COURT FILE NO.: 09/08
DATE: 20080918
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
RARE CHARITABLE RESEARCH RESERVE, KEITH AINSWORTH, MICHAEL BARNSTIJN, SHEILA O’DONOVON and 1258703 ONTARIO LIMITED
Applicants
- and -
JAN CHAPLIN, MARK FRETWURST and THE CRUICKSTON PARK COMPANY LIMITED
AND BETWEEN:
JAN CHAPLIN, MARK FRETWURST and THE CRUICKSTON PARK COMPANY LIMITED
Applicants
and
RARE CHARITABLE RESEARCH RESERVE, KEITH AINSWORTH, MICHAEL BARNSTIJN, SHEILA O’DONOVON,1258703 ONTARIO LIMITED, KAREN FARBRIDGE, PAUL KOCH, PETER KRAUSE and BRIAN MCGEE
Respondents
Dean A. Peroff, for the Applicants
Peter C. Wardle, for the Respondent, John Stirling
Valerie A. Edwards, for the Respondent, Thomas LeBrun
HEARD at Toronto: September 18, 2008
janet wilson J.:
[1] The applicants seek leave to appeal from the decision of Lederer J. pursuant to rule 62.02(4)(a) and (b) of the Rules of Civil Procedure. He added two solicitors and their law firms as parties with the right to intervene in these applications pursuant to Rule 13.01(1) of the Rules of Civil Procedure.
[2] Rule 13.01(1) provides:
LEAVE TO INTERVENE AS ADDED PARTY
13.01(1) A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,
(a) an interest in the subject matter of the proceeding;
(b) that the person may be adversely affected by a judgment in the proceeding; or
(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.
(2) On the motion, the Court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just.
BACKGROUND FACTS IN THIS CASE
[3] This application and cross application raises various issues with respect to a complicated land transaction involving the transfer of some 966 acres previously owned by the University of Guelph, including what was known as the Manor House (the “Transaction”).
[4] The disputing parties have each initiated separate actions against the same two lawyers and their law firms for negligence with respect to the Transaction. These lawyers were associated with steps taken or not taken, advice given or not given to the parties with respect to the Transaction.
[5] The losing party in the applications will be pursuing the lawyers involved in the Transaction. It appears clear that the factual underpinning for any claim for negligence in the two outstanding actions against the interveners will be largely determined by the facts and legal determinations in these applications.
THE CASE LAW
[6] The applicants argue that there is conflicting case law, justifying the determination of the issue by the full Divisional Court. In my view, there are no conflicting decisions, and any differences are a result of the facts of the case.
[7] By way of a governing principle I agree with the comments of Nordheimer J. in Lawyers’ Professional Indemnity Co. v. Geto Investments Ltd., [2002] O.J. No. 378 at paragraph 17. In private, as opposed to public litigation, the discretion to add parties should be exercised sparingly or rarely, depending upon the facts of this case. The “bench mark of caution” with respect to adding parties in the context of private litigation should apply.
[8] The applicants rely upon Geto as representing a conflicting case on the interpretation of Rule 13. I disagree. This decision and Geto are easily distinguishable based upon their facts. In Geto, the lawyer who sought to be added as a party had originally been sued and named in the proceeding. The claim against the lawyer was dismissed pursuant to a settlement reached. He was then removed as a party. The lawyer continued to wish to be involved in the proceeding due to “potential” civil or criminal actions and concerns about damage to his reputation. Being added as a party due to possible future legal involvement is very different from being added as a party, as in this case, as a result of being sued with respect to the very legal transaction that is the subject matter of the litigation.
[9] The applicant argues that the decision of Nordheimer J. in Geto, is in conflict with the decisions of Blair J. in Uniroyal Chemical Ltd. v. Kansa General Insurance Co., [1992] O.J. No. 4003 (Kansa) and Molloy J. in Trempe v. Reybroek et al. (2002), O.J. No. 369. Again, respectfully, I disagree. All of the cases considering Rule 13 are consistent. The bench mark of caution applies, yet the court should be concerned with maximizing efficiency and avoiding multiplicity of proceedings. Nordheimer J. in the facts of his case expressed concern that the Geto case could become unfocussed and side-railed by the involvement of the lawyer. By way of contrast in Kenzo and Trempe, the court focused on the need in the facts of those cases to avoid multiplicity of proceedings and to ensure consistency in potential or actual outstanding actions.
[10] The decisions from Alberta relied upon by the applicants are not helpful, or relevant. They do not, in my view, constitute conflicting decisions as these decisions are interpreting a different statutory provision quite similar to our Rule 5 (the rule for joinder of parties).
[11] In this case the applicants oppose the involvement of the interveners as parties. However, the other parties who are also suing the same lawyers welcomed and supported the involvement of the lawyers as intervening parties. The fact that one of the parties supported the involvement of the interveners is a relevant factor in the exercise of discretion.
[12] These applications involve complex nuanced questions of fact and law. There have already been several days of examinations. The end of the examinations is not yet in sight. One of the lawyers added as a party has already been examined for two days. According to counsel for the applicant, his examination alone may extend for another three days. To repeat these examinations in another proceeding would be wasteful, and contrary to the principle of avoiding multiplicity of proceedings, with potentiality conflicting results.
[13] The lawyers in these applications are not only participating, but are legally bound by any factual and legal conclusions reached in these applications.
CONCLUSION
[14] As I have outlined, the Ontario case law applies consistent principles in interpreting Rule 13 of the Rules of Civil Procedure in the context of private litigation. The differences in the cases are factually dependant as to when the discretion to add a party as intervener is appropriate. The Alberta decisions cited are interpreting a different statute. There are no conflicting Ontario decisions, and it would not be desirable for leave to appeal to be granted.
[15] Clearly a Rule 13 order is rare in private litigation. However, the motions court judge concluded that the facts of this case meet the test for the exercise of his discretion, having regard to the principle of the “bench mark of caution”. It is a rare case when both sides in a dispute sue the same lawyers that have involvement in the application, whether or not they are added as parties. Many of the factual and legal issues in these applications would have to be decided in the solicitor negligence actions.
[16] The learned motion court judge exercised his discretion in this case to add to the two lawyers and their law firms as parties. There is no reason to doubt the correctness of his decision. This motion does not raise issues of such public importance that leave should be granted.
[17] The applicant suggests that the intervention of the lawyers will unduly delay and complicate the proceeding, having regard to the factors in Rule 13.01(2) of the Rules of Civil Procedure. These concerns can easily be rectified by seeking a case management order for the overall management of the file. Alternatively, the parties may seek directions at a later point in time if difficulties arise. I note that the interveners have been involved to-date in the various examinations and there have not been any actual difficulties.
[18] The motion for leave to appeal is therefore dismissed pursuant to Rule 62.02(4) (a) and (b) of the Rules of Civil Procedure.
COSTS
[19] I heard submissions as to costs after I advised counsel orally with respect to the results of this motion, with reasons to follow. The two counsel for the interveners sought costs in the total amount of some $8,000.00. In my view, two counsel were not required to argue this motion. Costs are obviously a significant concern with respect to involvement of the intervening parties and should be reasonable. I fix costs of this motion for leave to appeal in the total amount of $4,000.00 inclusive, payable by the applicants to the counsel for the interveners to be divided between counsel for the interveners as they see fit. If there is any dispute, the costs should be divided equally.
[20] I thank all counsel for their submissions.
J. WILSON J.
Date of Reasons for Judgment: September 18, 2008
Date of Release: September 25, 2008
COURT FILE NO.: 09/08
DATE: 20080918
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
RARE CHARITABLE RESEARCH RESERVE, KEITH AINSWORTH, MICHAEL BARNSTIJN, SHEILA O’DONOVON and 1258703 ONTARIO LIMITED
Applicants
- and -
JAN CHAPLIN, MARK FRETWURST and THE CRUICKSTON PARK COMPANY LIMITED
AND BETWEEN:
JAN CHAPLIN, MARK FRETWURST and THE CRUICKSTON PARK COMPANY LIMITED
Applicants
and
RARE CHARITABLE RESEARCH RESERVE, KEITH AINSWORTH, MICHAEL BARNSTIJN, SHEILA O’DONOVON,1258703 ONTARIO LIMITED, KAREN FARBRIDGE, PAUL KOCH, PETER KRAUSE and BRIAN MCGEE
Respondents
ORAL REASONS FOR JUDGMENT
JANET WILSON J.
Date of Reasons for Judgment: September 18, 2008
Date of Release: September 25, 2008