COURT FILE NO.: CV-10-415058

DATE: 2012-03-09

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RONALD GUNRAJ and RUBY GUNRAJ

Plaintiffs/Respondents

– and –

CHRIS CYR, ROYAL LEPAGE ESTATE REALTY BROKERAGE, ALLISTER SINCLAIR, RE/MAX HALLMARK REALTY LTD. BROKERAGE, FRANCESCO BENINCASA, WILLIAM A. CHALMERS, AIRD & BERLIS LLP, PAUL CRUM-EWING, CRUM-EWING/POLIACIK, THOMAS GREGORIADES and DOMINION LENDING CENTRES ESTATE MORTGAGES INC.

Defendants/Applicants

Lorne Silver, for the Plaintiffs/Respondents

William E. Pepall and Eric S. Baum, for the Defendant/Moving Parties, William A. Chalmers and Aird & Berlis LLP

HEARD: November 29, 2011 at Toronto, Ontario

REASONS FOR JUDGMENT

MICHAEL G. QUIGLEY, J.

[1] Ruby and Ronald Gunraj bought a property on the Scarborough Bluffs in Toronto. They intended to develop and resell it. They knew of erosion issues in the area but not for the property that they agreed to buy. They were very keen on the property – they waived inspection conditions and accelerated the closing date. They made three visits to inspect. They met with an architect and builder to discuss the development they planned for the property.

[2] By the end of November of 2009, they had entered into an unconditional Agreement of Purchase and Sale (APS) and paid a non-refundable $200,000 deposit. They claimed to have only then discovered that the property had serious erosion problems. Their development plans would not be possible. They believe that the real estate agents intentionally failed to disclose the erosion problem.

[3] The vendor would not release them from the deal. Their real estate solicitor told them that their best option was to close the transaction and sue the real estate agents later. Faced with these circumstances, Mr. and Mrs. Gunraj made an appointment to obtain further legal advice. They were introduced to William A. Chalmers, a partner at Aird & Berlis LLP and made an appointment to meet him.

[4] Mr. and Mrs. Gunraj met with Mr. Chalmers on only one occasion for about one hour. By that time, there were only 2 options left – to close or not to close the transaction. Mr. Chalmers provided litigation advice. His real estate partner, Norman Kahn, also attended. Both had reviewed the agreement. In essence, Mr. Chalmers told them that if they did not close the transaction there was a significant risk that they would lose their deposit and be sued by the vendor.

[5] The Gunrajs took that advice. They acquired the property on January 4, 2010, but were unable to develop it as planned. They resold it 11 months later for almost $400,000 less than they paid for it. They sued everybody involved to recover their loss, including Mr. Chalmers and his firm. They have been sued for negligence, breach of contract, and breach of fiduciary duty.

[6] On this application, Mr. Chalmers and his firm move for summary judgment dismissing the actions against them.[^1] They disclaim any role in the transactions and insist their advice fell within the expected standard of care and scope of the retainer. They say it cannot reasonably be said to be actionable negligence or breach of any recognized duty. They say the plaintiff's claim against them discloses no genuine issue requiring a trial.

[7] I agree with the moving parties on much of the thrust of their summary judgment motion. Mr. Chalmers and his firm cannot be liable for damages arising out of the earlier executory agreement concluded long before Mr. Chalmers provided his advice. The plaintiffs have not adduced cogent evidence of negligence or breach of any recognized legal duty on the part of Mr. Chalmers, and in particular have not shown what a reasonably competent lawyer ought to have otherwise advised in the particular circumstances. They have not provided any expert opinion on the professional standard that could reasonably inform a finding of negligence. I also agree with the moving parties that the affidavit of the plaintiffs’ falls short of suggesting actionable fault of Mr. Chalmers or that anything he did or did not do actually caused any of the alleged harms that the Gunrajs claim they suffered.

[8] However, despite these conclusions, I find myself unable to grant summary judgment to Mr. Chalmers and Aird & Berlis. The problem that prevents me from finding in their favour is not legal but factual. There is undoubtedly a conflict here in the evidence of the parties. This conflict relates to exactly what was said at the meeting on December 16, and what the understanding of the parties was. There are aspects of this conflict that are reconcilable and explainable, but there is a deeper dilemma that is not. The problem is in part that Mr. Norman Kahn, Mr. Chalmers’ real estate partner, was present at that meeting and clearly spent some considerable time reviewing and considering the Gunraj’s agreement and pursuing research after the meeting with the Toronto Region Conservation Authority, on his own or through other Aird & Berlis staff, and yet there is no evidence from him of what was said at the meeting or of anything else he did apart from the cryptic entries in the law firm’s account.

[9] The moving parties argued that this is a small point, having regard to other aspects of this motion where they have met their onus of proof, but this small point goes to the heart of the Gunraj’s allegations against Mr. Chalmers and Aird & Berlis. Their allegations are, in essence, that the solicitor was negligent by not fully explaining all available options to them. As a result, the Gunrajs claim that they did not make a free and fully informed decision to close the transaction.

[10] It may well be that Mr. Chalmer’s advice was the better advice. It may well be, as discussed further in these reasons, that the allegations of Royal LePage Estate Realty (“Royal Lepage”) broker Chris Cyr that the damage the Gunrajs sustained came from Mr. Chalmer’s advice, rather than his own actions and those of Re/Max Hallmark Realty Ltd. (“Re/Max”) broker Allister Sinclair, appears to be without foundation. Nevertheless, that is what is claimed and pleaded. But, I cannot dismiss that position as groundless when there is an evidentiary hole in the summary judgment record put before the court by the moving parties.

[11] The solicitor’s notes are scanty at best. There was no opinion or reporting letter providing written confirmation of the advice. The Gunrajs swear that they did not understand that they actually had other options than to close. There is no affidavit evidence of Norman Kahn, the real estate specialist and partner who also attended the meeting with the Gunraj’s on December 16.

[12] I find that I am obliged to draw a negative inference from that evidentiary deficiency. This inference favours the plaintiffs, when combined with the presumption in favour of the reliability of the clients’ evidence, the absence of written evidence of Mr. Chalmer’s advice, any affidavit evidence of Mr. Kahn and any cross-examination of the plaintiffs. It results in these defendants being unable to satisfy the burden that they bear on this motion, notwithstanding the merits and strengths that are otherwise evident in their position. They have not put their best foot forward.

[13] For the reasons that follow, I find that there is a genuine issue requiring a trial relative to these two defendants, at least on the basis of this evidentiary record, so the summary judgment motion against the plaintiffs will be dismissed. I will address the issue of costs below having regard to the particular circumstances of my conclusions on this motion.

Summary of Facts

[14] In early December of 2009, the plaintiffs decided to seek legal advice on their right to terminate a transaction that they entered into to purchase 2 Meadowcliff Drive, Scarborough, Ontario (the “Property”). They wanted to terminate the transaction and retrieve their $200,000 down payment. The total purchase price was $1,740,000.

[15] The Gunrajs found that they needed legal advice almost immediately after they committed to buy the Property, once they claimed to have discovered that their real estate agent, Chris Cyr and Royal LePage, and the vendor’s real estate agent, Allistair Sinclair and Re/Max, had made several allegedly false representations to them. Misrepresentations were alleged − regarding not only the value of the Property but also its potential for development and resale. The potential for development and resale had been fundamental to the Gunrajs’ decision to purchase the Property.

[16] The Gunrajs believe that Cyr, Royal LePage, Sinclair and RE/MAX all knew two key facts: (i) that the Gunrajs desired to purchase the Property for the sole purpose of renovation and development, and (ii) that there were deficiencies of the Property that would preclude the Gunrajs from completing those plans.

[17] On December 14, 2009, Mr. Chalmers received an e-mail from a mutual acquaintance asking that he contact the plaintiffs. He was to assist them in considering their legal options with regard to this situation. The transaction was scheduled to close on December 31, 2009. In response, the next day Mr. Chalmers requested and received a copy of the November 5, 2009 APS from the plaintiffs’ real estate solicitor, Mr. Paul Crum–Ewing.

[18] Mr. Chalmers met for the first and only time with Ruby and Ronald Gunraj to discuss their concerns on the following day, December 16, 2009. Mr. Chalmers’ partner, Norman Kahn was also in attendance at that meeting. He is a senior real estate lawyer at the Aird & Berlis law firm.

[19] Mr. Chalmers and Mr. Kahn met with the Gunrajs for about an hour. The clients presented him with certain other documents during that meeting. They told Mr. Chalmers and his partner that their real estate agent, Chris Cyr, had brought the Property to their attention in late October or early November of 2009. It was located in the Scarborough Bluffs region. He told them that the Property was appropriate for investment, that is, for the development and resale purposes that they had in mind. The plaintiffs were generally aware and it was general public knowledge that the Scarborough Bluffs area is affected by erosion issues.

[20] The Gunrajs told Mr. Chalmers that when they entered into the APS, waived conditions, and put down a $200,000 deposit, they relied on representations made by Chris Cyr and others. They told Mr. Chalmers that they believed that Cyr and the vendor’s listing agent, Allistair Sinclair, were aware of an erosion problem specifically affecting this Property but had knowingly and intentionally failed to disclose it. The Gunrajs claimed to have wished to negotiate the inclusion of conditions into the APS to ensure that the property was suitable for their development and resale purposes, including providing for such things as a property inspection. However, they claimed that they did not do so on the advice of Mr. Cyr. Mr. Cyr tells a very different story.

[21] Initially, the APS did contain a financing condition in their favour, but the Gunrajs waived that condition. They asked to have the APS canceled by the vendor or on consent after they became alive to the erosion concern, but the vendor, Francesco Benincasa, failed to respond. Nevertheless, the plaintiffs say they have no specific reason to believe that the vendor acted fraudulently or was in league with the other defendants.

[22] Before coming to visit Mr. Chalmers, the Gunrajs had obtained advice from Mr. Paul Crum-Ewing, their own real estate solicitor. However, he also had no involvement in the negotiation of the deal either and was only retained on November 26, 2009. He advised that their best option in light of the circumstances would be to close the transaction and then commence litigation against the parties they believed had misrepresented these matters to them.

[23] By the time they met with him the plaintiffs’ options were limited to either closing or not closing in Mr. Chalmers’ view. Upon discussing those matters with Ronald and Ruby Gunraj and reviewing the documentation that they and Mr. Crum-Ewing provided, Mr. Chalmers provided them with the following advice:

(i) Based on information provided and given the vendor’s evident unwillingness to rescind the contract, if they did not close the transaction there was a significant risk that they would lose their deposit and be sued by the vendor;

(ii) In the alternative, they could close the transaction, reserving the right to sue Cyr and any other party responsible for damages for the alleged misrepresentation, negligence, and/or breach of contract;

(iii) Based on information they provided, there did not appear to be valid grounds to assert a claim against the vendor. However, if evidence of fraud were to come to light, the Gunrajs could amend their claim to include the vendor. In such a case, Mr. Chalmers advised them that there would be a possibility of the court vitiating the APS; and

(iv) They would likely end up in litigation regardless of whether the plaintiffs closed the transaction or not. As such, closing the transaction might be the preferable option insofar as they would not lose their deposit and would arguably retain a greater degree of control over the litigation as plaintiffs. Mr. Chalmers recommended that they close the transaction.

[24] The clients claim that they provided Aird & Berlis with a retainer for $5,000 during the meeting (although I saw no evidence that the cheque was ever cashed) and a package of documentation pertaining to the purchase transaction. They claim to have explained and passed on all of their knowledge, information, and belief about the nature and circumstances of the transaction to purchase the Property and the reasons why they believed that they should be able to terminate the transaction to purchase.

[25] More particularly, the Gunrajs believed that Cyr and Sinclair deliberately withheld material information regarding the Property, thereby reducing its market value and rendering it unsuitable for development and resale purposes. They say they disclosed all of this to the agents and discussed it and with Cyr and Sinclair in detail.

[26] The Gunrajs put a different label on the advice that Mr. Chalmers provided. They allege that he “instructed” them to close the transaction – to complete the purchase of the property and then sue for damages following closing. They say that they were not presented with options or alternative courses of action from which they could choose. They claimed that their decision to close the purchase of the property was based solely on Mr. Chalmers’ advice that they had no option but to close.

[27] Mr. Chalmers says that he provided no such “instruction” to the Gunrajs. He denies that they were compelled to take any particular course of action. He describes their statement as entirely inaccurate. Rather, he claims that he reviewed the options that were available to them and that the decision of whether or not to close the transaction was entirely theirs to make. Equally, except for that litigation advice, Mr. Chalmers notes that neither he nor Aird & Berlis played any role in the real estate transaction nor did they have any relationship with any of the other defendants.

[28] Following their meeting on December 16, 2010, Ruby and Ronald Gunraj left Mr. Chalmers’ office and never met with him again. They did not ask for his written opinion and he did not provide it. Neither Mr. Chalmers nor Aird & Berlis were retained to assist with the Property closing. Initially, it seemed after the meeting that Aird & Berlis would be asked to close the transaction and Mr. Chalmers’ notes reflect him telling the Gunrajs that they needed to decide who would close the transaction, but the Gunrajs then changed their minds and entrusted Mr. Crum-Ewing with that task.

[29] Aird & Berlis was not retained to commence litigation on the Gunrajs’ behalf. However, it is of importance, in my view, that Mr. Kahn did undertake an investigation of certain Toronto Region Conservation Authority issues after the meeting. On December 17, 18, 21 and 22, he and/or another member of the firm, K. Connell, spent about three and a half hours looking into those issues.

[30] The Gunrajs took possession of the Property on January 4, 2010 without the involvement of Mr. Chalmers or Aird & Berlis. Mr. Crum-Ewing closed the transaction. There were a couple of communications in the early months of 2010, but they never pursued litigation represented by Mr. Chalmers or Aird & Berlis. Ultimately, the Gunrajs resold the Property eleven and a half months later, on December 23, 2010, for $1,350,000. This price was $390,000 less than the price that they had paid to purchase it, excluding legal fees and other transactional costs.

[31] Mr. and Mrs. Gunraj did not wait until they had sold the Property to commence their legal proceedings. They commenced this action against the defendants on November 24, 2010. Of particular relevance here is the extent of the plaintiffs’ claim against Mr. Chalmers and Aird & Berlis. It is pleaded in paragraph 53 of the plaintiffs’ Statement of Claim:

Mr. Chalmers advised the Gunrajs could not cancel or otherwise terminate the closing of the purchase of the Property and instructed the Gunrajs to close. Mr. Chalmers further advised the Gunrajs that their only recourse was to close the purchase of the Property and initiate legal proceedings.

[32] It is on this basis that the plaintiffs claim that Mr. Chalmers and Aird & Berlis are liable in negligence, breach of contract and for breach of fiduciary duty. It is of note that the application record indicates that the advice provided by Mr. Chalmers and Aird & Berlis was consistent with the advice that their own real estate solicitor, Mr. Crum-Ewing, had previously provided to them. He is also being sued by the Gunrajs.

[33] Over the course of January and February of 2011, all defendants served and filed Statements of Defence against the plaintiffs’ claim and also cross-claims. These claims and cross-claims are too complex to detail here. They are detailed in the respondents’ materials. It will suffice for present circumstances to note that all of the defendants cross-claimed against Mr. Chalmers and Aird & Berlis for contribution, indemnity and costs. However, only Cyr and Royal LePage pleaded directly that the damages sustained by the plaintiffs, if any, arose “as a result of their own negligence and/or the negligence of Mr. Chalmers and Aird & Berlis,” and claimed “that if the Gunrajs were concerned about erosion, they should have refused to complete the transaction to purchase the Property.”

[34] Mr. Chalmers and Aird & Berlis delivered their statement of defence and cross-claim and served it on the other defendants on February 14, 2011.

[35] Finally, the plaintiff claims on this motion that the issues of negligence, causation, reliance and mitigation are overlapping among the defendants. As a result, they fear that the other defendants will continue to blame Mr. Chalmers and Aird & Berlis for recommending that the Gunrajs close the transaction, to the potential prejudice and detriment of the plaintiffs, if Mr. Chalmers and Aird & Berlis are granted summary judgment and released from these proceedings.

The Test for Summary Judgment

[36] Summary judgment is only to be granted if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim: Rule 20.04(2)(a) of the Rules of Civil Procedure.

[37] On December 5, 2011, in Combined Air Mechanical Services Inc. v. Flesch,[^2] the Court of Appeal set out the full appreciation test, “a fresh approach to the interpretation and application of the amended Rule 20.” The Court held at para. 50 that in deciding whether to grant summary judgment, the motions judge must ask:

Can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?

[38] In doing so, the court clearly focused on the adequacy of the evidentiary record filed on the motion and distinguished between achieving familiarity with a motion record and a full appreciation of a case. At para. 53 it observed that:

Simply being knowledgeable about the entire content of the motion record is not the same as fully appreciating the evidence and issues in a way that permits a fair and just adjudication of the dispute.

[39] The purpose of the summary judgment process is to “eliminate unnecessary trials, not to eliminate all trials”: Combined Air at para. 38. Rule 20 provides the Court with the means to weed out claims that have no chance of success in recognition that trying unmeritorious claims imposes a heavy burden on the parties and the justice system: Canada (Attorney General) v. Lameman.[^3] The language that has been imported into the “new” rule as of January 1, 2010 clarifies that this is what the Legislature intended.

[40] The new Rule 20.04 (2.1) expands the powers of the summary judgment motions judge to weigh evidence and evaluate the credibility of deponents and to draw inferences from the evidence. These enhanced powers may not be used if it is in the interest of justice that they be exercised only at trial. The Court of Appeal in Combined Air has clarified at paras. 60-61 that these powers “do not convert a summary motion into a trial” and are not intended to “permit the parties to supplement the motion record,” again clearly putting the focus on the adequacy of the record and whether it can reasonably permit the motion judge to have an adequate understanding and appreciation of the evidence to adjudicate on the matter, or whether the circumstances show that a trial is called for

[41] Nevertheless, the well-established principles relating to the parties obligations on summary judgment motions continue to apply. In particular, each party must still “put its best foot forward”: Combined Air at para. 56. The moving party must provide a level of proof that demonstrates that a trial is unnecessary to fairly and justly resolve the issues: Healey v. Lakeridge Health Corp.[^4]

[42] A moving party must still show that there is no genuine issue requiring a trial. Absent evidence being called on the motion itself, they must do so on the basis that the only evidence that will be available at trial is the evidence that is before the court in the summary judgment motion record: Dawson et al. v. Rexdale Storage &Warehouse Inc. et al.[^5] If the moving party is able to satisfy the heavy burden of proof that rests upon it, then the burden shifts to the responding party to prove that its claim or defense has a real chance of success and ought to be permitted to proceed to trial.[^6]

[43] The responding party says the onus on the moving party is "a heavy one," while its own burden is only to show the court that there are triable issues of fact or credibility.[^7] To my mind, that statement does not accurately describe the relative burdens of proof of the parties. It is true that the onus that rests on the moving party to show that there is no genuine issue requiring a trial is significant or “heavy,” as Sharpe J. described it in Sera, above, but it is not intended to pose an insurmountable burden. Further, provided that onus is satisfied by the moving party, then the burden that shifts to the responding party is equally significant, since the responding party must prove that its claim or defence has a real chance of success.[^8] It permits the court to assume that there will be no more evidence than what is contained in the record. It requires that coherent evidence be present in that record that shows that there is a genuine issue that does require that a trial be held.

[44] The responding party may not simply restate the allegations in its pleadings. It must instead set out in an affidavit, material and coherent evidence of specific facts showing that there is a genuine issue that requires a trial. Thus, while there is an onus on the moving party to establish that there is no genuine issue requiring a trial, the case law also resolutely establishes that the respondent must put his “best foot forward” as well and “lead trump or risk losing.”[^9] Where either the motion judge cannot gain the full appreciation of the evidence that is required to permit summary judgment to be granted, or real conflict remains on important evidentiary aspects of the matter even where the full appreciation test is satisfied, and that conflict cannot be resolved using the enhanced Rule 20 powers, the motion cannot succeed and the matter must be sent on for trial.

Issues and Analysis

[45] Stated simply, the issue on this summary judgment motion is whether William Chalmers and Aird & Berlis have satisfied the court that there is no genuine issue that requires a trial relative to the issues of negligence, breach of contract, and breach of fiduciary duty that are alleged in this action against them.

[46] There are a number of distinct aspects that inform this question. In my view, several of these support the granting of summary judgment to the moving parties, including:

(i) that the Gunrajs had already entered into a final and binding APS before they ever even consulted with Mr. Chalmers and Aird & Berlis,

(ii) that there is no satisfactory evidence of negligence or breach of duty that can likely support the plaintiff’s claim against these defendants, and

that there is no evidence advanced by the plaintiff that either Mr. Chalmers or Aird & Berlis actually caused any of the losses they claim to have suffered. Obviously, those are potentially significant issues with the plaintiff’s case that a trial judge will ultimately have to grapple with.

[47] However, there are three aspects of this matter that do not support the granting of summary judgment. They involve conflicts in the evidence that I find myself unable to resolve on this motion. Those conflicts and evidentiary holes preclude me from having the full appreciation of the evidence that is required before I could grant these defendants the summary judgment they seek. Regrettably, they are determinative of the motion. They are:

(i) whether Mr. Chalmers fully advised the plaintiffs of their options in the circumstances, regardless of the quality of his advice,

(ii) the absence of evidence from Norman Kahn who was present at the meeting and the implications of that omission, and

(iii) whether the presence of other defendants who claim against each other for indemnification and contribution requires the continuing participation of Mr. Chalmers and Aird & Berlis in this action.

The last of these issues must be addressed even if the allegation from the co-defendant may not reasonably establish the moving party’s liability for the losses sustained by the plaintiffs.

[48] In the result, I have found that the presence of factual conflict in this case that is not resolvable on this motion must necessarily result in the motion being dismissed. However, I have examined all six of these grounds in the paragraphs that follow in the hope that it may assist the parties to narrow and perhaps resolve the issues as the matter now progresses towards trial.

(i) The Plaintiffs had Already Entered into a Final and Binding APS Prior to Obtaining Advice from Mr. Chalmers and Aird & Berlis

[49] I agree with the moving party as a prima facie matter, that neither Mr. Chalmers nor Aird & Berlis can be liable for damages arising out of an executory agreement that arises from earlier transactions and dealings between the main parties. All of the agreement’s elements were determined long before Mr. Chalmers provided his advice to the Gunrajs. To the extent that this is the respondent’s claim, it is an illogical and untenable position.

[50] The plaintiff’s make their claim against Mr. Chalmers and his firm despite having retained Mr. Chalmers only after they had entered into the binding APS, after they had waived all conditions voluntarily, after they had agreed to an accelerated closing date, and after they had paid a non-refundable deposit of $200,000, all without evidently having received any legal advice. The plaintiffs assert that Mr. Chalmers and his firm may nevertheless be found to be liable for damages that they are alleged to have sustained arising out of those earlier events.

[51] It is useful to note the specific claims of the plaintiffs, as set out in paragraphs 78-84 of the Statement of Claim, describing the alleged liability of these defendants and Mr. Crum-Ewing. The problem with these claims is that they are largely boilerplate. No evidence other than Ronald Gunraj’s affidavit evidence was advanced to support them or the connecting links between the advice received and the damages allegedly sustained. What specific contractual and fiduciary duties did Mr. Chalmers owe to the Gunrajs? How did these duties arise and what did they embrace? These questions are left to the imagination, because there was no evidence presented that described the nature of the contractual duty claimed to be owed to the Gunrajs or specifically how that duty was breached by the advice Mr. Chalmers gave.

[52] The law is clear. A lawyer is not a client’s insurer, and a lawyer may not be held liable for the consequences that flow from a binding deal that was negotiated prior to the lawyer even being retained in the matter. Laskin J.A. made that point strongly in Wong v. 407527 Ontario Limited.[^10]

[53] The principle in Wong has been applied to grant summary judgment in another case similar to this in Graham v. Kaufman.[^11] Graham v. Kaufman was a real estate case where there was also a multiplicity of defendants joined in the action. While it is not clear from the face of the decision, it can fairly be assumed that rights of contribution and indemnity were probably sought as between the defendants there, just as they are here. Mr. Kaufman was the solicitor, who like Mr. Chalmers here, brought a summary judgment motion to have the plaintiff’s negligence claims dismissed as against him.

[54] Justice Michael J. Quigley from Brockville found Wong to be directly applicable. First, he noted that a solicitor’s obligations must be looked at contextually, in light of the state of the facts as he found them at the time of his involvement. He found that if Kaufman had advised the plaintiffs not to close in that case, he would most certainly have been subjecting them to a lawsuit for specific performance and/or damages. The result would have been the same here.

[55] Contextually, it does not appear that the Gunrajs could have presented any information or facts to Mr. Chalmers that could have given them legal grounds to escape the obligation they had bargained for or to excuse them from closing the transaction, whether it was now found to contain surprises or not. I make that statement notwithstanding:

(i) the research that we later find was being conducted by Norman Kahn into facts that might have permitted them to terminate and

(ii) Chris Cyr’s allegation that there was an outstanding work order at the time of closing that would have provided an excuse to not close the transaction (though, in fairness, it seems unlikely that either Mr. Chalmers or Kahn could have known this at the time they gave their advice, given what they said and did).

[56] It is undisputed that the plaintiffs’ APS was final and binding in this case at the time that they retained and went to meet with Mr. Chalmers. They were not entitled by that time to “a better deal” than what they had made for themselves.

[57] Mr. Chalmers was not retained to fix the deal. The plaintiffs provide no reason for failing to close the transaction at the time that Mr. Chalmers advised them. Given all this, it strikes me as odd that the plaintiffs now ask this court to find that Mr. Chalmers was negligent because he exercised his judgment to advise that they close and may not have focused on what the alternative consequences would have been if they did not close.

[58] So is Mr. Chalmers to be faulted for his advice after hearing that the plaintiffs were bound to an agreement of purchase and sale of the Property? While I make no finding given that this matter must go on to trial, I think not. On the evidence before me, there does not appear to have been any reasonable alternative advice to be provided in these circumstances. Even if Mr. Chalmers erred by not fully describing the consequences that would or could have arisen if the Gunrajs had chosen not to close the transaction, this does not mean that Mr. Chalmers strayed from the reasonably competent lawyer standard that he had to meet in his dealings with the plaintiffs.

[59] In Folland v. Reardon,[^12] Doherty J.A. explained that standard of reasonable competence. This standard must permit for errors in judgment. It is not a standard of perfection. He put the proposition as follows:

In accepting the reasonably competent lawyer standard, I do not detract from the often repeated caution against characterizing errors in judgment as negligence. Lawyers make many decisions in the course of a lawsuit. Those decisions require the exercise of judgment. Inevitably, some of those decisions, when viewed with the benefit of hindsight, will be seen as unwise. The reasonable lawyer standard does not call for an assessment of the sagacity of the decisions made by the lawyer. The standard demands that the lawyer bring to the exercise of his or her judgment the effort, knowledge and insight of the reasonably competent lawyer. If the lawyer has met that standard, his or her duty to the client is discharged, even if the decision proves to be disastrous.

[60] Perhaps the trial judge will be presented with further evidence that would support a finding of fault against Mr. Chalmers, but as I emphasize in the next section of these reasons, that evidence was not before me on this motion.

(ii) Unsatisfactory Evidence That Can Support the Plaintiffs Claims

[61] A further reason that would support the motion, in my view, is the failure of the plaintiffs to offer cogent supporting evidence beyond merely repeating the bare allegations set out in their pleading. The plaintiffs claim that they were entitled to assume that Mr. Chalmers and Mr. Crum-Ewing had the abilities and capacities to deal adequately with the legal matters that they undertook to perform on the Gunrajs behalf, but as noted above, they have not shown how the advice of Mr. Chalmers was deficient.

[62] Neither have they demonstrated what a reasonably competent lawyer ought to have otherwise advised in the particular circumstances that Mr. Chalmers and they faced when they met with each other on December 16, 2009. Specifically, Mr. and Mrs. Gunraj have not shown based on the information that was provided to Mr. Chalmers by them on December 16, 2009, that a reasonably competent lawyer would have concluded that the plaintiff should risk not closing the transaction. The fact was that at the time that they consulted with him, the Gunrajs were parties to a binding agreement of purchase and sale. It was a binding executory contract. No conditions remained to be satisfied. A $200,000 deposit had been paid. All that remained to be done was to go through the formalities of closing.

[63] The advice given by Mr. Chalmers, stated simply, was that there was no excuse, given the background, not to close the transaction. His advice was that at most, the Gunrajs had causes of action against the real estate agents for misrepresentation. Looked at fairly, his advice appears to have been supported by

(i) the doctrine of "caveat emptor" which provides that a buyer who does not protect himself by contract or by inspection will be without remedy in the absence of fraud; and

(ii) the rule that where a transaction for the sale of land does not close due to the default of the purchaser, the deposit, being a guarantee of performance, becomes the property of the vendor.

[64] While I make no finding on the competence of Mr. Chalmers’ advice, it seems likely based on this record that his advice was probably both reasonable and legally correct: see Fraser-Read v. Droumtsekas, [^13] CXL Universal Holdings Inc. v. Century 21 Harvest Realty Ltd.,[^14] V. DiCastri, Law of Vendor and Purchaser.[^15] However, that will be a decision for the trial judge to make based on the evidence that is actually presented at trial.

[65] In addition, the absence of any expert opinion that the conduct of Mr. Chalmers was wanting relative to the applicable professional standard of care supports the moving parties. The plaintiffs claim that expert evidence is not required to permit this court to determine if there is a genuine issue requiring a trial relating to the standard of care applicable to this solicitor. Yet, this is only correct if the standard of care issues in this dispute are of a non-technical nature.

[66] In my view, the standard of care issues are not simple. They are of a technical nature. I accept that expert opinion may not be necessary to permit a trial judge to determine whether to accept Mr. Chalmers’ or Mr. Gunraj’s evidence of what was said at the meeting, but it would and will be necessary to permit the legal implications of what was said or not said to be determined, and in particular whether Mr. Chalmer’s advice is actionable in negligence.

[67] The jurisprudence indicates that, in general, it is inappropriate for a trial court to determine the standard of care in a professional negligence case in the absence of expert evidence.[^16] There are two exceptions. The first is cases in which it is possible to reliably determine the standard of care without the assistance of expert evidence, because the court is faced with "non-technical matters or those of which an ordinary person may be expected to have knowledge.” The second is cases in which the impugned actions of the defendant are so egregious that it is obvious that his or her conduct has fallen short of the standard of care, even without precisely knowing the parameters of that standard.[^17] Nevertheless, even in cases like 1041590 Ontario Limited v. Camley Investments Inc.,[^18] in which the motions judge concluded that expert evidence was not strictly required, the matter ought not to proceed to trial where the summary judgment respondent has failed to provide virtually any standard of care evidence.

[68] However, it seems to me that this is a case where expert opinion would be required at trial and ought to have been present on this summary judgment motion. It ought to have been present to enable the legal and practical propriety of the two alternatives that were available to be addressed – to close or not to close – and thus to fairly evaluate the solicitor’s recommendation, the reasons for it and whether it met the applicable standard. This expert evidence ought to have been present in addition to the issue of factual communication that seems to be at the root of the Gunrajs’ complaint.

[69] The plaintiffs rely on Stern v. Stern[^19], Leone v. R. Craig Campbell Law Corp.[^20] and the decision of C.R. Harris J. of this court in Dinevski v. Snowdon[^21] to say that the issue of solicitor’s negligence in this case is not a technical issue, but rather merely a factual difference between what they say the solicitor said and what he says he said.

[70] Stern was a case of obvious conflict and did not involve technical questions of law. It does not strike me as relevant here. In Leone, the issue was whether the solicitor had met the standard of a reasonably competent family law practitioner conducting a mobility case. Fisher J. specifically acknowledged that expert opinion evidence is preferable in cases of solicitor's negligence. In that case, however, she found that she was in a position to assess the solicitors conduct without plaintiffs’ expert evidence, because the defendant had adduced expert evidence that permitted her to determine the issue. Finally, even in Dinevski, Harris J. thought it would have been helpful if the plaintiffs had provided some expert evidence, but was able to determine whether the solicitor met the standard of care because it was not a technical matter: see Zink v Adrian.[^22]

[71] In Dinevski, however, Harris J. found that there was an enormous difference between the lawyer’s and the client’s view of the advice given. As such, as Morton v. Harper Grey Easton[^23] suggests, the client’s version of the events was to be preferred, all other things being equal. Here, there is actually relatively little disagreement evident on the face of the record of what was said between these parties. Rather, it seems to me that it is (i) the inferences arising out of what was said that differ, that is, whether it was “advice” or an “instruction,” and (ii) whether Mr. Chalmers had a positive obligation in the circumstances of this case to describe in fuller scope what the procedure and consequences would have been had the Gunrajs not closed the transaction.

[72] Ironically, the Gunrajs deny that Mr. Chalmers advised them that they would be able to be in control of the litigation if they closed and sued. But that is exactly the course of action that he recommended and the course of action they took. They have that advantage as a result of their decision to follow his advice, and that decision seems to me not to be merely to be the result of a blind following of instructions that they did not understand. As is discussed further below, the subsequent emails make that plain.

[73] Against this background, whether Mr. Chalmers’ advice was appropriate or whether the more appropriate advice would have been for the Gunrajs not to close – to forfeit their $200,000 deposit and to sit back and wait for the vendor to decide whether to sue – is a technical issue on which expert advice was needed. I find that this issue is not of common knowledge of ordinary persons. Rather, it requires knowledge of the law of real property and of the full range of consequences, legal and factual, that could arise in a case such as this, depending on the direction pursued.

[74] I find that the absence of expert evidence on this issue in this case leaves an evidentiary hole. It leaves a large, unanswered question on the most central issue relative to the conduct of Mr. Chalmers and Aird & Berlis. It was a question that ought to have been addressed by the plaintiffs obtaining expert opinion evidence to enable the court to properly assess whether Mr. Chalmers conduct met the required standard. It was the plaintiff’s obligation to adduce that evidence as part of their claim. They did not do so. It is a further reason why it would otherwise have been appropriate here to grant summary judgment to the moving parties.

(iii) There is no Evidence Advanced that Mr. Chalmers or Aird & Berlis Caused any of the Alleged Harms or Loss They Claim to Have Suffered

[75] The third ground that would otherwise support the position of the moving parties relates to causation. In my view, the affidavit of the Mr. Gunraj falls short of suggesting any actionable fault by Mr. Chalmers or that anything he did or did not do actually caused the plaintiffs’ alleged harms. The plaintiffs claim to have suffered a loss of at least $390,000, but there is no damage that is specifically attributed to these defendants, nor is there any explanation or theory of how the conduct of these defendants contributed to the damages they may have suffered. These damages may instead be attributable to or have been caused by the other defendants.

[76] The Supreme Court’s decision in Athey v. Leonati[^24] requires that the plaintiffs show that they would have avoided the damages they claim to have suffered or obtained a benefit that was denied to them "but for" the allegedly negligent conduct of Mr. Chalmers. It requires a causal link between action or inaction and damage. The damages, if any, attributable to these defendants will be found to be too remote under relevant principles of our law if they cannot be directly traced to a breach of duty by either or both of them towards the plaintiff. However, the Gunrajs presented no evidence in the record filed on this summary judgment motion that shows they would have been better off if they had not closed the transaction, that is, if they had not followed the advice that was given to them by Mr. Chalmers.

[77] No evidence has been presented that could establish that the damage they suffered is attributable to them having followed the advice that Mr. Chalmers provided to them. Neither has evidence been presented that they would have been better off if he had given them contrary advice and told them not to close, to forfeit their deposit, and to wait to be sued rather than by closing and then claiming for alleged misrepresentations by their real estate agents and the other defendants involved.

[78] In that regard, I would also note for the present that there is no evidence of the existence, at that time, of the outstanding work order that is alleged by Cyr in his pleadings. Neither is there any evidence of information from the Toronto Region Conservation Authority. This evidence allegedly might have permitted the Gunrajs to terminate the transaction rather than closing it. These factual matters are addressed further in the analysis below.

[79] In this case, the foundation of Mr. and Mrs. Gunraj’s claim is not that there is erosion on the property per se – that in itself is not actionable. Rather, it is the alleged misrepresentation by the agents or vendor or others of facts relative to that erosion on the Property that potentially gives the Gunrajs a claim. Accordingly, the plaintiffs have commenced comprehensive litigation against the parties who were involved in the transaction at the time those misrepresentations were allegedly made: Cyr and Royal Lepage, Sinclair and Re/Max, the vendor Francesco Benincasa, and the mortgage brokers Gregoriades and Dominion Lending Centers Estate Mortgages Inc.[^25] However, there was no evidence adduced here that the actions or alleged inactions of William Chalmers or his firm were a cause of any specified loss or damage suffered by them or that they would have been better off if they had failed to close. Any such conclusion would have been groundless speculation on my part.

(iv) The Absence of Evidence from Norman Kahn and the Implications of that Omission

[80] As noted above, in my view, the preceding three issues would have favoured the granting of summary judgment to these defendants, but this and the following two factually focused difficulties are the basis of my conclusion that the motion cannot succeed. There are clearly credibility issues in this case. At present, those issues appear to require a trial to be resolved. There was no opportunity for me to resolve these issues or make a determination on issues of credibility, notwithstanding the expanded powers reflected in the new Rule. I could not achieve a full appreciation of all of the relevant evidence in this case because Norman Kahn, Mr. Chalmers’ partner who was present at the same meeting with the Gunrajs on December 16, 2009, has not filed an affidavit that would assist or permit me to resolve the conflict in the evidence.

[81] After the meeting that took place between Mr. Chalmers, Mr. Kahn and the Gunrajs, Mr. Gunraj says that Mr. Chalmers suggested that Kahn should be retained, instead of their current real estate solicitor, Paul Crum-Ewing, to close the purchase of the property. Mr. Gunraj said that Mr. Chalmers made that suggestion in furtherance of his recommendation that they close the transaction to purchase the property. Mr. Gunraj claims to have agreed to provide Mr. Kahn with instructions. Norman Kahn then evidently contacted Mr. Crum-Ewing and requested that the entire real estate file be transferred to him. However, that was not done.

[82] On the evening following the meeting, Mr. Gunraj wrote to Messrs. Chalmers and Kahn to confirm his understanding that the agreed strategy was to close the deal and advise the parties at the same time that the plaintiffs would be suing them. That same evening, however, Mr. Gunraj and his wife decided that they would let Mr. Crum-Ewing continue on with the closing of the property rather than transferring the file to the Aird & Berlis firm. There was no further meeting in person between Messrs. Chalmers or Kahn and Mr. or Mrs. Gunraj, but there was subsequent e-mail and telephone correspondence.

[83] On December 17, 2009, Mr. Chalmers sought instructions via e-mail whether the Gunrajs wished to pursue legal action after the closing. He was to be away until the beginning of the New Year, but said that he would be able to draft a claim upon his return to the office on January 5, 2010. Mr. Gunraj believed that Mr. Chalmers did not seek instructions to initiate legal proceedings prior to the closing of the property purchase, because they had already agreed to close the property on the basis of Mr. Chalmers’ advice given at the meeting on December 16, 2009.

[84] Mr. Chalmers states at paragraph 18 of his affidavit that Mr. and Mrs. Gunraj did not seek any further advice from him following the December 16 meeting, but I agree with the plaintiffs that this is not entirely accurate. On January 11, after the closing, Mr. Gunraj wrote to Mr. Chalmers in an e-mail to confirm that the closing had taken place and that the Gunrajs were in possession of the property as of January 4, 2010.

[85] Not long afterwards, Mr. Gunraj received further communication, an invoice from Aird & Berlis for the professional services it had rendered to him and Mrs. Gunraj throughout the period ended December 31, 2009. Almost a month later, Mr. Gunraj e-mailed a message to Mr. Chalmers on February 17, 2010 respecting the account. In particular, he was confused about why Norman Kahn had made inquiries of the Toronto Regional Conservation Authority when Mr. Chalmers’ advice to the Gunrajs at the meeting held on December 16, 2009 was to conclude the transaction to purchase the Property. Mr. Chalmers response is instructive on what was going on behind the scenes:

Dear Ron,

I have looked into the matter of the charges on the January invoice.

We researched the TRCA issue because depending upon the response, there was a possibility that you could have had an opportunity to terminate the transaction and receive a refund of your deposit. Accordingly, Norman followed this matter up following our meeting with you before he was advised on December 17, 2009 by Paul Crum-Ewing that he was taking over this matter which occurred.

We were trying to find a method by which you could terminate the transaction and receive a refund of your deposit.

As for the estimate of moving forward, it is easier to discuss that over the telephone.

Please let me know times in the next few days at which you are available to speak about this matter.

William A. Chalmers

[86] In fact, even though the last time entry recorded by Mr. Chalmers was on December 17, 2009, Mr. Kahn continued to record time for 6 more days. Commencing on December 17, there are six separate time entries in the Aird & Berlis account relating to contact made between the law firm and the Toronto and Region Conservation Authority (TRCA) on or after December 17. Those contacts were made either by Norman Kahn or by another member of the professional staff at Aird & Berlis by the name of K. Connell.

[87] These entries show that the law firm was making requests to the TRCA for information under the Freedom of Information Act and speaking to staff at the TRCA, including its Freedom of Information Officer, a Mr. Sun, regarding a proposed search and review of TRCA files and further calls in respect of an inquiry letter. Mr. Kahn recorded his time reviewing TRCA issues and holding a telephone conversation with Paul Crum-Ewing on December 21, 2009. He also records e-mail messages going to and coming from Mr. Chalmers and follow-up with K. Connell regarding the conservation authority issues, even though Chalmers does not record time spent from his end. K. Connell and Mr. Kahn appear to have had one further discussion on the subject on December 22, 2009, where further e-mail was exchanged with the TRCA Freedom of Information Officer. A response of some kind must have been provided, because Mr. Kahn recorded having spent about 20 minutes talking to K. Connell about it and reviewing that response. However, that response, whatever it said, was not part of the evidence on this motion.

[88] A key issue in this case is what was discussed on December 16, 2009. In his affidavit, Mr. Gunraj states at paragraph 19 that he and his wife Ruby were never told about the other options, or at least that he never understood that there were other options that could reasonably be pursued. Nevertheless, this evidence suggests that other options were being pursued. Whether those options were reasonable or would or might have changed the outcome is not the point. The point is that the solicitor and the client disagree on what was said and that Mr. Gunraj was not cross-examined on his affidavit. Further, no corroborative or confirmatory affidavit has been filed by Mr. Khan of his activity, thus raising a negative inference against the defendants relative to what actually transpired, whether deserved or not.

[89] Where there is a conflict in the evidence and the moving party has not satisfied the onus that falls upon him to resolve that conflict, then the moving party will not have satisfied the onus of establishing that there is no genuine issue requiring a trial. Moreover, the decision in Morton v. Harper Grey Easton, above, establishes that in circumstances where the evidence of the lawyer and the client differ, in the absence of written confirmation of the lawyer’s evidence, all other things being equal, the evidence of the client as to what transpired is to be preferred.

[90] In this case, even if Mr. Chalmers was correct that there was no factual basis that would provide an excuse to permit Mr. and Mrs. Gunraj to avoid closing the transaction, it nevertheless appears that their principal wish was to terminate the transaction and to obtain a return of their $200,000 non-refundable deposit.

[91] In Polischuk v. Hagarty,[^26] Henry J. emphasized the importance of a lawyer's duty to his client to inform them of proposals for deviation from the terms of a contract and to advise them of the consequences of such a deviation. The solicitor must inform the client of the implication of the proposed course of action and apprise them of the risks inherent in it. Only then, if the client has nevertheless decided to proceed with the proposed course can they be said to have assumed the risk of loss themselves. In Polischuk v. Hagarty, the defendant did not discharge that duty to his client and so he was in breach of his retainer. Henry J. concluded that he could not then look to them to assume the risk of loss that they had had no opportunity to appreciate and to accept, properly informed.

[92] Plaintiffs’ counsel says that strategic choices available to be made by clients are of critical importance in circumstances like these, and that the failure to advise a client of the availability of strategic choices constitutes a fundamental and negligent error by the solicitor. The problem is that the Court does not have a full appreciation of what the plaintiffs were advised, because the evidentiary record is not complete.

[93] The significance of the available evidence is that it shows clearly that there was some alternative inquiry being made by Mr. Kahn. Yet, there is no reference to an alternative inquiry to be looked into in Mr. Chalmers’ notes. Further, if Mr. Chalmers fully advised on the alternatives, one is left to wonder why Mr. Kahn would have been charged with doing further investigation after the meeting, when there is no evidence to show that anything further needed to be researched, based either on Mr. Chalmers’ notes or on his affidavit in this proceeding.

[94] The fact that such investigation was being conducted by Mr. Khan or by Mr. or Ms. K. Connell also appears to have been unknown to Mr. and Mrs. Gunraj. It is only after the deal is closed and the January 18 invoice is rendered by the Aird & Berlis law firm that Mr. Gunraj makes an inquiry respecting the rationale behind that expenditure. Mr. Chalmers responds that Mr. Kahn was looking into an avenue that it had been hoped might have permitted the Gunrajs to terminate the transaction and to obtain a return of their deposit.

[95] More importantly, this evidence also shows that the Gunrajs may indeed have preferred to terminate the transaction and obtain a refund of their deposit. Yet, there is no reference to that in Mr. Chalmers’ notes and there is no evidence from Mr. Kahn on that point or on any other aspect of the meeting and advice provided. This evidence is disturbing to me because it suggests an inquiry was being made by the lawyers without the client's knowledge, an inquiry that might have yielded a positive alternative answer, but that the Gunrajs were never advised of the inquiry or its outcome. Alternatively, if the Gunrajs were advised of this inquiry, then one is left to wonder why neither of the parties raised the point or made mention of it in their affidavit evidence.

[96] In the result, regardless of the first three factors noted above that favour the moving parties on this motion, the conflict in evidence and the failure to resolve the conflict by the tendering of affidavit evidence of Mr. Kahn or more fulsome affidavit evidence from Mr. Chalmers leaves this court with a factual conflict and a negative inference drawn against the moving parties. I have not been able to gain a full appreciation of the evidence. Both aspects raise genuine issues, point towards the need for a trial, and require that this motion be dismissed.

(v) Did Mr. Chalmers Fully Advise the Plaintiffs of their Options in the Circumstances?

[97] The second evidentiary conflict concerns whether Mr. Chalmers fully advised Mr. and Mr. Gunraj of the alternative courses of action that were available to them. The plaintiffs’ own evidence shows that Mr. Chalmers did present the plaintiffs with at least some level of options from which they were free to choose, even though they say they did not understand that they were free to choose. Paragraphs 16, 17, 18 and 19 of Mr. Gunraj’s affidavit cast some light on this factual dilemma:

16. After advising Mr. Chalmers of all of the circumstances of the transaction and answering any questions that he and/or Kahn asked us, we sought Mr. Chalmers’ professional opinion on whether we could terminate the closing of the Property.

17. Mr. Chalmers advised us that we could not cancel or otherwise terminate the closing of the purchase of the Property because the APS was legally binding. Mr. Chalmers further advised us that our best recourse was to close the purchase of the Property and initiate legal proceedings afterwards because otherwise we would lose our deposit and be vulnerable to being sued.

18. Mr. Chalmers did not advise us that we would "retain greater control over the litigation as plaintiff." Rather, Mr. Chalmers advised us that we close the purchase of the property since if we did not, we would lose our deposit and be vulnerable to being sued

19. Mr. Chalmers advised and instructed us to close the transaction and complete the purchase of the property and sue for damages upon closing. Ruby and I did not understand that we were being presented with options or alternatives from which we could choose. Our “decision” to close the purchase of the property was based on Mr. Chalmers’ advice that there was no option but to close. (all italics are my emphasis)

[98] What can be discerned from these four paragraphs? First, paragraph 16 shows that Norman Kahn was actively involved in providing the advice. In paragraph 17, Mr. Gunraj refers to Mr. Chalmers’ indication of their “best recourse.” This kind of language would not have been used if there had not been at least some explanation of alternatives provided. The use of the word “otherwise” also shows contradistinction. The reference in paragraph 18 to what could happen if they did not close obviously contemplates the existence of an alternative course of action, whatever it might be, but one that Mr. Chalmers advises against. Finally, there is the language in paragraph 19 that he and Mrs. Gunraj claim they were “instructed” by Mr. Chalmers to close the transaction. I will comment further on this below. But, even if I reject the notion that the Gunrajs were actually instructed to do anything, which I do, the question that still remains is the extent of the Gunrajs’ understanding and on what advice that understanding was based. This leaves an important but unresolved evidentiary conflict.

[99] This unresolved conflict is also informed by other factors. The record includes copies of Mr. Chalmers’ notes taken during a one-hour meeting, but they occupy less than one page. They are cryptic at best, and, to my eye, do not provide any evidence contemporaneous to the meeting to confirm or corroborate Mr. Chalmers’ later affidavit that he did advise Mr. and Mrs. Gunraj on the alternatives. Regrettably, my faith in the fullness of the advice he provided on the alternatives that were available to the plaintiffs was not bolstered or restored by looking at his notes. Combined with the absence of affidavit evidence from Mr. Kahn, this reality leaves a factual conflict. It is a conflict that requires that preference be given to the client’s evidence. It is an unresolvable conflict that creates a genuine issue that requires a trial.

[100] I find Mr. Gunraj’s evidence to be equivocal. Plainly, even on his evidence, Mr. Chalmers did advise the plaintiffs of options in the circumstances, at least to some indeterminable extent, and he gave his opinion of the preferable course of action, their “best recourse” to use Mr. Gunraj’s words. However, Mr. Gunraj’s evidence does not permit one to know if these options were fully explained and thus does not permit one to infer the extent to which the plaintiffs were fully informed before making their decision.

[101] Regardless, I agree that this evidence and the evidence relating to the closing plainly demonstrates that the plaintiffs were not “taking instructions” from Mr. Chalmers. Rather, at that time, before they decided to retain another firm and commence this action against the other defendants as well as Mr. Chalmers and his firm, the flavor of two email messages sent by the Gunrajs plainly suggests that they did understand what they were doing, the strategy that had been decided to be followed, and that it was the Gunrajs that were providing Mr. Chalmers with their instructions, not the reverse. The first e-mail was sent some hours after the meeting with Mr. Chalmers and the second a few weeks later after the closing.

December 16, 2009, 8:16:57 PM:

Gentlemen: Thanks for meeting with Ruby and I today. We undertook to talk to Paul Crum-Ewing and advice you further. Paul wants to ensure that the work he does on the Closing will not jeopardize your litigation action. Hence he is concerned about how to avoid this. He said he will talk to you (I also gave him Norman [Khan]’s card). He even suggested that perhaps your firm should handle the Closing also. Please let me know what would be best.

We want to confirm our understanding that 1) the strategy is to close the deal and 2) to advise the parties at the same time that we will be suing them. Please get back to us as we have to conclude arrangements with the bank and the insurance company, if we are going to go ahead. Ron & Ruby Gunraj.

January 11, 2010, 2:28;33 PM:

Hello Mr. Chalmers – may you have a great year ahead of you! We took possession of the property on 4 January 2010. At this time, Ruby and I are evaluating the options either to proceed with the renovation and resell the property or to put it back on the market without renovating it. Going forward, we have to decide on the option that would best mitigate any potential loss. We will contact you in another week or two. Ron and Ruby Gunraj. (my emphasis)[^27]

[102] The first message appears on its face to reflect an understanding by the Gunrajs of the advice they have received and a direction to which they are committed. Implicit in both messages is that a choice of direction has been made, but they do not enlighten on the extent to which the choice was fully informed. However, the allegation by Mr. and Mrs. Gunraj that Mr. Chalmers "instructed" them and that they were bound to follow what he told them to do simply defies credibility. It is not borne out by other evidence relative to their conduct. It is a fundamental mischaracterization of the lawyer client relationship.

[103] It is a submission that suggests the Gunrajs were inexperienced persons relative to commercial matters who were incapable of taking advice and determining what direction they would go in, but the record shows that was not the case. Rather, the evidence of the Gunrajs’ involvement as the Property transaction develops as reflected in paragraphs 14, 16, 17, 20, 21-23, 27-33, and 37-40 of the Statement of Claim undermines their assertions that they were effectively ‘babes in the woods’ in commercial matters. They were not incapable of making reasoned decisions whether or not to follow advice, rather than simply allegedly “following instructions” given to them by their advisers. It ought to be remembered that by the time they met with Mr. Chalmers, Ruby and Ronald Gunraj had met and dealt with a builder, two real estate agents, at least one mortgage broker, an architect, their own solicitor, Mr. Crum-Ewing, and had inspected the proposed Property three times.

[104] In any event, even if I accepted their claim that they were “instructed” to do what they did, which I do not, Mr. and Mrs. Gunraj have not demonstrated either that any such instruction constituted actionable negligence on the part of Mr. Chalmers or his firm or that it constituted the breach of any recognizable duty, or most importantly, that it was the cause of any loss to them. All this is demonstrated by the difference in the affidavit evidence of the parties, which shows that there is a conflict respecting the extent of the advice they received. This conflict in turn goes to the extent to which the plaintiffs’ decision was fully informed. This question requires resolution at trial.

(vi) Do the Cross-claims Require the Continued Participation of Mr. Chalmers and Aird & Berlis in this Case?

[105] Finally, counsel for Mr. and Mrs. Gunraj claims that the court should not dismiss a claim against a co-defendant where the remaining defendants could then throw blame on the absent defendant to the prejudice of the plaintiff. In Thompson v. Kootenay Lake District Hospital, [^28] McEachern C.J.B.C. explained the rationale for refusing to grant summary judgment in those circumstances in the following words:

If I regard the application therefore as a summary trial on affidavit evidence, I should have regard for the principle that in some classes of cases it has always been considered wise and fair, and therefore presumably just, not to grant a nonsuit where there are co-actors who are both defendants. The reason for this, of course, is to prevent the remaining defendant from throwing blame on the absent defendant to the prejudice of the plaintiff. That situation could arise in this case if I accede to the motion. I therefore regard it as prejudicial to the plaintiff and her case against the remaining defendant to accede to the motion and, as this creates a risk of injustice, I think I should not grant the application.

[106] Counsel for the plaintiff says that in circumstances where there are competing issues among the defendants, it is inappropriate to permit a defendant's motion for summary judgment to succeed. Similarly, he claims that summary judgment is inappropriate if there is any risk that the court may make inappropriate findings of fact that could give rise to contradictory findings at trial on the remaining issues. Interwoven issues of duty of care, breach, and causation are better determined at a full trial, in the opinion of plaintiffs’ counsel.

[107] The plaintiff goes on to warn that there is considerable risk that the court's findings of fact, if contrary to the facts advanced by the plaintiffs, could give rise to contradictory findings at trial on the remaining issues. The plaintiffs submit that their position that the issues of duty of care, breach and causation are interwoven amongst the defendants is bolstered by the fact that the remaining defendants’ cross-claim against Mr. Chalmers and Aird & Berlis are on the very grounds the plaintiffs advance against them. Closer examination shows, however, that this is only true relative to the defendants Cyr and Royal LePage.

[108] The plaintiffs’ position that the liability and damages attributable to each defendant can only be determined at trial together would deny these defendants a remedy to which they might otherwise be entitled, merely because of cross claims between defendants for contribution and indemnity but based solely on the plaintiff’s claims.

[109] The one exception to this is the defence filed by the defendant Chris Cyr and Royal LePage, which is based on the same grounds as the plaintiffs’ claims. Mr. Cyr and Royal LePage allege in their pleadings that any damages sustained by the Gunrajs arose as a result of the negligence of Mr. Chalmers and Aird & Berlis. Paragraph 21 from the Cyr pleading claims as follows:

In the alternative, These Defendants state that the damages sustained by the Plaintiffs (if any) arose as a result of their own negligence, and/or the negligence of the Defendants William A. Chalmers, Aird & Berlis LLP, Paul Crum-Ewing, and/or Crum Ewing/Poliacik (collectively the “Transaction Lawyers”). Without limiting the generality of the foregoing, These Defendants state that the Plaintiffs were entitled, as a result of the presence at closing of an unsatisfied Work Order, to refuse to complete the transaction. If the plaintiffs were truly concerned about erosion (which is denied), they ought to have refused to complete the transaction.

[110] In my view, the claims made by Mr. Cyr against Mr. Chalmers and Aird & Berlis are without reasonable foundation in the particular circumstances of this case. It seems to me that the pleading advanced by Mr. Cyr provides no foundation to continue to retain Mr. Chalmers and his firm as defendants in this action, because it is founded on the proposition that the Gunrajs ought to have breached the very contract that Mr. Cyr arranged for them.

[111] On the other hand, without affidavit evidence from Mr. Kahn, it is not possible to fully address Mr. Cyr’s pleading against the moving parties. Mr. Kahn attended the one-hour meeting with the Gunrajs on December 16, 2009. He then made several time entries in the Aird & Berlis account for the plaintiffs, docketing for inquires at the TRCA. Mr. Chalmers then explained in an email to the plaintiffs that they were charged for these inquiries, because the firm was trying to determine whether they could terminate the transaction and be refunded their deposit. However, Mr. Kahn provides no affidavit evidence about his investigations and what results they yielded. Without this evidence, there is no foundation from which to dismiss Mr. Cyr’s position or to conclude that it lacks the air of reality that could or should cause these defendants to be required to continue to participate in this litigation.

Conclusion

[112] For the foregoing reasons, the defendant’s summary judgment motion is dismissed.

[113] It is true that it was within the power of the defendants to ensure that the evidence that I have found to be missing in this case was provided, missing evidence that has prevented me from granting the summary judgment they seek because it has not permitted me to have a full evidential appreciation of the matter. Nevertheless, while I have found it necessary to dismiss the motion for that reason, it will be evident from the foregoing reasons that apart from that aspect, far from finding the moving party’s case to be deficient, it appeared to me to be substantively stronger in many respects than the position of the responding parties.

[114] As such, even though the defendant’s summary judgment motion is dismissed, it seems inappropriate to permit the plaintiffs to recover costs here given the substantive weakness of their case against these defendants, and equally it seems inappropriate to force costs totally against these defendants just because they did not succeed. In this case, I would be inclined to regard success as divided, and suggest that each of the parties bear responsibility for their own costs.

[115] However, I also acknowledge that I have not had submissions specifically on the matter of costs. Consequently, I would be obliged if counsel would advise me at their earliest convenience if they wish to appear before me to make formal costs submissions, or will instead be able to resolve the matter on their own.

Michael G. Quigley J.

Released: March 9, 2012

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RONALD GUNRAJ and RUBY GUNRAJ

Plaintiffs/Respondents

– and –

CHRIS CYR, ROYAL LEPAGE ESTATE REALTY BROKERAGE, ALLISTER SINCLAIR, RE/MAX HALLMARK REALTY LTD. BROKERAGE, FRANCESCO BENINCASA, WILLIAM A. CHALMERS, AIRD & BERLIS LLP, PAUL CRUM-EWING, CRUM-EWING/POLIACIK, THOMAS GREGORIADES and DOMINION LENDING CENTRES ESTATE MORTGAGES INC.

Defendants/Applicants

REASONS FOR JUDGMENT

Michael G. Quigley, J.

Released: March 9, 2012

[^1]: The other defendants take no position on this application.

[^2]: 2011 ONCA 764 at para. 35.

[^3]: [2008] S.C.R. 372, at para. 10; Combined Air, above, at para. 42.

[^4]: 2010 ONSC 725, [2010] O.J. No. 417 (Ont. S.C.J.) at paras. 29-30.

[^5]: (1998), 26 C.P.C. (4th)(C.A.).

[^6]: New Solutions Extrusion Corp. v. Gauthier, 2010 ONSC 1037 at para. 12.

[^7]: Demessey v. Cassels Brock, 2011 ONSC 4122, [2011] O.J. No. 3018 (Ont. S.C.J.), at paras. 14-18; Sera GmbH v. Sera Aquaristik Canada Ltd., [2007] O.J. No. 318 (O.C.A.) at para. 4.

[^8]: New Solutions Extrusion Corp., above,

[^9]: Sera, above, at para. 4; CIBC v. Mitchell, 2010 ONSC 2227, at para. 18 (Ont. S.C.J.), Rule 20.02(2).

[^10]: 1999 CanLII 3788 (O.C.A.) at paras. 44-45. Notwithstanding Laskin J.A.’s reservation in the last sentence of para. 45 which related to the 1998 decision of Cullity J. in Vaz-Oxlade v. Volkenstein and that was then under appeal, the Court of Appeal in Vaz-Oxlade v. Volkenstein later also reversed the finding of the trial judge. It found that the decision of Laskin J.A. in Wong was binding and dispositive of the issue: [2000] O.J. No. 2694.

[^11]: 2010 ONSC 3269.

[^12]: (2005), 2005 CanLII 1403 (ON CA), 74 O.R. (3d) 688 at 703, [2005] O.J. No. 216 at para. 44 (C.A.).

[^13]: 1979 CanLII 55 (SCC), [1980], 1 S.C.R. 720 at 723 per Dickson J. who said: “…[A] purchaser must fend for himself, seeking protection by express warranty or by independent examination of the premises. If he fails to do either, he is without remedy either at law or in equity, in the absence of fraud or fundamental between that which was bargained for and that obtained.” See also Ricchio v. Rota, 2011 ONSC 6192 (S.C.J.) per Mulligan J. at para. 25: “I am satisfied that the law in Ontario is still caveat emptor with respect to patent defects. In other words, if prudent purchasers can see and observe the defect, they take the property as they find it. Having observed the problem, prudent purchasers can protect themselves in contract by requesting repairs before closing, reducing the purchase price, or by refusing to remove any condition about a home inspection and allowing the contract to be terminated."

[^14]: [2007] O.J. No. 372, 2007 CanLII 2356 (S.C.J.) at para. 26.

[^15]: (Toronto: Carswell, 1989) at 17-24.1 and 17-25: “Whether or not a purchaser is entitled to the return of the deposit depends upon the terms of the contract, the general rule being that, in the absence of an agreement to the contrary, if the contract goes off by the default of the purchaser, the deposit, being a guarantee of performance, becomes the property of the vendor, even if he resells the land and an increased price. Where the land is sold at a loss, he is entitled to recover that loss, less the amount of the deposit. The loss of the deposit is not, infrequently, attributable to the purchaser's failure to insert in the agreement and appropriate "subject to" clause.”

[^16]: See Krawchuk v. Scherbak, 2011 ONCA 352 (C.A.) at paras. 130-131 and cases cited there.

[^17]: Ibid. at paras. 133 and 135.

[^18]: 2010 ONSC 6471 (S.C.J.).

[^19]: [2003] O.J. No. 97 (S.C.J.) at paras. 18-19 per Cullity J.

[^20]: [2008] B.C.J. No. 1404 (B.C.S.C.), 2008 BCSC 983 at paras. 25-28 per Fisher J.

[^21]: [2010] O.J. No. 2516, 2010 ONSC 2715(S.C.J.) at paras. 69-71 .

[^22]: [2005] B.C.J. No. 295, 2005 BCCA 93, per Southin J.A. at paras. 43-44.

[^23]: [1995] B.C.J. No. 1356 (B.C.S.C.). See also Turi v. Swanick, 2002 CanLII 16394 (ON SC), [2002] O.J. No. 3595 (S.C.J.).

[^24]: 1996 CanLII 183 (SCC), [1996] 3 S.C.R. 458.

[^25]: I do not include Paul Crum-Ewing or his firm. I have no knowledge of the precise time when they first became involved, but make no suggestion by omission of any inappropriate conduct on their parts.

[^26]: (1983), 1983 CanLII 3067 (ON SC), 42 O.R. (2d) 417, [193] O.J. 2519 at para. 40 (H.C.J.), On appeal, the Ontario Court of Appeal agreed with Henry J.s’ reasoning. However, it found that the plaintiff did discharge its onus of establish causation, and as a result, increased the nominal award of $500 given to the plaintiff to $18,694.07: (1984), 1984 CanLII 2076 (ON CA), 49 O.R. (2d) 71 at para. 4 (C.A.).

[^27]: Ronald Gunraj affidavit, exhibit "F" at page 99.

[^28]: 1985 CarswellBC 352 (B.C.S.C.) at para. 7 (In Chambers); Harder v. Wong, 1991 CarswellBC 824 (B.C.S.C.)(In Chambers) at para. 8; Henderson v. First Nations Band Council 629 – Mamalilikulla – Qwe’Qwa’Sot’Em, 2007 CarswellBC 1514 (B.C.S.C.) at paras. 60 – 66; Strata Plan LMS 2262 v. Stoneman Developments Limited, 2005 CarswellBC 689 (B.C.S.C.)(In Chambers) at para. 20; Otter Farm & Home Cooperative v. Sekhon, 2001 BCCA 636, [2001] B.C.J. No. 2338 (B.C.C.A.) at para. 6.