COURT OF APPEAL FOR ONTARIO

DATE: 20000329

DOCKET: C32516

RE:

PAMELA HOLTHAUS, JOHN CHARLES FOREST, DENHAM INTERNATIONAL INC. and EURASIA INVESTMENTS INC. (Respondents/Plaintiffs) v. BANK OF MONTREAL and YVONNE YOUNG (Appellants/Defendants) and RBC DOMINION SECURITIES LTD. and ATLAS STOCK TRANSFER CORP. (Appellant by Cross-appeal/Third Parties)

BEFORE: LABROSSE, WEILER and SHARPE JJ.A.

COUNSEL:

Peter J. Cavanagh, for the appellants Bank of Montreal and Yvonne Young

John T. Porter, for RBC Dominion Securities Ltd.

Daniel Condon, for the plaintiffs/respondents

HEARD: March 28, 2000

On appeal from the decision of Mr. Justice Wright dated June 16, 1999

E N D O R S E M E N T

[1] The appellants, Bank of Montreal and Young, appeal the decision of Wright J. (the motions judge) dismissing a motion to strike the statement of claim and granting a motion dismissing its third-party notice. The third party, RBC Dominion Securities Ltd. ("RBC"), cross-appeals against that part of the judgment dismissing the motion to strike the statement of claim.

[2] In 1995, the respondents (the plaintiffs) suffered substantial damages through the improper cancellation of certain share certificates. As a result, the respondents commenced an action against the predecessor to the third party RBC claiming damages for the loss of its shares. During the course of this action, the plaintiffs obtained information implicating the appellants, Bank of Montreal and its employee Young (the "Bank") in the loss of its shares.

[3] On January 23, 1998, the respondents and RBC settled that action. A full and final release was duly executed. The respondent agreed, inter alia, not to make any claim against "any other person, or corporation, who might claim contribution or indemnity from the Release by virtue of the said claim or proceeding".

[4] In October 1998, the respondents commenced a second action claiming damages against the Bank, which in turn issued a third- party claim against RBC seeking contribution and indemnity. RBC brought a motion to strike the statement of claim or, in the alternative, to strike the third-party claim.

[5] The motions judge dismissed the motion to strike the statement of claim and struck out the appellant's third-party notice.

[6] It was conceded at the outset of this hearing that if the appeal from the order striking the third-party notice is dismissed, the cross-appeal is moot.

[7] We agree with the decision of the motions judge to strike the third-party claim.

[8] In this action, the statement of claim expressly limits the damages sought to "the portion of the damages the plaintiffs experienced which can be attributed to the Bank's negligence …".

[9] As the statement of claim is limited to the damages which can be attributed to the fault of the Bank, the Bank can have no claim-over against RBC with respect to these damages. Sections 1, 2 or 5 of the Negligence Act do not assist the appellants.

[10] Moreover, since the damages claimed are limited to those attributable solely to the Bank's negligence, RBC could not be liable for all or any part of the respondents' claim within the meaning of rule 29.01(a) or (b). To be successful at trial, the respondents will have to show not only some fault on the part of the Bank but the extent of that fault.

[11] The motions judge did not err by refusing to exercise his discretion to permit the third-party claim to stand so that the Bank could obtain declaratory relief. On the facts of this case, there can be no prejudice to the Bank from this decision. It was conceded on appeal that the Bank was not seeking declaratory relief.

[12] The appeal is therefore dismissed with costs.

(signed) "J. M. Labrosse J.A."

(signed) "K. M. Weiler J.A."

(signed) "Robert J. Sharpe J.A."