Goodlet v. McCormick, 2021 BCPC 275

Citation: Goodlet v. McCormick 2021 BCPC 275 Date: 20211006 File No: 128078 Registry: Kelowna IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (Small Claims Court) BETWEEN: DAVID GOODLET AND ARLENE GOODLET CLAIMANTS AND: JAMES MCCORMICK & ALISON MCCORMICK & NICHOLAS AUBIN & NICHOLAS AUBIN NOTARY CORPORATION & NICHOLAS AUBIN NOTARY CORPORATION d.b.a.

AUBIN & ASSOCIATES DEFENDANTS File No: 128795 Registry: Kelowna IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (Small Claims Court) BETWEEN: JAMES MCCORMICK AND ALISON MCCORMICK CLAIMANTS AND: TAYLOR MUSSEAU & THE OWNERS OF KELOWNA CENTURY 21 ASSURANCE REALTY LTD. & MASSIMO "MAX" CARBONE AND ANN CARBONE & NICHOLAS AUBIN & NICHOLAS AUBIN NOTARY CORPORATION & NICHOLAS AUBIN NOTARY CORPORATION d.b.a. AUBIN & ASSOCIATES DEFENDANTS RULING ON APPLICATION OF THE HONOURABLE JUDGE A. TAM Counsel for J. & A. McCormick: S. Tessmer, by telecommunication Counsel for N. Aubin; N. Aubin Notary Corp. et al.: J.

Foster, by telecommunication Place of Hearing: Kelowna , B.C. Date of Hearing: September 21, 2021 Date of Judgment: October 6, 2021 Overview

[ 1 ] This is an application brought on by Nicholas Aubin, Nicholas Aubin Notary Corporation, and Nicholas Aubin Notary Corporation, d.b.a. Aubin & Associates (collectively the “Aubin Defendants”) for a dismissal of the action brought against them by James and Alison McCormick (the “McCormicks”) on the basis that it is an abuse of the Court’s process. At a very high level, the applicants say that there is already another law suit against them for exactly the same alleged negligence.

The McCormicks, on the other hand, say that the two law suits are separate, and that they are defendants in the first law suit, and that a dismissal of their action would leave them with no recourse. Background Facts [ 2 ] The McCormicks and the Goodlets (David and Arlene) jointly purchased a property on November 4, 2017. They jointly retained the Aubin Defendants to provide notarial services for the transfer of this property. Alison McCormick and David Goodlet are cousins. [ 3 ] At the material time, the Goodlets were Canadian citizens.

The McCormicks were citizens of the United Kingdom and were neither Canadian residents nor permanent residents. However, the McCormicks filed a property tax return with the Ministry of Finance, indicating that they were. In November 2019, the Ministry of Finance (BC) concluded that they were not and assessed an additional tax, known as the Foreign Buyers’ Tax, pursuant to s. 2.02 of the Property Transfer Tax Act (“ PTTA” ). This

section imposes an additional tax on buyers who are foreign nationals and provides that each joint purchaser on a transaction is jointly and severally liable for any outstanding tax. In pursuit of the additional tax owing ($65,044), the provincial government filed a lien on the property. In June 2020, the Goodlets purchased the McCormicks’ interest in the property, refinanced, and paid off the lien. As a result, the Goodlets filed a claim against the McCormicks and the Aubin Defendants.

The Goodlets claim an amount of $32,986.54, that being (approximately) their half of the $65,044 owing on the Foreign Buyers’ Tax. The Goodlets say that the Aubin Defendants were negligent, among other things, in not correctly determining the citizenship status of the McCormicks and collecting from them the appropriate amount of tax owing. The Goodlets also say that the McCormicks misrepresented their citizenship status on the tax return.

I will refer to this claim, as counsel have done, as the “Goodlet Action”. [ 4 ] Subsequent to the Goodlet Action being filed, the McCormicks started their own claim as against the Aubin Defendants, as well as the realtor (Mr. Taylor Musseau) and the owners of the real estate company (Max and Ann Carbone). The McCormicks say that the Aubin Defendants were negligent in not advising the McCormicks about the Foreign Buyers’ Tax and in miscalculating the amount of tax payable on the transaction. Similarly, the McCormicks say that Mr. Musseau was negligent in not properly advising them about the tax.

The McCormicks sue to collect on their half of the amount of the tax owing ($32,986.54). By consent, the action as against Max and Ann Carbone was withdrawn. I will refer to this action as the “McCormick Action”. The Present Application [ 5 ] The Aubin Defendants apply to this Court, pursuant to Rules 16(6)(

o) and 7(14) of the Small Claims Rules to dismiss the McCormick Action, at least with respect to the Aubin Defendants. Specifically, this Court has jurisdiction to dismiss a claim if it is “frivolous or an abuse of the court’s process”. The McCormicks oppose the application. The Goodlets take no position and did not participate at this hearing. Mr. Musseau is in agreement with the application but did not participate at this hearing. [ 6 ] In support of the application, Mr. Foster provided a comprehensive written argument. However, as ably as Mr.

Foster put the Aubin Defendants’ position forward, I have concluded that the application should be dismissed for the reasons below. I will use the framework Mr. Foster laid out in his written brief and address each of the issues in turn. Does this Court have jurisdiction to dismiss a claim if it is an abuse of process? [ 7 ] As alluded to above, Rule 7(14) specifically allows this Court to dismiss a claim at a settlement conference if it determines that it is frivolous or an abuse of the court’s process. Rule 16(6)(

o) provides that, following a hearing and with notice to the other party, a Court has jurisdiction to grant any order the Court has the power to make. I conclude, therefore, that this Court does have jurisdiction to grant the order sought. The McCormicks do not contest this point. Is the McCormick Action an Abuse of Process? [ 8 ] The doctrine of “abuse of process” allows the court to dismiss actions commenced for improper purposes. As Mr. Justice Punnett said in Steritt v.

Canada, 2017 BCSC 1064 at para. 11 , it is a “flexible doctrine unencumbered by specific requirements” and is “directed to prevent actions that violate such principles as judicial economy, consistency, finality, and integrity of the administration of justice”.

One scenario where that could happen is where the same plaintiff commences multiple actions against the same defendant for exactly the same alleged wrongdoing. [ 9 ] The Aubin Defendants say that it is an abuse of the court’s process for the McCormicks to start another action, alleging the same negligence, for the same amount, when the Goodlet action had already been started. It was open to the McCormicks to simply join the Goodlets in the same action as joint purchasers, or let the Goodlets pursue the matter on behalf of all the joint purchasers. In support of this proposition, Mr. Foster cites Stanford v.

Beazley, 2019 BCSC 671 . Similar to the case at bar, in Stanford , Mr. Stanford and Ms. Stanford purchased a property, retaining the defendant real estate company in the process. There was alleged negligence on the part of the defendant. Ms. Stanford sued in Small Claims Court, and Mr. Stanford sued in BC Supreme Court, alleging the same negligence, and seeking the same damage. At para. 39, the Court said: [39] It is also well established as a matter of common law that the commencement by a plaintiff of more than one action in the same jurisdiction arising from the same dispute is an abuse of court process.

As observed by Lord Jessel over a century ago, "It is prima facie vexatious to bring two actions where one will do": see McHenry v. Lewis , [1883] 22 Ch. D. 397 . [ 10 ] In the end, Madam Justice Horsman concluded that it was an abuse of process to have parallel proceedings, alleging the same negligence brought on by these purchasers who are married to one another. [ 11 ] The difficulty in relying on Stanford is that the plaintiffs in those two actions are husband and wife, working in concert, and their

interests were very much aligned. Although different people, there was no conflict between the couple and the judgment read as if they were very much working together. In the present case, the interests of the McCormicks are not at all aligned with those of the Goodlets. Indeed, in the Goodlet Action, the McCormicks themselves are defendants as the Goodlets allege that they misrepresented their citizenship status. Given that dynamic, I find that it was not open to the McCormicks to simply “join the Goodlet Action” and recover what they say is the award due to them from the Aubin Defendants.

The McCormicks are also unable to compel the Goodlets to seek recovery for the entirety of the Foreign Buyers’ Tax from the Aubin Defendants and share it with them. This is particularly so given that the relationship between the McCormicks and the Goodlets have “deteriorated and became unworkable” according to the pleadings. [ 12 ] In my view, one must look at the McCormicks and the Goodlets as completely separate entities even though they were joint purchasers of the property. The existence of a conflict, both legal and interpersonal, adds to that separation.

While the fact that they are different claimants, by itself, does not mean necessarily that the present application must fail, the relationship between the claimants in the different actions need to be looked at closely to better gauge whether a subsequent law suit should be considered an abuse. For example, in Lacharity v. University of Victoria Students’ Society , 2012 BCSC 1819 , Mr. Justice Goepel heard an application for dismissal of a petition on the basis of an abuse of process. Mr. Lacharity and Mr.

Foster were members of a group called the “Access Association of Disabled Students” and they alleged that the University of Victoria Students’ Society (UVSS) improperly withheld funding to Access. Prior to Mr. Lacharity and Mr. Foster’s petition, Access had already filed a petition against UVSS, for exactly the same alleged wrongdoing. In dismissing the petition as an abuse of process, Mr. Justice Goepel commented on the common interest of the petitioners and Access. At para. 27, the Court said: [27] I recognize that the petitioners in the two proceedings are different.

In the circumstances of this case it is a distinction without a difference. The petitioners are active members of Access. Their petition is brought for Access's direct financial benefit. The substantive relief they seek is that UVSS pay over to Access the monies raised by the referenda. It is the identical relief sought by Access in the 2011 Petition. There is plainly a sufficient community of interest to establish privity between the petitioners and Access: Tylon Steepe Homes v. Pont , 2011 BCSC 385 . [ 13 ] By contrast, I see no similar community of interest here.

The Goodlets blame, among others, the McCormicks for misrepresenting their citizenship status and seek to recover from them the Goodlets’ share of the Foreign Buyers’ Tax. Given my conclusion that it was not open to the McCormicks to seek their remedy in the context of the Goodlet Action, I find that it is not an abuse of process for them to have started their own against the Aubin Defendants. Indeed, an unfairness would be done to the McCormicks if they were barred from commencing such an action.

Did the Goodlets and McCormicks split their claim? [ 14 ] It was argued that the Goodlets and the McCormicks tactically split their claim in order to circumvent the monetary jurisdiction of this Court. In light my finding that there is no community of interest between the two sets of claimants, I am not satisfied that this is what is happening. Respectfully, I disagree with Mr. Foster’s characterization that this is a $65,000 claim split into two $33,000 claims. Rather, I agree with Mr. Tessmer that these are two separate $33,000 claims.

Parenthetically, I note that the Goodlets do not oppose the present application for the McCormicks’ claim to be struck. If the two sets of claimants are indeed working in concert to split their claim, one would have expected the Goodlets to oppose the application. Does Rule 7.1(4) Apply to these proceedings? Rule 7.1 — Transfers and Multiple Claims Multiple claims

(4) If more than one claimant has filed a notice of claim or a notice of civil resolution tribunal claim against the same defendant or defendants with respect to the same event, or if one claimant has filed notices of claim or notices of civil resolution tribunal claim against more than one defendant with respect to the same event, the judge may (

a) hear at one time evidence that relates to all the claims, (

b) apply that evidence to all the claims, and (

c) make a decision in each of the claims, even though the total monetary outcome of all the claims (not including interest and expenses) is likely to exceed $35 000. [ 15 ] In my view, this is an appropriate application of Rule 7.1(4). The mission statement of the Small Claims Act is to resolve claims in a “just, speedy, inexpensive and simple manner”. The evidence led in both actions will undoubtedly overlap to a large degree. Expedience and judicial economy call out for the two actions to be heard at the same time.

This procedure will also avoid the concern regarding res judicata since the same judge will be called on to decide both cases at the same time based on the same set of facts. Moreover, I do note that despite there being a number of issues in common, each case will have its own nuance. Strictly theoretically and hypothetically, I do not see any inherent difficulty with the trial judge concluding that the Aubin Defendants are liable vis-à-vis one set of claimants, but not the other. In any event, my sister Judge Heinrichs has already made an order that both actions will be heard together.

There is clearly much wisdom in that order. Is Transfer to the Supreme Court required? Rule 7.1 states: Transfer of claim to Supreme Court

(1) If satisfied that the monetary outcome of a claim (not including interest and expenses) may exceed $35 000, a judge must transfer the

claim to the Supreme Court (

a) on application at any time, or (

b) on the judge's own motion at the settlement conference or trial. [ 16 ] Given my finding that the Goodlets and the McCormicks have separate claims for $32,986.54 each, I am satisfied that each claim remains within the monetary jurisdiction of this Court. And since Rule 7.1(4) permits the total monetary outcome of all the claims to exceed $35,000, I find that a transfer to Supreme Court is not necessary.

Does dismissing the McCormick Action do an injustice to the McCormicks? [ 17 ] The Aubin Defendants say that there would be no injustice done to the McCormicks should their action be dismissed since “nothing prevents the McCormicks from sharing in any award the Goodlets may receive” and that “the McCormicks retain the right to commence an action for contribution against the Goodlets for any amount the Goodlets may recover and do not share with the McCormicks”. With respect, I do not share the same view.

The Goodlets started an action in Small Claims court for $32,986.54 (plus $625 as an interim payment on the account). That is something over which the McCormicks have no control. Indeed, they are themselves defendants and it may well be that the Goodlets aim to collect their judgment from the McCormicks. Legally and practically, the McCormicks are in no position to share any judgment the Goodlets may secure. Additionally, any award the Goodlets may receive is necessarily limited to $35,000.

Even if the McCormicks could seek a contribution from the Goodlets, the total to be shared still falls well short of the $65,044, which is the total amount of the Foreign Buyers’ Tax that was owed. Unless the McCormicks commence an action themselves, I do not see how they could possibly seek to recover their share of the tax in its entirety. Mr. Foster submitted that the choice between small claims and Supreme Court is one that every claimant/plaintiff has to make. With the reduced monetary limit comes sacrifices in procedural safeguards, but lesser expenses.

While that is clearly true, this was a choice that the Goodlets made; the McCormicks had no say in it. It would be prejudicial to the McCormicks to limit the remedies available to them under the circumstances. Conclusion [ 18 ] Returning to Steritt , I do not see the McCormick Action as violating the principles of judicial economy, consistency, finality, or integrity of the administration of justice. Short of filing an action themselves, there is no realistic legal mechanism to remedy the additional tax they had to pay as a result of the Aubin Defendants’ alleged negligence.

Given the desire to resolve cases in a just, speedy, inexpensive and simple manner, the two actions being heard together pursuant to Rule 7.1(4) where the trial judge will apply the same evidence to all claims makes imminent sense. For the foregoing reasons, the present application is hereby dismissed. ________________________ The Honourable A. Tam Provincial Court Judge