Milaad Hashmi

Shane Coblin and Milaad Hashmi successfully argued before the Court of Appeal that the act of filing a lien that the lien claimant knew or ought to have know was inflated, constitutes an abuse of process entitling an owner to damages.

In 601 Main Partnership v. Centura Building Systems (2013) Ltd., 2024 BCCA 76, the British Columbia Court of Appeal addressed the role of the tort of abuse of process in combatting inflated construction liens. The common law has restricted the application of the tort of abuse of process to circumstances where the abusive act complained of is separate from the litigation process itself.  The logic being, that abusive litigation conduct is dealt with by an award of costs within the proceeding and ought not to give rise to a separate cause of action—so as to avoid one failed action begetting another action, which may beget another action, and on and on.

To address this, the common law developed a requirement that the conduct giving rise to the claim of abuse of process be an “overt act” that is outside the normal incidents of litigation.

The Respondent argued that a Builders Lien is part of the litigation process associated with the enforcement of the lien, and therefore cannot be the type of “overt act” required to succeed on a claim for abuse of process.  After reviewing the common law relating to abuse of process and the need for an “overt act”, the Court of Appeal rejected this argument. The panel held that the filing and maintaining of a Builders Lien is an act which is outside the underlying debt or enforcement action.  In this respect, the court likened Builders Liens to Certificates of Pending Litigation, the wrongful filing of which have long been held to constitute an abuse of process.

The court also held an improper motive on the part of the lien claimant can be inferred by the court notwithstanding that the only evidence to support the claim is the deficiency in the lien claim itself.

Justice Wilcock concluded his analysis with the following words about Builders Liens and their potential misuse:

… liens are “powerful pre‑judgment weapons”. Their use should be carefully scrutinized. As noted in Guilford at 405–406: “mechanics’ liens, lis pendens and garnishing orders are sometimes, though not often, used by unscrupulous persons to achieve results which could not otherwise be obtained”.

In the end, this case provides useful guidance to all members of the construction industry that contractors that knowingly inflate their lien claims are exposed to a claim of abuse of process and may be required to pay damages to the Owner.

Our client is the developer of a large luxury mixed-use building located in Vancouver.   For the past number of years it has been a defendant in a complex multi-party construction dispute, part of which has been proceeding as a class action.  The client had a wrap-up liability insurance policy in place for the development that required the insurer to defend any actions alleging damage to property.  The insurer denied coverage relying on an exclusion referred to as the “your work” exclusion.  Shane and Devin successfully argued that the insurer had not met its burden to demonstrate to the court that this exclusion clearly applied to oust coverage.  Justice Millman found that the duty to defend had been triggered and ordered the insurer to reimburse our client for all costs incurred to date to defend those actions and to prospectively cover all defence costs going forward as they are incurred.

Shane Coblin and Milaad Hashmi successfully defend claims of fraudulent misrepresentation and unjust enrichment made against our clients in a dispute over a failed assignment of a pre-sale condominium agreement in Vancouver. They also obtained an order that the Plaintiff had forfeited to our client the $340,188 she had paid towards the assignment and an order that the Plaintiff pay special costs.

The dispute originated from a 2017 pre-sale condominium interest acquired by the Defendant, who later offered to assign that interest to the Plaintiff. The Plaintiff made payments totaling approximately $340,188, representing the first two deposits required under the pre-sale agreement. The agreement collapsed when the Plaintiff decided not to proceed with the acquisition and demanded a refund. Our client refused and treated the Plaintiff’s words and conduct as a repudiation of the agreement entitling her to keep the amounts already paid.

The court rejected the Plaintiff’s claim of fraudulent misrepresentation, finding no evidence that the Defendant misled the Plaintiff about the nature of the transaction or the Defendant’s interest in the pre-sale unit. The court determined that an oral contract existed between the parties, and that there was sufficient evidence in the form of WeChat messages, including WeChat audio messages, videos, and pictures, that showed a meeting of the minds on all the necessary and essential terms.

The court agreed with the Defendant that when the Plaintiff told the Defendant in January of 2019, that she was not going to complete and wanted her money back, those words constituted a clear and unequivocal repudiation of the contract.  By electing to accept the repudiation and put the contract at an end, the Defendant was entitled to keep the amounts previously paid to her.  The Plaintiff was unsuccessful on her unjust enrichment claim because the payments were made pursuant to a valid and binding contract, which stood as a juridic reason for any enrichment.

The Defendant was also awarded special costs for the whole action because of what were held to be baseless allegations of fraudulent misrepresentation. In this regard, this case provides a useful reminder that allegations of fraud are taken seriously and can give rise to an order for special costs in circumstances where the alleging party had access to information sufficient to conclude that the defendant was merely negligent or had committed no wrongdoing at all. In such circumstances, the allegations themselves are seen to be reprehensible warranting an order of special costs.

In Yegre EB Ltd. v. Seguin, 2024 BCCA 365, Shane Coblin and Milaad Hashmi were successful in having the Court of Appeal overturn a Chambers Judge's finding that a forum selection clause in a property purchase agreement conferred exclusive jurisdiction upon the courts of the province of Alberta.  This case provides guidance on the test applicable when interpreting a forum selection clause, and it clarifies that the failure to properly interpret or apply case law constitutes an extricable error of law in the contractual interpretation process.

The case involved a 2015 purchase agreement in which the appellant purchased five industrial properties in British Columbia and Ontario from the respondents. In 2022, the appellant commenced proceedings in the BC Supreme Court alleging fraudulent misrepresentation, breach of contract, and negligence in connection with the purchase of the properties. The respondents filed a jurisdictional response and then brough an application to stay the claim on the basis of the forum selection clause.

The clause stated that the parties "submit to the jurisdiction of the Alberta courts for all purposes arising in connection with this Agreement." The Chambers Judge agreed with the respondents and interpreted the clause as granting exclusive jurisdiction to Alberta. Fundamental to the Chambers Judge’s decision, was her finding that the common law draws a distinction between the words “submit” and “attorn”, and that “submit” means something more than simply attorning; it signals exclusivity.

The Court of Appeal disagreed and found the clause to be ambiguous, noting it could reasonably support both exclusive and non-exclusive interpretations. The Court held that a review of the common law does not support a distinction between words “attorn” or “submit”; and that neither word conclusively denotes exclusivity on its own. The Court clarified that the burden on a jurisdictional application rests with the party seeking to invoke a forum selection clause to show that the clause clearly and unambiguously confers exclusive jurisdiction to another forum. In this case, the language was ambiguous. As such, the Court of Appeal set aside the order of the Chambers Judge, interpreted the clause as merely conferring non-exclusive concurrent jurisdiction on Alberta, and dismissed the underlying stay application.

This decision is also notable as it represents a unique finding by the Court of Appeal: the misinterpretation of case law is an error of law extricable from the contractual interpretation process.

In the end, this case provides a useful reminder to parties drafting forum selection clauses that clear and unambiguous language is required to confer exclusive jurisdiction upon a particular forum. In this regard, the words “submit or “attorn”, on their own, do not connote exclusivity.