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Note: This article was also originally published on AdvocateDaily.com

A lawyer’s allegation that his former law firm’s late filing of a statement of claim cost him the chance to sue a car company for his difficulties in establishing a dealership, would represent a high standard for lawyers in terms of going back and analyzing all documents to find out when exactly a client should have known about their claim, franchise lawyer Peter Dillon tells Law Times.

The lawyer worked at the St. Catharines, Ont. law firm for a short time, before leaving to start a Mitsubishi car dealership in Niagara Falls in late 2002. Within three years, low sales and high overheads put the dealership in financial difficulty. The lawyer turned to an old colleague at his former law firm to sue the car company for “allegedly misleading him about the venture’s chances of success from the outset,” Law Times reports.

However, Ontario Superior Court Justice Peter Hambly dismissed the lawyer’s action, and ruled that the claim was filed after the expiration of the two-year limitation period. He also ordered the lawyer to pay Mitsubishi $150,000 in costs for the summary judgment motion.

The lawyer lost a subsequent appeal, and then filed a $5-million claim for negligence and breach of contract against his former colleague and law firm. As Law Times notes, the allegation, which has not been tested in court, claims that the firm “should have filed the statement of claim earlier or recognized the potential limitation period issues with the case once the firm was retained.”

In denying the allegations, the firm blamed the lawyer’s own late discovery of his claim for the missed deadline. It also claims the lawyer “suffered no damages as a result of its actions, since he never stood a chance of recovering any money from Mitsubishi.”

As Dillon, partner with Siskinds LLP in London, Ont., who is unconnected to the case, explains: “It’s a pretty high standard to require a lawyer to go back and analyze all the documents to find out when exactly you knew or should have known about your claim.

“The case is a bit of a quagmire, but I will follow it with interest,” adds Dillon.

In the lawyer’s initial claim, filed in 2007, he alleged he only entered into the agreement as a result of misrepresentations made by Mitsubishi, and accused the company of failing to comply with disclosure obligations under Ontario’s franchise legislation, the Arthur Wishart Act.

Dillon says there was room to challenge Hambly’s conclusion about the application of the Wishart Act, but he says it may only have been of limited use to the lawyer.

While the Act provides franchisees a right of rescission in cases where disclosure was lacking from the franchisor, it applies only within two years of the agreement, Dillon tells Law Times.

In late May, the law firm won the latest battle against the lawyer, when Ontario Superior Court Justice Edward Belobaba granted summary judgment dismissing part of the claim.

Belobaba agreed with the firm that since the lawyer never appealed Hambly’s findings on the lack of misrepresentation by Mitsubishi, he should not be able to claim “lost opportunity” damages related to that part of his original action. The rest of the claim is proceeding to trial, according to the judgment.

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