In O'Connor Associates, the third-party defendants
moved to strike proposed amendments to the third-party claims
against them on the basis that they disclosed no cause of action.
The main action involved allegations by the plaintiff, NEP Canada
ULC, that the defendant, Merit Energy Company LLC, deceived it with
regard to the status of regulatory compliance of certain oil and
gas assets purchased by NEP from Merit.
Merit commenced third-party proceedings against numerous
consultants/agents hired by NEP as part of the transactions'
due diligence process, alleging originally that these
consultants/agents were negligent in the performance of their due
diligence of the assets and that their negligence and/or breach of
contract contributed to/caused NEP's loss. Subsequently, in an
application to amend the third-party claims, Merit sought to add a
claim that these consultants/agents breached a tort duty that they
owed to Merit when performing their contracts with
NEP. Merit relied upon comments in Arceomittal and
suggested that the case stood for the proposition that a duty could
be owed to the opposite party on a transaction and, at any rate,
the Court could not strike pleadings alleging but rather that the
claims had to be left to trial.
The Court of Appeal clearly put this issue to rest relying on
the well-established duty of care analysis from Cooper v
Hobart in finding that no such duty of care exists at law
between a plaintiff's agent/consultant and the defendant. Not
only did the Court of Appeal find that there was no proximity
between the plaintiff's consultant/agent and the defendant, the
Court of Appeal cited public policy concerns as a basis for
refusing to recognize a duty of care, acknowledging the conflicting
situation that a consultant/agent would face if it owed duties to
parties on both side of the transaction. As a result, the Court of
Appeal struck the proposed amendments.
This is a welcome decision which restores certainty and
predictability to the case law and clarifies the scope of duties as
between parties and their consultants/agents to commercial
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).