Saskatchewan ap­peal court rules on le­gal fees dis­pute over res­i­den­tial schools

The Globe and Mail (Prairie Edition) - - NEWS -

The Saskatchewan Court of Ap­peal is al­low­ing an ap­peal of a lower-court rul­ing in a dis­pute be­tween the Cana­dian gov­ern­ment and the Mer­chant Law Group.

The gov­ern­ment has ar­gued that the firm, which rep­re­sented thou­sands of res­i­den­tial school sur­vivors, should have to pay back le­gal fees be­cause of al­le­ga­tions its billings were in­flated.

Lawyers for Canada’s at­tor­neygen­eral ar­gued the gov­ern­ment would not have en­tered into an agree­ment a decade ago to pay the firm $25-mil­lion if it had known there were con­cerns about how much time the com­pany spent work­ing on res­i­den­tial school claims.

Coun­sel for the law firm has ar­gued the gov­ern­ment knew there were con­cerns about billing and went into ne­go­ti­a­tions with its eyes wide open, adding that drag­ging the case into court again was an abuse of process.

In a de­ci­sion re­leased Wednes- day, Madam Jus­tice Jace­lyn Ryan-Froslie pro­vided a writ­ten de­ci­sion – with the other two ap­peal court jus­tices con­cur­ring – that con­cluded the fed­eral gov­ern­ment’s po­si­tion has merit.

Jus­tice Ryan-Froslie al­lowed the ap­peal and set aside the de­ci­sion by the lower-court judge, adding that Mer­chant Law Group “shall pay to Canada the costs of the within ap­peal as­sessed in the usual way.”

The case goes back about a decade, when courts in each prov­ince ap­proved the In­dian Res­i­den­tial Schools Set­tle­ment Agree­ment.

In the Saskatchewan set­tle­ment ap­proval hear­ing, Canada ar­gued that the agree­ment did not re­quire that it pay Mer­chant Law Group a min­i­mum of $25mil­lion.

But Jus­tice Dennis Ball dis­agreed and found the amount rea­son­able, not­ing that sub­stan­tial time had been spent on the case and the com­plex­ity of the lit­i­ga­tion.

Canada’s ap­peal was dis­missed by the Saskatchewan Court of Ap­peal in March, 2007.

Canada went back to court in De­cem­ber, 2007, ar­gu­ing it shouldn’t have to pay Mer­chant un­til a ver­i­fi­ca­tion process to re­view the firm’s billing records was com­plete.

Jus­tice Neil Gabriel­son, who was over­see­ing im­ple­men­ta­tion of the set­tle­ment agree­ment in Saskatchewan, ruled in 2008 that the ver­i­fi­ca­tion process was not com­plete but that Canada must pay.

The fed­eral gov­ern­ment filed a new law­suit against Mer­chant Law Group in Jan­uary, 2015, to try to get the money back, ar­gu­ing there had been fraud, de­ceit and fraud­u­lent mis­rep­re­sen­ta­tion.

In re­sponse, Mer­chant Law Group asked for the gov­ern­ment’s state­ment of claim to be struck be­cause it “dis­closed no rea­son­able cause of ac­tion, was scan­dalous, vex­a­tious and was an abuse of process.”

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