Woodglen & Co. Ltd. v. Owens

Woodglen & Co. Ltd. v. Owens Collection Decisions of the Court of Appeal Date 1999-10-28 Docket numbers C26286 Judges Finlayson, George Duncan; Catzman, Marvin Adrian; Sharpe, Robert J. Subject Civil Decision Content DATE: 19991028 DOCKET: C26286 COURT OF APPEAL FOR ONTARIO FINLAYSON, CATZMAN and SHARPE JJ.A. BETWEEN: WOODGLEN & CO. LTD., TOBA ) Frank J.C. Newbould, Q.C., DRIVE BUILDING CORP., PAUL ) for the appellants MANCHESTER and CLAUDIA ) MANCHESTER ) ) (Appellants) ) ) –and– ) ) DOUGLAS OWENS and ) Joel Richler and J.L. Lawrie, OWENS, WRIGHT ) for the respondents ) (Respondents) ) ) Heard: October 12, 1999 On appeal from the judgment of Ellen Macdonald J. dated November 20, 1996. FINLAYSON J.A.: [1] The appellants appeal from the judgment of Ellen Macdonald J. dismissing their action for negligence against the defendant solicitor Douglas Owens and his law firm. [2] The action involved a 7.2 acre parcel of land in the City of North York owned by the appellants under separate ownership for separate parts. The appellant Paul Manchester (“Manchester”) decided to develop the lands for expensive housing. The respondent Owens was retained as the solicitor at some stage induring the process of the development of these lands. The extent and nature of his retainer were very much in issue. [3] At the time of the acquisition of this parcel of land, the relevant zoning provisions in North York required that each lot consist of 2 acres for each residence. However, the lands in question were not subject to what is referred to as “part lot control” under the provisions of the Planning Act and therefore the land could be divided up and conveyed under a scheme known as “checkerboarding”. Initially, utilising solicitors othere than the respondents, the appellant Manchester commissioned and registered a plan creating three lots. North York refused to issue building permits and the appellant Manchester retained the firm of Weir & Foulds to act for him with respect to this problem and others as it turned out. At about this time the respondent Owens was retained with respect to the sale of one of the newly created lots. [4] The appellant Manchester then decided that he wished to increase the number of lots from three to five. He contends that he engaged the respondent Owens to do the conveyancing and create the easements necessary to provide for services for the lots and access to the public street. The respondent Owens did prepare and register deeds to convey the various parcels, but he did not prepare and register the various easements. Approximately one and one half years later, North York imposed part lot control without prior notice. The lands in question had been exempted from part lot control when they were purchased by Manchester in 1981 but, on September 23, 1988, By-law 30649 was registered and part lot control over the lands was reimposed. While the appellant Manchester acknowledged that he knew that part lot control could be reimposed, he incorrectly thought that he would receive advance notice and complained that the respondent Owens did not advise him to the contrary. [5] The issue in appeal was that whether there was a positive obligation upon the respondent Douglas Owens to warn the appellant Manchester of the risk attaching to his failure to register the required easements. In particular, it was submitted that the respondent Owens ought to have disabused the appellant Manchester of his belief that North York was obliged to serve notice of its intent to pass the by-law reimposing part lot control and that this, a notice that waswould have to be sufficient to allow him time to complete the registrations of the necessary easements and thus protect his properties from the consequences of such a by-law. [6] However, the trial judge took a different view of the relationship between the appellant Manchester and the respondents. She found that the respondents’ retainer was much narrower than that alleged by the appellants and that the guiding mind of the appellants, namely the appellant Manchester, did not rely upon the respondent Owen to give him the type of planning advice that he belatedly maintained he was entitled to receive. It is apparent from the record at trial, as accepted by the trial judge, that the easements which are now so much in issue were not that significant at the relevant time and the imposition of part lot control was only part of the problems that beset the appellants in their attempts to develop the lands in question. [7] The appellants on appeal stress that this problem about easements was the single issue in appeal but the trial judge was of the opinion that the case was “obscured by a complex factual background, all arising from Mr. Manchester’s complex and changing plans for the development of the lands.” She further said that: Having reflected on the matter in great detail, I have concluded that the defendants are correct in their theory that confining the focus of this case on the issue of part lot control is only part of the picture. The assessment of the performance of Mr. Owens’ retainer must be in the context of the entire history of important events from 1986 to 1991 when Mr. Owens was put on notice that his failure to create the easements was considered to be actionable by the plaintiffs. [8] The appellants attempted to portray the appellant Manchester as somewhat of a novice in land development. While he carried on the business of a mortgage broker, he was a chartered accountant by profession and this was his first venture with land development. It is said that he not only looked to the respondent Owens for legal advice but also relied heavily on his expertise in land development including instructions as to what was necessary to protect his exemption status under the Planning Act. However, the trial judge took a different view of the appellant Manchester. She said that he “presented himself as an articulate, quick thinking, intelligent and sophisticated person”. She was of the opinion that he was very much in control of the development project and had an “impressive” understanding of legal issues. He insisted on co- ordinating the efforts of all the experts that he retained. After reviewing some of the correspondence in this trial, she said of the appellant Manchester that he was: … articulate and relentless in attending to all aspects of the redevelopment of the lands. I was struck by the contents of much of his correspondence. It illustrates that he quickly grasped complicated concepts which impacted on his plans for redevelopment. [9] The appellants submitted that the respondent should have prepared the necessary easements well before lot control was invoked, but it is apparent on the record that the respondent Manchester had not made up his mind as to what his final development was to be and deliberately withheld instructions from the respondent Owens as to the number of lots he proposed to create. Accordingly, even assuming that it was the responsibility of the respondent Owens to create and register the necessary easements, he could not have done so until he knew the number and location of the lots. As found by the trial judge, the creation of easements in the context of the respondent Manchester’s latest checkerboard plan was a complex conveyancing task, complicated by the number of lots, the existence of present easements for water and storm sewers, and the desire of the appellant Manchester to be flexible with respect to the final configuration of the lots in order to pursue his goal of “intensification” of the development of his lands. The trial judge dealt with this issue in the context of the appellant Manchester’s reluctance to cede control of the development. She said: Mr. Manning [Garth Manning, the appellants’ expert] was critical of Mr. Owens for not ensuring that the legal documentation was not prepared and put in place for the development as a whole and not, on a piece meal basis, as individual lots were sold. As a general statement, I agree with this concept. But, in this case, the idea of permanent arrangements was premature because the client, Mr. Manchester, created the impression in the mind of Mr. Owens, that he was uncertain about many matters which would impact the conveyancing. Mr. Manchester wanted to maintain flexibility. Mr. Manchester was not always forthcoming about the details of what was in his mind because he had not made final and permanent decisions. These factors made it reasonable for Mr. Owens, in the context of 1987, to approach the matter as he did. Mr. Manchester approached the matters on a piece meal basis for understandable reasons. He wanted to optimize, as far as possible, the real estate market at the time. He understood the fundamental legal concepts that affect the creation of easements. He knew that if he finalized the easements too early, he would be restricted in the terms of the flexibility that he wanted to maintain. [Emphasis in original.] [10] The appellants continually stressed the importance of these easements in this court as if they were the sole basis for the difficulties that finally overwhelmed the project. However, this emphasis on the significance of the easements seems to have been an afterthought. On this issue which is pivotal to this appeal, the trial judge accepted the evidence of the respondents’ expert, Brian Bucknall and said: Mr. Bucknall was candid with the court in that he suggested that some aspects of Mr. Owens’ practice were sloppy. He viewed the project as being overly complex, characterized by the presence of many professionals and characterized by the uncertainty in the mind of Mr. Manchester as to what he would ultimately decide in terms of the configuration of the buildable lots and the private roadway. Mr. Bucknall’s opinion was that, in the context of the whole project and what was going on in 1987, easements were not of great significance. I have concluded that the easements were then put on the “back burner” by Mr. Manchester who was attending to other matters. Both Mr. Bucknall and Mr. Manning saw the lack of coordination amongst the professionals and the sophistication of the client as important considerations in assessing the performance of the retainer. [11] The trial judge specifically rejected the assertion of the appellants that the respondent Owens had some overriding responsibility for the land development as a whole. He was given specific retainers with respect to specific activities. In the words of the trial judge he “had a specific and limited retainer”. It was (1) to prepare a co-users’ agreement; (2) to act on a sale to a Mrs. Milnes; and (3) to complete the conveyancing on the checkerboard transfers. There was no reason for the respondent Owens to think that his responsibilities were any broader. As the trial judge said: Mr. Owens knew that the project was very much an ongoing process and he knew that Weir & Foulds was counsel to Mr. Manchester in respect of the ongoing process. Mr. Owens believed that Mr. Manchester knew and understood about the need for rezoning. I conclude that this was a reasonable belief, in all of the circumstances. Mr. Owens was aware that Mr. Manchester was getting advice from others with respect to rezoning matters. It was reasonable for Mr. Owens to proceed on the basis that the whole project was a work in progress and that the work expected of him was only part of the whole process. [12] In my view, the trial judge was correct in identifying the real issue in the trial as being the nature and scope of the respondent Owens’ retainer with the various appellants. In the last analysis this was a factual question on which the findings of the trial judge are entitled to great deference. There is no basis in this case for this court’s intervention. [13] Another factor that the trial judge quite properly commented upon was the delay by the appellant Manchester in making a complaint to the respondent Owen Owens about his failure to look after the easements. It would appear that the appellant Manchester received a letter in January of 1989 from North York advising him that part lot control had been imposed. The trial judge accepted that he did not advise the respondent Owens of this fact until around March of 1989. Notwithstanding his present position that the respondent Owens was responsible for the access problems caused by the imposition of part lot control, the appellant Manchester continued to retain the respondent Owens and his without any complaint on the subject. The assertion that he was negligent in this regard was not made until the fall of 1991, long after the development had collapsed. The trial judge did not accept the appellant Manchester’s explanation for this delay, namely that he was reluctant to sue a lawyer. She held that the real reason for the delay was that Manchester did not consider that the respondent Owens was responsible and therefore had no reason to advance the claim. [14] In summation, I am of the view on this record, as I believe the trial judge was, that the appellant Manchester was the author of his own misfortune. Counsel for the appellants conceded in argument that checkerboarding was a device, albeit a legal one, for circumventing planning control. The North York planning authorities were understandably unsympathetic to a land development project over which they would have little control. The appellant Manchester faced considerable resistance from North York concerning his First Checkerboard Plan, and this necessitated several court applications to force the issuance of building permits. Against this hostile environment, the appellant Manchester continued to negotiate personally with these officials in his attempts to maximise the yield he would receive from the proposed development. He retained his own lawyers, his own surveyors and engineers, but put no one in charge. He insisted on maintaining personal control over all aspects of the development. He did not cede responsibility for managing the project to any one group of experts and did nothing to encourage them to attempt to correlate their activities by conferring the one with the other. In short he attempted through his own efforts to extract the maximum advantage from his land’s exempt status under the Planning Act despite the ever present threat that this status could be removed by a lot control by-law. When the project failed because of his overreaching, it seems as though he looked around for someone to blame and, without cause, settled on Mr. Owens. [15] There was a final and separate argument that I will deal with briefly. The appellant Claudia Manchester, the wife of the appellant Manchester, maintained that the respondent Owens had a separate retainer with respect to her interests as the owner of one of the parcels known as 10 Toba Drive. She executed two mortgages on this property to the T-D Bank. The bank and the respondent Owens thought that she should receive independent legal advice before executing the documents and she did so. However, she now claims that the advice she received was deficient because the respondent Owens did not brief her advisor of the underlying legal problems affecting her title to the property in question. She maintains that it was up to the respondent Owens to ensure that she received proper independent legal advice and that he failed in his legal duty to her in this regard. [16] There is some confusion as to whether this issue was even argued below. Certainly, the trial judge does not deal with it. The appellant Claudia Manchester did not testify at trial nor had she been examined for discovery on the subject. The issue was not developed as part of the appellants’ case at trial and on appeal counsel was reduced to relying upon some statements made by the respondent Owens in a different context on the subject of his duty to Mrs. Manchester. This allegation of negligence is separate and distinct to the appellant Claudia Manchester and the onus was upon her to establish liability. She did not do so. The record does not indicate what advice she in fact received from her independent legal advisor. We are left to assume that he did not advise her about her title problems because he was not aware of them and was not himself negligent in not knowing of them. Further we are asked to accept that had he instructed her as to the true state of affairs, his client would not have executed the two mortgages any way. In view of the manner in which the case was presented at trial and the state of the record before us, I am not prepared to find that there is any merit in this ground of appeal. [17] For the above reasons, I would dismiss the appeal with costs. Released: OCT 28 1999 Signed: “G.D. Finlayson J.A.” G.D.F. “I agree. M.A. Catzman J.A.” “I agree. Robert J. Sharpe J.A.”