DATE: 20060721

DOCKET: C44611

COURT OF APPEAL FOR ONTARIO

RE:

DIAMOND CONTRACTING LTD. (Plaintiff) – and – LEN MacDEARMID, ANTHONY COLANGELO, MATTH PAYNE, SEAN COADY, JOHN McCRINDLE, 4036859 CANADA INC., WAGMAN, SHERKIN, WILSON CHONG and 1613719 ONTARIO LTD. (Defendants)

AND RE:

LEN MacDEARMID, ANTHONY COLANGELO, MATTH PAYNE, SEAN COADY, JOHN McCRINDLE (Plaintiffs by Counterclaim/Appellants) – and - DIAMOND CONTRACTING LTD., GREGORY MERKAC, MACDONALD PORTER DREES and JENS O. DREES (Defendants by Counterclaim/ Respondent)

BEFORE:

GILLESE, LANG and MACFARLAND JJ.A.

COUNSEL:

Allan S. Halpert

for the appellants

Gavin J. Tigihe and James R. G. Cook

for the respondent, MacDonald Porter Drees

No one appearing

for Wagman, Sherkin

HEARD & ENDORSED:

July 17, 2006

On appeal from the order of Justice Thea P. Herman of the Superior Court of Justice dated November 29, 2005.

A P P E A L B O O K E N D O R S E M E N T

[1] During a motion for summary judgment, the appellants sought to amend their statement of claim to raise a new cause of action. The motion judge denied leave in respect of the amendments in question on the basis that the proposed amendments disclosed no cause of action tenable at law. She also viewed the proposed amendments as amounting to a fresh step and that to permit the amendments would be an abuse of process.

[2] We share the motion judge’s view that the proposed amendments ought not to be allowed as they disclose no tenable cause of action.

[3] The letters at issue in this case were an exchange of correspondence between counsel whose respective clients were adverse in interest. The general rule is that a lawyer owes no duty of care to the clients of opposing counsel in litigation or commercial matters. A lawyer acting in his or her professional capacity owes a duty of care to his or her client, not to clients represented by opposing counsel. As was noted by Lane J. in Baypark Investments Inc. et al v. Royal Bank of Canada (2002), 2002 49402 (ON SC), 57 O.R. (3d) 528 (S.C.J.) at para. 33,

To hold otherwise would place solicitors in an untenable conflict between their duty to their client and their need to protect themselves against their client’s adversary.

[4] The appellants’ reliance on Windstar Equities Ltd. v. Sentinel Hills [2005] O.J. No. 1516 in this regard is misplaced. As the motion judge correctly observed, in Windstar, the lawyer made direct representations to non‑clients who were not represented by counsel and in circumstances in which the lawyer ought reasonably to have foreseen that the non‑clients would rely on those representations. In the case at bar, it would not be reasonably foreseeable that non‑clients represented by their own lawyer would rely on representations (if any) made by the lawyer acting for a party adverse in interest.

[5] We accept, however, that to permit such amendments would not have constituted an abuse of process as any prejudice suffered by the respondents was compensable by costs and there was no suggestion that the amendments were sought for an improper purpose.

[6] The appellants sought to argue that s. 1 of the Negligence Act could found the cause of action. We fail to see how, as s. 1 does not create a cause of action; it deals with contribution and indemnity.

[7] Accordingly, the appeal is dismissed with costs to the respondents fixed at $6,000, all inclusive.