Executive Summary: Key Legal and Evidentiary Issues

• The plaintiffs sought specific performance or damages following the defendants’ failure to complete a residential real estate purchase.

• Defendants denied breach, claiming the contract remained valid and enforceable despite missing the completion date.

• A third party notice was filed alleging conspiracy, fraud, negligent misrepresentation, and breach of fiduciary duty against non-party individuals and entities.

• The court found the third party claims inconsistent with the defendants’ own pleadings and responses in the main action.

• The third party proceedings were deemed an abuse of process and struck in full under civil procedure rules.

• Special costs were awarded against two third parties due to the defendants' meritless and damaging allegations.

Facts and outcome of the case

The plaintiffs entered into a contract to sell a residential property to the defendants for $965,000, with a completion date of July 8, 2022. The defendants paid a $45,000 deposit but failed to complete the transaction. In October 2023, the plaintiffs initiated a civil claim, alleging breach of contract and seeking specific performance or damages. The defendants responded that they were ready and willing to complete the purchase had they been granted more time and argued the contract remained valid with an unspecified completion date.

Despite that position, the defendants later filed third party claims against four individuals and entities: Kamalpreet Gelan (a friend and alleged insurance agent), Monia Grewal (presented as a mortgage broker), Rohit Jindal (a real estate agent), and Woodhouse Realty Ltd. (Jindal’s associated firm). The claims alleged the third parties engaged in conspiracy, fraudulent and negligent misrepresentation, and breached fiduciary and professional duties, causing the defendants’ failure to complete the purchase.

The court determined that the third party notice was filed late without leave and that the defendants' pleadings in it were irreconcilably inconsistent with their primary defense. The defendants claimed in their response that they had not breached the contract and were prepared to complete, but simultaneously alleged in their third party notice that they had been induced to sign a contract they could never fulfill. The court found this internally contradictory and a misuse of the legal process.

Because the claims against the third parties introduced complex tort allegations unrelated to the plaintiffs’ simple breach of contract claim, the court held that the inclusion of those third parties caused undue prejudice and would complicate otherwise straightforward litigation. The third party notice was therefore set aside and struck as an abuse of process. The defendants’ application to amend the third party notice and substitute new parties was also denied.

The plaintiffs had already succeeded in a prior application for forfeiture of the $45,000 deposit. Additionally, special costs were awarded to two third parties—Jindal and Woodhouse Realty—for being wrongfully implicated in baseless and damaging claims. Other third parties were given leave to apply for similar cost awards. The court concluded that allowing the third party proceedings to continue would have undermined the integrity and efficiency of the legal process.