Executive Summary: Key Legal and Evidentiary Issues

• Two interconnected property sales failed to complete, creating a cascading chain of breach of contract claims involving Mr. Hoffman as both seller and buyer.

• Mr. Hoffman sued the Alberta Numbered Company for breach of contract and his realtors (Check Realty Ltd. dba RE/MAX Check Realty and Jesse May) for negligence in failing to warn him of risks involved in the transaction.

• The Watts sued Mr. Hoffman for breach of contract after he failed to complete his purchase of their property, which he says was due to the Alberta Numbered Company's non-completion.

• Competing procedural applications were filed: Mr. Hoffman sought joinder of both actions, while the Realtor Defendants sought severance and a stay of the negligence claims.

• Sufficient commonality existed between the two actions to permit joinder, and sufficient distinction existed between the contractual and negligence claims to permit separation.

• The Court found that resolving the straightforward contractual claims first via summary trial was the most efficient and fair course and would simplify the later negligence proceedings against the realtors.

The cascading property transactions

This case arose from two interrelated real estate transactions in British Columbia. Terence Robert Hoffman was both the seller of a property to 1719349 Alberta Ltd. (the "Alberta Numbered Company") and the buyer of a separate property from Stephen Alfred Watts and Jennifer Louise Watts (the "Watts"). Neither purchase completed. The completion dates for both sales had initially been postponed together, suggesting some recognition of interrelationship. The Alberta Numbered Company subsequently appears to have said it was unable to complete because of a fire. Mr. Hoffman says this failure on the Alberta Numbered Company's part was the reason he did not complete his purchase from the Watts.

The lawsuits that followed

Mr. Hoffman commenced an action (Docket S232837) in the Supreme Court of British Columbia, Victoria Registry, against the Alberta Numbered Company for breach of contract. In the same action, he also sued his realtors — Check Realty Ltd. (which does business as RE/MAX Check Realty) and Jesse May (the "Realtor Defendants") — for failing to warn him of risks involved in the transaction (the "Realtor Negligence Claims"). Separately, the Watts commenced their own action (Docket S245063) against Mr. Hoffman for breach of contract. The Realtor Negligence Claims were for any loss Mr. Hoffman is unable to recover against the Alberta Numbered Company, on the theory that the Realtor Defendants breached the standard of care they owed Mr. Hoffman in failing to warn him about the risks in entering these transactions. Mr. Hoffman was also seeking indemnity from the Realtor Defendants for whatever he is liable for to the Watts.

The procedural applications

Four applications came before the Honourable Justice G. Morley on January 27, 2026. One application, for documents from the Alberta Numbered Company, was going by way of consent. Two applications were brought by Mr. Hoffman asking that the actions be tried together and the evidence in one be admissible in the other (the "joinder" applications). There were two such applications because they were brought in both actions. The fourth application was brought by the Realtor Defendants for severing and staying of the Realtor Negligence Claims pending final disposition of the breach of contract claim against the Alberta Numbered Company.

The legal framework applied

The Court considered the applicable legal tests for both joinder and severance. For joinder under Rule 22-5(8) of the Supreme Court Civil Rules, the applicant must establish, as set out in Lee v. UpMeals Technologies Inc., 2024 BCSC 888 at paras. 51–52: (a) based on the pleadings, the proceedings involve common claims, disputes and relationships; and (b) separate trials at separate times would be undesirable and fraught with problems. For severance under Rule 22-5(6), as supplemented by s. 8(2) of the Law and Equity Act and the court's inherent jurisdiction, the leading case was Johnston Estate v. Johnston, 2017 BCCA 59 at para. 69. Justice Morley noted that although the tests are stated differently, since they are symmetrical orders, there is a great deal in common, and ultimately it comes down to how best to determine the issues between the parties in a way that is as fair and cost- and time-effective as possible.

Threshold findings on commonality and distinctness

The Court found the threshold requirements met for both applications. There was sufficient commonality between the two actions because Mr. Hoffman's argument was that he would have been able to complete had the Alberta Numbered Company completed, and so he would not be facing any liability against the Watts at all if the Alberta Numbered Company had not breached its contract. That liability is part of what he says are his damages for contractual breach and also what he alleges to be the consequences of the negligence of the Realtor Defendants. There was also sufficient distinction between the Realtor Negligence Claims and the contractual claims such that separation could be considered — the defendants are different, the breach of contract claims could succeed even though the Realtor Negligence Claims do not, and different evidence would be necessary in each case.

Why the summary trial of the contractual claims should proceed first

The Court concluded that the most efficient and fair course was to provide for joinder of the two actions, but also severance and stay of the Realtor Negligence Claims, until such time as there has been an opportunity to have a summary trial of the contractual claims. The most important reason was that the Watts had already taken steps to schedule a one-day summary trial in September, and this could be expanded to include the contractual claims in Mr. Hoffman's action, but not the Realtor Negligence Claims. If the Realtor Negligence Claims needed to be heard first, or at the same time, a summary trial was unlikely to be possible, and even less likely to be heard in September. Any action for realtor negligence would involve findings of fact about the communications between the realtor and Mr. Hoffman, likely requiring credibility findings and cross-examination. Mr. Hoffman would also have to establish the standard of care for a realtor in this circumstance, which would require expert evidence and probably cross-examination on that expert evidence. The Court found it abundantly clear that waiting for those steps would, from the point of view of the Watts, increase the delay in their obtaining resolution and complicate and increase legal costs. The Court also noted that the Realtor Defendants would benefit from the summary trial in terms of knowing what they are facing in terms of the amount of potential damages. The overlap in evidence was actually a reason the summary trial should happen first, since it would provide relative certainty about the magnitude of the claim against the realtors.

The ruling and overall outcome

Justice Morley ordered as follows: first, leave was granted to Mr. Hoffman to bring his applications on short notice; second, the unopposed order for disclosure of documents by the Alberta Numbered Company was made; third, the claims against Check Realty Ltd. doing business as RE/MAX Realty and Jesse May in Action No. S232837 were ordered to be severed and stayed pending disposition of the summary trial of the proceedings against the remaining defendant, 1719349 Alberta Ltd.; fourth, the Court directed that, if possible, that summary trial be set down to be heard along with the summary trial of the claim in S245063, and directed Scheduling to attempt to find time in September for these two summary trial applications to be heard together; and finally, subject to that stay, Action No. S245063 and Action No. S232837 were ordered to be tried together if a trial is necessary, with evidence in one admissible in the other, subject to the directions of the trial judge or summary trial judge and subject to the right of any party to dispute admissibility on the basis of relevance or otherwise. On costs, the Court ordered that each party bear its own costs. No specific monetary award was determined at this stage, as the decision was procedural in nature, directing the parties toward a summary trial for resolution of the substantive contractual claims.