





CITATION: Oblates of Mary Immaculate v. 3220605 Canada Inc.
      (Life Lease Associates of Canada), 2011 ONCA 481

DATE: 20110628


DOCKET: C51228


COURT OF APPEAL FOR ONTARIO


Armstrong, MacFarland and Watt JJ.A.


BETWEEN


The Oblates of
          Mary Immaculate, St. Peters Province and

Laurier Court
          Life Lease Non-Profit Residence Inc.


Plaintiffs (Appellants)


and


3220605 Canada
          Inc. carrying on business under the firm name and style of

Life Lease
          Associates of Canada, Gary Zock, Deborah Edwards,

John T. Clark,
          Clarks, Lynn Le Mesurier and Vice & Hunter


Defendants (Respondents)


William J. Sammon and S. T. Hazra, for the appellants
          (plaintiffs)


Eric Williams, for the respondents (defendants) John T. Clark
          and Clarks

Paul Webber for the respondents (defendants) Vice & Hunter


Heard:  June 15, 2011


On appeal from the judgment of Justice Julianne A. Parfett of
          the Superior Court of Justice, dated October 26, 2009.


By the Court:

[1]

The appellants appeal the dismissal of their action against John T.
    Clark, Clarks, Lynn Le Mesurier and Vice & Hunter.
[2]

The claims arise as the result of a failed life lease project on land
    owned by the appellants on Laurier Avenue in Ottawa, Ontario.  The respondents
    are lawyers and their respective law firms. 3220605 Canada Inc., Gary Zock and
    Deborah Edwards did not participate in the appeal.
[3]

The trial judge dismissed the action against the respondents before this
    court and granted judgment in the sum of $509,851.00 plus interest against
    3220605 Canada Inc.
[4]

The appellants submit that when the trial judge found that Clark was in
    a solicitor-and-client relationship with them, it was then not open to her to
    conclude that he was not in a conflict of interest.  Although not pleaded nor
    argued below, the appellants position in this court was the fact that Clark
    acted both for Life Lease Associates of Canada (LLAC) and for the appellants
    placed him in a conflict of interest position via-à-vis the appellants.
[5]

The respondent Clark argues that the trial judge erred in finding he was
    in a solicitor-and-client relationship with the appellants.  It is submitted on
    behalf of Clark, that the appellants were represented by their own counsel of
    choice, that the contract for the provision of legal services was between the
    appellants and LLAC and that Clark never provided services to the appellants
    that are traditionally performed by a lawyer in such circumstances. They say
    the appellants were represented by their own counsel of choice upon whom they
    relied.
[6]

The appellants further argue that the trial judge erred in finding Vice
    & Hunter was on a limited retainer to them and that her finding in this
    regard was contrary to the evidence.
[7]

We do not accept this submission.  The evidence of Mr. Vice, which it
    was open to the trial judge to accept, was that at the outset he clearly and
    unequivocally informed the appellants, with whom he enjoyed a long-standing
    relationship, that he knew nothing about life leases and would not advise them
    in respect to that concept.
[8]

Assuming without deciding that both respondents were in a
    solicitor-client relationship with the appellants  it remained for the
    appellants to prove, on a balance of probabilities, that any breach of duty on their
    part caused the appellants losses which are the subject of these proceedings.
[9]

The central issue in this appeal is whether the failure on the part of
    either or both of Clark and/or Vice Hunter to advise the appellants of the
    legal uncertainties about life leases caused their losses.
[10]

The position of OMI, based solely on the evidence of Father Rushton was
    that had they been aware of the legal uncertainties in relation to life
    leases, they would never have gone ahead with the project.
[11]

This evidence given in-chief, in response to a leading question from his
    own counsel, is problematic.  It is clear from his overall evidence that Father
    Rushton suffers from memory problems and also he left the particulars of this
    project to others.  The trial judge quite properly gave careful consideration
    to this retrospective evidence.  She concluded that OMI had been informed of
    the fact that there was no regulatory control of life leases in Ontario and
    that there were legal uncertainties that might arise from other statutes such
    as the
Ontario Human Rights Code
, the
Tenancy Protection Act
, the
Assessment Act
and the
Land Transfer Tax Act
and concluded:
None of these legal uncertainties caused OMI to
    abandon the Laurier Court project.  Therefore, it is also unlikely that the
    information that there were additional legal uncertainties relating to the
    application of the
Planning Act
and the
Residential Complex Sales Representations
    Act
would have caused OMI to abandon the Laurier Court Project.
[12]

In our view, the trial judges conclusion in this regard is supported by
    the record.
[13]

Even assuming a breach of duty on the part of both Vice and Clark for
    failure to inform OMI of the legal uncertainties related to the life lease
    concept resulting from
Planning Act
and
Residential Complex Sales Representations
    Act
,

any such breach did not, on the trial judges findings, cause
    the loss.
[14]

In our view, the record supports her conclusion.
[15]

The appellants also appeal the trial judges damages award and submit
    that they should be entitled to the entire amount of their damages, which they
    calculate to be $1,671,552 without any reduction.
[16]

The evidence disclosed that at the time of sale the property before
    proceeding with this project was appraised at $1.4 million  at that point the
    property had only been excavated and a developer, who subsequently built on the
    property, paid the appellants $1.8 million for the property.  At trial the
    plaintiffs, the appellants in this court, took the position that the defendants
    should get credit for the $400,000 being the difference of the appraised and
    sale value.  In this court they argue there should be no reduction.
[17]

The trial judge concluded that the damages to which the appellants were
    entitled were the losses incurred when the appellants decided to proceed to
    construction despite the fact they had not sold the requisite number of units.
[18]

Other additional costs were incurred as a result of the decision to
    embark on the project in the first place. Those costs arising from that original
    decision were, on the trial judges findings, the responsibility of none of the
    defendants (neither the respondents before this court nor the defendants who
    took no part in the appeal).
[19]

The trial judge concluded that the costs properly attributed to the
    decision to proceed to construction included:


Sponsor
        Development Costs to April 27/03        $ 25,296

Construction
        Costs paid to Warlyn                       $815,360

Fencing                                                                      $  
        2,604

Legal Fees
$
        66,591


$909,851


[20]

From this sum she deducted the $400,000 difference between the appraised
    value and the sale price, which represented the increased value of the property,
    by reason of the excavation, to the developer who acquired the property.
[21]

A trial judges damage calculation is entitled to deference in this
    court.  Absent an error in principle, this court will generally not interfere. In
    our view, there is no such error in this case.
[22]

The appeal is dismissed.
[23]

Costs of the appeal to the respondent Clark fixed in the sum of $15,000
    and to the respondents, Le Mesurier and Vice & Hunter, fixed in the sum of
    $10,000, both sums inclusive of disbursements and HST.
Robert
    P. Armstrong J.A.
J.
    MacFarland J.A.
David
    Watt J.A.
RELEASED:  June 28, 2011 RPA