Mor-Town Developments Ltd. v. MacDonald, 2012 NSCA 35

The Nova Scotia Court of Appeal considered whether under the Legal Profession Act, a Small Claims adjudicator had jurisdiction to tax a solicitor’s account that has already been paid. In addition, the Court had to determine whether Mor-Town Developments Ltd ("Mor-Town") had the burden of proving the reasonableness of the legal account. The Court held that a Small Claims adjudicator had a right to tax paid legal accounts because it is consistent with the statutory objectives of the Act. In addition, the Court found that the onus of proving the reasonableness of an account should always rest with the lawyer and not the client.       

Mor-Town filed a Notice of Taxation with the Small Claims Court against David MacDonald to obtain reimbursement for unreasonable legal fees. The adjudicator ordered Mr. MacDonald to refund to Mor-Town the difference between the amount it paid and the reduced amount allowed on review. The trial judge set aside the decision, concluding that the adjudicator had lacked jurisdiction to tax paid accounts, and that Mor-Town had failed to prove that Mr. MacDonald's legal accounts were unreasonable.          

On appeal, the Court held that the primary purpose of the Legal Profession Act was to protect the public. Therefore, narrowly reading the words "to be paid" under the Act to only mean unpaid accounts would lead to unjust results. The Court concluded that the onus on proving reasonableness of an account was on Mr. Macdonald, because he was in the best position to know what tasks were completed and what fees to charge. Therefore, it would be impractical for a client to prove the unreasonableness of work done by a lawyer. Lastly, the Court determined that Mor-Town had a right to appeal a decision rendered by the Nova Scotia Supreme Court concerning taxation of a lawyer's account, because it was in accordance with s. 9A of the Small Claims Court Act. Consequently, the Court reversed the trial judge's decision and reinstated the decision rendered by the Small Claims Court adjudicator.   

Link to Decision

Haran Viswanathan

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