Executive Summary: Key Legal and Evidentiary Issues

• Dispute over whether Madame Kotsikas Vassiliki Koutsandreas and Monsieur Aristote Koutsandreas must pay additional professional fees claimed by Gagnon & Associés under a signed hourly-rate fee agreement.
• Examination of the lawyer–client relationship as a contract of services and mandate, and application of the Code of ethics of advocates to decide if the fees and disbursements are just and reasonable.
• Consideration of the defendants’ position that the amount already paid (2,543.85 $) was reasonable and that they owed nothing further, despite services rendered in connection with a retraction application and a second hearing before the Tribunal administratif du logement (TAL).
• Assessment of the defendants’ complaints about Me Shabnam Keymaram (information about possible retraction, questions asked at the second hearing, and explanations after the second invoice) and whether these support non-payment of the invoiced fees.
• Analysis of the contractual interest rate of 18% per year in light of ethical rules requiring a reasonable rate that does not give the profession a character of lucre, leading the Court to limit interest to the legal rate plus the additional indemnity.
• Determination that Madame and Monsieur Koutsandreas are jointly and severally condemned to pay 1,185.70 $ in fees, with interest at the legal rate and the additional indemnity from 15 August 2022, plus 163 $ in court filing fees as part of the legal costs.

Facts of the case

In 2022, Madame Koutsandreas wanted to recover possession of a dwelling in order to house Monsieur Koutsandreas. In March 2022, Madame and Monsieur Koutsandreas gave a mandate to the law firm Gagnon & Associés to represent them in this context before the Tribunal administratif du logement (TAL). Me Shabnam Keymaram, a lawyer at Gagnon & Associés, acted for them and a fee agreement (convention d’honoraires) was signed. Under this agreement, Madame and Monsieur Koutsandreas undertook to pay an hourly rate of 160 $ for services, plus applicable taxes, and not a lump sum or fixed price. The time spent on services therefore affected the amount of the fees. Me Keymaram rendered services and, among other things, represented Madame Koutsandreas at a first hearing before the TAL regarding repossession of the dwelling. At this hearing, the tenants were absent. Following this hearing, the TAL rendered a first decision in April 2022 authorizing repossession of the dwelling. Madame and Monsieur Koutsandreas were satisfied with this first decision of the TAL. For services and disbursements from 22 March to 1 April 2022, including the first hearing, Gagnon & Associés billed 2,543.85 $, taxes included. This invoice was paid in full by Madame and Monsieur Koutsandreas.

Fee agreement and services after the first decision

In May 2022, the tenants applied for retraction of the first TAL decision. Gagnon & Associés then continued to advise and represent Madame and Monsieur Koutsandreas in the repossession matter, including at a second hearing before the TAL on 1 June 2022 concerning the retraction application. Following this second hearing, the TAL rendered a second decision dated 2 June 2022, in which it retracted the first decision. Madame and Monsieur Koutsandreas were dissatisfied with this second decision, after which a third hearing before the TAL would be necessary in connection with the hoped-for repossession of the dwelling. On 7 June 2022, Gagnon & Associés billed 1,185.70 $, taxes included, for other services and disbursements, with the fees charged at the hourly rate set out in the fee agreement. This invoice included, among other things, fees for various telephone conversations, including with Monsieur Koutsandreas, a case law search, and 2.4 hours of work for the second hearing. The only item billed after this second hearing was a telephone conversation of about three minutes with Monsieur Koutsandreas on 7 June 2022. After this, Monsieur Koutsandreas revoked the mandate given to Gagnon & Associés, which therefore did not act at the third hearing before the TAL.

Defendants’ position and complaints

Madame and Monsieur Koutsandreas considered that the amount already paid was reasonable and that they did not owe any further sum. They argued that, in their view, everything had already been settled by the first TAL decision, so there was no reason for them to pay for subsequent services related to the retraction application and the second hearing before the TAL. They also reproached Gagnon & Associés and Me Keymaram for not informing them, at the first hearing, that an application for retraction of judgment could follow; for not asking certain questions to Madame Koutsandreas at the second hearing; and, after the second invoice was sent, for not being transparent about the services rendered and the amounts billed. On this basis, they maintained that they were not required to pay the 1,185.70 $ claimed.

Legal framework governing the dispute

The Court recalled the rules on the burden of proof: the party who wishes to assert a right must prove the facts that support its claim, and the party alleging that a right is null, has been modified, or is extinguished must prove the facts on which its contention is based. The applicable standard is the balance of probabilities, namely clear and convincing evidence going beyond a mere possibility, without requiring certainty. On the contractual level, the Court noted that the contract between a lawyer and a client may be in the nature of a contract of services and of mandate. In addition to what is set out in the fee agreement, the lawyer must comply with the rules of conduct in the Code of ethics of advocates. This code provides that a lawyer must request and accept only fees and disbursements that are fair and reasonable, that is, justified by the circumstances and proportionate to the professional services rendered. The Court also recalled that, generally, a lawyer has an obligation of means towards the client and cannot be held liable solely because the result hoped for by the client is not achieved. A client’s dissatisfaction with the outcome of a case does not release the client from the obligation to pay the fair and reasonable fees that the client undertook to pay for services rendered.

Court’s analysis of fees and interest

As regards the fees, the Court noted that, under the fee agreement, Madame and Monsieur Koutsandreas undertook to pay an hourly rate and not a lump sum or fixed price, so that the time devoted to the services affected the amount of the fees. It was only after the second hearing that Monsieur Koutsandreas revoked the mandate. The dissatisfaction of Madame and Monsieur Koutsandreas with the second decision rendered by the TAL did not release them from the obligation to pay the agreed hourly rate. The Court found from the evidence that, at the first hearing, given the tenants’ absence, Me Keymaram explained to Monsieur Koutsandreas that an application for retraction of judgment could follow. The Court took the view that the criticisms made by Madame and Monsieur Koutsandreas did not support the conclusion that the fees claimed were not fair and reasonable. It considered that the invoices, including the one claimed, were sufficiently detailed and supported by the report of interventions. Through the testimony of Me Keymaram and Me Josée Gagnon and the report of billed interventions, Gagnon & Associés met its burden of proving that the fees billed were consistent with the fee agreement and were fair and reasonable in the circumstances. The Court therefore granted the claim for 1,185.70 $ and condemned Madame and Monsieur Koutsandreas jointly and severally to pay this amount. As regards interest, the Court recalled that, under the Code of ethics of advocates, a lawyer must avoid methods likely to give the profession a character of lucre and may collect, on overdue accounts, only such interest as is agreed to in writing with the client, at a reasonable rate. The fee agreement provided for an interest rate of 18% per year, but case law had already held that a lawyer may not claim an interest rate of 18% per year, or even 16%. In light of this case law and in the absence of evidence to the contrary, the Court concluded that Gagnon & Associés had not discharged its burden of proving that an 18% annual rate was reasonable. Consequently, the Court limited interest to the legal rate, to which the additional indemnity provided by law is added. It set the starting point for interest and the additional indemnity at 15 August 2022, the date on which, following receipt of a demand letter, Madame and Monsieur Koutsandreas were in default.

Outcome and monetary consequences

On legal costs, the Court recalled that, in principle, costs are owed to the party who is successful and found no reason to depart from this principle. It therefore condemned Madame and Monsieur Koutsandreas to pay Gagnon & Associés 163 $ corresponding to the court filing fees (droits de greffe) for filing the claim. In the end, the Court partially allowed the claim of the plaintiff Gagnon & Associés and condemned the defendants, Madame Kotsikas Vassiliki Koutsandreas and Monsieur Aristote Koutsandreas, jointly and severally, to pay Gagnon & Associés the sum of 1,185.70 $ with interest at the legal rate and the additional indemnity provided for in article 1619 of the Civil Code of Québec from 15 August 2022, as well as legal costs including the amount of 163 $ for the filing fees.