Braun et al. v. Peszko et al., (2015) 466 Sask.R. 1 (QB)

• Judge: Allbright, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: February 26, 2015
• Jurisdiction: Saskatchewan
• Citations: (2015), 466 Sask.R. 1 (QB);2015 SKQB 64

Braun v. Peszko (2015), 466 Sask.R. 1 (QB)

MLB headnote and full text

Temp. Cite: [2015] Sask.R. TBEd. MR.044

Larry Braun, 627332 Saskatchewan Ltd., 627360 Saskatchewan Ltd., 627469 Saskatchewan Ltd., 627470 Saskatchewan Ltd., and 627471 Saskatchewan Ltd. (plaintiffs) v. 4 Jason Peszko and Bill Roe, operating under the name Roe & Company (defendants) and Bill Thompson, Dale Anderson, and Larry Machula (third parties)

(2008 QBG No. 1490; 2015 SKQB 64)

Indexed As: Braun et al. v. Peszko et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Allbright, J.

February 26, 2015.

Summary:

The plaintiffs owned a major piece of property in Saskatoon. A forgiveable loan had been provided to the plaintiffs by CMHC and was registered as a mortgage charge (the RRAP mortgage). In January 2006, the plaintiffs executed a contract of purchase and sale for the property. The purchase price was $9,660,000. The plaintiffs' understanding was that the purchasers were to assume the RRAP mortgage and that the amount owing ($514,800) was not part of the purchase price. However, last minute changes to the contract made this ambiguous. In February 2006, Peszko was retained to close the sale. The vendor's statement of adjustment credited the purchasers with $514,800. Peszko's efforts to procure the unpaid balance were unsuccessful. The plaintiffs sued Peszko in negligence, seeking $514,800. Peszko added Thompson (the plaintiffs' realtor), Anderson (the purchasers' realtor) and Machula (Anderson's consultant) as third parties. Thompson cross claimed against Anderson and Machula.

The Saskatchewan Court of Queen's Bench allowed the action. The court found that the contract called for the plaintiffs to receive $9,660,000 net of the RRAP mortgage and that they were entitled to damages of $514,800. Peszko was 80% at fault while the plaintiffs were 20% contributorily negligent. Thompson was liable for 25% of the damages ascribed to Peszko. Anderson and Machula were liable for 20% of the damages ascribed to Peszko. Thompson's cross claim against Anderson and Machula was jointly and severally allowed at 10% of Thompson's liability.

Barristers and Solicitors - Topic 2501

Negligence - General principles - Standard of care - The plaintiffs owned a major piece of property in Saskatoon - A forgiveable loan had been provided to the plaintiffs by CMHC and was registered as a mortgage charge (the RRAP mortgage) - In January 2006, the plaintiffs executed a contract of purchase and sale for the property - The purchase price was $9,660,000 - The plaintiffs' understanding was that the purchasers were to assume the RRAP mortgage and that the amount owing ($514,800) was not part of the purchase price - However, last minute changes to the contract made this ambiguous - In February 2006, Peszko was retained to close the sale - The vendor's statement of adjustment credited the purchasers with $514,800 - Peszko's efforts to procure the unpaid balance were unsuccessful - The plaintiffs sued Peszko in negligence, seeking $514,800 - The court found that the contract called for the plaintiffs to receive $9,660,000 net of the RRAP mortgage - At issue was Peszko's negligence - The Saskatchewan Court of Queen's Bench found that Peszko was negligent in failing to review the statement of adjustments with the plaintiffs - Peszko's retainer was limited to closing the transaction - A reasonably prudent solicitor would have reviewed the statement of adjustments with the plaintiffs prior to forwarding it to the purchasers for completion - If that had occurred, the plaintiffs would have identified the shortfall and could have clarified the matter - However, as the drafting and execution of the agreement occurred before Peszko's involvement, others involved in the transaction, including the plaintiffs, bore some moral and legal responsibility - See paragraphs 158 to 191.

Barristers and Solicitors - Topic 2597

Negligence - Particular negligent acts - Re closing of sale of land - [See Barristers and Solicitors - Topic 2501 ].

Barristers and Solicitors - Topic 2669

Negligence - Damages - Re sale of client's land - The plaintiffs owned a major piece of property in Saskatoon - A forgiveable loan had been provided to the plaintiffs by CMHC and was registered as a mortgage charge (the RRAP mortgage) - In January 2006, the plaintiffs executed a contract of purchase and sale for the property - The purchase price was $9,660,000 - The plaintiffs' understanding was that the purchasers were to assume the RRAP mortgage and that the amount owing ($514,800) was not part of the purchase price - However, last minute changes to the contract made this ambiguous - In February 2006, Peszko was retained to close the sale - The vendor's statement of adjustment credited the purchasers with $514,800 - Peszko's efforts to procure the unpaid balance were unsuccessful - The plaintiffs sued Peszko in negligence, seeking $514,800 - Peszko added Thompson (the plaintiffs' realtor), Anderson (the purchasers' realtor) and Machula (Anderson's consultant) as third parties - The court found that the contract called for the plaintiffs to receive $9,660,000 net of the RRAP mortgage and that they were entitled to damages of $514,800 - At issue was the apportionment of fault - The Saskatchewan Court of Queen's Bench assessed the degrees of fault of the parties - Peszko's negligence played a key role - The plaintiffs were contributorily negligent in choosing to have a contract drafted by realtors and in not reading it before execution or asking Peszko to review it - Peszko was 80% at fault while the plaintiffs were 20% contributorily negligent - Thompson breached his duty to the plaintiffs by, inter alia, failing to read the final contract - Thompson was liable for 25% of the damages ascribed to Peszko - Anderson and Machula breached their duties to Thompson and the plaintiffs to advise of changes made to the contract and not to mislead them - Anderson and Machula were liable for 20% of the damages ascribed to Peszko - Thompson's cross claim against Anderson and Machula was jointly and severally allowed at 10% of Thompson's liability - See paragraphs 215 to 246.

Barristers and Solicitors - Topic 2909

Negligence - Defences - Contributory negligence - [See Barristers and Solicitors - Topic 2669 ].

Brokers - Topic 3144

Duties of broker to principal - Real estate brokers - Negligence (incl. duty of care, standard of care, etc.) - [See Barristers and Solicitors - Topic 2669 ].

Brokers - Topic 3563

Duties of broker to third parties - Real estate brokers - Duty of care - [See Barristers and Solicitors - Topic 2669 ].

Damages - Topic 206

Entitlement - Loss of chance - The plaintiffs owned a major piece of property in Saskatoon - A forgiveable loan had been provided to the plaintiffs by CMHC and was registered as a mortgage charge (the RRAP mortgage) - In January 2006, the plaintiffs executed a contract of purchase and sale for the property - The purchase price was $9,660,000 - The plaintiffs' understanding was that the purchasers were to assume the RRAP mortgage and that the amount owing ($514,800) was not part of the purchase price - However, last minute changes to the contract made this ambiguous - In February 2006, Peszko was retained to close the sale - The vendor's statement of adjustment credited the purchasers with $514,800 - Peszko's efforts to procure the unpaid balance were unsuccessful - The plaintiffs sued Peszko in negligence, seeking $514,800 - The court found that the contract called for the plaintiffs to receive $9,660,000 net of the RRAP mortgage - The Saskatchewan Court of Queen's Bench held that the plaintiffs were entitled to damages of $514,800 - Under a "loss of a chance" assessment, there was little, if any, chance of the plaintiffs ultimately receiving anything less than $514,800 - See paragraphs 198 to 214.

Damages - Topic 258

Bars - General - Illegal position of plaintiff - The plaintiffs owned a major piece of property in Saskatoon - A forgiveable loan had been provided to the plaintiffs by CMHC and was registered as a mortgage charge (the RRAP mortgage) - In January 2006, the plaintiffs executed a contract of purchase and sale for the property - The purchase price was $9,660,000 - The plaintiffs' understanding was that the purchasers were to assume the RRAP mortgage and that the amount owing ($514,800) was not part of the purchase price - However, last minute changes to the contract made this ambiguous - In February 2006, Peszko was retained to close the sale - The vendor's statement of adjustment credited the purchasers with $514,800 - Peszko's efforts to procure the unpaid balance were unsuccessful - The plaintiffs sued Peszko in negligence, seeking $514,800 - The court found that the contract called for the plaintiffs to receive $9,660,000 net of the RRAP mortgage - The Saskatchewan Court of Queen's Bench rejected the defendants' assertion that the plaintiffs were precluded from seeking any damages due to the "illegality doctrine" - The motivation of the plaintiffs and their real estate agent to put the clause regarding the RRAP mortgage in a schedule attached to the contract (allegedly an attempt to misrepresent the purchase price to the Canada Revenue Agency) was inappropriate, but not illegal - The doctrine of illegality did not negate the plaintiffs' damages - See paragraphs 192 to 197.

Torts - Topic 6601

Defences - Contributory negligence - General - What constitutes contributory negligence - [See Barristers and Solicitors - Topic 2669 ].

Torts - Topic 6603

Defences - Contributory negligence - General - Apportionment of fault - General (incl. breach of contract cases) - [See Barristers and Solicitors - Topic 2669 ].

Torts - Topic 6634

Defences - Contributory negligence - Particular cases - Professional negligence - [See Barristers and Solicitors - Topic 2669 ].

Cases Noticed:

Central Trust Co. v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109, refd to. [para. 165].

Tiffin Holdings Ltd. v. Millican (1965), 49 D.L.R.(2d) 216 (Alta. S.C.), refd to. [para. 166].

Henderson et al. v. Hagblom et al., [2003] 7 W.W.R. 590; 232 Sask.R. 81; 294 W.A.C. 81; 2003 SKCA 40, refd to. [para. 201].

Alberta Wheat Pool v. Northwest Pile Driving Ltd. (2000), 142 B.C.A.C. 113; 233 W.A.C. 113; 2000 BCCA 505, refd to. [para. 221].

Heller v. Martens et al. (2002), 303 A.R. 84; 273 W.A.C. 84; 213 D.L.R.(4th) 124; 2002 ABCA 122, refd to. [para. 222].

Counsel:

Curtis J. Onishenko and Rebecca J.T. Wood, for the plaintiffs;

Robert G. Kennedy, Q.C., for the defendants;

Deryk J. Kendall, for the third party, Bill Thompson;

John B. Rozdilsky, for the third parties, Dale Anderson and Larry Machula.

This action was heard by Allbright, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on February 26, 2015.