A Master of the Court of Queen’s Bench of Alberta has ruled in favour of one law firm but against another in a real estate leasing company’s lawsuits against both firms, in a “legal odyssey” he compared to the great classical work by Homer.
But HOOPP Realty lost its claim because its 1999 design-build agreement with Clark Builders had a mandatory arbitration clause, and HOOPP Realty had not served a notice to arbitrate, instead opting to sue the builder in the Court of Queen’s Bench. By the time HOOPP Realty was told its claim was in the wrong forum, the limitation period had run out to arbitrate.
HOOPP Realty then sued its lawyers for negligence: namely, Emery Jamieson LLP, which began the claim against Clark Builders, and Dentons Canada LLP (as it is now known), to which the claim was later transferred. Both law firms have denied they were negligent.
There were three applications before the Court of Queen’s Bench when Robertson heard the appeal this winter, all for summary judgment. The two law firms asked for summary dismissal and HOOPP Realty asked for summary decisions affecting liability, but not finally deciding the outcome. Emery Jamieson’s application was successful, while the other two were denied.
Robertson decided that the claim against the first firm, Emery Jamieson, was limitation barred and so summarily dismissed the claim. But he found that “the evidence does not support a summary dismissal of the claim against Dentons, or the making of the declarations that HOOPP Realty seeks.”
The discrete issue for Emery Jamieson was the limitation period for it to be sued, which Robertson agreed had run out, under Alberta’s Limitations Act, “before this claim [against it] was filed.”
But HOOPP Realty’s claim against Dentons was more “multi-faceted,” Robertson found. “If the claim against Clark Builders would have been won but for the missing notice to arbitrate, then perhaps HOOPP Realty has a claim against Dentons for the lost opportunity to sue Emery Jamieson. However, that claim would also require evidence to show that Emery Jamieson would have been liable in negligence — and that aspect of the claim requires expert evidence as well.”
Robertson determined that expert evidence was required in order for both sides, Dentons and HOOPP Realty, to demonstrate their positions.
Over the years, HOOPP Realty’s claim against Clark Builders went to a chambers judge twice, to the Court of Appeal of Alberta twice and to the Supreme Court of Canada on a leave to appeal application, which was denied.
“At the end, HOOPP Realty was left with no recovery against Clark Builders, a costs liability to the builder, and significant legal expenses,” Master Robertson noted.
Yet Alberta’s Court of Appeal “made important rulings along the way that arguably affected the lawyers’ previous understanding of the law,” he wrote. The first one was in a case involving another builder — Babcock & Wilcox Canada Ltd. v. Agrium Inc., 2005 ABCA 82 — that was decided while HOOPP Realty’s claim against Clark Builders was active. “That may have caused a change in the general understanding of the law about lawsuits, arbitration proceedings, and the limitation of actions,” Robertson noted. In that case, he said, the Court of Appeal held that where there was an arbitration clause in an agreement, the underlying arbitration was statute-barred.
“In hindsight, that development in the law should have been of concern to both Emery Jamieson and Dentons,” Robertson wrote. “But it passed unnoticed as having any bearing on the HOOPP Realty claim,” and despite the fact that two of Dentons’ lawyers had discussed the Babcock & Wilcox case at a conference at which they presented in 2006 and another Dentons lawyer had argued the case.
HOOPP Realty did not sue Emery Jamieson promptly once it knew of the problem with its claim against the builder, and Dentons, by then HOOPP Realty’s counsel, “then waited a few days before advising HOOPP Realty” of the problem, Robertson found.
Dentons and HOOPP Realty may still appeal the decision of the Court of Queen’s Bench. Counsel for the parties either declined comment or were unavailable for comment at press time.