To Sue or Not to Sue? Failure to Sue = No Compensation

Gilbertson Davis LLPAppeals, Civil Liability, Civil Litigation, Commercial and Contract Litigation, Contract Disputes, Real Estate Litigation0 Comments

In Griffiths v. Zambosco, 2001 CanLII 24097 (ON CA), the Ontario Court of Appeal (“ONCA”) concluded that failure to sue is a bar to recovery of any compensation, even if the party to a lawsuit may otherwise have been entitled to compensation had she sued.

In this case the Plaintiff sued the Appellant for negligence in respect of a vendor take back mortgage to the Plaintiff and his then-wife. The Plaintiff’s ex-wife refused to join the proceeding as a plaintiff and so the Plaintiff added her as a defendant.

The trial judge found that the Appellant was negligent and awarded damages of close to $300,000 to both the Plaintiff and his ex-wife (almost $150,000 each).

On appeal, the ONCA agreed with the trial judge that the Appellant owed a duty of care to both the Plaintiff and to the Plaintiff’s ex-wife.

However, the ONCA did not agree with the trial judge that the Appellant was liable to the Plaintiff’s ex-wife. The ONCA advised that the Plaintiff’s ex-wife did not sue the Appellant, nor did she counterclaim against the Appellant when she was added as a defendant in the proceeding by the Plaintiff.

The ONCA opined that “a party who has not sought relief in the relevant pleadings cannot obtain a judgment” and that the order that the Plaintiff obtained adding his ex-wife to the proceeding as a defendant “did not expose” the Appellant to a claim for damages by the Plaintiff’s ex-wife. The ONCA further cautioned that a “joint tenant is not, by the existence of the joint tenancy, the agent of the other” and that joint tenants “have a separate, albeit indivisible, interest in the jointly held asset”.

In conclusion, the ONCA found that the Appellant “should not be required to compensate a defendant who did not seek compensation from him in the action” and set aside the part of the judgment against the Appellant requiring him to compensate the Plaintiff’s ex-wife.

This case provides a cautionary tale for those with a potential claim: you need to sue or you will not receive any order for compensation from the courts.

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