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CIVIL PROCEDURE - Third party procedure - Availability

Tuesday, July 14, 2020 @ 6:00 AM  


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Appeal by the defendant solicitors from a decision refusing addition of a third party. A former client, B & B Environmental Services Ltd., sued the appellants for damages for professional negligence. The client had employed a bookkeeper who converted the client’s funds for personal use through a Scotiabank account. The client retained the appellants to pursue recovery of the proceeds of the fraud. The appellants commenced an action against Scotiabank on the client’s behalf but failed to commence an action against the bookkeeper’s estate within the limitation period. In defence of the professional negligence action, the solicitors pled that the client’s cause of action was against Scotiabank. The client consequently commenced a separate negligence action against Scotiabank. The appellants moved to commence a third-party claim against Scotiabank on the basis that any damages were recoverable against Scotiabank. The motion judge found no issue in the present action to which Scotiabank should be bound. The solicitors appealed.

HELD: Appeal allowed. There were questions of law and fact in common in the client’s professional negligence action against the appellants and its negligence action against Scotiabank. Both actions involved the same set of transactions, with common issues of damages and Scotiabank’s negligence. All parties to both actions would be best served by having all relevant parties included in the same action, as it would avoid a multiplicity of actions and the possibility of discordant findings. The order below was set aside with an order to add Scotiabank as a third party.

Canty v. B & B Environmental Services Ltd., [2020] N.B.J. No. 125, New Brunswick Court of Appeal, K.A. Quigg, R.T. French and L.A. LaVigne JJ.A., June 11, 2020. Digest No. TLD-July132020004