Malton v Attia, 2021 ABQB 503

Court of Queen’s Bench of Alberta Citation: Malton v Attia, 2021 ABQB 503 Date: 20210630 Docket: 0803 08190 Registry: Edmonton Between: Janette Malton and John Malton Plaintiffs - and - Ashiraf S. Attia Also Known As Sam Attia, Etc Defendants _______________________________________________________ Judgment of the Honourable Madam Justice M.E. Burns _______________________________________________________ [ 1 ] The Plaintiffs, Janette and John Malton, had a plan to move from B.C. to Alberta to pursue their retirement dreams.

As part of their plan they purchased a house that they would live in while acquiring investment properties. The house was not properly inspected and had deficiencies. The Maltons retained the Defendant, Ashiraf S. Attia, to sue their home inspector. While they were partially successful in their lawsuit as liability was found, damages were significantly lower than the Maltons had anticipated. The Maltons allege that Mr. Attia was negligent in his representation and his conduct of that action, which I will refer to as the Housemaster Trial. [ 2 ] For the record, this is a re-trial of this action.

I have not read the prior decision or the Court of Appeal decision which sent it back for a re-hearing. This decision is based only on the evidence I heard. I did read and do reference a ruling made by the prior trial judge relating to the need for an expert witness on the issue of setting of the standard of care which is reported at Malton v Attia , 2013 ABQB 642 ( Malton ). 1. Issues

[3] The Maltons advance their action in contract and negligence. Mr. Attia concedes that he owed a duty of care to the Maltons.The duty of care owed by Mr. Attia to the Maltons arises concurrently in tort as well as contract: Central & Eastern Trust Co v Rafuse, (SCC), [1986] 2 SCR 147 at para 58. In addition, a lawyer’s duty under his or her retainer is to meet the standard of careof a reasonably competent member of the profession, similarly situated: Central & Eastern Trust; Spence v Bell, 1982 ABCA 282(Spence). [4] The question is what the standard of care was and whether Mr. Attia breached that standard.

Imbedded is the question ofwhether an expert was needed to establish the standard. Finally, if there was a breach of the standard, did the breach cause any damages,and if so, what were the damages? 2. Analysis 2.1 Credibility of witnesses [5] While there was a lot of common ground on the facts before me, certain facts were contested. In resolving the contestedfacts, I will reference the documentary evidence and if I cannot resolve on that basis I will prefer the evidence of the Maltons over theevidence of Mr. Attia.

This is largely based on the evidence surrounding the conduct of the Housemaster Trial. [6] It is incredible for Mr. Attia to testify before me that he arrived at the Housemaster Trial with an exhibit book with thephotos in the book and in document sleeves. Upon reading the Housemaster Trial transcript, I simply do not believe him. Mr. Attia saysthe adjournment on the first day of trial was because there were no duplicates of the photos. However, there are references in theHousemaster Trial transcript to “envelops” that say “East wall” and references to “piles of photos”. Justice Lee suggests that Mr.

Attiawork on the photos “so that the photos come out in some kind of album at the end of the day”. I do not believe Mr. Attia on this pointand therefore have concerns with respect to the rest of his evidence. I have concerns that his memory at trial is more detailed than any ofthe notes he made at the time in question, 15 - 20 years ago. Where there is a conflict in the evidence, I prefer the evidence of theMaltons. 2.2 Failure to call expert witness [7] Mr.

Attia argues that the Maltons have not met their evidentiary onus to prove the standard of care applicable to them in thespecific circumstances and timeframe of this case because they failed to call expert evidence. [8] The Alberta Court of Appeal has cautioned trial courts about the dangers of setting a standard of care when there is no expertevidence: Mraz v Herman, 2016 ABCA 313 at para 43.

However, that court has also noted that judicial notice can be taken of facts thatare “notorious and undebatable”: Tran v Kerr, 2014 ABCA 350 at paras 21 – 25. [9] In Adeshina v Litwiniuk & Co, 2010 ABQB 80 at para 175 (Adeshina), Martin J, as she then was, stated: Expert evidence is not the only source of relevant information, but there are serious risks to a plaintiff who fails to tender expert evidenceon the standard of care expected.

The plaintiff always and ultimately carries the burden of proof and non-technical matters are limited.While it is true that a court remains free to accept all, part, or none of an expert’s testimony, evidence on a standard of care is informedby those currently engaged in the enterprise at issue. Their opinions are tested by cross examination. In my view courts should berestrained and cautious about setting the standard of care absent such evidence. [10] But some latitude exists.

As Renke J identified in 623455 Alberta Ltd v The Partnership of Jackie Handerek & Forester andShawn D Hagen, 2018 ABQB 86 at para 77, claims regarding negligent conduct which do not involve especially “esoteric or specializedlegal practice”, may be judicially noticed as falling “within the knowledge of any of the members of this court”. [11] As noted above, this exact question was argued before the first trial justice in this action and that argument was rejected. I amadvised that that ruling was not appealed or interfered with on appeal.

Consequently, the Maltons assumed, not unreasonably, that theywould not have to call an expert at the re-trial and I agree. The analysis done by the first trial justice was extensive and thorough. Shenotes that as “a general rule, a judge will rarely require expert standard of care evidence to evaluate the litigation practices of a lawyeroperating before that same court”: Malton at para 213. She concluded: The HouseMaster Action was conducted in the Alberta Court of Queen’s Bench. I am a judge of that court. Presumptively I have theexpertise to evaluate the conduct of litigation in this court.

I have not received any evidence from the Defendants to displace thatpresumption: Malton at para 217.

I therefore conclude I do not require expert lawyer standard of care evidence to evaluate any of Attia’s alleged and admittedmisconduct...: Malton at para 221. [12] Both in the interest of fairness, and given the nature of the failures advanced (breach of duty related to a relativelystraightforward civil claim) I find that the skills and abilities necessary to execute the retainer here, in a way that meets the standard of areasonably competent and diligent lawyer, are known to and within the general knowledge of this court.

No expert evidence is necessary. 2.3 Standard of Care [13] The standard of care expected of a lawyer is reasonable competency and diligence. A lawyer does not guarantee success, alawyer must apply skills and abilities to the retainer in a way that meets the standard of a reasonably competent and diligent lawyer. Anerror of judgment is not sufficient: Spence at para 27; Ashraf v Zinner, 2019 ABQB 389 at paras 59-60 (Ashraf), aff’d 2020 ABCA 207.

[ 14 ] The standard is always assessed given the circumstances of each particular case: Baniuk v Filliter , 2010 NBQB 272 at para 149 ( Baniuk ), aff’d 2011 NBCA 110 ; see also John Adair, Stephan M Grant & Linda R Rothstein, Lawyers’ Professional Liability , 4th ed (Markham, Ont: LexisNexis Canada, 2020) at 41. [ 15 ] Applicable codes of conduct may be relevant in determining the required standard since they outline professional norms that are expected of a reasonably competent lawyer; however, a code of conduct “does not and cannot dictate the standard of care...”: Ashraf at para 71 .

The Supreme Court made the following comments in Galambos v Perez , 2009 SCC 48 at para 29 : ... there is an important distinction between the rules of professional conduct and the law of negligence. Breach of one does not necessarily involve breach of the other.

Conduct may be negligent but not breach rules of professional conduct, and breaching the rules of professional conduct is not necessarily negligence. ...They are not, [...], binding on the courts and do not necessarily describe the applicable duty or standard of care in negligence [case citations omitted]. [ 16 ] The standard of care does not require perfection, and disastrous results do not necessarily mean that the standard was breached. In assessing whether a lawyer’s conduct falls below the standard of care, one must be careful not to apply hindsight.

The conduct must be assessed from the position the lawyer was in at the time of the acts or omissions: Adeshina at para 205 . [ 17 ] As noted in Ashraf , “the expectation that a client has as to representation of a reasonably competent lawyer does not raise to the level of expecting or requiring perfection by the lawyer retained, nor does it rise to the level that the lawyer guarantee success before undertaking any legal work”: para 60. [ 18 ] Included in the standard of care is a duty to diligently protect the interests of the client and to communicate in a timely fashion about perceived difficulties: Ashraf at para 63 .

A lawyer’s duty of reasonable diligence includes keeping clients informed of developments in a matter. Specifically, a lawyer should notify a client forthwith of any settlement offer and the lawyer’s opinion on it: Baniuk at para 61 . 2.4 Allegations of failure to meet the standard of care [ 19 ] The Maltons allege many instances of Mr. Attia failing to meet the standard of care required by him. 2.4.1 Delay in pursuing action [ 20 ] The Maltons allege that Mr.

Attia failed to work effectively on their behalf to secure the earliest possible trial date i.e. he failed to diligently pursue the action on their behalf. [ 21 ] Undoubtedly a lawyer retained to pursue an action has a duty to pursue the action diligently. Here the evidence at trial establishes that on April 1, 2001, Mr. Attia was instructed to commence a lawsuit. The Statement of Claim was served April 30, 2001, and the matter went to trial on September 5, 2006. [ 22 ] While there are undoubtedly a few delays that, ideally, would not have happened (for example, it appears for some reason Mrs.

Malton was not given the list of her undertakings from the August 2001 discoveries until January 2002 (after the second set of discoveries)) overall the time to get this matter to the end of questioning and ready to enter the certificate of readiness was not excessive – essentially from April 2001 to June 2003. Entering the certificate of readiness does seem to have taken quite awhile.

Delays from that point until the trial of the matter are not ideal either but relate to time necessary to obtain a pre-trial conference, a judicial dispute resolution, entering the matter on the long trial list, and waiting for a long trial slot. [ 23 ] Overall, I do not find that the timeliness of Mr. Attia’s prosecution of the action (while not perfect) falls below the standard of a reasonably competent and diligent lawyer. 2.4.2 Lack of communication [ 24 ] The Maltons assert that Mr.

Attia was difficult to get a response from or to get information from when required. [ 25 ] As noted above, a lawyer’s standard of care includes a duty to diligently protect the interests of the client and to keep clients informed of developments and perceived difficulties in a timely fashion. Communicating with the client at all relevant stages of a matter is key to a lawyer’s retainer and meeting the lawyer’s standard of care. It is interesting to note that communicating is found within the definition of “competent lawyer” in the Alberta Law Society’s Code of Conduct (Rule 3.1-1 (d)). [ 26 ] Mrs.

Malton testified that they were “paying good money for this guy and he is not responding”. The Maltons received very few documents from Mr. Attia and they had no idea what was going on. Any communication from Mr. Attia was about what he had done but did not show what he was going to do or ask for any instructions. He was hard to get a hold of and would not call back for days. There was very little communication. When pressing Mr. Attia as to why things were not proceeding as she expected, Mrs. Malton was led to believe that all delays were being caused by Counsel for Housemasters – to the point that Mrs.

Malton sought to report that Counsel to the Law Society. [ 27 ] In mid-2002 Mrs. Malton was getting frustrated with Mr. Attia’s unresponsiveness. She sent him a fax asking him to have his office update her phone number and wondering why he had not responded in two weeks to her message. She then followed up in mid- September 2002 wondering when she would hear from him. Near the end of October 2002, she conveyed that they could not continue financially to make repairs and that they had incurred more costs in what they saw as their obligation to mitigate. Mr.

Attia was unresponsive and his file does not counter this perception. [ 28 ] Mr. Attia’s file does not assist him in establishing that he was communicating diligently with his client. His notes indicating

responses to Mrs. Malton’s many inquiries are few. There was a clear breakdown in communication that only accelerated as time went by and, as discussed below, lead to further issues around making offers, the findings at trial, settling the terms of judgment, and the bill of costs. [ 29 ] At trial Mr. Attia testified that he sent all documents to the Maltons that he thought they should be aware of depending on the stage of the litigation. He said he was “trying to keep costs down” (postage and fax charges).

He did not relay all correspondence from opposing counsel because “the correspondence may not have been relevant to me getting instructions” and “a lot of stuff goes on between lawyers”. He testified that he sent the Maltons “everything I thought [they] needed to be aware of”. He did not discuss the legal arguments he submitted in writing because in his view the concepts were complex and he did not see any reason to - “that was my job”. It was also his view that the Maltons did not need to be advised of issues arising after trial relating to the filings of briefs and damages.

He explained that “you really didn’t understand what we were talking about”. [ 30 ] As noted in his written brief “Mr. Attia considered the option of repair was a safer approach for the Maltons” – this epitomizes his approach to the file. Rather than giving his legal assessment Mr. Attia decided what the right approach was and took away choice from his clients. It is no wonder that they were disappointed at the end. They were not allowed to assess the risks and make informed choices – the options presented to them were not options at all - - they were fait accompli . [ 31 ] Quite frankly, given Mr.

Attia’s paternalistic view of his role in communicating with his clients it is not difficult to see why communications broke down. While it is difficult to find when communication falls below the standard required of a lawyer with a client, the specific instances outlined below reflect the consequences of a breakdown of communication inviting problems into the process that can lead to failing to meet the standard expected. 2.4.3 Failure to convey offers [ 32 ] As a manifestation of the failure to communicate, the Maltons assert that Mr.

Attia failed to convey offers to settle their claim. [ 33 ] The commentary to the Code of Conduct notes that “a lawyer has an ethical obligation to put all settlement offers to the client and to obtain specific instructions with regard to making or accepting settlement offers on a client’s behalf” (see Rule 3.2-4). Courts have stated that lawyers undoubtedly owe a duty to inform their clients of settlement offers and provide advice regarding them ( Baniuk at para 61 ; see also Adair, Lawyers’ Professional Liability at 41).

Although no authority was provided to me, I find that similar discussions should follow instructions to convey an offer. The client should be told of counsel’s view of the offer, its likelihood of being accepted and the potential impact on negotiations. Simply ignoring the offer or not conveying it when instructed to do so because one did not understand the instructions or did not like the instructions or simply forgot, falls below the standard expected of a competent lawyer. [ 34 ] There is evidence that some initial offers were conveyed to Housemasters; however, in February 2004 the Maltons wrote to Mr.

Attia and indicated that they would consider Housemasters buying them out of their house at fair market value. This must have been noteworthy as at discoveries held December 17, 2001, Mrs. Malton testified that while they had thought of selling the house, she, as a realtor, would not sell the house to anybody unless she was absolutely sure of the condition of it. Nonetheless, they were prepared in February 2004 to offer to sell it to Housemasters. The Maltons were not advised that this offer was made. There was no documentation in Mr. Attia’s file indicating this offer was made. [ 35 ] At trial, Mr.

Attia testified that he “informally” ran the offer by Ms. Cairns “and she laughed”. Ms. Cairns testified that she generally insists that offers be made in writing but if she obtained an oral offer there would be a note in her file. For example, she notes that she spoke with Mr. Attia at the courthouse and advised that she had no instructions to make an offer and there were no further offers to give him in March of 2003. There is no note to the effect that the February 2004 offer was made.

I find that the offer was not made. [ 36 ] With respect to another offer, on October 6, 2004, Housemasters sent an offer for $20,000. The Maltons immediately rejected the offer and asked for a court date (which is evidenced by a fax sent by Mrs. Malton). In writing, Mr. Attia proposed a counter offer of $70,000 plus costs. The Maltons responded in writing saying they would consider $95,000 plus costs and interest. Mr. Attia testified that he did not think that he had made that offer. Mr. Attia testified that “we decided against it”.

He said that it was too close in time to a formal offer that they already had out and the parties were too far apart. He was hoping to resolve the matter on the steps of the courthouse. Everyone agrees that the offer was not conveyed, the question is whether Mr. Attia was instructed to make the offer. Mrs. Malton testified that she was instructing Mr. Attia to make an offer, although admittedly not as clearly as earlier times. [ 37 ] I have two versions of what happened to the $95,000 offer. The Maltons say they expected Mr. Attia to make the offer; he says “we decided against it”.

I have the Maltons’ fax raising the offer. I have nothing else in Mr. Attia’s file to indicate that it was discussed or to support his testimony that “we decided against it”. I find that the Maltons wanted the offer to be made. While I have no doubt that Mr. Attia did not think that making the offer would be productive, he had an obligation to discuss this with his client and outline his reasons, the likelihood of the offer being accepted, and the impact on the process. I find that he did not do so. By failing to convey the offers as instructed by his clients I find that Mr.

Attia’s conduct fell below the standard of care expected of a competent and diligent lawyer. 2.4.4 Negligent Advice [ 38 ] The Maltons assert that they were given incorrect legal advice in that they were advised (1) that the money they were losing by not being able to invest was not recoverable (lost opportunity); and (2) they had to mitigate damages “no matter what the cost” (reasonable mitigation). [ 39 ] When giving advice, the standard is not one of perfection. It may be that counsel is wrong in the advice given while not falling below the standard of care required. Sometimes the law is not settled.

Sometimes it takes litigation to determine the law. Sometimes counsel may assert a position and find that an adjudicator does not agree. This does not mean that the counsel’s advice fell below the standard of a reasonably competent and diligent lawyer.

2.4.4.1 Lost opportunity to invest [40] This claim relates to the Maltons’ retirement plan to buy a home and then to invest in two investment properties to build a nestegg for retirement. The Maltons argue that they spent their investment money on fixing the house as opposed to investing it whichderailed their plans and the Maltons thought that they should be able to recover that lost opportunity. Although his exact advice is notclear, Mr. Attia advised that the lost opportunity was not recoverable from Housemasters and the claim was not pursued. If Mr.

Attiawas correct in his advice, no claim can be made; if he was wrong in his advice, it must be determined if his advice was negligent. [41] With respect to a claim for lost opportunity, I find that Mr. Attia was correct in his advice and a claim for lost opportunity wasnot sustainable.

A plaintiff claiming lost opportunity damages must establish that but for the defendant’s wrongful conduct, the plaintiffhad a chance to obtain a benefit (or avoid a loss). [42] In these circumstances, even with the home inspector’s wrongful conduct, the Maltons could have invested their money for itsoriginal purpose and obtained the benefit. They chose to divert the funds to the house. In addition, to sustain a claim, they would have toestablish that the opportunity lost was sufficiently real to rise above mere speculation.

There was little evidence to establish that theirretirement plan was acted on to make it more than mere speculation. [43] Finally, the Maltons’ lost opportunity to invest “...[was] too unrelated to the wrongful conduct to hold the defendant fairlyliable”: Deloitte & Touche v Livent Inc (Receiver of), 2017 SCC 63 at para 77. The lost opportunity to invest is too remote. The homeinspector cannot have foreseen that his wrongdoing would prevent the Maltons from buying investment properties as it is unlikely thatthe home inspector knew about the Maltons’ desire to buy investment properties with their savings.

While it was foreseeable that hiswrongdoing would result in a financial burden on the Maltons, the reasonable expectations between the home inspector and the Maltonswere related only to the purchase of the property that the home inspector was inspecting, not other investment properties. [44] As such I find that Mr. Attia’s advice on this matter was correct and his conduct did not fall below the standard expected. 2.4.4.2 Reasonable mitigation [45] The Maltons assert that Mr. Attia repeatedly advised them that they must, by law, mitigate the damages being caused to “thehouse”, no matter the cost. Mrs.

Malton testified that Mr. Attia insisted they must repair the house, that it was a “matter of law” and thatthey would be breaking the law if they did not. They were told that it was not a defence that they were impecunious. They spent all theircash and took out a line of credit. [46] Mr. Malton also testified that Mr. Attia told them to mitigate because it was “a matter of law” and running out of money wasnot a consideration. In cross examination, Mr. Malton confirms that Mr. Attia told them to “mitigate and repair”. [47] Mr. Attia testified that he discussed mitigating damages with Mrs.

Malton but he did not testify in detail as to what he told her.Mr. Attia’s notes of conversations with Mrs. Malton (which were limited) do not disclose any conversations relating to mitigation). [48] Whatever Mr. Attia specifically told them, the Maltons were left with the clear impression that as a matter of law, they had tomitigate.

There is little doubt that the Maltons thought they had to repair the house to make it habitable. [49] The law on the duty to mitigate requires that plaintiffs need only take reasonable steps to mitigate the issues in their homewhich the home inspector ought to have noticed and reported: Southcott Estates Inc v Toronto Catholic District School Board, 2012SCC 51 at para 25 (Southcott).

With respect to mitigation, in Costello v Calgary (City), 1997 ABCA 281 at paras 70 and 72, the AlbertaCourt of Appeal noted that: ...The onus of proof lies on the defendant to establish on a balance of probabilities that the plaintiff failed to take reasonable steps toavoid losses...However, the courts will not allow the defendant, in discharge of that onus, to be overly critical of the plaintiff.

Havingcommitted a wrong, the defendant should not quickly be heard to point out his victim’s shortcomings in avoiding resulting losses...Thebenefit of doubt, therefore, generally will be given to the plaintiff... (citations omitted) ... ...

The plaintiff need not incur great expense or inconvenience in an attempt to stem the flow of losses resulting from the defendant’sbreach... [50] Determining the reasonableness of mitigation is a balancing process: “[t]he Court must make sure that the victim iscompensated for his loss; but it must at the same time make sure that the wrongdoer in not abused”: Southcott at para 25, citing RedpathIndustries Ltd v “Cisco” (The) (1993), (FCA), [1994] 2 FC 279 (CA) at 302; Janiak v Ippolito, (SCC), [1985] 1 SCR 146 at para 33. Mitigation is based on common sense and fairness: Southcott at para 25. [51] While Mr.

Attia did not testify as to what exactly he advised the Maltons with respect to mitigation (beyond saying they mustmitigate), Mr. Attia did testify that he considered the safest strategy for the Maltons was to repair the house in any event because of hisconcerns about the possibility of no recovery against Housemasters. His view was that the repair of the acreage was a safer protection ofthe Maltons investment in the acreage. He also testified that he was not in favour of selling the house as the Maltons would take a loss onit and then, if they also lost the action, they would be worse off.

Repairing the house meant they would have the house at the end of theday. [52] Thus, Mr. Attia appears to have been motivated to tell the Maltons to mitigate and repair. The issue is that it is not Mr. Attia’sjob to decide what is in the Maltons’ best interest – it is his job to advise them as to the law – in this circumstance the duty to mitigate.This means advising of the duty to mitigate and the extent of the duty. The Maltons thought they had to mitigate at all cost and thatimpecuniosity was not a defence. Mrs. Malton raised with Mr. Attia, several times, the difficulties they were having mitigating (in

accordance with their understanding of their duty). Mr. Attia did not dissuade them from this obvious misconception of the law, apparently because he thought it was in their interest to fix the house. This was not his decision to make. [ 53 ] I find that removing that decision from them is a breach of the standard of care. A competent and diligent lawyer may have the same concerns Mr. Attia had but a competent and diligent lawyer is required to explain all the reasons why he thought they should fix the house while also advising on the limits to mitigation. Having taken away the decision from the Maltons, Mr.

Attia’s conduct fell below the standard of care expected. 2.4.5 Failing to pursue claim for mould and its effect [ 54 ] The Maltons assert that Mr. Attia was aware of a significant mould problem that was adversely affecting their health. The Maltons assert that they were getting sick from the house and that damages related to mould should be advanced. [ 55 ] It appears that Mr. Attia conflated two distinct claims related to mould – one related to liability and one related to damages. Mr.

Attia was correctly of the view that the Maltons could not pursue Housemasters for not identifying mould because Housemasters did not undertake to test for its presence during its inspection (i.e. relating to liability).

However, this did not preclude the Maltons from pursuing damages, which may include mould, from an inspector negligently failing to identify surface defects such as missing drip caps and an improper skylight that caused damages including mould. [ 56 ] A home inspector will be found liable for failing to recognize and note red flags which a reasonable inspection and home inspector would have detected through a reasonably careful visual inspection.

In Alloway v CMG Engineering Services Ltd , 2008 ABPC 88 at para 56 ( Alloway ), Judge Kerby concluded: ...[T]he Defendants missed the red flags...concerning potential problems with improper installation and potential water leakage as well as the problems related to the drip edge missing and the rotting of the felt and plywood along the eave end of the garage... [ 57 ] Judge Kerby noted that the red flags and the issues with the drip edge and rotting ought to have been observed by a reasonable inspection and home inspector if visual examination of the roof had been performed reasonably carefully: paras 56–57. “These indicators would have suggested to a reasonable inspector that further investigation was necessary”: para 56.

Thus, the case law supports that in negligent inspection cases, claims for damages arising from mould may be advanced ( Alloway , Semeniuk v Key Home Inspections Ltd , 2013 ABPC 254 ; Yi v Varadi, 2013 ABQB 201 ( Yi )) however, no claim was made in this case. In fact, Mr. Attia interrupted each of his clients when they were on the stand and raised the issue of mould. Mr.

Attia advised the Court that they were not pursing a claim relating to mould [Exhibit 7, Binder A p 63 and Binder B Tab 5 p 84]. [ 58 ] The Maltons testified that there was evidence obtained in May 2001 that indicated there was significant water damages, rot, and mould. While there was a time delay between the French Report and the inspection – that gap might have been addressed – and they find it difficult to understand why the claim for illness and mould was not advanced. Evidence indicating mould in the house included the Dave Wallace Report, Mr.

Martyniuk’s evidence, and the French Report. [ 59 ] The Maltons testified that they asked Mr. Attia repeatedly to advance a claim but he responded that it would “slow down the case and be very expensive”. Mr. Attia’s view was that the Maltons accepted this advice because they wanted it over as soon as possible as their financial losses were not being covered. It appears that Mr.

Attia’s advice was based on his view that the Inspection Order Agreement specifically provided that the inspection was not meant to detect environmental concerns, presumably including mould. [ 60 ] But the Maltons’ claim for damages for mould does not flow from the failure to detect the mould by Housemasters but from the failure to detect things such as missing drip caps where Housemasters’ supplemental information acknowledges that “hidden damage may exist if prior leakage occurred”. This makes the claim for damages from mould foreseeable in the claim for the poor inspection. While Mr.

Attia now states that there was no medical evidence with respect to the health damages suffered by the Maltons – this is because he discouraged them from collecting such evidence based on his understanding that “it would slow down the case and be very expensive”. [ 61 ] I note that in Mr. Malton’s letter to Mr. Attia of January 14, 2003, the Maltons raised their health issues from the mould and Mr. Attia conveyed those concerns to Housemasters in his letter to Ms. Cairns of January 17, 2003. [ 62 ] With respect to this issue I find that Mr.

Attia’s conduct did fall below the standard of a competent and diligent lawyer. Mr. Attia did not appear to understand the distinction between the liability for mould issue and the damages flowing from the liability for missing the red flags such as the missing drip caps. Understanding this distinction would have allowed him to explain to the Maltons what was required of them to prove their damages (both to their property and their health), instead of dismissing their damages out of hand as being time consuming and expensive. 2.4.6 Failure to provide appropriate representation [ 63 ] The Maltons assert that Mr.

Attia was negligent in failing to provide appropriate representation on their behalf. The allegations cover virtually every step of the litigation process and I will review each below. As acknowledged by the defendant, a lawyer preparing for trial must bring reasonable care, skill, and knowledge to the performance of the professional service that he or she has undertaken to perform: Adeshina at para 109 . 2.4.6.1 Poor record keeping and disorganized file [ 64 ] The Maltons assert that Mr. Attia was disorganized and had poor record keeping. It is apparent from comparing Ms. Cairns’ records to those of Mr.

Attia that many items did not seem to make it to Mr. Attia’s file. Through the course of the file Mr. Attia appears to have lost:

(

a) a supplemental affidavit of documents and corresponding records; (

b) a property disclosure statement; (

c) a certificate of readiness; (

d) a damages list; (

e) one hundred pages of handwritten notes which were misfiled in his records and found late in the day. [ 65 ] As with poor communication, it is difficult to pinpoint when a disorganized and poorly kept file will be negligent. However, the consequences of such poorly kept file will be manifest in such things as the failure to communicate (as discussed above) and in the conduct of litigation as discussed below. 2.4.6.2 Lack of preparation for discovery/questioning [ 66 ] The Maltons submit that the average lawyer should have been asking for, receiving and reviewing all producible documents before discovery.

It is alleged that Mr. Attia was not well prepared for discovery. There is some evidence that Mr. Attia was not fully aware of all the material on the file and there was some concern about the handling of responses to undertakings (related to the disclosure statement). However, the discovery process is intended to assist in counsel’s knowledge of the case as well as the disclosure of materials not yet made available. I do not see any evidence that Mr. Attia’s conduct fell below the standard expected of him. Discoveries proceeded and information and material were disclosed.

While there is no evidence of correspondence to Ms. Cairns requesting documents before discovery, Mr. Attia did ask for the documents during questioning and undertakings were ultimately fulfilled to Ms. Cairns’ satisfaction. There is no assertion that Mr. Attia failed to obtain the information he needed from Housemasters to pursue the action.

I find there was no breach of the standard of care. 2.4.6.3 Failure to prepare for JDR [ 67 ] The Maltons were not happy to go to a judicial dispute resolution (JDR), but upon being advised that it was to proceed they were of the view that the JDR should advance the whole case. It appears that Mr. Attia saw this as a dry run for the liability issue. [ 68 ] In Mr. Attia’s file there is a copy of the Courts “Guidelines for Judicial Dispute Resolution”.

The material includes a notice to counsel about late adjournments and notes that counsel should “treat Judicial Dispute Resolution with the priority that it deserves”. Notes from the pre-JDR meeting on June 2, 2004, speak of the requirements for briefs, materials, and potential agreements. It is noted that the “success of the process is directly linked to the preparation of Counsel, including time spent with clients on setting priorities and importance of closure”. [ 69 ] A brief of law, a book of authorities and a book of exhibits were sent to the justice before the JDR. There is also no evidence that Mr.

Attia prepared for JDR, other than drafting the material for the court. Mrs. Malton testified that she met with Mr. Attia very shortly before heading over to court and that she felt she was put in the position of putting her story in front of the judge without briefing. At the JDR the Maltons assert no use was made of Mr. Martyniuk’s Report or the numerous photos that had been taken of the house and repairs. [ 70 ] I accept that Mr. Attia saw the JDR as an opportunity to run his legal argument past a judge and some obvious effort was put into the brief, authorities and exhibits relating to liability.

While the Maltons now state that “it would have been nice to have input into what he was doing” Mr. Attia did prepare and use the JDR for a meaningful purpose. I find that Mr. Attia’s conduct related to the preparation and conduct of the JDR did not fall below the standard of a competent and diligent lawyer. 2.4.6.4 Disorganized and unprepared presentation at trial [ 71 ] The Maltons assert that Mr. Attia charged them for trial preparation but arrived at the trial unprepared. The trial itself had many issues attributable to Mr. Attia’s lack of preparedness.

To assess what happened at trial I have the benefit of a full court transcript. While I acknowledge that sometimes the transcript does not tell the whole story of what is happening in the courtroom, it does give a solid idea. [ 72 ] With respect to trial preparation, Mrs. Malton recalled meeting Mr. Attia on one day the weekend before the trial. Mr. Malton also indicated one day preparation just before trial but on cross it was pointed out that in questioning he indicated it was the week before trial, not the weekend before. In addition, Mr.

Attia has a note on file saying he “interviewed Bert” August 28, 2006, approximately a week before the trial. This accords with Mrs. Malton’s memory that Mr. Spencer was being prepped just after them. Nonetheless, whether the prep was the weekend before or the day before the trial it appears that there was minimal preparation of Mr. and Mrs. Malton and this was evident when they were on the stand. [ 73 ] With respect to other trial preparation, the documents suggest that Ms. Cairns tried to contact Mr. Attia before trial to get an agreed exhibit book together but Mr. Attia was not responsive.

As a result, at the start of trial the court granted a small adjournment so Ms. Cairns could show Mr. Attia what she was proposing to produce. [ 74 ] After this bumpy start the first day of trial went downhill. Mrs. Malton was the first witness called. Mr. Attia had an envelop of pictures that he required Mrs. Malton to identify and have marked as an exhibit. The pictures were not organized and Mr. Attia did not have copies of the pictures for the witness or the court.

The pictures as he originally gave them to defence were in the order which they were taken; however, he was presenting the pictures to the witness and marking them in a different manner. All parties were clearly frustrated. The court was patient and suggested Mr. Attia get the pictures organized and dated through the lunch break. After lunch Mr. Attia suggested he be given overnight to accomplish the task. While the court allowed him to do so, the court noted its frustration:

Well, I would underscore for you it is very important that this be done...And it is preferable that it was done before we got into this process, but given that we are in the middle of it - - it is not helpful right now- - because what I am doing is I am - - I have no idea what is in these pictures.

And because I am not able to conceptualize where this is relative to everything, but once it gets organized it will be much more helpful...So it is a bit of a disadvantage that the plaintiff is in at this point...Because I think it is - - it would be much more helpful to your case if you have it in a position to go and I have something in front of me to look at. [Housemaster Trial transcript pages 66 to 68] ...

I think it would help your case if I could follow along better rather than kind of grasp at these things as we go...And assuming that the case is as important as I think it is, it would strike me that you are better off to get the case ready to go completely, rather than 90 percent or 80 percent. [p 69] ... I did not realize the extent of the problem with the photos. I do not even know how many photos we are talking about. I thought maybe we could do it over the break. But since we cannot, I would prefer to stop. [p 73] ... So if we can work somehow with my clerk or you independently Mr.

Attia, so that the photos come out in some kind of album at the end of the day - - so that I can actually look at this, rather than sort through myriads of photos trying to remember which one is which by number. I need some kind of system to collate this information. [p 74] [ 75 ] While the photos were a clear issue, Mr. Attia’s preparation of other exhibits was also a problem. For example, Mr. Attia gave the court an exhibit with his own handwritten notes on it and did not have a clean copy. Duplicate exhibits were put to the witness. Some of the exhibits presented had pages out of order.

Both defence counsel and the court were having some difficulty following the numbering of exhibits and it was agreed that copies of the exhibits being marked would be made for the court and defence. The court suggests something should be done about the other binders of exhibits. The court’s frustration was apparent on the transcript: But I don’t know how long Mr. Attia is going to be fumbling around finding this picture because, as you know, we have a lot of pictures [p 464] ... Mr.

Attia, I must say, I am not here to attribute fault but the fact that none of the pages in these reports are numbered is very awkward.... It’s a waste of everybody’s time and it costs a lot of money at the end of the day for somebody to spend time looking through pages, and this is just one example. There’s worse examples in this, in this case, but I’m just making that observation. [September 7, 2006 transcript, p 23] [ 76 ] Mr. Malton testified that when he was on the stand in direct for the Housemaster Trial, he was embarrassed and felt that he had not been prepared properly.

He was testifying to the bills and receipts the Maltons had related to mitigation. He had provided all the bills he had accumulated to Mr. Attia and he did not know which were relevant and which were not. [ 77 ] Mr. Malton testified before me that he felt that he had been “ground” at trial and felt he was on trial about the bills. I understand this feeling arose from Mr. Attia dismissing parts of the claim based on the receipts while he was on the stand. At one point, Mr. Malton was being examined by Mr. Attia about using his truck for hauling garbage from the remedial work and Mr.

Malton noted he had to buy some transmission fluid and a hose for his truck. Mr. Attia’s response to his evidence was “Well, I’d say that was your fault, sir, you’re not entitled...So we’re not making a claim for that one, all right Mr. Malton.” [Housemaster Trial transcript, September 7, 2006, p 79]. At page 90 Mr. Attia states “well sir, unless – unless you can say that you attribute this to some problem with the report...so you’re not making a claim in respect to [that]”. On another bill Mr. Attia responded “can you see any fault on the part of HouseMaster that would entitle you to [that]...”. This was Mr.

Malton’s treatment from his own lawyer and it is clearly linked to a lack of preparation for the witness’ evidence. [ 78 ] There is no doubt that had Mr. Attia gone through the receipts he had with Mr. Malton before trial, Mr. Malton would have been saved from embarrassment. It is evident that Mr. Malton was not prepared for his examination by Mr. Attia and that Mr. Attia had not gone through the material he was putting to Mr. Malton before the hearing. [ 79 ] A reasonably competent and diligent lawyer would have been better prepared for trial.

While sometimes litigation cannot be anticipated, preparing your witnesses for direct examination, preparing all the exhibits you plan on entering for trial to prove your own case, and having copies for the court and opposing counsel is not too much to ask for. This is particularly true for a plaintiff who gets to present their case first. I find that it is not unreasonable to expect counsel to have reviewed the material he intended to put into court and to prepare his client on how the material will go in. A reasonable and competent counsel would have done so. Mr. Attia did not.

I find that he failed to meet the standard of care required of a reasonably competent and diligent lawyer. 2.4.6.5 Failure to advance damages [ 80 ] Closely aligned with the issues of preparation was how the evidence of damages went into trial. The Maltons assert that Mr.

Attia should have anticipated and been aware of the importance to the Maltons of the various receipt breakdowns and damages assessments that would be required for their case, specifically with respect to damaged areas in the home that had not been repaired but needed repairing and invoices for work that had been done that required more detailing. [ 81 ] At trial the Maltons were claiming $107,607.07. They were awarded $38,381.10. Several comments by the trial judge indicated he did not have sufficient evidence:

[76] It is unfortunate that the evidence presented by Counsel for the Plaintiffs as it related to damages was decidedly unhelpful, andthere were significant inconsistencies between the witness’ testimony and the written materials submitted in support of that evidence. [82] The trial judge was frustrated with how the evidence went in at trial relating to damages: • I know one of the areas I want you to cover or think about in terms of these various options is it is not clear to me what it is yourclients are actually claiming. [p 572] • ...Because I know you were throwing things out on the spot, so to speak, in terms of the claim. [p 573] • ...

Because, as you know, some of your invoices are, kind of, combined or they do not exist or they are not the most clear... [p 557] • But some of these invoices, as you know, you have arbitrarily taken certain factors. They combine different things and it is prettyimportant, regardless of what happens in terms of the lawsuit overall, to know what it is your client is claiming. [p 575] • My guess, Mr. Attia, and I do not want to ever short change you, but given what has happened here, I would be very surprised ifyou can have that ready in enough time for the Court and for Ms.

Cairns to properly analyse and respond to it. [p 575] (citations from the Housemaster Trial Transcript) [83] After failing to come to agreement post-trial as encouraged by the trial judge, Mr. Attia confirmed in a letter to the trial judgethat “the Defendants’ counsel did not take issue with the quantum of damages but only liability and the evidence at trial speaks foritself”. This is what was argued in his final written arguments. However, a review of the trial transcript does not in any way leave onewith the impression that the defence did not take issue with the quantum of damages.

The closest that can be identified is where Ms.Cairns concedes that the invoices established that the matters were invoiced and paid – this does not establish that they are properdamages arising from the claim. [84] In his decision, the trial judge again expressed concern with the evidence presented: • what is particularly difficult in this regard is that the evidence does not clearly establish how much... [para 89] • although the evidence is less than ideal in this area... [para 90] • although the amount was included in the quantum set out in the Plaintiff’s written submission, the claim was clearly abandoned attrial... [para 93] • ...not particularized in any useful manner... [para 102] • ...abandoned several claims... [para 103] • ...in their written submissions, the Plaintiffs abandoned some of the miscellaneous claims they made during oral testimony... [para103] • ... no evidence whatsoever that the Plaintiff actually paid... [para 126] • ...no evidence that the ...cost has actually been incurred... [para 131] (citations from the Housemaster Trial decision) [85] While “courts have long recognized the difficulty facing lawyers in the conduct of litigation where decisions are made in whatmight be described as the heat of battle”, I find this is not what was happening here: Garrant v Moskal, at para 10, 40Sask R 155 (SKCA).

While Mr. Attia had a good grasp of the liability issues he was facing, it appears he did not prepare for, consider, orunderstand anything about the damages his clients were claiming. A reasonably competent and diligent counsel would have known hisclients’ case relating to damages, not just liability. Mr. Attia clearly was not prepared to present his clients’ case related to damages. Heappeared to be “winging it”.

I find his lack of preparation and presentation of the Maltons’ damages claim fell below the standardexpected of reasonably competent and diligent counsel. 2.4.6.6 Failure to call expert or qualify witness as expert [86] The Plaintiffs allege that Mr. Attia failed to properly present two witnesses as experts at the trial. [87] First, it is alleged that Mr. Attia did not use Mr. Letourneau to his best advantage as an expert. No expert report was filedbefore trial and Mr. Attia’s attempts to elicit opinion evidence from Mr. Letourneau were rebuked by Justice Lee who stated at p 269: Well, Mr.

Attia, if you wanted him to venture forth with opinion evidence there’s no problem whatsoever. All you had to do was servenotice and ...provide the appropriate report. I just think that it is too late now to try to fix that problem. Even after this admonishment, Mr. Attia attempted to introduce opinion evidence from the witness and Justice Lee did rein him in on aseveral other instances. [88] Second, when qualifying Mr. Martyniuk, Mr. Attia attempted to qualify him as an expert in estimations which the expertreport did not address. Ms.

Cairn crossed and objected on the basis that he was not qualified for estimates. [89] Is this a breach of the standard of care? Calling or not calling expert evidence is very much part of trial strategy and casepresentation. If not calling Mr. Letourneau or Mr. Martyniuk was part of a trial strategy, no breach would be apparent. However, in this

case it appears the approach to experts was more likely related to the lack of presentation of damages as discussed above. 2.4.6.7 Issues relating to final arguments [ 90 ] Written arguments were done after trial. Defence counsel submitted her arguments before the Plaintiffs. The Maltons had no input into the final arguments other than giving the square footage of the home. [ 91 ] Ms. Cairns wrote to Justice Lee indicating Mr. Attia never attempted to settle damages or agree to damages, as Justice Lee had encouraged. Mr. Attia responded that he had not realized that he was required to do so. The transcript supports Ms. Cairns

interpretation – Justice Lee wanted counsel to come to some agreement on damages and to assist, they were to order Mr. Malton’s transcript. Although the transcript was ordered, Mr. Attia did not try to resolve damages with Ms. Cairns. [ 92 ] Having realized he misunderstood Justice Lee’s directions Mr. Attia asked for an extension to address damages and was granted an extension to November 3 – which date he let lapse without further addressing damages other than to indicate the parties could not agree. [ 93 ] I find that this conduct is closely related to Mr.

Attia’s failure to prepare and present the damages claim made by the Maltons. 2.4.7 Settling without instructions [ 94 ] The Maltons assert that costs and interest to be paid to them by Housemasters was settled without their instructions. Mr. Attia admits this in para 7(iv) of his Statement of Defence but states that calculating interest was problematic and would have been costly if an agreement was not reached. Ms. Cairns’ notes from June 19, 2007, confirm her conversation with Mr.

Attia that he wanted to “saw-off” the amount and that he did not want to recalculate judgment interest. [ 95 ] With respect to appealing the decision, Mrs. Malton testified that there was never any discussion of the appeal. She reaffirmed this on cross examination, saying no appeal was discussed. Although Mr. Attia testified that he remembers talking to Mrs. Malton about an appeal and that he didn’t think it was worth an appeal because he was worried the decision might be overturned, I do not believe him. [ 96 ] Ms. Cairns’ file has notes from her conversation with Mr.

Attia on August 21, 2008, where she notes “he doesn’t want to ask her for instructions re: appeal”. Mr. Attia told her that he anticipated that the Maltons would be challenging his accounts. She noted that Mr. Attia did not want to raise the issue of an appeal with his client. Nonetheless, Ms. Cairns advised him that the appeal period was up that day. [ 97 ] That same day Mr. Malton went to Mr. Attia’s office to pick up a cheque for the damages and Mr. Attia did not meet with him. Mr. Malton was advised that he needed to acknowledge there would be no appeal if he wanted to take the cheque. Mr.

Malton was told that the appeal time ran out the next day. In effect, Mr. Attia waited until the Maltons were out of time and got Mr. Malton to sign a “no appeal” acknowledgement only when he came to pick up the cheque. Mr. Malton felt he had no choice, so signed the letter. [ 98 ] In cross examination, Mrs. Malton was asked “what could you have contributed” to the discussion on costs and prejudgment interest because she did not understand things such as party and party costs. This is entirely beside the point.

Counsel has an obligation to seek instructions before settling any part of a claim and if that involves explaining what counsel is proposing and why, so be it. Counsel cannot simply imply that the client would not have understood and they were acting in the client’s best interest. I find that Mr. Attia breached his standard of care by failing to obtain settlement instructions prior to setting the final judgment roll and failing to advise the Maltons of their right to appeal the decision. 2.5 Conclusions on Breach of Standard [ 99 ] I have found that Mr.

Attia breached the standard of a reasonably competent and diligent lawyer by: (

i) Failing to convey two offers; (ii) Failing to correctly advise his clients on mitigation; (iii) Failing to pursue damages for mould; (iv) Failing to prepare for the trial presentation; (

v) Failing to properly prepare and present the Maltons’ claim for damages; and (vi) Settling costs and interest without instructions and failing to advise of appeal rights. [ 100 ] Having found a breach of the standard, I must now determine if the breaches caused foreseeable damages. 3. Damages and causation [ 101 ] As with the trial against Housemaster, the burden of proof is on the Maltons to establish what was actually lost as a result of negligence or breach of contract. As noted by Mr. Attia, the Alberta Court of Appeal in Webb v Birkett , 2011 ABCA 13 at para 62 noted: As stated by Lord Goddard, CJ in Bonham-Carter v Hyde Park Hotel (1948) 64 TLR 177 at 178 :

Plaintiffs must understand if they bring actions for damages it is for them to prove their damage; it is not enough to write down theparticulars, and, so to speak, throw them at the head of the court, saying:” This is what I have lost, I ask you to give me these damages”.They have to prove it. [102] A finding of a breach of the standard of care does not necessarily mean that the Plaintiff is entitled to damages: Snell vFarrell, (SCC), [1990] 2 SCR 311; St. Jean v Mercier, 2002 SCC 15 at para 116, [2002] 1 SCR 491.

The Plaintiff mustestablish on the balance of probabilities that the defendant’s action caused foreseeable damages. Causation can generally be establishedonly if the plaintiff’s injury would not have occurred but for the contribution of the negligent act: Clements (Litigation Guardian of) vClements, 2012 SCC 32at para 46, [2012] 2 SCR 181.

Nonetheless, the causation test is not to be applied too rigidly: Clements at para46. [103] Generally, damages for breach of contract should place the plaintiff in the same position as if the contract had been performed.This may include damages for mental distress where the damages are in the reasonable contemplation of the parties at the time thecontract was made: Fidler v Sun Life Assurance Co of Canada, 2006 SCC 30 at para 44 (Fidler).

In lawyer negligence cases themeasure of damages includes the amount that would have been awarded but for the negligence of the lawyer: Alberta (Workers Compensation Board) v Riggins, 1992 ABCA 263 at para 21, 5 Alta L R (3rd) 66. [104] In the context of determining causation in some of these types of breaches of a lawyer’s standard of care, I must conduct a “trialwithin a trial” to determine whether “but for” the breach of standard the plaintiff would have been successful on issues of liability,causation, or damages: Ashraf paras 45-46; Hemraj v Caron & Partners LLP, 2020 ABQB 246 at para 51.

A noted by Strathy J in DiMartino v Delisio, , 2008 CarswellOnt 4275 (ONSC) at para 58: ...[W]here a party claims that his or her counsel was negligent in the presentation of the case at trial, and that the result would have beendifferent had the case been competently presented, the court must necessarily engage in an examination of what evidence was presentedat the trial, what evidence should have been presented, what the result at trial was and how that result might have been different haddifferent evidence been presented.

The party may allege that certain evidence was not before the court that should have been, thatfindings of fact were made on an inadequate record and that findings as to a witness’s credibility were based on improper examination,inadequate preparation, or incomplete evidence... [105] Guidance provided by the Alberta Court of Appeal in Fisher v Knibbe, 1992 ABCA 121 at para 12 is particularly useful: After conducting the “trial within a trial” to determine what damages, if any, a negligent solicitor is liable for missing a limitation period,three results are possible.

First, the trial judge could find that had the case gone to trial the plaintiff would have been successful and insuch case 100% of the lost damages would be awarded against the solicitor. Second, the trial judge could find that the plaintiff would nothave been successful therefore only nominal damages may be awarded against the solicitor.

Finally, where time has passed to such anextent that a “trial within a trial” would be impossible, then the court must to the best of its ability calculate the value of the opportunitylost to the plaintiff and award damages against the solicitor on that basis. 3.1 Lost damages on Housemaster Trial [106] With respect to the negligence established in the conduct of the Housemaster Trial, i.e. failing to pursue damages for mould,failing to prepare for the trial presentation and failing to properly prepare and present the Maltons’ claim for damages, I must conduct atrial within a trial to determine what might have happened at trial but for the negligence.

The question in this “trial within a trial” iswhether damages would have been different but for the breaches. I find that they would have been.

Although Justice Lee accommodatedmany of the shortcomings in the trial process, there were several areas, discussed and quantified below, that would have resulted inincreased damages, including claims for the house mould and its adverse health implications. [107] As noted above, a home inspector can be found liable for failing to recognize and note red flags which a reasonable inspectionand home inspector would have detected through a reasonably careful visual examination: Alloway at para 57.

In the Housemaster TrialJustice Lee made several findings relating to the defects in the inspection report and some of the resulting damages, including thatHousemaster: (

a) Failed to identify the improper atrium skylight and its contribution to water leaking into the roof and walls [HousemasterTrial decision, para 18]; (

b) Failed to identify that there were serious problems with respect to all of the siding, not just those with contact to the ground[Housemaster Trial decision, para 21]; (

c) Failed to identify that the cedar shakes required extensive repairs beyond routine maintenance and that the deteriorationcaused extensive rotting with water entering the roof system [Housemaster Trial decision, paras 22-24]; (

d) Failed to identify the faulty power source for the waste disposal system [Housemaster Trial decision, para 25]; and (

e) Failed to identify the lack of drip caps or the lack of guard rails [Housemaster Trial decision, para 26]. [108] These finding were obviously very favourable to the Maltons. What was not argued or ruled upon by Justice Lee was the linkbetween the water infiltration and the resultant mould and rot and its sequalae of health concerns raised by the Maltons.

The Maltonsargue that these are damages that should have been pursued. [109] The issue is complicated in cases where there is evidence that the purchaser would not have purchased the home had anaccurate appraisal of the condition and the cost of repairs been provided (see Cudmore v Home Chec Canada Ltd, 2000 MBQB 138 atpara 28 (Cudmore) and Alloway at para 59). Practically speaking, Canadian courts have used “the actual cost of repair as a starting pointfor assessment of damages in this area of law”: Yi at para 26, citing Ingles v Tutkaluk Construction Ltd, 2000 SCC 12, Ingles v

Tutkaluk Construction Ltd, 1994 CarswellOnt 637; Cudmore at para 49. In addition, plaintiffs have been awarded general damages foranxiety, stress, emotional disturbance and inconvenience: Cudmore at para 50. [110] Further, upon considering the cost of repairs one must also consider whether the repairs resulted in a “betterment” to theproperty. Betterment is a question of fact to be determined on the evidence and with regard to what is reasonable in the particular case.The onus to establish betterment is on the defendant.

As noted by the Ontario Court of Appeal in James Street Hardware & FurnitureCo v Spizziri, , 62 OR (2d) 385 (CA) the assessment of damages should be practical and should prioritize the justicebetween the parties (Yi at para 49). [111] In this matter both Maltons testified that they would not have bought the house if they were fully aware of the issues. Inaddition, Mr. Attia testified that he thought Mrs. Malton felt guilty about her selection. I am satisfied that the Maltons would not havepurchased the house but for Housemasters’ defective assessment estimating repair costs at $6,000, but they did.

Adopting a practicalapproach to damages the starting point must be the actual costs of repair. [112] At trial the Maltons claimed $107,607.07 in damages. Justice Lee’s approach was to try, as best he could, to take the amountclaimed, deduct for repairs on items that were identified by Housemasters and deduct for betterment. He assessed damages at$38,381.10. I find that competent counsel at trial would have argued that work that was done to remediate rot and water infiltration wasrecoverable even if it was unseen by Housemasters.

The point is that Housemasters missed the red flags that this damage was lurkingbelow the surface, they should have identified it for the Maltons, they did not. The Maltons bought the house so Housemasters isresponsible for fixing it.

Justice Lee also deducted amounts for repairs identified in the report that were in addition to the $6,000.However, in this trial within a trial I will not be doing so as I accept that the Maltons would not have bought the house in its currentcondition and Housemasters should be responsible for those repairs too. [113] Had the damages been properly presented and argued, the Maltons would be seeking all of the $107,607.07 on the basis thatthey would not have incurred any of the expenses but for Housemasters’ negligence, plus additional damages for repairing mould and rotdamages and damages for the health consequences of the mould and general damages for the anxiety and stress of the action. [114] Notwithstanding that at the original trial claims were thrown out on the fly during examination, I find that all receipted itemsclaimed by the Maltons were incurred to remediate the house except the following: i.

Inspection Unlimited Inc. Report for $1,570 which was claimable as a disbursement; ii. The $75.00 claim for Depner Plumbing Ltd. relating to a natural gas line to the oven and stove; iii. The claim for office equipment of $2,327.17 as Mrs. Malton was claiming expenses for working away from home; iv. The cost of an assistant of $9,532.91 which is unrelated to the claim as found by Justice Lee; and v.

Costs of a septic field for $11,600 which was not within the scope of the inspection and Housemaster’s negligence, again, asfound by Justice Lee. [115] The result is that the claim for repairs in the trial within a trial is $82,501.99. From that must be deducted “betterment” costsnoting that the onus is on the defendant to prove betterment. Although there was some reference to “betterment” from having a basementroom built and some painting on walls done, the amount of the betterment was small and the onus was not placed on the defendant.

I willconsider the possibility of a successful betterment argument as part of my assessment of “likelihood of success” of obtaining the fullyclaimed amount, or “opportunity lost”. Likewise, I will factor in the fact that the $8,200 for the roof was potentially at least partially abetterment given that the roof was very close to the end of its projected useful life. [116] In addition to the repairs that were presented at the Housemaster Trial, there were additional costs asserted at trial and thedamages related to the Maltons’ health issues and general damages.

This is where the trial within the trial gets tricky as the passage oftime makes it almost impossible at this point to quantify such things as the level of the mould in the house at the relevant time, whetherwhat was being suffered by the Maltons was in fact related to the mould and rot, and whether the causation could be proved to establishHousemasters’ liability. [117] With respect to the health issues, I have reviewed years of medical charts for both Mr. and Mrs.

Malton that satisfy me that theysuffered some form of respiratory illnesses around the time that they were dealing with the rot and mould in the house. I have somegeneric mould articles to link the symptoms to the mould but not much else. This certainly leaves me within the third category of theCourt of Appeals guidance in Fischer and I must “to the best of [my] ability calculate the value of the opportunity lost to the plaintiffand award damages against the solicitor on that basis”. So, while there was an argument to be made, the evidence before me does notestablish the effects were long term.

The medical records indicate both were smokers for long portions of their lives. They also indicatethat treatment was provided to address the symptoms. Thus, the evidence provided does not support this claim of damages as being muchgreater than nominal and I award $4,000 to Mr. Malton and $6,000 to Mrs.

Malton (the evidence is that her damages were greater) whichwill be adjusted on my assessment of the lost opportunity. [118] With respect to general damages, the court must be satisfied that (1) one object of the contract was to secure a psychologicalbenefit such that mental distress upon breach was in the reasonable contemplation of the parties when the contract was entered; and (2)the degree of mental suffering caused is sufficient to warrant compensation: Fidler at para 47.

Here there is ample evidence of the stressand anxiety experienced by the Maltons as a result of Housemasters’ negligence and I find that the services provided by Housemasterswas intended to give the type of “peace of mind” that is contemplated in Fidler. In Cudmore, Justice Schwartz found that the plaintiff’sanxiety and depression resulted from the issues related to her purchase of the house (para 37). The plaintiff was awarded generaldamages for her anxiety, stress, emotional disturbance and inconvenience in the amount of $5,000 (para 50).

I find that this case issimilar and would award general damages of $5,000 in the trial within a trial. [119] Before calculating the damages in the trial within a trial I must then consider a discount factor for the risk of litigation or

“opportunity lost”. There is no certainty that the Maltons would get the amount I have assessed. Different evidence may have been presented. Housemasters may have marshalled greater efforts toward damages, even in argument, if the Maltons’ strategy in the trial was adjusted. I also must factor in the betterment argument as noted above. While it is not a science, I must do my best and estimate that the Maltons lost a 70% opportunity to have the damages I set out above. [ 120 ] The total potential damages in the trial within the trial are $97,501.99 ($82,501.99 plus $10,000 plus $5,000).

From the damages calculated I would deduct the $6,000 Housemasters estimated for repairs and add the lost opportunity factor of 70%, leaving damages at $68,251.39. The difference between the lost opportunity and the amount awarded by Justice Lee ($38,381.10) means a difference of $29,870.29 being the damages caused by Mr. Attia’s failure to represent his clients to the standard expected of him at trial. 3.2 Losses from mitigation advice [ 121 ] With respect to failing to correctly advise his clients on mitigation, the question is “but for” this failure what would the Maltons have done?

The Maltons argue that they would have sold the house “as is where is” in 2000 or 2001 and cut their losses – meaning they would have settled their claim with Housemasters for a fraction of the amount and they could have gone on with their life by purchasing two investment homes and living in one and renting the other. They also assert that Mr. Malton would have been able to write and Mrs. Malton would have become a successful real estate broker.

They would move back to BC in 2008, sell investments and reinvest in BC. [ 122 ] While this scenario follows the Maltons’ dream as it was before the house was purchased, the decisions and choices the Maltons made after the house purchase changed the prospect of realizing their retirement dream, and not necessarily due to the actions of Mr. Attia. Mr. Attia should have told the Maltons that their duty was one of reasonable mitigation, not mitigation at all costs, but the Maltons’ actions were not only guided by his advice. [ 123 ] On December 17, 2001, at discovery, Mrs.

Malton said they had thought about re-selling the house but thought she would get in trouble with her real estate licence and “I wouldn’t morally sell this house to anybody until I was absolutely sure of what condition it’s in anyway”. The Maltons chose not to sell the house and I cannot find that ‘but for’ Mr. Attia’s advice they would have done anything differently about re-selling. [ 124 ] In addition, the Maltons assert that they were wasting their savings on the house and had lost their opportunity to invest in a rising real estate market.

The evidence does indicate that there was a rising real estate market from 2002 to 2008 but it does not establish that Mr. Attia’s advice on mitigation impacted the Maltons’ choices about investing. Mrs. Malton testified she started her real estate practice in November 2000 and had a good stream of income from it from the beginning yet they did not purchase any investment properties before the Maltons had met Mr. Attia. What I heard was evidence that the Maltons lost a chance to purchase a property when financing could not be arranged quickly enough and I heard they were able to invest in a property with Mrs.

Malton’s parents. [ 125 ] The evidence is that the bulk of the repairs to the house started April 15, 2002, and concluded Oct 15, 2002. The Maltons wrote to Mr. Attia on October 22, 2002, asking how much longer “they” (meaning Housemasters) can tie their (the Maltons) hands financially. The Maltons also indicated that they could not afford the repairs they were making and “we are on the last day of completing all the renovations we can afford financially”. Mrs.

Malton testified that by January 14, 2003, they were out of money and they wanted to get out of the house as soon as possible because they could not claim investment losses according to Mr. Attia, yet the evidence shows that in October 2002 they still had $42,000 in CIBC and were obviously not following their investment plan of buying an investment property with the money. [ 126 ] Based on the evidence I have before me there were many factors affecting the choices made by the Maltons and I accept that includes Mr. Attia’s advice to mitigate even if impecuniosity was a problem.

I accept that there is causation and Mr. Attia’s advice caused some damages to the Maltons. The difficulty is that the Maltons have not pointed to evidence of what exactly that damage was. I award a nominal amount of $3,000 for this breach, as some award is warranted. 3.3 Failing to convey offers [ 127 ] With respect to the breaches found above relating to the failure to convey offers, the evidence establishes that had the offers been conveyed the action was unlikely to have settled or that the result of the action would have been different.

The evidence discloses that the parties were far apart and liability was being hotly contested. With respect to the $95,000 offer, the offer was plus costs and interest. The Defendants had just offered $20,000 plus taxable costs. At that time there was already a formal offer of $107,000 by the Maltons on the table. Nonetheless conveying the offers as instructed may have had some unforeseen impact on the dynamics of the litigation relationship and I am of the view that nominal damages should be awarded where counsel ignores instructions.

I set damages for this head at $3,000. 3.4 Loss on settling without instructions [ 128 ] With respect to the breach of settling costs and interest without instructions to do so, I have no difficulty in finding causation however damages have not been established to be any more than nominal. The evidence established that counsel for the parties were exchanging Bills of Costs and also prejudgment interest calculations. Ms. Cairns pointed out that prejudgment interest had not been ordered and that in any event interest would have to be calculated from the time each of the contractor invoices were incurred.

One can see that this would be a tedious and relatively costly task where the amount spent on counsel calculating the interest likely would outweigh the interest received. It is a task that calls for a settled amount, which is what Mr. Attia and Ms. Cairns did. The issue is that Mr. Attia settled the issue without instructions. The further issue is that the Maltons did not provide me with a calculation of the amount either.

Given the seriousness of proceeding without instructions, I think an award of nominal damages is called for and I set that amount at $2,750, which is essentially the $750 costs and $2,000 interest Mr. Attia negotiated away without instructions.

3.5 General damages [129] As with the action against Housemasters, general damages may be claimed where the test in Fidler is met. I have no hesitationin finding that when retaining a lawyer, one object of the contract is to secure a psychological benefit and that mental distress uponbreach was in the reasonable contemplation of the parties when the contract was entered. I also find that the degree of mental sufferingcaused in this case is sufficient to warrant compensation. Both Mr. and Mrs.

Malton testified to the stress, the lost trust in society, thebroken relationships with friends and family, and the lost time occasioned by their involvement with Mr. Attia. Damages for mentaldistress do not need to be corroborated and although they are difficult to demonstrate, they are compensable and can be substantial: Boudreau v Benaiah (1998), (ON SC), 154 DLR (4th) 650 at para 129 (ONCJ), var’d (2000), (ON CA), 46 OR (3d) 737 (ONCA) (Boudreau). [130] The Maltons urge me to follow the case of Keirstead v Piggott (1999), 1999 NSSC 3 , 177 NSR (2d) 1 (SC), where thecourt awarded general damages of $60,000.

That case involved the negligence of a solicitor on a real estate transaction and breaches bythe vendor of the property. However, the general damages in that case included damages that the court felt difficult to quantify andmakes it an unsuitable comparator. [131] The Maltons’ case of Boudreau involved negligence of a lawyer in a criminal trial. The trial judge awarded $30,000 citingevidence of depression and loss of familial ties. The Ontario Court of Appeal lowered the award to $15,000 finding there was notsufficient evidence of the loss of familial ties.

I do not find this case comparable to Boudreau. [132] In this case there was evidence of the stress of litigation and ample evidence of Mr. Attia failing to keep communication openwith his clients. In fact, the Maltons stated that Mr.

Attia was doing a good job for them – until they received the decision of Justice Lee.I find that given the Maltons’ evidence of the stress they were experiencing, general damages in the amount of $10,000 is appropriate. 3.6 Damages arising from caveat [133] One issue raised is whether the Maltons are entitled to damages from the defendants putting a caveat for security for costs onthe house title. I find that they are not. Security for costs is contemplated in the Alberta Rules of Court and court sanctioned.

If theMaltons wanted to do something with their property before they sold in 2016, they could have asked the court to remove the caveat andthey could have put a bond or alternative security in. 3.7 Damages post-2007 [134] There was a lot of evidence introduced involving what the Maltons did with the property following the Housemasters Trialincluding their choice not to sell the house until 2016 (at a significant gain from purchase) and their choice to become landlords from adistance. I find that this evidence is too remote, i.e. unforeseeable, and not causally connected to Mr. Attia’s breach of his duty.

I am notawarding damages based on that evidence. I have detailed above those elements of damages that I found causally connected to the breachof duty. 3.8 Punitive damages [135] The Maltons assert that the conduct of Mr. Attia was high handed, flagrant, callous, and egregious, entitling them to awards ofpunitive, aggravated and exemplary damages. I do not agree.

Aggravated or punitive damages are usually not awarded unless there is afinding that the Defendant’s conduct was harsh, vindictive, reprehensible, and/or malicious: Paquet v Getty, 2002 NBQB 272 at para 98.Punitive damages are designed to address the objectives of retribution, deterrence, and denunciation of such conduct: Whiten v PilotInsurance Co, 2002 SCC 18, at para 43, [2002] 1 SCR 595. While Mr. Attia’s conduct fell below the standard expected of counsel, Isaw no evidence that his conduct was harsh, vindictive, reprehensible or malicious.

At worst it was paternalistic and he let his view ofhow things should be guide his conduct to the detriment of his clients. I find this is not sufficient to found an award for punitivedamages. 4. Conclusion [136] In conclusion, I find that Mr. Attia did fall below the standard of care required of him and award the following damages to theMalton

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