10.10: Time limitation on reviewing retainer agreements and charges
10.9: Reasonableness of retainer agreements and charges subject to review
13.5: Variation of time periods

Case Summary

The Appellant appealed the Decision of the Chambers Judge to uphold the Master’s Fiat which granted the Respondent an extension of time to review the Appellant’s accounts beyond the six months prescribed by the Rules, which the Respondent obtained ex parte. The Court noted that the relevant Rules in the circumstances are Rules 10.9, 10.10 and 13.5.

The Court maintained that the Chambers Judge correctly identified the applicable case law and that Samson Cree Nation v O’Reilly & Associés, 2014 ABCA 268 (CanLII) (“Samson”) sets out the six factors to be considered in extending time. However, the Chambers Judge incorrectly characterized the threshold that must be met to allow an extension of time for the review of a lawyer’s accounts as very low. Specifically, the Chambers Judge stated: “[a]s long as there is some evidence that a client, in good faith, seeks an independent review of their legal fees, the fiat ought to be granted”.

The Court remarked that Rule 10.10 provides for a six month limit as a balance of the “client’s right to review a legal account against the lawyer’s right to have an account reviewed promptly”. The threshold set by the Chambers Judge ignored this balance. Further, the Court held that the test set out by the Chambers Judge did not give effect to the limitation in Rule 10.10. The Court also found that the Chambers Judge did not address four of the six factors set out in Samson. Given this, and that the Chambers Judge made a palpable and overriding error on the facts, the Court held that it could not conclude that the Chambers Judge exercised discretion reasonably. As such, the Court granted the Appeal and set aside the Fiat granted by the Master.

The Court provided advice to counsel acting for individuals, in light of the fact that Respondent did not promptly seek taxation of the lawyer’s accounts. The Court noted that when acting for individuals in particular, counsel “might consider advising their clients in writing that they have the right pursuant to the Rules to review a retainer agreement and the lawyer’s charges”. The Court suggested counsel could do so in the retainer agreement or a letter provided to the client at the same time as the retainer agreement, including the wording of Rules 10.9 and 10.10, and noting that it is difficult to obtain an extension of time beyond the time prescribed in Rule 10.10.

Finally, the Court held that it might not be appropriate to extend the deadline set out in Rule 10.10(2) through an ex parte fiat. Instead, Masters should direct those seeking such a Fiat to “give notice to the opposing lawyer/law firm or client, to provide an evidentiary basis for the requested extension and consider whether an order rather than a fiat should be granted if the test is met”.

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