Sharon Jacobs Plaintiff / Defendant by counterclaim And: Judy Clarke Defendant / plaintiff by counterclaim, 2018 NLSC 185

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation: Jacobs v. Clarke, 2018 NLSC 185 Date: September 17, 2018 Docket: 201601G3552 Between: Sharon Jacobs Plaintiff / Defendant by counterclaim And: Judy Clarke Defendant / plaintiff by counterclaim Before: Justice Deborah J. Paquette Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: October 23, November 3, 2017, and May 25, 2018 Appearances: Raymond G. Critch Appearing on behalf of the Plaintiff/Defendant by Counterclaim Sarah J.

Clarke Appearing on behalf of the Defendant/Plaintiff by Counterclaim Christopher J. Peddigrew Appearing on behalf of Intended Second Third Party Colin D. Feltham Appearing on behalf of Intended Third Third Party Authorities Cited: CASES CONSIDERED: Ryan v. Dew Enterprises Ltd, 2014 NLCA 11; Burry v. Centennial Properties Ltd. (1979),

(NS CA), 38 N.S.R. (2d) 450, 69 A.P.R. 450 (C.A.); Midnight Marine Ltd. v. Aviva Insurance Co. of Canada, 2014 NLTD(G) 166;Vardy v. Dufour, 2008 NLCA 22; 10475 Newfoundland Ltd. v. Houston, 2012 NLCA 34; Stanford v. Lawton’s Drug Stores Ltd., 2013NLTD(G) 161; HSBC Bank Canada v. Drover, 2018 NLSC 30; Economical Mutual Insurance Co. v. Bank of Nova Scotia, 2015 NLCA29; Congregation of the Sisters of Mercy of Newfoundland v. Stokes Management Ltd., (NL SC), 217 Nfld. &P.E.I.R. 153, 651 A.P.R. 153 (N.L.S.C.(T.D.)); Builders Holdings Ltd. v.

Gasland Properties Ltd., 2001 ABQB 823 STATUTES CONSIDERED: Conveyancing Act, R.S.N.L. 1990 c. C-34; Judicature Act, R.S.N.L. 1990, c. J-4; Limitations Act, S.N.L.1995, c. L-16.1 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sched.

D REASONS FOR JUDGMENT Paquette, J.: INTRODUCTION [1] The Defendant / Plaintiff by Counterclaim (the “Applicant”) and the Plaintiff / Defendant by Counterclaim (“Respondent”)entered into a mortgage agreement and promissory note dated 17 May 2013 securing the Applicant’s purchase of property in Town ofGreen’s Harbour operating as a restaurant and service station. The intended first third party, Crocker & Jacobs Services Ltd. was thevendor of the commercial premises.

The Respondent was at all material times its sole director. [2] The purchase price was $200,000, with $100,000 payable on closing and three annual payments of $33,333.33. TheApplicant alleges that she soon encountered serious problems with the premises and defaulted in the timing of the first payment. [3] Proceedings were initiated to recover the mortgage balance under the authority of the Conveyancing Act, R.S.N.L. 1990 c. C-34.

Unable to sell the property at two public auctions, a private sale for less than 75% of the appraised value was approved by order ofthis Court on 5 February 2016. [4] The Respondent commenced legal action for the mortgage deficiency and interest in the amount of $76,891.14.

TheApplicant has counterclaimed in that proceeding seeking damages for breach of contract, breach of undertaking and fraudulent and/ornegligent misrepresentation of the conditions and ownership of certain property, which she alleges prevented her from operating thebusiness, for which she seeks damages. [5] The Applicant applies pursuant to Rule 12.03 of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sched.

D (the“Rules”) to add the vendor Crocker &Jacobs Services Ltd., the realtor Michelle Crocker and legal counsel Marc Cooper as third parties,claiming that they may be liable to her in indemnity or alternatively by way of contribution. [6] Each of the intended third parties was served with notice of these proceedings. Ms. Crocker and Mr. Cooper filed affidavitevidence and made submissions in opposition to their joinder as third parties. The intended first third party, Crocker & Jacobs ServicesLtd. did not respond to the application nor participate in the hearing.

ISSUES [7] The issues to consider here are: ⋅ Whether the Applicant’s claim falls within the scope of third party claims ⋅ Whether it is an appropriate case to exercise judicial discretion to add third parties THE LAW [8] Rule 12 addresses third party claims.

The following pertinent provisions provide: 12.02(1) Where a defendant claims against any person, who is a co-defendant or who is not a party to the proceeding, that the latter is ormay be liable to the defendant for all or any part of the plaintiff's claim against the defendant, the defendant may, before the defendantfiles a defence or appears on a hearing under an originating application, issue and serve a third party notice without the leave of theCourt, and thereafter with leave. 12.02(3) A third party shall, from the time of service upon the third party of the third party notice, be a party to the proceeding with thesame right to oppose any claim made against the third party as if the defendant had commenced a proceeding against the third party inthe ordinary way.

12.03 Application for leave to issue third party notice 12.03(1) Unless the court otherwise orders, an application for leave to issue a third party notice shall be made with notice to all existing parties. 12.03(2) An application for leave to issue a third party notice shall be supported by an affidavit stating (

a) the nature of the claim made by the plaintiff in the proceeding; (

b) the stage which the proceeding has reached; (

c) the nature of the claim made by the applicant and the facts on which the third party notice is based; and (

d) the name and address of the person against whom the third party notice is to be issued and served. 12.05(1) Unless the Court otherwise orders, a third party shall deliver a defence within ten days from the service of the third party notice upon the third party, or appear on the hearing under the notice within the time limited therein. 12.05(2) A third party may dispute the liability of the defendant to the plaintiff or the third party's liability to the defendant, or both, in a defence or on the trial or hearing under a third party notice. [ 9 ] The Newfoundland and Labrador Court of Appeal in Ryan v.

Dew Enterprises Ltd , 2014 NLCA 11 set out the principles applicable to the joinder of third party claims pursuant to Rule 12. Green, C.J.N.L., for the court explained the role of

section 94 of the Judicature Act , R.S.N.L. 1990, c. J-4 in the

interpretation and application of Rule 12. [ 10 ] Sections 93 and 94 of the Judicature Act provide: 93. Equitable and legal relief The court may grant to a defendant (

a) in respect of an equitable estate or right, or other matter of equity; and (

b) in respect of a legal estate, right or title claimed or asserted by that defendant, all the relief against a plaintiff or petitioner that the defendant has properly claimed and that the court might have granted in a proceeding instituted for that purpose by the same defendant against the same plaintiff or petitioner. 94 Joined defendant 94(1) Relief (

a) claimed under

section 93; (

b) related to or connected with the original subject matter of the proceeding; and (

c) in a similar manner claimed against another person whether a party to the same proceeding or not,

may be granted against a person who has been served with written notice of the claim under a rule or an order of the court, and that mighthave been granted against that person if that person had been made a defendant to a proceeding instituted by the defendant seeking reliefunder

section 93 for a similar purpose. 94(2) A person served with a notice under subsection (1) is considered to be a party to the proceeding with the same rights in respect ofthat person's defence against the claim as if that person had been sued in the ordinary way by a defendant seeking relief under

section 93. [11] Ryan instructs that third party applications engage judicial consideration as to whether the defendant’s cause of action againstthe third party “arises out of the same general factual and/or legal matrix of the extant issues between the plaintiff and defendant” (atpara. 58). [12] Green, C.J.N.L. wrote, “...

The touchstone for determining whether the court should exercise its discretion to allow a third partyclaim should therefore be whether the third party claim is related to or connected with the original subject matter of the proceeding” (atpara. 61). [13] Ryan considered similarly worded provisions in other jurisdictions, citing Burry v.

Centennial Properties Ltd. (1979), (NS CA), 38 N.S.R. (2d) 450, 69 A.P.R. 450 (C.A.) at paragraph 63, where the Nova Scotia Court of Appeal concluded: 63 … [31] … All the defendant must show is that the plaintiff is claiming against him something for which the third party is liable to thedefendant and it then becomes convenient to have the common issues tried at the same time unless good reason is shown by one of theparties to convince the Court that it would be unfair to have a joint trial of the two causes. [14] The facts in Burry, which grounded the requisite connection there are also set out in paragraph 63: 63 … [35] Surely, as here, where one party undertakes an obligation to provide a housing unit to its customer "constructed in a thorough andworkmanlike manner" and then contracts with another party to construct that unit in a similar manner, and it was subsequently allegedthat the unit was not properly constructed, there are sufficient common issues to justify the holding of a single trial in which all partiesmay participate and in which the rights of all parties will be determined in accordance with the findings of the Judge. [36] The defendant would simply know that if he was liable for failure to live up to his contractual obligation to the plaintiff he couldpass this obligation over to the third party, who did not agree to indemnify him, but did agree to do all the things necessary to enable himto meet his obligations to the plaintiff.

This, in my opinion, is the plain meaning of the words in rule 17.02. [15] It is incumbent on the Applicant to explain the basis upon which the third party joinder is sought. In Ryan the statement ofdefence did not claim breach of a duty of care, failed to particularize negligence, and did not plead contractual indemnity. The court ofappeal remarked that while the best practice was to recite this information in the statement of defence, it was not mandatory. Theaffidavit supporting the third party claim, however, must detail the facts relied upon.

Following review, the court was satisfied that therewas a basis for the third party claim, reasoning that if the intended third party had been retained to do the design work and it was notproperly performed, the defendant could be in breach of the contract with the plaintiff. From such a relationship may arise either animplied indemnity or a contractual claim against the intended third party.

The court summarized these scenarios at paragraph 103: 103 In the current context, therefore, depending on how the evidence unfolds and what findings the trial judge makes, it is possiblethat Dew could have a claim against Ryan Designs to be indemnified for losses Dew faces at the hands of Pakara on the basis that,having been requested to undertake the work in a competent manner and undertaking it, Ryan Designs was implicitly undertaking that ifit was not competently performed, Ryan Designs would indemnify Dew from any resulting loss.

Alternatively, and perhaps more likely,Dew could have a claim against Ryan Designs for damages for breach of contract. Either of these types of claims can be the subject ofthird party proceedings. [16] The Applicant’s statement of defence asserts that the Respondent is in breach of her agreement with the Applicant. Thecounterclaim states that the Respondent misrepresented the condition of the premises with the result that the mortgage agreementassociated with the sale is impacted by the negligent and/or fraudulent misrepresentations.

The counterclaim asserts that the Respondentis liable in damages for breach of contract and tortious conduct. [17] This court in Midnight Marine Ltd. v. Aviva Insurance Co. of Canada, 2014 NLTD(G) 166 included within the scope of a thirdparty claim an allegation that a party had acted as agent for another, writing that such a finding was consistent with the broadinterpretation of Rule 12 as articulated in Ryan (at paras. 7, 13 - 15). [18] A third party claim must be related to or connected with the original action, not the counterclaim (Ryan at para. 38).

Independent claims can be initiated by third party procedure, provided the claim is related to or connected with the original subject

matter of the action ( Ryan at para. 45 ). A claim in negligence, even though not falling within the concept of indemnity, is covered by the scope of Rule 12 ( Ryan at para. 95 ). [ 19 ] In these proceedings the causes of actions as between the Applicant and the intended second and third third parties are alleged to be statute-barred. It is also advanced that the claim of negligent misrepresentation as against the intended first third party falls outside the limitation period.

Section 5 (

b) of the Limitations Act provides: 5. Following the expiration of 2 years after the date on which the right to do so arose, a person shall not bring an action (

b) for damages in respect of injury to person or property including economic loss arising from negligent misrepresentation and professional negligence whether based on contract, tort or statutory duty; [ 20 ] Section 11(1) of the Limitations Act , S.N.L. 1995, c. L-16.1 permits the addition of a third party where the limitation period has expired where the claim is related to or connected with the original action: 11(1) Notwithstanding

section 17, where an action to which this or another Act applies has been commenced, the lapse of time limited for bringing an action is no bar to (

a) a counterclaim; (

b) a third party claim; (

c) a claim by way of set-off; or (

d) the addition of a new party under the Rules of the Supreme Court, 1986 respecting a claim relating to or connected with the subject matter of the original action. [ 21 ] Counsel brought to the Court’s attention case law analyzing the addition of new defendants after the expiration of a limitation period. In Vardy v. Dufour , 2008 NLCA 22 , the court of appeal considered the applicable rule, 7.04(2) in assessing whether two medical doctors should be added as defendants.

The court concluded that it was not necessary to join the new defendants because the issues of causation and damages as between the existing parties could be decided without their participation. The court did not conduct an analysis of third party joinder as there was no application to add them in such capacity. [ 22 ] In 10475 Newfoundland Ltd. v. Houston , 2012 NLCA 34 the plaintiff also sought to add new defendants after the expiration of the limitation period.

The application was denied; the court referring to the fact that discoveries had taken place, proceedings were ready for trial, and the essential aspects of the cause of action were in place, noting the underlying principle to be whether the addition of the defendants was “related to or arising from the original cause of action as pleaded” (at para. 49). [ 23 ] Houston addresses the purposive impact of the Limitations Act explaining that in the exercise of discretion an underlying principle remains whether that party’s participation is related to or connected with the original action (at para.67). [ 24 ] With particular reliance on Rule 7.02 and case law articulating relevant consideration in the addition of defendants, the Respondent asserts that the third parties are unnecessary here because they have no evidence to offer relating to the deficiency mortgage litigation in which no damages are sought against them.

This argument fails to take into consideration the particular nature of a third party claim as explained in Ryan . Third parties are joined by a defendant, not because they are necessary to the adjudication of a plaintiff’s claim but because the indemnity or contribution that a defendant seeks from them “arises out of the same general factual and/or legal matrix of the extant issues between the plaintiff and defendant”( Ryan at para. 58 ).

Rule 12 and the authoritative case law interpreting it, demonstrate that the plaintiff/defendant relationship is different than the plaintiff/third party relationship, with the result that the evaluation of necessity in their participation in litigation is to be interpreted within this context. (See also Stanford v.

Lawton’s Drug Stores Ltd. , 2013 NLTD(G) 161 and Midnight Marine Limited ) [ 25 ] Ryan further instructs that even if a third party claim falls within the scope of Rule 12, the court has a discretion to deny joinder if from a practical point of view it would be contrary to considerations of justice and fairness ( at para. 74). Examples include consideration as to whether the trial is imminent and whether the addition of third parties would unduly complicate the proceedings. [ 26 ] In HSBC Bank Canada v.

Drover , 2018 NLSC 30 , Handrigan, J. applied the rules set out in Ryan to an application for joinder of third parties. In that case the statement of claim alleged that legal counsel did not follow the lender’s instructions to secure a first mortgage charge on property ultimately resulting in loss for the Bank. [ 27 ] Handrigan, J. referred to another decision of the Newfoundland and Labrador Court of Appeal, Economical Mutual Insurance Co. v. Bank of Nova Scotia , 2015 NLCA 29 , writing at para. 12 :

12 Our Court of Appeal revisited third party applications more recently in Economical Mutual Insurance Co. v. Bank of Nova Scotia , 2015 NLCA 29 . Welsh, J.A. acknowledged Green, C.J.N.L.’s (as he then was) comprehensive review of the law in Ryan and summarized her understanding of the “analysis” a court should undertake when deciding to issue third party notices: 22. … [T]he the focus is on whether the facts and allegations set out in the applications provide the foundation for a cause of action, that is, an arguable case.

The merits of the cause of action are left for determination at trial based on the evidence and the parties’ submissions on the applicable law. [ 28 ] He summarized the test for third party claims at paragraph 13: 13 From my review of the law, I am satisfied that Mr.

Drover may only succeed in his application, if he proves all of the following: • His claim falls within the scope of third party claims allowed by the Rules and legislation; • The facts and allegations he relies on ground a cause of action, to the standard of an arguable case, with the merits of his claim to be decided at trial; and • The existing litigation between him and HSBC can accommodate the third party claim. [ 29 ] The defendant in HSBC sought to serve a third party notice against Pezzack Financial Services (“Pezzack”) claiming they had agreed to rank their mortgage below that of the plaintiff; failed to do so and therefore should indemnify or contribute to the defendant in the event that he was found liable to the Bank. [ 30 ] Handrigan, J. stated that the defendant would have to show that Pezzack (

i) represented that it would subordinate its security; (ii) Mr. Drover was permitted to rely on those representations; and (iii) he did so. At this stage of the analysis the court was satisfied that the claim against Pezzack fell within the scope of permissible third party claims as set out in Ryan . [ 31 ] Handrigan, J. next considered whether Mr. Drover had an arguable case against the intended third party. He noted that Pezzack deposed in affidavit evidence that it had not given any assurances that the HSBC mortgage would be a first charge.

The defendant was unable to provide specific information to counter this evidence through “e-mail, hard copy, text messages nor anything of the like to support his assertion that Pezzack Financial agreed to subordinate its security interests in 184 Signal Hill Road to HSBC’s” (at paras. 52 and 53). [ 32 ] Handrigan, J. also concluded that the addition of the third party claim would be unjust in the circumstances.

The defendant made no reference to a potential claim against Pezzack in his pleadings and there was no indication that he had ever advised the Bank or the Law Society (once they became involved), that he had relied on representations by Pezzack. The facts established that he either “routinely” ignored communications from the Bank and the Law Society or “misrepresented” matters when he corresponded with them (at paras. 58 to 59).

Whether the Applicant’s claim falls within the scope of third party claims [ 33 ] The statement of claim, the starting point, seeks payment of a deficiency remaining under a mortgage document. The counterclaim and statement of defence allege negligent and/or fraudulent misrepresentation in the sale transaction and also claim breach of contract, resulting in damages.

Equitable estoppel is advanced as a bar to the recovery of the mortgage deficiency. [ 34 ] In her defence to the counterclaim, the Respondent denies the existence of an agreement or any representations by her respecting the premises. [ 35 ] Ryan clarifies that the factual circumstances justifying the third party claim should be contained in the statement of defence, but this is not mandatory provided that the facts are adequately set out in the defendant’s affidavit supporting the application (at paras. 71 and 72). [ 36 ] The third party claim asserts indemnity or alternatively a contribution from the intended third parties should liability be established as against the defendant.

It sets out that the first intended third party, Crocker & Jacobs Services Ltd., sold the commercial premises to the Applicant and in breach of its agreement failed to maintain insurance and negligently and/or fraudulently misrepresented the condition of property and ownership of certain assets, depriving the Applicant from any monetary benefit.

The intended second third party, the realtor, is alleged to have withheld information about the condition of the premises and the intended third third party, legal counsel, is alleged to have failed to protect the Applicant’s interests and to have been in a conflict of interest throughout the course of the transaction. [ 37 ] The Applicant’s affidavit states that the Respondent is the sole director of Crocker & Jacobs Services Ltd. and at all material times was acting on behalf of the corporate vendor in the purchase and in doing so had misrepresented that the equipment was in good working condition; the electrical system was up-to-code; the vendor owned the gas pumps and coolers; the roof was in good condition;

and the propane infrastructure was functional. She also asserts that the Respondent, speaking on behalf of Crocker & Jacobs Services Ltd., misrepresented the status of insurance coverage.

The Applicant deposed that she incurred significant expense to rectify kitchen equipment and began operating the take-out portion of the restaurant on 17 October 2013, but was unable to operate business in any other part of the premises. [ 38 ] As to the intended second third party, the Applicant alleges that the business had been presented to her as “turn-key” and in light of the significant issues arising, alleges without further particularity that Ms. Crocker withheld information.

In December 2013 the Applicant made a complaint to the Newfoundland and Labrador Association of Realtors, which she deposed, resulted in Ms. Crocker’s license suspension. She filed a letter from the Association of Realtors indicating that a hearing would be scheduled in relation to the complaint. Subsequent correspondence indicated that Ms. Crocker was no longer working as a realtor and that a hearing would not be scheduled. [ 39 ] The claim against the intended third third party, Mr.

Cooper, alleges that he undertook to arrange the first annual mortgage payment, failed to do so and the late payment triggered the default with attempts to resolve the matter unsuccessful. Without further particulars she alleges that he failed to adequately represent her in the real estate transaction. She also maintains that he was in a conflict of interest throughout. [ 40 ] Crocker & Jacobs Services Ltd. did not respond to the notice of third party claim.

Nonetheless the Respondent sets out in her Memorandum of Law that Crocker & Jacobs Services Ltd. was operating a functioning service station and restaurant from the property and that the equipment, including the electrical system and the propane infrastructure were in working order. She also submits that the company had repaired the roof prior to the sale and that there were no issues with the property at the time of the sale. She states that the Applicant inspected the premises.

The Respondent’s Memorandum of Law also sets out that Crocker & Jacobs Services Ltd. attempted to continue the insurance coverage but this was not possible following the sale and that she notified the Applicant of this fact. [ 41 ] The intended second third party countered by affidavit evidence that her realtor license had not been suspended as a result of complaints against her by the Applicant and disputed the allegation that she had withheld information about the condition of the property.

Confirmation that her real estate license had never been suspended is found in the affidavit of the Respondent’s legal counsel. The intended second third party stated that the Applicant and her husband visited the property without her before they made the decision to purchase.

She had advised that the agreement to purchase be subject to an inspection but the Applicant refused to insert such a condition wishing to proceed without any conditions and desirous of an early closing date. [ 42 ] The intended third third party deposed by affidavit evidence that the Applicant had been advised to obtain a commercial building inspection and an environmental inspection but that she declined to take his advice. The Applicant signed an indemnity waiver acknowledging this.

The Applicant also signed an indemnity waiver acknowledging that she had declined to seek advice in relation to potential HST implications. [ 43 ] Mr. Cooper stated that in the fall of 2013 the Applicant told him that she and her husband suspected that the realtor had withheld information about the condition of the property and wanted him to take action against her. Mr. Cooper informed them that he had previously acted for Ms. Crocker and could not represent them in such a proceeding.

He subsequently sought an independent legal opinion, which confirmed that he would be in a conflict of interest in representing the Applicant in an action against the realtor. In response to the Applicant’s allegation that he had taken on the responsibility to arrange the first annual mortgage payment, Mr. Cooper refuted same. He deposed that when the Applicant informed him that she was considering not making this payment in light of the condition of the property, he strongly advised against this given the possibility for foreclosure. Mr.

Cooper stated that over four and a half years had elapsed since he represented the Applicant on this purchase and financing transaction. [ 44 ] The Respondent opposes the addition of these third parties asserting it is solely an action for repayment of a debt and is not an action relating to misrepresentations made in the purchase of a property or one in which breach of professional responsibility has a connection. I disagree. [ 45 ] The claims (

i) that the Respondent represented Crocker & Jacobs Services Ltd. in the of the sale of the business; (ii) that the realtor representing both parties in the transaction failed to disclose key information to the purchasers; and (iii) that legal counsel did not perform his legal responsibilities to the clients in accordance with the professional standards engaged in a real estate transaction, all relate, and have a connection, to the sale and financing of a commercial property. [ 46 ] I will next examine whether the Applicant’s assertion of facts and law meet the standard of an arguable case.

The Respondent’s brief sets out that she did not act as agent for the company. Her Memorandum of Law nonetheless confirms that she had firsthand knowledge of the sale transaction and condition of the premises at the time of the sale and spoke directly to the Applicant respecting the insurance issue. Her role, as gleaned from these proceedings, was not removed from the sale transaction in the manner of a lending institution. Mr.

Cooper’s affidavit deposes that the purchase and sale was as between Jacobs and Clarke (at paras. 6 and 7) and in the intended second third party’s 19 December 2014 submission to the Ethics Chairperson in response to the complaint by the Respondent she refers to the vendor as Sharon Jacobs, potentially suggesting an intermingling of her roles. [ 47 ] I am satisfied that the third party claim as against the intended first third party is connected to the original proceedings such as to merit joinder.

The Applicant alleges that the mortgagee played a role in the purchase and sale transaction as agent of the intended first third party, which resulted in loss to her. The third party claim is not only framed in negligent/fraudulent misrepresentation, but also in breach of contract. The facts and allegations relied upon by the Applicant persuade me that she has asserted a cause of action to the standard of an arguable case, noting of course that the merits of the claim can only be decided at trial ( Economical Mutual Insurance Company at para. 12 ).

This does not end the matter, however, as I must also decide whether in the exercise of my judicial discretion, it would be unjust to order joinder as third party. [ 48 ] As to the intended second third party, I am not satisfied, upon consideration of the facts here that the Applicant has established to the standard of an arguable case that the realtor withheld information from her. The Applicant has not provided evidence to counter the realtor’s assertion that she advised the Applicant and her husband to include an inspection condition in the offer to purchase or to

support her allegation that “key” information was hidden from them by Ms. Crocker. Accordingly, the request to join Ms. Crocker asthird party is denied. [49] I also conclude that the Applicant has failed to meet the standard of an arguable case against Mr. Cooper. Mr. Cooper’saffidavit evidence outlining the advice he provided to the Applicant has not been countered by her. He deposed that he advised theApplicant to undergo a commercial inspection of the property and perform other due diligence measures but his advice was not taken.

Attached to his affidavit are written waivers signed by the Applicant, foregoing these inspections. He further deposed that at no timedid he undertake to make the first mortgage payment but to the contrary advised that non-payment could result in foreclosure. He wasretained in 2013 and at no time during the four-year period following did the Applicant suggest to him that he was responsible for thedifficulties arising in relation to the property. [50] The Applicant did not seek to cross-examine Mr. Cooper or adduce any further evidence to rebut that this advice was given. The Applicant’s request to join Mr.

Cooper as third party is denied. Whether it is an appropriate case to exercise judicial discretion to add third parties [51] In the exercise of its judicial discretion, the Court should consider justice and fairness to all parties or potential parties. Relevant considerations include delay and whether the addition of third parties will unduly complicate the trial. [52] The statement of claim was filed on 7 June 2015. The defence and counterclaim were filed on 8 July 2016.

Counsel for theApplicant stated that she had advised counsel for the Respondent of her intention to file a third party joinder application in November2016. The claim was not filed until August 2017, on the explanation that the Applicant was working out of the province for an extendedperiod of time. [53] The Applicant submits that the proceedings, commenced in 2016, are not in an advanced stage. Discoveries have yet to be heldand a certificate of readiness is not completed. An application to proceed by way of

summary trial has yet to be heard and is opposed bythe Applicant. [54] In Congregation of the Sisters of Mercy of Newfoundland v. Stokes Management Ltd., (NL SC), 217 Nfld.& P.E.I.R. 153, 651 A.P.R. 153 (N.L.S.C.(T.D.)), Goulding, J. considered delay in the context of third party proceedings. There hadbeen a long delay in bringing the application, but on the facts the court was satisfied that the joinder was appropriate.

Ten years hadelapsed with “apparent acquiescence” by the litigating parties and the intended third party was aware of the proceedings because it haddenied coverage. [55] In Builders Holdings Ltd. v. Gasland Properties Ltd., 2001 ABQB 823, the court permitted the joinder of third parties despite afive-year delay and outstanding application for

summary judgment where the evidence failed to disclose prejudice to the intended thirdparty, which was a co-defendant. [56] Here, the Respondent’s counsel was made aware of the intended third party application. The Respondent’s position that theproceedings are near conclusion as a result of an application for

summary judgment or

summary trial must be qualified, given that theapplication, which is opposed, has yet to be heard on its merits. The Respondent was at all times sole director of Crocker & JacobsServices Ltd. I am not persuaded that the addition of the company, the vendor of the mortgaged premises, will promote delay, given theissues already arising in the main litigation and counterclaim. [57] I am also satisfied that the joinder of the intended first third party will not complicate these proceedings. The Respondentcharacterizes the litigation as merely collection of mortgage deficiency.

This fails to take into consideration the legal issues arising fromthe defence and counterclaim involving breach of contract and negligent and/or fraudulent misrepresentation. The Applicant asserts thatat all material times, the Respondent who received a mortgage back as part of the transaction, acted as the agent of the vendor, theintended first third party.

The current trial already involves an examination of the role of the Respondent in the sale and financing of thecommercial premises and the Applicant has raised equitable estoppel against the Respondent in relation to her claim to recover thedeficiency under the mortgage.

The intended first third party is a potential witness in those proceedings irrespective of third partyjoinder. [58] I am satisfied that leave to issue a third party notice as against the intended first third party is consistent with the objects of thirdparty proceedings as articulated by the court of appeal decisions and summarized at paragraph 13 of Congregation of the Sisters ofMercy Newfoundland: 13 In Fitzpatrick v. A. Harvey & Co. (1986), 59 Nfld. & P.E.I.R. 144 (Nfld.

T.D.) at p. 147, Noel, J. commented: The objects of third party proceedings are stated in The Law of Civil Procedure, Wiliston and Rolls, at p. 426, they may be summarized: 1. to avoid a multiplicity of actions, 2. to avoid contradictory or inconsistent findings in two different actions on the same facts,

3. to allow the third party to defend the plaintiff's claim, 4. to save costs; and 5. to prevent the plaintiff from enforcing a judgment against the defendant before the third party issue is determined. [ 59 ] I accordingly conclude that this is an appropriate case to exercise judicial discretion to join Crocker & Jacob Services Ltd as third party.

SUMMARY AND COSTS [ 60 ] Leave is granted pursuant to Rule 12.03 of the Rules of the Supreme Court, 1986 to issue a third party notice to Crocker & Jacobs Services Ltd. [ 61 ] Leave to issue a third party notice to Michelle Crocker and to Marc Cooper pursuant to Rule 12.03 of the Rules of the Supreme Court, 1986 is denied. [ 62 ] The Applicant shall pay the party and party costs of Michelle Crocker and Marc Cooper in accordance with Column 3 of the Scale of Costs pursuant to Rule 55 of the Rules of the Supreme Court, 1986 . [ 63 ] Costs as between the Applicant and Respondent shall be costs in the cause. _____________________________ Deborah J. Paquette Justice