Filipovic et al. v. Upshall et al., (1998) 70 O.T.C. 179 (GD)

• Judge: Chapnik, J.
• Court: Ontario Court of Justice General Division (Canada)
• Case Date: May 28, 1998
• Jurisdiction: Ontario
• Citations: (1998), 70 O.T.C. 179 (GD)

Filipovic v. Upshall (1998), 70 O.T.C. 179 (GD)

MLB headnote and full text

Temp. Cite: [1998] O.T.C. TBEd. JN.069

Nick Filipovic, Tony Modugno, Evan Efston, Sam Delmonte, Renzo Rinaldi, Stephen Bray, Joe Camara, Jamco Wood Products Ltd., Efston Science Inc., 436416 Ontario Limited and Marquis Investments Services Inc. (plaintiffs) v. Philip Upshall, Angus MacKenzie, Eric Kelday, and George Snowdon (defendants)

(File No. 94-CQ-46797)

Indexed As: Filipovic et al. v. Upshall et al.

Ontario Court of Justice

General Division

Chapnik, J.

May 28, 1998.

Summary:

In December 1989 and January 1990, each of the plaintiffs invested $50,000 or more in a real estate deal with a group of syndicators. They were led to believe that they were purchasing a beneficial interest in a piece of land whereas, in reality, they only purchased shares in the company holding the property. In March 1990, the plaintiffs discovered that two mortgages totalling $2,200,000 were registered against the property. They sued the company and the syndicators who had promoted the venture. The trial judge found for the plaintiffs and, inter alia, expunged the $1,200,000 second mortgage that had essentially been given to the promoters by the company that they had incorporated to purchase the property. Ultimately, the first mortgagee foreclosed on the property and the plaintiffs lost their investment monies. The plaintiffs sued the solicitors who had acted on behalf of the company that purchased the property, and in which they were shareholders. The defendants contended that the earlier judgment precluded the present lawsuit because the plaintiffs had an opportunity to join them in the other action but declined to do so.

The Ontario Court (General Division) rejected the defences of issue estoppel and res judicata. The court dismissed the action, holding that: no solicitor and client relationship existed between the individual plaintiffs and the defendants; although the defendants had no fiduciary duty to the plaintiffs, the defendant Snowdon in particular (the only solicitor who had any direct involvement with the matter) had a duty of care to the plaintiffs to carry out their instructions on behalf of the corporation in a professional and competent manner - one in which their rights and interests would not be compromised; Snowdon met that duty; even if a breach of duty had been established, nothing Snowdon said or did caused any of the plaintiffs to enter into the transaction in the first place and thus, no damages flowed to the plaintiffs as a result thereof. The court subsequently ordered costs against the plaintiffs. The quantum was to be divided in accordance with the proportionate interest of each of the plaintiffs, but was enforceable on a joint and several basis.

Barristers and Solicitors - Topic 1502

Relationship with client - General - Lawyer as fiduciary - See paragraphs 59 to 65.

Barristers and Solicitors - Topic 1504

Relationship with client - General - Solicitor-client relationship - What constitutes - See paragraph 60.

Barristers and Solicitors - Topic 4326

Relations with third parties - Negligence - Real estate transactions - See paragraphs 73 to 79.

Barristers and Solicitors - Topic 4443

Relations with third parties - Duty to third parties - Unrepresented parties - See paragraphs 66 to 72.

Equity - Topic 3607

Fiduciary or confidential relationships - General principles - Relationships which are not fiduciary - See paragraphs 59 to 65.

Equity - Topic 3711

Fiduciary or confidential relationships - Commercial relationships - General - See paragraphs 59 to 65.

Estoppel - Topic 381

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - In civil proceedings - See paragraphs 16 to 18.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - See paragraphs 16 to 18.

Practice - Topic 7168

Costs - Party and party costs - Liability for party and party costs - Between defendants - See paragraphs 85 to 95.

Torts - Topic 61

Negligence - Causation - Causal connection - See paragraphs 79 to 81.

Cases Noticed:

Bear Island Foundation v. Ontario (1995), 38 C.P.C.(3d) 215 (Ont. Gen. Div.), refd to. [para. 18].

Yat Tung Investment Co. v. Dao Heng Bank Ltd., [1975] A.C. 581 (P.C.), refd to. [para. 18].

Romaniuk v. Alberta et al. (1988), 86 A.R. 81; 50 D.L.R.(4th) 480 (Q.B.), refd to. [para. 18].

Levasseur v. British Columbia, [1983] B.C.J. No. 237 (S.C.), refd to. [para. 18].

Feschuk v. Hudema and Ziegler, [1995] 2 W.W.R. 103; 126 Sask.R. 26 (Q.B.), refd to. [para. 60].

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. 61].

National Westminster Bank plc v. Morgan, [1985] 1 All E.R. 821; 60 N.R. 384 (H.L.), refd to. [para. 61].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84; 42 D.L.R.(4th) 81, refd to. [para. 61].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14, refd to. [para. 61].

Panko v. Simmonds, [1983] 3 W.W.R. 158 (B.C.S.C.), refd to. [para. 67].

Whittingham v. Crease & Co., [1978] 5 W.W.R. 45 (B.C.S.C.), refd to. [para. 67].

Tracy v. Atkins (1979), 16 B.C.L.R. 223 (C.A.), refd to. [para. 67].

Linsley v. Kirstiuk (1986), 28 D.L.R.(4th) 495 (B.C.S.C.), refd to. [para. 67].

Midland Mortgage Corp. v. Jawl & Bundon (1997), 33 C.C.L.T.(2d) 248 (B.C.S.C.), refd to. [para. 67].

Kamahap Enterprises Ltd. v. Chu's Central Market Ltd. (1989), 64 D.L.R.(4th) 167 (B.C.C.A.), refd to. [para. 68].

Abacus Cities Ltd. (Bankrupt) v. Bank of Montreal et al. (1987), 74 A.R. 53; 39 C.C.L.T. 7 (Q.B.), affd. (1987), 80 A.R. 254; 44 C.C.L.T. 199 (C.A.), refd to. [para. 68].

Wynston v. MacDonald (1979), 27 O.R.(2d) 67 (H.C.), affd. (1981), 32 O.R.(2d) 108 (C.A.), refd to. [para. 68].

Luckiw Holdings (1980) Ltd. v. Murphy (1986), 80 A.R. 14 (C.A.), refd to. [para. 69].

Ontario Securities Commission v. Consortium Construction Inc., [1993] O.J. No. 1408 (Gen. Div.), refd to. [para. 69].

Agip (Africa) Ltd. v. Jackson, [1989] 3 W.L.R. 1367 (Ch. D.), affd. [1991] 3 W.L.R. 116 (C.A.), refd to. [para. 76].

Air Canada v. M & L Travel Ltd., Martin and Valliant, [1993] 3 S.C.R. 787; 159 N.R. 1; 67 O.A.C. 1, refd to. [para. 77].

Ontario (Wheat Producers' Marketing Board) v. Royal Bank of Canada et al. (1983), 41 O.R.(2d) 294 (H.C.), refd to. [para. 77].

Gold v. Rosenberg et al. (1995), 86 O.A.C. 116; 25 O.R.(3d) 601 (C.A.), affd. [1997] 3 S.C.R. 767; 219 N.R. 93; 104 O.A.C. 1, refd to. [para. 77].

London Loans & Savings Co. of Canada v. Brickenden, [1934] 2 W.W.R. 545 (P.C.), refd to. [para. 80].

Canson Enterprises Ltd. et al. v. Boughton & Co. et al. (1991), 131 N.R. 321; 6 B.C.A.C. 1; 13 W.A.C. 1; 85 D.L.R.(4th) 129 (S.C.C.), refd to. [para. 80].

Swindle v. Harrison, [1997] 4 All E.R. 705, refd to. [para. 81].

588147 Ontario Inc. v. 500105 Ontario Ltd. (1990), 44 C.P.C.(2d) 43 (Ont. Dist. Ct.), refd to. [para. 88].

S & A Strasser Ltd. v. Richmond Hill (Town) et al. (1990), 45 O.A.C. 394; 1 O.R.(3d) 243 (C.A.), refd to. [para. 89].

Foulis v. Robinson (1978), 21 O.R.(2d) 769 (C.A.), refd to. [para. 92].

Vipond v. Sisco (1913), 14 D.L.R. 129 (Ont. C.A.), refd to. [para. 92].

Apotex Inc. v. Eglis Pharmaceuticals (1991), 4 O.R.(3d) 321 (Gen. Div.), refd to. [para. 93].

Coughlin v. Mutual of Omaha Insurance Co. (1992), 96 D.L.R.(4th) 551 (Ont. Gen. Div.), refd to. [para. 93].

King v. On-Stream Natural Gas Management Inc. (1993), 21 C.P.C.(3d) 16 (B.C.S.C.), refd to. [para. 95].

Counsel:

Bernard Burton, for the plaintiffs;

Tristram J. Mallett and Monica Creery, for the defendants.

This action was heard on March 9 to 13 and 16 to 20, 1998, by Chapnik, J., of the Ontario Court (General Division), who released the following decisions at Toronto, Ontario, on the merits and costs on May 28, 1998, and November 4, 1998, respectively.