Petition or Notice of Claim?

Is it a Petition or Notice of Claim?

Litigators must choose the appropriate forum to commence a court action: a petition or notice of claim.

Most cases are commenced by the use of a notice of claim while certain types of cases may or must be commenced by petition.

Carphin v Braich Estate et al 2017 BCSC 1140 dismissed the Petitioner’s claim for bringing the court action in the form of a petition rather than using a notice of claim and sets out the criteria for using a petition.

A former lawyer had without having a judgement or having passed his accounts commenced an action to attempt to recover substantial legal fees and accrued interest by proceeding against  estate assets.

The Appropriate Form of Proceeding

[75]  The respondent administrators argue that a threshold issue in this matter is whether the petition is suitable for a proceeding under Rule 2-1 of the Supreme Court Civil Rules and rely on McDonald v. Lau, 2016 BCSC 1651 at para.39:

As a threshold issue, the Court must determine whether it was appropriate for the petitioner to bring this matter by way of petition. If it was not, then the matter must be converted into an action.

[76]  Rule 2-1(1) directs that every proceeding is to be begun by notice of civil claim unless an enactment or the Rules themselves provide otherwise and then sets out a list of circumstances in Rule 2-1(2) which will require a proceeding to be begun by way of petition. The potentially applicable circumstances are as follows:

(2) To start a proceeding in the following circumstances, a person must file a petition or, if Rule 17-1 applies, a requisition:

(c) the sole or principal question at issue is alleged to be one of construction of an enactment, will, deed, oral or written contract or other document;

(d) the relief, advice or direction sought relates to a question arising in the execution of a trust, or the performance of an act by a person in the person’s capacity as trustee, or the determination of the persons entitled as creditors or otherwise to the trust property;

The relief sought here extends far beyond simple questions arising in the execution of a trust or determination of a creditor.

[77] The argument of the respondent administrators is that the petitioner is seeking to enforce a debt claim against Herman Braich Jr. on the basis of the retainer, written and oral, by way of an originating application.

[78]  The respondent administrators argue that it is ill-conceived to bring this matter by way of petition given that a proceeding begun by petition can involve interpretation of a contract but not the enforcement of it: see Yates v. Air Canada, 2001 BCSC 127 at para. 36; McDonald at para. 51.

[79]  The respondent administrators further argue that, while letters have been placed into evidence, there is no formal written retainer agreement put forward by the petitioner.  Given that the onus remains on the solicitor to prove the retainer contract where there is a dispute, there must be evidence of the retainer put forward by the lawyer: see Cox Taylor v. Cochrane, 2007 BCSC 432; Walker v. Takhar, 1994 CanLII 697 (B.C.S.C.).

[80]  Accordingly, the onus is on the petitioner to prove his retainer contract with Herman Braich Jr. The respondent administrators caution that, given that Herman Braich Jr. is deceased, the retainer agreement must be examined with some care and scepticism, relying on Johl Estate v. Purewal, 2015 BCSC 2331 at para. 28; Hunt v. Kazmer, 2005 BCSC 1815 at para. 21.  While Johl Estate was brought by petition, that case involved only the retainer agreement and not the enforcement of it or all the ancillary matters sought here by the petitioner.

[81]  Given that a declaratory judgment would not resolve all the issues between the parties, I find that proceeding by way of petition is inappropriate and agree with the argument of the respondent administrators in this regard: see also Yates at paras. 35-39, when BaumanJ., as he then was, reviewed this point:

[35]As to Rule 10(1)(b), Justice Skipp’s decision in Three Stars Investments Ltd. v. Narod Developments Ltd. (1981), 33 B.C.L.R. 164, is cited.

[36]  After reviewing the law Justice Skipp concluded:

From these cases it can be concluded that the R. 10(1)(b) petition is inappropriate where:

(1)   Serious questions of law or fact are raised;

(2)  A decision will not end the matter, but requires further proceedings to be pursued;

(3)  The application involves not the interpretation but enforcement of a contract.

The petitioner has used an inappropriate procedure in its use of a petition. The role of declaratory judgments, as provided for under R.10, was commented upon by Dickson J. in Solosky v. R. (1979), 16 C.R. (3d) 294, 50 C.C.C. (2d) 495, 105 D.L.R. (3d) 745, 30 N.R. 380 (S.C.C.). In that case he adopted the view which asserted that the declaratory action is discretionary and should not be granted if it will not settle the questions at issue between the parties.

In the present case, a declaratory judgment on the construction of the contract will not settle all issues between the parties. They must still proceed to trial to enforce whichever construction is presented. On that ground alone the R.10(1) petition is inappropriate.

[39] He concluded (at 4):

In my view, the test laid down in Three Stars still applies on a Rule 10 application. However, after Douglas Lake, the existence of disputed questions of fact alone will not defeat the application. If disputed questions of fact can be satisfactorily resolved by reference of the documentation between the parties such that the court can concluded that the respondent would be bound to lose if the matter went to trial, then the application can be allowed, provided it still meets the Three Stars test. In Douglas Lake, the issue was one solely of contractual interpretation and the decision on that point ended the matter.

In this case, the respondent advances a misrepresentation claim in the approximate sum of $2,722,000. An interpretation of the contract will not end the mater [sic] and in my view further proceedings will have to be pursued. Finally, it is clear that the petitioner is seeking not only an interpretation of the purchase contract but also the enforcement of the promissory note free of any set-off claim. In my view, this does not fall within the purview of Rule 10 and this matter should be pursued by way of writ and statement of claim.

Accordingly, given the relief sought, I find that proceeding by petition is ill-conceived for the case before me, which will not resolve all the issues between all these parties.  No application or submission was made to the Court about converting this matter to an action and, as a result, in these circumstances, it would be inappropriate for the Court to do so pursuant to Rule 16-1(18).

Recommended Posts