band(Indian Reserve No. 133) v. R., 1983 ABCA 308 , 29 Alta. L.R. (2d) 310, [1984] 2 W.W.R. 540, (sub nom. R. v. Paul IndianBand) 50 A.R. 190, [1984] 1 C.N.L.R. 87 (C.A.), at p. 549 [W.W.R.]), it by necessity must have powers in addition to those expresslyset out in the statute. This was recognized by the British Columbia Supreme Court in Lindley v.

Derrickson (March 29, 1976)[unreported], wherein it was held that a “band council must have the implied power to bring legal proceedings on behalf of the band” (p.84). In this regard I accept the suggestion Jack Woodward advances in his book Native Law (Toronto: Carswell, 1989), at p. 166: It may be said that band councils possess at least all the powers necessary to effectively carry out their responsibilities under the IndianAct, even when not specifically provided for.

There is an implied power to contract, without the need for authority in the Indian Act. [9] Given that the band council had the power to give the guarantee on behalf of the band, the question then becomes whether this powerwas properly exercised. Section 2(3)(

b) of the Indian Ac governs, and reads as follows: 2 …

(3) Unless the context otherwise requires or this Act otherwise provides, (

b) a power conferred on the council of a band shall be deemed not to be exercised unless it is exercised pursuant to the consent of amajority of the councillors of the band present at a meeting of the council duly convened. I am satisfied by the evidence that the provisions of this

section are met, that is, that the guarantee was given “pursuant to the consent ofa majority of the councillors of the band present at a meeting of the council duly convened.” It was stated in the agreed statement of factsthat the council meeting was duly convened. The minutes show that a motion respecting financing was placed before the council byRomeo Morin, was seconded by Raymond Cardinal, and was passed.

Although the minutes state that the motion was “to approve thepurchase/lease agreement,” I am satisfied it included the question of the contract of guarantee: it is clear from the minutes that the needfor a guarantee was discussed in the context of the motion, and that the members of the council understood that the execution of theguarantee was integral to the financing arrangement. Thus, when the members of the council passed the motion approving thepurchase/lease agreement, they approved the execution of the guarantee.

The band council resolution which was subsequently drafted ismerely a formal document evidencing the resolution passed by the council. Leonard v. Gottfriedson (1980), (BC SC),21 B.C.L.R. 326, [1982] 1 C.N.L.R. 60 (S.C.), raised by the defendant, is distinguishable on its facts from the matter before me. [33] Proving that a meeting was duly convened is difficult for a third-party (such as Rath here), as they have no control over themanner in which meetings of the Chief and Council are to be convened.

Nor does Rath have any knowledge as to who was actuallyserved with notice of either meeting. [34] In this application, Mikisew essentially says that Rath has not proven that either CFA was approved by a majority of theCouncillors at a duly convened Council meeting. That is true, in that all Rath can do is point to copies of the CFAs that purport to besigned by the Chief and various Councillors, as well as BCRs purporting to be signed by the Chief and various Councillors. [35] Rath has provided no evidence that the meeting of October 17, 2019, was properly convened.

Nor is there evidence that themeeting of June 18, 2020, was properly convened.

[ 36 ] The BCRs themselves are some evidence that the CFAs were agreed to by a majority of the Councillors at a duly convened meeting. That is what they say. They are, however, not conclusive of those issues. Is there any evidence to the contrary? Ms. Marcel’s affidavit raises issues but does not purport to resolve them. She was not present at any of the meetings. Most of her evidence comes from Mikisew’s admittedly incomplete records.

A number of Mikisew’s records were apparently lost or damaged because of a flood that intervened between the relevant dates and the termination of the CFAs in the fall of 2021. [ 37 ] There is insufficient evidence before me to conclude that the meetings at which the CFAs and BCRs were approved were not properly called in October 2019 or June 2020. As for the absence of several of the Councillors, two of them had been suspended before October 2019 and were involved in Federal Court Proceedings at the time of the CFAs and BCRs here. They were not reinstated until December 2020.

So the fact that they did not attend the meeting and that they may not have been given notice of it is probably irrelevant and a red herring. [ 38 ] The minutes indicate that one of the councillors who signed the CFAs and the BCRs was not present at the meeting. Yet there is a signature that purports to be that Councillor’s on the CFA. Perhaps the minutes are in error, or perhaps the Councillor attended late. Or perhaps the Councillor gave his approval after the meeting. That may be an irregularity, but it may also be an irregularity that the Councillor can waive.

In any event, there was no evidence before me that anyone who was entitled to receive notice of any of the referenced meetings had not been given notice. [ 39 ] None of the BCRs actually state the date of the meeting that had supposedly been “duly convened”. An unfilled-in blank in a document is more likely an irregularity than a fatal flaw where the date is supported by other uncontested evidence. [ 40 ] I think more is required of a Band to resile from signed agreements and executed BCRs than saying “the other side hasn’t proven they were the result of a majority of a quorum at a duly convened meeting”.

That is evidence only the Band has. If there are no records available for the Band to produce in that regard, or if the records are incomplete, or if the records are inconclusive, the answers may have to come from former employees and the Chief and Councillors at the time. Any such evidence is absent here. [ 41 ] The Nation is the applicant here. Applicants bear the burden of proof on their applications. The onus on this application as to the “duly convened meeting” and “majority of the quorum” rests with the Applicant.

The materials here are not sufficient to persuade me that the CFAs and BCRs were not properly approved by at a duly convened meeting of the Chief and Council. [ 42 ] The Nation needed more evidence than the Acting Chief’s affidavit evidence as to what she understands to be usual practices. She was not on Council at the time these meetings were held and offered no direct evidence of what actually happened. [ 43 ] This ground fails. Out of time [ 44 ] Rath argues that this application was commenced out of time, relying on Rule 10.10.

That Rule provides: 10.10(1) A retainer agreement may not be reviewed if 6 months has passed after the date on which the retainer agreement terminated.

(2) A lawyer’s charges may not be reviewed, whether at the request of the lawyer or the client, if one year has passed after the date on which the account was sent to the client. [ 45 ] Rath’s retainer was terminated by a BCR dated September 14, 2021. The Application for review was filed on March 7, 2022.

It was served on Rath on March 15. [ 46 ] Rath argues that the application should have been served on him by March 14. [ 47 ] The answer for this issue is found in a recent decision Rath & Company Barristers & Solicitors v Sturgeon Lake Cree Nation , 2022 ABQB 556 . [ 48 ] In that decision, the application for review was filed within the 6-month period but it was not served on the respondent for some months. Master Prowse dismissed the application as being out of time.

Johnson, J allowed the appeal, stating at paras 51-53: [51] In order to obtain a review of an account or retainer agreement, either party (lawyer or client) must file the court document which initiates the review process (Form 42) and supporting evidence within six months of the final account being sent to the client. The parties agree on this point.

That is, there is no dispute that an attempt to file a Form 42 request more than six months after the final account has been sent will run afoul of Rule 10.10. [52] Rather, the issue is whether Rule 10.10 is best interpreted as requiring both filing and service within six months. I find that it is not. [53] To do so would, in my view, make service of the appointment date an essential element of Rule 10.10 without expressly stating this fact.

It would mean that parties would be prima facie unable to obtain closure on an account by operation of something akin to a limitations issue without being expressly notified of the effect of a failure to serve , as opposed to simply commence , their Appointment for a review. [ 49 ] Leave to appeal to the Court of Appeal was dismissed at 2022 ABCA 373 .

However, a leave to appeal decision does not have much precedential value and it does not carry as much weight but is certainly supportive of the approach taken by the trial or chambers judge. [ 50 ] R v Sullivan , 2022 SCC 19 reinforces the principle of horizontal stare decisis . There is no basis for me to distinguish that case from this one, and I am not inclined to do so in any event. I agree with its treatment of the facts in that case and find it to be applicable here. Accordingly, I conclude that there was substantial compliance with Rule 10.10(1) and this objection to the application

fails. Prematurity [ 51 ] On this issue, I agree with Mikisew. Mikisew undoubtedly intends to pursue the Annuities and the Education claims against Canada. They simply want to pursue those claims with new counsel. From a purely practical point of view, Mikisew needs to know what the litigation will cost them. They need to know if Rath has any right to further fees if anything is ultimately collected from Canada on either or both of these claims. Compliance with Rule 10.7 provisions [ 52 ] Many of Mikisew’s complaints about the CFAs are of no legal consequence.

A lawyer does not need to be personally present to enter into a retainer agreement with a client. A lawyer is not required to be present to explain the consequences of a retainer agreement where that can be gleaned from the agreement itself. Mikisew paints a picture of being taken advantage of by the CFAs but there is no evidence of that whatsoever.

To the extent that the application purports to describe former Chief and Council as unsophisticated, there is no evidence of that and an allegation of that nature from the new Chief and Council has little credibility to it. [ 53 ] There is no time requirement for how long a Council must discuss or debate something. It does not matter that something is done shortly before an election, if it was validly done at the time. No affidavits of execution are required for BCRs. It does not matter that George Poitras was not CEO of Mikisew in October 19.

He was named in the CFAs of that date as Mikisew’s representative, not Mikisew’s CEO. There is no requirement I was made aware of that a Band’s representative for contractual purposes must be its CEO. [ 54 ] Some of these concerns were addressed in Rath’s brief, although as pointed out by Ms. O’Kelly, there was no sworn evidence as to Mikisew’s sophistication or explaining the presence of Mr. Poitras’s name in the CFAs when he was not CFO in October 2019. [ 55 ] This application is somewhat confusing as it involves at least two sets of CFAs and BCRs.

The October 17, 2019, CFAs were deficient in that they did not have affidavits of execution attached to them. Perhaps because of an upcoming election, someone recognized that the October 17, 2019, CFAs had not been completed in accordance with the Rules of Court . There are two affidavits of execution sworn by George Poitras on June 18, 2020. Neither affidavit references the document is supposed to be attached to. One affidavit swears that Mr. Poitras saw Chief Archie Waquan sign a document on June 18, 2020. The other affidavit swears that Mr.

Poitras saw Chief Archie Waquan and Councillors Randy Marten, Calvin Waquan and Sally Whiteknife sign a document on June 18, 2020. [ 56 ] The BCRs dated June 18, 2020 are also signed by Chief Waquan and Councillors Marten, Waquan and Whiteknife. There are no minutes in the materials for any meeting on June 18, 2020. But there is also no evidence that there was no meeting that date. Acting Chief Marcel’s affidavit only says that there are no minutes associated with the BCRs dated June 18, 2020. [ 57 ] I do not know what happened on June 18, 2020.

The BCRs recite that there was a meeting and a clear quorum of those members entitled to vote signed the BCR. It is not clear if they re-signed the CFAs, or whether they acknowledged in some fashion to Mr. Poitras that they had signed the CFAs and acknowledged their signatures in a way that was satisfactory to him. [ 58 ] The only evidence before me is Mr. Poitras’s unchallenged evidence that he saw the Chief and three Councillors sign something that day. He also saw the Chief sign something that day. These affidavits of execution have been attached to the CFAs by someone.

If the affidavit of only Chief Waquan’s signature was attached to one of the CFAs, that is likely an irregularity due to an administrative error on someone’s part that should be waived. It is of no consequence to the substance of the rules. [ 59 ] There is a distinction to be made between arguments as to the contracting powers of Mikisew and the validity of BCRs, and compliance with the Alberta Rules of Court . The Rules of Court do not speak of “duly convened meetings and majority votes”. Rather, they are geared to the more common indoor management rule.

For the purposes of compliance with the Rules , the documents will generally speak for themselves, subject to evidence to the contrary. [ 60 ] The only evidence as to service of the CFAs on the Nation is the affidavit of Sara Braun, a legal assistant in Mr. Rath’s office. That is not really challenged, although Acting Chief Marcel says in her affidavit that those documents do not appear to be in the Nation’s files. Analysis [ 61 ] Rule 10.7 governs the enforceability of contingency fee agreements in Alberta. It provides: 10.7(1) A contingency fee agreement must (

a) be in writing, and (

b) be signed by the lawyer and the lawyer’s client or by their authorized agents.

(2) To be enforceable, a contingency fee agreement must contain the following particulars in precise and understandable terms: (

a) the name and address of each client; (

b) the name and address of the lawyer;

(

c) a statement of the nature of the claim; (

d) a statement of the event or contingency on which the lawyer’s fees are to be paid to the lawyer; (

e) a statement about (

i) the manner in which the contingency fee is to be calculated, provided that no fee, calculated as a percentage or otherwise, may be payable on disbursements or other charges recovered, (ii) the maximum fee payable, or the maximum rate calculated, detailing the disbursements and other charges that are included in that fee or rate or indicating that disbursements and other charges are in addition to that fee or rate, and (iii) whether the client is responsible to pay disbursements and other charges, and if so, a general description of the types of disbursements and other charges likely to be incurred, other than relatively minor disbursements; (

f) if the lawyer is to receive any amount from a costs award, a statement that (

i) the cost award is intended to be a complete or partial reimbursement of the lawyer’s charges to the client, (ii) the cost award is owned by the client and that by signing the contingency fee agreement the client is waiving the right to any amount from the costs award that is payable to the lawyer in accordance with subclause (iv), (iii) the amount from the costs award retained by the lawyer will be in addition to the lawyer’s percentage, fixed fees or other form of legal fees, and (iv) the percentage of the costs award that the lawyer may receive may not exceed the percentage of the judgment or settlement that the lawyer is entitled to; (

g) a statement that, if the client gives notice in writing to the lawyer within 5 days after the client’s copy of the contingency fee agreement is served on the client, the client may terminate the contingency fee agreement without incurring any liability for the lawyer’s fees, but that the client is liable to reimburse the lawyer for reasonable disbursements; (

h) a statement that (

i) at the request of the client, a review officer may review either or both of the contingency fee agreement and any lawyer’s charges in an account rendered under the agreement, and (ii) either or both of the contingency fee agreement or any lawyer’s charges may be further reviewed by way of an appeal from a review officer’s decision to a judge.

(3) The contingency fee agreement must be witnessed by a person who sees the client sign the agreement, and that person must then swear an affidavit of execution.

(4) The client must be served with a copy of the signed contingency fee agreement within 10 days after the date on which the agreement is signed, and an affidavit of service to that effect must be executed by the person who served the agreement.

(5) A client may terminate a contingency fee agreement without incurring any liability for the lawyer’s fees under the agreement if the client, within 5 days after service on the client of the copy of the contingency fee agreement, gives written notice of the termination to the lawyer, but the client is liable to reimburse the lawyer for reasonable disbursements incurred by the lawyer.

(6) If a contingency fee agreement provides that a lawyer is entitled to an amount from a costs award, the lawyer is not entitled to receive from the costs award any higher percentage of the judgment or settlement than the lawyer is entitled to receive under the contingency fee agreement.

(7) Every account rendered under a contingency fee agreement must contain a statement that at the client’s request a review officer may determine both the reasonableness of the account and the reasonableness of the contingency fee agreement.

(8) An account that does not contain the statement required by subrule (7) is of no effect unless the Court (

a) is satisfied (

i) that the omission of the statement was inadvertent, and ii) the client has not been misled or prejudiced, and (

b) the Court waives the requirement for the statement. [ 62 ] Mikisew argues that the CFAs here do not meet many of the requirements of that Rule . In issue, as directed by the Assessment Officer, are Subrule s 7(2)(

c) and (d), Subrule 10.7(3) and Subrule 10.7(4). [ 63 ] It cites several Alberta cases in that regard: • Morrison v Rod Pantony Professional Corporation , 2008 ABCA 145 ;

• MS v DM, 2014 ABQB 702; • Downes v Botan, 2018 ABQB 341; • Rusk v Medicine Hat (City of), 2001 ABQB 1020; • Sonnenberg v Schumacher & Associates, 2005 ABQB 352; • Botan (Botan Law Office) v St. Amand, 2011 ABQB 774; • Niam v Silverberg, 2015 ABQB 682 [64] Rath cites: • Baergen v Peterson Ross, (ABQB); • Niam v Silverberg, 2015 ABQB 682; and • Botan (Botan Law Office) v St. Amand, 2011 ABQB 774. Case law [65] Morrison v Rod Pantony is a Court of Appeal case under the old Rules, although the principles stated in it are equallyapplicable to the new Rule 10.7. It dealt with the

interpretation of contingency fee agreements, not compliance with the formalrequirements of the Rules of Court. It notes at para 26: …the courts should not set aside agreements between solicitors and clients without good cause. [66] That case also describes the purpose of the contingency Rules “to eliminate uncertainty and disputes over the exact provisionsof the retainer agreement”. It also noted: In conducting the fairness analysis, rhetorical language about “heavy burdens” on solicitors is not particularly helpful. [67] In MS v DM, 2014 ABQB 702, Yungwirth, J considered irregularities in a CFA.

She noted at para 52 that the deficiencieswere numerous: [52] The Agreement in this case does not comply with r 616 of the former Rules of Court. It does not contain the statements required by r616(2)(f). Rule 616(2)(

e) has also not been complied with because Clause 8 of the Agreement makes it impossible for the client tocalculate the maximum fee payable should the circumstances indicated in that clause occur. In addition, there is no Affidavit ofExecution attached to the Agreement as required by r 616(3), though there is no suggestion that the Agreement was not signed by TS.There is no indication that r 616(4) has been complied with. Further, the Statement of Account does not contain the statement required byr 616(7)(b). Rule 616(2) is very clear.

To be enforceable, a contingency agreement must contain certain particulars and statements. If alawyer does not comply with Rule 616, then pursuant to Rule 618, he or she loses the ability to rely on that agreement and is entitled onlyto those legal fees that would have been payable in the absence of the contingency fee agreement. In my view, the flexible approachreferred to in Rusk, that should be taken to problems arising from contingency fee arrangements does not extend to permit a disregardfor the Rules that apply to contingency agreements.

Rather, the flexible approach is more appropriate when considering more minor ortechnical departures from the Rules as well as

interpretation issues arising from an otherwise valid contingency agreement. A flexibleapproach also has application when considering the reasonableness of a fee charged under a contingency fee agreement. [68] She concluded that the flexibility suggested by Rusk is “more appropriate when considering more minor or technicaldepartures from the Rules as well as

interpretation issues” (at para 52). [69] In Botan v St. Amand, the admitted non-compliance was that no affidavit of execution was prepared, and the CFA was notserved on the client. [70] Michalyshyn, J referenced Sonnenberg and other cases on the need for strict conformance with the requirements of thecontingency fee rules, holding at para 44: [44] In all of the circumstances I would not invalidate the Agreement. The formalities around execution of a contingency fee agreementaim to avoid uncertainty and disputes as to what was agreed.

Formal service of such an agreement creates a “cooling off” period enablingthe client to walk away from the agreement without liability even for disbursements. Here the Agreement would have been no clearer toSt. Amand with or without an affidavit of execution of the witness to St. Amand’s signature or indeed with or without Botan’s signature.And St. Amand was no worse off for the loss of the “cooling off” period that follows service.

He could terminate the Agreement at anytime before Botan submitted an application for compensation, without liability for fees and – given Botan’s waiver of out-of-pocketexpenses – without liability for disbursements. [71] While that decision was upheld by the Alberta Court of Appeal at 2013 ABCA 227, the appeal dealt only with the quantum offees Mr. Botan was ultimately entitled to, and it did not deal with Rules of Court issues. [72] MS v DM and Botan v St. Amand were considered by Inglis, J in Downes v Botan, 2018 ABQB 341.

She concluded at paras20 and 21: [20] I find that the Agreement in this case does not meet the requirements of either the old or new rules. I find that each of the breachesalleged exist. Of the breaches, I find specifically that the lack of affidavit of service to be no concern in this circumstance. If this were theonly breach I would be inclined to follow my brother Justice Michalyshyn and not invalidate the contract due to the technical breaches.

[21] However, it cannot be considered merely “technical” or “imperfect” that there is no maximum fee stated, no description of thepercentage owed of a costs award, and no witness to the signing swearing an affidavit of execution. The Agreement does not comply withthe Rules and is therefore invalid. [73] Rusk v Medicine Hat (City of), 2001 ABQB 1020 (ABQB), did not deal with the technical requirements of CFAs,but rather dealt with the reasonableness of the fee charged.

Sulatycky, ACJ encouraged a “flexible approach to problems arising fromcontingency fee arrangements in order to facilitate access to the courts for more Canadians” (at para 15). [74] Sonnenberg v Schumacher is notable for its comments on the Court’s ability to waive some but not all irregularities in aCFA. Germain, J stated at paras 38 and 39: [38] I agree that Rule 618 purposefully prohibits enforcement when there is non-compliance, but I find that the Rule should not beinterpreted so inflexibly that the most minuscule and immaterial omission would prevent the enforcement of the agreement.

Therefore,even though I confirm that defects in a contingency agreement will be strictly construed against the lawyer, the court is not without itsjudicial discretion to alleviate against minor technical oversights that are without import. The failure of the agreement to set out theaddress of the client is one of those minor drafting irregularities that I would relieve against.

However, here there are two moresubstantial irregularities. [39] The next irregularity is the lack of an affidavit of execution on some copies of the agreement, including the copy that the client hadand that was filed in the original taxation. Here, where the law firm was able to produce a properly signed copy, complete with anaffidavit of execution, the fact that some copies did not have all affidavits attached is not an irregularity at all, or if so is insignificant. [75] While this case dealt with irregularities under the “old” Rules of Court, its principles are equally applicable to the “new”Rules.

Germain, J contrasted between “minuscule and immaterial omissions” and “minor technical oversights that are without import”and “more substantial irregularities”. There, he concluded that the failure to include a proper affidavit of execution was not the sort ofirregularity or omission that could be saved. [76] In Niam v Silverberg, service of the signed contingency agreement was in issue, but Brooker, J concluded that because of thecircumstances of the retainer, the fact that no signed contingency agreement had actually been served on Ms.

Niam within the required10-day period was not fatal to the enforceability of the CFA. Strict compliance with the Rule because Ms. Niam was represented by herown counsel in the negotiations with Ms. Silverberg. It was Ms. Niam who provided the completed CFA to Ms. Silverberg after Ms.Niam executed it in front of a notary. [77] Brooker, J concluded at para 128 that it would in the circumstances of that case: …be unreasonable to set aside the CFA simply because CESPC failed to return to Niam a copy of the exact document that Niam had justexecuted an provided to CESP.

In the circumstances, the final version of the CFA was provided to Niam and her counsel after anextensive period of negotiation and revision. [78] Baergen v Peterson Ross is helpful on the issue of prematurity and confirms at para 11 that “a solicitor who fails to complywith Rules 616 and 617 (the CFA provisions under the old Rules) should not be entitled to derive any benefit from his failure oromission”. a.

Subrule 7(3) Affidavit of Execution [79] Subrule 10.7(3) requires that the CFA be witnessed and that the witness swear an affidavit of execution. [80] As best I can tell from the materials on this application, written CFAs were signed by both Chief and Counsel and Rath. Thefact that Mikisew does not have copies signed by themselves and Rath is not evidence that this requirement was not satisfied. Theirrecord-keeping is inconclusive. The uncontradicted evidence of Sara Braun, Rath’s paralegal, is that executed copies of the CFAsincluding affidavits of execution were sent to Mikisew on September 3, 2020.

That should satisfy the requirements of subrule 7(3) absentevidence to the contrary. [81] The affidavit of execution by Chief Waquan alone is in my view a red herring as it is not clear from the affidavit whatdocument is referred to. In any event, an error in an affidavit of execution would in most cases be the sort of irregularity that is not fatalto the enforceability of a CFA (following Sonnenberg v Schumacher and Botas v St. Amand). Attaching it to the wrong documentwould also be an irregularity capable of being forgiven. If necessary, I would apply the reasoning in Botas v St.

Amand to these allegedirregularities as there is no suggestion that any harm was done to Mikisew from any imperfect compliance. [82] I conclude that subrule 7(3) has been satisfied. b. Subrule 7(4) Service [83] The first time the CFAs were served on Mikisew was when they were sent to Mikisew’s Band Office on September 3, 2020.If there had been prior service of the CFAs on Mikisew following October 17, 2019, that would have been ineffective as there were noaffidavits of execution until June 18, 2020.

In any event, there is no evidence that Rath served the October 17, 2019 CFAs on Mikisew atany time before September 2020. [84] Service of the CFAs on September 3, 2020 may be problematic. While the CFAs then included affidavits of execution,Subrule 10.7(4) requires service of a signed copy of the CFA within 10 days after the date on which the agreement is signed. These newCFAs with Mr. Poitras’ affidavit of execution were not served on Mikisew for some two and a half months after that date.

[ 85 ] There is no explanation provided for this delay. It is possible that Mr. Rath did not sign or resign the CFAs for some time, but there is no evidence before me as to when Mr. Rath signed the CFAs. That is a hole in the evidence on Rath’s behalf. [ 86 ] From a review of the case law there is no bright line between minor and substantial irregularities in compliance with the Rules . As far as I can tell, the Court of Appeal has not yet weighed in on the issues arising in this case. The decisions in Niam v Silverberg and Botan v St.

Amand are somewhat at odds with MS v DM and cases that take a stricter approach to compliance or irregularities in compliance. [ 87 ] From my perspective, the circumstances surrounding the negotiation and execution of the CFA are the most significant factor to consider in most situations. In Niam v Silverberg , the CFA was negotiated with Ms. Silverberg by another lawyer acting for Ms. Niam for that purpose, and Ms. Niam provided Ms. Silverberg with the fully executed copy of the CFA herself. [ 88 ] Here, Mr. Rath was no stranger to Mikisew.

He had obviously performed legal work for them in the past, and Mikisew’s materials include documents pertaining to other litigation Rath was conducting on Mikisew’s behalf at the time the CFAs were initially signed. Indeed, it is a matter of public record that Mr. Rath had been to the Supreme Court of Canada on Mikisew’s behalf, winning an important Indigenous rights case: Mikisew Cree First Nation v.

Canada (Minister of Canadian Heritage) , [2005] 3 S.C.R. 388, 2005 SCC 69 . [ 89 ] This is a far different situation than one where a claimant hears of a lawyer or responds to an advertisement for that lawyer, with no previous background or experience with the lawyer or their firm. It is also a different situation than one where the claimant has had no previous experience with the legal system and has no real idea as to how to pursue a claim or what a lawyer actually does.

Mikisew has been involved in a number of court cases and is no stranger to the legal system. [ 90 ] This is also not a situation where the client never got a copy of the final executed CFA or had an opportunity to reconsider the arrangement. Similar to Niam v Silverberg , it is clear from the evidence and documents that Mikisew executed the CFAs in the absence of Rath and sent executed copies to Rath once they had done so.

Rath assisted with the completion of the BCRs, but it was Mikisew that completed them and provided the completed BCRs to Rath. [ 91 ] Mikisew arguably had two opportunities to revisit and annul the CFAs: firstly, when they were sent to them on September 3, 2020, and secondly, when they were sent again on August 5, 2021.

The failure of Rath to serve fully executed copies with completed affidavits of execution within 10 days from October 17, 2019 or June 18, 2020 caused no harm to Mikisew at all. [ 92 ] When Rath sent the CFAs to Mikisew in September 2020, that gave the Chief and Council who signed the CFAs an opportunity to reconsider. Arguably, if there were any irregularities in that, the new Chief and Council had the same opportunity when they received the CFAs in August, 2021. [ 93 ] The old Council took no steps to terminate the CFAs within 5 days from the September 3, 2020 service (or at all).

The new Council terminated the CFAs on September 14, 2021, more than a month after service of the documents and well outside the termination period provided in the Rules . [ 94 ] Justice Michalyshyn stated at para 44 of Botan v St. Amand that Mr. St. Amand was “no worse off for the loss of the “cooling off” period that follows service.” [ 95 ] In the circumstances of this case, I find that the failure to serve the CFRs on Mikisew in accordance with Rule 10.7(4) was a technical error or irregularity that caused no harm and was corrected by subsequent service of the documents. c.

The nature of the claim [ 96 ] Also in issue is compliance with 10.7(

c) and (d).

Mikisew says the nature of the claim and the events triggering payment of the contingency fee are not certain or are overbroad. [ 97 ] The description of the Annuities Claim is: (claims) wither respect to non-payment of annuities and indexation of annuities to inflation by the Government of Canada. [ 98 ] The description of the Education Claim is: (claims) with respect to the obligations of the Government to provide education under Treaty No. 8, including continual underfunding of primary, secondary and post-secondary education for all members of Treaty No. 8 in a manner that respects the Treaty and in a manner either equal or greater than the manner in which education is funded for non-Treaty citizens of Alberta living Off Reserve. [ 99 ] I am not persuaded by Mikisew’s arguments that the either claim is uncertain or overbroad.

Brooker, J discussed the principles of

interpretation for CFRs at paras 45-46 of Niam v Silverberg , with which I agree: [45] The key principles of contractual

interpretation are well known and do not warrant extensive review. It is clear that issues regarding the

interpretation of a contingency fee agreement should be resolved first by the ordinary Rules respecting contractual

interpretation: Morrison v Pantony , 2008 ABCA 145 , 429 AR 259, para 13 . The Court in Morrison succinctly summarized the Rules of

interpretation as follows: Contracts are interpreted on an objective basis, having regard to what a reasonable person would infer from the words used. The contract must be interpreted considering the factual and legal background against which it was concluded and the practical objectives which it was intended to achieve: ATCO Electric Ltd. v. Alberta (Energy and Utilities Board) , 2004 ABCA 215 , 31 Alta. L.R. (4th) 16 at para. 77 . With contingency retainer agreements, the special relationship between a solicitor and client is an important part of that background. [...]

[46] The above makes it clear that in disputes over contractual

interpretation, the Court must examine the contract as a whole, giving the terms their ordinary meaning consistent with the circumstances known to the parties at the time of its formation... [ 100 ] Claims for compensation for breaches of treaty obligations under particular headings of the Treaty are as clear as “claims for compensation arising out of a motor vehicle accident on May 1, 2022”. CFAs are frequently entered into before an action is commenced, and before any negotiations are conducted.

Otherwise, the lawyer will be at risk for their fees. [ 101 ] I do not think it is necessary to describe a particular action or the court in which that action might take place. It should not be necessary to describe “compensation” in any detail and it would be overkill to say “including without limitation all claims for general and special damages, pecuniary and non-pecuniary damages, aggravated and punitive damages and interest”. [ 102 ] In some cases no action will ever be commenced; in other cases there may be a choice of fori .

Again, I do not think it is necessary to describe the court as there may be a choice: King’s Bench, Court of Justice, or Federal Court, or potentially tribunals, arbitration or mediation. [ 103 ] I see no uncertainty or ambiguity: if Mikisew recovers any amount from anyone as a result of a claim that Canada breached its treaty obligations to Mikisew as to the Annuity Payments, Rath gets its Contingent Fee. [ 104 ] The Annuities CFA provides: If any Claim(

s) are successfully prosecuted to the point at which settlement or judgement becomes payable or benefits accrue to you, whether in the form of money, land and economic value of lands, opportunity or other consideration (the Claim “Proceeds”), the firm shall be entitled to…Contingent Compensation. [ 105 ] That is unambiguous and clear as to entitlement, although as in Niam v Silverberg that might lead to some difficulties in valuation if that is not otherwise clear from the settlement or judgment themselves. [ 106 ] Under the Education CFA, if any amount is recovered by Mikisew as a result of a claim that Canada breached its treaty obligations to Mikisew, Rath gets its Contingent Fee. [ 107 ] Are these provisions overbroad?

I am not persuaded that there is any overbreadth in them. Mikisew points to no claims that might be made that should not be covered by the CFAs or where applying a contingency fee to any such recovery would be improper or outside the reasonable scope of the CFAs. [ 108 ] I thus see no problem with 10.7(1)(c). d. Event or contingency on which fees are to be paid [ 109 ] As for the “contingent event”, that is clearly covered by the payment provisions in the CFAs. They speak for themselves.

There may be arguments in the future in the event a settlement were to include things other than cash, or relating to a stream of ongoing payments, or promises for services. The fact that there could be issues interpreting “payment” should not invalidate an agreement in its entirety and should not be decided in a vacuum. Any issues over “payment” are in my view clearly premature. [ 110 ] I thus do not see that there is any issue with 10.7(1)(

d) Conclusion [ 111 ] Mikisew has not satisfied me that the CFAs do not comply with the Rules of Court . While there are irregularities regarding service of the fully executed CFAs on Mikisew, I find that there has been no prejudice whatsoever as a result of any delays in service, and that the CFAs should not be unenforceable because of those irregularities. Mikisew has also not satisfied me that the CFAs and BCRs were not agreed to by a majority of a quorum of Chief and Council at a properly constituted meeting. [ 112 ] I recognize this decision leaves Mikisew in a position of some uncertainty.

While that is unfortunate, they should take comfort from the extensive case law that permits the review of a solicitor’s fees under a CFA. The factors discussed in cases such as Rusk v Medicine Hat as to what a reasonable fee is in the circumstances of the case essentially compensate a solicitor based on the solicitor’s efforts, the result, and the risks taken by the solicitor along the way.

The Court of Appeal decision in Tallcree First Nation v Rath & Company , 2022 ABCA 174 is an example of what can happen on a review once the results of the case are known. [ 113 ] Here, there is no information as to what, if any steps, that were taken by Rath to pursue claims under either CFA. No proceedings have apparently been commenced in any court or tribunal.

A CFA after it has been terminated and before there has been any result obtained in the litigation does not operate like a realtor’s listing agreement which provides the realtor with their full fee for any sale or lease effected during the term of the listing agreement regardless of the realtor’s efforts. [ 114 ] In any event, that determination will have to await a result of some sort in either claim. [ 115 ] I would observe that if I am incorrect in my conclusion that there has been compliance with the Rules and the formalities of contracting for an Indian Band and the CFAs are not enforceable, then Rath would be entitled to revisit any accounts rendered to Mikisew in pursuing both claims.

As I understand the operation of the CFAs, billings during the progress of the claims was to be done at a reduced rate having regard to the contingency fee. If the contingency fee is eliminated, Rath would (subject to review) be entitled to bill at his normal rates as if no contingency fee agreement had been entered into. [ 116 ] I am grateful to counsel for their well-prepared written submissions and their able arguments at the oral hearing of this

application. Heard on the 31 st day of March, 2023. Dated on the 30 th day of May, 2023 at the City of Edmonton, Alberta. Robert A. Graesser J.C.K.B.A. Appearances: Orlagh O'Kelly for the Applicant Jeffrey Rath for the Respondents _______________________________________________________ Corrigendum of the Reasons for Decision of The Honourable Justice Robert A. Graesser _______________________________________________________ The Docket number on page one was changed from 2203 02843 to 2203 03568.