Oel v. Levine, 2013 ABQB 242

Court of Queen ’ s Bench of Alberta Citation: Oel v. Levine, 2013 ABQB 242 Date: 20130423 Docket: 0901 13309 Registry: Calgary Between: Suzanne Adele Oel Plaintiff - and - Darryl Marc Levine, Levine Currie LLP and Levine Law Office Defendants _______________________________________________________ Reasons for Judgment of J.B. Hanebury, Master in Chambers _______________________________________________________ [ 1 ] Ms. Oel entered into an improvident matrimonial property settlement with a spouse she alleges was manipulative and controlling.

She did so after receiving independent legal advice from the defendant, Mr. Levine. She ultimately sued her former husband to set the agreement aside and for unjust enrichment. As well, she commenced this action against her counsel who provided the Certificate of Independent Legal Advice. Both actions were commenced some three years after the execution of the agreement. [ 2 ] Her former husband applied for

summary dismissal of the claim against him on the basis that the claim was out of time. He was successful in relation to the claim regarding the Matrimonial Property Act , R.S.A. 2000 c. M-8, on the basis that it is governed by a strict limitation period. The claim for unjust enrichment came under s. 3 of the Limitations Act , R.S.A. 2000 c. L-12. and Justice Nation, in an oral decision, refused to grant

summary dismissal of that claim.

[ 3 ] Mr. Levine now seeks to summarily dismiss this claim on the same basis as that used by Ms. Oel’s former husband: that it is out of time pursuant to s. 3 of the Limitations Act . FACTS [ 4 ] The parties were married in 1985. They separated in 2004 and a division of their assets occurred at that time. The children remained with Ms. Oel. [ 5 ] Ms. Oel stated that when her husband first presented the division of assets to her in December, 2003, he made it clear that there was no room for negotiation and she would accept his plan or get nothing. So, in 2004 Ms.

Oel received 1.1 million dollars made up of investments and RRSPs. Subsequently the matrimonial home was transferred to her, and valued at approximately $300,000.00, for a total of 1.4 million dollars. [ 6 ] Ms. Oel acknowledged that she knew in 2004 that their assets were worth around 13 million dollars. She had been involved in entering numbers for their business into a computer program at home and supplying information to the accountant.

However, when her husband determined that he wished to separate, she was removed from the business, and as of 2004 she no longer had access to the records. [ 7 ] She stated that when she asked questions about the separation of their assets her husband became angry and asked where his guns were. She took this as a threat that he would either harm himself or her over the division of their assets. [ 8 ] In late 2005, his lawyer drafted the separation agreement and sent her to Mr. Levine for its execution and the Certificate of Independent Legal Advice. Mr.

Levine shared an office with her husband’s lawyer, used a common receptionist, and had a common mailing address and fax number. She was told it would be cheaper to do it this way as the two lawyers could work together. [ 9 ] No current financial disclosure was provided nor did her lawyer ask for any. She says that they had two brief meetings and the only changes were clerical and to clarify the s. 7 expenses. Mr. Levine provided no advice as to child support or spousal support nor did he request any income or budgets. [ 10 ] She said that the only comment Mr.

Levine made about the agreement was just after she signed it in January, 2006, and he merely commented that it wasn’t fair. She said that he did not elaborate nor explain that comment and he didn’t tell her what she was entitled to. She said that at that time, she feared for her safety and the well being of their children if she refused to sign the agreement as drafted. However, Mr. Levine did not ask her if she was under duress, or subject to inducement or intimidation. [ 11 ] Mr. Levine has no detailed notes on his file of what, if any, advice he provided. [ 12 ] Ms.

Oel signed the minutes of settlement on January 23, 2006 with respect to custody, access, child support, spousal support and the division of matrimonial property. The agreement was structured so that $1,000,000.00 of the sum that she had received was a lump sum for child support for the children. Therefore, from assets that she believed stood at approximately 13 million dollars in 2004, she received as her share around $400,000.00. There was no spousal support. Mr. Levine subsequently transferred the matrimonial home to her, as provided for in the agreement.

He billed her and she paid his account. [ 13 ] The facts found in Justice Nation’s reasons in relation to the

summary judgment application filed by her former husband were relied upon and referred to by both parties. Justice Nation stated that there was nothing on the face of the agreement that described any reason for the inequity in distribution, the unusual child support lump sum payment, or the lack of financial disclosure. She found that Ms. Oel acknowledged that she felt at that time, in 2006, that the agreement was unfair and she appreciated that she may be entitled to 50 percent of the assets, but had a feeling or understanding that such a division might be hard to obtain. She also knew at that time that she

was bullied, under duress, coerced and she wanted to save the marriage. [ 14 ] Justice Nation referred to evidence from Ms. Oel that she felt she was cut off from her family of origin and that she was deeply religious and trying to keep her marriage together at all costs. She testified that when their marriage deteriorated, her husband threatened suicide, told her he was dying of cancer when he was not, and generally was manipulative. She lost her self-confidence. [ 15 ] Much of the evidence of the abuse she alleges in this action is found in the affidavit and assessment of Dr. Larry Fong.

He repeated comments made to her by her husband such as, if she did not settle their matrimonial property: “I will end you...I don’t mind going to jail.” He spoke also to the continuing control still being exercised by her husband through the children who have told her, for example, that she could not attend one’s graduation nor the other’s wedding if she did not drop the legal action against their father. [ 16 ] Dr.

Fong confirmed that as his testing is more recent he did not and could not provide an opinion as to whether or not she was suffering from a psychological disability or impairment when the agreement was signed. Dr. Fong stated that he could not say whether she had the ability at that time to make reasonable legal decisions with respect to her action against her former lawyer, Mr. Levine. He did say that his work with her strongly indicated that her autonomy to think and consider her needs was impaired and caution should have been expressed at the time of signing. [ 17 ] Ms.

Oel says that it was only a few years after she signed the agreement, when one of their children went to live with her husband and he said he would seek a return of part of the lump sum for child support, that she went to a lawyer and learned of her rights. She then brought the action against her husband and this action against her former lawyer. ANALYSIS [ 18 ] While the purpose of

summary judgment and dismissal is to ensure the courts are not tied up with actions that have no real chance of success, at the same time, the Court is not to lightly dismiss a claim before trial: Lameman v. Canada (Attorney General) , 2006 ABCA 392 . [ 19 ] The test for

summary dismissal is well known: the court must be satisfied that there is no genuine issue for trial. Only if that test is met can an action be dismissed. In an application to dismiss a claim as outside the period allowed in the Limitations Act , the Alberta Court of Appeal said in De Shazo v. Nations Energy Co. , 2005 ABCA 241 , para. 19 : When faced with a

summary judgment application of this type the court must ascertain whether there are undisputed facts that necessarily lead to the conclusion that it is plain and obvious the plaintiff’s claim is statute barred. [ 20 ] In Dow Chemical Canada Inc. v. Shell Chemicals Canada Ltd. 2010 ABCA 126 , para. 13 , the Court confirmed its earlier analysis in Tottrup v. Clearwater (Municipal District No. 99) , 2006 ABCA 380 : There are, however, other types of

summary judgment applications. In some cases the facts are clear and undisputed. The ultimate outcome of the case may depend on the

interpretation of some statute or document, or on some other issue of law that arises from undisputed facts. In such cases the test for

summary judgment is not whether the issue of law is "beyond doubt", but whether the issue of law can fairly be decided on the record before the court. If the legal issue is unsettled or complex or intertwined with the facts, it is sometimes necessary to have a full trial to provide a proper foundation for the decision. In other cases it is possible to decide the question of law summarily... [ 21 ] At issue in this case is

section 3 of the Limitations Act which provides: 3(1) Subject to

section 11, if a claimant does not seek a remedial order within

(a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding... the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. ... 3(5) The claimant has the burden of proving that a remedial order was sought within the limitation period provided by subsection (1)(a). [ 22 ] Counsel for Mr. Levine argued that Ms.

Oel had sufficient knowledge in 2006 to meet the requirements of s. 3(1) and the only thing that changed in 2009 was that she went to a lawyer when her former husband threatened to seek a return of some of the lump sum child support. [ 23 ] Ms. Oel’s counsel argued that Ms. Oel had essentially been told by her husband that if she did not agree to the settlement she would lose her home; be without money; he might harm himself; and, he threatened to kill her.

He argued that the effects of this psychological abuse and information deprivation affected her ability to recognize her injury and the lingering effects of the exploitation compromised her ability to address this matter at any date prior to 2009 when counsel became involved. This, he argued, leads to an assessment of her evidence and raises a question of mixed fact and law that requires a trial and

summary judgment is inappropriate. [ 24 ] Neither party provided any decision on all fours with the facts in this case, other than Justice Nation’s reasons in relation to the claim against Ms.

Oel’s former husband. [ 25 ] Justice Nation found that the law is not clear as to how duress and threats affect the circumstances of the plaintiff and her ability to either know, or to determine whether she ought to have known, of the injury and that it warrants bringing a proceeding. [ 26 ] Acknowledging that uncertainty or ignorance of the law does not postpone the limitation period, she held that there can be situations, particularly matrimonial cases, where there is an apparent knowledge of the facts but the plaintiff, for some reason, is unable to do anything about the situation or believes that he or she can do nothing about it.

She concluded that “in the face of that law, and the allegations and sworn evidence here that the respondent testifies she was psychologically affected and under duress, [her] evidence should be evaluated as to how it may have, in this situation, affected the application of the provisions of the Limitations of Actions Act .” [ 27 ] The claim in front of this court relates to the same time frame, the same contract and similar circumstances. The difference in this case is that Mr. Levine did not threaten Ms. Oel. He was not the source of the psychological or other abuse.

In this situation, is it plain and obvious that there is no genuine issue for trial in relation to the provisions of the Limitations Act ? Are there undisputed facts that lead to the conclusion that Ms. Oel knew or ought to have known of her injury, that it was caused by the plaintiff and that it warranted bringing a proceeding? [ 28 ] Since the introduction of the present limitations legislation in 2000, a number of cases have considered aspects of its

application. [1] [ 29 ] What is relevant is not when the plaintiff knew she had a cause of action, as was the test under the former legislation, but when she knew she had suffered an injury. [2] There can be more than one injury arising from a single event. [3] [ 30 ] It is the facts that are relevant.

Error, ignorance or uncertainty of the law, does not postpone any limitation period. [4] [ 31 ] The determination of whether a limitation has expired contains both an element of time and discoverability, ie. knowledge of the facts (acts or omissions) that may give rise to a claim. [5] A plaintiff does not need to have perfect certainty about the facts to start the clock running under the Act. [6] At the same time, more than mere suspicion is required. [7] When the plaintiff does not know the facts, she is expected to have exercised reasonable diligence to acquire those facts. [8] [ 32 ] The clock starts to run the earlier of when the plaintiff actually knew or ought to have known the facts in relation to all of the three criteria, i.e. that she had been injured, the injury was caused by the defendant and it warranted bringing a proceeding. [ 33 ] However, the plaintiff’s own particular and personal circumstances can impact the determination of when the plaintiff knew or ought to have known the facts in relation to each of the three criteria found in s. 3 . [9] The Court has held that a “restrictive subjective/objective” approach is to be taken that takes into account the plaintiff’s “important and substantial interests”.

The clock will start when “in light of the plaintiff’s particular situation, the bringing of a suit is reasonably possible, not when it would be ideal from the plaintiff’s perspective to do so”. [10] Matters such as the fact that the strains of litigation would be overwhelming; the damages recoverable would be minimal or speculative; or personal circumstances of the plaintiff that combined make it unfeasible to start an action, were cited as examples of factors that require consideration. [11] [ 34 ] The first determination to be made is the nature of the injury as that will determine the relevant facts which Ms.

Oel needed to know or ought to have known to start the clock. “Injury” is defined in the act as a personal injury, property damage, an economic loss, the non-performance of an obligation, or in the absence of any of those, the breach of a duty. [ 35 ] There is little law on how to properly categorize an injury. [12] Counsel for Ms. Oel described the injury as an economic loss or a breach of a fiduciary duty, while counsel for Mr.

Levine said that the injury found in the pleadings was the provision of negligent advice resulting in economic loss, but then categorized the injury as an economic loss. [ 36 ] In this case the end result is the same no matter how the injury is categorized as all three criteria must be known or discoverable for the clock to start. [ 37 ] If the injury found in s. 3(1)(a)(

i) of the Act is characterized as an economic loss, then that injury can be attributed under s. 3(1)(a)(ii) to Mr. Levine’s conduct, his failure to provide the advice required to Ms. Oel. If the injury is characterized as a breach of a contractual obligation to provide such advice, then knowledge of the resulting economic loss is necessary to warrant bringing an action under s. 3(1)(a)(iii). [ 38 ] Furthermore, counsel for Mr. Levine argued that the timing of Ms. Oel’s knowledge of both occurrences was identical. Ms.

Oel knew that she had suffered an economic loss and that she had been given insufficient legal advice at the same time: when she signed the matrimonial agreement and Mr. Levine said it was not fair. [ 39 ] As the analysis undertaken below is equally applicable in either instance, no final determination of this question need be made.

[40] The allegation is that Mr. Levine failed to perform his obligation to Ms. Oel as a lawyer. Although the statement of claimalleges that Mr. Levine was Ms. Oel’s lawyer for the transaction, the parties’ submissions acknowledged that his retainer was to provideindependent legal advice. Case law has held that the nature and circumstances of a situation will dictate what constitutes adequateindependent legal advice. It could be advice solely as to understanding and voluntariness, or advice as to the merits of the transaction, orboth: Cope v.

Hill, 2005 ABQB 625. [41] The Matrimonial Property Act, s. 38, provides that Ms. Oel had to acknowledge before Mr. Levine that she was: aware of thenature and effect of the agreement; aware of her possible future claims to their property; and, was giving up those claims and wasexecuting the agreement freely and voluntarily without any compulsion by her husband. Therefore, Mr. Levine’s obligation was toprovide advice as to both the voluntariness and the merits of the transaction.

The unchallenged evidence is that he did neither. [42] Are there undisputed facts that necessarily lead to the conclusion that it is plain and obvious that Ms. Oel’s claim is statutebarred? In other words is it plain and obvious that Ms. Oel knew or ought to have known of the fact that Mr. Levine had an obligation toprovide this advice and no such advice was provided to her? [43] As Justice Nation noted and the case law has indicated, a matrimonial contract is not treated in the same fashion as a businesscontract. She pointed to the quote found in Rick v.

Brandsema, 2009 SCC 10 , [2009] 1 S.C.R. 295, a quote helpful in thisinstance as well: This Court has frequently recognized that negotiations following the disintegration of a spousal relationship take place in a uniquelydifficult context.

The reality of this singularly emotional negotiating environment means that special care must be taken to ensure that, tothe extent possible, the assets of the former relationship are distributed through negotiations that are free from informational andpsychological exploitation. [44] This view is supported by the promulgation in this jurisdiction of the Matrimonial Property Act.

This legislation recognizesthe difficult emotional situation that can accompany a marriage breakdown, the possibility of duress, manipulation, and the hiding ofassets and requires the provision of independent legal advice. [45] The very circumstances that Mr.

Levine was to be alert to in the provision of his advice, are the same circumstances that Ms.Oel now says rendered her unable to understand her rights and the injury that had occurred. [46] Can those circumstances be used to extend the limitation period? [47] The case law has made it clear that the plaintiff’s own particular and personal circumstances will affect the determination ofwhen she knew or ought to have known of the facts in relation to each of the criteria found in s. 3(1)(

a) of the Limitations Act. Dr. Fong,while unable to provide an opinion as to Ms. Oel’s psychological state at the time she met with Mr. Levine due to the fact his testing wassubsequent to the event, noted that caution should have been expressed at the time of signing as there was a strong indication that herautonomy to think and consider her needs was impaired.

In my view Ms’ Oel’s psychological state and her ability to appreciate thefactors relevant to the running of the limitation period require assessment by a trial judge. [48] Finally, I note that section 5(2) of the Limitations Act provides for a limitation period to be stayed when a claimant is “aperson under disability”. That term includes “an adult who is unable to make reasonable judgments in respect of matters relating to aclaim.” The law is not clear if a situation of psychological abuse such as is alleged here can be considered under s. 5(2) of the Act, i.e. asa possible disability.

The parameters of s. 5(2) have not yet been drawn: Gayton (supra, footnote 9) para. 38. CONCLUSION [49] I have come to a similar conclusion in this action to that of Justice Nation when considering the claim for economic lossagainst Ms. Oel’s former husband.

[50] In line with the direction found in Dow Chemicals (supra), as the law is unsettled and the facts in this case are intertwinedwith the law, the question of whether the claim is statute barred requires assessment by a trial judge. Therefore the action and thequestion of whether Ms. Oel’s claim is statute barred are referred to trial. [51] The application for

summary dismissal of the claim is dismissed. Ms. Oel is entitled to her costs. Heard on the 12th day of February, 2013. Dated at the City of Calgary, Alberta this 23rd day of April, 2013. J.B. Hanebury M.C.C.Q.B.A. Appearances: Ronald S. Foster, Q.C. Foster LLP For the Plaintiff / Respondent Raymond Bastedo Jensen Shawa Solomon Duguid Hawkes LLP for the Defendants / Applicants [1] For ease of reading the numerous citations are included as footnotes. [2] Sun Gro Horticulture Canada Ltd. v. Abe’s Door Service Ltd., (2006), 2006 ABCA 243 , 273 D.L.R. (4th) 295; Remenda v.Miles Davison LLP, 2008 CarswellAlta 929, para. 30, aff’d on appeal, 2008 ABCA 251; Mills v. Royal Bank of Canada, 2012 ABCA

75. [3] Sun Gro (supra) and Stack v. Hildebrand, 2010 ABCA 108. [4] Sztuczka v. Knebel, 2012 ABQB 72 (Master) at para. 11, citing, Dickieson v. Dickieson, 2010 ABQB 227, 28 Alta. L.R. (5th) 310 atparagraph 21; Waap v. Alberta, 2008 ABQB 544 at paragraph 126. [5] Sztuczka (supra) citing Dickieson v. Dickieson at paragraph 21; Burtch v. Barnes Estate, (2006), (ON CA), 80O.R. (3d) 365 (Ont. C.A.) at paragraph 24. [6] De Shazo v Nations Energy Co., 2005 ABCA 241, para. 28. [7] Photinopoulos v. Photinopoulos, (AB CA). [8] Central Trust Co. v. Rafuse, (SCC), [1986] 2 S.C.R. 147; Borchers v. Kulak, [2009] A.J.

No. 801 (Q.B.). [9] Gayton v. LaCasse, 2010 ABCA 123. [10] Novak v. Bond, (SCC), [1999] 1 S.C.R. 808, as quoted in J.N. v. G.J.K., 2004 ABCA 394, para. 14. [11] Ibid. [12] Ramenda v. Miles Davison, (supra).