Stancor Enterprises Ltd. v. Fiorvento

2022 BCSC 196 Stancor Enterprises Ltd. v. Fiorvento

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Stancor Enterprises Ltd. v. Fiorvento, 2022 BCSC 196 Date: 20220208 Docket: S1711415 Registry: Vancouver Between: Stancor Enterprises Ltd. Plaintiff And: Roberto Fiorvento, Coal Harbour Realty Advisors Inc., Brigham Jagger, Rowland & Company, William Randall, Bill Randall Personal Real Estate Corporation and Cushman & Wakefield ULC Defendants And: Pier Michele De Lazzari also known as Michael De Lazzari Third Party Before: Master Vos Reasons for Judgment In Chambers (Hearing proceeded via MS Teams) Counsel for the Plaintiff and the Third Party: C.E. Hunter, Q.C. M. Evans Counsel for the Defendant, Roberto Fiorvento: D.P. Church, Q.C. Counsel for the Defendants, William Randall, Bill Randall Personal Real Estate Corporation and Cushman Wakefield ULC: K.A. Murray No one appearing on behalf of the Defendants, Roberto Fiorvento, Coal Harbour Realty Advisors Inc., Brigham Jagger and Rowland & Company. Place and Date of Hearing: Vancouver, B.C. January 12, 2022 Place and Date of Judgment: Vancouver, B.C. February 8, 2022 Introduction [1] The defendant, Roberto Fiorvento, applies for leave to file an amended third party notice to this action. The proposed amended third party notice is attached as Appendix "A" to Mr. Fiorvento's notice of application filed December 2, 2021. [2] The third party and the plaintiff oppose the defendant's

application with respect to the amendments sought at Part 1, paras. 18, 19 and the first sentence of para. 20 of the proposed amended third party notice. They also oppose the amendment at Part 3, para. 4 of the proposed amended third party notice. They take no position on the other amendments proposed by Mr. Fiorvento. [3] The defendants, William Randall, Bill Randall Personal Real Estate Corporation and Cushman and Wakefield ULC, take no position on the granting of the orders sought by Mr. Fiorvento. Background [4] The plaintiff, Stancor Enterprises Ltd. ("Stancor") is a single purpose real estate holding company that owned an industrial property on Annacis Island. [5] The third party, Pier Michele De Lazzari, also known as Michael De Lazzari ("Mr. De Lazzari" or "Michael De Lazzari"), together with members of his family, hold 70% of the shares of Stancor, either directly or through holding companies. The defendant, Mr. Fiorvento, is a 10% shareholder in Stancor, through his holding company. [6] In late 2015 the defendant, William Randall, a real estate agent, approached Mr. Fiorvento on behalf of a client, seeking an industrial property on Annacis Island. Mr. Fiorvento told Mr. Randall about Stancor's property. After Mr. Randall stated his client's interest in the property, Mr. Fiorvento approached Mr. De Lazzari to see if he would entertain the possible sale of Stancor's

Annacis Island property. [7] Mr. Fiorvento says he was indifferent as to whether the property would be sold, as he was only a 10% shareholder in Stancor. Mr. De Lazzari indicated he would consider sale of the property. The other shareholders agreed with Mr. De Lazzari. [8] Mr. Fiorvento alleges that Mr. De Lazzari agreed that a commission would be paid to Mr. Fiorvento if the sale completed. Mr. De Lazzari denies this. [9] The property sold. The sale closed on December 25, 2016. A real estate commission of $600,000 was paid. A portion of the commission was provided to Mr. Fiorvento. [10] In 2017 Mr. De Lazzari and Mr. Fiorvento had disputes about the possible sale of another property, identified as the "Norfolk Property" in the notice of application. It was owned 60% by Mr. De Lazzari's family and 40% by Mr. Fiorvento. Mr. De Lazzari wanted to sell the property. Mr. Fiorvento prevented a potential sale. On October 23, 2017, after receiving a further offer for sale of the property, Mr. De Lazzari wrote to his real estate agent stating: We are on the final stage of our plans of how to deal with Rob Fiorvento going forward. We have been advised to hold off for now. We should know within a month or so how we are going to proceed. [11] Stancor filed its notice of civil claim to commence this action soon thereafter, on December 11, 2017. Among other things, it alleges Mr. Fiorvento

breached his fiduciary duty as a director of Stancor and his duties as a real estate agent in relation to the 2016 sale of Stancor's Annacis Island property. [12] Mr. Fiorvento has defended the action commenced against him by Stancor and on March 9, 2018 he filed a third party notice against Mr. De Lazzari. In the third party notice Mr. Fiorvento alleges that Mr. De Lazzari was instrumental in the commencement of this action and claims that the action is an abuse of process, alleging that it was brought for the collateral and improper purpose of attempting to compel Mr. Fiorvento to sell his interest in the Norfolk Property. [13] By way of this application, Mr. Fiorvento seeks to amend that third party notice, to add allegations as against Mr. De Lazzari. [14] The trial of this action is scheduled for a 19-day hearing, starting on May 24, 2022. Analysis [15] The third party and the plaintiff challenge the following proposed pleadings in the Statement of Facts section (Part 1) of the proposed amended third party notice: 18. On January 17, 2018, McCarthy and Robert De Lazzari, on behalf of De Lazzari, met with Fiorvento. In that meeting, McCarthy threatened that De Lazzari would cause Stancor to continue the Action unless Fiorvento agreed to sell, to De Lazzari, Fiorvento's interest in the Norfolk Property as well as in the Romiro Property and the Dolomite Property and that all sales would be in amounts below market value. In addition, McCarthy demanded return of the commission Fiorvento earned on the sale of the Property.

19. In that same meeting, McCarthy, on behalf of De Lazzari, further threatened Fiorvento to the effect that, if the Beedie family, Fiorvento's business associates, became aware of the Action, it would be bad for Fiorvento. The clear implication, and intended meaning of McCarthy's statement, on behalf of De Lazzari, was that Fiorvento's employment and career would be negatively affected.

20. Fiorvento rejected McCarty's threats and left the meeting. [16] The parties agree that if these challenged proposed pleadings are not allowed, para. 4 in Legal Basis section (Part 3) of the proposed amended third party notice will have to be changed to remove claims based on allegations in the challenged amendments. [17] The proposed amended third party notice identifies "McCarthy" as William P.J. McCarthy and his company W.P.J. McCarthy and Company Ltd., and alleges Mr. McCarty was an advisor and agent for Mr. De Lazzari. "De Lazzari" is identified as Michael De Lazzari. Robert De Lazzari is Michael De Lazzari's son. "Fiorvento" is Roberto Fiorvento. The "Action" is this lawsuit. The "Romiro Property" and the "Dolomite Property" are real estate holdings in which the De Lazzari family and Mr. Fiorvento each have an ownership interest. The "sale of the Property" referenced in para. 18 is the 2016 sale of Stancor's Annacis Island property. [18] The third party and the plaintiff challenge these proposed amendments to the extent that they refer to communications that occurred during a meeting on January 17, 2018. They contend that the meeting was held on a without prejudice basis and discussions that took place during the meeting are protected by settlement privilege. [19] Emails attached as Exhibit "A" to Robert De Lazzari's second affidavit, made January 4, 2022, describe

arrangements relating to the January 17, 2018 meeting. The email chain starts with the following email Mr. Fiorvento sent to Robert De Lazzari, dated December 17, 2017. The resulting email correspondence is as set out below. Hey Rob .. trust you are doing well. Best of the season. If you are game, I was thinking it may be time for just you and I to meet on a personal and confidential basis .. without prejudice of course differences aside, I have no desire to bring pain and suffering to you or your family, especially for your mother and father .. I have no issues whatsoever if you and your father want to continue with your legal action .. it is your right to do so .. but I do want to offer some insight and facts from my end and also share our position moving forward At the end of the day we still have numerous property holdings together and I don't think you nor I want to deal thru lawyers for the next foreseeable future. Only group that is going to win are the lawyers [20] Robert De Lazzari's email to Mr. Fiorvento dated December 22, 2017: I am prepared to meet with you on what you reference as a "personal and confidential basis without prejudice of course " but I would do so accompanied by William McCarthy of the firm W.P.J. McCarthy and Company Ltd. who is assisting us with matters relating to the litigation. A meeting with us three alone could be arranged in the immediate

future if you wish. [21] Mr. Fiorvento's email to Robert De Lazzari dated December 28, 2019: Hey Rob happy to meet with you and Mr. McCarthy I will be away in Australia returning January 12th, 2018 however, I can meet the following week .. January 17 or January 19th work best for me if either of those dates work for the two of you .. [22] Robert De Lazzari's email to Mr. Fiorvento dated January 3, 2018: I have confirmed with Mr. McCarthy and we are available to meet with you 10:00 am on Wednesday, January 17, 2018 at his office located at 700 - 4980 Kingsway, Burnaby. We further confirm that it will be just us three in attendance, and that this meeting will be considered confidential and off the record and will proceed on a without prejudice basis. Please confirm. [23] Mr. Fiorvento's confirmation email to Robert De Lazzari: That works. And yes, agreed. See you then. Thx. [24] Mr. Fiorvento, Robert De Lazzari and Mr. McCarthy met, as planned, on January 17, 2018. [25] Mr. Fiorvento submits that the challenged proposed amendments at paras 18-20 deal with overt acts and threats made during the January 17, 2018 meeting. Specifically, a threat that this action would continue if Mr. Fiorvento would not sell his interests in the properties at a discount and a further threat to Mr. Fiorvento's reputation with his business associates and employer. These allegations are described in Mr. Fiorvento's first affidavit, made January 10, 2022: 3. I did meet with Roberto De Lazzari and William McCarthy on January 17, 2018 ("January 17, 2018 meeting"). The meeting was initially organized on a without prejudice basis for the purposes of seeking a resolution to the Plaintiff, Stancor Enterprises Ltd.'s ("Stancor"), claim.

4. At the meeting, I asked William McCarthy in what capacity he was acting. He stated that he was acting for not only the shareholders of Stancor but the majority shareholders (ie: the De Lazzari family) in the administration of their real estate holdings 6. At the January 17, 2918 meeting, Mr. McCarthy led the discussion. Robert De Lazzari largely just expressed agreement with Mr. McCarthy's statements. Mr. McCarthy was very aggressive in his statements to me. He specifically stated that, to resolve this action, I would be required to transfer all of my interest that I held in Norfolk, Romiro and Dolomite and the properties they own to Michael De Lazzari, at values below market value. Mr. McCarthy stated that these steps would have to be taken in addition to my refunding the commission I had received regarding the sale of the Stancor property, which sale closed in December 2016.

7. At the January 17, 2018 meeting, Mr. McCarthy went further and stated that he was friends with Keith Beedie, Ryan Beedie's father and had known Ryan Beedie since he was a teenager. Ryan Beedie is my business partner in Beedie Development Corp. Mr. McCarthy went on to say that Keith Beedie and Ryan Beedie would not want this lawsuit to go public as it would negatively impact their reputation and that was a further reason why I should want to "make the lawsuit go away". [26] Mr. Fiorvento's first affidavit attaches, as Exhibit "B", a copy of a letter that apparently was anonymously sent to Ryan Beedie. It refers to "Rob F" and "the lawsuit he is involved in". The anonymous letter to Mr. Beedie presumably is attached as an exhibit to Mr. Fiorvento's affidavit in an attempt to establish a basis for the allegations at para. 19 of the proposed amended third party notice. A letter from Mr. McCarthy is attached as Exhibit "C" to Mr. Fiorvento's first affidavit. In that letter Mr. McCarthy clearly and unequivocally denies that he was the author of the Exhibit "B" letter and denies any knowledge of the drafting or sending of that letter. There is no other evidence in the application record that would link Mr. McCarthy to the preparation or delivery of the letter or support the allegations in para. 7 of Mr. Fiorvento's affidavit. In these circumstances, the letter is not probative

evidence on the application before the court. [27] The third party notice is founded on Mr. Fiorvento's claim that the third party, Mr. De Lazzari, has committed the tort of abuse of process. Mr. Fiorvento refers to the components of abuse of process as set out in Oei v. Yan, 2020 BCCA 214. At para. 5 the court explained that tortious abuse of process requires, as a precursor, previous court proceedings advanced against the now plaintiffs by the now defendants. At paras. 5 and 6 the court indicated the essential elements of abuse of process are: 1. A court proceeding commenced for a collateral and improper purpose, such as extortion; 2. A overt act or threat in furtherance of a purpose not legitimate in the use of the legal process; and 3. Damages resulting to the plaintiff from the wrongful use of the legal process. [28] Mr. Fiorvento submits that the challenged proposed amendments at paras. 18-20 outline his abuse of process claims against Mr. De Lazzari. He argues that the collateral and improper purpose alleged in those paragraphs is Mr. De Lazzari's attempt to compel Mr. Fiorvento to sell his interest in the three properties at a discount; the overt acts are the threat to continue this litigation if Mr. Fiorvento did not sell his interest in the properties to Mr. De Lazzari and a threat to Mr. Fiorvento's reputation with his business associate. Mr. Fiorvento claims damages

for the cost of defending this action, for his responsibility for a share of Stancor's costs in relation to this action (as a 10% shareholder of Stancor), for reputational harm and for loss of professional opportunities. [29] Mr. Fiorvento seeks leave of the court to file his proposed amended third party notice pursuant to Rule 6-1(1)(b)(i) of the Supreme Court Civil Rules, B.C. Reg. 168/2009 (the "Rules"). [30] Amendments should be permitted as are necessary to determine the real questions in issue between the parties: Victoria & Grey Metro Trust Co. v. Fort Gary Trust Co., (1988) 30 B.C.L.R. (2d) 45 (S.C.) at p. 46 ("Victoria & Grey"). As far as possible, the pleadings should present all matters in controversy between the parties so they may be completely and finally determined: Victoria & Grey, p. 46; Tekamar Mortgage Fund Ltd. v. British Columbia, 2021 BCSC 1355, para. 6. [31] An application to amend or strike a third party notice should be considered on the assumption that the facts pleaded can be established: McNaughton v. Baker (1988), 25 B.C.L.R. (2d) 17 (C.A.) at para. 33. [32] Mr. Fiorvento points out that courts generally take a generous approach to amendments and a pleading will be struck out as disclosing no reasonable claim only in the clearest of cases. Where there is doubt on either the facts or law, the matter should be allowed to proceed for determination at trial and a pleading, or an amendment to a pleading, should be allowed to stand: McNaughton para. 29; Victoria & Grey, p.

46. Nonetheless, useless amendments or amendments that violate the rules which govern pleadings, including amendments that disclose no reasonable claim or are scandalous, frivolous or vexatious, are not allowed: Victoria & Grey, p. 46. [33] The third party and the plaintiff submit that the discussions at the January 17, 2018 meeting are protected by settlement privilege. They argue that the court should not grant leave for the amendments at paras. 18-20 of the proposed amended third party notice to the extent that those proposed pleadings refer to communications during that meeting. [34] Public interest in the settlement of disputes generally requires "without prejudice" documents or communications created for, or communicated in the course of, settlement negotiations to be privileged: Middelkamp v. Fraser Valley Real Estate Board (1992), B.C.L.R. (2d) 276 (C.A.), para. 18. [35] In Stronach v. Stronach, 2021 ONSC 5758 the court provided an outline of the legal principles with respect to settlement privilege: [23] In Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, the Supreme Court of Canada set out the rationale for settlement privilege and the principles that apply to the assertion of settlement privilege. Abella J., writing for the Court, held, at para. 2, that "the purpose of settlement privilege is to promote settlement", and "the privilege wraps a

protective veil around the efforts parties make to settle their disputes by ensuring that communications made in the course of these negotiations are inadmissible". Settlement privilege extends beyond documents and communications expressly designated to be "without prejudice". See Sable, at paras. 12-14. [24] Settlement privilege will attach to a document or communication where (a) there is a litigious dispute, (b) the communication has been made with the express or implied intention it would not be disclosed in a legal proceeding in the event the negotiations failed; and (c) the purpose of the communication is to attempt to effect a settlement: Re Hollinger, 2011 ONCA 579, at para. 16. [25] Settlement privilege is a class privilege and, while there is a prima facie presumptions of inadmissibility, exceptions will be found "when the justice of the case requires it". See Sable, at paras. 12 and 19. [26] Where settlement privilege is asserted over documents and communications made in furtherance of settlement, the party asserting the privilege must first show that they are prima facie protected by settlement privilege. If this is done, the party seeking disclosure on the ground that an exception to the privilege applies must show that, on balance, a competing public interest outweighs the public interest in encouraging settlement. See Sable, at para. 19. [27] In Union Carbide

Inc. v. Bombardier Inc., 2014 SCC 35, the Supreme Court of Canada explained that settlement privilege is a common law rule that protects communications exchanged by the parties as they try to settle a dispute. The Supreme Court of Canada held, citing Sable, that settlement privilege promotes a priority of our justice system of encouraging settlements. Settlement privilege applies even in the absence of statutory provisions or contract clauses with respect to confidentiality, and the privilege applies even after a settlement is reached. In a mediation held to discuss settlement, the parties' communications are protected by the common law settlement privilege. See Union Carbide, at paras. 31-34, and 39. [36] At paras. 28 and 29 in Stronach the court outlines the approach to be taken on an application to strike pleadings on the ground they disclose documents or communications that are subject to settlement privilege. The onus is on the party seeking to strike the pleadings. To discharge this onus, the moving party (here, the third party) must first show that the documents and/or communications are prima facie protected by settlement privilege. If the moving party discharges this initial burden, the responding party (here, Mr. Fiorvento) has the onus to show that an exception to privilege applies. If the evidentiary record is insufficient for the court to determine if the

challenged pleadings allege documents or communications that, prima facie, are subject to settlement privilege, the moving party will have failed to discharge its initial burden and the application should be dismissed. If the responding party establishes that the documents or communications are not subject to settlement privilege, or that the findings of fact needed to determine if an exception to settlement privilege applies cannot be made on the evidentiary record for the application, the application should be dismissed. The question of admissibility of the allegedly privileged documents or communications would then be left to the trial judge. [37] Mr. Fiorvento December 17, 2017 email to Roberto De Lazzari proposed that they meet on a "confidential basis" for "without prejudice" discussions. This was six days after Stancor filed the notice of civil claim for this action. The email chain resulting from this proposal (reproduced above) clearly indicates the participants in the January 17, 2018 meeting agreed that the meeting would be a confidential meeting, would proceed on a without prejudice basis, and that matters relating to possible settlement of this lawsuit would be discussed. The fact that settlement was to be discussed during the meeting is also confirmed in Mr. Fiorvento's first affidavit, at para. 3 (reproduced above) and in Robert De Lazzari's first affidavit, made

December 31, 2021, wherein he deposes that he understood that the meeting "was intended for having preliminary settlement discussions and [he] attended the meeting with that intention" (para. 8). [38] The third party and the plaintiff have discharged the onus on them to show that the communications between the three individuals who attended the meeting are prima facie protected by settlement privilege. There was a litigious dispute; the participants in the January 17, 2018 meeting specifically agreed the discussions would be on a "without prejudice" basis; and the parties met to attempt to settle the dispute. [39] There is no evidence to support a finding that the third party or the plaintiff have waived the settlement privilege that may apply to communications at the meeting. Indeed, the evidence is to the contrary. In his first affidavit, Robert De Lazzari specifically states that he and Stancor do not waive "settlement or any other privilege" in relation to the meeting (para. 9). [40] Mr. Fiorvento now bears the onus to show that an exception to settlement privilege applies to the proposed amendments to the extent that they refer to communications that occurred during the January 17, 2018 meeting. [41] Mr. Fiorvento submits that he should be allowed to include the challenged amendments in his amended third party notice because they are based on threats he alleges Mr.

McCarthy made during the January 17, 2018 meeting. It should be noted that Robert De Lazzari denies that threats were made by him or Mr. McCarthy during the meeting (para. 11 of Robert De Lazzari's first affidavit). The task here is not to decide if the threats were in fact made, but rather to determine if the challenged proposed amendments can properly be based on communications during the meeting. [42] Mr. Fiorvento submits that the rule of privilege with respect to "without prejudice" communications during settlement discussions was never intended to give protection for threats, citing Greenwood et al. v. Fitts (1961) 29 D.L.R. (2d0 260 (BCCA), at paras. 32, 33. That case concerned a party's threat that he would commit perjury and bribe witnesses if the case proceeded to trial. Mr. Fiorvento argues that even in cases where a true settlement proposal is discussed, evidence of matters communicated may be admissible for the purpose of showing that the party made the very threats alleged in the proceeding: Intercontinental Precious Metals Inc. v. Cooke, [1993] BCJ No. 1903, at para. 30. [43] In Dos Santos (Committee of) v. Sun Life Assurance Co. of Canada, 2005 BCCA 4, at para. 20, our Court of Appeal cautioned that the test for discharging the burden to establish that an exception to settlement privilege applies should not be set too low. The court stated that the public policy

behind settlement privilege is a compelling one and indicated it so compelling that threats arising in the context of settlement negotiations may not justify an exception (para. 19). The court pointed out that a party seeking an exception to settlement privilege must show that a competing public interest outweighs the public interest in encouraging settlement (para. 20). [44] In Evergreen Building Ltd. v. IBI Leaseholds Ltd., 2006 BCSC 1190, at para. 11, the court acknowledged that threats have traditionally been regarded as an exception to the general rule that settlement communications are privileged, and referred to Greenwood and Berry v. Cypost Ltd. (2003), 21 B.C.L.R. (4th) 186. The court went on to consider Dos Santos, which was decided after both of those cases, and indicated: [12] In order to find that a communication is exempt from settlement privilege, it is not enough to characterize it as a threat. Rather, it must be of such a character that the public interest in its disclosure outweighs the public interest in protecting settlement communications. [16] Privilege is lost not by making a threat, but by threatening to do something of an egregious nature. For example, a threat to commence an action or to bring a motion does not destroy the privilege attaching to a settlement communication. On the other hand, a threat to commit perjury is not privileged: See Greenwood,

Berry [45] Mr. Fiorvento contends that Mr. McCarthy threatened that Stancor would continue this action unless Mr. Fiorvento agreed to certain terms of settlement. This threat is not of an egregious nature. It is akin to the threat to commence an action the court referred to in Evergreen. [46] Mr. Fiorvento's allegation that Mr. McCarthy threatened that it would be bad for Mr. Fiorvento if his business associates became aware of this litigation also does not constitute an egregious threat. It simply is a statement reminding a party of the negative social consequences of being involved in litigation. [47] It should also be noted that the evidence on this application does not tie the alleged threats to the third party. It is common ground that Michael De Lazzari did not attend the January 17, 2018 meeting. Robert De Lazzari's first affidavit states that he and Mr. McCarthy did not attend the meeting on behalf of Michael De Lazzari (para. 10). [48] Mr. Fiorvento has not has not established that an exception to settlement privilege applies to justify the amendments he proposes at paras. 18, 19 and the first sentence of para. 20 in the Statement of Facts section (Part 1) of the proposed amended third party notice. [49] Although an application to amend a third party notice is to be considered on the assumption that the facts pleaded can be established, the court must guard against

amendments that are useless, disclose no reasonable claim, or are scandalous, frivolous or vexatious. At para. 17 of Stronach, the court referred to case authority that held that "it is settled law that referring to settlement offers or discussions which are subject to settlement privilege are subject to being struck as scandalous, frivolous or vexatious given that such communications are inadmissible". Here, communications that took place during the "without prejudice" January 17, 2018 meeting have been shown to be inadmissible in evidence. Any amendments based on those communications cannot be allowed. Conclusion [50] Mr. Fiorvento is granted leave to file an amended third party notice in the form attached to his notice of application filed December 2, 2021, with the following changes. The amendments proposed at paras. 18, 19 and the first sentence of para. 20 in the Statement of Facts section (Part 1) are not allowed. The amendment proposed as para. 4 in Legal Basis section (Part 3) will have to be removed or altered to eliminate references to communications that occurred during the January 17, 2018 meeting. [51] The third party was successful on the matters in issue on this application. He is awarded costs in the cause as against the defendant, Mr. Fiorvento. "Master Vos"