Executive Summary: Key Legal and Evidentiary Issues

• Whether the City of Kitchener can maintain a third party claim for contribution and indemnity against the plaintiff’s solicitor despite also pleading contributory negligence against the plaintiff.
• Characterization of the lawyer’s role as either an “agent” (whose negligence is attributable to the plaintiff) or an “advisor” (whose negligence is independent and supports a third party claim).
• Application of the Adams/Hengeveld line of cases distinguishing when third party claims against professionals are barred because their faults are fully captured by contributory negligence defences.
• Whether the alleged negligence of the solicitor relates to the creation of the original loss (due diligence at purchase) or only to mitigation of an existing loss, which would fall under the “nuanced exception” barring third party claims.
• Sufficiency of the amended third party pleading under Rule 21.01(1)(b), including whether it is “plain and obvious” that no reasonable cause of action for contribution and indemnity is disclosed.
• Impact of potential solicitor-client privilege concerns on the viability of the third party claim, and whether such issues can justify striking the claim at the pleadings stage.

Background and parties

Cowal Chalmers Inc. purchased a building in Kitchener, Ontario in 2015. The sole shareholder of Cowal is Stuart Cameron Murray, a lawyer who operates a sole proprietorship under the name Mullin Law Firm. Murray’s firm acted for Cowal on the acquisition, and a lawyer employed by him, Elmira Chimirova, had carriage of the real estate file. After the purchase, in 2019, the City of Kitchener issued fire inspection orders in relation to the property. Cowal alleges that these orders were based on fire safety deficiencies and other non-compliance that already existed at the time of purchase. Some deficiencies were remedied promptly, while others became the subject of references and appeals. Cowal later sold the property in April 2021 and commenced an action against the City in May 2021. It claims that the fire inspection orders caused it loss, including adverse impact on its ability to sell the property, and pleads that the City was negligent in failing to require the previous owner to complete the necessary fire safety work before Cowal’s acquisition.

The claim, defence, and third party proceedings

In its defence, Kitchener denies any negligence and pleads, among other things, that Cowal failed to conduct adequate investigations before the purchase to ensure the property complied with all applicable laws, including fire safety requirements. The City also issued a third party claim against Murray and Chimirova for contribution and indemnity. It alleges that, as Cowal’s solicitors on the purchase, they were negligent in failing to conduct appropriate and competent searches, in not undertaking proper due diligence, and in failing to warn Cowal about the risks and potential legal consequences of existing fire safety deficiencies at the time of purchase. The third party pleading includes particulars such as alleged failures to obtain or act on information that was known or ought to have been known to the lawyers, as well as failures to advise Cowal adequately on the risks associated with acquiring the property in its then condition. The third party action against Chimirova was later dismissed on consent of all parties in May 2025, leaving Murray as the remaining third party.

The motion to strike and governing legal framework

Murray brought a motion under Rule 21.01(1)(b) of the Rules of Civil Procedure to strike the third party claim on the basis that it discloses no reasonable cause of action. On such a motion, no evidence is admissible, the facts pleaded must be taken as true unless they are manifestly incapable of proof, and the claim can only be struck if it is “plain and obvious” that it discloses no reasonable cause of action. This is a stringent standard, and pleadings must be read generously. Murray’s central legal argument rested on the principle from Adams v. Thompson, Berwick, Pratt & Partners, and as developed in Hengeveld v. The Personal Insurance Company and other authorities. In essence, that line of cases holds that a defendant cannot “double dip” by both reducing its liability through a contributory negligence defence against the plaintiff and simultaneously claiming contribution and indemnity from a third party in respect of the same fault that is legally attributable to the plaintiff. Where a professional (often a solicitor) acts as an agent of the plaintiff, and the alleged negligence falls entirely within that agency relationship, any negligence is imputed to the plaintiff and is fully addressed by a contributory negligence defence. In that scenario, there is no remaining overpayment risk for the defendant, and no basis for a third party claim.

Agency versus advisory role of the solicitor

The court reviewed the two recognized lines of authority stemming from Adams and its progeny. In the first line of cases, professionals are treated as agents whose acts and omissions are legally the acts and omissions of the plaintiff. Where all the alleged negligence is within the scope of such an agency relationship, the defendant can raise those faults directly against the plaintiff via contributory negligence, leaving no room for a separate third party claim. In the second line of cases, professionals are not treated as agents but rather as advisors whose negligence is not automatically attributable to the plaintiff. In those situations, a defendant may maintain a third party claim for contribution and indemnity, because the professional’s independent negligence may leave the defendant exposed to paying more than its fair share of the loss to the plaintiff. The court also noted a refined “mitigation” exception: where a lawyer’s alleged negligence relates purely to advice about mitigating an already-existing loss, that negligence is still treated as attributable to the plaintiff (because mitigation is the plaintiff’s responsibility) and is properly raised as a defence, not via a third party claim.

Application of the principles to Murray’s role

On the pleadings, the court concluded that the third party claim casts Murray in an advisory role rather than as a pure agent. The City’s Amended Third Party Claim alleges that Murray, as Cowal’s solicitor on the purchase, failed to conduct proper due diligence, failed to perform adequate searches, and failed to warn Cowal of the legal risks and consequences associated with acquiring the property given the fire safety deficiencies. These alleged wrongs are connected to the events that gave rise to the plaintiff’s claimed loss: the initial purchase and the condition of the property at that time, not a later failure to mitigate. The pleading does not assert or rely upon an explicit agency characterization, nor does it place Murray in a role akin to filing a prospectus, registration, or similar acts that courts have treated as prototypical agency situations. In this respect, the court found the case closer to 478649 Ontario Ltd. v. Corcoran, where the plaintiff’s solicitor’s alleged negligence in protecting the purchaser’s interests supported a valid third party claim, than to the Adams-type agency cases in which the third party claims were barred. Here, because the plaintiff has not sued Murray, the City argued it would be at risk of being held liable for the entire loss even if Murray’s negligence also contributed to that same loss, unless allowed to pursue contribution and indemnity. The court accepted that, at the pleadings stage, this is a viable theory that should not be struck out.

Privilege and mitigation concerns

The court also considered whether potential issues of solicitor-client privilege might justify striking the claim at this early stage. It acknowledged that, in some mitigation-related contexts, policy concerns about undermining the solicitor-client relationship have been factors in not permitting third party claims against solicitors. However, the court emphasized that those concerns cannot defeat a valid legal claim for contribution and indemnity in circumstances analogous to Corcoran, where the alleged solicitor negligence goes to the creation of the original loss and not merely to mitigation. Issues about whether privileged communications will actually need to be disclosed, or whether privilege can or should be overridden or waived, were held to be matters for the trial judge to manage, not a basis for striking the pleading.

Outcome and monetary consequences

In the result, the court held that it is not “plain and obvious” that the City of Kitchener’s third party claim against Murray discloses no reasonable cause of action. The motion to strike was therefore dismissed, and the third party claim is allowed to proceed to be determined at trial on a full evidentiary record. On this motion, the successful party is the City of Kitchener, which obtained an order that Murray’s third party claim to strike be dismissed and was awarded its costs of the motion on a partial indemnity basis in the total amount of $10,237.47, inclusive of HST and disbursements; no damages have yet been determined or awarded on the underlying negligence claim itself.