Larizza v. Royal Bank of Canada

Larizza v. Royal Bank of Canada Collection Decisions of the Court of Appeal Date 2018-07-11 Neutral citation 2018 ONCA 632 Docket numbers C64580 Judges Pepall, Sarah E.; van Rensburg, Katherine; Paciocco, David M. Subject Civil Decision Content COURT OF APPEAL FOR ONTARIO CITATION: Larizza v. Royal Bank of Canada, 2018 ONCA 632 DATE: 20180711 DOCKET: C64580 Pepall, van Rensburg and Paciocco JJ.A. BETWEEN Antoinette Larizza Plaintiff (Appellant) and The Royal Bank of Canada, Royal Trust Corporation of Canada as the Estate Trustee for the Estate of the Marcelle Kaye Trust, The Bank of Nova Scotia, Wildeboer & Dellelce LLP, Fasken Martineau DuMoulin LLP, Fasken Martineau DuMoulin International LLP, Minto Group Inc., Bastedo Stewart & Smith, Bryan Smith, Albert Allan Rosenberg, Marwa Holdings Inc., Marwa Bloor Street Inc., M.A. Investments Inc., and Rosenberg Investment Group Inc. Defendants (Respondents) Julian Heller and Neil Foley, for the appellant Gavin Tighe and Scott Gfeller, for the respondent Fasken Martineau DuMoulin LLP Adam Grant and Karen Bernofsky, for the respondent Minto Group Inc. Heard: May 25, 2018 On appeal from the judgment of Justice Lise G. Favreau of the Superior Court of Justice, dated October 13, 2017, with reasons reported at 2017 ONSC 6140. Pepall J.A.: Introduction [1] The appellant, Antoinette Larizza, was 54 years old when she met Albert Allan Rosenberg through an online dating service in February 2012. By August 2012 and at Mr. Rosenberg’s urging, the appellant had quit her job, sold her house, given the proceeds of sale to him, and moved with him into a Yorkville penthouse. By October 9, 2012, the appellant had given Mr. Rosenberg about $230,000. By March 2013, they were married. Mr. Rosenberg told the appellant that he was a wealthy, 56 year-old Swiss-Canadian businessman and heir to an Ovaltine fortune. In fact, he was 69 and a fraudster who had been convicted of fraud on multiple occasions. The Ovaltine inheritance was non-existent. [2] By the summer of 2013, the appellant became aware that Mr. Rosenberg was not who he purported to be and that she had lost all the money she had given to him. She seeks damages arising from her financial losses from various parties, including her penthouse landlord, the respondent Minto Group Inc. (“Minto”), and her lawyers, the respondent Fasken Martineau DuMoulin LLP (“Faskens”). She commenced an action against them and others. [3] Minto and Faskens successfully brought motions for summary judgment, and the appellant’s action against them was dismissed. She appeals from that judgment. For the reasons that follow, I would dismiss the appeal. [4] I do not propose to repeat the unfortunate saga that is the subject matter of the motion judge’s decision. I will simply summarize those facts that are germane to the claims against the two respondents. A. Claims against Minto [5] In May 2012, Mr. Rosenberg inquired about renting a penthouse in the Yorkville building in which he lived. The building was owned and managed by Minto. The appellant testified that all of the couple’s dealings with Minto had been left to Mr. Rosenberg. Minto obtained an Equifax credit report on Mr. Rosenberg but concluded that there was insufficient information to justify rental of the penthouse to him. The credit report noted two inquiries made in 2009 by “Correction Service”. Minto then asked Mr. Rosenberg the name of someone else on whom a credit report might be done in support of the proposed penthouse rental, and he provided the appellant’s name. Minto obtained a credit report on the appellant without her knowledge or express consent. Her credit rating was sufficient to enable her to lease the penthouse. On May 23, 2012, the appellant signed the lease that expressly stated that she was signing as the tenant, and Mr. Rosenberg signed it as occupant. The lease commenced on July 1, 2012. The two resided there together. [6] About one year later, in August, 2013, Minto wrote to the appellant and Mr. Rosenberg notifying them of the accumulation of two months of rent arrears and advising that Minto would commence legal action in the absence of payment. The appellant then had a confrontation with Mr. Rosenberg over financial issues. He assaulted her and was subsequently arrested. On October 11, 2013, he pleaded guilty to assault and various fraud charges and was sentenced to 60 months in prison. The proceedings revealed that he was a serial fraudster who had been incarcerated multiple times in the last 30 years. [7] The appellant claimed damages from Minto for various causes of action: intrusion upon seclusion, breach of contract, negligence, negligent misrepresentation, and intentional or negligent infliction of mental distress. (i) Intrusion upon Seclusion [8] On appeal, the appellant submits that the motion judge erred in concluding that there was no genuine issue requiring a trial with respect to her claim for intrusion upon seclusion. In particular, she asserts that the motion judge erred in her interpretation and treatment of the relationship between the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5 (“PIPEDA”) and the Consumer Reporting Act, R.S.O. 1990 c. C.33 (“CRA”) and in concluding that Minto’s credit check on her without her knowledge or consent did not raise a genuine issue requiring a trial. [9] The motion judge properly set out the test for intrusion upon seclusion: (i) the defendant’s conduct must be intentional or reckless; (ii) the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and (iii) a reasonable person would regard the invasion as highly offensive, causing distress, humiliation, or anguish: Jones v. Tsige, 2012 ONCA 32, 108 O.R. (3d) 241, at para. 71. [10] Although Minto’s conduct was intentional, the motion judge found that the appellant failed to meet the other two elements of the test. She concluded that the credit report was lawful under the CRA but potentially unlawful under PIPEDA. However, the motion judge found as a fact that the information in the credit report was not information about the appellant’s “private affairs or concerns”. She also found that a reasonable person would not regard Minto’s actions as highly offensive, causing humiliation or anguish within the meaning of the test. [11] For the purposes of this appeal, there is no need to address the second requirement and I decline to do so. The motion judge’s finding on the third element of the test is unassailable and fatal to the appellant’s position. The appellant had left the couple’s dealings with Minto to Mr. Rosenberg. Minto obtained the report to determine whether to rent the penthouse to the appellant and Mr. Rosenberg; there was no improper purpose. As the motion judge found, at paras. 62-63: Minto did not use the credit report for any purpose other than deciding whether to rent the unit to Ms. Larizza and there is no evidence that the information was disseminated or otherwise used improperly. It is worth noting that Ms. Larizza’s claim against Minto is not founded on allegations that she felt shocked, humiliated or anguished by the fact that Minto conducted the credit check. Rather, the thrust of her claim is that Minto failed to protect her from Mr. Rosenberg. [12] I would not give effect to this ground of appeal. (ii) Breach of Contract [13] The appellant also submits that the motion judge erred in finding that Minto negotiated and performed the lease agreement in good faith. The only contract between the parties was the lease. [14] The motion judge rejected the appellant’s breach of contract claim. She did not err in that regard. At paras. 67-70, she wrote: In advancing the breach of contract argument, Ms. Larizza relies on the duty of good faith recognized by the Supreme Court of Canada in Bhasin v. Hrynew, 2014 SCC 71. The conduct Ms. Larizza complains about are Minto’s actions prior to the formation of the lease, namely the fact that Minto obtained the credit check without her consent, the fact that Minto dealt primarily with Mr. Rosenberg in negotiating the lease, and her contention that she was not aware that she was listed as the tenant on the lease. She argues this conduct shows that Minto breached a general duty of good faith. However, the flaw in this argument is that the duty of good faith recognized by the Supreme Court in Bhasin v. Hrynew, [2014 SCC 71, [2014] 3 S.C.R. 494], at para. 73, arises in the context of the performance of the contract, and not from the circumstances leading up to the formation of the contract. Moreover the obligation of good faith in the performance of a contract is a requirement not to lie or mislead the other party in the performance of the contract. … In this case, Ms. Larizza does not complain about Minto’s performance under the lease or even that Minto was dishonest in the performance of its contractual obligations, but rather that Minto failed to take steps to protect Ms. Larizza from Mr. Rosenberg in the contract formation. In my view, it is evident based on the record before me that Ms. Larizza does not have a viable claim for breach of contract against Minto. [15] I agree with the motion judge’s analysis and conclusion. (iii) Negligence, Negligent Misrepresentation and Intentional or Negligent Infliction of Mental Suffering [16] The appellant next claims that the motion judge erred in her negligence analysis. [17] This issue is readily addressed. Assuming, without accepting, that a duty of care could even be established, the harm alleged was too remote. Again, as the motion judge wrote, at para. 78: In any event, this is a case in which the harm alleged is simply too remote to be foreseeable. Ms. Larizza’s complaint against Minto is not that its conduct improperly induced her to enter into the lease, thereby placing her in the position of incurring liability for the unpaid rent. Rather, she claims that if Minto had alerted her to the issues surrounding Mr. Rosenberg’s credit check and the fact that she was named as the tenant rather than him, she would have realized that Mr. Rosenberg was a fraudster and she would have avoided her financial losses and emotional distress. The harm in this case is far too removed from the nature of the relationship between landlord and tenant, and cannot form the basis of a legal obligation owed by Minto to Ms. Larizza. [18] The claim for negligent misrepresentation, which was not pleaded and only asserted in the appellant’s factum filed before the motion judge, may also be disposed of on this basis. The motion judge also properly rejected the claim of intentional or negligent infliction of mental suffering on the basis that there was no conduct by Minto that could be characterized as “extreme, flagrant and outrageous”, much less any evidence that Minto’s conduct was calculated to harm the appellant. [19] For these reasons, I would dismiss the appeal against Minto and would order the appellant to pay Minto’s costs fixed in the amount of $12,500, inclusive of disbursements and applicable tax. B. Claims against Faskens [20] A lawyer at the defendant law firm, Wildeboer & Dellelce LLP, who purportedly acted for Mr. Rosenberg (and who possibly acted for the appellant), referred the appellant to Elena Hoffstein, a partner at Faskens who specializes in estate planning and personal tax. On September 10, 2012, the appellant met Ms. Hoffstein. This was their only meeting. The appellant states that she retained Ms. Hoffstein to advise her on a prenuptial agreement, estate planning, and a trust fund. Specifically, she sought advice about: a prenuptial agreement that Mr. Rosenberg’s lawyers in Switzerland were allegedly preparing; estate planning to draft a new will for the appellant given her pending marriage to Mr. Rosenberg; and the establishment of a trust. Mr. Rosenberg was purportedly purchasing a $10 million insurance policy naming as the beneficiary a trust for the benefit of the appellant and her daughters. [21] Ms. Hoffstein stated that she advised the appellant that she did not practice family law and would have to refer the appellant to a family law lawyer when the prenuptial agreement was ready for review. The appellant contested this evidence and claimed that Ms. Hoffstein was her family lawyer. [22] There was no written retainer. [23] After the initial meeting, the appellant and Ms. Hoffstein exchanged communications between October 17, 2012 and January 2013. Ms. Hoffstein sent draft documents but never received responses to her inquiries. The prenuptial agreement was never available for review from Switzerland (or for referral to a family lawyer). Ms. Hoffstein requested further information, including the date of the appellant’s pending marriage to Mr. Rosenberg, but none was ever provided. The appellant did not answer Ms. Hoffstein’s emails or comment on drafts provided to her by Ms. Hoffstein in January 2013. The appellant and Mr. Rosenberg married on March 30, 2013 without advising Ms. Hoffstein. As found by the motion judge, none of the tasks were completed because Ms. Hoffstein did not receive instructions or information requested that would allow her to complete the tasks. [24] The appellant claimed damages from Faskens for various causes of action: negligence, negligent misrepresentation, breach of contract, and breach of fiduciary duty, all arising from her dealings with Ms. Hoffstein. [25] There was no allegation that Ms. Hoffstein was negligent in the manner in which she performed the services she provided. Rather, the allegation is that, as part of the retainer, Faskens had a duty to protect the appellant from Mr. Rosenberg by investigating his background. The motion judge captured the essence of the parties’ positions, at paras. 91 and 92 of her reasons: Ms. Larizza’s claim against Faskens is essentially that Ms. Hoffstein should have conducted searches with respect to Mr. Rosenberg that would have revealed that Mr. Rosenberg was not who he claimed to be, or alternatively that Ms. Hoffstein failed to refer Ms. Larizza to a family law lawyer, and that such a lawyer would have taken necessary steps to protect Ms. Larizza’s interests by conducting background searches on Mr. Rosenberg. There is also a suggestion that Ms. Hoffstein acted improperly because, rather than protecting Ms. Larizza’s interests, she was acting at Mr. Rosenberg’s behest to ensure that Ms. Larizza was not a “gold digger”. Faskens responds to these allegations by arguing that Ms. Hoffstein did not have an obligation to conduct any searches to ascertain Mr. Rosenberg’s identity, and that matters never reached a point where it was necessary for Ms. Larizza to be referred to a family lawyer. Faskens also denies that Ms. Hoffstein’s role was to investigate Ms. Larizza’s motivations on Mr. Rosenberg’s behalf. [26] On appeal, the appellant advances three arguments: (i) the motion judge erred in her findings relating to the scope of the retainer between her and Faskens; (ii) she also erred in concluding that Faskens did not have to adduce expert evidence on the standard of care applicable to Ms. Hoffstein; and (iii) she erred in awarding partial summary judgment. [27] I would not give effect to any of these arguments. [28] The motion judge found the appellant’s claims to be meritless. I agree. I will address each of the appellant’s grounds of appeal against Faskens in turn. (i) Scope of Retainer [29] The appellant complains that the motion judge shifted the onus of proof on the scope of the oral retainer from Faskens to the appellant. She argues that Ms. Hoffstein “needed to know everything about all aspects of the situation with [Mr.] Rosenberg, and advise [Ms.] Larizza accordingly.” In particular, she submits that the appellant’s evidence that Ms. Hoffstein was her family lawyer should be preferred over Ms. Hoffstein’s contrary evidence. She asserts that, had Ms. Hoffstein exercised reasonable due diligence, Mr. Rosenberg’s true age and the unavailability of trust funds would have been revealed. [30] The motion judge properly noted, at para. 97 of her reasons, that: In order to succeed on her negligence claim against Faskens, Ms. Larizza would have to demonstrate that the scope of Faskens’ retainer included an obligation to investigate Mr. Rosenberg’s background. In my view, there are a number of flaws in this argument. [31] She then proceeded to identify the flaws in this argument. She noted that the appellant did not claim that there was ever any request that Ms. Hoffstein conduct a background check on Mr. Rosenberg. The real dispute was whether there was an implicit requirement to do so. [32] The appellant’s claims in negligence, negligent misrepresentation, and breach of contract against Faskens depended on the appellant’s claim that there was an implied requirement for Ms. Hoffstein to conduct a background check. [33] The motion judge rejected the appellant’s position in this regard, stating that it defied common sense. I agree. Moreover, it is important to note that, as she also found, the fraud perpetrated on the appellant predated Faskens’ retainer. The appellant had already sold her house, given Mr. Rosenberg $155,000, quit her job, and moved into the penthouse with him. [34] As for the appellant’s claim for breach of fiduciary duty, the appellant claims that Ms. Hoffstein failed to disclose a conflict of interest arising from the referral from Wildeboer & Dellelce LLP. The motion judge found that Faskens had not been retained by Mr. Rosenberg. The record supports such a finding. Moreover, there was no evidence that the purpose of the referral to Ms. Hoffstein was to benefit Mr. Rosenberg. A conflict of interest does not exist simply by virtue of a referral. (ii) Expert Evidence [35] The appellant submits that the motion judge erred by relying on common sense and states that expert evidence was required to determine the applicable standard of care. [36] I disagree. [37] At para. 103 of her reasons, the motion judge correctly observed that: In any event, even if on a motion for summary judgment involving professional negligence the defendant’s burden of showing that there is no triable issue required the defendant to adduce expert evidence, I accept Faskens’ argument that no expert evidence is required in this case. In Krawchuk v. Scherbak, [2011 ONCA 352, 106 O.R. (3d) 598], at para. 133, the Court of Appeal held that there are two exceptions to the requirement for expert evidence to prove the negligence of a professional. One of those exceptions is when the court is faced with “non-technical matters or those of which an ordinary person may be expected to have knowledge”. [38] As a non-technical and common sense matter, absent specific instructions, there could be no obligation on Ms. Hoffstein, even if she had been a family law lawyer, to investigate the background of the appellant’s future spouse. Furthermore, there is no evidence from which it could be inferred that Ms. Hoffstein should have recommended such an investigation. There is no evidence that the appellant ever expressed any suspicions about Mr. Rosenberg, and her marriage took place without telling Ms. Hoffstein. (iii) Partial Summary Judgment [39] Thirdly, the appellant submits that this was not the clearest of cases in which partial summary judgment was appropriate, and that given the ongoing litigation against other defendants, there was a risk of duplicative or inconsistent findings. Moreover, she argues that partial summary judgment presented an access to justice issue because any adverse costs award could prejudice the appellant’s ability to continue her claims against the other defendants. [40] I do not accept these submissions. The dangers outlined in Butera v. Chown, Cairns LLP, 2017 ONCA 783, 137 O.R. (3d) 561, do not present themselves in this case. The claims against Faskens are standalone and limited in nature. There is no real concern about duplicative or inconsistent findings arising with respect to the claims asserted against the remaining defendants. This was the clearest of cases where the issues raised in the appellant’s claims against Faskens were readily separable from the balance of the case. [41] Moreover, although the motion judge would not have had the benefit of this court’s decision in Butera, she expressly or implicitly considered the issues of delay, expense, and the possibility of inconsistent findings. She was satisfied that the issues could be readily bifurcated from those in the main action and could be dealt with in a focused and cost-effective manner. [42] The motion judge’s decision is entitled to deference. I would also note that the summary judgment motion did not seek to dismiss some of the causes of action against Faskens and leave others remaining. I agree with Faskens that it would be disproportionate, inefficient, and costly to require them to remain as a defendant in the appellant’s action. In my view, summary judgment was appropriate for the claims asserted against Faskens. [43] For these reasons, I would dismiss the appeal against Faskens and would order the appellant to pay Faskens costs fixed in the amount of $12,500, inclusive of disbursements and applicable tax. I see no reason to depart from the principle that costs be paid forthwith. Released: “SEP” “Sarah E. Pepall J.A.” “JUL 11 2018” “I agree K. van Rensburg J.A.” “I agree David M. Paciocco J.A.”