Canam Ent. Inc. v. Coles (2002), 167 O.A.C. 1 (SCC)
MLB headnote and full text
[French language version follows English language version]
[La version française vient à la suite de la version anglaise]
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Temp. Cite: [2002] O.A.C. TBEd. OC.072
Alan H. Coles v. Canam Enterprises Inc. et al.
(28264; 2002 SCC 63)
Indexed As: Canam Enterprises Inc. v. Coles et al.
Supreme Court of Canada
McLachlin, C.J.C., Gonthier, Major, Binnie, Arbour, LeBel and Deschamps, JJ.
October 8, 2002.
Summary:
A purchaser defaulted on a take-back mortgage. The vendor issued a notice of sale. The purchaser commenced a separate action against the vendor seeking a declaration that the mortgage was void and unenforceable because the vendor’s realtors had falsely represented the zoning. The vendor counterclaimed for the balance owing on the mortgage and for payment on a guarantee. The vendor moved for summary judgment.
The Ontario Court (General Division), in a decision reported at [1998] O.T.C. Uned. 636, allowed the motion and dismissed the purchaser’s claim. The court held that false representations were made concerning zoning on behalf of the vendor. However, the misrepresentation did not entitle the purchaser to set aside the mortgage contract because of the doctrine of merger. Thereafter, the purchaser sued its lawyer, alleging that he had been negligent in not warning it of a zoning restriction. The lawyer commenced a third party claim for contribution against the realtors who had acted for the vendor. The realtors commenced a fourth party claim for contribution against the vendor. The vendor moved for summary judgment dismissing the third and fourth party claims. The realtors moved for summary judgment dismissing the third party claim.
The Ontario Court (General Division), in a decision reported at [2000] O.T.C. Uned. 43, allowed the motions and dismissed the third and fourth party claims on the basis that they were barred by issue estoppel or, alternatively, abuse of process. The lawyer appealed the dismissal of the third party claim.
The Ontario Court of Appeal, Goudge, J.A., dissenting, in a decision reported at 139 O.A.C. 1, affirmed the dismissal of the third party claim on the basis of abuse of process. The lawyer appealed.
The Supreme Court of Canada allowed the appeal and dismissed the motion for summary judgment.
Estoppel – Topic 386
Estoppel by record (res judicata) – Res judicata as a bar to subsequent proceedings – Issues decided in prior proceedings – A purchaser of real property sued the vendor for a declaration that the mortgage was void and unenforceable because the vendor’s realtors had made misrepresentations (the mortgage action) – A motions judge granted the vendor summary judgment holding that although misrepresentations were made, they did not entitle the purchaser to set aside the mortgage because of the doctrine of merger – Thereafter, the purchaser sued its lawyer in negligence – The lawyer commenced a third party claim against the vendor’s realtors – The Ontario Court of Appeal affirmed the summary dismissal of the third party claim where it would be an abuse of process to allow the lawyer to retry the misrepresentation issue – The Supreme Court of Canada allowed an appeal – It was not a abuse of process to allow the lawyer to bring the claim or to require the realtors to defend it.
Practice – Topic 5361
Dismissal of action – Grounds – General and want of prosecution – Abuse of legal process – [See
Estoppel – Topic 386
].
Counsel:
Valerie A. Edwards and Duncan Embury, for the appellant;
Jeffrey S. Klein and Allen Wassermuhl, for the respondents.
Solicitors of Record:
[not disclosed]
This appeal was heard on October 8, 2002, by McLachlin, C.J.C., Gonthier, Major, Binnie, Arbour, LeBel and Deschamps, JJ., of the Supreme Court of Canada. McLachlin, C.J.C., delivered the following oral judgment in both official languages for the court on the same date.
