By: Jonnette Watson Hamilton
PDF Version: A Cautionary Tale about Suing in the Name of the Correct Legal Entity
Case Commented On: 2040497 Alberta Ltd v Samateh, 2019 ABPC 321 (CanLII)
In 2017, Abdoulie Samateh was sued by his landlord for rent in arrears – or was he? He was sued by William Masri, and Masri was the sole owner of 2040497 Alberta Ltd, as well as its president, secretary and treasurer. And it was 2040497 that was the landlord of the apartment rented to Samateh, not Masri. And so when the 2017 action went to trial on April 23, 2019, Assistant Chief Judge Gordon W. Sharek dismissed the landlord’s claim because the party suing – Masri – was not the landlord. He also dismissed a counter-claim by the tenant because the tenant called no evidence to support his claimed loss of personal property. One month later 2040497 sued its former tenant, Samateh, for the same rental arrears, as well as for damages. But 2040497 also lost, this time following a trial in December 2019. Judge Sandra L. Corbett decided that 2040497’s action was res judicata and also an abuse of process, and she awarded enhanced costs of $1,825 to the tenant. She held that 2040497 was wrong to sue because it tried to relitigate matters that had already been decided by ACJ Sharek in the first action. Many landlords who run their business through a corporation (and others operating small businesses) might be shocked to learn that they might have only one chance, when suing, to name the correct legal entity. If they get it wrong, there might be no “do over.” In addition, there might be a monetary penalty for what Judge Corbett called “litigation misconduct”. Continue reading →