Case updates
Mar 05, 2026
Rush Ihas Hardwick LLP is pleased to report a significant victory at the British Columbia Court of Appeal, where our partner Jeffrey W. Robinson successfully defended the summary dismissal of a negligent misrepresentation claim in Sherwood Real Estate Corporation v. Kingsnorth, 2026 BCCA 80. In a unanimous decision by Justices Harris, Warren, and Francis, the Court dismissed the appeal and confirmed that there is no genuine issue for trial on the negligent misrepresentation claim. Notably, Mr. Robinson prevailed even though the Court of Appeal found an error in the chambers judge’s reasoning — a testament to the strength and depth of the arguments he advanced.
Background: A Failed Joint Venture and a Persistent Plaintiff
This case arose from a failed joint venture for gravel extraction on Okanagan Indian Band Reserve No. 1. The plaintiff, Sherwood Real Estate Corporation, had purchased a 50 percent shareholding in Civil-X Aggregate Productions Ltd. (“CAP”) for $1.25 million, later contributing a further $375,000. When the venture did not succeed, Sherwood sued Mr. Steven Kingsnorth and Civil-X Contractors Inc. for negligent misrepresentation and breach of contract, pointing to an email Mr. Kingsnorth sent in June 2020 describing the commercial opportunity.
Sherwood claimed that email falsely represented there was “$9–14 million of already produced product on the ground ready for sales” at the quarry, and that this representation induced Sherwood to enter into a shareholders operating agreement (the “SHO Agreement”).
Mr. Robinson defended Mr. Kingsnorth and Civil-X throughout the proceedings. He brought three successive applications to dismiss the claim before the action was finally dispatched by summary judgment under Rule 9-6 of the Supreme Court Civil Rules — the decision at first instance reported as Sherwood Real Estate Corporation v. Kingsnorth, 2025 BCSC 961. Sherwood then appealed that dismissal to the Court of Appeal, retaining King’s Counsel to lead its case. Mr. Robinson appeared alone for the respondents.
The Strategic Challenge: Defending a Win When the Court Finds an Error Below
This appeal presented an unusual challenge. The Court of Appeal agreed with Sherwood on its first ground of appeal — finding that the chambers judge had erred in his proximity analysis by focusing too narrowly on Mr. Kingsnorth’s expertise in gravel valuation and his familial relationship with Sherwood’s principal, without considering the broader contextual circumstances emerging from the June 2020 email.
Sherwood argued those circumstances — including that Mr. Kingsnorth was deliberately pitching a business opportunity, held a financial interest in the outcome, portrayed himself as knowledgeable, and was seeking to induce investment — could support a finding of the proximate “close and direct relationship” required to establish a duty of care.
The Court of Appeal agreed that those contextual factors were relevant and should have been considered. This was a potential opening for Sherwood to revive its claim. The question became whether, even accounting for those factors, there was a genuine issue for trial.
The Winning Argument: Purpose of Undertaking vs. Purpose of Reliance
Mr. Robinson’s decisive argument focused on a fatal mismatch at the heart of Sherwood’s claim: the purpose of Mr. Kingsnorth’s alleged undertaking and the purpose of Sherwood’s alleged reliance did not align.
Drawing on the Supreme Court of Canada’s framework in Deloitte & Touche v. Livent Inc., 2017 SCC 63 and 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35, Mr. Robinson argued that a duty of care in negligent misrepresentation requires a correspondence between what the defendant undertook and what the plaintiff claims to have relied upon. Reliance that falls outside the purpose of the undertaking is neither reasonable nor foreseeable and therefore does not give rise to a proximate relationship.
The appellant’s argument about the June 2020 email bound it to the premise that Mr. Kingsnorth’s purpose was to induce Mr. Iadarola/Sherwood to purchase shares in CAP.
But Sherwood’s claim — as pleaded in its Second Amended Notice of Civil Claim — was that the alleged misrepresentation induced it to enter into the SHO Agreement (the shareholders operating agreement), not to purchase the shares. Critically, Sherwood had previously alleged that the misrepresentation induced it to “invest and purchase shares in CAP” — and then deliberately deleted that allegation from its amended pleading.
As Justice Warren wrote for a unanimous Court:
“The detrimental reliance alleged in the SANOCC (entering into the SHO Agreement) falls outside the scope of the undertaking implicitly alleged in the SANOCC (to induce Mr. Iadarola/Sherwood to purchase shares in CAP). In the result, despite the error in the judge’s proximity analysis, there is no genuine issue as to the existence of a duty of care that could ground liability for the alleged detrimental reliance.”
In plain terms: Sherwood had boxed itself in with its own pleading. By carefully tracking and exploiting this self-imposed limitation, Mr. Robinson ensured the appeal was doomed even where the Court found the chambers judge had gone wrong.
The Result: Appeal Dismissed
The Court of Appeal unanimously dismissed the appeal. The negligent misrepresentation claim remains extinguished, and Mr. Kingsnorth and Civil-X are free from litigation without every having faced the risk of going to trial.
It is worth noting that this was not a case where the respondents simply held their ground on the chambers judge’s reasoning. The Court of Appeal found that reasoning was partially flawed. The appeal was dismissed because Mr. Robinson identified and argued an independent, analytically sound basis for affirming the result. That is a different and more demanding form of appellate success.
A Reflection of Our Approach
This result reflects the hallmarks of Jeffrey W. Robinson’s appellate practice and of Rush Ihas Hardwick LLP:
- Mastery of the law: Mr. Robinson navigated the Supreme Court of Canada’s evolving negligent misrepresentation framework — Livent, Maple Leaf Foods — to identify a case-dispositive argument the chambers judge had not reached.
- Pleading discipline: By tracking the evolution of Sherwood’s pleadings across three iterations, Mr. Robinson was able to demonstrate a fatal and self-inflicted deficiency in the plaintiff’s case.
- Appellate composure: When the Court of Appeal found an error below that could have opened the door for Sherwood, Mr. Robinson had a principled alternative argument ready to close it.
- Efficient, decisive advocacy: After three applications and a full appeal, Mr. Robinson delivered final resolution for his clients.
As the first commercial litigation boutique in BC’s Interior, Rush Ihas Hardwick LLP is proud to deliver this calibre of representation at every level of court.