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EXTINCTIVE PRESCRIPTION - Civil Code of Québec - 3 years - Action to enforce personal right - Starting point - When right of action arises

Friday, June 09, 2017 @ 12:57 PM  

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Appeal by Pellerin Savitz LLP (Pellerin) from a judgment of the Quebec Court of Appeal setting aside in part a decision that concluded that Pellerin’s action for recovery of professional fees was prescribed and ordering the client, Guindon, to pay one invoice, dated March 1, 2012. In September 2011, Guindon retained the services of Pellerin to represent him in litigation. The parties entered into a fee agreement providing, among other things, that invoices would be payable within 30 days. On October 5, 2011, Pellerin sent the client a first invoice. Pellerin subsequently sent four more invoices, the last of which was dated March 1, 2012. Guindon informed Pellerin on March 21, 2012 that he was terminating the contract. On March 12, 2015, Pellerin brought an action to claim the unpaid fees. Guindon replied that the action was prescribed because it had been instituted more than three years after each invoice was sent. Pellerin countered that the prescription period had not begun to run until the termination of the mandate on March 21, 2012. The Court of Québec concluded that the action was prescribed. The Court of Appeal affirmed its decision, but found that the claim relating to that final invoice was not prescribed, given that prescription had not begun to run until the expiration of the 30 day period specified in the fee agreement. The main issue in this case was whether the action was prescribed pursuant to the applicable three-year prescription period. The Court had to identify the beginning of the prescription period, which was the date when the lawyer’s right of action arose. In the alternative, it was to determine whether prescription was suspended, as Pellerin contended.

HELD: Appeal dismissed. In this case, the parties’ fee agreement established when Guindon’s obligation to pay was to become exigible. Having regard to the wording of the fee agreement between the parties and the content of the invoices sent by the law firm, prescription began to run on the 31st day after each invoice was sent, not upon termination of the parties’ contractual relationship. Because it was brought on March 12, 2015, Pellerin’s action for recovery of professional fees was prescribed, except in respect of the March 1, 2012 invoice.

Pellerin Savitz LLP v. Guindon, [2017] S.C.J. No. 29, Supreme Court of Canada, B. McLachlin C.J. and A. Karakatsanis, R. Wagner, C. Gascon, S. Côté, R. Brown and M. Rowe JJ. June 9, 2017. TLD-June52017011SCC