ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

VIOLET V. CLARKE

Plaintiff

and

AMRITPAL S. MANN, APS MANN LEGAL PROFESSIONAL CORPORATION, NATIONAL MORTGAGE LOANS LTD. (previously named CENTUM NATIONAL MORTGAGE LOANS INC.) operating as CENTUM STAR FINANCIAL CORPORATION and CENTUM LENDING AND MORTGAGES CORP., MA MORTGAGE ARCHITECTS INC., ZULFIQAR ALI ZULFI, WENTY LEE, SANDRA LEE, 2343680 ONTARIO INC., 2462030 ONTARIO INC., SCOTT COOK, and COOK LAW LLP.

Defendants

HEARD: August 4, 2022 (Virtually).

RSJ Ricchetti

Reasons for Judgment

[1] This is a motion for summary judgment by Scott Cook and Cook Law LLP (collectively “the Cook defendants”).

[2] This motion was scheduled for today. A timetable had been agreed to by Ms. Clarke’s prior counsel. Counsel for the Cook defendants delivered its materials. Ms. Clarke’s prior counsel was removed as solicitor of record. Ms. Clarke chose to represent herself.

[3] Ms. Clarke did not file any materials for today’s motion (whether in accordance with the timetable or not). Ms. Clarke did not ask for an adjournment to do so.

[4] Ms. Clarke’s position was that she only added the Cook defendants on her prior counsel’s advise, but that she had no intention of seeking any relief/damages against the Cook defendants except that she wanted the Cook defendants to produce copies of two cheques regarding the Lenders Fee and Finders Fee described below.

[5] The only remaining defendants in this action are the Cook defendants and Amritpal S. Mann and APS Mann Legal Professional Corporation (collectively “Mann defendants”).

Overview of the Facts

[6] Scott Cook is a lawyer, who at all material times, represented his co-Defendants, 2343680 Ontario Inc. and 2462030 Ontario Inc. (collectively the “Mortgagee”) in a mortgage transaction with Ms. Clarke as mortgagor.

[7] Ms. Clarke was represented by her own lawyer, the Mann defendants, in the mortgage transaction.

[8] Mr. Cook of the Cook defendants was retained in or around October 2016, by the Mortgagee for the mortgage transaction.

[9] The Mortgagee had agreed to advance $150,000 to Ms. Clarke to refinance an existing second mortgage on her property, 880 Stainton Drive, Mississauga (the “Property”).

[10] The $150,000 funds were to be distributed as follows:

(a) A Lender fee: $9,000.00.

(b) A Finders Fee: $1,000.00.

(b) Kurt A. Sunn, in trust (2nd mortgage pay out): $52,638.82; and

(c) Mann, in trust: $75,971.65.

[11] The intended distribution of $150,000 second mortgage financing was clearly set out in a “Net Advance Statement” executed by Ms. Clarke.

[12] Ms. Clarke also signed an “Acknowledgement of Independent Legal Representation” with respect to the mortgage transaction documents, acknowledging the Mann defendants represented her in the transaction and acknowledging her understanding the nature and effect of the documents she had signed.

[13] Mr. Mann executed a Certificate of Independent Legal Advice that he had given to Ms. Clarke in connection with this transaction.

[14] The second mortgage financing was completed on October 18, 2016.

[15] The financing monies were distributed in accordance with the Net Advance Statement.

[16] Within one month, November 19, 2016, Ms. Clarke was in arrears on the second mortgage.

[17] Ms. Clarke retained new counsel who, in January 2017, sought a discharge statement for the second mortgage. One was provided by the Mortgagee.

[18] The property was sold on February 6, 2017. The second mortgage was paid out.

[19] Starting in July 2018, Ms. Clarke questioned the amounts paid out on the second mortgage as the “Lenders Fee” of $9,000 and a “Finders Fee” of $1,000.

[20] On October 10, 2018, Ms. Clarke issued a Small Claims Court action against Mr. Cook regarding the second mortgage seeking a return of those monies. The status of the Small Claims Court action is not disclosed in the motion materials.

[21] A Notice of Action in this proceeding was issued on October 17, 2018. But the Notice of Action, and the subsequent Statement of Claim, did not make any claims against the Cook defendants.

[22] Ms. Clarke moved, on October 14, 2020, to amend the Statement of Claim to add the Cook defendants. The motion was heard on June 15, 2021, and the court granted Ms. Clarke leave to amend the Statement of Claim.

[23] On July 22, 2021, Ms. Clarke, through new counsel, issued a Fresh as Amended the Statement of Claim and sought $2,000,000 damages against the Cook defendants.

[24] While the allegations in the Fresh as Amended Statement of Claim are not entirely clear, the central allegations against Cook defendants are set out in para. 44 – negligence. There is also a bald allegation of conspiracy and fraud but without any factual foundation for these causes of action as against the Cook defendants.

ANALYSIS

[25] Given that Ms. Clarke has chosen not to file any materials to respond to the summary judgment motion, I am satisfied that there is no genuine issue requiring a trial because:

a) This court can make the necessary findings of fact on this evidence before this court;

b) The law is clear and can be applied to the facts; and

c) The result will be a more expeditious and less expensive means to a just result.

[26] Let me deal with the issue that, if successful, this motion would only dispose of the claim against the Cook defendants, but the action could continue against the Mann defendants. In other words, it seeks partial judgment.

[27] Notwithstanding that this motion seeks partial judgment I am satisfied this is an appropriate case for partial summary judgment as:

a) If granted, the action will be streamlined, more focused, less expensive since the claim will continue only with the Mann defendants.

b) The examinations for discovery, which have not yet occurred, will be significantly shortened and the matter can be set down for trial quickly.

c) The claims against the Cook defendants are entirely separate from the claims advanced against the Mann defendants and involve entirely different issues. There is no significant (if any) overlap in the claims; and

d) There is no real risk of inconsistent findings given the above. The Cook defendants’ involvement with Ms. Clarke, was limited and essentially the only communications by the Cook defendants were with the Mann defendants.

Negligence Claim

[28] A lawyer generally owes a duty of care only to his or her own client, and not to persons other than his or her client. It will only be under very narrow or exceptional circumstances that a lawyer can be held to owe a duty to a non-client third party to protect his, her or its economic interests. 9383859 Canada Limited v Saeed, 2020 ONSC 4883 at para. 32.

[29] In this case, Mr. Cook was retained by the Mortgagee who was advancing funds to Ms. Clarke in the transaction. At all material times, Ms. Clarke was represented by Mr. Mann, her own counsel. Mr. Cook prepared the mortgage documentation and sent the documents to Mr. Mann to have the documents explained to and executed by Ms. Clarke. That includes the Net Advance Statement.

[30] In these circumstances, Mr. Cook owed no duty of care to Ms. Clarke. Mr. Cook was the lawyer on the other side of the mortgage transaction. Ms. Clarke did not and could not have reasonably relied on Mr. Cook to provide her advice on the mortgage transaction or the distribution of funds.

[31] There is no merit to the claim in negligence against the Cook defendants as pleaded.

Alternatively, a Limitations defence

[32] Section 4 of the Limitations Act, 2002 provides that unless the Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

[33] Section 5(2) of the Limitations Act, 2002 provides that a person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proven.

[34] Ms. Clarke was fully aware of the intended disbursement of funds in October 2016 when she approved the proposed distribution in writing.

[35] In addition, and notwithstanding her knowledge of the distribution of the financing funds, she subsequently proceeded, with the assistance of counsel, to sell the property and pay out the second mortgagee in February 2017.

[36] Accordingly, Ms. Clarke knew, on or about October 18, 2016, or at the latest February 6, 2017 (when the Property was sold and the second mortgage discharged), the material facts upon which to base a claim about the propriety of the payment of the Lenders Fee and possibly the Finders Fee.

[37] Ms. Clarke did not serve the Cook defendants with a motion to add them to this action until on or about October 14, 2020, which is more than two years later (even excluding the tolling of the limitation due to the Covid-19 shutdown).

[38] I am satisfied that the claim against the Cook defendants should be dismissed as being statute barred.

Conclusion

[39] Ms. Clarke’s claim against the Cook defendants is hereby dismissed.

Costs

[40] The Cook defendants seek $35,912.96 all inclusive on a substantial indemnity basis.

[41] I agree there was clearly no merit to the claim against the Cook defendants. Further, the Limitation Act defence was a clear defence in the circumstances of this case.

[42] It is not an answer to the claim for costs that “my lawyer advised me” to bring this claim. That is an issue between Ms. Clarke and her lawyer.

[43] Having reviewed the Cost Outline, the amount claimed, the issues raised, the amount of legal services provided to deal with this claim, I see no basis to reduce the amount of costs or to award costs on a lower scale.

[44] The action is dismissed, and costs of the action are awarded to the Cook defendants in the amount of $35,912.96 all inclusive. Post judgment interest will apply in accordance with the Courts of Justice Act.

RSJ RICCHETTI

Released: August 08, 2022

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: VIOLET V. CLARKE

Plaintiff

-and-

AMRITPAL S. MANN, APS MANN LEGAL PROFESSIONAL CORPORATION, NATIONAL MORTGAGE LOANS LTD. (previously named CENTUM NATIONAL MORTGAGE LOANS INC.) operating as CENTUM STAR FINANCIAL CORPORATION and CENTUM LENDING AND MORTGAGES CORP., MA MORTGAGE ARCHITECTS INC., ZULFIQAR ALI ZULFI, WENTY LEE, SANDRA LEE, 2343680 ONTARIO INC., 2462030 ONTARIO INC., SCOTT COOK, and COOK LAW LLP.

Defendants

REASONS FOR JUDGMENT

RSJ RICCHETTI

Released: August 08, 2022