Kirk Montoute Dawson LLP v Hearn, 2022 ABKB 775

Court of King’s Bench of Alberta Citation: Kirk Montoute Dawson LLP v Hearn, 2022 ABKB 775 Date: 20221122 Docket: 2101 11878 Registry: Calgary Between: Kirk Montoute Dawson LLP Plaintiff/Respondent - and - Wendy Suzanne Hearn (AKA Sackett) Defendant/Appellant _______________________________________________________ Reasons for Decision of the Honourable Justice M.H. Hollins _______________________________________________________ [ 1 ] The Respondent law firm, Kirk Montoute Dawson LLP, represented Ms. Hearn in an arbitration involving the division of matrimonial property and a claim for spousal support. Ms.

Hearn has refused to pay the outstanding invoices of the Respondent. [ 2 ] The review of the Respondent’s accounts was conducted by the Review Officer over the course of two days. Ms. Hearn appeals the decision of the Review Officer dated November 9, 2021, which deducted $240 from the accounts rendered and certified the amount of $157,365.67 owing. [ 3 ] Although Ms. Hearn commenced her oral argument for her appeal in a Special Chambers application, a medical issue arose.

The parties agreed that I could and should render my judgment on this appeal based on their written material. [4] Before we concluded the in-person appearances, Ms. Hearn was able to assist me with navigating her materials. Specifically,she confirmed that of the multiple written arguments she had filed, she was relying on the last of those, titled “Brief of Wendy SuzanneHearn in the Appeal of Review Officers Decision” and filed on September 30, 2022 (the “Brief”).

I have therefore considered that Briefand the materials referenced therein. [5] Counsel for the Respondent pointed out that I needed to disregard any evidence referred to that was not before the ReviewOfficer. Under Rule 10.26(2) of the Alberta Rules of Court this is an appeal on the record, which means that I can only consider the sameevidence as was before the Review Officer. Either party can apply to introduce new evidence but in this case, Ms. Hearn’s application todo so was heard and dismissed before our hearing date.

I have done my best to delineate the evidence which is properly available for myconsideration. [6] Under Rule 10.27, I have a great deal of discretion as to how I dispose of this appeal. I can confirm, vary or revoke thedecision of the Review Officer, send all or any part of it back to the Review Officer for reconsideration or substitute my own decision forhis. For the reasons that follow, I confirm the certification of the Review Officer dated November 9, 2021.

The Standard of Review [7] When King’s Bench Court judges sit in appeal of a decision of the Review Officer, we are required to show deference to hisdecision because he has experience and expertise in assessing legal costs that most judges of this Court do not have. This reality wasacknowledged in Rocks v Ian Savage Professional Corporation, 2015 ABCA 77 at para.15: The standard of review to be applied to appeals of review officers’ decisions is deferential.

Considerable weight is to be given to thedecision of the review officer as he has specialized knowledge and experience in assessing the reasonableness of lawyers’ accounts.Furthermore, as the person hearing the evidence and examining the parties’ materials, the review officer is in the best position to assessand weigh the evidence. (See Mercantile Bank of Canada v. Keen Industries Ltd. (1988), 1988 ABCA 224 , 86 A.R. 311, 59Alta. L.R. (2d) 369 (Alta.

C.A.)). [8] An earlier decision of this Court commended the same approach but also set out the bases on which the decision of theReview Officer might be overturned or varied: When one reviews the many cases that deal with appeals from decisions of review officers (or taxing officers, as they were formerlyknown), there are certain principles that emerge. A review officer’s decision is entitled to curial deference: 509703 at para 11. Why?

Areview officer’s “duties commonly call for him to do this type of vetting because of the nature of his position and the expertise that hegathers in carrying out those duties”: Carr & Co. v. Markdale Ltd. (1996), (AB KB), 46 Alta. L.R. (3d) 324 (Alta.Q.B.) at para 20 [“Carr & Company”]. See also Mercantile Bank of Canada v. Keen Industries Ltd. (1988), 1988 ABCA 224 ,59 Alta. L.R. (2d) 369 (Alta. C.A.) at para 6 [“McLennan Ross”].

The Alberta Court of Appeal in Mercantile Bank of Canada went on tosay that, “the taxing officer’s function is a specialized one and he may have to bring his own experience and expertise to bear” (at para12). Curial deference, however, is not absolute. A court hearing an appeal from a review officer’s decision may interfere if the review officer“operated on a wrong principle and thereby fell into error”: Mercantile Bank of Canada at para 6, citing Cape Breton Landowners v.Stora Kopparbergs Bergslags AB (1983), (NS CA), 33 C.P.C. 1, 146 D.L.R. (3d) 369, 58 N.S.R. (2d) 193, 123 A.P.R.193 (N.S. C.A.); Petty v.

Bishop (1977), 2 A.R. 241 (Alta. T.D.), at 243 . An error in principle may include a situation where thequantum that the review officer awards is inordinately high or low: Mercantile Bank of Canada ibid; 509703 at para 11. Similarly, acourt hearing an appeal from a review officer’s decision may interfere if the review officer makes an error concerning the scope of theretainer agreement under which the parties are operating: Brown v. Snyder & Associates, 2004 ABQB 899 (Alta. Q.B.) at para 20[“Brown”].

Finally, a court hearing an appeal from a review officer’s decision may find that the review officer made a finding of fact thatis clearly in error: Carter v. Blake (1982), 41 A.R. 418 (N.W.T. C.A.) at para 7 [“Carter”]. With respect to the latter point, a court hearing an appeal from a review officer’s decision must exercise caution, and must not step toofar into arena of gathering evidence and weighing that evidence. As the court said in Mercantile Bank of Canada at paras 11-12: I do not read R. 657 as giving the judge sitting on appeal a power to reassess or reweigh the material before the taxing officer.

There aresome matters of discretion open to a taxing officer and open for review by the judge hearing the appeal, but not the assessment of avalue. In making his assessment the taxing officer is not exercising a discretion, any more than the judge who fixes general damages isexercising a discretion. There are practical grounds for not making the hearing before the reviewing judge a de novo hearing. In the first place, the taxing officerwill often hear evidence and examine material which gives rise to questions of credit or weight. A chambers judge cannot effectivelysubstitute his views on such questions.

This makes it clear that the parties must put forward their “best case” to the review officer; not to the court hearing the appeal. Fraser Milner Casgrain LLP v Kristof Financial Inc, 2013 ABQB 359 at paras.16-18 [9] I take from these authorities that I should defer to the Review Officer unless he has proceeded on a wrong principle of law,including where he has made an award that is inordinately high or low as a result. I can only correct errors of fact where the findings wereclearly wrong.

The Appellant’s Brief [ 10 ] Ms. Hearn’s Brief raises three grounds of appeal: (1) errors of jurisdiction, law or procedure; (2) error of fact; and (3) errors in the decision. Procedural/Legal/Jurisdictional Errors [ 11 ] Beginning with the alleged errors of procedure, law and jurisdiction, Ms.

Hearn’s first complaint is that the review was unfair because the Respondent was given more time to talk and because there was not sufficient time for the Review Officer to hear and address all issues (para.15 of the Appellant’s Brief). [ 12 ] As mentioned earlier, the Review Officer heard submissions of both parties for more than 5 hours spread over two days, well exceeding what would normally be allotted for the review of legal accounts for a file of this nature. [ 13 ] The Review Officer expressly mentioned that there was a great deal of repetition. The transcript shows Ms.

Hearn continually interrupting his attempts to give his decision in order to repeat her arguments. Similarly, the Review Officer could not even manage to review the evidence from their earlier court appearance without repeated interruptions by Ms. Hearn to make her arguments. [ 14 ] Ms. Hearn refers in her material to an “admission” made by the Review Officer regarding this procedural unfairness argument. This is the exchange she excerpted (from page 66 of the Transcript): Ms.

Hearn: So I can appeal it [the Review Officer’s decision] based on the fact that you are not going to review all my evidence and you don’t have time to deal with it? Review Officer: Sure. [ 15 ] However, the Review Officer was not agreeing with her underlying premise – that insufficient time had been spent on the review. Rather, he was affirming that she could indeed appeal his decision on those grounds and, in reality, on any others she chose. In fact his full answer (also on page 66) was: Review Officer: Sure.

Sure, you can raise that as a ground of appeal if you wish, okay. [ 16 ] I have reviewed the November 9, 2021 transcript very carefully and there is no question that Ms. Hearn had equal if not more time to address the issues before the Review Officer. He not only listened to hours of argument, sifted through voluminous Affidavit material and gave an oral decision notwithstanding the obstacles to doing so, he also explained to Ms. Hearn the appeal process and the process for making a complaint to the Law Society of Alberta. [ 17 ] There was no procedural unfairness in the conduct of the review. Mr.

Ross’ Continued Work on the File [ 18 ] Another error of “procedure” identified by Ms. Hearn in her Brief was the fact that the Review Officer did not reduce the final amount owing, notwithstanding that Mr. Ross continued to work on the file after Ms. Hearn indicated that she did not want Mr. Ross to work on her file. I would not characterize this as a “procedural error”, nor a question of jurisdiction.

Rather, it is her objection taken to the disposition of her argument on this point. [ 19 ] The Retainer Agreement gave discretion to the law firm to assign lawyers as was deemed necessary, subject to the instructions of the client. [ 20 ] On July 27, 2020 Ms. Hearn objected to Mr. Ross’ continued work on the file and to the announced increase in his hourly rate. On July 28, 2020, Mr. Kirk responded to her email, explaining that Mr. Ross’ work on the file was necessary for the arbitration and that his rate increase was envisioned by the Retainer Agreement. [ 21 ] Nothing more was said by Ms.

Hearn in response to that explanation. Mr. Ross continued to work on the file and accounts showing his time continued to be generated. At least three relatively minor accounts were generated between December, 2020 and March, 2021 with no further objections made by Ms. Hearn to Mr. Ross’ involvement. [ 22 ] Although not particularly fleshed out, it appears the Review Officer treated this as estoppel by conduct – a fancy term meaning that the Appellant condoned Mr.

Ross remaining on the file by not objecting again even when she knew that he continued to work and bill for his work. [ 23 ] There might also be a deeply-buried quantum meruit argument available, to the effect that Ms. Hearn benefited from the considerable work that Mr. Ross did in the preparation and conduct of the arbitration. Ms. Hearn would no doubt disagree, because she was unhappy with the results of the arbitration. However, the Review Officer found as a fact that she was well-represented at the arbitration.

She received a matrimonial property division at the low end of the expected range and spousal support above what was expected. That is an important backdrop to this appeal, as it was to the initial review. [ 24 ] Lastly, it is also important to note that Mr. Ross’ hourly rate was lower than that of Mr. Kirk. Therefore, the only alternative to having Mr. Ross do the work he did would have been to reassign that work to Mr. Kirk, in which case the final bill would have been even higher. Mr. Kirk advised the Review Officer that he did reduce the final account rendered to Ms. Hearn by $4,000, $2,218 of which were Mr.

Ross’ fees.

[ 25 ] Although the reasoning of the Review Officer could have been presented differently, I would not interfere with his conclusion, which I find to be correct. There was no error on this ground. Breach of Confidentiality [ 26 ] Ms. Hearn also cites the breach of her confidentiality as a ground of appeal. It was accepted throughout that her lawyers inadvertently disclosed her address to opposing counsel in an exchange of documents.

The Review Officer did adjust the account by decreasing the fees owing by $240, which was the amount of fees related to extra correspondence dealing with this mistake. [ 27 ] I do not understand this mistake, albeit serious, to have affected the outcome of Ms. Hearn’s arbitration in any way. I would not disturb the Review Officer’s decision to reduce the accounts in the manner he did. Breach of the Charter [ 28 ] Ms.

Hearn has cited a breach of the Canadian Charter of Rights and Freedoms (para.15 of her Brief), with respect to a repeated complaint about allowing a criminal law issue (an assault) to seep into her family law matter. Although it is raised towards the end of her Brief, she frames it as a jurisdictional issue so I will deal with it here. [ 29 ] This issue was never completely laid out for me, perhaps because of Ms. Hearn’s wish to have it remain private. I gather that it came up in the context of the medical records which were discoverable as part of Ms. Hearn’s spousal support claims.

In any event, the Respondent is correct that the Charter does not apply to a Retainer Agreement between private citizens. The law firm is not a government nor any kind of quasi-government agency and thus the Charter has no application. General Complaints Regarding the Respondent’s Advocacy [ 30 ] Ms. Hearn clearly felt that her evidence was not well presented at the arbitration and that the arbitration decision was detrimental to her as a result.

Without re-litigating the arbitration, which is now the subject of a separate appeal, I cannot agree with her arguments on this ground. [ 31 ] She argues in support of this point that some issues she wanted addressed by the arbitrator were not addressed.

She takes issue with the statement of the Review Officer that every issue was “brought to the arbitrator’s attention and was argued well” because, as she points out, he did not have a copy of the Arbitration Agreement outlining the issues for arbitration. [ 32 ] First, this is not a procedural or jurisdictional error, it is another complaint about the findings of fact made by the Review Officer. In fact, it appears again in Ms. Hearn’s list of errors of fact, below and so I will deal with it there.

Errors of fact [ 33 ] Alleged errors of fact are to be reviewed on a standard of correctness. [ 34 ] As mentioned, the first alleged error of fact is the Review Officer’s finding that the Arbitrator heard all the issues for arbitration. [ 35 ] Adequate representation does not mean that every issue the client raises will or can be argued. Lawyers should present the client’s case in a way which is persuasive, but which also recognizes and observes the legal parameters of the case. It is not uncommon for clients to think that things that are important to them are legally relevant when they are not.

The lawyers’ understanding of that difference is a big part of the service they provide. [ 36 ] Ms. Hearn is now appealing the arbitration award so whether significant changes are made to that award remains to be seen. But even if that happens, it will not necessarily mean that Messrs. Kirk and Ross somehow failed to present her case adequately for the reasons just stated. [ 37 ] The Review Officer might have chosen his words more carefully as he could not have known exactly what issues were outlined on the arbitration agreement.

However the matter of what the arbitrator was bound to consider is not the purview of the Review Officer anyway. He had adequate evidence on which to find that the Respondents had provided proper representation to Ms. Hearn, at least as far as was necessary to confirm the legal fees charged. His decision was not incorrect. [ 38 ] The second alleged error of fact made by the Review Officer concerned the arbitrator’s treatment of Ms. Hearn’s budget, prepared for her spousal support argument at the arbitration. Apparently, she was not happy with the budget, even though she prepared it herself.

The arbitrator made a comment that it seemed excessive to him. Ms. Hearn says that the use of this budget at the arbitration hurt her credibility. [ 39 ] First, it would be difficult to see how, even if that were true, it could be properly blamed on her counsel. But more importantly, as Mr. Kirk pointed out repeatedly at the initial review, that comment seems, by all accounts, to have been an off-hand comment and not a reflection of the arbitrator’s ultimate conclusions on Ms. Hearn’s credibility. This is evidenced by the fact that the ultimate spousal support award was higher than Ms.

Hearn had been told to expect. [ 40 ] The Review Officer was correct in finding no necessary deductions for counsel’s use of the budget or conduct of the arbitration generally.

Errors in outcome [ 41 ] Ms. Hearn argues that the outcome of her complaints to the Review Officer was not fair or reasonable. She says that his decision was inaccurate and that the certified fees remain excessive. The particulars of this ground of her appeal are generally the same (or additional) complaints about the conduct of the arbitration itself (see pages 21-22 of her Brief). [ 42 ] For example, she felt that her counsel should have objected at points in the arbitration when they did not. One of these was the introduction of certain medical records, which Mr.

Kirk did not object to being exhibited with a reservation of his right to cross-examine on the accuracy of the information. [ 43 ] Somewhat like the layperson’s perception of what is legally relevant, clients often expect that their counsel will object to the introduction of evidence because they don’t like the evidence or think it is incorrect or inaccurate. There is nothing to suggest that Mr. Kirk did not properly assess the basis on which the evidence was being tendered. He put the arbitrator and opposing counsel on notice that his client was not necessarily accepting the import or the truth of those records.

This is proper advocacy, whether or not it ultimately turns out the arbitrator erred in accepting or considering any particular evidence. [ 44 ] Additional complaints included that Messrs. Kirk and Ross failed to hurt her husband’s credibility as she thought should have happened. She was also unhappy that, after a suggestion that the parties share some expert fees, her husband rejected that option and she was forced to pay her expert’s costs herself.

The Respondent had no ability to force her husband to share expert costs just because the arbitrator thought it was a good idea. [ 45 ] In my view, these complaints generally evidence some unfamiliarity with the legal process and the lawyer’s role in representing a client within that process. [ 46 ] Errors in the outcome, as a ground of appeal, refers to errors in the decision of the Review Officer, not of the Arbitrator.

This is not a re-litigating of the arbitration, nor of particular decisions made by counsel at the arbitration unless those decisions are clearly linked to discernible costs charged unfairly to the client. That is not the case here. The decision of the Review Officer was not clearly wrong and will not be varied on this appeal. Conclusion [ 47 ] It is obvious, even from the written materials that the entire process was severely taxing for Ms. Hearn, both physically and mentally.

While I understand that she feels genuinely aggrieved at the outcome of the arbitration process, I can find no errors - procedural, jurisdictional or factual - to justify any outcome of this appeal other than to confirm the certification of the Review Officer. [ 48 ] The appeal is dismissed. Parties may speak to costs if they cannot agree. Heard on the 28 th day of October, 2022. Dated at the City of Calgary, Alberta this 22 nd day of November, 2022. M.H. Hollins J.C.K.B.A. Appearances: Gary A. Kirk and Michael S.

Ross for Kirk Montoute Dawson LLP, the Plaintiff/Respondent Wendy Suzanne Hearn (AKA Sackett) for herself, the Defendant/Appellant