Addison & Leyen Ltd. v Fraser Milner Casgrain LLP, 2013 ABQB 473

Court of Queen’s Bench of Alberta Citation: Addison & Leyen Ltd. v Fraser Milner Casgrain LLP, 2013 ABQB 473 Date: 20130819 Docket: 1101 13007 Registry: Calgary Between: Addison & Leyen Ltd., John Joseph Dietrich, Jeannette Marie Dietrich, Wilfrid Daniel Roach and Helen Roach Plaintiffs / Applicants - and - Fraser Milner Casgrain LLP and Wallace Y. Shaw Defendants / Respondents _ ________________________________________ ______________ Reasons for Judgment of the Honourable Mr. Justice J.T. McCarthy _________________________________________ ______________ I.

Introduction [ 1 ] The Plaintiffs seek contribution and indemnity from the Defendants for tax liability and expenses they incurred in October 2010 in the amount of $1.75 million. The Plaintiffs allege this tax liability arose as a result of a negligent legal opinion provided by the Defendants in late 1989 relating to a share purchase agreement. The Defendants deny liability and argue that the Plaintiffs’ claim is statute-barred, as the limitation period has expired. [ 2 ] This is an application brought by the Plaintiffs for the determination of the following question of law:

Is the Plaintiffs’ claim barred by the operation of the 10-year limitation period in the Limitations Act , RSA 2000, c L-12 (the “ Limitations Act ”), s 3(1)(b)? II. Facts [ 3 ] The application proceeded on the basis of an Agreed Statement of Facts, agreed to for the limited purpose of this application (Exhibit #1). The facts, briefly stated, are as follows. [ 4 ] The Plaintiff, Addison & Leyen Ltd. (“Addison”), is an Alberta corporation. At all relevant times, the Plaintiff, John Joseph Dietrich, was a director and 40% shareholder of Addison.

The Plaintiff, Jeannette Dietrich, was a 10% shareholder of Addison and is Mr. Dietrich’s spouse. The Plaintiff, Wilfrid Daniel Roach, was also a director and 40% shareholder of Addison at all relevant times. The Plaintiff, Helen Roach, was a 10% shareholder of Addison and is Mr. Roach’s spouse. Mr. Dietrich, Mrs. Dietrich, Mr. Roach and Mrs. Roach are together referred to as the “Individual Plaintiffs”. [ 5 ] The Defendant, Fraser Milner Casgrain LLP (“FMC”), is a law firm with offices in numerous Canadian cities, including Calgary.

FMC is a successor of Fenerty, Robertson, Fraser & Hatch (“Fenerty”), a former Calgary-based law firm where, at the relevant time, the Defendant, Wallace Y. Shaw, practiced as a tax lawyer. Mr. Shaw is now retired. [ 6 ] York Beverages

(1968) Ltd. was a Saskatchewan corporation that carried on a soft drink bottling business in Regina, Saskatchewan until around October 1988. On September 26, 1989, it changed its name to 309093 Saskatchewan Ltd. It continued into Alberta and changed its name to 475320 Alberta Ltd. on November 19, 1990. This entity is referred to as “York”. [ 7 ] The Individual Plaintiffs each held an ownership interest in York, either directly as shareholders or indirectly through their ownership of Addison.

Until September 1989, all of the Individual Plaintiffs were directors of York. [ 8 ] York’s taxation year was October 1 to September 30. On October 1, 1988, York sold the assets of its bottling business for approximately $10 million cash and $3 million in assumed indebtedness. York intended to cease carrying on business and distribute the proceeds of the asset sale by the end of its taxation year, namely September 30, 1989. Approximately $6.2 million was distributed to the shareholders in dividends.

After other payments were made, York’s sole remaining asset was $2.8 million cash, which was retained to pay York’s estimated income tax liability for the 1989 tax year. [ 9 ] In September 1989, the Plaintiffs agreed to sell their shares in York to 388777 Alberta Ltd. (the “Purchaser”) for $1,115,000 (the “Share Purchase Transaction”). Fenerty acted for the Purchaser in connection with the Share Purchase Transaction. Mr.

Shaw was one of the lawyers with carriage of the matter at Fenerty. [ 10 ] The Purchaser intended to use York’s available cash to purchase seismic data, which would enable it to claim a tax deduction of approximately $6.5 million. The Purchaser valued the seismic data at $6,295,000, based on three independent appraisals. The Purchaser expected that, as a result of the seismic data purchase, York would have no income tax liability for the 1989 tax year. The Plaintiffs did not have knowledge of, or involvement in, the seismic data purchase until years after the transactions were completed.

They resigned as directors of York on September 26, 1989, and the Share Purchase Transaction closed on September 28, 1989. It was the Purchaser’s representatives on York’s Board of Directors, not the Plaintiffs, who entered into the transactions involving the seismic data purchase. [ 11 ] One of the conditions of closing the Share Purchase Transaction was that the Purchaser would provide a legal opinion to the Plaintiffs regarding their potential tax liability. Mr.

Shaw delivered a tax opinion stating, among other things, that it was reasonable to conclude that York would be able to pay its income tax liabilities for the 1989 tax year, and that the Plaintiffs would not be liable for any income tax liability in respect of York for matters arising after the Plaintiffs resigned as directors of York (the “Tax Opinion”). [ 12 ] On December 29, 1992, the Minister of National Revenue (the “Minister”) reassessed York for the 1989 tax year on the basis of the valuation of the seismic data.

The Minister determined it was worth only $1,696,500, and that, as a result, York owed $3,247,074 in taxes, penalties and interest. York was not able to pay this tax liability. [ 13 ] In around February 2001, the Minister issued notices of assessment to the Plaintiffs and others for York’s income tax liability for the 1989 tax year (the “Assessments”). At that time, York’s tax liability was $6.7 million as a result of interest accruing.

The Minister took the position that the Plaintiffs were statutorily liable for York’s income tax debt, and that the Plaintiffs were each liable for this debt up to the amount they received from York. The Plaintiffs’ exposure to this income tax liability was not due to any fault, wrongful act or misconduct on their part. [ 14 ] The Plaintiffs opposed the Minister’s Assessments: they filed notices of objection, sought judicial review, and actively litigated their notices of objection.

In October 2010, the Plaintiffs entered into a settlement with the Minister whereby the Minister agreed to increase the valuation of the seismic data from approximately $1.7 million to approximately $5.15 million. This left York with a tax liability from the 1989 tax year of $492,676 (the “Tax Liability”). As part of the settlement, the parties were responsible for their own costs. [ 15 ] Addison paid the Tax Liability due of $492,676.

In addition, the Plaintiffs incurred approximately $1.25 million in legal fees, disbursements and other expenses in their opposition and settlement of the Assessments (“Assessment Expenses”). [ 16 ] The Statement of Claim was filed in this action on September 21, 2011. The Plaintiffs bring this action for contribution and indemnity from the Defendants, based on the common law implied right to indemnity. They seek payment of the Tax Liability and their Assessment Expenses in the amount of $1.75 million.

There is an agreement in place between the parties to suspend the running of any applicable unexpired limitation period between February 2003 and September 2011 (the “Standstill Agreement”).

III. Issues and Analysis [ 17 ] For the purpose of this application, the parties have agreed to the above facts.

They have also agreed that the terms of settlement of the Assessments were reasonable, and that the Plaintiffs would not have incurred the Tax Liability or the Assessment Expenses but for their reliance on the Defendants’ Tax Opinion. [ 18 ] The parties have agreed, by way of Consent Order filed January 23, 2013, that the question of law to be determined is as follows: Is the Plaintiffs’ claim barred by the operation of the 10-year limitation period in the Limitations Act , s 3(1)(b)? [ 19 ] The Plaintiffs’ position is that their cause of action against the Defendants only arose once they incurred liability through the settlement of the Minister’s tax claim in October 2010, or alternatively, when they first learned of the Assessments in February 2001.

Because of the Standstill Agreement in place, the limitation period had not expired in either case by the time the Statement of Claim was filed and, as a result, the Plaintiffs’ claim is not statute-barred. [ 20 ] The Defendants take the position that the Plaintiffs’ claim is improperly characterized as a claim for contribution based on a common law implied right to indemnity; rather, it is a straightforward negligence claim. The Plaintiffs’ cause of action arose when the Defendants’ alleged act or omission occurred in providing the Tax Opinion in the Share Purchase Transaction in September 1989.

Accordingly, it is statute-barred because the Plaintiffs did not commence the action within 10 years after their claim arose, as required by section 3(1) (

b) of the Limitations Act . [ 21 ] In order to answer the above question of law, it is necessary to determine whether the Plaintiffs’ action is properly framed as a breach of an implied contract of indemnity at common law. For the reasons that follow, I conclude that the Plaintiffs’ cause of action against the Defendants is properly a negligence claim, not a claim for contribution based on an implied right to indemnity. As a result of this conclusion, the Plaintiffs’ claim is barred by the operation of the 10-year limitation period in section 3(1) (

b) of the Limitations Act . A. Policy Considerations and the Limitations Act [ 22 ] The Plaintiffs obtained a Tax Opinion from the Defendants as a condition of closing for the Share Purchase Transaction in 1989, wherein the Defendants opined that it was reasonable to conclude that York would be able to pay its income tax liabilities for the 1989 tax year, and that the Plaintiffs would not be liable for any income tax liability in respect of York for matters arising after the Plaintiffs resigned as directors of York.

The Plaintiffs relied on the Tax Opinion in order to complete the Share Purchase Transaction and would not have proceeded without it. The Plaintiffs plead that the Defendants were negligent in providing the Tax Opinion. As a result, they suffered loss through no fault of their own. For the purpose of this application, the parties agree that the Defendants are liable to the Plaintiffs for the Tax Opinion, subject to the operation of any limitation period. [ 23 ] I have some sympathy for the Plaintiffs’ position in this case.

The Defendants provided them with a Tax Opinion in September 1989, and they relied upon it in completing the Share Purchase Transaction to sell their ownership interests in York. York was reassessed by the Minister in December 1992, and the Plaintiffs received Assessments in February 2001. They were not aware of any tax consequences impacting them for nearly 11.5 years after the Tax Opinion was given. [ 24 ] Section 3(1) of the Limitations Act 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, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. [ 25 ] The 10-year period in section 3(1)(

b) is often referred to as the “ultimate limitation period”, and imposes a limit on indeterminate liability. The

section is clear that the absolute limitation period starts to run from the negligent or wrongful act or omission itself, and does not depend on when the claimant first knew, or ought to have known, about the claim: Bowes v Edmonton (City) , 2007 ABCA 347 , 425 AR 123 at para 151 .

As a result, the Plaintiffs’ cause of action against the Defendants in negligence was statute-barred before they were even aware it existed. [ 26 ] The present situation is similar to Bowes , where Côté J.A. noted at para 116: Now the big complaint of the plaintiffs is that the time for them to sue expired before they knew that they had a claim, indeed maybe even before they had a claim which the law would act upon. They say that is unjust. Their statement is correct in fact. And if one looks only at the plaintiffs, it is unfair.

[27] In Bowes, Côté J.A. analyzed the law regarding the ultimate limitation period, and outlined the conflicting policyconsiderations. Although Côté J.A. dissented, the majority agreed with his analysis, disagreeing with his conclusion based on the facts ofthe case: para 208. He discussed the important purpose served by limitation periods, noting at paras 118-122: 118 We must start by recalling the main purpose of limitations legislation. It is enacted to prevent certain plaintiffs from suing ongood causes of action.

If pressed to trial, poor causes of action will not likely succeed on the merits; they will be dismissed. 119 What is the policy reason for barring such suits? To eliminate the harm to defendants of very belated litigation. Most of that harmdivides into two categories. 120 First, people and businesses have to get on with their lives. They should not have to store bulky or fragile records forever, evenfor decades. Their savings and futures should not be founded on fading memories, or the hazard of whose witness first dies or disappears.The social cost of all that is high.

People and businesses must be able to plan their affairs without keeping idle huge reserves against thepossibility of ancient claims arising. No one would buy a construction business or a professional practice if it might drag with it claimsover 30 years old. Indeed, Canadians daily use buildings, bridges, dams, roads, and railways a century or more old. Companies dependon constituting documents drafted by long-forgotten solicitors. Wills and trusts generations old govern pensions plans and other vastsums.

Many Canadians were delivered by obstetricians over 65 years ago; and got medical advice over 60 years ago. 121 With no limitation periods, much of the country’s assets, infrastructure, and capital would be sterilized by the dead hand ofhistory. See Alberta Law Reform Institute, Limitations 1-2, 70 (Report #55, December 1989). ... 122 The second aspect of the harm is that trying to find and test evidence about events decades old is usually roulette, not a seriousexploration of the truth.

After some years, a defendant cannot prove a proper defence, or even disprove the plaintiff’s allegations. [28] It is difficult to balance these competing policy concerns. However, the Legislature was clear in enacting the ultimatelimitation period in section 3(1)(

b) of the Limitations Act. The conclusion reached by Justice Côté in Bowes is applicable to the presentcase (at paras 156-157): 156 I appreciate two of the plaintiffs’ arguments. First, that they should not be deemed to have lost their right to sue before theylearned of it. And second that even if that were wrong, they should not lose a right to sue before it arose, i.e. if the harm occurred morethan 10 years after the wrongful act or omission. From their point of view alone, that can seem unfair, even capricious. 157 But this is not constitutional legislation, and no constitutional argument was put to us.

The Legislature is sovereign on this topic,and in my view, it has spoken deliberately and clearly in this area. We cannot amend the Act, nor can we ignore its history or its scheme.See Zaidan Group Ltd. v. London (City) (1990), (ON CA), 36 O.A.C. 384, 71 O.R. (2d) 65 (Ont. C.A.) (para. 11),affd., (SCC), [1991] 3 S.C.R. 593, 129 N.R. 227 (S.C.C.). Furthermore, when one considers the policy dilemma set outin

Part I above, the unfairness largely disappears. The danger of long-hidden losses must land on someone’s shoulders. We cannotlegislate it away. [29] Unfair though it may seem, the 10-year ultimate limitation period applies to a right to sue for negligence before the Plaintiffshave even learned of their cause of action. [30] I will now consider whether the Plaintiffs can advance a cause of action for contribution for breach of a common law impliedcontract of indemnity. Because of the Standstill Agreement between the parties, that cause of action is not statute-barred by operation ofthe Limitations Act. B.

Common law implied contract of indemnity [31] The Plaintiffs have a claim against the Defendants in negligence, but acknowledge that the limitation period has passed andthat the negligence claim is statute-barred. The Plaintiffs instead seek to advance a claim for contribution for breach of a common lawimplied contract of indemnity, and argue that this claim and a claim for negligence are not mutually exclusive; one or both claims can beadvanced independently of each other. [32] I accept that a claim for contribution and indemnity may be advanced on its own, or as an additional or alternative cause ofaction.

I agree with the Plaintiffs that having a cause of action in negligence does not detract from their ability to advance a claim forcontribution and indemnity. However, it must be a valid claim for contribution and indemnity, and not a claim improperly characterizedas such for another purpose, such as to avoid the operation of a statutory limitation period. I must determine whether the Plaintiffs in thiscase have a proper cause of action for breach of an implied contract of indemnity. [33] The Limitations Act, section 3(3)(

e) provides: a claim for contribution arises when the claimant for contribution is made a defendant in respect of, or incurs a liability through thesettlement of, a claim seeking to impose a liability on which the claim for contribution can be based, whichever first occurs... [34] A claim for contribution may be established by statute, such as under the Tort-Feasors Act, RSA 2000, c T-5, where adefendant may seek contribution from a third party in any amount that the plaintiff could have sought from the third party: Tort-FeasorsAct, s 3(1); Canada Deposit Insurance Corp. v Prisco (1996), (AB CA), 181 AR 161 (CA) at para 10.

Claims underthe Tort-Feasors Act are derivative in nature, in that the defendant’s claim against a third party is derivative of the plaintiff’s claimagainst that third party: Dean v Kociniak, 2001 ABQB 412, 289 AR 201 at para 19. [35] A claim for contribution may also be established under the common law in “circumstances where one of the potential

defendants owes a duty recognized by the common law to identify [sic] or contribute to the other potential defendants”: Dean at para 18.For example, such a duty may arise in a contract situation where one party expressly or impliedly agrees to indemnify another party, ormay arise in an agency relationship where the principal seeks contribution for liability from its agent.

Circumstances giving rise to a rightto indemnity were summarized by the Privy Counsel in Eastern Shipping Company, Limited v Quah Beng Kee, (UKJCPC), [1924] AC 177 (PC) at 182-183: A right to indemnity generally arises from contract express or implied, but it is not confined to cases of contract. A right to indemnityexists where the relation between the parties is such that either in law or in equity there is an obligation upon one party to indemnify theother.

There are, for instance, cases in which the state of circumstances is such that the law attaches a legal or equitable duty toindemnify arising from an assumed promise by a person to do that which, under the circumstances, he ought to do. The right toindemnity need not arise by contract; it may (to give other instances) arise by statute; it may arise upon the notion of a request madeunder circumstances from which the law implies that the common intention is that the party requested shall be indemnified by the partyrequesting him; it may arise (to use Lord Eldon’s words in Waring v.

Ward 9; a case of vendor and purchaser) in cases in which theCourt will “independent of contract raise upon his (the purchaser’

s) conscience an obligation to indemnify the vendor against thepersonal obligation” of the vendor. ... [36] In this case, the Plaintiffs do not rely on a statutory right or an express contract. Rather, the Plaintiffs allege that there was animplied contract of indemnity between them and the Defendants entitling them to contribution for the Tax Liability and their AssessmentExpenses.

The Plaintiffs state that an implied contract arose because the Defendants owed a duty of care to the Plaintiffs in preparing theTax Opinion, the Defendants were negligent in its preparation, and it was foreseeable to the Defendants that the Plaintiffs could incurliability if the Defendants were negligent in preparing the Tax Opinion.

The Defendants respond that this is not an implied contract ofindemnity, but a straightforward negligence claim. [37] The parties both refer to McFee v Joss, (ON CA), [1925] 2 D.L.R. 1059 (Ont SC (AD)), a 1925 decision ofthe Ontario Supreme Court – Appellate Division involving a motor vehicle accident. One of the defendants leased an automobile fromthe plaintiff for the purpose of the other defendant’s business and, while driving, was in a motor vehicle accident with a non-party,Watson. Watson successfully sought damages from the plaintiff, as owner of the motor vehicle.

The plaintiff then commenced a separateaction for indemnity from the defendants for the amount paid to Watson as a result of the motor vehicle accident.

The Court held that theplaintiff was entitled to indemnity from the defendants, and set out the requirements for an implied contract of indemnity at para 24: ...an implied contract of indemnity arises in favour of a person who, without fault on his part, is exposed to liability and compelled to paydamages on account of the negligence or tortious act of another, provided the parties were not joint tort-feasors in such a sense as toprevent recovery; that is, where the act done is not clearly illegal in itself.

This right of indemnity is based upon the principle that everyone is responsible for his own negligence, and if another is, by a judgment of a court, compelled to pay damages which ought to havebeen paid by the wrongdoer, such damages may be recovered from the wrongdoer. [38] Based on McFee, the Plaintiffs argue that it is not necessary for the Canada Revenue Agency or the Minister to have a claimagainst the Defendants in order for there to be a common law right to indemnification.

What matters is that the Plaintiffs were notpersonally at fault for the tax liability they incurred, and that they were exposed to this liability as a result of the Defendants’ negligence. [39] The Defendants dispute the Plaintiffs’

interpretation of McFee on the basis that the Plaintiffs’ position fails to recognize thespecific requirements for a common law right to indemnification.

In particular, the Defendants submit that McFee allows for indemnityat common law only where the Plaintiffs, without fault, are compelled to pay damages which ought to have been paid by the Defendants.In McFee, a claim for indemnity was asserted against another who could independently be liable to the plaintiff in the first instance. [40] McFee was referred to by this Court in the decision of Edmonton (City) v Lovat Tunnel Equipment Inc., 2000 ABQB 882, 279AR 1 at paras 382-386.

The City of Edmonton purchased from Lovat Tunnel Equipment Inc. (“Lovat”) a tunnel boring machine in 1976and spare bearing part for the machine in 1978. In 1986, the spare bearing was installed and failed. Edmonton commenced an actionagainst Lovat and the manufacturer, Rotek Incorporated (“Rotek”). A partial settlement was reached between Lovat and Edmontonduring trial.

Lovat pursued a third party claim against Rotek for indemnity at common law. [41] In Lovat Tunnel, this Court held that Edmonton’s claim against Lovat was statute-barred, as the limitation period had expired.The limitation period began to run when the cause of action arose (at delivery of the spare bearing), not on discovery of the breach.Further, Edmonton’s claim against Rotek for damages for pure economic loss arising from Rotek’s negligence also failed.

While Rotekowed Edmonton a prima facie duty of care in the manufacture of the bearing, this duty was negated for public policy reasons: 249 In Blacklaws v. 470433 Alberta Ltd., supra the Court of Appeal appears to have accepted that there are valid policy reasons forexcluding liability for the manufacture of shoddy but non-dangerous articles.

Given the conclusion of the majority in Blacklaws v.470433 Alberta Ltd., ibid. and the lack of any allegation or evidence that a defect in the Replacement Bearing posed a danger to personsor property, I am unable to find that Rotek was under a duty of care in the present case to manufacture the Replacement Bearing in such afashion so as to avoid pure economic loss on the part of the City of Edmonton. 250 With the greatest of respect, in the absence of a duty of care, there is no negligence: paras 249-250. [42] Justice Lee concluded that, had he held that there was a duty of care, he “would have found Rotek negligent in its manufactureof the Replacement Bearing”: para 544.

There was no liability finding against Lovat. Notwithstanding that Rotek did not owe a duty ofcare to Edmonton, Lee J. concluded that Lovat would have a common law right of indemnity against Rotek for any damages for whichLovat may be held liable, had Edmonton’s claim against Lovat not been statute-barred: para 385. [43] In Lovat Tunnel, a common law right of indemnity would have been found if a party who is not at fault (Lovat) had been heldliable for the acts of another party (Rotek). Rotek manufactured a defective bearing that Lovat sold to Edmonton.

This is distinguishablefrom the present case, where the Plaintiffs were not held liable for the negligent acts of the Defendants in providing the Tax Opinion;rather, they incurred the Tax Liability and their Assessment Expenses as a result of their receipt of funds in the Share PurchaseTransaction and the position taken by the Minister that the Plaintiffs were statutorily liable for York’s unpaid Tax Liability. While it is

accepted for the purpose of this application that they would not have entered into the Share Purchase Transaction but for the Defendants’ negligent Tax Opinion, that is not the basis for the Tax Liability. [ 44 ] Relying on Dean , the Plaintiffs submit that the factual basis upon which a party seeks indemnification does not have to be the same as the factual basis upon which that party incurred liability. That may be true, but there must be a connection between the actions of the party from whom indemnity is sought and the cause of liability in the first place.

In Dean , the plaintiff was injured while entering a taxi cab owned by one of the defendants. That defendant sought leave to issue a Third Party Notice against the designer of the taxi cab after the expiry of a limitation period. Justice Slatter of this Court (as he then was) discussed claims for contribution and the operation of the Limitations Act. He concluded the Third Party Notice should issue.

While the factual basis upon which indemnification is claimed (design of the taxi cab) differs from the facts underlying the main action (injury while entering the taxi cab), it is noteworthy that the plaintiff in Dean could have asserted a claim directly against the designer of the taxi cab, as a negligent design could arguably have caused her injury.

In the present case, the Tax Opinion did not cause the Tax Liability; rather, it admittedly (for the purpose of this application) caused the Plaintiffs to take certain actions (complete the Share Purchase Transaction) that led to the Tax Liability. [ 45 ] Common in the McFee , Lovat Tunnel and Dean cases is that a claim for contribution and indemnity was permitted, or would have been permitted, only where the party against whom indemnification was sought could independently be found liable for the damages suffered by the plaintiff.

The requirement is summarized by Langston J. in Doucette v Hasegawa and Associates Ltd. , 2009 ABQB 502 , 486 AR 124 at para 27 : A claim is one for contribution when one tort-feasor has the right to claim against another, or an entity has a duty to indemnify one of the defendants.

If the defendant in a Third Party Notice is one, or one of many, that may be found ultimately liable for the damages suffered by the plaintiff, then the claim against that third party defendant is one for contribution. [ 46 ] Although the Plaintiffs claim (and it is accepted as a fact for the purpose of this application) that they would not have entered into the Share Purchase Transaction or consequently incurred the Tax Liability or the Assessment Expenses but for the actions of the Defendants, the Defendants could never have been found liable to the Minister for the Tax Liability or the Assessment Expenses.

This is not a claim for contribution and indemnity from a party who caused a plaintiff to suffer loss. In this case, the Plaintiffs were pursued by the Minister for the Tax Liability pursuant to statute for funds they received from York in the Share Purchase Transaction because York could not pay its Tax Liability. While they may have suffered a loss as a result of their reliance on a negligent Tax Opinion, the Plaintiffs’ claim against the Defendants is for negligence, and is not properly a claim for contribution and indemnity. IV.

Conclusion [ 47 ] The Plaintiffs’ claim against the Defendants is properly a negligence claim, not a claim for contribution based on an implied contract of indemnity. In the result, the Plaintiffs’ claim is barred by the operation of the 10-year limitation period in the Limitations Act . [ 48 ] If the parties are unable to agree on costs, they may make an appointment to speak to costs. Heard on the 31 st day of May, 2013. Dated at the City of Calgary, Alberta this 19 th day of August, 2013 . J.T. McCarthy J.C.Q.B.A. Appearances: Daniel J. McDonald, Q.C. / Andrew F.

Sunter Burnet, Duckworth & Palmer LLP for the Plaintiffs / Applicants

J. Patrick Peacock, Q.C. / Matthew Vernon Peacock Linder & Halt LLP for the Defendants / Respondents