Precision Forest Industries Ltd v Cox, 2023 ABKB 3

Court of King’s Bench of Alberta Citation: Precision Forest Industries Ltd v Cox, 2023 ABKB 3 Date: 20230104 Docket: 0503 08080 Registry: Edmonton Between: Precision Forest Industries Ltd. Plaintiff - and - Kevin Cox Defendant - and - David Shynkar Third Party _______________________________________________________ Reasons for Decision of the

Honourable Justice James T. Neilson _______________________________________________________ [ 1 ] In this action, the Plaintiff, Precision Forest Industries Ltd. (“Precision”) claims that the Defendant, Kevin Cox (“Cox”) is in breach of a contract of offer of purchase and sale between those parties dated November 17, 2003. Cox has issued third party proceedings against David Shynkar (“Shynkar”), who at that time was in the private practice of law in Peace River, Alberta.

The allegation in the third party proceedings is that Shynkar, who had been jointly retained by the parties with respect to this transaction, failed to meet the standard of care required of him as a barrister and solicitor with respect to his retainer. [ 2 ] The trial of this action proceeded on the basis that the Court is to determine whether the contract was and is valid and enforceable, and whether Cox is in breach of the contract. The issue of any remedies that may follow depending on a determination of the issue of liability, is not before the Court in this trial.

Facts [ 3 ] Precision’s principal is Pat Rehn (“Rehn”). Precision was in the business of harvesting wood products. Cox was a principal of Cox Brothers Contracting & Assoc. Ltd. [ 4 ] Rehn had been sourcing out possible purchases of woodland in the area of High Prairie, Alberta. On November 15, 2003, he approached Cox at Cox’s residence and place of business near High Prairie and offered to buy 8 ½ quarters of land for a purchase price of $240,000.00.

Rehn drew up an offer to purchase that Cox did not sign. [ 5 ] At that time, the land in question was owned jointly by Cox and his brother, but his brother was in the process of transferring title to Cox as sole owner. [ 6 ] Rehn then drew up another offer to purchase nine parcels of land described in Appendix A for a total purchase price of $345,500.00, including a deposit of $50,000.00. The deposit was paid to Cox in two installments, $24,000.00 being the deposit in the initial offer that was not accepted, plus an additional $26,000.00. Cox signed his acceptance of this offer on November 17, 2003.

This is the contract in issue. As Rehn testified, there was a typographical error in the description of one of the parcels in Appendix A. The parcel described as E1/2 of 27-73-13-W5M was corrected to read W1/2 of 27-73-13-W5M in the transfer documents subsequently prepared by Shynkar. [ 7 ] The offer provided that, subject to the terms thereof being complied with, possession of the property shall be available for the buyer at noon on December 10, 2003. Any money owing to the seller shall be paid to the seller’s lawyer on or before the possession date.

If the seller agrees to accept monies after the possession date, the buyer shall pay interest at the rate of 3% per annum above the current Bank of Canada rate on any money owning to the seller at possession date, from the date of possession until the purchase monies have been released to the seller’s solicitor. [ 8 ] The offer was subject to the following conditions precedent for the benefit of the buyer.

Any one of these conditions may be unilaterally waived by the buyer by written notice, or by signed facsimile transmission to the buyer or their agent on or before the expiry date for the satisfaction of the condition:

a) The buyer obtaining mortgage financing from Farm Credit Canada on or before the 15 th day of December, 2003 [i.e. after the possession date] at an interest rate not to exceed 5%. The buyer shall deliver to the agent written notice that the mortgage approval has or has not be obtained by the said date. [ 9 ] A further condition was that the offer will be open for acceptance to the seller until November 21, 2003. That condition was satisfied as the offer was accepted by Cox on November 17, 2003.

The offer also provided that the buyer understands the seller has to obtain full ownership of some of the lands before the seller can transfer title. [ 10 ] The offer provided, as well, that time shall be of the essence of this contract. [ 11 ] Cox had previously retained Shynkar on other legal matters. Rehn proposed that Shynkar be retained jointly by Precision and Cox to conclude this sale, thereby saving legal fees. [ 12 ] Neither party was in a position to close the transaction as of the possession date, December 10, 2003. Precision had not yet finalized the terms of financing with Farm Credit Canada.

For his part, Cox was not in a position to tender title documents as of December 10, 2003. [ 13 ] On December 1, 2003, Shynkar made a note that “Kevin is heading to Vancouver for tests. Martha has the agreement with Pat. Registration of the seven quarters Kevin is getting from Donald appears complete.” [ 14 ] Shynkar’s joint retainer was confirmed verbally. No written joint retainer agreement was drawn up by him at that time. On December 16, 2003, Shynkar sent a letter to Cox, as follows: Precision’s financing is going to be in place fairly soon, so that deal can proceed.

It will likely be after Christmas before it is complete. I still do need a copy of the Agreement, and confirmation of the amount of the deposit. [ 15 ] Shynkar received a signed copy of the offer to purchase from Farm Credit.

[ 16 ] On December 31, 2003, Shynkar sent a letter by fax to Cox, as follows: Re: Cox sale to Precision Forest Industries Ltd. Further to the above noted matter, I wish to confirm the following: 1. I have received a signed copy of the Offer to Purchase; 2. Kevin Cox currently holds the $50,000.00 deposit monies; 3. The probable closing date for this transaction will be January 30, 2004.

Please be advised that documentation is now being prepared to complete the transaction and I will contact you in the near future to make arrangements to meet with you to sign the transfer documents. [ 17 ] Also on December 31, 2003, Shynkar sent a letter to Precision Forest Industries Inc. to the attention of Patrick Rehn, as follows: Re: Cox sale to Precision Forest Industries Ltd. Further to the above noted matter, I wish to confirm the following: 1. I have received a signed copy of the Offer to Purchase; 2. Kevin Cox currently holds the $50,000.00 deposit monies; 3.

The probable closing date for this transaction will be January 30, 2004. Please note that Farm Credit Canada requires the following documentation before they will advance any monies under the mortgage: 1. Copy of the Articles of Incorporation for Precision Forest Industries Ltd.; 2. Proof from Corporate Registry that Precision Forest Industries Ltd. is in good standing; 3. Accountant prepared financial statements for Precision Forest Industries Ltd. for its November 30, 2003 year end. Please provide the required information to me by no later than January 16, 2004 to ensure the transaction is completed on time.

Please be advised that documentation is now being prepared to complete this transaction and I will contact you in the near future to make arrangements to meet with you to sign the transfer documents. [ 18 ] On December 22, 2003, Normand Therrien, account manager with Farm Credit Canada, wrote to Shynkar as follows: Re: Precision Forest Industries Ltd., Patrick Rehn, Maureen Rehn We have been advised by Mr. and Mrs. Rehn that you will be acting on their behalf with respect to the above mentioned loan.

Please find enclosed a Loan Agreement and Solicitor’s Instructions, along with the necessary documentation to complete the terms and conditions of this loan. Once you are in a position to accept Loan Funds, you are to notify our disbursement centre in Regina by faxing them the completed Request for Disbursement form. All other loan documentation should be sent to our Edmonton office. You will find complete details on page two of the Solicitor’s Instructions. To ensure that customers receive their funds in a timely fashion, we must have three days advance notice of the requested delivery date.

This timeframe is necessary to allow FCC to submit the information to its bank and for the bank to transfer the funds into your trust account. Any questions regarding these instructions and all final documentation should be directed to the undersigned. [ 19 ] On January 8, 2004, Shynkar wrote to Rehn at Precision Forest Industries Ltd. requesting the documents required by Farm Credit Canada that are necessary to complete the financing package.

Shynkar was informed that Rehn increased the purchase price to $345,500.00, the mortgage increased to 1 million dollars, and the additional requirements for a Security Agreement, a Guarantee, and an Assignment.

These additions would increase fees and disbursements to approximately $4,800.00, reduced by a 50% discount to the mortgage. [ 20 ] On January 8, 2004, Shynkar made this note: Kevin says he wants to sign the documents there, and clarifies the land use for the land which he did not get from Don (environmental land use). [ 21 ] On January 14, 2004, Shynkar wrote to Kevin Cox, as follows: Re: Cox sale to Precision Forest Industries Ltd. Further to above noted matter, I enclose the following documentation for execution by you:

1. Conflict Letter. Please sign the conflict letter where indicated. 2. Transfer of Land. Please date and sign the transfer of land where indicated by the yellow “Sign Here” tab on page 2, in front of a witness. Please also swear, in front of a Commissioner for Oaths, the Dower Affidavit on page 3 where indicated by the red tab. The witness to your signature must then complete and swear the Affidavit of Execution on page 4, where indicated. Finally, please sign the Vendor’s Certificate where indicated by the purple tab. 3. Direction to Pay Sale Proceeds.

Please date and sign, in front of a witness, where indicated by the yellow “Sign Here” tab. 4. Environmental Questionnaire. Please complete the questionnaire and date and sign it where indicated by the yellow “Sign Here” tab. 5. Statement of Adjustments. Please initial the Statement of Adjustments on the bottom of the page. Once you have dated, signed, and where necessary, sworn all of the enclosed documentation, please return it to our office as soon as possible. PLEASE NOTE THAT THE WITNESS TO YOUR SIGNATURE AND THE COMMISSIONER FOR OATHS CANNOT BE THE SAME PERSON.

I trust the above and the enclosed is satisfactory, however, should you have any questions or concerns please do not hesitate to contact either myself or my assistant, Joan. I look forward to return of the executed documentation at your earliest convenience. [ 22 ] On January 28, 2004, Shynkar wrote to Cox as follows: Re: Cox sale to Precision Forest Industries Ltd. Further to the above noted matter and my correspondence to you of January 14, 2004, I am writing to inquire when we might expect to receive the executed transfer documentation from you. Mr.

Rehn is planning on attending at our office in the near future to execute the purchase documentation after which we will be in a position to register the Transfer, providing we have received same from you. I look forward to hearing from you in this regard. [ 23 ] The Conflict Letter referred to in the correspondence dated January 14, 2004, to Precision Forest Industries Ltd. and to Cox provided as follows: Re: Purchaser: Precision Forest Industries Ltd.

Vendor: Keith Cox [sic] Municipal address Closing date: January 30, 2004 As required by the Law Society of Alberta where a law firm represents both the Vendor and the Purchaser of a land transaction, we advise as follows: 1. In the event a dispute arises between the interests of the Vendor and the Purchaser, we must refer both parties to independent legal counsel for the completion of the transaction; 2. Information received from either of the parties in connection with the transaction cannot be treated by us as confidential so far as the other party is concerned; 3.

If we are asked to give evidence in Court, neither of you will be able to claim any privilege based on solicitor/client relationship. We ask that you endorse this letter acknowledging that you have been advised of the above, and consenting to our firm representing both parties to the transaction. [ 24 ] This letter was signed by Patrick Rehn on behalf of Precision Forest Industries Ltd. as purchaser.

It was not signed by Kevin Cox as vendor. [ 25 ] Shynkar then made the following notes: ● February 5, 2004: Phone call with Martha, she advises Kevin went for surgery on Tuesday, and she will look for the transfers. ● February 6, 2004: Rehn had attended to sign the documents. ● February 19, 2004: Kevin’s sister has died, he will be back next week. Transfers are in High Prairie, and he’s in Edmonton. Faxed Pat advising of delay. ● February 20, 2004: Telephone call with Kevin. He left the transfers in his truck, and his son took the truck to Edmonton.

He will go get them this weekend, bring them back, and get them to me.

● March 9, 2004: Telephone call with Kevin, Kevin is concerned over paragraph 4 in the direction to pay, which indicates thatexcess funds “if any” will go to him. He wants to know why there wouldn’t be any excess funds, and of course there will be. ● March 15, 2004: Telephone call with Kevin, he indicates he is not sure he wants to proceed. He will let me know what he intendsto do and whether he will proceed. ● March 16, 2004: Telephone call with Kevin. He is sending the documents immediately, but wants his sale price by March 26, andwe discussed land titles registration timing.

Returned a call from Pat shortly before 5, confirmed to him that I would have documentsfrom Kevin the next day, and that the deal will be completed as quickly as possible. ● March 17, 2004: Telephone call with Kevin. He indicates the deal will not proceed. [26] Shynkar wrote this letter to Cox dated March 24, 2004 as follows: Re: Pat Rehn, Precision My position, which I have just had confirmed by the Law Society’s practice advisor is correct, is that both you and Mr. Rehn are entitledto know everything that has happened on this file.

If you have a lawyer telling you that is not so, I need to hear from that person rightaway, as it will be matter of time before I am asked by Mr. Duke to provide copies of everything and a detailed chronology of what Isaw occurring. I have checked my notes, and you are correct, that on March 15, you told me you may not proceed, and that your family was unhappywith the deal. You said you would let me know.

On March 16, shortly before 5pm I believe (although I was returning of 11:34), you toldme the deal would proceed, that the documents were on their way to me, and that you wanted to be paid no later than March 26. Wediscussed Land Titles turnaround times. Very shortly after that, Pat Rehn called and I advised that the documents were on their way tome and the deal would be completed. When nothing arrived here March 17, we spoke again and you told me the deal was off. Your lawyer needs to know what evidence exists in order to properly advise you, and you really should have him contact me very soon.

Iam gone Thursday and Friday. [27] Shynkar prepared a memo to file detailing the chronology of events as to his involvement from November 5, 2003-March 17,2004. The chronology did not capture many undocumented calls with Cox and Rehn in both 2003 and 2004, regarding timeframes forcompletion, and requirements for documentation. [28] Precision registered a caveat against the subject lands, but this caveat was discharged by Precision’s legal counsel inDecember 2004. [29] Precision then commenced legal proceedings against Cox in 2005 for breach of the contract and resulting damages.

TheStatement of Claim was subsequently amended claiming extensive damages resulting from Cox’s alleged breach. By that time, Cox hadcontracted with another company who removed trees from the woodland properties. There was also the prospect of exploiting graveldeposits on some of the lands. [30] Since then, the litigation has progressed only in fits and starts as detailed in the procedure card.

There have been amendments,Court applications, changes in legal representation and, finally, the scheduling of a trial date in 2021, then adjourned to 2022. [31] At the trial, evidence was given by Rehn on behalf of Precision, by Cox and by Shynkar. [32] Expert opinion evidence was also given by Bogumil F. Romanko, K.C., Barrister & Solicitor at the request of Cox and byCyril Gurevitch, K.C., Barrister & Solicitor at the request of the third party Shynkar. The experts gave evidence as to the standard of careexpected of a reasonably competent solicitor in the context of this retainer. Analysis

a) Whether the Contract was and is valid and enforceable [33] Rehn drew up the offer to purchase the subject lands for a total purchase price of $345,500.00, including a deposit of$50,000.00 that was paid to Cox. Cox signed his acceptance of this offer on November 17, 2003. The contract provided that the propertyshall be available for the buyer at noon on December 10, 2003. The offer was also subject to the condition for the benefit of the buyerthat the buyer obtain mortgage financing from Farm Credit Canada on or before December 15, 2003.

It is anomalous that the conditionfor financing date would be after the possession date. However, the fact remains that Cox was not in the position to tender transferdocuments as of the possession date, nor was Precision in a position to confirm that financing had been obtained by that date. Thecondition, for the benefit of Precision, that the buyer obtain mortgage financing from Farm Credit Corporation before December 15,2003 was effectively waived by Precision. Financing was subsequently confirmed by FCC. [34] Therefore, neither party was ready, willing and able to close on the specified closing date.

Where time was of the essenceunder the contract, neither party was in a position to close as at that date. [35] The Ontario Court of Appeal in King v Urban County Transport Ltd., (ON CA), [1973] 1 O.R. (2d) 449considered the law as it pertains to this situation. Arnup J.A. speaking for the Court at para 22, stated: I think it is sufficiently established that a “time of the essence” provision, and non-compliance with it by a Plaintiff, can be set up as adefence only by a party who was himself ready, willing and able to close on the agreed date.

[36] The Court further stated at para 25: ... normally, in this situation, when both parties let the time go by, and one of the parties wishes to re-instate time as of the essence, it isnecessary to serve a notice upon the other party, fixing a new date for closing, which must be reasonable, and stating that time is to be ofthe essence with respect to the new date. [37] These principles have been affirmed in subsequent judicial decisions: Domicile Developments Inc v MacTavish, (ON CA), [1999] 120 O.A.C. 375 (Ont.

C.A.) at paras 11 and 12; Ching v Pier 27 Toronto Inc, 2021 ONCA 551 at para 52; Toorv Dhillon, 2020 BCCA 137, paras 45 to 50; Beacon Industrial Development Corp v G.C. Farms Supply Ltd, (1981), (AB KB), 123 D.L.R. (3d) 467 (ABQB) at paras 8 and 9; 532782 B.C. Inc v Republic Financial Ltd, 2001 ABQB 581 at paras 22 and23; Bowlen v Digger Excavating

(1983) Ltd, 2001 ABCA 214 at para 18. [38] In the Domicile Developments Inc case, supra, the Court of Appeal stated as follows at paras 11 & 12: Therefore, on the closing date neither Domicile nor MacTavish was entitled to enforce or end the agreement. A similar situation arose inKing v. Urban & Country Transport Ltd. (1974), (ON CA), 1 O.R. (2d) 449, 40 D.L.R. (3d) 641, a decision of thiscourt relied on by Binks J. In King v. Urban, the purchaser was not in a position to close on the closing date; but the vendor was also indefault and not entitled to rely on the time of the essence provision in the contract.

Arnup J.A. resolved the stalemate by applying twopropositions (at pp. 454-56): 1. When time is of the essence and neither party is ready to close on the agreed date the agreement remains in effect. 2. Either party may reinstate time of the essence by setting a new date for closing and providing reasonable notice to the other party.

An important corollary of Arnup J.A.'s second proposition is that a party who is not ready to close on the agreed date and whosubsequently terminates the transaction without having set a new closing date and without having reinstated time of the essence willitself breach or repudiate the agreement. [39] In the Bowlen decision, supra, the Alberta Court of Appeal stated at para 18 as follows: The rule that the equitable jurisdiction of the court is not triggered where time is of the essence is not absolute.

Courts have held that aparty may only rely on a time of the essence provision where three qualifications have been met. These qualifications are found in the“commonly cited rule”, set out in Shaw v. Holmes, (ON CA), [1952] 2 D.L.R. 330 at 334 (Ont. C.A.): Time may be insisted upon as of the essence of the agreement by a litigant, (

a) who has shown himself ready, desirous, prompt and eagerto carry out his agreement: Mills v. Haywood (1877), 6 Ch. D. 196; (

b) who has not been himself the cause of the delay or in default;Snell v. Brickles (1914), (SCC), 20 D.L.R. 209, 49 S.C.R. 360; revd (UK JCPC), 30 D.L.R. 31,[1916] 2 A.C. 599; and (

c) who has not subsequently recognized the agreement as still subsisting; he must not play fast and loose at hispleasure: Springer v. Gray (1859), 7 Gr. 276; Cudney v. Gives (1890), 20 O.R. 500; Labelle v. O’Connor (1908), 15 O.L.R. 519, andHarris v. Robinson (1892), 1892 CanLII 14 (SCC), 21 S.C.R. 390. [40] Neither party was ready, willing and able to close on the agreed December 10, 2003 possession date. When that date passedby, time was no longer of the essence.

The contract and the transaction remained in effect, such that it would close within a reasonableperiod of time, unless either of the parties formally remade time of the essence. [41] Shynkar had proposed a “probable” closing date of January 30, 2004. In doing so, however, time of the essence was not re-set.Neither party actually served written notice that time would be of the essence as at a specified date, within a reasonable period of time.Shynkar had been retained to prepare the legal documents to conclude the sale by Cox to Precision. He prepared the documentation inaccordance with his instructions.

However, it was Cox who repudiated the agreement, as he informed Shynkar on March 15, 2004. [42] During the course of the trial, Cox testified that he had repeatedly informed Shynkar, and also Rehn, verbally, that he did notwant to proceed with the transaction. There is no writing from Cox confirming this intention. Shynkar and Rehn deny that they had beenso informed by Cox. I find that Shynkar’s notes and his recollection in testimony at this trial accurately recounts his communicationswith Cox.

At no point did Cox so indicate to Shynkar before March 15, 2004, when he told Shynkar he was not sure he wanted toproceed, and on March 17, 2004, when he told Shynkar that the deal will not proceed. [43] Bogumil F. Romanko, K.C. gave expert opinion evidence at the request of the Defendant. In Mr. Romanko’s opinion, onceShynkar had received a copy of the Contract he should have advised both the seller and the buyer that the Contract, as drafted, was at anend and as such unenforceable on the basis that:

a) the Possession Date had passed and had not been extended on or before that date; andb) the Condition Date had passed and had not been extended on or before that date. [44] In his opinion, the financing condition was neither met nor waived in accordance with the terms of the Contract. [45] It was Mr.

Romanko’s further opinion that Shynkar was required to have advised the Seller and the Buyer that either: 1) theBuyer and the Seller must enter into an Amending Agreement signed by both parties pursuant to which the contract would be reinstated,the Possession Date amended to January 30, 2004 and the Financing Condition waived; or 2) a completely new Real Estate PurchaseContract be entered into between the Buyer and the Seller. [46] However, this opinion does not accord with the cases cited above, to the effect that, where neither party was in a position toclose as of the possession date, the agreement remains in effect.

It would be up to either party to set a new date within a reasonableperiod of time, by written notice that time would then be of the essence. That did not occur in this case. [47] I conclude, therefore, that the contract remained valid and enforceable, and that Cox was in breach of the contract when herepudiated the agreement on March 17, 2004.

Other Issues raised by the Defence [ 48 ] Other issues were raised by Cox in defence of the claim by Precision:

a) that Precision had filed a caveat with respect to this agreement, that was subsequently discharged; and

b) the allegations raised against Shynkar in the third party proceedings. Discharge of Caveat [ 49 ] On March 19, 2004, Precision registered a Caveat with the Registrar of Land Titles, taking notice that Precision claims an interest as purchaser pursuant to an offer to purchase in writing dated November 17, 2003 and made between Kevin Cox as vendor and the Caveator as purchaser of the nine parcels of land legally described. [ 50 ] This Caveat was discharged on December 22, 2004.

Cox takes the position that by virtue of this discharge, Precision had no further claim against Cox pursuant to the offer to purchase and the action should therefore be dismissed on that ground. [ 51 ] The purpose and effect of a Caveat was explained by the Alberta Court of Appeal in Holt Renfrew & Co. v Henry Singer Ltd. , 1982 ABCA 135 at para 88 .

There, the Court stated that a “Caveat does not create rights, it merely protects rights”. [ 52 ] The Caveat Discharge reads as follows: Precision Forest Industries Ltd. of the City of Red Deer, in the Province of Alberta, the Caveator, acknowledges that it has no further interest under the Caveat in the nine parcels of land. [ 53 ] It is important to note that the Discharge provides that Precision “has no further interest under the Caveat ” (emphasis added). The Discharge does not state that Precision had no further underlying interest in the lands, or underlying interest against Cox.

By registering the Discharge, Precision was not relying on the Caveat to preserve its underlying rights related to the lands. Rather, the effect of the discharge put Precision in a lower priority position vis-à-vis subsequent encumbrancers. The Discharge did not extinguish Precision’s breach of contract claim against Cox or its underlying interest in the lands at issue. Third Party Proceedings against Shynkar [ 54 ] On March 29, 2006, Cox issued third party proceedings against Shynkar.

Cox denied any liability to the Plaintiff but, if Cox is in any way liable to the Plaintiff, then Cox claimed to be entitled to indemnity or contribution from Shynkar upon the following grounds:

a) Purporting to vary the terms of the Offer to Purchase without authority from the Defendant, express or implied, to do so;

b) Negligently misrepresenting to the Defendant his rights and obligations pursuant to the Offer to Purchase;

c) Negligently misrepresenting the Defendant’s interests in relation to the Offer to Purchase; and

d) Such further and other particulars of negligence as may be proven at the trial of this action. [ 55 ] Shynkar had been retained jointly by Precision and Cox to prepare the transfer documentation required to close their agreement as per the Offer to Purchase dated November 17, 2003. No written retainer agreement was drawn up at the time, however, the retainer was a binding oral agreement. The scope of the agreement, however, was for the preparation of the closing documentation.

Neither party had sought Shynkar’s legal advice on the offer to purchase itself, a copy of which was provided to Shynkar by FCC at the end of December 2003. He was not provided with a copy of the offer until the end of December 2003 by FCC. The scope of the retainer was therefore limited in this regard. As the Supreme Court of Canada stated in Strother v 3464920 Canada Inc. , 2007 SCC 24 at para 34 : When a lawyer is retained by a client, the scope of the retainer is governed by contract.

It is for the parties to determine how many, or how few, services the lawyer is to perform, and other contractual terms of the engagement. ... [ 56 ] While there was no written retainer agreement, I find that Precision and Cox did consent to the joint retainer. I also find that this retainer was limited to the preparation of the documentation required to conclude the transaction, including the documentation required by FCC for the financing to confirm the financing. There has been no complaint as to the professional quality of the closing documentation that Shynkar did prepare. [ 57 ] Cox’s expert, Bogumil F.

Romanko, K.C., opined that, as time was of the essence under the offer to purchase, the agreement was at an end or void for uncertainty as to the closing date preceding the condition date. [ 58 ] Romanko’s opinion is that Shynkar breached the required standard of care when acting for both buyer and seller, by not advising them to enter into an amending agreement signed by both parties by reinstating the contract, amending the possession date to January 30, 2004 and waiving the financial condition, or a completely new real estate purchase agreement to be entered into between the buyer and the seller. [ 59 ] However, as previously noted, the law established in the previous cases cited is that when neither party was ready willing or able to close the agreement by the stated possession date, then the agreement is not at an end.

Either party may provide reasonable notice establishing a new date for time of essence, but that was not done in this case. [ 60 ] Romanko was of the opinion that Shynkar should have given advice about an amending agreement or a new agreement, and that he breached the standard of care required of him as a solicitor in this regard. However, I find that as the agreement remained in force

and effect, Shynkar was under no obligation to provide such advice to Precision and Cox and he was not negligent in failing to do so. [ 61 ] The expert retained by the Plaintiff, Cyril Gurevitch, K.C., was of the opinion that it was standard practice that a conflict letter and retainer agreement letter would be signed at the same time as the conveyancing documentation was prepared to the clients for execution. [ 62 ] After being retained, Shynkar was keeping the clients informed and up to date with the status of the file as matters came to his attention.

As I have found, neither Precision nor Cox had sought legal advice from Shynkar at the time that they entered into the offer to purchase agreement. [ 63 ] After being informed by Cox on March 17, 2004 that he was not proceeding with the agreement, Shynkar appropriately sent the correspondence advising the clients, because of the emerging conflict, that they must seek independent legal advice.

Shynkar also obtained appropriate advice from the Law Society of Alberta Practice Advisor on how to proceed in the face of the emerging conflict and the obligations to provide information to newly appointed solicitors. [ 64 ] In argument, counsel for Cox submitted that Shynkar had made numerous errors in the handling of this retainer, constituting a breach of the standard of care required of a solicitor.

Without enumerating all of the argued errors, I cite the following as examples: ● Failing to insist on reviewing the offer before taking steps to advance the interests of any client (Cox, Rehn or FCC); ● Upon reviewing the offer on or about December 31, 2003, failing to clearly advise any of his clients that the offer was no longer valid (was dead) as written given the passage of the closing date, the inconsistent condition and closing terms and the erroneous land descriptions; ● Failing to obtain agreement and instructions from both Cox and Rehn to renew the offer, or draft a new purchase and sale contract with corrected land descriptions, a new closing date and condition removal date, a waiver or confirmation of the time is of the essence clause and clause related to the handling of the buyer’s deposit; ● Failing to make notes of instructions, advice or any crucial conversations with Cox and Rehn regarding the relevant terms of any new deal to ensure both parties were in agreement on all relevant terms, and in particular, “indefinite” closing date; ● Failing to copy all correspondence to Cox and Rehn when relevant to common interests. [ 65 ] There were more alleged errors constituting a breach of the standard of care required of Shynkar in the circumstances.

However, while Cox makes these assertions of errors, I find that none of the alleged errors constituted a breach of the standard of care required of a solicitor in these circumstances.

Also, some of the allegations are, in fact, contrary to the parties’ actual legal positions when the agreement persisted but time was no longer of the essence. [ 66 ] None of the alleged errors argued on behalf of Cox are cited by Cox’s expert as being in breach of a standard of care, other than the advice that Shynkar should have proposed to the parties that an amended agreement or a new agreement be entered into between the parties. I have found that Shynkar had no such obligation in the circumstances. He was retained to prepare the documentation to close the transaction in accordance with the contract.

This he did, until the date that Cox informed him that he would not proceed with the deal. As I have found, it was Cox who repudiated the valid and subsisting contract. Anything that Shynkar did or failed to do, in his role as solicitor, did not result in Cox’s decision to repudiate the contract. [ 67 ] At the conclusion of his expert witness statement, Cyril Gurevitch, K.C., stated as follows: In conclusion, while I agree with Mr.

Romanko, that it would have been prudent to obtain an extension agreement as to the condition and closing dates, in my respectful view, that lapse did not amount to a breach of duty to the Defendant for which damages would flow under the third party notice. [ 68 ] For the reasons that I have previously stated, I would not characterize this failure to obtain an extension agreement as a “lapse” on the part of Shynkar. The agreement remained valid and enforceable.

An extension agreement would not have been required in these circumstances. [ 69 ] Furthermore, the additional errors alleged to have breached Shynkar’s standard of care are not borne out by any expert opinion evidence that the Court may consider in support of these allegations. [ 70 ] As noted by the Alberta Court of Appeal in Kostic v Thom , 2021 ABCA 406 at para 15 : ... expert evidence is required to establish the standard of care to which a lawyer will be held.

Although not an absolute rule, there is a strong presumption that expert evidence is required to prove the standard of care expected of a professional. ... in absence of such evidence, trial judges should be cautious about attempting to determine if the professional was negligent. [ 71 ] With no standard of care opinion relating to the other alleged errors, Cox has failed to establish the threshold standard of care required to assess whether the alleged errors were even breaches, let alone negligent. [ 72 ] Cox also submitted that Shynkar had breached the standard of care with respect to the interests of Precision.

However, Precision did not institute legal proceedings against Shynkar alleging professional negligence or anything else. There is no basis for the Court to make any finding vis-à-vis any alleged negligence on the part of Shynkar in relation to Precision. No such allegations have been raised in the pleadings. [ 73 ] I conclude that the third party proceedings by Cox against Shynkar are dismissed.

Conclusion [ 74 ] As stated, I find that the offer to purchase remained valid and enforceable, and that Cox breached the offer to purchase upon advising that he was repudiating the transaction. [ 75 ] As costs normally follow the event, the costs of Precision with respect to this trial, and the costs of Shynkar in defending the third party proceedings, are payable to those parties by Cox. If the parties are unable to agree on costs, then they may make written submissions to me within 60 days of the date of these Reasons for Decision. Heard on the 10 th -14 th day of January, 2022.

Written submissions by Counsel for the parties: 31 st day of January, 2022 - 22 nd day of February, 2022 . Dated at the City of Edmonton, Alberta this 4 th day of January, 2023. James T. Neilson J.C.K.B.A. Appearances: Ryan P. Krushelnitzky Field Law for the Plaintiff William B. Hembroff Bennett Jones LLP for the Defendant Kember Handzic Emery Jamieson LLP for the Third Party Defendant