Canam Ent. Inc. v. Coles (2000), 139 O.A.C. 1 (CA)
MLB headnote and full text
Temp. Cite: [2000] O.A.C. TBEd. DE.017
Canam Enterprises Inc. (plaintiff/respondent) v. Alan H. Coles (defendant/appellant) and CB Commercial Real Estate Group Canada Inc., Kevin W. Leon and Peter D. Senst (third parties/respondents) and National Trust Company of Canada, James Duncan and James Duncan Estate and Business Broker (fourth parties/respondent)
CB Commercial Real Estate Group Canada Inc., Kevin W. Leon and Peter D. Senst (plaintiffs by counterclaim) v. Alan H. Coles (defendant by counterclaim)
(C33982)
Indexed As: Canam Enterprises Inc. v. Coles et al.
Ontario Court of Appeal
Finlayson, Weiler and Goudge, JJ.A.
December 8, 2000.
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 [1988] 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, affirmed the dismissal of the third party claim on the basis of abuse of process.
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 seeking 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 realtors commenced a fourth party claim against the vendor – The Ontario Court of Appeal rejected the vendor’s assertion that issue estoppel barred the third and fourth party claims – The parties to the mortgage action did not have an opportunity to raise the issue of the realtors’ liability – Additionally, while the merger determination was fundamental to the mortgage decision, it might not be a defence to the third party claim – However, the court affirmed the summary dismissal of the third and fourth party claims where it would be an abuse of process to allow the lawyer to retry the misrepresentation issue.
Practice – Topic 5361
Dismissal of action – Grounds – General and want of prosecution – Abuse of legal process – [See
Estoppel – Topic 386
].
Cases Noticed:
Carl Zeiss-Stiftung v. Rayner & Keller Ltd. (No. 2), [1967] 1 A.C. 853 (H.L.), refd to. [para. 19].
Gleeson v. Wippell (J.) & Co., [1977] 3 All E.R. 54 (Ch. D.), refd to. [paras. 21, 50].
Fenerty v. Halifax (City) (1920), 53 N.S.R. 457 (S.C.), refd to. [para. 28].
Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397; 47 D.L.R.(3d) 544, refd to. [paras. 29, 49].
M.C.C. Proceeds Inc. v. Lehman Brothers International (Europe), [1998] 4 All E.R. 675 (C.A.), refd to. [para. 31].
Solomon v. Smith and Montreal Trust Co., [1988] 1 W.W.R. 410; 49 Man.R.(2d) 252; 45 D.L.R.(4th) 266 (C.A.), refd to. [paras. 31, 53].
Heynen v. Frito-Lay Canada Ltd. et al. (1999), 124 O.A.C. 341; 45 O.R.(3d) 776 (C.A.), refd to. [para. 47].
Rasanen v. Rosemount Instruments Ltd. (1994), 68 O.A.C. 284; 17 O.R.(3d) 267 (C.A.), refd to. [para. 47].
House of Spring Gardens Ltd. v. Waite et al., [1990] 3 W.L.R. 347 (C.A.), refd to. [para. 55].
Counsel:
Christine Innes, for the respondent;
V.A. Edwards and J. Sebastian Winny, for the appellant;
Jeffrey S. Klein, for the third parties respondents;
Mark Hartman, for the fourth party respondent, National Trust Company of Canada.
This appeal was heard on October 10, 2000, before Finlayson, Weiler and Goudge, JJ.A., of the Ontario Court of Appeal.
On December 8, 2000, the judgment of the Court of Appeal was delivered and the following judgments were filed:
Finlayson, J.A. (Weiler, J.A., concurring) – see paragraphs 1 to 35;
Goudge, J.A., dissenting – see paragraphs 36 to 62.
