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Solicitor’s Negligence in the Estates and Trusts Context – No. 3: Duty of Care

Over 25 years have passed since the “high-water mark” decision of White v Jones [1] establishing the ability of disappointed beneficiaries to sue drafting lawyers in negligence. This blog series will review the historical development of the duty of care in Canada, the elements of the claim in solicitors’ negligence as well as relevant case law. Guidelines as well as tips to assist estates and trusts drafting lawyers to avoid solicitor’s negligence claims will also be included in this blog series.

DUTY OF CARE: HISTORICAL DEVELOPMENT OF THE DISAPPOINTED BENEFICIARY

In 1924, the Ontario Court of Appeal in Re Fitzpatrick[2] denied the recovery of damages to a beneficiary claiming against a solicitor in negligence for failure to properly witness a will. The Court made its decision on the basis that there was no privity of contract between the disappointed beneficiary and the solicitor. The state of the law, as it existed in Canada in 1924, limited a drafting solicitor’s liability for negligence to the solicitor’s client only.

In the United States, since in or about 1958, when the case of Biakanja v. Irving[3] was released by the Supreme Court of California, the courts have recognized that the beneficiary of a will deprived of his inheritance because of the negligence of the lawyer who drew the will had a remedy in law against the lawyer. This liability was established despite the absence of privity of contract.

However, it was not until 1978 that Canadian courts first recognized that a duty of care was owed by a drafting solicitor to intended beneficiaries. It was in the case of Whittingham v. Crease and Co.,[4] where the solicitor attended at the testator’s home and read the will in the presence of the testator, the testator’s son and the son’s wife. The son was the intended beneficiary. The solicitor asked the son’s wife to witness the will, even after the wife questioned her ability to do so. This rendered the gift to her husband, the testator’s son, void by reason of section 12(1) of the British Columbia Wills Act[5]  then in force which nullified bequests made to either witnesses of a will or to their spouses.

The British Columbia Supreme Court allowed recovery on the basis of the principles long enunciated in Hedley Byrne Co. Ltd. v. Heller & Partners Ltd.[6] Hedley is the threshold case on liability for pure financial or economic loss, the basic principles for which the courts extended economic loss to will preparation. Particularly, that if a person seeks information from another possessing a special skill and trusts, that person is required to exercise due care and, if that person knew, or ought to have known, that reliance was being placed on his or her skill or judgment, then the skilled person owes a duty of care and the injured person can recover damages for financial, or economic loss caused by the negligent misrepresentation made.

Meanwhile, in England in 1980, the case of Ross v. Caunters[7] was tried at the Court at Chancery Division, where Sir Robert Megarry V-C was presiding. Ross was a similar case to that of Whittingham, and is analogous in that regard. The solicitor drafted the testator’s will and then upon the request of the testator sent it to him for signing. The husband of the beneficiary under the will was one of the witnesses. The plaintiff’s gift made by the testator was void. The solicitor failed to notice the problem when the will was returned to him.

The plaintiff brought an action against the solicitor in negligence for damages for the loss of her benefits under the will. The plaintiff alleged that the defendant failed to check whether the will had been duly executed, failed to observe that one of the witnesses was the plaintiff’s husband and failed to draw the testator’s attention to that fact. The defendant admitted the allegations of wrongdoing but denied liability on the grounds that he owed a duty of care only to the testator and not to the plaintiff/beneficiary. The Court found in favour of the plaintiff stating:

a solicitor who is instructed by his client to carry out a transaction that will confer a benefit on an identified third party, owes a duty of care towards that third party in carrying out that transaction, in that, the third party is a person within his direct contemplation as someone who is likely to be so closely and directly affected by his own acts or omissions that he can reasonably foresee that the third party is likely to be injured by those acts or omissions.[8]

The Court’s principle considerations in Ross v. Caunters were as follows:

  • The close proximity of the plaintiff to the defendant;
  • The proximity was a product of the duty of care owed by the defendants to the testator; and
  • That to find that the defendant was under a duty of care to the plaintiff would not impose an uncertain and unlimited liability, but a finite one to a finite number of persons, namely, one.

Accordingly, the Court held that the defendant owed a duty of care to the plaintiff beneficiary because it was obvious that if the lawyer was careless, the plaintiff would suffer loss.

In the subsequent 1995 decision by the House of Lords of England, in White v. Jones[9] the duty of care owed to intended beneficiaries by solicitors drafting wills was affirmed. In this case the testator was estranged from his two children and he asked his solicitor to remove his daughters as beneficiaries in his will. The solicitor re-drafted the will and it was executed by the testator. Three months later he had a change of heart and he reconciled with his daughters. The testator told his daughters that he had taken them out of his will but that he was going to rectify it. He asked his solicitor to prepare a new will with a gift of money to each of his daughters and made an appointment with his solicitor. However, his solicitor failed to keep the appointment and went on holiday. While the solicitor was on holiday, the testator fell, hit his head, suffered a heart attack and died. The two daughters claimed damages for negligence alleging that the solicitor’s inexcusable delays were the cause of the failure to receive monies from their father’s estate. The claim failed at first instance; however, the Court on appeal decided that a duty should be owed by the testator’s solicitor to the disappointed beneficiary. Lord Goff of Chieveley stated:

[I]f such a duty is not recognized, the only persons who might have a valid claim (i.e. the testator and his estate) have suffered no loss, and the only persons who have suffered a loss (i.e. the disappointed beneficiary) have no claim. It can therefore be said that, if the solicitor owes no duty to the intended beneficiaries, there is a lacuna in law, which needs to be filled. This is a point of cardinal importance in the present case.

The injustice of denying such a remedy is reinforced if one considers the importance of legacies in a society, which recognizes the right of citizens to leave their assets to whom they please. . .

There is a sense in which the solicitor’s profession cannot complain if such a liability may be imposed upon their members. If one of the has been negligent in such a way as to defeat his client’s testamentary intentions, he must regard himself as very lucky indeed if the effect of the law is that he is not liable to pay damages in the ordinary way. It can evolve no injustice to render him subject to such a liability, even if the damages are not payable to his client’s estate for distribution to the disappointed beneficiary, but rather directly to the disappointed beneficiary…[10]

Courts across Canada adopted the reasoning in White v. Jones in subsequent cases over the next decades including in Smolinski v. Mitchell,[11] Couture v. Lamontgane,[12] Danchuk v Calderwood,[13] Earl v. Wilhelm,[14] Wakeford v. Arnold,[15] Rosenberg Estate v. Black,[16] Korpiel v. Sanguinetti,[17] Re Brown Estate,[18] Stern v. Stern,[19] Hall v. Bennett,[20] and Graham v. Bonnycastle.[21] These cases show that it is now firmly established in Canadian jurisprudence that a third party beneficiary has standing to bring a claim in solicitor’s negligence against a drafting solicitor. The solicitor owes a duty to the third-party beneficiary despite the lack of privity of contract.

[1] [1995] ALL ER 692 (HL)[White v Jones]

[2] [1924] 54 OLR 3, [1924] 1 DLR 981 (CA)[Fitzpatrick].

[3] 40 Cal 2d 647, 320 P 2d 16 (1958) [Biakanja].

[4] 1978, 88 DLR (3d) 353 (BCSC)[Whittingham].

[5] RSBC 1960, 408 s 12(1).

[6] [1964] 2 ALL ER 575 [Hedley Byrne].

[7] [1980] 1 Ch 297, [1979] 3 ALL ER 580 (ChD)[Ross v. Caunters].

[8] Ross v Caunters, supra note 7.

[9] Supra note 1.

[10] [1995] 1 ALL ER 692 (HL) at 705.

[11] [1995] 10 BCLR (3d) 366, 8 ETR (2d) 247, [1995] 10 WWR 68.

[12] (1996) 151 Sask. R. 283 (Sask. O.B.).

[13] (1996), 15 ETR (2d) 193 (BCSC).

[14] (2000) 189 Sask R. 71 (C.A.).

[15] [2001] AJ No. 1372 (QB).

[16] 2001 CarswellOnt 4504 (SCJ) [Rosenberg].

[17] 1999 CanLII 6524 (BCSC).

[18] 2001 CarswellOnt 1333 (SCJ).

[19] (2003) 49 ETR (2d)129.

[20] [2001] OJ No 5092, 40 ETR (2d) 65, rev’d [2003] 64 OR (3d) 191 (CA).

[21] [2004] ABCA 270, 10 ETR (3d).

This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

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