Executive Summary: Key Legal and Evidentiary Issues

• Allegation that the review officer exceeded jurisdiction by applying the 2017 retainer agreement to 2021 legal services.

• Complaint of procedural unfairness due to absence of sworn testimony during the review hearing.

• Dispute over the reasonableness of a $750,000 final fee, partly based on estimated tax savings.

• Contention that 2017 interim payments should have reduced the final 2021 fee.

• Core issue of whether the 2017 retainer agreement governed distinct 2021 work.

• Review officer and courts emphasized deference under Rule 10.19 for assessing lawyer’s fees.

Background facts and chronology of events

In 2017, the Bertram Family Trust, 1548199 Alberta Ltd, Tammy Bertram, and Robert Bertram retained Felesky Flynn LLP to provide tax planning advice related to the sale of a manufacturing company. That transaction fell through. The law firm billed based on hourly rates, and the applicants paid without dispute. The file remained open in anticipation of a future sale.

In 2021, the applicants again pursued a sale to the same purchaser. They requested new tax advice from Felesky Flynn LLP. No new retainer was signed, and the same client file number was used. The 2017 work was not directly transferrable. The firm issued interim invoices totaling $205,295, which were paid. The transaction involved 14 entities and 5 countries, ultimately resulting in a $42,000,000 sale.

In November 2021, the firm issued a final invoice for a “Proposed Fee” of $750,000, less interim payments. The fee, based on “value billing,” reflected less than 15% of the applicants’ estimated tax savings and was consistent with the factors outlined in the 2017 retainer agreement. After deducting interim payments, the balance owing was $544,705, including disbursements.

Policy terms and retainer agreement provisions

The 2017 retainer agreement allowed Felesky Flynn LLP to issue interim accounts and a final account, which could be adjusted “up or down” based on specified factors. These included urgency, time expended, results obtained, lawyer experience, rush services, dollar value involved, risk magnitude, value to the client, prior estimates, and the agreement itself. The final fee was not capped at hourly rates but contemplated a global assessment.

Applicants disputed the fee methodology, arguing that no agreement existed to charge based on a percentage of tax savings and claiming it resembled a disguised contingency fee. However, the review officer and the courts found that the fee determination aligned with the retainer’s express terms.

Review officer and appeal outcomes

Felesky Flynn LLP initiated a review under Part 10 of the Alberta Rules of Court. The review officer concluded the final fee was reasonable, applying a $100,000 reduction to account for various concerns including overbilling and urgency. He found that the 2017 and 2021 work were materially different, and that the final 2021 fee need not account for 2017 interim billings.

The applicants appealed to the Court of King’s Bench under Rule 10.26, alleging jurisdictional overreach, procedural unfairness, and unreasonable fee confirmation. The appeal judge upheld the review officer’s decision, finding no error in concluding the 2017 retainer governed the 2021 work. The appeal judge also found that the applicants had full opportunity to present their case and had not requested sworn evidence. An additional fee reduction of $3,295 plus GST was applied due to hourly rate discrepancies.

Final decision by the Alberta Court of Appeal

Justice Kevin Feth denied the applicants permission to appeal to the Alberta Court of Appeal. He held that the applicants failed to demonstrate a question of general or public importance, or a reasonable chance of success. The process was found to be procedurally fair. Justice Feth emphasized that the review and appeal process under Part 10 was intended to be simplified, timely, and economical. The application was dismissed on February 14, 2025, and costs were awarded to the respondent.

Overall outcome

The law firm’s final fee of $750,000 (adjusted by $103,295 in total) for 2021 services was upheld at all levels. The courts found that the 2017 retainer agreement governed the 2021 work and that the fee was reasonable based on the criteria outlined therein. No further appeal was permitted.