By Don Lapowich
Yes, it sometimes happens.
AL, a lawyer and his client SJ, a Realtor and investor, were parties to a joint venture involving two apartment buildings. In an action, SJ denied there were other beneficial interests and sued for partition and sale. SJ settled the proceedings with the other parties including AL.
A dispute on the division of the profits arose and the parties’ corporation sued. In that action SJ argued that his former lawyer AJ breached a fiduciary duty to SJ.
The court held that an experienced Realtor and real estate investor would understand the alleged issue of conflicts of interest. Also a claim for fiduciary duty is barred by resjudicata or abuse of process, which SJ should have asserted in the first proceeding. (Chancery Estate Holdings Corp. v. Sahara Real Estate Investment Inc., 2011 BCSC 1067)
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In 2006, a plaintiff purchased the defendant’s home. Sometime after closing, water appeared in the finished basement while the husband of the plaintiff was doing renovations.
The plaintiff alleged that the defendant knew of water penetration and failed to disclose.
However, a home inspection showed the house was in good condition and recommended window well covers.
The court held that any leakage was a result of the plaintiff’s renovations to windows and eavestroughs and that the vendor was not liable. (Ricchio v. Rota, 2011 ONSC 6192)
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In B.C., a landlord leased a commercial building to the plaintiff (tenant). The plaintiff stayed in the property for some time but then sublet the property to another without the landlord’s approval as required by a term in the lease. The plaintiff then allowed the building to remain vacant. The plaintiff failed to produce evidence of insurance coverage to the landlord.
The landlord gave notice of termination of the lease for breach of covenants. The landlord then rented to a third party.
The plaintiff moved for “relief from forfeiture”, which is an “equitable” remedy.
The court determined the plaintiff in the above circumstances was not entitled to an equitable remedy. The plaintiff did not have “clean hands” (subletting without consent, building vacancy subletting without prior consent and not providing proof of insurance coverage). Special costs were awarded against the plaintiff. (600433 B.C. Ltd. v. XJ Motors Ltd., 2011 BCSC 1144)
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Where a claimant sues stating that the issue has been determined in a prior action, the defence may be faced with the principle that it would be an abuse of process to permit the matter to be litigated.
This was tried in an action where the plaintiff purchased a holiday home in the defendant’s park.
A friend of the plaintiff purchased a similar unit but obtained a rescission of his contract, pleading that a bylaw prohibited use of the park for holiday homes.
In the plaintiff’s action, the defendant owner of park pleaded that the plaintiff’s unit could be put in the park as a “legal non-confirming use”. The judge struck the defence as abuse of process.
The Court of Appeal allowed the defence because in the friend’s case no issue was before the court of non-conforming use. There was no determination of that issue and therefore no abuse of process. (Petrelli v. Lindell Beach Holiday Resort Ltd., 2011 BCCA 367)
All of the above judgments are available at www.canlii.org.
Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting for builders, real estate agents and lawyers.
