Court File and Parties

Citation: Taber v. Paris Boutique & Bridal Inc. (Paris Boutique), 2010 ONCA 157

Date: 2010-03-04

Docket: C51130

Court of Appeal for Ontario

Before: Doherty, Goudge and Epstein JJ.A.

Between:

Therese Taber Plaintiff

and

Paris Boutique & Bridal Inc., (carrying on business as Paris Boutique), Tina Globocki and Danica Globocki Defendants (Appellants)

and

Susan Ambrose Third Party (Respondent)

Counsel: Paul Starkman and Samuel Yoon, for the appellants Heidi Rubin, for the respondent

Heard: February 17, 2010

On appeal from the order of Justice Gregory M. Mulligan of the Superior Court of Justice dated September 15, 2009.

Reasons for Decision

By the Court:

[1] The plaintiff in this lawsuit is a commercial landlord. The defendants are Paris Boutique & Bridal Inc., a commercial tenant, Tina Globocki, its owner, and her mother, Danica Globocki. The third party, Susan Ambrose, acted as the plaintiff’s lawyer.

[2] The defendants’ pleadings disclose the following. On November 14, 2008, she sent a demand letter to Paris Boutique, indicating that the tenant would be locked out on November 28, 2008, unless the arrears of rent were settled. That did not happen, and at midnight on that day, the landlord changed the locks, denying the tenant access.

[3] The next day, Ms. Globocki and her mother sought a meeting with Ms. Ambrose at which minutes of settlement and a promissory note were signed, enabling the tenant to go back into possession. The defendants were also required to sign the promissory note guaranteeing the payment of Ms. Ambrose’s fees, and naming her as the payee. That note was later assigned to the plaintiff.

[4] The plaintiff subsequently commenced this action to enforce the minutes of settlement. The defendants defended and counterclaimed against the landlord, seeking to set aside the minutes of settlement and the promissory note, together with general damages, aggravated damages and punitive damages.

[5] The defendants also commenced a third party claim against Ms. Ambrose to set aside the promissory note and to recover general damages, aggravated damages, and punitive damages for the duress that they allege Ms. Ambrose applied, to force them to sign the minutes of settlement and promissory note in order to be allowed to re-enter the property.

[6] Ms. Ambrose successfully moved under Rule 21 to strike the third party claim as disclosing no reasonable cause of action. The defendants appeal from this decision.

[7] In our view, the appeal must be dismissed.

[8] There is no doubt that economic duress can serve to make an agreement unenforceable against a party who was compelled by the duress to enter into it. Nor is there any doubt that the party can have the agreement declared void on this basis.

[9] However, not all pressure, economic or otherwise, can constitute duress sufficient to carry these legal consequences. It must have two elements: it must be pressure that the law regards as illegitimate; and it must be applied to such a degree as to amount to “a coercion of the will” of the party relying on the concept. See: Stott v. Merit Investment Corp., 1988 (ON CA), 63 O.R. (2nd) 545 (Ont. C.A.), at para. 89.

[10] The third party claim here is asserted against the plaintiff’s lawyer acting as lawyer. The only conduct of the lawyer that is pleaded to constitute the necessary economic pressure is that she would not provide re-entry to the defendants unless they agreed to sign the minutes of settlement and the promissory note. No other pressuring conduct by the lawyer is pleaded or even suggested. Nor is there any suggestion that in acting as pleaded, the lawyer was doing anything other than advancing her client’s position.

[11] It is plain and obvious that, without more, the defendants cannot succeed in elevating such routine conduct by a lawyer to a level that the law regards as illegitimate. On this basis alone, the third party claim was properly struck. Given that no suggestion is offered about what could be added to the claim to save it, leave to amend is denied.

[12] It is thus unnecessary to explore whether the consequences of a proper claim for economic duress can extend beyond the setting aside of an agreement made as a consequence, or allowing the recovery of money having received, the only consequences described in the leading case of Universe Tank Ships Inc. of Monrovia v. International Transport Workers’ Federation, [1982] 2 All E.R. 67 (H.L.). We simply note that no case was brought to our attention suggesting that economic duress can go further to yield general damages, aggravated damages, or punitive damages, as are claimed here, save for one in the majority of Wisconsin Court of Appeals, which was reversed on further appeal albeit on different part.

[13] The appellants’ final argument is that in any event, they are entitled to contribution from the third party because of her “fault” under the Negligence Act, R.S.O. 1990, c. N-1.

[14] The simple answer to this is that the only “fault” alleged in the third party claim is economic duress by the third party. Since we have concluded that this claim is fatally flawed, no allegation of fault against the third party remains.

[15] In the result, the appeal is dismissed. Costs to the respondent fixed at $6,500 inclusive of disbursements and GST.

RELEASED: March 4, 2010 (“D.D.”)

“Doherty J.A.”

“S.T. Goudge J.A.”

“Gloria Epstein J.A.”