



COURT OF APPEAL FOR ONTARIO

CITATION:
Fontaine v. Duboff
    Edwards Haight & Schachter, 2012 ONCA 471

DATE: 20120704

DOCKET: C53526

Rosenberg, Juriansz and
    Rouleau JJ.A.

BETWEEN

Larry Philip Fontaine in his personal capacity
    and in his capacity as the Executor of the estate of Agnes Mary Fontaine,
    deceased, Michelline Ammaq, Percy Archie, Charles Baxter Sr., Elijah Baxter,
    Evelyn Baxter, Donald Belcourt, Nora Bernard, John Bosum, Janet Brewster,
    Rhonda Buffalo, Ernestine Caibaiosai-Gidmark, Michael Carpan, Brenda Cyr, 
    Deanna Cyr, Malcolm Dawson, Ann Dene, Benny Doctor, Lucy Doctor, James Fontaine
    in his personal capacity and in his capacity as the Executor of the Estate if
    Agnes Mary Fontaine, deceased, Vincent Bradley Fontaine, Dana Eva Marie
    Francey, Peggy Good, Fred Kelly, Rosemarie Kuptana, Elizabeth Kusiak, Theresa
    Larocque, Jane McCullum, Cornelius McComber, Veronica Marten, Stanley Thomas
    Nepetaypo, Flora Northwest, Norman Pauchey, Camble Quatell, Alvin Barney
    Saulteaux, Christine Semple, Dennis Smokeyday, Kenneth Sparvier, Edward
    Tapiatic, Helen Winderman and Adrian Yellowknee

Plaintiffs

and

Duboff Edwards Haight
    & Schachter

Appellant

and

The Attorney General of
    Canada, The Presbyterian Church in Canada, The General Synod of The Anglican
    Church of Canada, The United Church of Canada, The Board of Home Missions of
    The United Church of Canada, The Women's Missionary Society of The Presbyterian
    Church, The Baptist Church in Canada, Board of Home Missions and Social
    Services of The Presbyterian Church In Bay, The Canada Impact North Ministries
    of The Company for The Propagation of The Gospel in New England (also known as
    The New England Company), The Diocese of Saskatchewan, The Diocese of The Synod
    of Cariboo, The Foreign Mission of The Presbyterian Church in Canada, The
    Incorporated Synod of The Diocese Of Huron, The Methodist Church of Canada, The
    Missionary Society of The Anglican Church of Canada, The Missionary Society of
    the Methodist Church of Canada (also known as The Methodist Missionary Society
    of Canada), The Incorporated Synod of The Diocese of Algoma, The Synod of The
    Anglican Church of The Diocese of Quebec, The Synod of The Diocese of Athbasca,
    The Synod of The Diocese of Brandon, The Anglican Synod of The Diocese of
    British Columbia, The Synod of The Diocese of Calgary, The Synod of The Diocese
    of Keewatin, The Synod of The Diocese of Qu'appelle, The Synod of The Diocese
    of New Westminister, The Synod of The Diocese of Yukon, The Trustee Board of
    The Presbyterian Church in Canada, The Board of Home Missions and Social
    Service of The Presbyterian Church of Canada, The Women's Missionary Society Of
    The United Church of Canada, Sisters of Charity, A Body Corporate also known as
    Sisters of Charity of St. Vincent De Paul, Halifax (also known as Sisters of
    Charity Halifax), Roman Catholic Episcopal Corporation of Halifax, Les Soeurs
    de Notre Dame- Auxiliatrice, Les Soeurs de St. Francois D'assise, Insitut des
    Soeurs du Bon Conseil, Les Soeurs de Saint-Joseph de Saint- Hyancithe, Les
    Soeurs de Jesus-Marie, Les Soeurs de L'assomption de La Sainte Vierge, Les
    Soeurs de L'assomption de La Saint Vierge de L'alberta, Les Soeurs de La
    Charite de St.-Hyacinthe, Les Oeuvres Oblates de L'ontario, Les Residences
    Oblates du Quebec, La Corporation Episcopale Catholique Romaine de La Baie
    James (The Roman Catholic Episcopal Corporation of James Bay), The Catholic
    Diocese of Moosonee, Soeurs Grises de Montréal/Grey Nuns of Montreal,  Sisters
    of Charity (Grey Nuns) of Alberta, Les Soeurs de La Charité des T.N.O., Hotel-Dieu
    de Nicolet, The Grey Nuns of Monitoba Inc.-Les Soeurs Grises du Monitoba Inc.,
    La Corporation Episcopale Catholique Romaine de La Baie d'hudson - The Roman
    Catholic Episcopal Corporation of Hudson's Bay, Missionary Oblates - Grandin
    Province, Les Oblats De Marie Immaculee du Manitoba, The Archiepiscopal
    Corporation of Regina, The Sisters of The Presentation, The Sisters of St.
    Joseph of Sault St. Marie, Sisters Of Charity of Ottawa, Oblates of Mary
    Immaculate - St. Peter's Province, The Sisters of Saint Ann, Sisters of
    Instruction of The Child Jesus, The Benedictine Sisters of Mt. Angel Oregon,
    Les Peres Montfortains, The Roman Catholic Bishop Of Kamloops Corporation Sole,
    The Bishop of Victoria, Corporation Sole, The Roman Catholic Bishop of Nelson,
    Corporation Sole, Order of The Oblates Of Mary Immaculate in The Province of
    British Columbia, The Sisters of Charity of Providence of Western Canada, La
    Corporation Episcopale Catholique Romaine de Grouard, Roman Catholic Episcopal
    Corporation of Keewatin, La Corporation Archiépiscopale Catholique Romaine de
    St. Boniface, Les Missionnaires Oblates Sisters de St. Boniface-The Missionary
    Oblates Sisters of St. Boniface, Roman Catholic Archiepiscopal Corporation of
    Winnipeg, La Corporation Episcopale Catholique Romaine de Prince Albert, The
    Roman Catholic Bishop of Thunder Bay, Immaculate Heart Community of Los Angeles
    Ca, Archdiocese of Vancouver - The Roman Catholic Archbishop of Vancouver,
    Roman Catholic Diocese of Whitehorse, The Catholic Episcopale Corporation of
    Mackenzie-Fort Smith, The Roman Catholic Episcopal Corporation of Prince
    Rupert, Episcopal Corporation of Saskatoon, OMI Lacombe Canada Inc. and Mt.
    Angel Abbey Inc.

Defendants (Respondents)

Harley Schachter, for the appellant Duboff Edwards Haight
    & Schachter

E.F. Anthony Merchant Q.C., for the intervener Merchant
    Law Group LLP

Charles Hofley and Leanne N. Fisher, for the respondent
    Chief Adjudicator, Independent Assessment Process

Catherine Coughlan and Dalal Mouallem, for the intervener
    Attorney General of Canada

Heard: January 31, 2012

On appeal from the order of Chief Justice Winkler acting
    in his capacity as Administrative Judge for the Indian Residential Schools
    Settlement Agreement, dated March 7, 2011.

Rouleau J.A.:

INTRODUCTION

[1]

For more than 100 years, Canada required aboriginal children to attend
    residential schools. The children were isolated from their families and
    communities and many were subjected to profoundly disturbing physical, sexual,
    and psychological abuse. The schools were operated primarily by religious
    organizations under Canadas supervision. The last residential schools were
    closed in 1996. Canada has since acknowledged its long-standing policy
    respecting the Indian residential schools as a seriously flawed failure.

[2]

Various class action proceedings were brought against the Attorney
    General of Canada in relation to the Indian residential schools in Canada. On
    December 15, 2006, nine provincial and territorial superior courts issued
    concurrent reasons approving a national settlement agreement (S.A.)
    concluding the class actions: see
Baxter v. Canada (A.G.)
(2006), 83 O.R.
    (3d) 481 (S.C.). The reasons of the courts were followed by a set of nine
    identical approval orders incorporating the S.A. and addressing issues of
    implementation and administration of the settlement (implementation orders).

[3]

The S.A. provides two mechanisms through which class members can obtain
    individual compensation: (1) the Common Experience Payment (CEP), which is
    available to all eligible class members who resided at a residential school;
    and (2) the Independent Assessment Process (IAP), which is available to those
    claimants who establish that they suffered serious physical or sexual abuse, or
    psychological harm at a residential school.

[4]

Most claimants under the IAP retain counsel to represent them. Under the
    terms of the S.A., Canada agreed to contribute an amount up to 15% of the
    compensation awarded to the claimant for legal fees. This amount is paid in
    addition to the full amount of the award paid out to the successful claimant.

[5]

When the S.A. was approved, Winkler R.S.J. (as he then was) expressed
    concern that it did not provide for any review of the fees charged by counsel
    to their clients under the IAP: see
Baxter
, at paras. 73-78. All nine
    approving courts addressed this issue in the formal implementation orders of
    the S.A.

[6]

The implementation orders were not opposed by the parties to the S.A.,
    including the appellant  a Manitoba law firm. The implementation orders limit
    the legal fees that counsel may charge to IAP claimants to 30% of the
    compensation award. This limit is inclusive of, and not in addition to,
    Canadas 15% contribution to legal fees. The implementation orders also permit
    an Independent Adjudicator under the IAP (Adjudicator) to assess the fairness
    and reasonableness of the legal fees. With respect to this type of review, the
    implementation orders provide, at para. 18:

THIS
    COURT FURTHER ORDERS
that upon a claimants request which
    request shall be made at the conclusion of the hearing, or within fourteen (14)
    days thereof, or on the Adjudicators own motion, legal counsels legal fees
    for conducting the IAP may be reviewed by the Adjudicator for fairness and
    reasonableness. In the event of such a review legal counsel shall in addition
    to submitting their retainer agreement provide any other information pertinent
    to their legal fees. The Adjudicator shall assess the fairness and
    reasonableness of the legal fees in accordance with the generally accepted
    principles and authority for the assessment of accounts, including the
    following:

a.

time expended by legal counsel;

b.

the legal complexity of the matters;

c.

the degree of responsibility assumed by legal counsel;

d.

the monetary value of the matters at issue;

e.

the importance of the matter to the claimant;

f.

the degree of skill and competence demonstrated by the legal
    counsel;

g.

the results achieved and the contribution of legal counsel to the
    result;

h.

the ability of the claimant to pay; and

i.

the claimants expectations as to the amount of the legal fees,

and [the Adjudicator] shall take into account the fact that
    Canada will contribute an amount equal to 15% of the compensation award towards
    the legal fees.

[7]

The assessment of the legal fees can be initiated at the claimants
    request or on the Adjudicators own motion.

[8]

Paragraph 19 of the implementation orders provides that claimants or
    their legal counsel may request the Chief Adjudicator or his designate to
    review an Adjudicators ruling on the fairness and reasonableness of legal fees
    (for ease of reference, in these reasons Chief Adjudicator includes the Chief
    Adjudicators designate). Any such request is to be brought within seven days
    of the Adjudicators ruling and the Chief Adjudicator is to release written
    reasons within 14 days.

[9]

The implementation orders also provide for the ongoing supervisory role
    of the courts in relation to the S.A. The orders state, at para. 23, that:

[T]he Courts shall supervise the implementation of the
    Agreement and this order and, without limiting the generality of the foregoing,
    may issue such further and ancillary orders, from time to time, as are
    necessary to implement and enforce the provisions of the Agreement, the
    judgment dated December 15, 2006 and this order.

[10]

Schedule
    A to the implementation orders is a Court Administration Protocol (CAP).
    The CAP sets out a process for addressing issues that may arise regarding the
    administration or implementation of the S.A. The CAP provides that  where a
    matter requires court orders, directions or consideration  the party,
    counsel or other entity bringing the matter forward should file a Request for
    Direction. The request will be brought to the attention of one of two
    designated Administrative Judges, who are selected from among the nine judges
    who heard the motions for approval of the S.A.

OVERVIEW OF THE APPEAL

[11]

This
    is an appeal from directions issued by Winkler C.J.O. in his capacity as
    Administrative Judge pursuant to the CAP. The appellant, Duboff Edwards Haight
    & Schachter (DEHS), and the respondent, Chief Adjudicator, jointly brought
    a Request for Direction to the Administrative Judge following a review of the
    fairness and reasonableness of the legal fees that the appellant contracted to
    charge its client in the IAP. In his directions, the Administrative Judge
    determined, among other matters, that there is no right to appeal from, or to
    obtain judicial review of, decisions of the Chief Adjudicator in the fee review
    process. DEHS brought an appeal to this court from the Administrative Judges
    directions.

[12]

The
    respondent brought a motion to this court to quash the appeal on the basis that
    the court does not have jurisdiction to hear an appeal from a judges order
    giving directions pursuant to the S.A. The motion to quash was heard together
    with the appeal.

[13]

For
    the reasons that follow, I would dismiss the motion to quash and would also
    dismiss the appeal.

FACTS

(1)

The Adjudicators Legal Fee Review

[14]

The
    appellant, DEHS, represents claimants under the IAP and is a signatory to the
    S.A. In July 2006, DEHS entered into a contingency fee agreement with one of
    its IAP clients for 30% of any compensation awarded. The clients claim was
    heard in April 2009 and the Adjudicator awarded $103,000. Legal fees claimed at
    30% of the award were $30,900, plus applicable taxes totalling $3,708.

[15]

The
    reported time value of DEHS fees and disbursements when the claim hearing took
    place was $15,685.88. The Adjudicator informed the client of his right to
    initiate a legal fee review at the original claim hearing and in a letter
    following the hearing. The client did not seek a review.

[16]

On
    May 25, 2009, the Adjudicator undertook a legal fee review hearing on his own
    motion. The Adjudicator gave notice to the appellant of his intention to review
    the legal fees, and received both written and oral submissions from the
    appellant. The Adjudicator received the oral submissions by way of a conference
    call with counsel in the presence of the claimant.

[17]

On
    June 30, 2009, the Adjudicator issued a ruling adjusting DEHS proposed fee
    down to $20,600, plus taxes totalling $2,472. The approved fees reduced the 30%
    contingency fee to 20% (15% to be paid by Canada, 5% to be paid by the client).

[18]

A
    dispute erupted between Canada and the claimant involving whether GST and PST
    owing on compensation awarded under the S.A. is a disbursement to be paid by
    Canada on behalf of the claimant. A separate hearing to deal with those issues
    was scheduled to take place before the Chief Adjudicator on November 19, 2009.
    At the end of those proceedings, the reported time value of DEHS fees and
    disbursements had increased from $15,685.88 to $27,532.18.

(2)

Chief Adjudicators Decision

[19]

On
    July 29, 2009, DEHS appealed the decision of the Adjudicator to the Chief
    Adjudicator by way of written submissions. DEHS argued a list of 13 grounds for
    review. Of particular relevance to this appeal, DEHS argued that the
    Adjudicator erred in these three ways: (1) by basing his decision on the time
    that had been spent up to the date of the hearing, and on the fact that the
    hearing was completed in less than one day when the GST and PST disbursement
    issue was not yet settled and would require significant additional time; (2) by
    considering what other lawyers might charge for IAP claims for other clients;
    and (3) by presuming that 15% is the standard fee in IAP hearings.

[20]

On
    September 17, 2009, the Chief Adjudicator issued a ruling dismissing DEHS
    appeal and upholding the Adjudicators decision to reduce the legal fees. The
    Chief Adjudicator held that the Adjudicators decision provided a transparent reasoning
    path, fell within a range of reasonable outcomes, and was consistent with
    similar cases that had been the subject of fee review.

[21]

In
    response to DEHS three concerns described above, the Chief Adjudicator first
    noted that the reduced fee would be subject to a possible further ruling [by
    the Adjudicator or the Chief Adjudicator] that will be made on completion of
    the decision regarding the question of whether GST and PST on this case are a
    legitimate disbursement to be paid by Canada.

[22]

On
    the second point he reasoned that:

An adjudicator does not operate in a vacuum. Adjudicators bring
    with them the experience of handling other cases and learning what other
    lawyers charge for the same kind of work. To refer again to my fee review
    [appeal] decision of W-13760 I stated:

Many lawyers across Canada accept Canadas contribution of
    15% as full payment for their services. Lawyers in Quebec who handle IAP cases
    have agreed among themselves to limit their fees to Canadas contribution. It
    is difficult to accept that some lawyers would expect more than others for
    similar cases and delivery of the same quality of work. In fact, in many cases
    the difference cannot be reconciled.

I continue to stand behind these words. The fact that other
    lawyers working in the IAP process accept payment at Canadas contribution is a
    well known fact among lawyers and adjudicators working in this process.

[23]

Finally,
    regarding DEHS third point, the Chief Adjudicator was satisfied that the
    Adjudicator never presumed that a standard fee should be 15% in an average
    case. He reiterated that there is no such presumption, only a maximum fee of
    30% and a minimum fee of zero. The Chief Adjudicator concluded that, in all
    respects, the Adjudicator acted in accordance with the terms of the S.A. and
    there was no basis to interfere with the legal fee review decision.

(3)

The Administrative Judges Directions

[24]

On
    October 16, 2009, DEHS filed a notice of application at the Manitoba Queens
    Bench, seeking judicial review and other relief in respect of the decision of
    the Chief Adjudicator. Before the matter was heard, the Chief Adjudicators
    office took the view that a Request for Direction ought to be brought to one of
    the Administrative Judges to clarify the procedure for appealing or reviewing
    decisions of the Chief Adjudicator in the IAP legal fee review process.

[25]

In
    March 2010, the Chief Adjudicators office and DEHS submitted a joint Request
    for Direction to Winkler C.J.O., in his capacity as Administrative Judge
    pursuant to the CAP. The Chief Adjudicator requested directions on whether or
    not its fee review appeal decisions are reviewable by the courts, and if so,
    the proper procedure for such a review.

[26]

DEHS
    requested directions on several general points concerning the interpretation of
    the terms of the IAP legal fee review process as set out in the implementation
    orders. Of relevance to this appeal, DEHS sought direction on the issue of how
    contingency fee agreements are to be dealt with in provinces with statutes that
    govern the legal fee review process. DEHS also sought directions on three case
    specific issues, two of which pertain to this appeal: (1) whether the fee
    review in this case was commenced prematurely; and (2) whether the Adjudicator
    failed to consider the relevant factors in the fee review process.

[27]

In
    response to the joint request for directions, on March 7, 2011, the
    Administrative Judge issued directions. He summarized the directions sought by
    the Chief Adjudicator, at para. 8:

The Chief Adjudicator seeks directions regarding the extent to
    which IAP legal fee reviews conducted by him (or his designate) are subject to
    any further appeal; if there is a right to further appeal, to whom the appeal
    lies; and the nature of such appeal.

[28]

The
    Administrative Judge then summarized the directions sought by DEHS, at para. 9:

DEHS also seeks directions on issues specific to the Chief
    Adjudicators legal fee review in [this case]. In addition to the IAP file
    specific issues, DEHS seeks directions concerning the various factors to be
    considered by the IAP Adjudicators when they are conducting fee reviews.

[29]

On
    the first question raised by the Chief Adjudicator, the Administrative Judge
    concluded that no appeal lies from a decision of the Chief Adjudicator. The
    underlying litigation has ended and the relationship among the parties is
    governed by the court orders approving the settlement. The claims
    administration and assessment process is a creature of the S.A. In the words of
    the Administrative Judge, at para. 17: [T]he only appeal rights from decisions
    rendered under the claims administration and assessment process in respect of
    individual claims are those expressly set out in the terms of the order. The
    implementation orders provide for an appeal from a fee review to the Chief
    Adjudicator. Once that appeal route is exhausted, there is no further right of
    appeal.

[30]

The
    Administrative Judge rejected the suggestion that judicial review of the
    decision of the Chief Adjudicator is available. He explained, at para. 19, that
    the Chief Adjudicator acts pursuant to the terms of the implementation orders
    issued by the court and, therefore, cannot be said to be exercising a statutory
    power of decision that is subject to judicial review.

[31]

The
    Administrative Judge went on to say, at para. 22:

Further, no right of appeal can be grounded on the supervisory
    jurisdiction that the courts have over the implementation of the Settlement and
    the Settlement Orders. In other words, there is no implicit right to appeal
    each determination made within the context of the claims administration or
    assessment process as an incident of the judicial oversight function.

[32]

The
    Administrative Judge then responded to DEHS request for directions concerning
    the manner in which certain factors are to be considered by Adjudicators when
    reviewing the fairness and reasonableness of legal fees. He addressed the
    following five factors: (1) contingency agreements; (2) the IAP claimants
    views concerning legal fees; (3) the 30% limit for legal fees under the IAP;
    (4) Canadas 15% contribution to legal fees; and (5) fees charged by other
    lawyers.

[33]

The
    Administrative Judge issued the following directions with respect to each
    factor:

(1)
    Contingency agreements

The terms of a contingency agreement are only one factor to be
    considered by the Adjudicator. The weight to be given to the contingency
    agreement must be assessed in the context of the facts of each case (at para.
    28).

(2)
    Claimants views

[O]nce the Adjudicator decides that a fee review is
    appropriate, the claimants views are one of the factors that the Adjudicator
    must take into consideration. In particular, the claimants views go to his or
    her expectations [...]. The weight to be given to the views of the claimant
    must be assessed in the context of the facts of each case (at para. 32).

(3) The
    30% limit for legal fees

The maximum fee under the IAP, 30% of a claimants compensation
    award, ought to be reserved for the most-time consuming or difficult of cases
    (at para. 37).

(4)
    Canadas 15% contribution

Canadas 15% contribution to the legal fees of an IAP claimant,
    is neither a positive nor negative factor in the fee assessment process. An
    Adjudicator must have regard to the total amount of legal fees sought in order
    to conduct the fairness and reasonableness review (at para. 38)

(5) Fees
    charged by other lawyers

The range of fees being charged by lawyers across the country
    in relation to IAP claims is a fact that may go to the claimants expectations.
    That said, it is no more than one factor to be considered (at para. 41).

[34]

The
    Administrative Judge confirmed that the factors listed in para. 18 of the
    implementation orders (set out above at para. 6) are to be taken into account
    in rendering a decision as to the fairness and reasonableness of legal fees,
    and those factors cannot be ignored by the Adjudicator. He explained, at paras.
    37 and 41:

In conducting a review of the fairness and reasonableness of
    legal fees, IAP Adjudicators
must
consider the factors set out in
    paragraph 18 of the Implementation Orders ... [T]he test is fairness and reasonableness
    in all the circumstances and, as such,
it remains necessary for
    Adjudicators to apply the required factors
in arriving at their
    determination in any particular case.

...

In the same way that the lawyers cannot limit the discretion of
    the Adjudicators as set out in paragraph 18 [of the Implementation Orders],
the
    Adjudicators cannot ignore its provisions
. [Emphasis added].

[35]

Finally,
    with respect to DEHS request for directions on its specific concerns related
    to the assessment of its legal fees, the Administrative Judge said, at para.
    44:

No appeal lies from the decision of the Chief Adjudicator
    pursuant to paragraph 19 of the Implementation Orders.  Accordingly, the
    request for a review of the decision is denied.

[36]

DEHS
    appeals from these directions.

PRELIMINARY ISSUE: THE CHIEF ADJUDICATORS MOTION TO QUASH

[37]

I
    would dismiss the motion to quash for the following reasons.

[38]

The
    Chief Adjudicator argues that when the Administrative Judge issued directions,
    he was acting pursuant to the S.A. and not in his capacity as a judge of the
    Superior Court. Directions given by the Administrative Judge are not court
    orders in the traditional sense. Rather, they are made pursuant to a
    self-contained system designed to administer a private agreement reached by the
    parties.

[39]

I
    disagree. The S.A. was incorporated into a series of court orders. Paragraph 23
    of the implementation orders states that the Courts shall supervise the
    implementation of the Agreement and this order. The CAP sets out the procedure
    through which parties to the S.A. can ask the court to exercise its supervisory
    jurisdiction. It provides, at para. 2, that [a]ll matters that require court
    orders, directions or consideration, will be brought to the attention of the
    Administrative Judges at first instance by the filing of a Request For
    Direction. The Administrative Judges are chosen from among the nine judges who
    heard the motions for approval of the S.A., or their successors.

[40]

In
    my view, the Request for Direction was made to the Administrative Judge acting
    in his capacity as a Superior Court judge appointed pursuant to s. 96 of
The

Constitution Act, 1867
(U.K.)
,
30 & 31 Victoria, c. 3.
    Under the terms of the implementation orders and the CAP, the Administrative
    Judges are representatives of the nine provincial and territorial superior
    courts that approved the S.A. Thus, in issuing his directions, he was acting in
    a judicial capacity. The judicial role of the Administrative Judge is confirmed
    by the fact that his directions were affixed with the seal of the Superior
    Court, were released on Superior Court forms, and refer to the court file
    number for the claim that was issued by the class members to the S.A.

[41]

The
    Administrative Judges directions finally determined the issue whether legal
    fee review decisions of the Chief Adjudicator are subject to any further appeal
    or review. His directions were incorporated as a final order of a judge of the
    Superior Court of Justice. An appeal lies to this court pursuant to s. 6(1)(b)
    of the
Courts of Justice Act
, R.S.O. 1990, c. C.43.

ISSUES

[42]

The
    appellant in his factum raised the following issue:

Are decisions of the Chief Adjudicator immune from judicial
    scrutiny by the Superior Courts of each province?

[43]

However,
    in the course of oral submissions, it became clear that the appellant does not
    take issue with the Administrative Judges conclusion that no appeal lies to
    the Superior Courts of each province from a decision of the Chief Adjudicator.
    Rather, the appellants position was that the Chief Adjudicator is subject to
    the rule of law and the rules of natural justice. In the event that these rules
    are breached, a judge of the Superior Court in the province, having
    jurisdiction over the parties and the subject matter, could intervene to
    correct those errors.

[44]

Having
    regard to counsels position in oral argument, I would reframe the issues as
    follows:

1.

Are there any circumstances in which a Chief Adjudicators
    decision in the fee review process is reviewable by a judge of Superior Court?

2.

Did the Administrative Judge err in not granting the specific
    directions requested by the appellant?


DISCUSSION

Issue 1: Are there any circumstances in which a Chief
    Adjudicators decision in the fee review process is reviewable by a judge of
    Superior Court?

Positions of the Parties

[45]

The
    appellant argues that the Administrative Judges directions in this case leave
    the parties to the S.A. in an impossible position. According to the appellant,
    the Administrative Judge effectively ruled that he has no jurisdiction to
    correct any errors of law or to redress any denial of natural justice that the
    Chief Adjudicator may have committed in reviewing an Adjudicators fee review
    assessment. Thus, decisions of the Chief Adjudicator are immune from judicial
    scrutiny, even if he or she fails to comply with the terms of the S.A. and
    implementation orders and the rules of natural justice. Such decisions would
    also be immune from judicial scrutiny if the Chief Adjudicator incorrectly
    concludes that the Adjudicator complied with the terms of the S.A. and the
    implementation orders and the rules of natural justice. For convenience,
    reference to a failure to comply with the S.A. and the implementation orders
    includes a failure to comply with the rules of natural justice.

[46]

The
    intervener Attorney General of Canada and the intervener Merchant Law Group
    agree that, pursuant to the terms of the CAP, recourse to the Administrative
    Judges from a decision of the Chief Adjudicator should be available in limited
    circumstances where a legal fee review decision does not comply with the terms
    of the S.A. or the implementation orders.

[47]

The
    respondent Chief Adjudicator argues that the ongoing supervisory role of the
    court contemplated by the implementation orders does not allow the
    Administrative Judge to review or correct fee decisions made pursuant to the
    implementation orders. The only appeal from a legal fee decision lies to the
    Chief Adjudicator. In accordance with the IAP legal fee review process, there
    is no further appeal from that decision. The intention of the parties to the
    S.A. is clear: the process is meant to be expeditious. The S.A. is final and
    the process giving effect to the S.A. must be limited to what is set out in the
    implementation orders.

[48]

The
    Chief Adjudicator also submits that allowing further review of IAP legal fee
    determinations, whether framed as an appeal, judicial review, or a Request for
    Direction, stands to re-introduce power imbalances that the IAP was intended to
    avoid and to frustrate the efficiency and finality that was intended for the
    IAP and S.A. more generally.

[49]

Furthermore,
    there are sufficient checks and balances built into the IAP legal fee review
    process to ensure that the Chief Adjudicator respects the terms of the
    implementation orders. For example, the Chief Adjudicators appointment is
    approved by the court and the Chief Adjudicator remains accountable to the
    court and the parties to the S.A.; the Chief Adjudicator is accountable to an
    oversight committee comprised of interested parties; and the Chief Adjudicator
    reports to the courts on a regular basis on all aspects of the implementation
    and operation of the IAP.

Analysis

[50]

The
    Administrative Judge correctly concluded that no appeal lies from a legal fee
    review decision of the Chief Adjudicator. I agree with his reasons on this
    point and the appellant did not press the contrary position in oral argument.

[51]

The
    Administrative Judge also correctly concluded that there is no right to seek
    judicial review from a legal fee review decision of the Chief Adjudicator. The
    courts jurisdiction to issue a declaration under s. 2(1)2 of the
Judicial
    Review Procedure Act
, R.S.O. 1990, c. J.1 (
JRPA
), relates only
    to the exercise, refusal to exercise or proposed or purported exercise of a
    statutory power. As the Administrative Judge explained, the Chief Adjudicator
    is not exercising a statutory power of decision, but rather renders his fee
    review appeal decision pursuant to the authority derived from the
    implementation orders, as approved by the relevant provincial and territorial
    superior courts.

[52]

The
    appellant further contends that the office of the Chief Adjudicator is a
    quasi-judicial public body that is subject to judicial review proceedings by
    way of an application for an order in the nature of mandamus or certiorari
    under s. 2(1)2 of the
JRPA
. I do not agree with this assertion.
    Judicial review is not available to review the exercise of authority by a
    judicially-created body, which has been given certain duties as provided by the
    terms of the S.A. and the implementation orders. The office of the Chief
    Adjudicator was created by order of the courts in approving the negotiated
    terms of settlement of class action litigation. The authority of that office is
    exercised in relation to those class members who have elected to advance claims
    through the IAP and their counsel. The terms of the S.A. and the implementation
    orders set out the process for reviewing decisions of the IAP Adjudicators.
    Recourse to the courts is only available if it is provided for in the S.A. or
    the implementation orders.

[53]

I
    turn now to whether a process, other than an appeal or judicial review, is
    available to review a decision by the Chief Adjudicator. The Administrative
    Judge properly confirmed that the IAP Adjudicators cannot ignore the
    provisions of the implementation orders and that it remains necessary for
    Adjudicators to apply the required factors when conducting a legal fee review
    at first instance. In the perhaps unlikely event that the final decision of the
    Chief Adjudicator reflects a failure to consider the terms of the S.A. and
    implementation orders, including the factors set out in para.18 of the
    implementation orders, then, in my view, the parties to the S.A. intended that
    there be some judicial recourse. Having said that, I emphasize my agreement
    with the Administrative Judges comment, at para. 22 of his reasons, that
    there is no implicit right to appeal each determination made within the
    context of the claims administration or assessment process as an incident of
    the judicial oversight function. As I will go on to explain, the right to seek
    judicial recourse is limited to very exceptional circumstances.

[54]

The
    parties intended that implementation of the S.A. be expeditious and not mired
    in delay and procedural disputes. As noted by the Chief Adjudicator, there are
    already many checks and balances in place to ensure that the process is
    administered fairly and in accordance with the terms of the S.A. The Chief
    Adjudicator is granted broad discretion by the terms of the S.A.

[55]

The
    implementation orders speak to the principles that are to be applied by the
    Adjudicator in carrying out a fee review at first instance. The parties
    provided for an ongoing right to seek the assistance of the courts to require
    compliance with the terms of the implementation orders. As noted, the
    implementation orders provide, at para. 23:

[T]he Courts shall supervise the implementation of the
    Agreement and this order and, without limiting the generality of the foregoing,
    may issue such further and ancillary orders, from time to time, as are
    necessary to implement and enforce the provisions of the Agreement, the
    judgment dated December 15, 2006 and this order.

[56]

The
    CAP specifies that recourse to the courts may be obtained by way of a Request
    for Direction that is to be brought to one of the two Administrative Judges, as
    designated by the courts.

[57]

Thus,
    in the very limited circumstances where the final decision of the Chief
    Adjudicator reflects a failure to comply with the terms of the S.A. or the
    implementation orders, the aggrieved party may apply to the Administrative
    Judges for directions. These limited circumstances would include where the
    Chief Adjudicator upholds a decision of the Adjudicator as fair and reasonable
    even though the Adjudicator failed to consider the factors set out in para. 18
    of the implementation orders in arriving at his/her fee review decision in a
    specific case. By providing for recourse to an Administrative Judge in these
    limited circumstances, the parties will be able to ensure that the bargain to
    which they consented is respected.

[58]

Before
    leaving this issue, I note that I agree with the Chief Adjudicators submission
    that allowing a party to request directions when it is
alleged
that
    the Chief Adjudicators decision reflects a failure to apply the terms of the
    implementation orders raises concerns about finality, efficiency and has the
    potential to overburden the Administrative Judges. However, I am satisfied that
    these concerns are alleviated by the clear limits on when such a request is
    available. Moreover, the Administrative Judges who hear such requests are well
    aware of the concerns that led to the adoption of the implementation orders,
    namely, the need to protect vulnerable claimants and the need for timely
    resolution of disputes in light of the advanced age of many claimants: see
Baxter
,
    at paras. 74 and 85.

Issue 2: Did the Administrative Judge err in not granting the
    specific directions requested by the appellant?

[59]

The
    appellant argues that the Chief Adjudicators decision upholding the
    Adjudicators fee review decision was not carried out in accordance with the
    terms of the implementation orders. According to the appellant, the fee review
    decision of the Chief Adjudicator is infected by four errors. Three of these
    errors were committed by the Adjudicator and went uncorrected by the Chief
    Adjudicator. The fourth error was allegedly committed by the Chief Adjudicator.
    The alleged errors are as follows:

(1) The Adjudicator did not consider or apply Manitoba law
    which requires that a contingency fee agreement be set aside before an
    assessment of fees is carried out.

(2) The Adjudicator failed to give due or proper weight to the
    expectations of the client in assessing the fairness and reasonableness of the
    fee agreement.

(3) The Adjudicator carried out the fee assessment before the
    appellant had completed all of the work required.

(4) The Chief Adjudicator relied on the erroneous assumption
    that all Quebec lawyers had agreed to limit their contingency fee to 15%.

These errors  whether on their own or taken together
     are said to demonstrate that the Chief Adjudicator acted outside the scope of
    his authority and in breach of the terms of the implementation orders,
    warranting directions by the Administrative Judge to correct said errors.

[60]

I
    will now explain why none of these alleged errors demonstrates any basis for
    finding that the Administrative Judge erred in refusing the appellants request
    for specific directions concerning the Chief Adjudicators decision in this
    case.

(1) The Alleged Failure to Apply Manitoba law

[61]

The
    appellant argues that it entered into a contingency fee agreement with its
    client, who is a resident of Manitoba, and that their agreement is governed by
    ss. 55(5) and 55(7) of Manitobas
Legal Profession Act
, C.C.S.M., c.
    L107 (Act). These sections read as follows:

55.(5) The client may, at any time within six months after the
    remuneration provided for in the contingency contract is paid to or retained by
    the member, apply to the Court of Queens Bench for a declaration that the
    contract is not fair and reasonable to the client.

(7) If the judge hearing the application is satisfied that the
    contingency contract is not fair and reasonable to the client, the judge must

(a) declare the contract void;

(b) order the costs, fees, charges, and disbursements of the
    member in respect of the business done to be taxed as if no contingency
    contract has been made; and

(c) if the member has received or retained more than the
    amount so taxed, order repayment of the excess to the client.

[62]

According
    to the appellant, the Adjudicator ought to have considered these statutory
    provisions because para.18 of the implementation orders requires that a fee
    review be conducted in accordance with the generally accepted principles and
    authority for assessment of accounts. The appellant says that the Act requires
    the court to set aside a contingency fee agreement before the court can order
    that the fees be taxed as if there was no such contract. In this case, the
    Adjudicator assessed the reasonableness of the legal fees without first
    explaining why the contingency agreement ought to be set aside and he is thus
    said to have failed to comply with Manitoba law and the terms of the S.A. and
    implementation orders.

[63]

In
    my view, the appellants position misconceives the effect of the S.A. and the
    implementation orders. Indeed, in initiating a review of the fairness and
    reasonableness of the legal fees charged by the appellant, the Adjudicator was
    acting in accordance with the terms of the implementation orders, rather than
    outside of the terms of those orders. Conducting a fee review assessment in
    accordance with the generally accepted principles and authority for assessment
    of accounts  as provided by para. 18 of the implementation orders  does not
    obligate the Adjudicator to follow the process for assessing contingency fee
    agreements set out in the Manitoba Act. The terms of the implementation orders
    create a complete procedural code for assessing the fairness and reasonableness
    of legal fees. The client or the Adjudicator is not required to also follow
    procedures under provincial legislation for assessing contingency fee
    agreements.

[64]

None
    of the parties to the S.A., including the appellant, opposed the terms of the
    implementation orders, including the criteria to be taken into account by the
    Adjudicator in the legal fee review process. Paragraph 18 of the implementation
    orders sets out these criteria. Moreover, in contrast with the Act, para. 18
    requires the Adjudicator to consider the fairness and reasonableness of the
    legal fees, and not the fairness and reasonableness of the contract between the
    lawyer and client.

[65]

The
    Administrative Judge did not err in refusing the appellants request for a
    specific direction that the fee review process must be conducted having regard
    to the particular laws of the province or territory in which the adjudication
    took place.

(2) The Alleged Failure to Give Sufficient Weight to the
    Clients Expectations

[66]

As
    I have explained, a Request for Direction may be brought where it is alleged
    that the Chief Adjudicators decision reflects a failure to enforce the
    provisions of the S.A. or the implementation orders. Here, the appellant
    alleges that the Adjudicator failed to give sufficient weight to the fact that
    the client agreed to a legal fee of 30% of the amount awarded, as provided for
    in a contract that was freely entered into between the parties.

[67]

If
    a contingency fee agreement exists, para. 18 of the implementation orders
    requires that it be provided to the Adjudicator. However, contrary to the
    appellants suggestion, the existence of a fee agreement, freely entered into,
    is not determinative of the fairness and reasonableness analysis. The weight to
    be assigned to the fee agreement in determining the expectations of the client,
    and ultimately the fairness and reasonableness of the fees, is entirely within
    the discretion of the Adjudicator.

[68]

The
    reasons of the Adjudicator demonstrate that he considered the views of the
    claimant in arriving at his legal fee review decision. The Adjudicator observed
    that the claimant signed the fee agreement without any duress or coercion and
    that the claimant was content with the appellants fee. However, it was open to
    the Adjudicator to refuse to treat the claimants expectations as the critical
    factor in assessing the fairness and reasonableness of the legal fees.

[69]

Thus,
    the Administrative Judge did not err in refusing to grant the requested
    direction addressing the weight that should have been assigned to this
    factor.

(3) The Fee Assessment was Conducted Prematurely

[70]

The
    appellant submits that it was a breach of the rules of natural justice and of
    the terms of the implementation orders for the Adjudicator to proceed with the
    legal fee review before all of the legal work in this case was completed. The
    legal fee review was carried out at the conclusion of the IAP hearing. At that
    time a dispute remained between the claimant and the federal government over
    liability for GST and PST owing on compensation awarded under the S.A. The
    value of the additional time expended by the solicitor in resolving this
    dispute after the completion of the IAP hearing was claimed to be approximately
    $12,000.

[71]

The
    appellant contends that by failing to delay the assessment until all of
    counsels work was completed, the Adjudicator did not respect the terms of the
    implementation orders. The Chief Adjudicator did not correct this error on
    appeal and his decision ought to be set aside.

[72]

I
    would not give effect to this submission. The Chief Adjudicators designate was
    aware of the need for additional time to be expended when the fee review appeal
    was heard. He indicated that the Chief Adjudicator was seized with the dispute
    regarding the GST and PST and stated that the Chief Adjudicator may address
    the matter of fees in this application or if not, the Adjudicator remains
    seized with this case and can hear more submissions solely on the matter of
    whether additional fees are justified on the matter of liability for GST and
    PST.

[73]

The
    appellant does not appear to have pursued the matter as suggested by the Chief
    Adjudicators designate. The appellant has failed to establish that the terms
    of the S.A. were ignored or that the rules of natural justice were breached.
    There was no basis for the Administrative Judge to intervene in this respect.

(4) The Chief Adjudicator Wrongly Assumed that all Quebec
    Lawyers Limited their Contingency Fee to 15%

[74]

The
    appellant submits that the Chief Adjudicator incorrectly referred to Quebec
    lawyers having agreed amongst themselves to limit their fees to Canadas 15%
    contribution. The appellant was not given the opportunity to challenge this
    assertion. This error is said to fail to respect the terms of the
    implementation orders and to thereby constitute a breach of the rules of
    natural justice. As such, the Chief Adjudicators decision should be set aside.
    Fresh evidence filed by the appellant shows that there is no such agreement
    among Quebec lawyers.

[75]

I
    agree that the Chief Adjudicators reference to an alleged agreement among
    Quebec lawyers is incorrect. I also agree with the appellants submission that
    there is no presumption in the S.A. that a 15% contingency fee should apply to
    most cases. As stated by the Administrative Judge, at para. 41:

The range of fees that are being charged by lawyers across the
    country in relation to IAP claims is a fact that may go to the claimants
    expectations. That said, it is no more than one factor to be considered. The
    fee must be assessed on its fairness and reasonableness in the context of the
    facts of the case and the language set out in paragraph 18 [of the
    implementation orders].

[76]

However,
    despite referencing the supposed agreement among Quebec lawyers, the Chief
    Adjudicator correctly explained that there is no presumption that the standard
    fee in an average case is 15%. The Chief Adjudicator confirmed that he
    understood this by agreeing with the Adjudicator that a 20% fee is appropriate
    in this case. Viewed in context, the error is not significant enough to warrant
    intervention beyond the comment made by the Administrative Judge in his general
    directions concerning the nature of the fee review process under the S.A. and
    the implementation orders.

CONCLUSION

[77]

A
    fee review decision of the Chief Adjudicator in the IAP is not reviewable by
    way of an appeal to the Superior Court, or by way of an application for
    judicial review to the Superior Court. The Chief Adjudicators decision is only
    reviewable by an Administrative Judge through a Request for Direction under the
    CAP, but such review is available only in very limited circumstances.

[78]

In
    particular, a Request for Direction may only be brought where it is alleged
    that the Chief Adjudicators decision reflects a failure to enforce the
    provisions of the S.A. and the implementation orders. This very limited
    availability of a right to seek review of a Chief Adjudicators decision
    reflects both the importance of the finality of decisions under the S.A. and
    the relative expertise of the Chief Adjudicator in the legal fee review
    process.

[79]

In
    this case, the appellant has not established that the Chief Adjudicators
    decision reflects a failure to comply with the S.A. or the implementation
    orders. Thus, I would dismiss the appeal from the Administrative Judges
    refusal to grant the specific directions sought by the appellant.

[80]

For
    these reasons I would dismiss the appeal. The parties have agreed that there
    should be no order as to costs.

Paul Rouleau J.A.

I agree M. Rosenberg
    J.A.

I agree R.G. Juriansz
    J.A.

Released: July 4, 2012


