Dhillon v. Jaffer, 2016 BCCA 119

• Judge: Newbury, Harris and Fitch, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: March 15, 2016
• Jurisdiction: British Columbia
• Citations: 2016 BCCA 119;(2016), 384 B.C.A.C. 215 (CA)

Dhillon v. Jaffer (2016), 384 B.C.A.C. 215 (CA);

    663 W.A.C. 215

MLB headnote and full text

Temp. Cite: [2016] B.C.A.C. TBEd. MR.028

Gurmej Singh Dhillon (appellant/plaintiff) v. Jalal Jaffer (respondent/defendant)

(CA42947; 2016 BCCA 119)

Indexed As: Dhillon v. Jaffer

British Columbia Court of Appeal

Newbury, Harris and Fitch, JJ.A.

March 15, 2016.

Summary:

While Dhillon was in India, his estranged wife and son agreed to sell his home using a forged "Special Power of Attorney" which purported to give her the authority to sign on his behalf. Although the wife backed out of the transaction, the purchasers sued for, and obtained, a default declaration for specific performance. When the purchasers moved for a vesting order, the wife retained a lawyer (Jaffer) to oppose the motion on various grounds, including that the power of attorney was defective and that Dhillon, who had abandoned the wife and their children, had changed his mind about sharing the proceeds of sale. Jaffer moved to vary the default declaration.

The British Columbia Supreme Court refused to vary the order, but expressed sympathy for the wife and stated that it intended to ensure that the sales proceeds would be available to her for her use until Dhillon had established a right thereto (Macdonald, J.'s order). The remarks were made in the context of the wife's professed intention to bring proceedings under the Family Relations Act to protect her interest in the property. No proceedings were taken.

A Master of the British Columbia Supreme Court settled Macdonald, J.'s order and directed that title to the property be vested in the purchasers' names and that the proceeds of sale be paid to Jaffer. Jaffer, on the wife's behalf, filed an appeal from the specific performance judgment and sought a stay of proceedings.

The British Columbia Court of Appeal, in a judgment not reported in this series of reports, denied a stay. The appeal was discontinued. The conveyance closed and Jaffer received the proceeds of the sale. Instead of holding the funds in trust for Dhillon, he paid them out to the wife. Dhillon returned to Canada and learned that his property had been disposed of. Dhillon obtained judgment against his wife and his son for fraud in using the fake power of attorney to sell his property and to withdraw money from his credit union account (see [2005] B.C.T.C. Uned. 912, affd. (2006), 232 B.C.A.C. 249; 385 W.A.C. 249). Dhillon sued Jaffer for damages for breach of contract, negligence and breach of fiduciary duty.

The British Columbia Supreme Court, in a decision reported at [2011] B.C.T.C. Uned. 942, dismissed the action. Dhillon appealed.

The British Columbia Court of Appeal, in a judgment reported (2012), 319 B.C.A.C. 218; 542 W.A.C. 218, allowed the appeal on the ground that Jaffer breached his duty of care to Dhillon and was liable in negligence for damages. The matter was remitted for assessment of damages.

The British Columbia Supreme Court, in a judgment reported [2013] B.C.T.C. Uned. 1595, awarded Dhillon damages equal to the sale proceeds ($187,000), $5,000 damages for loss of opportunity and $40,000 general damages for mental distress. Jaffer appealed the $187,000 and $40,000 damage awards. The award for loss of opportunity was not appealed. Dhillon cross-appealed.

The British Columbia Court of Appeal, in a judgment reported (2014), 356 B.C.A.C. 252; 610 W.A.C. 252, allowed the appeal and dismissed the cross-appeal. First, Dhillon's entitlement to damages was limited to the loss occasioned by Jaffer's negligence. Since Dhillon recovered $101,000 against his wife in the fraud case, the $187,000 award against Jaffer violated the principle of double recovery. Further, since Dhillon was presumptively entitled to only 50% of the net sale proceeds of the matrimonial home ($93,500) and already recovered more than that ($101,000), his losses were already fully satisfied. Absent evidence of a foreseeable psychiatric injury, this was not an appropriate case for damages for mental distress. The damage awards were set aside. The court found it unnecessary to deal with the fiduciary duty claim. Dhillon then applied for a summary trial of his fiduciary duty claim, arguing that the "limits" applied to his damages claim in negligence did not apply to "equitable damages" for his fiduciary duty claim.

The British Columbia Supreme Court, in a judgment reported [2015] B.C.T.C. Uned. 1456, dismissed the application. The court stated that "it is plain and obvious that Mr. Dhillon's summary trial application cannot succeed. It is barred at the very least by the doctrines of merger and cause of action estoppel as well as the principle that a litigant cannot take inconsistent positions before the Court. ... I have no doubt that ... the summary trial application is an attempt to re-litigate the original claim and as a result is an abuse of process." Dhillon appealed.

The British Columbia Court of Appeal dismissed the appeal. The court agreed that the summary trial was barred by the doctrines of merger and cause of action estoppel. Dhillon received judgment for damages, merging the cause of action with the judgment. There was no injustice in not permitting Dhillon to proceed with his fiduciary duty claim in the hope of getting more in damages. He would not have been entitled to more damages in equity for breach of fiduciary duty than he received at common law for negligence.

Equity - Topic 3655

Fiduciary or confidential relationships - Breach of fiduciary relationship - Damages - See paragraphs 1 to 31.

Equity - Topic 5006

Merger - General - Application of doctrine - See paragraphs 1 to 31.

Equity - Topic 5041

Merger - Judgments - General - See paragraphs 1 to 31.

Estoppel - Topic 379

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Cause of action - See paragraphs 1 to 31.

Cases Noticed:

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161, refd to. [para. 7].

Finch v. Ross, Todd & Co. et al. (2006), 384 A.R. 133; 367 W.A.C. 133; 2006 ABCA 98, refd to. [para. 7].

Mills v. Royal Bank of Canada et al. (2012), 524 A.R. 127; 545 W.A.C. 127; 2012 ABCA 75, refd to. [para. 7].

Schemel (Bankrupt), Re, [2009] B.C.T.C. Uned. 1048; 2009 BCSC 1048, refd to. [para. 10].

Royal Bank of Canada v. United Used Auto & Truck Parts Ltd., 2006 BCSC 1192, refd to. [para. 10].

Morgan Power Apparatus Ltd. v. Flanders Installations Ltd. (1972), 27 D.L.R.(3d) 249 (B.C.C.A.), refd to. [para. 11].

Henderson v. Henderson (1843), 3 Hare 100 (H.C.J.), refd to. [para. 11].

Hoystead v. Commissioner of Taxation, [1926] A.C. 155 (P.C.), refd to. [para. 11].

Ladner v. Ladner (2004), 200 B.C.A.C. 298; 327 W.A.C. 298; 30 B.C.L.R.(3d) 144; 2004 BCCA 366, refd to. [para. 12].

Toronto (City) v. Canadian Union of Public Employees, Local 79 et al. (2003), 311 N.R. 201; 179 O.A.C. 291; 2003 SCC 63, refd to. [para. 13].

Virgin Atlantic Airways Ltd. v. Zodiac Seats UK Ltd., [2013] N.R. Uned. 133; [2013] UKSC 46, refd to. [para. 14].

Sherwood Steel Ltd. v. Odyssey Construction Inc., 2014 ABCA 320, refd to. [para. 14].

Louie (H.Y.) Co. v. Bowick (2015), 373 B.C.A.C. 159; 641 W.A.C. 159; 2015 BCCA 256, refd to. [para. 14].

Williams v. Kameka et al. (2009), 282 N.S.R.(2d) 376; 895 A.P.R. 376; 2009 NSCA 107, refd to. [para. 14].

India (Republic) v. India Steamship Co., [1993] A.C. 410; 153 N.R. 244 (H.L.), refd to. [para. 14].

Hislop et al. v. Canada (Attorney General) (2007), 358 N.R. 197; 222 O.A.C. 324; 2007 SCC 10, refd to. [para. 14].

Kendall v. Hamilton (1879), 4 App. Cas. 504 (H.L.), refd to. [para. 14].

Lew v. Lee, [1924] S.C.R. 612, affd. [1925] A.C. 819 (P.C.), refd to. [para. 14].

Fraser v. HLMAD Ltd., [2006] EWCA Civ. 738, refd to. [para. 14].

Ontario (Attorney General) v. Bear Island Foundation, [2000] 2 C.N.L.R. 13; 126 O.A.C. 385 (C.A.), refd to. [para. 16].

Johnson v. Agnew, [1980] A.C. 367 (H.L.), refd to. [para. 19].

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415; 197 N.R. 379; 91 O.A.C. 379, refd to. [para. 19].

Wroth v. Tyler, [1974] Ch. 30, refd to. [para. 19].

Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534; 131 N.R. 321; 6 B.C.A.C. 1; 13 W.A.C. 1, refd to. [para. 22].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1, refd to. [para. 22].

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. 23].

Day v. Mead, [1987] 2 N.Z.L.R. 443 (C.A.), refd to. [para. 23].

Norberg v. Wynrib, [1992] 2 S.C.R. 226; 138 N.R. 81; 9 B.C.A.C. 1; 19 W.A.C. 1, refd to. [para. 26].

K.M. v. H.M., [1992] 3 S.C.R. 6; 142 N.R. 321; 57 O.A.C. 321, refd to. [para. 26].

Cadbury Schweppes Inc. et al. v. FBI Foods Ltd. et al., [1999] 1 S.C.R. 142; 235 N.R. 30; 117 B.C.A.C. 161; 191 W.A.C. 161, refd to. [para. 26].

3464920 Canada Inc. v. Strother et al., [2007] 2 S.C.R. 177; 363 N.R. 123; 241 B.C.A.C. 108; 399 W.A.C. 108; 2007 SCC 24, refd to. [para. 26].

Target Holdings Ltd. v. Redferns et al., [1996] A.C. 421; 187 N.R. 220 (H.L.), refd to. [para. 26].

Pilmer v. Duke Group Ltd., [2001] HCA 31, refd to. [para. 26].

Grewal et al. v. Sandhu et al. (2012), 315 B.C.A.C. 170; 535 W.A.C. 170; 2012 BCCA 26, refd to. [para. 26].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201 (C.A.), refd to. [para. 27].

Counsel:

P. Jaffe, for the appellant;

R.S. Anderson, Q.C., and L.B. Herbst, Q.C., for the respondent.

This appeal was heard on February 16, 2016, at Vancouver, B.C., before Newbury, Harris and Fitch, JJ.A., of the British Columbia Court of Appeal.

On March 15, 2016, Newbury, J.A., delivered the following judgment for the Court of Appeal.