Samarina v Worrall, 2017 ABQB 473

Court of Queen’s Bench of Alberta Citation: Samarina v Worrall, 2017 ABQB 473 Date: 20170727 Docket: 1601 05607 Registry: Calgary Between: Viktoriya Samarina Plaintiff - and - Keith Worrall, Andrew Keirstead, Christopher Tahn and Thornborough Smeltz LLP Defendants _______________________________________________________ Reasons for Judgment of J.T.

Prowse , Q.C., Master in Chambers _______________________________________________________ [ 1 ] This is a claim by a purchaser of a house in Calgary against a number of defendants associated with the purchase, including the vendor’s lawyer, the defendant Andrew Keirstead (“Keirstead”). [ 2 ] The plaintiff Viktoriya Samarina (the “purchaser”) brings this application for partial

summary judgment against Keirstead. She seeks a declaration that Keirstead is liable for any damages which flowed from Keirstead’s failure to discharge a City of Calgary caveat within a reasonable time, contrary to his undertaking to do so. She proposes that the damages be assessed later. [ 3 ] For the reasons which follow I allow the application for partial

summary judgment and declare that the only issue for trial with respect to the claim against Keirstead is an assessment of the damages which can be shown to have resulted from Keirstead’s failure to comply with his undertaking.

Background to the giving of the undertaking [ 4 ] In May of 2013, the purchaser and her common law partner moved into the subject house as tenants. The house was owned by the defendant, Keith Worrall (the “vendor”). [ 5 ] In the spring of 2014 the vendor advised the purchaser that he was contemplating selling the house. She indicated that she would be interested in purchasing it. They eventually agreed on a purchase price of $1,075,000. [ 6 ] The parties signed a written residential real estate purchase agreement.

The agreement stated that, unless otherwise agreed upon, title would be transferred to the purchaser “free and clear of all encumbrances, registrations and obligations”. The agreement listed some exceptions. For example, it allowed registrations to remain on title for “non-financial obligations” such as “are normally found registered against property of this nature and which do not affect the salability of the Property”. [ 7 ] The purchaser retained the defendant Christopher Tahn to be her lawyer.

The vendor retained Keirstead to represent his interests as vendor. [ 8 ] The sale closed and during that process Keirstead provided Tahn with a letter dated May 24, 2014, which included the following undertakings by Keirstead: Upon the unconditional release of the cash to close plus interest if any, I hereby undertake: 2. to discharge Caveat No. 131 134 160 in favour of the City of Calgary [the “caveat”], 5. to forward your office an updated Certificate of Title confirming the discharge of the foregoing within a reasonable period of time; [ 9 ] On August 25, 2014 the purchaser received an inspection report from the City of Calgary, pursuant to its caveat, notifying her that the property did not comply with a development permit that had previously been issued by the City. [ 10 ] It took Keirstead until May 30, 2017 to confirm that the caveat had been discharged, and the purchaser claims that damages to her resulted from that delay.

Keirstead’s defences as to the quantum of damages [ 11 ] Keirstead raises a number of arguments that his failure to discharge the City caveat within a reasonable time did not result in any damages to the plaintiff. These arguments, listed below, can be dealt with during the assessment of damages phase. They are not defences to liability.

I am referring to the following arguments: • The assertion that the purchaser did not intend to resell the property quickly and that it was only the burden of two expensive mortgages that ultimately persuaded the purchaser to consider re-selling the property. • The fact that there was no specific time frame in Keirstead’s undertaking for when the caveat was to be discharged.

While it is true that there was no specific date, he did undertake to provide a clear title within a reasonable period of time and the decision as to what was a reasonable time can be dealt with in the assessment. • The assertion that the purchaser incurred no expense in ultimately fulfilling the requirements protected by the City caveat. • The assertion that the existence of the City caveat did not affect the saleability of the house. • The assertion that the house could not have been successfully resold within a short period of time even absent the City caveat, and the question of what that resale price would have been.

Keirstead’s defences as to liability [ 12 ] Keirstead raises a number of liability defences, none of which in my opinion have any validity, as follows: • The assertion that it was not until April 2015 that the purchaser learned that Keirstead had given the undertaking to discharge the caveat. I do not understand how this fact, even if true, is a defence to the purchaser’s claim. • the question of whether the caveat is a “non-permitted encumbrance” under the purchase agreement. Keirstead argues in essence that he should not have given the undertaking. In my view, it is too late to raise this argument.

Having given the undertaking he is liable for damages for his failure to fulfill it within a reasonable time. • The assertion that the purchaser knew of the deficiencies claimed by the City pursuant to its caveat and that she purchased the house in any event. Again, I fail to understand how these factors would diminish Keirstead’s liability. • The lack of fault on Keirstead’s

part in that nobody would have reasonably expected that it would take the developer so long to rectify the deficiencies raised by the City. With respect, fault has nothing to do with it. Keirstead made an undertaking and was responsible to fulfill it. • An argument of contributory negligence on the part of the purchaser. Keirstead provides no case law indicating that this doctrine applies to a breach of undertaking situation which, as indicated, is not a ‘fault based’ claim. In my view the doctrine of contributory negligence does not apply. • Keirstead raises failure to mitigate.

I am not sure what he means by this. Is he suggesting that the purchaser should have pitched in and fulfilled his undertaking to remove the City caveat? I do not think the purchaser had any responsibility to do so.

Conclusion [ 13 ] It is clear that Keirstead, despite his efforts, breached his undertaking to the purchaser’s solicitor, and he is liable to the plaintiff for any damages which were caused by that breach. Accordingly I grant partial

summary judgment in the form of a ruling that the only real issue is an assessment as to what damages, if any, were caused by the breach. To be clear, no defences to liability, including those listed in paragraph 12 of these reasons, are valid. [ 14 ] The parties are to proceed to production of records and questioning on the issue of damages and, upon completion, the matter can be set down for an assessment. [ 15 ] As a result of this partial

summary judgment the topics relevant to production and questioning have been reduced and there will be a saving in time and expense to the litigants. Costs [ 16 ] If the parties cannot agree on costs of the application they make seek a ruling from me in that regard. Heard on the 25th day of July, 2017. Dated at the City of Calgary, Alberta this 27th day of July, 2017. J.T. Prowse, Q.C. M.C.C.Q.B.A. Appearances: Shaun Flannigan Merchant Law Group LLP for the Plaintiff Richard Van Dorp Peacock Linder Halt & Mack LLP for the Defendant Andrew Keirstead