LEWIS ESTATES COMMUNITIES INC v BROWNLEE LLP, 2013 ABQB 508
10.10: Time limitation on reviewing retainer agreements and charges
10.17: Review officer’s authority
13.5: Variation of time periods
The Applicants, being various golf course owners, applied for an Order allowing them to seek review by a Review Officer of accounts for services rendered by the Respondent, Brownlee LLP, notwithstanding that most of the invoices were issued over six months prior to filing the Appointment for Taxation. The Applicants also sought an Order compelling Brownlee to provide them with complete files relating to the matters covered by the accounts.
The Parties agreed that the golf courses were entitled to a review of Brownlee’s accounts dated April and March of 2010, but also agreed that an Order was required for a review of Brownlee’s accounts going back further. The actual Appointments for Review were filed prior to the adoption of the current Rules of Court; therefore, the Court was required to apply former Rule 647, as it governed the Application at the time it was filed - Brown J. noted that the effect of former Rule 647(d) was the same as the combined effect of current Rules 10.10(2) and 13.5(2)(a).
Whether considering the former Rules or the current Rules, the Applicants were only entitled to a review of lawyers’ charges delivered within the prior six months. Brown J. stated that this limit was meant to balance the right of a client to initiate a review of accounts, which required the lawyer to demonstrate reasonableness, and the right of lawyers to a prompt request by clients for a review. Further, any exercise of judicial discretion to extend the time period beyond six months must weigh the factors relevant to the circumstances of the Application, having regard to established principles and possible injustices.
In this instance, the Court considered several factors, including: the types of accounts Brownlee rendered to the Applicants; the length of the requested extension; the reason for the delay to file the Appointments; whether the delay caused prejudice to Brownlee; whether there was evidence of overcharging by Brownlee; and whether the evidence of the entire relationship between the Parties supported an extension of time. Brown J. stated that no one factor was determinative; however, the first factor considered was the type of accounts rendered by Brownlee, as it was seen to be pivotal to some of the other factors.
Regarding the type of account, the issue was whether Brownlee’s periodic accounts were interim or final. Brown J. stated that a periodic account was likely to be considered final if the parties understood that the charges would be based on hours spent at an hourly rate and would not be adjusted at the conclusion of the matter. The Court held in this case that the accounts on their face were final in that they were for services rendered during a specific time period, the total was said to be “due” and the Applicants actions demonstrated that they considered the accounts to be payable immediately, not subject to a later adjustment.
Regarding the length of the extension, the longer the extension, the more the Court felt this factor would militate against granting an extension. In one instance, review was statute-barred pursuant to the Limitations Act. Brown J. stated that the Applicants needed a “very good reason” to support an extension of time for reviewing lawyers’ charges and expressed two concerns with the evidence provided by the Applicants. First, the Applicants failed to identify their concerns earlier than 2009 and, second, the Applicants failed to provide particularity in their account of the time period between identifying their concerns about possible duplicative work and filing the Appointments.
Regarding prejudice, Brown J. examined whether the Applicants’ delay was inordinate and, if so, whether the Applicants rebutted the presumed prejudice to Brownlee. The length of the delay varied with each account, and Brown J. concluded that delay in respect of accounts sent in connection with the 2009 and 2010 matters were not reasonably characterized as inordinate. Regarding the 2007 and 2008 matters, the delay in seeking a review of those accounts was considered inordinate. Where the delay was found to be inordinate, Brown J. held that the Applicants were able to rebut the presumed prejudice to Brownlee, as Brownlee still had the files for those matters in its custody and was therefore able to address the merits of the accounts.
The Court also considered the allegations of overcharging and agreed with Brownlee’s submission that the time entries were not necessarily suggestive of overcharging; however, it was held that there was some evidence that could support a finding of overcharging. Finally, Brown J. considered the relationship between the Parties and held that the relationship between Brownlee and the Applicants gave them many opportunities to identify concerns and raise them with Brownlee; therefore, this factor weighed against allowing an extension.
After all of the factors were considered, Brown J. concluded that the interests of justice and public confidence were best served by permitting a review of Brownlee’s accounts relating to the 2009 and 2010 assessment matters. The Court extended the Applicants’ time for seeking review by six months for those specific matters.
Regarding the Applicants’ request for an Order compelling Brownlee to provide them with complete files, Brownlee submitted that the request was premature and unnecessary. Brown J. disagreed, finding that it would be better to ensure that the Applicants had all the file materials in advance of the Review, rather than to adjourn it later. The Court also held that the Review Officer’s authority under Rule 10.17(1)(b) was intended to empower the Review Officer. Brown J. ordered Brownlee to provide the Applicants with the complete files regarding the matters under review.View CanLII Details