Court of Appeal for Ontario

CITATION: Davenport v. Stakiw, 2008 ONCA 707

DATE: 20081016

DOCKET: C46935

BEFORE: O’Connor A.C.J.O, Simmons and Lang JJ.A.

BETWEEN:

Mark Davenport

Plaintiff (Respondent)

and

James Stakiw, John Thiel Real Estate Limited, Sutton Group Select Realty Inc. Gary Pollock and Al Walden

Defendants (Appellants) (Respondents)

COUNSEL:

Aaron Postelnik, for the appellant Sutton Group Select Realty et al.

James Stakiw, acting in person

Catherine Patterson, for Mark Davenport

HEARD: October 7, 2008

On appeal from the judgment of Justice W.U. Tausenfreund of the Superior Court of Justice dated March 8, 2007.

By the Court:

[1] The appellants were the listing agent for the vendor and the agent for the purchaser in connection with the sale of a property to be used as a dental office. The sale closed on June 28, 1995. Following the closing, the purchaser learned that the property did not have the eight parking spaces required by the applicable zoning by-law to permit its use as a dental office. This was because four of the parking spaces encroached on adjoining lands that the vendor had previously conveyed to his wife and because the other four parking spaces were the subject of a revocable parking arrangement with the city.

[2] Initially, the purchaser sued his lawyer for negligence and that action settled. The purchaser then commenced this action against the appellants and the vendor of the property, claiming damages for negligence and misrepresentation. At trial, the purchaser sought a determination of the total amount of damages he had suffered, as well as a determination of the degree of fault to be apportioned to each of the appellants, the vendor and the purchaser’s lawyer.

[3] The trial judge found the appellants and the vendor liable in negligence and apportioned liability as follows: the purchaser’s lawyer (50 %), the listing agent and his employer (20%), the purchaser’s agent and his employer (20%), and the vendor (10%). In addition, the trial judge assessed damages at $164,563, being $110,000 on account of the difference between the sale price of the price of the property ($270,000) and its reduced value without adequate parking ($160,000), plus $54,563 on account of the cost of borrowing $110,000.

[4] The appellants raise three grounds of appeal. First, while they do not challenge the trial judge’s finding that they were negligent, the appellants argue that the trial judge erred in allocating 20% of the fault or negligence to each of them. They submit that because the vendor received the largest portion of the benefits resulting from the negligence, the trial judge should have allocated a proportionately larger amount of the fault or negligence to the vendor and correspondingly lesser amounts to them.

[5] We do not accept this argument. The purchaser brought an action against all the defendants based on negligence and misrepresentations. The trial judge found that each of the defendants was negligent. Pursuant to s. 1 of the Negligence Act, R.S.O. 1990, c. N.1, the trial judge then determined the degree in which each of the defendants was at fault or negligent.

[6] Section 1 of the Negligence A reads as follows:

Where damages have been caused or contributed to by the fault or neglect of two or more persons, the court shall determine the degree in which each of such persons is at fault or negligent, and where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.

[7] Importantly, s. 1 speaks to determining liability on the basis of the degree in which each defendant is found to be at fault or negligent. The section does not contemplate that liability to the plaintiff be based on other considerations such as the amount of benefit received by one defendant as compared to that received by others. In making this observation, we should not be taken to say that the receipt of a benefit obtained by negligence could never be a factor in determining the degree of fault or negligence. We are saying only that, at most, the receipt of a benefit could be a factor in determining the degree of fault or negligence, it is not a freestanding consideration.

[8] In this case, the trial judge was alive to the fact that the vendor received a higher price for the property than he would have received had the purchaser been aware of the shortage of parking spaces. However, the trial judge noted that there was no evidence that the vendor would have sold the property for a lesser amount. The vendor may well have chosen to keep the property rather than sell it for a reduced price. Had he kept the property, it would have been open to him to adjust the eastern boundary to address the parking problem. Against that background it is important to bear in mind that the appellants’ negligence, as found by the trial judge, played a substantial role in the events that led to the difficulties that underlie this law suit. In these circumstances, we see no basis to interfere with the way the trial judge allocated fault or negligence among the defendants.

[9] Accordingly, we would not give effect to this ground of appeal.

[10] Second, the appellants asserted a cross-claim against the vendor for unjust enrichment on the premise that the vendor received a purchase price of $270,000 for a property that the trial judge concluded was only worth $160,000. However, in our view, it is not open to the appellants to raise a claim that the vendor was unjustly enriched. To succeed in such a claim, the appellants would be required to establish that they suffered a deprivation. However, on the facts of this case, if any party suffered a deprivation, it was the purchaser who acquired a property of significantly less value than that for which he had bargained. The fact that the appellants may be obliged to compensate the purchaser for a portion of his losses because of their negligence cannot support a claim for unjust enrichment. Accordingly, we would not give effect to this ground of appeal.

[11] Third, we are not satisfied that the trial judge erred in finding that the limitation period with respect to the purchaser’s claim against the appellants did not begin to run until the purchaser first learned about the parking problem after the closing date. The appellants submit that the limitation period commenced to run prior to the closing based on a theory that the purchaser’s solicitor ought to have discovered the parking problem prior to closing and that his imputed knowledge should be attributed to the purchaser.

[12] However, a conclusion that the limitation period commenced to run on an earlier date would have required not only a finding that the purchaser’s lawyer ought to have discovered the parking problem prior to closing but also a finding that the purchaser’s lawyer ought to have turned his mind to and discovered the appellants’ negligence prior to closing. The trial judge did not make either of these findings. Even if the appellants are correct that a solicitor’s knowledge may be attributed to a client in some instances, we are not persuaded that, in the circumstances of this case, the trial judge erred in approaching the discoverability issue in the way that he did.

[13] We do not accept the appellants’ argument that s. 139(2) of the Courts of Justice Act should disentitle the purchaser to his costs. We see no basis to interfere with the trial judge’s implicit conclusion that it was reasonable in the circumstances for the purchaser to sue his lawyer first.

[14] The appeal is dismissed with costs to the respondent purchaser fixed in the amount of $11,000 inclusive of disbursements and G.S.T.

RELEASED: October 16, 2008 “DRO”

“D. O’Connor A.C.J.O.”

“Janet Simmons J.A.”

“S.E. Lang J.A.”