Executive Summary: Key Legal and Evidentiary Issues

• Plaintiffs alleged their real estate agent failed to advise them to update the Property Disclosure Statement (PDS) after discovering a leak.

• Defendants brought a motion to strike the claim based on issue estoppel, abuse of process, and witness immunity.

• The court examined whether the prior decision by Coughlan J. addressed the same issues raised in the current claim.

• It was determined that the defendants in this case were not parties or privies to the prior action.

• The court found no abuse of process, emphasizing that this was not an improper relitigation of prior findings.

• Witness immunity was ruled inapplicable as the claim centered on pre-testimonial conduct, not in-court statements.

Facts and procedural background

Shawna and Brian Nichols sold their home through real estate agent Maita Lavoie, under a Seller Designated Brokerage Agreement with Viewpoint Realty Services Inc. After the sale, the buyers sued the Nichols for failing to disclose a water leak in the Property Disclosure Statement (PDS). In that earlier case (Sproule v. Nichols, 2024 NSSC 26), the Nichols were found liable for negligent misrepresentation and breach of collateral warranty. Following that ruling, the Nichols initiated this separate action against Lavoie and Viewpoint, alleging negligence and breach of contract for failing to advise them to update the PDS to reflect the leak.

Before the trial of this new claim could proceed, Lavoie and Viewpoint brought a motion to strike the Nichols’ statement of claim. They argued that the issues had already been decided in the previous case, that allowing the suit to proceed would constitute an abuse of process, and that Lavoie was immune from liability under the doctrine of witness immunity because she had testified in the earlier trial.

Legal issues and findings

The court addressed three main legal defences raised in the motion to strike: issue estoppel, abuse of process, and witness immunity.

On issue estoppel, the court rejected the claim that the previous judge, Coughlan J., had decided the issue of whether Lavoie was negligent toward the Nichols. The earlier decision only dealt with the Nichols’ conduct and liability toward the buyers, and Lavoie was not a party to that action. Furthermore, there was no privity between Lavoie and the Nichols that could justify issue estoppel. The judge noted that Lavoie was not involved in the purchase agreement nor affected by the outcome of the buyers’ claim.

On abuse of process, the court considered whether the new action was a misuse of the judicial system. While the defendants argued the Nichols should have brought their claim earlier as a third-party claim in the original case, the court emphasized that relitigation only amounts to abuse if it undermines judicial economy, consistency, finality, or the administration of justice. Since the Nichols’ current claim involved different legal issues and parties, it did not constitute a collateral attack or relitigation.

The court also found no unfairness in how the claim was brought. While the Nichols’ lawyer filed the claim against Lavoie shortly before she testified for them in the earlier trial—without disclosing this to her—the court found that even had she known, the Nichols likely would have compelled her testimony. There was no evidence that Lavoie’s testimony would have been different had she obtained legal counsel beforehand.

On the issue of witness immunity, the court emphasized that the Nichols’ claim was not based on what Lavoie said during her testimony but rather on her alleged failure to advise them prior to trial. The court found this type of conduct falls outside the scope of witness immunity, which protects only testimony and preparatory statements relating directly to evidence given in court.

Conclusion and result

Justice Gatchalian dismissed the defendants’ motion to strike the claim. The court ruled that the Nichols’ action could proceed, as none of the arguments raised by Lavoie and Viewpoint—issue estoppel, abuse of process, or witness immunity—barred the claim. The court left the matter of legal costs to further written submissions if the parties could not agree.