Purchaser’s claim against lenders’ lawyer survives challenge over failed Vancouver sale

A Vancouver property purchaser can continue his negligence lawsuit against the lenders’ lawyer over a court-approved sale that never closed, after a B.C. judge found a genuine issue for trial about whether the lawyer owed him a duty of care despite never representing him.

In Joshi v Richards, 2026 BCSC 2052, dated October 23, 2026, Justice Ormiston of the Supreme Court of British Columbia dismissed the summary-judgment application brought by George Richards and his firm, Richards and Richards. The decision lets Madan Joshi’s claim proceed; it does not finally establish negligence, fraud or an entitlement to damages.

A court-approved purchase overtaken by refinancing

Richards represented Samra Enterprises Inc. and Colossal Fortune Holdings Ltd., mortgage lenders that had begun foreclosure proceedings against properties on Vancouver’s East 41st Avenue. The lenders obtained authority to conduct a sale. Joshi signed a purchase agreement in January 2021, subject to court approval, and the lenders obtained a vesting order approving his purchase on March 30.

The owners obtained a stay pending appeal on April 6. On April 8, Joshi’s lawyer sent Richards the conveyancing documents for an April 21 completion. But the owners paid out the existing mortgage on April 15, before Joshi’s purchase could close.

The reasons list several undisputed steps in that process: Richards provided a mortgage payout statement and authorized removal of the certificate of pending litigation from title; the certificate was cancelled, new mortgages were registered and the payout money reached his firm’s trust account. The lenders then discharged their mortgages.

The result was that the owners redeemed their mortgage and refinanced the properties before the court-approved sale to Joshi could be completed. In subsequent proceedings in 2022, the vesting order was declared to have no force and effect because that redemption had occurred—not because the order was legally defective.

Joshi alleges that Richards negligently facilitated those steps to his detriment and undermined the order protecting his purchase. Richards disputes wrongdoing. He argues that he acted on his clients’ instructions and that the stay allowed the owners to redeem the mortgage. He also says the claim cannot succeed because neither he nor his firm ever acted as Joshi’s lawyer.

Why the absence of a lawyer-client relationship was not decisive

The application turned on a preliminary question: was there a genuine issue for trial about a duty of care? On a summary-judgment application under Rule 9-6, a defendant can defeat an unsound claim or present evidence that completely answers it. But the judge cannot conduct a general weighing of disputed evidence.

Lawyers ordinarily owe their duties to their own clients, not the opposing side. A duty to someone else cannot conflict with that primary obligation. Such a duty is exceptionally unusual where, as here during the alleged negligence, the other person has independent counsel.

For a claim seeking compensation for purely economic loss, foreseeable harm alone is not enough. The relationship must be sufficiently close to justify a legal obligation, and policy considerations must not rule it out. Reasonable reliance on the lawyer’s conduct can be important, but cannot simply be assumed.

Justice Ormiston found enough in Joshi’s pleaded facts and the record to require that analysis at trial. The case concerned an existing court-approved interest in property, not just an ordinary negotiation in which each side was free to pursue its own economic advantage. The alleged conduct could support a finding that Richards stepped outside his role as the lenders’ solicitor by undermining an order that benefited both the lenders and Joshi.

The judge also considered the claim that Richards continued sending completion documents to Joshi’s lawyer after the lenders had been paid out, without explaining that the purchase could no longer be completed as contemplated. Along with the alleged lack of notice about the steps affecting title and the stays, that could support Joshi’s argument that his own lawyer’s ability to protect him had been undermined.

Although Joshi generally had counsel, he was self-represented at the March 30 vesting-order hearing. Richards’ agent supported the order there. The judge said the alignment of their interests at that stage, followed by the alleged lack of communication, provided a basis for arguing that Richards should have anticipated Joshi’s reliance on compliance with the order.

A narrow ruling, with liability still to be decided

Richards argued that recognizing a duty would conflict with his obligations to his clients and expose opposing lawyers to litigation better addressed through contempt proceedings or claims against their clients. The judge was not persuaded those arguments justified dismissing this action. On the facts advanced, the proposed duties aligned: neither a duty to the lenders nor a duty to Joshi would require disobeying the vesting order. Potential solicitor-client privilege issues were not shown to be unmanageable.

The reasons contain strong criticism of the alleged conduct, but the ruling is about whether this potentially rare duty-of-care claim should survive summary judgment. Justice Ormiston expressly noted that earlier judicial criticism of Richards was not binding or decisive on this application and that other adjudicators would ultimately decide why he acted as he did and whether his conduct was proper.

The decision does not create a general right to sue the other side’s lawyer. It leaves Joshi to establish the requirements of his negligence claim, including duty, breach, damage and causation. No damages were awarded. Richards and his firm’s application was dismissed, with costs to Joshi on the ordinary scale; the reasons do not fix a dollar amount.