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Appeal by plaintiff law firm from a decision setting aside summary judgment for $157,968 in favour of the appellant for legal fees owing by the respondents. The appellant was retained by the respondents to prosecute an action for amounts alleged to be owed pursuant to a partnership agreement. To secure payment of its legal fees, the appellant prepared a promissory note for the principal sum of $150,000 with interest supported by certificates of independent legal advice. The respondents signed the promissory note before a different legal counsel. The appellant carried the litigation from June 2009 to July 2010 when it ceased acting for the respondents. In 2015, the appellant commenced this action on the promissory note, claiming $103,516 together with interest, post-judgment interest and indemnity costs. The respondents claimed they believed they were only signing the promissory note so that the lien could be placed against the property and that the appellant would tax its legal bill and adjust the amount owing on the promissory note accordingly. The master found that the promissory note constituted a stand-alone agreement that the appellant was entitled to sue on, as a security agreement, even if it fell short of the strict definitions in the Bills of Exchange Act. The chambers judge concluded that summary judgment raised some issues of fairness due to the assertions by the respondents that the nature of the promissory note was never properly explained to them, the law firm’s accounts would be taxed, the certificates of independent legal advice were on the collateral mortgage only, they did not receive the accounts in entirety until after the action was started, and there was a dispute as to the legal services provided. The chambers judge also found the respondents’ oral representations evidenced an umbrella agreement as a prior collateral agreement necessary to interpret the promissory note.

HELD: Appeal allowed in part. Summary judgment was granted on all but one invoice. The final quantum of those accounts was to be determined by a referee. The chambers judge failed to apply the law set out in Weir-Jones. It was unreasonable to assume, absent some evidence to support it, that neither the appellant nor the independent lawyer failed to advise the respondents of the contents and import of the promissory note. Not only was the respondents’ bald assertion contrary to established conduct and practice, it was wholly unsupported by other evidence. It was not material that the promissory note did not have a certificate of independent legal advice. It was again also a bald assertion that the respondents did not receive the accounts until commencement of the action. While the appellant did indicate the accounts would be taxed which was never done, the overarching concept of fairness, by itself, did not in the present case justify denial of summary judgment. Any concern over fairness could be addressed by remitting this quantum dispute and the accounts in question to a referee for determination. Consideration of the respondents’ assertions did not constitute an exception to the parol evidence rule and were of no assistance in interpreting the contract between the parties evidenced by the promissory note. It was an error for the chambers judge to find the assertions constituted an umbrella agreement necessary to interpret the terms of the promissory note. There was no evidence of an umbrella agreement wherein the parties intended to bind themselves to contractual obligations as consideration for further promises, where the terms of the agreement were not vague, and were capable of both performance and enforcement. The promissory note complied with the Bills of Exchange Act, but even if it did not, it was a contract between the parties capped at $150,000 plus interest and costs, and the lesser demand made was based upon the number of legal invoices properly rendered.

P & C Lawfirm Management Inc. v. Sabourin, [2020] A.J. No. 1359, Alberta Court of Appeal, T.W. Wakeling, M.G. Crighton and K.P. Feehan JJ.A., December 9, 2020. Digest No. TLD-January252021002