Addison & Leyen Ltd. et al. v. Fraser Milner Casgrain LLP et al., 2013 ABQB 473

• Judge: McCarthy, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 31, 2013
• Citations: 2013 ABQB 473;(2013), 568 A.R. 130 (QB)

Addison & Leyen v. Fraser Milner Casgrain (2013), 568 A.R. 130 (QB)

MLB headnote and full text

Temp. Cite: [2013] A.R. TBEd. AU.080

Addison & Leyen Ltd., John Joseph Dietrich, Jeannette Marie Dietrich, Wilfrid Daniel Roach and Helen Roach (plaintiffs/applicants) v. Fraser Milner Casgrain LLP and Wallace Y. Shaw (defendants/respondents)

(1101 13007; 2013 ABQB 473)

Indexed As: Addison & Leyen Ltd. et al. v. Fraser Milner Casgrain LLP et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

McCarthy, J.

August 19, 2013.

Summary:

In 1989, the defendants provided the plaintiffs with a tax opinion. The plaintiffs relied on the tax opinion to enter into an agreement under which they sold their ownership interests in a corporation, believing that they would have no income tax liability. In 1992, a reassessment of the 1989 tax year found that the corporation owed taxes, penalties and interest that it could not pay. In 2001, the Minister of National Revenue issued notices of assessment to the plaintiffs for the corporation's tax liability. Following litigation, in 2010, the plaintiffs settled with the Minister. In 2011, they sued the defendants, seeking contribution and indemnity, relying on a common law implied contract of indemnity. The defendants asserted that the claim was a straightforward negligence claim that was statute-barred under the 10 year limitation period in s. 3(1)(b) of the Limitations Act.

The Alberta Court of Queen's Bench agreed. The plaintiffs' claim was for negligence and was not properly a claim for contribution and indemnity. The negligence cause of action arose when the tax opinion was provided in 1989. As the plaintiffs' action was commenced more than 10 years later, it was statute-barred.

Actions - Topic 1625

Cause of action - Torts - Tort vs. contractual cause of action - [See second Limitation of Actions - Topic 1904 ].

Actions - Topic 1630

Cause of action - Torts - Negligence - [See second Limitation of Actions - Topic 1904 ].

Barristers and Solicitors - Topic 2508

Negligence - General principles - Limitation period for actions against lawyers - [See second Limitation of Actions - Topic 1904 ].

Limitation of Actions - Topic 10

General principles - Nature of action - Effect of - [See second Limitation of Actions - Topic 1904 ].

Limitation of Actions - Topic 1904

Actions - General - Ultimate limitation period - In 1989, the defendants provided the plaintiffs with a tax opinion - The plaintiffs relied on the tax opinion to enter into an agreement under which they sold their ownership interests in a corporation, believing that they would have no income tax liability - In 1992, a reassessment of the 1989 tax year found that the corporation owed taxes, penalties and interest that it could not pay - In 2001, the Minister of National Revenue issued notices of assessment to the plaintiffs for the corporation's tax liability - Following litigation, in 2010, the plaintiffs settled with the Minister - In 2011, they sued the defendants, seeking contribution and indemnity, relying on a common law implied contract of indemnity - The defendants asserted that the claim was a straightforward negligence claim that was statute-barred under the 10 year limitation period in s. 3(1)(b) of the Limitations Act - The Alberta Court of Queen's Bench agreed - The effect of this was that the limitation period had expired before 2001, when the plaintiffs first became aware of their tax liability - The legislature had been clear when it enacted the ultimate limitation period in s. 3(1)(b) - Though it might seem unfair, for policy reasons, the limitation period applied to the right to sue for negligence before the plaintiffs had even learned of their cause of action - See paragraphs 22 to 30.

Limitation of Actions - Topic 1904

Actions - General - Ultimate limitation period - In 1989, the defendants provided the plaintiffs with a tax opinion - The plaintiffs relied on the tax opinion to enter into an agreement under which they sold their ownership interests in a corporation, believing that they would have no income tax liability - In 1992, a reassessment of the 1989 tax year found that the corporation owed taxes, penalties and interest that it could not pay - The Minister of National Revenue issued notices of assessment to the plaintiffs for the corporation's tax liability - Following litigation, in 2010, the plaintiffs settled with the Minister - In 2011, they sued the defendants, seeking contribution and indemnity, relying on a common law implied contract of indemnity - The defendants asserted that the claim was a straightforward negligence claim that was statute-barred under the 10 year limitation period in s. 3(1)(b) of the Limitations Act - The Alberta Court of Queen's Bench agreed - While the plaintiffs claimed that they would never have entered into the agreement or incurred the tax liability but for the defendants' actions, the defendants could never have been found liable to the Minister for the plaintiffs' tax liability and assessment expenses - This was not a claim for contribution and indemnity from a party who caused a plaintiff to suffer loss - The plaintiffs were pursued by the Minister because the corporation could not pay its tax liability - While the plaintiffs might have suffered a loss as a result of their reliance on a negligent tax opinion, the plaintiffs' claim was for negligence and was not properly a claim for contribution and indemnity - The negligence cause of action arose when the tax opinion was provided in 1989 - As the plaintiffs' action was commenced more than 10 years later, it was statute-barred - See paragraphs 31 to 46.

Limitation of Actions - Topic 3103

Actions in tort - Negligence - When time begins to run - [See second Limitation of Actions - Topic 1904 ].

Practice - Topic 1771

Pleadings - Claim for contribution or indemnity - General - [See second Limitation of Actions - Topic 1904 ].

Cases Noticed:

Bowes v. Edmonton (City) et al. (2007), 425 A.R. 123; 418 W.A.C. 123; 2007 ABCA 347, refd to. [para. 25].

Canada Deposit Insurance Corp. et al. v. Prisco et al. (1996), 181 A.R. 161; 116 W.A.C. 161 (C.A.), refd to. [para. 34].

Dean v. Kociniak et al. (2001), 289 A.R. 201; 2001 ABQB 412, refd to. [para. 34].

Eastern Shipping Co. v Quah Beng Kee, [1924] A.C. 177 (P.C.), refd to. [para. 35].

McFee v. Joss, [1925] 2 D.L.R. 1059 (C.A.), refd to. [para. 37].

Edmonton (City) v. Lovat Tunnel Equipment Inc. et al. (2000), 279 A.R. 1; 2000 ABQB 882, dist. [para. 40].

Doucette v. Hasegawa and Associates Ltd. et al. (2009), 486 A.R. 124; 2009 ABQB 502, refd to. [para. 45].

Counsel:

Daniel J. McDonald, Q.C., and Andrew F. Sunter (Burnet, Duckworth & Palmer LLP), for the plaintiffs/applicants;

J. Patrick Peacock, Q.C., and Matthew Vernon (Peacock Linder & Halt LLP), for the defendants/respondents.

This application was heard on May 31, 2013, by McCarthy, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on August 19, 2013.