ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-12-462600
DATE: 20150729

BETWEEN:

CLAUDIO PICCOLOTTO
Plaintiff

– and –

BHARAT KANHAI, RUPY SINGH, 1027074 ONTARIO LIMITED, PETER J. LEWARNE, SUSAN AMBROSE, SUSAN AMBROSE AND ASSOCIATES, LAWRENCE SILVER, GARY STEINHART, HARVEY SPRING, GLEN COHEN, BERKOW COHEN LLP, FIRST CANADIAN TITLE COMPANY LIMITED, JACOB HOLDING INCORPORATED, CECIL YOLLES, NELSON MORTGAGE GROUP LTD, JOE MAZZAFERRO, THE CANADA TRUST COMPANY, B2B TRUST, VISHNU RAJENDRA POONAI, JERRY KORMAN, GIOVANNI SAVAGLIO, L.A. LAW PARALEGAL SERVICES, LYNDA MARGARET FRIZELL, ROBERT PAUL HARPER, BRIAN McCULLOUGH, MICHAEL SCOTT, MARY MOLLO, JENNIFER FONTAINE, PETER McSHERRY, JON VENUTTI

Defendants

Gregory Gryguc, for the Plaintiff

Jameel Madhany, for the Defendant, Peter McSherry

HEARD: July 17, 2015

S.A.Q. akhtar j.

FACTUAL BACKGROUND

Introduction

[1] The plaintiff commenced this action in 2007 against numerous defendants. His complaint was that he had been defrauded by one of the defendants in the main action, Barhat Kanhai. The plaintiff alleges that several mortgages were fraudulently registered by Kanhai on two plots of land owned by another defendant, 1027074 Ontario Limited (“1027074”), a corporation owned by the plaintiff but held in trust by third defendant, Michael Scott. According to the plaintiff, Kanhai had no authority to deal with 1027074’s assets.

[2] The plaintiff’s action is based on the allegation that Scott swore an affidavit falsely stating that had transferred his shares in 1027074 to Kanhai. This permitted Kanhai to represent that he had the authority to mortgage the properties owned by 1027074.

[3] Peter McSherry, the applicant on this motion, is a lawyer who drafted the affidavit sworn by Scott.

The Allegations Contained in the Pleadings

[4] The plaintiff’s original Statement of Claim was struck out on 10 August 2014 on the basis that it pleaded no facts to support the allegations contained therein of professional negligence against McSherry. Leave to amend the claim, however, was granted by the motions judge.

[5] The amended pleadings read as follows:

The defendant, Peter A. McSherry (”McSherry”) is a barrister and solicitor who practises in the City of Guelph, in the Province of Ontario and at all material times was a barrister and solicitor practicing [sic] law in the Province of Ontario and represented Kanhai with respect to 1027074, who was negligent with respect to the mortgage actions herein.

The Plaintiff pleads that the material facts supporting its claim in professional negligence are:

a. By owing a duty of care to the co-defendant 1027074 for who [sic] the Plaintiff is a beneficiary, with respect to drafting and commissioning the Affidavit of Michael Scott sworn April 14, 2004 and provide [sic] legal consultation;

b. McSherry failed to property confirm and investigate the information as set out in Michael Scott's Affidavit sworn April 14, 2004, specifically that Michael Scott transferred all his shares in 1027074 to the co-defendant Bharat Kanhai on August 4, 2003, together with failing to provide proper legal consultation with respect to the Agreement for Exchange of Shares and as a result fell below the standard care of a reasonably competent practitioner; and

c. As a result of the Affidavit of Michael Scott, sworn August 14. 2004, the co-defendant Bharat Kanhai entered into all relevant mortgages as set out in the herein claim causing the Plaintiff to suffer a cloud on title on Property 1 and Property 2 and receiving no benefit from the mortgages and the loss of all equity in Property 1 and Property 2.

[6] McSherry brings this motion on the basis that the plaintiff has pleaded no reasonable cause of action.

LEGAL PRINCIPLES

[7] McSherry, as the moving party relies on Rule 21.01(b) of the Rules of Civil Procedure which permits a judge to strike out a pleading on the ground that it discloses no reasonable cause of action or defence.

[8] It must be “plain and obvious” that a plaintiff’s claim discloses no reasonable cause of action before that claim is struck out. For the purposes of this motion, I am obliged to assume the facts alleged in the plaintiff’s Statement of Claim are true.

[9] The test must be read as generously as possible to take account of drafting deficiencies. A plaintiff should not be “driven from the judgment seat” if there is a chance that the action might succeed. It is not overly difficult for a plaintiff to overcome the test for resisting the motion to strike a pleading: McKinnon v. Ontario Municipal Employees Retirement Board, 2007 ONCA 874, 88 O.R. (3d) 269. On the other hand, the plaintiff must plead the necessary legal elements of a recognised cause of action. The omission of an element may render the pleading in error, indicate that the plaintiff cannot succeed and result in the striking out of the pleading: Deep v. Ontario, [2004] O.J. No. 2734 (S.C.), aff’d [2005] O.J. No. 1294 (C.A.).

THE ISSUES

Do The Amended Pleadings Disclose A Reasonable Cause Of Action?

[10] The negligence alleged by the plaintiff is based on two separate components: first, McSherry owed a duty of care to the co-defendant, 1027074, and secondly, he breached that duty of care by failing to investigate the truth of the contents of Scott’s affidavit.

[11] For the plaintiff to succeed in an action against McSherry he would have to establish that:

(a) McSherry owed the plaintiff a duty of care: Central Trust Co. v. Rafuse, 1986 29 (SCC), [1986] 2 S.C.R. 147 at paras. 49-53;

(b) McSherry breached that duty of care by failing to provide the standard of care of a reasonably competent practitioner: Folland v. Reardon, 2005 1403 (ON CA), 74 O.R. (3d) 688 at para. 41; and

[12] The plaintiff has not pleaded any facts to demonstrate that McSherry owed the plaintiff a duty of care. Instead, the plaintiff relies on an allegation that McSherry breached a duty of care to a co-defendant. I fail to see how this breach, if proven, can be relied upon by the plaintiff as an allegation of negligence against himself.

[13] McSherry was not retained by the plaintiff as his lawyer and there is no evidence on the record to suggest that McSherry even knew that the plaintiff existed at the time the affidavit was drafted. As such, the pleadings do not disclose a reasonable cause of action against McSherry.

[14] Moreover, a lawyer’s duty of care does not include the task of investigating the truth of the content of an affidavit that they have drafted.

[15] In Gerling Global General Insurance Co. V. Siskind, Cromarty, Ivey & Dowler (2002), 59 O.R. (3d) 55, at paras. 15-16, Nordheimer J. was prepared to accept that a duty of care would arise between a lawyer who commissioned an affidavit and those parties who the lawyer ought reasonably to foresee would be relying on that document. He qualified this acceptance by stating:

The plaintiff contends that the lawyer makes a representation that the contents of the document are true. I do not accept that contention. The representation that the contents of the document are true is one which is made by the deponent of the document. The representations which the lawyer makes in commissioning the document are limited to the identity of the deponent, the place and time when the document is sworn and that the deponent has sworn that the contents of the document are true. If any of those representations should subsequently turn out to be untrue, inaccurate or misleading then the issue will become one of whether the lawyer was negligent in the manner in which he confirmed those representations. For example, if a lawyer commissioned a deponent’s affidavit without making reasonable inquiries to determine the identity of the deponent, then the lawyer might be liable in negligent misrepresentation to a party who relied on the document if it subsequently transpires that the person who swore the document was not, in fact, the named deponent. It would expose lawyers and others who commission documents to a vast sphere of liability if it could be successfully asserted that, in commissioning those documents, they were in some manner warranting the truth of the contents of the document itself.

[16] I agree with these comments and I see no difference between commissioning and drafting an affidavit as was done in this case. As Nordheimer J. points out, the words of the affidavit are those of the affiant and not the lawyer, as is the representation that the content contained therein is true. To hold otherwise would, in addition to exposing commissioners to liability claims, put a lawyer into a position of potential adversity with their clients. I have not been provided with any authorities that suggest this is the law.

[17] The situation may have been different if it was alleged that McSherry had falsely attested to the identity of the deponent or had himself added statements to the affidavit that he knew were false. These allegations, however, are not pleaded in this case.

[18] I find that the plaintiff’s claim discloses no reasonable cause of action against McSherry.

Should Leave to Amend be Granted to the Plaintiff?

[19] When a Statement of Claim is struck, the court, in the normal course of affairs, grants a plaintiff leave to amend the Statement of Claim to cure any defects. This case is an exception to that rule.

[20] The plaintiff’s action has a lengthy history, having previously been stayed in 2008 to permit the plaintiff to pursue his claim against Kanhai. This is McSherry’s second application to strike the plaintiff’s Statement of Claim against him. The original application was granted with leave to amend.

[21] Most importantly, the plaintiff concedes that there is no other cause of action that can be pleaded in this case other than the one currently contained in the Statement of Claim. Any leave to amend would be pointless as the pleadings cannot be improved: Indal Metals v. Jordan Construction Management Inc., [1994] O.J. No. 1616 (Gen. Div.); Joseph v. Lefaivre Investments (Ottawa) Ltd. (c.o.b. Cash Cow), [2006] O.J. No. 2364 (S.C.).

Conclusion and Costs

[22] I therefore strike the claim without any leave to amend. The plaintiff’s action against McSherry is dismissed.

[23] I invite counsel to discuss the issue of costs with each other. If there is no agreement, McSherry shall make written submissions limited to 5 pages within 30 days. The plaintiff may respond with submissions of a similar length within the period of 2 weeks thereafter.

S.A.Q. Akhtar J.

Released: July 29, 2015

COURT FILE NO.: CV-12-462600
DATE: 20150729

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

CLAUDIO PICCOLOTTO
Plaintiff

– and –

Defendants

REASONS FOR JUDGMENT

S.A.Q. Akhtar J.

Piccolotto v. Kanhai et al., 2015 ONSC 4807

Case Summary