VALAYATI v CHEEMA, 2018 ABQB 1014
6.14: Appeal from master’s judgment or order
7.3: Summary Judgment (Application and decision)
The Plaintiff, Valayati, appealed a Master’s Decision which summarily dismissed the Plaintiff’s claims against the Defendants, Rehman and Shahzad. The other Defendant, Cheema, cross-appealed the Master’s Decision denying his Application to summarily dismiss the Plaintiff’s claims against Cheema.
The Plaintiff had listed a home for sale at a price below market or assessed value. The Defendant real estate agent, Cheema, reviewed the property with the Plaintiff and advised that because of required repairs that the Plaintiff could not complete, the property should be listed at a depressed value. The property was subsequently purchased by the Defendants, Rehman and Shahzad. However, unbeknownst to the Plaintiff, Rehman and Shahzad had an exclusivity agreement with Cheema whereby Cheema would act solely on their behalf in a real estate transaction. Rehman and Shahzad failed to close the transaction because they could not secure proper financing. Cheema then offered to purchase the property himself for $450,000. The Plaintiff accepted this offer and signed an acknowledgement stating that she was aware that Cheema was not acting for her and he owed her no fiduciary duties.
The Plaintiff closed the transaction for the property with the intention of suing Cheema after its completion. After taking possession, Cheema listed the property for $589,000, well above the initial list price he had suggested to the Plaintiff. The Plaintiff then commenced the Action against Cheema, Rehman, Shahzad, as well as the lawyer who completed the transaction for Cheema. The lawyer was not involved in this Application. Master Mason had summarily dismissed the claims against Rehman and Shahzad but determined that Summary Dismissal could not be granted to Cheema.
McCarthy J. confirmed the standard of review of an Appeal of a Master’s Decision pursuant to Rule 6.14 is correctness. It is an appeal de novo. McCarthy J. then summarized the law governing Summary Judgment under Rule 7.3. Summary Dismissal is appropriate when there is no genuine issue for Trial and the Court can reach a fair and just determination on the merits based on the existing record. The moving party applying for Summary Dismissal bears the burden of proving there is no genuine issue for Trial, and this requires more than simply raising a doubt. Conversely, a Plaintiff can resist a Summary Dismissal motion by showing that: the Applicant has not proven there is no genuine issue for Trial; that Summary Dismissal is not just or appropriate based on the facts and record; or that the material facts cannot be determined on the existing record or they reasonably warrant a Trial.
McCarthy J. also confirmed that there is ambiguity regarding the standard of proof for showing there is no genuine issue for Trial. There are authorities stating that the standard of proof is that the moving party must show that its case is “unassailable” and also that the moving party need only show a lack of merit on a balance of probabilities. Applying these principles to the facts, McCarthy J. decided to uphold Master Mason’s ruling. There were enough indicia of a fiduciary relationship between the Plaintiff and Cheema, and there were sufficient issues with the enforceability of the acknowledgement that the Plaintiff’s claims for breach of fiduciary duty and fraudulent misrepresentation should go forward.
However, the same could not be said about the Plaintiff’s claim of a conspiracy between Cheema, Rehman, and Shahzad. There was no evidence that Rehman or Shahzad knew that the initial list price was below market value or that the property would eventually be sold to Cheema immediately after the sale.
The Appeal and the cross-Appeal were both dismissed and the parties were directed to speak to Costs if they could not agree.
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