Sutton v. Cypress-Batt

2000 BCSC 0232 Citation: R.Buell Sutton v Cypress-Batt 2000 BCSC 0232 Date: 20000208 Docket No.: J940585 Registry: Vancouver IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: RICHARDS BUELL SUTTON SOLICITORS AND: CYPRESS-BATT ENTERPRISES LTD. AND NATHAN BATT CLIENTS REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE SIGURDSON Counsel for the Solicitors Bruce F. Fraser, Q.C. Counsel for the Clients P. Daniel Le Dressay Date and Place of Hearing January 5, 2000 Vancouver, B.C. INTRODUCTION [1] This is the latest chapter in an ongoing dispute over fees between a client and his solicitors. After the Registrar taxed the solicitors' account, the clients paid it, in full, including prejudgment and post-judgment interest on the taxed bill. On appeal from the Registrar to this Court, I reduced the account but the entered order did not provide for repayment of any interest. The solicitors unsuccessfully appealed that reduction to the Court of Appeal. Now, over two years later, the clients apply under the slip rule to amend this Court's order, in order to provide for repayment of interest. The solicitors say that repayment of interest was not sought at the hearing, was known not to be in the order before it was entered and that it is now too late to amend the order. BACKGROUND [2] The solicitors represented Dr. Nathan Batt in connection with an action against a bank for breach of trust and negligent misrepresentation. After the action concluded, Dr. Batt contested his solicitors' fees. On September 18, 1996, the Registrar, after a taxation, found that a reasonable amount for fees was $50,000, part of which had been paid earlier. The Registrar signed the Certificate of Fees on September 18, 1996. On June 17, 1997, prior to the appeal, the clients paid the balance of the monies owing. [3] On appeal to this Court, I concluded that the Registrar erred by failing to reduce the amount under scrutiny, $55,300, by $6,650, which represented an inadvertent double charge and charges for paralegal and secretarial time. I found that the Certificate should be $6,650 less than the Certificate issued by the Registrar. The formal order of this Court was entered December 15, 1997 and simply provided that "the Certificate for fees be reduced by $6,650.00 from $26,078.50 to $19,428.50". [4] According to Dr. Batt's affidavit, following the hearing by the Registrar, he paid the principal, as well as the prejudgment and post-judgment interest on the amount then held to be owing to the solicitors. After the appeal, some funds were returned to Dr. Batt, but he did not receive any of the interest that he had previously paid. [5] Prior to the formal order of the Supreme Court being entered, counsel for the clients raised the question of interest, and told opposing counsel that Dr. Batt reserved the right to revisit the question of interest paid. He said "this will have to be adjusted to reflect the amount reduced from the Certificate". However it appears that this issue was forgotten as the dispute headed to the Court of Appeal. [6] In the result, Dr. Batt paid more interest than he should have. He paid prejudgment interest of $3,819.92 but should only have paid $2,946.62 (an excess of $873.30). He paid $1,617.49 of post-judgment interest but should have paid $776.41 (an excess of $841.08). Therefore Dr. Batt ought to have been refunded, by the solicitors, interest in the amount of $1,714.38. DISCUSSION [7] The clients apply pursuant to Rule 41(24) to amend the entered order to provide for repayment by the solicitors of that interest. [8] The clients had also applied for costs of the transcripts of the proceedings before the Registrar but I dismissed that part of the clients' application at the hearing. [9] Mr. Le Dressay argues that Rule 41(24), commonly known as the slip rule, allows the Court to amend an order to provide for any matter which should have been but was not adjudicated upon. He submits that the Court should have considered interest paid on the reduced portion of the fees and ordered it to be returned. He refers to the Court Order Interest Act, R.S.B.C. 1996, c. 78, which provides that the Court must add interest to a pecuniary judgment at a rate that it considers appropriate. [10] Counsel for the solicitors argues that I cannot amend the order as the question of repayment of interest was not argued before me. Counsel for the solicitors argues that the rule only permits the Court to rectify or amend orders in relation to a point that was considered or dealt with by the Court in its reasons but had been wrongly put in, or omitted from, the order. He further submits that the Court does not have the jurisdiction to amend an order and make a decision which it had previously not made. He submits that the slip rule has a narrower focus than suggested by Mr. Le Dressay. [11] Moreover, counsel for the solicitors argues that the power under the slip rule is discretionary and should not be exercised in the clients' favour because there has been inexcusable and unexplained delay and there is prejudice. [12] Generally speaking, the Court pronouncing an order is functus officio after that order has been entered or otherwise perfected and therefore, is unable to amend or set aside that order: Liu v. Hansen (1995), 38 C.P.C. (3d) 398 (B.C.S.C.). However, Rule 41(24) of the Supreme Court Rules provides an exception: The court may at any time correct a clerical mistake in an order or an error arising in an order from an accidental slip or omission, or may amend an order to provide for any matter which should have been but was not adjudicated upon. [13] Rule 41(24), by its language, appears to either allow the court to rectify an error made in drawing the order which, if remained uncorrected, would produce a result contrary to the intention of the Court, or to provide for a matter which should have been but was not adjudicated upon. It is the scope of that last phrase that is in dispute on this application. [14] The fact that repayment of the interest was excluded in the order was not an error in the drawing up of the order. The question of interest was never specifically raised before me. The question is whether or not, in these circumstances, the interest paid by the clients on the taxed bill was a matter which should have been but was not adjudicated upon. [15] Many decisions of this Court demonstrate that where an issue ought to have been adjudicated upon but was not, an amendment to the original order may be granted under Rule 41(24): Canson Enterprises Ltd. v. Boughton & Co. (1996), 25 B.C.L.R. (3d) 386 (S.C.). But the court's jurisdiction under the rule has limits. For example, in Liu v. Hansen, supra at 400, the Court held that Rule 41(24) was: ... not meant to provide an avenue to deal with arguments that could have been advanced, but ... to allow consideration of matters that must be dealt with, in the sense that, had they been brought to the judge's attention at the time of the hearing, he or she would have been obliged to take the matter into account. [16] My initial impression after the hearing was that the issue of repayment of interest already paid by the clients falls within the language of Rule 41(24), being a matter which should have been adjudicated upon but was not. [17] Mr. Fraser, counsel for the solicitors, said that it was never brought up and it is too late to raise it now that the order is entered. He cited two Court of Appeal decisions, Bau-Und Forschungsgesellschaft Thermoform AG v. Paszner (1992), 69 B.C.L.R. (2d) 52 and Kenmar Inns Ltd. v. Letroy (1994), 100 B.C.L.R. (2d) 323 to support his contention that the slip rule is limited to correcting orders that do not properly express the intent of the Court. He argued that if the repayment of interest was not requested the failure to include it in the order can hardly be contrary to the intention of the court. [18] In Bau-Und, after the order was entered, the applicant sought to have an additional party responsible to pay a party's costs. Lambert J.A., in rejecting the application said: Nor has any authority been put forward on behalf of the applicant in relation to the "slip" rule to suggest that it has a wider ambit than correcting a slip in the drawing of the order in relation to a point that the court has considered and decided in its reasons but which has been wrongly put in the order or incorrectly omitted from the order. He also said: ...any such order would require the making of a decision that has not yet been made. [19] In Kenmar, Southin J.A. distinguished Bau-Und on the basis that in Bau-Und the Court had not overlooked anything put before it by the successful litigant, but in Kenmar, she concluded that it had. In Kenmar, the entered order of the Court of Appeal remitted reconsideration of the costs of "future proceedings" to the trial judge but the successful appellant had expressly asked for an order remitting the question not just of "future costs" but of the trial costs to the trial judge. [20] Both Kenmar and Bau-Und, of course, dealt with orders of the Court of Appeal and are, therefore, governed by Rule 23(1) of the Court of Appeal Rules and not Rule 41(24) of the Supreme Court Rules. Rule 23(1) of the Court of Appeal Rules gives the Court the power to correct a clerical mistake and to provide for any matter that should have been but was not provided for in the order, or to express its intent better (emphasis added). [21] In my opinion, Rule 41(24), the governing rule here, is slightly broader in scope than its Court of Appeal counterpart, Rule 23(1). The Supreme Court Rule clearly contemplates an amendment to an order where a matter, which ought to have been adjudicated upon, was not; whereas Rule 23(1), as it has been interpreted, does not permit amendments where the issue had not been put before the Court: Kenmar, supra; Bau-Und, supra. However, in my view, nothing turns on that difference on this application. [22] It was obviously the intent of the Court that the principal sum of $6,650 be returned to the clients. If the clients had paid interest on that amount to the solicitors, the question of whether it also ought to be returned should have been adjudicated upon. If after a principal sum and interest is paid the Court orders repayment of the principal sum or part thereof, I think that it must necessarily consider whether the interest has to be repaid. The Court Order Interest Act suggests as much. [23] In my opinion, the question of repayment of interest was a matter that should have been adjudicated on. Even if Rule 41(24) is no broader than its Court of Appeal counterpart, I think the question of interest, by necessary implication, was before the Court and the order ought to be amended to deal with it. Nevertheless, I think that Rule 41(24) is somewhat broader in scope and has application to matters that were not before the Court but ought to have been adjudicated upon. It clearly has application to these circumstances. [24] The order sought by the clients is discretionary. Factors such as delay and prejudice are important to consider in deciding how to exercise that discretion: Ricwil Piping Systems Ltd. Partnership v. Ideal Welders Ltd. (1998), 51 B.C.L.R. (3d) 290 (S.C.). Counsel for the solicitors argues that the application under Rule 41(24) has been brought too late. [25] Ordinarily a delay such as the one in this case, particularly after an appeal has been heard, would result in prejudice to the other party and be a sufficient basis for denying an application to amend an order. However, despite the considerable delay, counsel for the clients has satisfied me that no prejudice would result to the solicitors if the order was amended. No party was misled as a result of the omission or acted on the strength of it to their detriment. The clients' lawyer knew that interest was not specifically provided for in the order but failed to apply for interest before it was entered. I can only conclude that he overlooked it and entered the order without coming back to Court. The clients' entitlement to the return of interest they have paid, however, appears obvious. A refusal to grant the amendment would result in an injustice. [26] The order of December 15, 1997 will be amended to provide for repayment of interest, namely $1,714.38, to the clients. As success on this application was divided, there will be no order as to costs. "Sigurdson J"