Executive Summary: Key Legal and Evidentiary Issues

• Yellow Quill Property Management Corp. appealed a chambers decision striking its claims against Saskatoon Dawah and Community Centre Inc., Michael Derbowka, and Cuelenaere LLP under Rule 7-9(2)(a) of The King's Bench Rules.
   
• Negligence allegations against the solicitor and his firm turned on whether they owed a duty of care to a non-client party on the opposite side of a real estate transaction.
   
• A central evidentiary question was whether the further amended statement of claim pleaded sufficient material facts to establish proximity, a required element of any duty-of-care analysis.
   
• Injurious falsehood claims required the court to examine whether the transfer authorization constituted a false, maliciously published statement causing special damage.
   
• Section 95(1) of The Land Titles Act, 2000 raised an unresolved statutory interpretation question about whether it creates a stand-alone private cause of action.
   
• Whether a bare assertion that a transfer was void ab initio, paired with a request for a vesting order, could independently sustain the claim was also at issue.
   

Facts of the case

Yellow Quill Property Management Corp. (YQPM or YQPMC), the general partner of Yellow Quill Property Management LP and wholly owned by the Yellow Quill First Nation, owned nine contiguous parcels of land on 20th Street West in Saskatoon. In April 2023, Dennis Perillat, who had no authority to act for YQPMC, listed the property for sale at $1,350,000 through a brokerage contract executed in the name of a different, non-owning corporation. Saskatoon Dawah and Community Centre Inc. (SDCC) offered $800,000, and after a counter-offer the parties settled on $850,000 with a closing date of July 31, 2023. Ryan Grieve of McDougall Gauley LLP acted as solicitor for YQPMC, while Michael Derbowka of Cuelenaere LLP acted for SDCC. Before the possession date, Bruce Slusar, counsel generally acting for the First Nation, raised concerns to Grieve about whether the sale had been properly authorized, and by August 1, 2023, Slusar had warned both Grieve and Derbowka in writing that the transaction lacked authorization and should not proceed. Despite this, on August 4, 2023, Derbowka or others at his firm submitted the transfer for registration, and title was registered in SDCC's name. YQPMC subsequently sued SDCC, Derbowka, and Cuelenaere LLP, along with other defendants not relevant to the appeal, alleging the transfer was void ab initio and seeking a vesting order plus damages, and its amended claim asserted negligence against Derbowka and Cuelenaere LLP. YQPMC later applied to further amend its claim to add two additional causes of action against SDCC, Derbowka, and Cuelenaere LLP: injurious falsehood and a claim under section 95(1) of The Land Titles Act, 2000. The respondents applied to strike the claim against them, and a Chambers judge granted the applications in full, a decision reported as 2025 SKKB 122.

Policy and legislative provisions at issue

The strike application was brought under Rule 7-9(2)(a) of The King's Bench Rules, which permits a court to strike a pleading that "discloses no reasonable claim or defence." The proposed further amended claim relied on section 95(1) of The Land Titles Act, 2000, which allows a person who "sustains a loss or damage with respect to a matter governed by this Act" to bring an action against a responsible person other than the Registrar. YQPMC also invoked sections 15(2), 107(1), and 109 of the Act, which address alteration of title, applications to the court, and the court's general jurisdiction to order that title be vested in a person or transferred. These provisions were considered alongside section 95's placement within Part XII of the Act, titled "Assurance and Compensation," which primarily governs claims for errors or omissions by the Registrar.

Reasoning and analysis

Writing for the court, Tholl J.A. addressed each of YQPMC's grounds of appeal in turn. On the negligence claim, the court held that the general rule against lawyers owing duties of care to non-clients applied squarely to this commercial transaction. Although foreseeability of harm was arguable, there were no pleaded facts showing any close and direct relationship, reliance, or vulnerability between YQPMC and Derbowka, who acted only for his own client throughout. On injurious falsehood, applying the four-part test from Solo v Institute of Electrical and Electronic Engineers Incorporated, the court found the transfer authorization did not amount to a false, disparaging statement, and the pleadings did not support the malice element required for the tort. Turning to section 95(1) of the Land Titles Act, the court engaged in statutory interpretation, noting the provision's placement within Part XII and its evident purpose of addressing losses connected to the operation of the land titles registry itself, rather than losses arising from an underlying commercial dispute that merely culminates in registration. The court concluded there was no nexus between YQPMC's alleged loss and the registry system sufficient to ground a claim under that section. The court further held that a bare assertion that the transfer was void ab initio, without an underlying valid cause of action, could not independently support a vesting order under sections 107 and 109 of the Act, since whether an instrument is void ab initio is a legal conclusion rather than a pleaded fact. Finally, the court found no basis to fault the Chambers judge for declining to grant further leave to amend, given that YQPMC had already amended its claim substantially and could not identify a further amendment that would remedy the deficiencies.

Ruling and overall outcome

The Court of Appeal dismissed YQPMC's appeal in its entirety, upholding the Chambers judge's decision to strike the claims against SDCC, Derbowka, and Cuelenaere LLP for failing to disclose a reasonable cause of action. The court ordered that YQPMC pay one set of costs for the appeal to SDCC and one set of costs for the appeal to Derbowka and Cuelenaere LLP, both calculated on Column 4 of the Tariff of Costs; the judgment does not state a specific dollar figure for these costs, so the exact amount is not specified.