Décision

[1]           On appeal from a judgment of the Court of Quebec, District of Montreal, (the Honourable Brigitte Gouin), rendered on April 14, 2011, which granted the respondent's motion for homologation of an arbitral award;

[2]           For the reasons of Kasirer, J.A., with which Morin and Dalphond, JJ.A. agree, THE COURT:

[3]           DISMISSES the appeal;

[4]           Without costs.

[5]           Concetta Patti appeals from a judgment of the Court of Quebec, District of Montreal, (the Honourable Brigitte Gouin), rendered on April 14, 2011, which granted the respondent's motion for homologation of an arbitral award made pursuant to the Regulation concerning the conciliation and arbitration procedure for the accounts of advocates (the Regulation).[1] The arbitration council declared Ms. Patti to be solidarily liable with her daughter Francesca Patti for professional fees owing to the respondent and ordered them to pay Mtre Hammerschmid the sum of $30,671.67.

[6]           The appellant alleges that the arbitration council did not have jurisdiction to declare that she and Ms. Francesca Patti were solidarily liable in the circumstances. The appellant says that the trial judge thereby erred in homologating the arbitral award, that the judgment of the Court of Quebec should be set aside and the arbitral award should be quashed.

[7]           The facts are simply stated. On December 15, 2006, Ms. Francesca Patti engaged Mtre Linda Hammerschmid as her advocate in an ongoing family law dispute. On that day, she signed a professional fees' agreement with Mtre Hammerschmid pursuant to which she paid an advance and agreed to an hourly rate for the services to be rendered. Sometime later, Francesca Patti found herself in dire financial straits. At the suggestion of the respondent, she sought out a third party to co-sign the professional fees' agreement. On March 2, 2007, the same document which had recorded the fees' agreement was signed by Francesca Patti's mother, Concetta Patti, who was not otherwise involved in the proceedings. Concetta Patti signed her name under the typewritten addition: "I have read and I accept the above terms and conditions".

[8]           On March 20, 2008, Ms. Francesca Patti signed an "Acknowledgement of Debt" with the respondent in which she recognized that she owed an amount of $54,643 in professional fees to Mtre Hammerschmid, pursuant to the professional fees agreement, for services rendered before and after February 8, 2008.

[9]           On May 20, 2008, Mtre Hammerschmid sent three accounts for a total of $31,471.54 to both Francesca Patti and Concetta Patti for services rendered after February 8, 2008. On June 11, 2008, they petitioned the syndic of the Bar of Quebec for conciliation of the unpaid accounts pursuant to section 1 of the Regulation. Conciliation did not resolve the matter and both Francesca Patti and Concetta Patti then applied to submit the dispute to arbitration. Concetta Patti did not attend the hearing but she and her daughter were represented there by counsel.

[10]        The arbitral award was rendered on March 29, 2010. After reviewing the evidence, the arbitration council observed that, contrary to her claim, Francesca Patti had in fact been satisfied with Mtre Hammerschmid's services at the time those services were rendered. She had been fully and properly informed of the costs involved. The council ordered that the accounts be paid, subject to a reduction for photocopies. The council made reference to the fact that Concetta Patti signed the fees' agreement "as a guarantor" and that she had been personally absent at the hearing (para. [37] of the award). The arbitration council included the following conclusion in its award: "DECLARES Plaintiffs, Mrs. Francesca Patti and Mrs. Concetta Patti, to be jointly and severally liable for the attorney's fees" (paragr. [110] of the award).

[11]        On April 6, 2010, Mtre Hammerschmid filed a motion to homologate the award before the Court of Quebec. In response, Concetta Patti filed a motion on November 11, 2010 to contest the homologation, arguing that the arbitration panel exceeded its jurisdiction in declaring her to be solidarily liable with Francesca Patti.[2] The motion to homologate was granted on April 14, 2011 by the trial judge, giving rise to the present appeal.

[12]        In parallel proceedings taken before the Court of Quebec, Mtre Hammerschmid and another advocate sued Francesca Patti and Concetta Patti for unpaid professional fees and expenses of $24,202.29 arising out of professional services rendered before February 8, 2008, along with a further sum of $13,200 relating to costs of collecting accounts past due. While the action was based on bills for an earlier time period than the accounts at issue in the present appeal, those bills were based on the same professional fees' agreement relevant to the dispute before the arbitration council. On April 12, 2010, Judge Henri Richard rendered judgment in the Court of Quebec, holding that $13,656.16 of the amount claimed was owed to Mtre Hammerschmid, but he was of the view that the debt was not a solidary one as between Francesca Patti and Concetta Patti.[3] Citing article 1525 , para. 1, C.C.Q., Judge Richard decided that solidarity was not expressly stipulated by the parties in the professional fees' agreement nor was it otherwise imposed by law (para. [42] et seq. of his reasons). He also decided that Concetta Patti's undertaking in the fees' agreement could not be considered to be a suretyship which guaranteed payment of her daughter's debt in the circumstances (paras. [46] and [47]). Ms. Concetta Patti was thus ordered only to pay half the net amount due.

***

[13]        In the judgment on appeal that homologated the arbitration award, the trial judge held that the arbitration council did have jurisdiction to rule on whether the debt owed by Francesca Patti and Concetta Patti was solidary. The judge disagreed with Concetta Patti that the Regulation did not provide the arbitrators proper authority to decide the matter of solidarity (paras. [22]). Moreover, the judge was of the view that, in connection with a motion to homologate made under articles 946.1 et seq., C.C.P., the Court of Quebec could not review the correctness of the arbitral decision to declare Francesca Patti and Concetta Patti "jointly and severally liable" for the debt to Mtre Hammerschmid (para. [24]). A contestation of the finding of solidarity could only be undertaken, wrote the judge, by way of judicial review (para. [26]).

***

[14]        The appellant submits that the trial judge erred in holding that the arbitration council did not exceed its jurisdiction when it declared the appellant to be solidarily liable with Francesa Patti for the debt. Citing a venerable line of cases from the law relating to the jurisdictional limits of administrative tribunals,[4] the appellant argues that the arbitration council had no jurisdiction under the Regulation to make such a finding and that its privative clause has no application in the circumstances.

[15]        The judge made no such error.

[16]        As a preliminary matter, it should be observed that, notwithstanding its connections to the Regulation and the Professional Code[5], the arbitration was an "arbitration by agreement" rather than statutory arbitration.[6] Arbitration of advocates' accounts is best characterized as consensual given that the proceedings remain subject to the will of the parties who can, in defined circumstances, opt out of arbitration. In Marquis,[7] my colleague Dalphond, J.A. wrote the following on this point for the Court:

[28]      En résumé, une procédure d'arbitrage complète, non négociable, se rattache par l'effet de la loi aux contrats de services des avocats qui facturent leurs clients. Cette situation s'apparente à une clause compromissoire faisant partie d'un contrat d'adhésion, ce qui ne signifie pas pour autant que l'arbitrage cesse de faire partie de la catégorie consensuelle (Dell Computer Corp. c. Union des consommateurs, 2007 CSC 34 , [2007] 2 R.C.S. 801 ).

[17]        With respect for the trial judge's contrary view, the arbitral award is therefore not subject to judicial review, as the arbitration council is not a statutory tribunal in the strict sense. As a form of arbitration by agreement, the two recourses for having the award set aside are the contestation of homologation (article 946.1 C.C.P.) and the motion to annul the award.[8] In proceedings before the Court of Quebec, the appellant chose the first of these two paths.

[18]        The Court of Quebec was not entitled to embark on an inquiry as to the "correctness" or "reasonableness" of the arbitral decision as a court sitting in judicial review might have done had the arbitral council been an administrative tribunal, but was constrained to decide only whether or not the council's award could be homologated. The different nature of a court's task pursuant to a contestation of homologation, as opposed to judicial review, was explained by my colleague Bich, J.A. in Coderre[9] as follows:

[45]   Dans un autre ordre d'idées, l'intervention de la Cour, comme celle de la Cour supérieure, s'inscrit dans le cadre de l'application des articles 946.4 et 947.2 C.p.c. et diffère de celle que l'on adopte dans le cadre d'une procédure de révision judiciaire. Il ne s'agit donc pas ici de se demander si les motifs ou les dispositifs des sentences litigieuses sont appropriés, opportuns, corrects, justes, équitables ou raisonnables, l'article 946.2 C.p.c. interdisant au tribunal de l'homologation ou de l'annulation d'examiner le fond du différend. Il s'agit uniquement de s'assurer que ces sentences ou le processus qui y a mené ne comportent pas l'un ou l'autre des vices indiqués à l'article 946.4 C.p.c. [...].

[References omitted.]

[19]        In service of her argument that the arbitration council exceeded its jurisdiction by declaring the debtors to be solidarily liable, the appellant must show that her case falls within one of the limited grounds upon which homologation can be refused by a court. To this end, article 946.4 (4) C.C.P. provides the principal basis for her claim:

[Emphasis added.]

[20]        The reference to "the terms of the arbitration agreement" in article 946.4 (4) C.C.P. may be taken to extend to the terms of the Regulation.[10] Yet notwithstanding appearances, the arbitration remains "consensual": the question as to whether the council overstepped the terms of the agreement to arbitrate should be measured on this basis.

[21]        Did the arbitration agreement, informed as it was by the provisions of the Regulation, provide the council with the power to characterize the debt owed by Francesca and Concetta Patti as solidary rather than joint or did the council overstep its bounds in so deciding?

[22]        Sections 1, 7 and 30 of the Regulation provide that the arbitration council has power to decide disputes brought by a client, or another person, like Concetta Patti, who has a dispute with an advocate, concerning the "amount" of an unpaid account due to that advocate. Section 31 provides the council with the power to render an award that is final, binding and executory on the matter:

[Emphasis added.]

[23]        The appellant argues rather ingeniously that the council is empowered to decide on the "amount of an unpaid account" under section 1 of the Regulation, but cannot be understood to enjoy the authority to decide whether the resulting obligation is a solidary one or not. She casts her argument on the basis of the longstanding principle that statutory tribunals must find their jurisdiction within the four corners of the legislative instrument that charges them with their decisional authority. Moreover a decision exceeding that authority would not be saved by a clause such as section 31 that purports to insulate the decision from appeal.

[24]        The appellant's argument plainly must be recast in light of Coderre and Marquis discussed above. When viewed as arbitration by agreement, as opposed to statutory arbitration, the council’s award can only be attacked pursuant to article 946.4 C.C.P. Reframed on that basis, the real question the Court must consider is whether the council overstepped its arbitral powers, within the meaning of article 946.4 (4) C.C.P., in deciding solidarity, as opposed to limiting itself to the "unpaid amount of the award".

[25]        Even as recast, the appellant has failed to show that the arbitration council exceeded its powers in declaring Francesca and Concetta Patti to be solidarily liable.

[26]        The arbitration council enjoys all powers necessarily incidental to making binding and executory orders concerning the "amount of unpaid accounts".[11] This extends, perforce, to determining whether the debt owed to the advocate is subject to simple modalities, such as an obligation with a term, and complex modalities, such as whether the obligation is joint or solidary.

[27]        Where, for example, a professional account is owed to an advocate by more than one client, the unpaid amount that each client owes cannot be properly determined without a consideration as to whether the two or more persons who sign a professional fees' agreement are joint debtors or solidary debtors. One can well imagine circumstances in which the question of the extent of the fees owed and the nature of the modality that binds the debtors to the advocate might arise. Spouses may sign a fees agreement as joint debtors or solidary debtors. An advocate may strike different arrangements with, say, shareholders for the preparation of a unanimous shareholders' agreement depending on the stake each of them has in the company or, conversely, seek to hold them all solidarily liable for his or her fees. The same might be said of a fees agreement signed by several co-owners in undivided co-ownership.

[28]        The questions of the extent of a debt and the modality to which it is subject are thus intimately connected, at least insofar as they are both wrapped up in a dispute between the advocate, on the one hand, and his or her multiple debtors on the other hand. If the obligation owed to the advocate is joint, each debtor would only be held responsible, individually, for the unpaid account "up to his share of the debt" (article 1518 , para. 1, C.C.Q.). By contrast, if the obligation owed to the advocate is solidary, each of the debtors "may be compelled separately to perform the whole obligation" (article 1523 C.C.Q.), i.e. to pay the whole of the unpaid account to the advocate. In other words, where there are two or more persons obliged to pay professional fees to an advocate in the same agreement, determining the "amount of the unpaid account" that each of them must pay as either joint or solidary debtors is necessarily incidental to the core power of the arbitrators to decide on unpaid accounts pursuant to the Regulation.

[29]        The text of the Regulation plainly contemplates the possibility of multiple debtors of an advocate’s account. Moreover, sections 1 and 7 allude to a "client", as well as a "person" other than a client who owes all or part of an unpaid account. Pursuant to section 30, an arbitration council can "uphold or reduce the amount in dispute": one could well imagine an account sent to a client or person on the assumption that he or she was a solidary debtor being reduced where a council decided, on the facts of the case, that the debtors were bound to a joint, rather than a solidary obligation to pay the debt. Determining whether two clients, or a client and another person, are in circumstances of passive solidarity in respect of their debtor-creditor relationship with the advocate may well be central to a dispute between the advocate and those persons over what the Regulation calls an "unpaid account".

[30]        To interpret the Regulation otherwise - to argue, as does the appellant, that the "amount of an unpaid account" only extends to the gross amount of what is unpaid and not what each of the advocate's several debtors owe individually - is to give a narrow, illiberal reading of the terms of the arbitration agreement as shaped by this regulatory instrument. It would create the perverse and highly inefficient circumstance in which the arbitration award would be "final", "binding" and "executory" for the parties pursuant to section 31 as to the amount, but that the parties would then have to address themselves to the courts to determine the accessory issue relating to whether the obligation is a joint or solidary one. This falls afoul with the interpretative approach that courts have been urged to take in matters relating to arbitration.[12]

[31]        The trial judge thus made no mistake in concluding, at paragraph [22] of her reasons, that the arbitration council had the power to declare Francesca Patti and Concetta Patti solidarily liable to Mtre Hammerschmid:

[22] Rien dans les arguments des intimées ne démontre que le Conseil d'arbitrage n'a pas les pouvoirs de condamner solidairement les intimées au paiement de la somme de 30 671,67 $. Le Tribunal est d'opinion que le Conseil d'arbitrage avait ce pouvoir en vertu du Règlement sur la procédure de conciliation et d'arbitrage de comptes des avocats, il a interprété les termes des mandats signés par les intimées pour conclure à une responsabilité solidaire.

[32]        Finally, as an alternative argument, the appellant contends that the trial judge erred on the substance of the matter in upholding the arbitral council's declaration on solidarity that was, for the appellant, plainly wrong in law. Pointing to the reasons of Judge Richard in the case that dealt with a dispute between the same parties and the same professional fees' agreement, the appellant says that in law, Francesca Patti and Concetta Patti cannot be solidarily liable because solidarity was not expressly stipulated by the parties in the professional fees' agreement or otherwise imposed by law.

[33]        Whatever opinion she may have had on whether, as a matter of substance, Concetta Patti is solidarily liable, it would have been wrong for the trial judge to substitute her views for those of the arbitration council on this point. The judge correctly chose not to review the merits of the arbitration award given the limited compass of the motion to homologate with which she was seized. Article 946.2 C.C.P. provides:

[34]        The fact that the arbitration council adopted another interpretation of the professional fees' agreement than that retained by Judge Richard is thus of no consequence in respect of the outcome of the homologation proceedings. The matter before Judge Richard turned on different bills and was decided shortly after the time the arbitration award was rendered. The trial judge was in no way bound by Judge Richard’s decision - on the contrary, she was obliged to homologate the award unless valid grounds of contestation were raised - and the argument that the respondent’s motion to homologate was an indirect appeal of Judge Richard's judgment misconstrues both that ruling and the nature of homologation proceedings.

[35]        I would dismiss the appeal.

[36]        Given the particular circumstances of this case, including the fact that there were conflicting outcomes on the matter of solidarity as between the two judgments of the Court of Quebec, I propose that there be no order as to costs.