One of the country’s largest residential real estate law firms is suing Dye and Durham after the legal software company locked them out of its popular Conveyancer platform.
In a notice of action filed June 17 with the Ontario Superior Court of Justice, Parnes Rothman LLP – which operates under the name Real Estate Lawyers.ca LLP – accuses DoProcess and its new owner Dye and Durham of terminating their access to Conveyancer because of the involvement of the law firm’s principals in a rival product. Two of the law firm’s owners are shareholders in iClose Software Inc., whose conveyancing offering is currently under development.
According to the notice of action, none of whose claims have been proven in court, Parnes Rothman is seeking an injunction restraining Dye and Durham and DoProcess from what it calls their “bad faith and illegal” termination of the law firm’s access to Conveyancer.
The defendants meanwhile, claim they were exercising their rights under Conveyancer’s user agreement, which they say allows them to terminate access with 10 days’ notice, or immediately in certain circumstances.
In their notice of action, Parnes Rothman says it was using Conveyancer as its practice management system long before operator DoProcess was acquired by Dye and Durham in December 2020. Over 20 years, the law firm says it has built up a file repository of more than 40,000 clients inside the platform.
Although there is one other competitor in the market, Parnes Rothman claims Conveyancer is the only viable option for high-volume firms like them because of the direct integration the product offers for key players in a real estate transaction, including real estate agents, title insurance providers, banks and mortgage brokers.
In their notice of action, the law firm claims the defendants threatened to terminate Parnes Rothman’s access to Conveyancer in March after learning about iClose’s planned rival product.
“This was an attempt to intimidate the principals of Parnes Rothman into shutting down iClose by threatening
their livelihood, their firm, and their clients,” the notice of action reads.
The law firm alleges the defendants then expressed an interest in buying out or partnering with iClose during an April meeting, which it claims ended with an agreement that Parnes Rothman’s access to Conveyancer would not be terminated so long as they switched to the iClose product once it launches.
Things came to a head on June 14, the notice says, when iClose delivered its buyout price to Dye and Durham, which rejected the proposal.
The following morning, the law firm alleges its access to Conveyancer was cut off without warning. It claims this was done in breach not only of the April agreement, but also of the software’s end user licence agreement, which requires a minimum of 10 days’ notice of termination.
After Parnes Rothman complained, the defendants served a 10-day notice of termination and partially restored the law firm’s service – granting them access to existing files, but no ability to create new ones, the notice claims.
Share
Parnes Rothman then went to court, convincing Justice Marie-Andre Vermette to grant an interim injunction restoring their previous access to Conveyancer at least until June 28, when the court will hear the firm’s motion for an interlocutory injunction.
“If interim terms are not granted, the plaintiff will suffer irreparable harm. The limited access to Conveyancer that the plaintiff currently has is having an immediate impact on their business and reputation. IOf the limited access is terminated, it will effect hundreds of files, the orderly transition of which requires some time,” she wrote. “Given the urgency of this matter, I had to make this order based on very limited information. The judge hearng the motion for an interlocutory injunction may well come to a different conclusion based on a more fulsome evidentiary record.”