Grewal v Fantastic Homes Ltd, 2016 ABQB 337

Court of Queen ’ s Bench of Alberta Citation: Grewal v Fantastic Homes Ltd, 2016 ABQB 337 Date: 20160617 Docket: 1003 06502 Registry: Edmonton Between: Harminder Grewal and Balwinder Dhaliwal Plaintiffs - and - Fantastic Homes Ltd and Avtar Thind and Lakhvir Thind and 1091035 Alberta Ltd Defendants - and - Shourie Bhatia LLP and Arun Shourie Third Parties ______________________________________________________ Reasons for Judgment of the

Honourable Madam Justice D.L. Shelley _______________________________________________________ Background [ 1 ] This action arises out of a loan (the Loan) made by the Plaintiffs to the Defendant Fantastic Homes Ltd. (Fantastic) in December of 2008. The Third Parties were instrumental in introducing the Plaintiffs and the Defendants, and had acted for both prior to doing so. They acted on the Loan and the security granted to the Plaintiffs in connection with it.

They also acted for both parties during the discussions leading up to, and the preparation of, the Agreement (as described later in these Reasons). [ 2 ] Contemporaneously with the execution of other loan documentation, Mr. Shourie witnessed the execution of an Acknowledgment of Conflict of Interest, dated December 17, 2008, by Avtar and Lakhvir Thind, Fantastic and 109. Although there are signature lines on this document for the Plaintiffs, the document produced at trial did not contain their signatures. The Acknowledgment references the Loan, the mortgage security and the guarantees.

It contains an Acknowledgment and confirmation that Mr. Shourie’s then law firm would be acting on behalf of the lender and the guarantors in relation to the transaction and that no information could be treated as confidential as between them. It further contains an acknowledgment that the parties signing it had been advised of a potential conflict of interest.

It confirmed that, if a conflict of interest occurred, the firm would cease to act on behalf of all parties and all parties would be required to retain independent legal counsel. [ 3 ] The Loan was secured by a mortgage (the Mortgage) dated December 17, 2008, which secured the $400,000 principal sum and interest at 16% per annum, calculated annually. The Mortgage was registered against a property (the Property) in which Fantastic had a 50% interest.

The Mortgage was to be paid by monthly installments of $5,333, with the outstanding amount to be fully due and owing on December 15, 2009, or earlier in the event of default in payment of an installment when due. The Loan was guaranteed by the other three Defendants. [ 4 ] When the Loan was not paid when due, the parties entered into discussions concerning the default and alternatives to satisfying this debt obligation.

Those discussions and their result will be more fully discussed later in these Reasons. [ 5 ] In connection with those discussions, on February 14, 2010, Fantastic entered into an Offer to Purchase and Interim Agreement (the Agreement) with 1319141 Alberta Ltd (131). 131 was controlled by the Plaintiffs. 131 was to assume the obligations of Fantastic under a mortgage to 1206748 Alberta Ltd. (120) which was registered as a first charge against the Property. Conclusion of the purchase was conditional upon:

a) the discharge of a mortgage registered against Fantastic’s interest in the Property (the Naib mortgage); and

b) confirmation that 50% of the amount owing to 120 did not exceed $165,000. These conditions were to be satisfied or waived by 5 pm on March 10. The stated purchase price under the Agreement was $582,000. Under the Agreement, the purchase and sale was to be completed on March 15, 2010. [ 6 ] The condition requiring confirmation of the amount owing to 120 was satisfied on February 26, 2010. No written confirmation of its satisfaction was ever requested or received - the other parties accepted Mr.

Shourie’s oral advice in relation to it. [ 7 ] On or about March 1, 2010, Fantastic had entered into an agreement to purchase a lot (the Hasco lot) from 1254384 Alberta Ltd. (125). In connection with the anticipated purchase, Fantastic had paid deposits totalling $73,700, by way of credit for deposits previously paid in respect of a failed condominium project. [ 8 ] In connection with Mr. Thind’s discussions with Mr. Naib, Fantastic had made a $5,000 payment on or about April 13, 2010, with a receipt dated April 8, 2010 being issued in relation to it.

In connection with such payment, Fantastic also executed an assignment of the contract with 125, such assignment being dated April 13, 2010 and executed on or about such date. [ 9 ] Related to Fantastic’s transaction with 125 were Mr. Thind’s dealings with Mr. Dhillon. On or about March 9, 2010, Fantastic entered into an agreement whereby Fantastic would sell the Hasco lot to Mr. Dhillon for a purchase price $22,000 higher than Fantastic was going to pay 125.

This transaction is referred to in these Reasons as the “Hasco flip” transaction. [ 10 ] Sometime around March 25, 2010, the Plaintiffs sought legal advice from a new lawyer, at a different law firm, who issued demand letters dated March 26. These letters demanded repayment of the outstanding balance owed under the Mortgage, as well as legal fees, within ten days of the date of the letters. [ 11 ] On April 2, 2010, Mr. Shourie sent an email to Mr. Grewal confirming “... that Avtar has completed what he had to do to get Dr. Naib discharge his mortgage. Now I am going to finalize with Dr.

Naib and discharge the mortgage.” [ 12 ] On April 7 Mr. Shourie sent an email to the Plaintiffs’ new lawyer which stated: In order to get the settlement completed we have drafted two assignment of contracts which are being executed, hopefully today or tomorrow morning; and a discharge of mortgage from the parcel on which Bobby has his mortgage; I’m hoping to have this done by the end of this week. I think we have a settlement in place and is near to closing. I will keep you posted.

This was in response to the Plaintiffs’ new counsel’s email to him, which stated: Bobby Grewal has come to me and I have demanded payment under the mortgage and guarantees. The demand has expired and I am ready to commence an action. Bobby tells me that a proposed deal that I understood had previously lapsed may be still in the works. If true, I am fine with holding off on commencing an action. If it is still soft then I will move ahead. Can you tell me where this deal sits at this time? [ 13 ] On April 14, 2010, Mr.

Shourie sent a letter to the Plaintiffs’ new lawyer, confirming that he had an executed discharge of the Naib mortgage and asking the new lawyer to “confirm your position.” The discharge was executed April 13, 2010. Its use was subject to the satisfaction of certain trust conditions, which will be discussed later in these Reasons. The Naib mortgage was not discharged from title until January 13, 2011. [ 14 ] On April 19, 2010, the Plaintiffs’ new lawyer wrote to Mr. Shourie to advise him that he would be “filing and serving a statement of claim very shortly”.

The Statement of Claim was filed on April 20, 2010, and served shortly thereafter. [ 15 ] The first mortgagee eventually took title to the Property through a foreclosure proceeding. The Plaintiffs obtained title to the Property from the first mortgagee thereafter. Issues [ 16 ] The main issues which I must determine are: 1.

Whether there was an extension of the dates for satisfaction of the condition related to discharge of the Naib mortgage and for closing of the purchase and sale transaction referenced in the Agreement; 2. whether the condition related to discharge of the Naib mortgage was satisfied within the time required for its satisfaction; 3. if the condition was satisfied within the time required for its satisfaction, whether the Plaintiffs repudiated the Agreement, preventing the Defendants from completing the transaction; 4. whether the Loan has been extinguished as a result of either or both:

a) the Plaintiffs’ repudiation of the Agreement; or

b) the Plaintiffs’ having acquired title to the Property from 120. Position of the Parties Position of the Plaintiffs [ 17 ] The Plaintiffs submit that, when the Loan fell into arrears, they agreed that the Defendants could satisfy their obligations in respect of the Loan by transferring Fantastic’s interest in the Property to a corporation nominated by the Plaintiffs. For this reason, they entered into the Agreement with Fantastic. However, the Agreement required the satisfaction of the two conditions by March 10, 2010.

The Plaintiffs submit that when one of these conditions was not satisfied, the purchase and sale transaction failed. Accordingly, they issued demand for repayment of the Loan and are seeking judgment on the personal guarantees of Mr. and Ms. Thind. [ 18 ] Referring to the Statement of Defence, which the Plaintiffs submit defines the Defendants’ case, the Plaintiffs submit that the Defendants have failed to provide evidence in support of their contention that the Plaintiffs had agreed to extend the condition and closing dates to April 10.

Furthermore, the evidence does not support the Defendants’ position that the Defendants had secured the Naib discharge by April 6. Rather, the evidence shows that the agreement with Mr. Naib was signed April 13, after the alleged extended condition date. More importantly, the mutual release was not signed until November 15, making that the earliest possible date that the Naib mortgage discharge could be used. In fact, the Naib mortgage was not discharged until January 13, 2011. [ 19 ] In the context of this transaction, it is nonsensical to suggest that the Plaintiffs ought to have “tendered” on the closing date.

They did not have to do anything; it was up to the Defendants to take the steps necessary to ensure that the Defendants could convey title to the Plaintiffs as required under the Agreement. It is equally inappropriate to suggest that, by the Defendants failing to do so, the Plaintiffs repudiated.

Advancing an estoppel argument against them is not appropriate in the circumstances of this case, nor is the suggestion that the Plaintiffs (through a nominee) ought to have acquired title subject to the nominee’s obligation to pay the Mortgage which secured the Loan. [ 20 ] The Plaintiffs reject the Defendants’ argument that Mr. Grewal’s conduct led the Plaintiffs to believe that time was no longer of the essence. Rather, they suggest Mr.

Grewal only made inquiries with a view to a possible resurrection of the transaction, but he did not provide extensions. [ 21 ] The Plaintiffs have provided an exhibit which calculates the quantum of their claim. They point out that the amount is under- calculated, because it was too complicated to determine the amount of default interest and, therefore, it was not included in their calculations. Position of the Defendants

[ 22 ] The Defendants submit that the Plaintiffs had extended time for completion of the purchase and sale of the Property, by virtue of their conduct. The Plaintiffs cannot rely on the express terms of the Agreement after having waved strict compliance. New condition and closing dates could have been reinstated either by express statement or, in the absence of an express statement, the condition would have to be satisfied and the transaction completed within a reasonable period of time.

Here, the emails amongst the parties and/or their counsel clearly evidence an extension, and a new date was never expressly re-established. [ 23 ] The Defendants maintain that the condition was satisfied by Mr. Shourie’s email of April 2, long before any new deadline was imposed by the Plaintiffs. Mr. Shourie should therefore have registered the discharge after April 2 to remove any doubt that the condition had been satisfied. His failure to do so constitutes negligence. [ 24 ] The Defendants urged me not to confuse satisfaction of the condition with registration of the discharge.

The condition was satisfied by Mr. Shourie being in a position to fulfill the condition. The Defendants argue that I am left unable to determine whether the Naib mortgage would have been discharged within a reasonable period of time, because the Plaintiffs then refused to proceed. [ 25 ] The Defendants further submit that, since the condition concerning discharge of the Naib mortgage was satisfied in fact by April 2, written confirmation of the same was not required, given the Plaintiffs’ prior acceptance of oral confirmation from Mr.

Shourie in relation to the other condition. [ 26 ] The Defendants submit that the Plaintiffs knew that the condition had been satisfied and had a duty of good faith to complete the purchase and sale. The failure of the transaction was the Plaintiffs’ fault. They tried to resile from the Agreement, having changed their mind because, in the interim, they found out the Property was not worth what they had thought. [ 27 ] The Defendants request specific performance on the basis of the Plaintiffs’ repudiation. This requires the Plaintiffs to take the Property in satisfaction of the Loan.

Because the Plaintiffs now have the Property, the Defendants maintain the Loan has been extinguished. [ 28 ] The Defendants point out that the Third Parties acted for everyone, at least up until the closing date specified in the Agreement. They submit that Mr. Shourie had knowledge that the second condition had been satisfied and his knowledge was the parties’ knowledge. Position of the Third Parties [ 29 ] The Third Parties submit that the Defendants did not have the funds to fulfill their obligation to obtain a discharge of the Naib mortgage and, therefore, are pointing their fingers at the other parties.

The Third Parties maintain that the attempted “side deals” complicated the matter. [ 30 ] The Third Parties also point out that specific performance was not pled by the Defendants. [ 31 ] If an extension is found, the Third Parties suggest that new condition and closing dates might be established by: the date of the demand letters; the date Mr. Grewal stopped communicating with the other parties; or April 2, when everything had allegedly been satisfied. [ 32 ] Mr. Shourie acknowledges that he was in a difficult position, acting for everyone and trying to satisfy them all.

If, however, the Defendants’ argument is correct that his knowledge was knowledge of all his clients, then the Defendants should not be allowed to pick and choose portions of his evidence that favour only them. Mr. Shourie testified that he was not in a position to use the Naib discharge and that the others knew this. In addition, he testified that completion of the transaction with Mr. Naib required the cooperation of Mr.

Dhillon and that was not obtained until months after April 2. [ 33 ] The Third Parties also argue that expert evidence is required in order to establish the standard of care required of a solicitor in these circumstances and no such evidence was led at trial. Evidence of the Parties Mr. Grewal [ 34 ] Mr. Grewal testified for the Plaintiffs. He and Mr. Dhaliwal are business partners who met the Defendants when their lawyer, Mr. Shourie, advised them that Fantastic wanted to borrow $400,000.

When the Plaintiffs agreed to make the Loan, they knew that Fantastic had a 50% interest in the Property, and that there was a first mortgage registered on title. They learned of the Naib mortgage after they had advanced the Loan proceeds. [ 35 ] Fantastic did not make all payments when due and, by the time the Loan was fully due on December 15, 2009, he met with Mr. Thind in an effort to settle the matter. At that meeting, he agreed to waive the outstanding arrears interest if the outstanding principal balance was paid in full. The Plaintiffs agreed to wait a little longer when Mr.

Thind advised that he was going to get the money from India. [ 36 ] When the principal amount was not paid by sometime in January, Mr. Thind proposed to satisfy the Loan obligation by transferring Fantastic’s interest in the Property to the Plaintiffs. The Plaintiffs agreed to this proposal on condition that the Naib mortgage be discharged and that the first mortgage balance not exceed $165,000. They also agreed that February 15, 2010 was to be the closing date for this transaction. [ 37 ] They advised Mr. Shourie of this, expecting that Mr. Thind would then instruct Mr. Shourie to get the paperwork prepared as

Mr. Thind had told them he would. When they did not receive the necessary documents, Mr. Grewal called Mr. Shourie, who advised that he had not heard from Mr. Thind. He then called Mr. Thind, who advised that he “totally forgot”. Mr. Grewal said he then called Mr. Shourie and told him he wanted everything in writing. [ 38 ] On February 14, the Plaintiffs met with Mr. Thind and Mr. Shourie to draw up the Agreement. They used a standard Commercial Real Estate Purchase Contract form, completing the necessary blanks and inserting the two conditions.

Although the Agreement indicated that there was a “Balance Owing” of $160,000, the Defendants did not expect to receive any cash from the transaction. About one to two weeks later, Mr. Grewal made changes to the numbers on the first page and the dates and number on p 3. [ 39 ] Mr. Grewal acknowledged that it was the intention of the parties that, if Fantastic’s interest in the Property was transferred to the Plaintiffs’ nominee (131), the Loan would be extinguished.

However, he denied that it was the agreement of the parties from the outset that the Plaintiffs would take the land if the Defendants did not satisfy their respective obligations in respect of the Loan. [ 40 ] Mr. Grewal confirmed that the condition regarding the balance of the first mortgage was satisfied in February, when Mr. Shourie advised him of the amount owing on that mortgage. He maintained that the condition regarding discharge of the Naib mortgage was always to be satisfied by having a discharge in hand by March 10. He admitted that he had never told Mr. Thind or Mr.

Shourie this, and also testified that what was required was confirmation that the mortgage was being discharged. When asked whether it was sufficient for Mr. Shourie to tell him this, Mr. Grewal answered both “yes” and “no”. Mr. Grewal also testified that he had been prepared to proceed on March 15, when he was still asking Mr. Shourie where the documents were and on the 25th, when he asked Mr. Shourie to tell him the “exact date”. When asked to explain what was meant by “exact date”, Mr. Grewal said he was not sure, but thought it might be a reference to when the Naib mortgage discharge was expected. [ 41 ] Mr.

Grewal testified that he trusted Mr. Shourie, but was not prepared to accept what Mr. Shourie told him regarding the status of the Naib mortgage discharge. He confirmed that Mr. Shourie was his lawyer up until at least March 25, 2010, that he retained his new lawyer sometime in March 2010, but he also said he was not sure if Mr. Shourie was still his lawyer when he sent Mr. Shourie the March 25th email. [ 42 ] On March 31, he had met Mr. Thind at his office, after Mr. Thind had received the demand letters. Mr. Thind wanted an extension and promised to get it done “by the next day”. Mr. Grewal said he had cut Mr.

Thind off and told Mr. Thind to do “whatever you need to get it done”. He also told Mr. Thind he was going to talk to his lawyer, because he had no patience left. No specific extension was discussed. In another part of his testimony, Mr. Grewal also said that he had never received any requests for an extension. [ 43 ] Mr. Shourie sent Mr. Grewal an email after April 2, advising that the Naib mortgage discharge was being finalized. Mr. Shourie subsequently advised him that it had been done. However, Mr. Grewal did not take Mr. Shourie’s April 2 email to mean that it was a “done deal”. [ 44 ] Mr.

Grewal maintained that, when he kept asking about Mr. Thind doing things to get the deal done, he did not mean he was giving an extension. Rather, he testified that he continued to need some proof (in the way of documents) from Mr. Shourie, confirming that the discharge was registered. He never received any “concrete evidence” that the discharge was signed, although Mr. Shourie told him it was. He did not learn that the Naib mortgage had been discharged until long after April 2, sometime after the Statement of Claim was filed. Mr.

Grewal testified that the Plaintiffs were no longer willing to wait by the time he instructed new counsel to prepare the Statement of Claim. Although he knew the transaction was not going to close on March 15, he did not terminate the transaction. Instead, he continued to wait, hoping that Mr. Thind would satisfy the outstanding condition. He did not write or tell Mr. Shourie or Mr. Thind that the transaction was off anytime before April 2, never stipulated a new closing date, and never waived or extended the condition date. Evidence of Mr. Thind [ 45 ] Mr.

Thind acknowledged that he had previously borrowed money from Mr. Naib, but could not remember if he had repaid it in full before he took out the third mortgage loan which was registered against the Property. Prior to trial, he had given evidence that Mr. Naib had lent him $110,000 in relation to the Property, but that it included $10,000 from a previous loan. At trial, Mr. Thind said he did not necessarily agree that the $10,000 was owing to Mr. Naib, but he had agreed to include it, because he needed the money. Mr. Thind was then shown a loan agreement entered into with Mr.

Naib effective December 20, 2008 and signed by the parties on January 22, 2009. It specified that Mr. Thind owed $60,000 to Mr. Naib in relation to a previous transaction. When asked to explain this, Mr. Thind confirmed that Mr. Shourie kept his records and, when he signed the document, Mr. Shourie had told him what it said (that is, that he still owed $60,000 to Mr. Naib). When asked about a series of cheques payable to Mr. Naib regarding this $110,000 loan, Mr. Thind said that Mr. Shourie had made out all of the cheques and he just signed them, but he understood them to be payments on the $110,000 loan.

He testified that he was not sure if any of the cheques had been cashed. When it was put to him that none had been cashed, he said that he did not recall. He was reminded that at Questioning he had been asked to produce the cancelled cheques, but none had been found. He also did not recall if he had signed a separate guarantee on the Naib loan. When a copy of an executed guarantee was shown to him, he indicated that he then remembered having provided it. [ 46 ] Mr. Grewal testified that, before entering into the Loan arrangement, he showed Mr.

Grewal the Property and discussed with him how the Plaintiffs could have it, although he was not clear about the circumstances under which this would happen. [ 47 ] After this, the Defendants entered into the Loan and provided the security related to it. At this time, they had discussions with the Plaintiffs about the Plaintiffs taking over the Property after the Loan maturity date. He maintained that the Plaintiffs had agreed to this. He acknowledged that he had done real estate transactions before and understood that important terms should be in writing and any changes should be initialled.

He acknowledged that there was nothing in writing about this agreement, nor did the documents related to the Loan mention this. [ 48 ] Mr. Thind acknowledged that he intended to repay the Loan. He acknowledged that he missed two payments on the Loan and

was late in paying others, because his financial situation was very tight. He also acknowledged that he ran into financial problems and could not pay the three mortgages (that is, the Naib mortgage, Fantastic’s share of the 120 mortgage on the Property, and the payments on the Loan). [ 49 ] Mr. Thind testified that he spoke to Mr. Shourie all the time and that they asked for an extension “all the time” “right from the start”. He maintained that Mr. Shourie definitely told him that he could get an extension and that in fact the condition date under the Agreement had been extended.

He maintained that there was another document (not produced at trial) that changed the dates (both the condition and closing dates) which he remembered initialing. This recollection only arose well into his cross-examination, when he said it was “coming into his mind”. [ 50 ] Mr. Thind denied that he had told the Plaintiffs he could repay the Loan from proceeds of the sale of property he owned in India. [ 51 ] Mr. Thind testified that the transfer of the Property to the Plaintiffs (through a nominee) was going to be the solution to his problems with them.

He acknowledged that part of concluding this transaction required discharge of the Naib mortgage and that he had not worked out arrangements with Mr. Naib to obtain the discharge. [ 52 ] Mr. Thind said that Mr. Shourie was responsible for getting the sale conditions satisfied. He thought Mr. Shourie was guaranteeing that he could obtain a discharge of the Naib mortgage. He denied that Mr. Shourie told him to deal with Mr. Naib and work something out to obtain the discharge. He denied that Mr. Shourie advised him that he could not obtain the discharge until he paid Mr. Naib in full or worked something else out.

He understood the conditions were to be satisfied by March 10, but also realized that he could not get a discharge of the Naib mortgage by that date. He learned of the changes to the Agreement a couple of days after the first mortgage balance was confirmed. He was unable to explain the reason for his delay in initialing the changes, other than “maybe he was busy”. [ 53 ] Initially, Mr. Thind testified that, after signing the Agreement, he did not meet with Mr. Grewal again. Up to that point he did not think he had spoken to Mr. Grewal, only to Mr. Shourie. He denied that he showed up at Mr.

Grewal’s office unannounced after he received the demand letters. He denied telling Mr. Grewal that he had forgotten about the Naib mortgage discharge. The day after testifying that he had not gone to Mr. Grewal’s office, he testified that, “having thought about it overnight”, he recalled that, after Mr. Shourie told him that Mr. Grewal was unhappy, he went to Mr. Grewal’s office on March 31, because Mr. Shourie had suggested he should go and apologize. He maintained that he asked the Plaintiffs for an extension at this meeting. When asked why Mr. Shourie would suggest he apologize to Mr.

Grewal if there had been an extension and if Mr. Shourie was looking after everything, Mr. Thind replied that he now remembered saying to Mr. Shourie “Why would I go see him and apologize?”. But he nonetheless did so, because Mr. Shourie had told him to. [ 54 ] Mr. Thind testified that, around this same time, he had a dinner meeting with Mr. Naib and Mr. Shourie and that an agreement was reached in relation to the discharge of the Naib mortgage. Mr. Thind did not recall precisely what these discussions were, but he recalled offering Mr. Naib a replacement lot (the Hasco lot) and Mr.

Naib agreeing to accept the replacement lot and the $5,000 to provide the discharge. He also recalled that Mr. Shourie was to prepare the necessary paperwork. He maintained that, to obtain the discharge of the Naib mortgage, all he had to do was pay the $5,000 and Mr. Shourie was going to do everything else. Sometime after the meeting (Mr. Thind believed this was a few days before April 1), Mr. Thind found out that Mr. Naib wanted $5,000 more, so he took a cheque for $5,000 to Mr. Shourie’s office on March 31 or April 1. He replaced the cheque with cash after Mr. Shourie told him that Mr. Naib wanted cash.

The receipt for this payment is dated April 8. The assignment in relation to the Hasco lot is dated April 13. While he was in Mr. Shourie’s office, Mr. Shourie had called Mr. Grewal to tell him that Mr. Thind had now done everything necessary to obtain the discharge. [ 55 ] However, in a different part of his testimony, Mr. Thind testified that, when they attended this meeting, he had explained to Mr. Naib that he had a way of paying him back. Initially, he said he did not think they had discussed the $5,000 deposit that Mr.

Dhillon had made in relation to the Hasco lot, which he now proposed to be transferred to Mr. Naib. He subsequently said that they had done so and that is why Mr. Naib asked for the $5,000 deposit. He denied, however, that Mr. Naib was going to take the balance from Mr. Dhillon, maintaining that Mr. Naib wanted to buy the lot. At another point in his testimony, however, Mr. Thind said the purpose of the release was to have the $73,000 credit paid to Mr. Naib. He said that Mr. Shourie did all the calculations and that is why Mr. Naib agreed to take the Hasco lot. He said they discussed what to do about Mr.

Dhillon and the agreement he had already entered into with him in relation to the Hasco lot. He denied that Mr. Shourie had explained to him that Mr. Dhillon would have to release his interest in the Hasco lot before Mr. Naib could exercise his rights under the assignments which would be required in relation to the Hasco lot. Mr. Thind said that he was dealing with Mr. Dhillon and expressed his view that, because Mr. Dhillon was his friend, he could make Mr. Dhillon understand. [ 56 ] Mr. Thind denied that he realized there would not be enough money to pay off Mr. Naib’s loan or that Mr.

Naib had insisted he be repaid in full. He also denied that he had called Mr. Shourie’s office and told him not to cash the cheque, because it would not be honoured. [ 57 ] Regarding the agreement with Mr. Dhillon, Mr. Thind acknowledged signing the document which purported to sell the same lot as the property that was the subject of the Hasco transaction. He confirmed that he intended to conclude the purchase from Hasco and to “flip it” to Mr. Dhillon on the same day at a $22,000 profit. He denied filling in the document and had no doubt that it had been done at Mr. Shourie’s office.

He acknowledged that he was present when Mr. Dhillon signed it and that it was witnessed by a man whose last name is also Dhillon. He acknowledged that he found Mr. Dhillon as a buyer and made the agreement with him, but that they had signed the agreement at Mr. Shourie’s office. Mr. Shourie had not witnessed it, because he was busy when they went there. Mr. Thind acknowledged that it was he who was dealing with Mr. Dhillon. He denied that Mr. Shourie had ever called him to advise that he was having trouble contacting Mr. Dhillon. He was not sure if he was present when Mr.

Dhillon signed the Release on November 15, 2010. [ 58 ] When asked if Mr. Naib ever acquired title to the replacement lot, he answered “yes”. In response to when this occurred, he indicated that it was “between him [Mr. Naib] and Mr. Shourie”.

[ 59 ] It was pointed out that the mutual release required in order to permit the transfer of the replacement lot to Mr. Naib was dated November 15, 2010. When it was put to Mr. Thind that Mr. Naib was not in a position to provide the discharge until the release was signed on November 1, Mr. Thind replied that this was “between the lawyers” and he did not know if the discharge could be used before that date. [ 60 ] During cross-examination, several inconsistencies were pointed out to Mr.

Thind regarding his testimony at trial and the evidence he had given at Questioning and Examinations for Discovery in 2013 and 2014. There are many such examples, some of which include: • In 2013, Mr. Thind said that Mr. Shourie had agreed to take care of obtaining the discharge of the Naib mortgage, but he did not recall if they had discussed what would have to be done to do so. • In 2013, Mr. Thind said he could not remember if he had ever met with Mr. Naib, or when he paid the $5,000 cash. • In 2013, he said that Mr.

Shourie had discussed extensions with the Plaintiffs, but he could not recall doing so himself. • In 2013, he said that he did not think the initials on p 3 of the Agreement were his, just the ones on the first page, while at trial he believed all the initials were his. • Also in 2013, unlike at trial, he maintained that he did not know if he had received the demand letters that had been sent to his home address. He explained that he could not remember at Discovery, but did remember on the first day of trial. • At trial, he recalled discussing the demand letters at Mr. Grewal’s office.

In 2013, he could not remember ever doing so. • In 2014, he said that he had never had any contact with Mr. Naib; that he had called him, trying to deal with him, but could never get through to Mr. Naib because Mr. Naib was always busy. • At trial, he acknowledged that Mr. Shourie was not responsible for paying out the Naib mortgage. At Questioning, he took the position that it was Mr. Shourie’s responsibility to work everything out to obtain the discharge. Mr. Thind maintained that these inconsistencies were not the product of his changing his mind or changing his story.

He accounted for them by explaining that he is a normal person and does not have perfect memory. Therefore, his recollections differed with the passage of time. Furthermore, he maintained that he had a hard time remembering things back in 2010, because he was under a lot of stress. [ 61 ] Mr. Thind denied that Mr. Shourie ran his business, but also testified that he did whatever Mr. Shourie told him, that Mr. Shourie made all the decisions, and that Mr. Shourie took care of everything. Mr. Thind was unclear about when Mr.

Shourie told him he could not act for him anymore, saying that it was two years ago and he could not remember what Mr. Shourie had said to him. Evidence of Mr. Shourie [ 62 ] Mr. Shourie confirmed that he acted for the Plaintiffs, the Defendants and Mr. Naib in connection with the transactions referred to in these Reasons. He did not have files for these transactions, nor any notes of his discussions regarding them. [ 63 ] When the Loan was in arrears, he spoke to Mr. Thind because the Plaintiffs had been calling him asking about the overdue payments.

The purpose of the purchase and sale transaction was to extinguish the Defendants’ obligation regarding the Loan. If the transaction was concluded, the Loan would be extinguished. If not, the Defendants would remain liable for repayment of the Loan. [ 64 ] Although he prepared the Agreement, he did not suggest its terms, which were determined by the parties. At the time he prepared it, there was no discussion concerning how the discharge of the Naib mortgage would be obtained. He maintained that he always told Mr. Thind that Mr. Thind would have to go and make arrangements with Mr.

Naib to secure the discharge, even though Mr. Thind kept telling him that he should deal with it. Mr. Shourie denies that he was ever responsible for getting the discharge or that he guaranteed to Mr. Thind that he would obtain it. He acted only as an intermediary between his two clients. He maintained that he repeatedly told Mr. Thind that Mr. Thind needed to come up with an acceptable settlement proposal with Mr. Naib. He was upset with Mr. Thind, calling him repeatedly and expecting him to secure the discharge, but Mr. Thind was not doing anything to deal with Mr.

Naib. [ 65 ] The three requirements which had to be met to obtain a discharge of the Naib mortgage were: 1. payment of $5,000 cash; 2. either conclusion of the flip transaction with Mr. Dhillon (involving the payment of approximately $87,000) or Mr. Naib taking the benefit of the credits (approximately $74,000) under the Hasco contracts; and 3. payment of any balance owing to Mr. Naib. He warned Mr. Thind about the consequences of failing to satisfy Mr. Naib’s conditions, although there is nothing in writing documenting this advice. Even though he may not have expressed Mr.

Naib’s three prerequisites in exactly those terms, he maintains that Mr. Grewal knew things had to be done in order to get the discharge. [ 66 ] Mr. Shourie testified that he had minimal involvement in the Hasco flip transaction, which he maintained was negotiated between Mr. Thind and Mr. Dhillon. He did not prepare the documents related to this transaction, which were provided to him by Mr. Thind. At the time Mr. Thind brought the documents to him, Mr. Shourie understood that the proceeds realized on the Hasco flip would not be enough to pay out Mr. Naib. This occurred some time shortly after March 8.

No agreement was reached at the meeting. Mr.

Thind wanted a usable discharge based solely on the Hasco flip transaction, with any balance owing to be paid by Mr. Thind over time. However, he wanted the discharge to be usable immediately. The meeting ended with Mr. Thind’s agreement that he would pay $5,000 to Mr. Naib, at which time he would explain how the Hasco flip proceeds would be paid and provide his proposal regarding payment of the balance owing. [ 67 ] Mr. Shourie received a $5,000 cheque from Mr. Thind shortly after this meeting but Mr. Thind then called to tell him not to deposit it because he was going to bring cash instead.

He brought the $5,000 in cash and Mr. Shourie turned it over to Mr. Naib. Mr. Shourie testified that Mr. Naib did not agree to Mr. Thind’s proposal regarding provision of the discharge in exchange for the two Hasco flip documents, with a balance to be paid later. Mr. Naib wanted to be paid in full immediately, although he never told them a specific amount. [ 68 ] Mr. Grewal did not stop calling Mr. Shourie until after April 2. He continued to call between March 15 and April 2 even though he had retained new counsel. Mr. Shourie maintained that Mr.

Grewal never told him during this period that he was no longer prepared to proceed. [ 69 ] Mr. Shourie denied that the April 2 email from him to Mr. Grewal implied that Mr. Thind had fulfilled all three requirements. He maintained that he was only referring to the $5,000 payment, maintaining that the email has to be viewed in its context, in light of their earlier conversation. He said Mr. Grewal understood this because they were all talking to each other and everyone knew what was going on. Mr. Grewal knew Mr. Thind had not yet satisfied Mr. Naib’s requirements. Furthermore, on April 14, when he told Mr.

Grewal’s new counsel that he had the discharge, he was expecting counsel to come back to him, so they could talk further, maintaining that this is his usual practice as a real estate lawyer. The discharge was not then useable as its use was subject to trust conditions which he could not fulfill. He did not think Mr. Grewal’s new counsel would expect him to register the discharge. He viewed this e-mail as an invitation to counsel to talk to him and to ask him if he could really use the Naib discharge. [ 70 ] Mr.

Shourie testified that there was no extension granted in relation to the satisfaction of the conditions contained in the Agreement. No one ever advised him of new condition or closing dates. On the other hand, no one ever told him the transaction was over. He confirmed that it was his normal practice to document all extensions. When asked why he sent the Agreement to Mr. Thind for initialing, after receiving it from Mr. Grewal, when it was five days past the March 10 condition deadline, he indicated that he did so because Mr.

Grewal asked him to, even though he did not believe the deadline had been extended. [ 71 ] However, Mr. Shourie testified that he interpreted Mr. Grewal’s comments in his March 15 e-mail as an extension, since Mr. Grewal seemed to be accepting the initialled Agreement and was inquiring as to whether the Naib mortgage discharge “would be all done today”. Similarly, in his April 1 email, Mr. Grewal indicated that Mr. Thind had been to his office the day before and had advised him that he was taking care of everything on April 1. He concluded his email with: “Let’s see this time. Thanks for the update”. Mr.

Shourie interpreted this email as an indication that Mr. Grewal still wanted to conclude the transaction. Similarly, when he received an email on April 19 from Mr. Grewals’ new counsel, he interpreted counsel’s comment that “I will be filing and serving a Statement of Claim very shortly” as an indication that the transaction might still proceed. He had prepared the assignment documents “to get the deal going” and had had them signed in his office on April 13. [ 72 ] Mr. Shourie testified that Mr.

Naib decided to participate in the lot purchase transactions, by way of the assignment, by May 6, 2010. [ 73 ] Attempts by his office personnel to contact Mr. Dhillon in June and August were not successful. He told Mr. Thind he needed to contact Mr. Dhillon because his office hadn’t been able to. He warned Mr. Thind that if the Hasco flip fell through it would be a problem because Mr. Thind would not be able to pay Mr. Naib. The Hasco flip transaction never occurred because they could never reach Mr. Dhillon. Mr.

Dhillon eventually arrived in his office, where one of the other lawyers witnessed his execution of the release on November 15, 2010. [ 74 ] When the Hasco flip transaction did not proceed with Mr. Dhillon, the release was obtained so that the Defendants could provide the $73,700 Hasco credit to Mr. Naib. Mr. Naib used this credit to buy another lot from Hasco. [ 75 ] The Naib mortgage was discharged on January 13, 2011, because Mr. Naib had lost money on the transaction and just wanted to get out of it. Legal Authorities [ 76 ] The parties submitted, and I considered, the following cases: 1.

Gateway Alliance Church v Boodhoo , 1999 ABQB 919 2. Knight v Exploration Innovations Inc. , 2002 ABQB 21 , [2002] AWLD 314 3. 1072194 Alberta Inc. v Ninety North Construction & Development Ltd. , 2005 ABQB 751 4. Dove Homes

(1999) Ltd. V Fountain Creek Estates Ltd. , 2012 ABQB 1 5. B & J Petroleum Ltd. v Rhim , 2015 ABQB 1 6. Dr. Gokul Bhanwath Inc. v Business Development Bank of Canada , 2008 BCSC 681 7. Rock v Foster , [1998] OJ No 1784, 12 ACWS (3d) 391 (Ont HCJ) 8. Bowlen v Digger Excavating

(1983) Ltd. , 2001 ABCA 214

9. McCauley v McVey, (SCC), [1980] 1 SCR 165 10. Castledowns Law Office Management Ltd. v FastTrack Technologies Inc., 2009 ABCA 148 11. Rahall v Tait, 2006 ABQB 587 12. Kirilenko and Kirilenko v Lavoie and Sinclair, (SK KB), 10 Sask R 324, 1981 SKQB 2211 13. Hummelle v Advani, 2014 ABQB 619 14. Tran v Kerr, 2014 ABCA 350 Analysis Reliability and Credibility of the Parties [77] The parties testified to events that began over seven years ago and were largely over more than five years ago.Understandably, they have less than perfect recollection of the events.

Their recollections are no doubt affected by the passage of timeand the fact that their once cooperative relationship became increasingly adversarial in nature. [78] It is both disappointing and troubling that Mr. Shourie was not able to provide any documentation confirming his discussionswith his clients or their instructions to him. Maintaining detailed notes, or confirming in writing to his clients the material parts of hisdiscussions with them and their instructions, would have gone a long way to resolving some of the uncertainties in the evidence.

This isparticularly so in a case like this, where both he and other witnesses take the position that words contained in various emailcorrespondence among them should be given meanings other than the plain meaning of the words used. For example, Mr. Shourie’sexplanation of the meaning of his emails of April 2 and 14 are difficult to reconcile with his choice of words in preparing them. Hesuggests that the parties knew what he meant, because of ongoing discussions they were having at the time.

However, he has no notes orother written confirmation of those discussions which might have confirmed that, in light of those other discussions and the otherunderstandings of the parties at the time, the emails meant something other than what an objective bystander might perceive as theirmeaning. [79] However, although none of the witnesses’ recollections are perfect, Mr. Thind’s is particularly troublesome. I found itdifficult to summarize his evidence, because it was often confusing and contradictory.

Although I did not find it necessary to outline allof them, some of those inconsistencies and contradictions are outlined above. While I accept Mr. Thind’s argument that he does not havea perfect memory (nor would anyone expect him to), the changes in his testimony often occurred during the trial. This occurred after hehad an opportunity to reflect on his evidence overnight. Or, shortly after taking a position, he would alter his position to somethingdifferent or even opposite to what he initially said. I also do not accept that Mr.

Thind, who on the one hand said he did not rememberanything back in 2010, and, on the other, indicated that he had various recollections “coming into his memory” during the course of histestimony, suddenly had accurate recollection of five year old events. Many of those spontaneous recollections were at odds with histestimony given three to four years earlier or with his other evidence given in the trial.

I can only conclude that many of thesespontaneous recollections were self-serving and arose once he had an opportunity to think about what testimony would best support theposition he was now advancing. [80] The recollections of Mr. Grewal and Mr. Shourie are more consistent with each other than they are with Mr. Thind’s. It is notonly for that reason, however, that I prefer their evidence to that of Mr. Thind where there is an inconsistency or a conflict. While notentirely free from contradiction, inconsistency, and sometimes logic, the evidence of Mr. Grewal and Mr.

Shourie are much moreconsistent with the verifiable events that occurred. More importantly, they make the most sense when viewed in context. [81] The phrase “contextual approach” is often used in Canadian jurisprudence. It seems to me that this is one of those cases inwhich a contextual approach must be employed to make sense of the actions of the parties and the resolution of their dispute. TheDefendants emphasize the terms of the Agreement and treat this matter as if it were a failed real estate transaction.

While the Agreementis in relation to a real estate transaction, it would be an error to view this as a failed real estate transaction. At its core, this was a loantransaction. The evidence clearly establishes that soon after the Loan proceeds were advanced, the debtor (Fantastic) began to default,either by paying late or missing payments in their entirety. The lenders (Plaintiffs) made concessions aimed at providing an incentive toFantastic to repay the principal balance.

When the Loan was still not paid, the Plaintiffs agreed to wait longer on the strength of Mr.Thind’s representation (which I accept occurred) that he was going to obtain funds from India in order to retire the Loan. That did nothappen, and it is clear from the evidence (including Mr. Thind’s admission) that he was at that time in financial difficulty. The evidenceshowed that the financial difficulty related not only to the Loan, but also to loans that Fantastic had with Mr. Naib and others. Theevidence suggests that Mr. Thind had refinanced Fantastic’s debt with Mr.

Naib on at least one occasion and, after doing so, had not beenable to satisfy those obligations. [82] I reject Mr. Thind’s evidence that the Plaintiffs had always agreed to take title to the Property if the Loan was not repaid. It isclear from the evidence that Mr. Thind was scrambling to find sources of funds, and to try and keep his creditors happy. The failedHasco flip transaction with Mr. Dhillon is one such example. In any event, I accept that it was Mr.

Thind’s suggestion that the Plaintiffstake title to the Property as a way of satisfying the Loan obligation, since he could not fulfill his original intention and agreement torepay it. It is clear, however, that there were preconditions to this, because the Plaintiffs wanted to ensure that they would receive the fullLoan value through this transaction and that was clearly the objective in including the two conditions (i.e. to ensure the transferred equitywould cover the Loan balance).

Whatever the reasons for structuring the transaction as the parties did (whether tax driven, cost driven, toavoid a foreclosure proceeding, or some other underlying motivation that was not canvassed at trial), it is clear that the Agreement didnot arise as a result of the Plaintiffs’ desire to purchase the Property from Fantastic. Rather, it was a mechanism aimed at satisfying theDefendants’ debt obligation to the Plaintiffs.

[ 83 ] At the latest, the Loan was fully due and payable on December 15, 2009. Rather than taking action against the Defendants, the Plaintiffs entered into discussions to avoid that alternative. It is relevant that Mr. Thind had already misled the Plaintiffs about his ability to repay the debt obligation when he raised the proposed transfer of the Property to them in February. That the Agreement contained very short (and in fact unrealistic) timelines for satisfaction of the conditions and closing of the transaction is therefore not surprising. However, it was Mr.

Thind who made this proposal and the Plaintiffs may have assumed that he would not make such a proposal unless he was confident that he could obtain a discharge of the Naib mortgage. Mr. Shourie did not act for Mr. Naib and there is no reason to believe that he would have known that Mr. Thind had not even discussed the matter with Mr. Naib at the time Mr. Thind made his proposal. Similarly, there is no reason to believe that at that time any of the other parties were aware of Mr. Thind’s proposed Hasco flip transaction with Mr.

Dhillon. [ 84 ] I do agree, however, with the Defendants’ submission that the Plaintiffs’ actions, and the correspondence amongst the parties, after March 15, 2010, evidenced an extension of the date for satisfaction of the outstanding condition and the closing of the transaction. The evidence clearly shows that all parties continued to hope (unrealistically as it turned out) that Mr. Thind would make the necessary arrangements to obtain a discharge from Mr. Naib, allowing the transaction to proceed soon after the anticipated transfer date. [ 85 ] I reject Mr. Thind’s suggestion that it was always Mr.

Shourie’s obligation to obtain the discharge from Mr. Naib. Mr. Thind’s evidence on this point was all over the place. He eventually admitted that it was not his expectation that Mr. Shourie would personally pay out the Naib mortgage in order to secure the discharge. No reasonable person (and certainly not an experienced business person like Mr. Thind) would expect their lawyer to satisfy their debt obligations. I conclude that it was always Mr. Thind’s obligation to secure the discharge from Mr. Naib. As usual, Mr.

Shourie’s role was to facilitate those discussions and to prepare any necessary documents for the parties. [ 86 ] Although the conduct of the parties acted as a waiver of strict compliance with the time deadlines in the Agreement, it is clear that the condition and closing dates were never expressly extended to specified new dates. However, the Plaintiffs made their dissatisfaction abundantly clear when they retained the services of a new lawyer. The demand letters dated March 26 made it abundantly clear that they were not prepared to wait any longer.

Those letters provided ten days for the outstanding balance to be paid. The fact that the Plaintiffs then delayed further can be attributed to the exchange of email correspondence between April 2 and April 14, which I will discuss later in these Reasons. The Plaintiffs’ new lawyer’s letter dated April 19, and the filing and serving of the Statement of Claim immediately thereafter, clearly ended the discussions. [ 87 ] I reject the argument of the Defendants that the filing and service of the Statement of Claim rendered moot the issue of whether or not the Naib mortgage discharge could be used.

The evidence is clear that the discharge was not usable on April 2, or April 13, or April 14, or April 19 or April 20. In fact, it was not usable for a considerable number of months after it was signed, because Mr. Thind was not in a position to satisfy Mr. Naib’s requirements for its use.

It is clear that Fantastic was not in a position to remove the remaining condition and to close the purchase and sale transaction under the Agreement within a reasonable period of time following the original condition and closing date, the issuance of the demand letters on March 26, or the filing of the Statement of Claim on April 20, 2010. [ 88 ] I reject the suggestion that Mr. Shourie ought to have registered the discharge on or shortly after April 2, in light of his email correspondence of that date (or his subsequent correspondence of April 14). I note that in his April 2 email, Mr.

Shourie stated “I am going to finalize with Dr. Naib”. In his April 7 email, he said “ In order to get this settlement completed... I am hoping to have this done by the end of the week. I think we have a settlement in place and is near to closing. I will keep you posted ”. In his April 14 letter, Mr. Shourie asked the Plaintiffs’ new lawyer to “ confirm your position ”. [emphasis added] The Defendants focus on portions of the correspondence from Mr. Shourie which suggest he was in a position to register the discharge.

However, they fail to note those portions of the same correspondence which equivocate or suggest that he was not yet in a position to do so. [ 89 ] It is clear from the evidence that the Plaintiffs did not take as hard a line with the Defendants as they could have, and that they were prepared to extend short periods of time to allow the Defendants (i.e., Mr. Thind) to make arrangements which Mr. Thind advised them he would make.

Initially, that was to obtain funds to repay the Loan in full and, subsequently, it was to make arrangements to transfer an interest in the Property, the value of which would be sufficient to cover the amount of the Loan. They eventually got tired of waiting and they made that abundantly clear. [ 90 ] As I have indicated earlier, Mr. Shourie’s conduct in this matter falls short of what one might expect of a prudent lawyer who has agreed to act for multiple parties in a transaction, including failing to maintain files or to document discussions and instructions.

He was clearly alive to the issue of conflicting interests. Having advised at least some of the parties at the outset that, if a conflict developed, he would require them to all seek independent legal advice, he continued to act when it is clear that the parties were in a conflict position. Possibly his judgment was clouded by the fact that these were all long-term clients and he was hopeful that he could assist them in working out a satisfactory resolution.

However, continuing to act in these circumstances compounded an already difficult situation. [ 91 ] It is clear that in many situations expert evidence is required regarding the standard of care applicable in a given situation. I do not consider this to be such a case. The nature of Mr. Shourie’s failings in this matter do not require an expert opinion. Keeping notes of discussions with clients and confirming their instructions are practices commonly employed by prudent solicitors. This is particularly important when they are acting for parties who have opposing interests. Similarly, Mr.

Shourie, in having at least some of the parties sign the Acknowledgement of Conflict of Interest, was alive to the importance of sending the parties elsewhere once they were in an actual conflict. Unfortunately, his desire to facilitate a solution for all of them appears to have interfered with his ability to realize that they had reached the point where independent advice was required. [ 92 ] Having said that, however, although Mr. Thind wants to blame everything on Mr. Shourie, I cannot conclude that, if there was any loss, it was due to negligence on the part of Mr. Shourie.

If there was a loss, it arose as a result of Mr. Thind’s actions in borrowing money from the Plaintiffs at a time when it appears his ability to repay it was questionable. Shortly thereafter, it became abundantly clear that Fantastic would not be able to repay the Loan. Mr. Thind misled the Plaintiffs in order to get them to give him more time. When he was still not able to repay, he made a proposal that he knew or ought to have known he could not fulfill. The evidence makes it clear that he did not take any reasonable steps (either before he made the proposal or as quickly as he should have thereafter) to ensure

that Fantastic would be able to complete the transaction proposed as an alternative method of repayment. Although he was quick to blame Mr. Shourie for the failure of the transaction, I cannot do so, as the evidence is clear that it was Mr. Thind’s actions/inactions that resulted in the transaction not proceeding. [ 93 ] As for the matter of loss, I conclude that no loss occurred. Fantastic borrowed $400,000 with interest and has never paid it back. Although it made promises to satisfy this obligation (initially by repayment and subsequently by a transfer of property), it was not able to do so.

I have rejected the suggestion that this was due to the actions of the Plaintiffs or the Third Parties. I conclude that the Defendants remain liable, either as principal debtor or as guarantors, of the Loan and accrued interest. [ 94 ] The Defendants argued that the Plaintiffs had breached their duty of good faith in connection with the purchase and sale transaction. It is clear that both parties had a duty of good faith in connection with the commercial arrangements between them.

However, the Defendants provided no evidence in support of their suggestion that the Plaintiffs decided to resile from the Agreement because they found out the Property was not worth what they had thought. What the evidence does show is that Mr. Thind repeatedly misled the Defendants and Mr. Shourie by advancing proposals that he could not fulfill. Presumably, he made these promises in order to buy more time, hoping that he would find a solution to his admittedly difficult financial circumstances. If anyone breached their duty of good faith, it was Mr.

Thind. [ 95 ] The best that can be said about the suggestion that the Plaintiffs’ decision to purchase the Property from the first mortgagee, following the conclusion of its foreclosure proceedings, extinguished the Loan is that it is original and inventive. However, I do not see any basis upon which this argument can succeed in law.

This did not in any way satisfy, in whole or in part, the obligation of the Defendants in respect of the Loan. [ 96 ] Having rejected the above referenced arguments advanced by the Defendants, and there being no other arguments advanced as to why Fantastic ought not to be liable for repayment of the Loan or the guarantors for their guarantee obligations in respect of the Loan, I grant judgment against the Defendants. Similarly, I received no argument from the Defendants in relation to the amount of the Judgment calculated by the Plaintiffs and therefore, Judgment will be issued to them in that amount.

Conclusion [ 97 ] For the above Reasons, Judgment is awarded to the Plaintiffs in the amount of $883,217.59, with per diem interest thereon of $339.27 from November 2, 2015. [ 98 ] If the parties are unable to agree on costs, they are to contact my assistant within 30 days to

schedule a time at which the issue may be addressed. Heard on the 2 nd to 5 th days of November, 2015. Dated at the City of Edmonton, Alberta this 17 th day of June, 2016. D.L. Shelley J.C.Q.B.A. Appearances: Brian S. Sussman, Q.C. Biamonte Cairo & Shortreed LLP for the Plaintiffs Murray L. Engelking

Engelking Wood for the Defendants L. Vaughn Cox Chatwin LLP for the Third Party