Hartum et al. v. Loewen et al., 2006 ABQB 498

• Judge: Lee, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 01, 2006
• Citations: 2006 ABQB 498;(2006), 405 A.R. 185 (QB)

Hartum v. Loewen (2006), 405 A.R. 185 (QB)

MLB headnote and full text

Temp. Cite: [2006] A.R. TBEd. JL.033

Adele Hartum, Executor of the Estate of Bruce Hartum, Deceased And Big Game Outfitters Ltd. (plaintiffs) v. Douglas Todd Loewen and Red Willow Outfitters Ltd. (defendants)

(0103 17583)

Douglas Todd Loewen (plaintiff by counterclaim/defendant) v. Adele Hartum, Executor of the Estate of Bruce Hartum, Deceased and Big Game Outfitters Ltd. (defendants by counterclaim/plaintiffs)

Adele Hartum, Kirk Hartum, Blair Hartum, Jessica Moorhead, Big Game Outfitters Ltd. and The Estate of Bruce Earl Hartum (plaintiffs) v. Larry A. Sitko (defendant) and Douglas Todd Loewen and Red Willow Outfitters Ltd. (third parties)

(0203 04701; 2006 ABQB 498)

Indexed As: Hartum et al. v. Loewen et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Lee, J.

June 30, 2006.

Summary:

The plaintiff estate brought two actions against Loewen and Sitko respectively for breach of fiduciary duty. In the Loewen action, the alleged breach pertained to Loewen's administration of the estate's outfitting company. Loewen counterclaimed. During examination on discovery, the executor of the estate gave two undertakings. The first one was to provide copies of the written sub-contracts with the outfitters hired for the hunting allocations that were received back from Loewen. The second undertaking was to provide an accounting from the estate regarding the use of all the allocations which were the subject of the action. In the Sitko action, Sitko, a lawyer and former executor of the estate, gave an undertaking to provide his lawyer's file relating to the estate when the lawyer was acting on Sitko's instructions with regard to Loewen. Loewen applied for an order requiring the executor and Sitko to comply with their undertakings. In the alternative, in the Loewen action, Loewen moved for leave to amend his counterclaim to add a claim of breach of a right of first refusal agreement respecting the allocations.

The Alberta Court of Queen's Bench dismissed the motions.

Equity - Topic 1482

Equitable principles respecting relief - Clean hands doctrine - Application of - The plaintiff estate sued a former fiduciary, Loewen, for breach of fiduciary duty - Loewen counterclaimed - Arguing also that he had a right of first refusal respecting buying and leasing the estate's hunting allocations, Loewen sought an order that the executor comply with two discovery undertakings - The first one was to provide copies of subcontracts with outfitters hired in respect of allocations received back by the estate from Loewen - The second one was to provide an accounting regarding the use of all the allocations which were the subject of the action - In the alternative, Loewen sought leave to amend his counterclaim to add a claim for breach of the right of first refusal agreement - Loewen invoked the "clean hands" doctrine and said that a plaintiff with unclean hands could not obtain relief against a defendant who breached his fiduciary duty toward it - The estate replied that the documentation sought was irrelevant and that it would be too onerous to prepare an accounting - The Alberta Court of Queen's Bench dismissed the motion - The clean hands doctrine did not apply - The claim for breach of fiduciary duty was a "strict liability claim" - Since there were no allegations regarding the right of first refusal agreement as such, the subcontracts were irrelevant - No amendment was appropriate because of onerousness and non-compliance with rule 132 of the Alberta Rules of Court - See paragraphs 1 to 33.

Practice - Topic 2143

Pleadings - Amendment of pleadings - Circumstances when amendment denied - [See Equity - Topic 1482 ].

Practice - Topic 4574

Discovery - What documents must be produced - Effect of undertaking to produce - [See Equity - Topic 1482 ].

Practice - Topic 4577.1

Discovery - What documents must be produced - Privileged documents - Solicitor's files, notes, etc. - Sitko, a former executor of the plaintiff estate, gave a discovery undertaking to provide his lawyer's file relating to the estate when the lawyer was acting on Sitko's instructions with regard to a former fiduciary of the estate, Loewen - The plaintiff estate objected to production, saying that there was solicitor-client privilege at all times that the lawyer was acting for executor Sitko and that the plaintiff estate never implicitly or otherwise waived that privilege - The Alberta Court of Queen's Bench ruled against production - See paragraphs 34 to 40.

Cases Noticed:

Gouin et al. v. Gouin et al., [2005] A.R. Uned. 944; 2005 ABQB 899, refd to. [para. 13].

Harris Scientific Products Ltd. v. Araujo (2005), 382 A.R. 332; 2005 ABQB 603, consd. [para. 19].

Hongkong Bank of Canada v. Wheeler Holdings Ltd., [1993] 1 S.C.R. 167; 148 N.R. 1; 135 A.R. 83; 33 W.A.C. 83, consd. [para. 20].

Valley Vu Realty (Ottawa) Ltd. v. Victoria & Grey Trust Co. (1984), 47 O.R.(2d) 544 (C.A.), refd to. [para. 22].

Canadian Aero Service Ltd. v. O'Malley et al., [1974] S.C.R. 592; 40 D.L.R.(3d) 371, refd to. [para. 27].

Abbey Glen Property Corp. v. Stumborg, Stumborg and Gem Holdings Ltd. (1978), 9 A.R. 234 (C.A.), affing. [1975] A.J. No. 284 (T.D.), leave to appeal refused (1978), 23 N.R. 351; 11 A.R. 270 (S.C.C.), refd to. [para. 27].

Potter (Carl B.) Ltd. v. Mercantile Bank of Canada, [1980] 2 S.C.R. 343; 33 N.R. 175; 41 N.S.R.(2d) 573; 76 A.P.R. 573, consd. [para. 28].

Stone v. White, [1989] O.J. No. 1486 (Sup. Ct.), refd to. [para. 31].

Western Canadian Place Ltd. et al. v. Con-Force Products Ltd. et al. (1997), 202 A.R. 19 (Q.B.), consd. [para. 37].

Statutes Noticed:

Rules of Court (Alta.), rule 132 [para. 12].

Counsel:

Norman Pollock, Q.C. and Leah A. Muzzillo (Witten LLP), for the plaintiffs and defendants by counterclaim;

Frank P.K. Friesacher (McCuaig Desrochers LLP), for the applicant, Douglas Todd Loewen and Red Willow Outfitters Ltd.;

Donald P. Mallon, Q.C. and Anita Floden (Prowse Chowne LLP), for the defendant, Larry A. Sitko.

Lee, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, heard this motion on June 1, 2006, and delivered the following reasons for judgment on June 30, 2006.