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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Wallace v. Canadian Pacific Railway, 2011 SKCA 108

The Court in Wallace v. Canadian Pacific Railway clarified the duty of loyalty that lawyers owe to their clients in situations where there are conflicting interests. It was also found that the remedy of disqualification should not be used for punishment but to protect the public’s confidence in the legal profession and the administration of justice.

In this case, the respondent had its former counsel, the appellant, disqualified from acting as counsel for the representative plaintiff of an upcoming class action that the appellant had begun acting for while still working on unrelated matters for the respondent. In adjudicating the case, the Court applied the test from R. v. Neil concerning the "Professional Litigant Exception" and the "bright line" rule disallowing a lawyer simultaneously representing two clients whose interests are adverse. The Court held that the "Professional Litigant Exception" does not only apply to minor or non-contentious unrelated matters, and advocated a more flexible approach to the Neil test looking at all the circumstances.

Relevant factors for this analysis included: the size and sophistication of the former client; dependency on the solicitor; the type of cases worked on by the solicitor; the danger of confidential information being abused; vulnerability of the former client; and whether or not the solicitor’s actions would diminish the public’s confidence in the profession. In looking for a suitable remedy, it was found that even though the appellant had breached its duty of candour, disqualification would not be appropriate. Instead, the Court held that where there is no further relationship between the solicitor and former client to protect; where there is no risk of prejudicial use of confidential information; where disqualification would be unnecessarily costly to the parties; and where other remedies are available to the former client disqualification should not be used.

September 28, 2011
Link to Decision

Liam Oster
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